Dekalb Cnty. v. U.S. Dep't of Labor

• Decision Date: 08 February 2016
• Docket Number: No. 14–15435.,14–15435.
• Parties: DEKALB COUNTY, Petitioner, v. U.S. DEPARTMENT OF LABOR, Ryan Petty, Daisy Abdur–Rahman, Respondents.
• Court: U.S. Court of Appeals — Eleventh Circuit

812 F.3d 1015

DEKALB COUNTY, Petitioner,

v.U.S. DEPARTMENT OF LABOR, Ryan Petty, Daisy Abdur–Rahman, Respondents.

No. 14–15435.

United States Court of Appeals, Eleventh Circuit.

Feb. 8, 2016.

Randy C. Gepp, Taylor English Duma, LLP, Atlanta, GA, for Petitioner.

Erin Mohan, Thomas E. Perez, Paul M. Igasaki, U.S. Department of Labor Office of the Solicitor, Washington, DC, Robert Marx, Jean Simonoff Marx, Marx & Marx, LLC, Atlanta, GA, for Respondents.

Petition for Review of a Decision of the Department of Labor.

Before TJOFLAT and MARTIN, Circuit Judges, and ROSENTHAL,^* District Judge.

ROSENTHAL, District Judge:

This petition for review asks us to clarify the standard the Department of Labor's Administrative Review Board applies to an appeal from an Administrative Law Judge's findings and conclusions in a proceeding under the Federal Water Pollution Control Act, 33 U.S.C. § 1367. The petitioner asks us to vacate the Board's ruling reversing the ALJ because the Board applied de novo rather than substantial-evidence scrutiny to the ALJ's factual findings. The parties agree that the Board applied the incorrect standard. We conclude, however, that reviewing for substantial evidence would not have changed the result because the Board reversed the ALJ on matters of law, not fact. We therefore deny the petition for review.¹

I. BACKGROUND

Daisy Abdur–Rahman and Ryan Petty filed complaints after they were terminated from their jobs with the DeKalb County, Georgia Department of Public Works. The ALJ held a 13–day hearing on their claims that they were fired in retaliation for whistleblower activity protected under the Federal Water Pollution Control Act ("FWPCA").

Abdur–Rahman and Petty worked as compliance inspectors on a program to reduce sewer overflows caused by restaurants improperly disposing of fats, oils, and grease. The County requires restaurants—there are around 5,000 in the County—to have grease traps to collect this type of solid waste. If the traps are missing or fail, fats, oils, and grease accumulate in sewer lines and can cause the lines to burst or overflow, releasing raw, untreated sewage that can seep into surrounding waters. The County's compliance inspectors monitor the traps, process and respond to complaints, and investigate discharges. The Department also assigned Abdur–Rahman and Petty to a committee updating the County's ordinances and procedures regulating this type of solid-waste disposal.

For the first six months after the County hired them in mid–2004, Abdur–Rahman and Petty were probationary employees who could be fired at will. Their immediate supervisor was Chester Gudewicz, the County's Compliance Section Supervisor. Gudewicz, in turn, reported to John Walker.

The probationary period was marked by conflict between Gudewicz and Abdur–Rahman and Petty. All three, and Walker, testified about the conflicts before the ALJ. Problems began when Abdur–Rahman and Petty asked Gudewicz for historical records of sewer spills in the County. They wanted the records for their committee and compliance work so they could identify "hot spots" where sewers had frequently overflowed and use that information to facilitate future enforcement. When Gudewicz failed to produce the records, Abdur–Rahman and Petty persisted, asking for them on a weekly basis. By late 2004, Gudewicz was actively discouraging the search, telling Abdur–Rahman and Petty that they were "ruffling too many feathers" and "rocking the boat." Gudewicz became increasingly frustrated and impatient with their questions, and with them. He viewed their questions as "insubordination" and would walk away to avoid them. Walker also resisted the efforts to find the records, telling Abdur–Rahman and Petty that they did not need the data and were being "too thorough or scientific."

This opposition led Abdur–Rahman and Petty to suspect that the County had something to hide. They told coworkers and supervisors that "the County could get in trouble" with the State for failing to properly document and report spills. They also came to believe that Gudewicz was unqualified for his position and concerned with preserving the status quo and his job, rather than the program. They raised their concerns about the County's lack of compliance and enforcement with increasing frequency. Tensions spiked in January 2005, when, according to Gudewicz's testimony, he overheard Abdur–Rahman call him "incompetent" and "a liar."

