[Federal Register Volume 69, Number 163 (Tuesday, August 24, 2004)]
[Rules and Regulations]
[Pages 52105-52117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-19197]



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Part III





Department of Labor





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Occupational Safety and Health Administration



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29 CFR Part 1980



Procedures for the Handling of Discrimination Complaints Under Section 
806 of the Corporate and Criminal Fraud Accountability Act of 2002, 
Title VIII of the Sarbanes-Oxley Act of 2002; Final Rule

  Federal Register / Vol. 69, No. 163 / Tuesday, August 24, 2004 / 
Rules and Regulations  

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DEPARTMENT OF LABOR

Occupational Safety and Health Administration

29 CFR Part 1980

RIN 1218 AC10


Procedures for the Handling of Discrimination Complaints Under 
Section 806 of the Corporate and Criminal Fraud Accountability Act of 
2002, Title VIII of the Sarbanes-Oxley Act of 2002

AGENCY: Occupational Safety and Health Administration, Labor.

ACTION: Final rule.

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SUMMARY: This document provides the final text of regulations governing 
the employee protection (``whistleblower'') provisions of section 806 
of the Corporate and Criminal Fraud Accountability Act of 2002, Title 
VIII of the Sarbanes-Oxley Act of 2002 (``Sarbanes-Oxley'' or ``Act''), 
enacted on July 30, 2002. The Act generally was designed to protect 
investors by ensuring corporate responsibility, enhancing public 
disclosure, and improving the quality and transparency of financial 
reporting and auditing. The whistleblower provisions were intended to 
protect employees who report fraudulent activity that can mislead 
innocent investors in publicly traded companies. This rule establishes 
procedures and time frames for the handling of discrimination 
complaints under Title VIII of Sarbanes-Oxley, including procedures and 
time frames for employee complaints to the Occupational Safety and 
Health Administration (``OSHA''), investigations by OSHA, appeals of 
OSHA determinations to an administrative law judge (``ALJ'') for a 
hearing de novo, hearings by ALJs, review of ALJ decisions by the 
Administrative Review Board (acting on behalf of the Secretary) and 
judicial review of the Secretary's final decisions.

DATES: This final rule is effective on August 24, 2004.

FOR FURTHER INFORMATION CONTACT: Thomas Marple, Director, Office of 
Investigative Assistance, Occupational Safety and Health 
Administration, U.S. Department of Labor, Room N-3603, 200 Constitution 
Avenue, NW., Washington, DC 20210; telephone (202) 693-2199.

SUPPLEMENTARY INFORMATION:

I. Background

    The Sarbanes-Oxley Act of 2002 (``Sarbanes-Oxley''), Public Law 
107-204, was enacted on July 30, 2002. Title VIII