Abdur–Rahman's and Petty's suspicions turned out to be unfounded. The records they sought were available in a nearby office, and the County was investigated by Georgia's Environmental Protection Division, which concluded that the County had reported spills as required by state law. In the meantime, however, Gudewicz concluded that Abdur–Rahman's and Petty's behavior was disruptive and harmful to workplace morale. In January 2005, Gudewicz sent Walker two memoranda, one recommending firing Petty, and the other reporting Abdur–Rahman for "argumentative" behavior. The County fired both in early March 2005.

One month later, Abdur–Rahman and Petty each filed a complaint with the Occupational Safety and Health Administration ("OSHA"), asserting that the County had fired them in retaliation for voicing their concerns and complaints. OSHA found no violation of the FWPCA's antiretaliation provision. A number of witnesses testified at the evidentiary hearing held before the ALJ between September 2006 and March 2007. The testimony frequently conflicted. The ALJ had to, and did, make credibility judgments in resolving the factual inconsistencies.

The ALJ found and concluded that Abdur–Rahman and Petty had engaged in activity that the FWPCA protects, but that this activity was not the motivating factor behind the decision to terminate their employment. The ALJ found and concluded that the County showed that it would have terminated Abdur–Rahman and Petty "even had they not engaged in protected activity because managing them was above their supervisor's [Gudewicz's] means and they did not fit the peculiar culture [of their workplace]." The ALJ dismissed Abdur–Rahman's and Petty's complaints.

On appeal, the Administrative Review Board reviewed the ALJ's findings and conclusions de novo and reversed. The Board agreed with the ALJ's finding that Abdur–Rahman and Petty had engaged in protected activity by pressing for the records and by voicing concerns about the County's regulatory compliance and enforcement when they met resistance. But the Board found that this activity was a motivating factor—not the motivating factor, as the ALJ had incorrectly stated—in the County's decision to fire them. The Board also agreed with the ALJ's factual findings that the County had both legitimate and retaliatory reasons for its termination decision and that the reasons arose from the same protected activity. The Board rejected the ALJ's legal analysis, however, "arriv[ing] at [the] different legal conclusion" that the County's legal and illegal motives could not be separated and the County had not shown that it would have fired Abdur–Rahman and Petty absent their protected activity. The Board remanded to the ALJ to decide the remedy for the retaliatory terminations.² The Board affirmed the ALJ's post-remand decisions, including the reinstatement and back-pay awards, and the County petitioned this court for review. We have jurisdiction under 33 U.S.C. § 1367(b) and 33 U.S.C. § 1369, and we deny the petition.

II. THE STANDARD OF REVIEW

An appellate court "must review the [Administrative Review Board's] decision pursuant to the standard of review outlined in the Administrative Procedure Act." Stone & Webster Constr., Inc. v. U.S. Dep't of Labor (" Stone & Webster II "), 684 F.3d 1127, 1132 (11th Cir.2012). Legal conclusions are reviewed de novo, keeping in mind that agencies often receive deference in construing the statutes they administer. Chevron, U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). The Board's factual findings are reversed only if "unsupported by substantial evidence" on the record as a whole. 5 U.S.C. § 706(2)(E) (APA standard for formal adjudications); Stone & Webster II, 684 F.3d at 1132.

"The substantial evidence standard limits the reviewing court from deciding the facts anew, making credibility determinations, or re-weighing the evidence." Stone & Webster II, 684 F.3d at 1133 (quotation marks omitted). When "we review administrative findings of fact under the substantial-evidence test, [we] will reverse such findings only when the record compels a reversal; the mere fact that the record may support a contrary conclusion is not enough...." Indrawati v. U.S. Att'y Gen., 779 F.3d 1284, 1304 (11th Cir.2015) (quotation marks omitted). Substantial evidence is "more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971) (quotation marks omitted).

Since 2007, these same standards have applied to the Board's review of the ALJ's findings and conclusions in an FWPCA claim. "[I]n 2007, the Secretary of Labor revised the [Board's] standard of review of an ALJ's factual findings ... from de novo review to substantial evidence review." Stone & Webster, 684 F.3d at 1132 ; see also 29 C.F.R. § 24.110(b) ("The [Board] will review the factual findings of the ALJ under the substantial evidence standard."). The parties agree that the Board incorrectly reviewed the ALJ's factual findings de novo. The issue is the effect of that error.

III. DISCUSSION

The elements of an FWPCA retaliation claim are that (1) the employee engaged in protected activity, (2) the employee suffered an adverse action, and (3) the protected activity was a motivating factor in the adverse action. Kaufman v. Perez, 745 F.3d 521, 527 (D.C.Cir.2014). The parties agree that Abdur–Rahman and Petty suffered an adverse action. The...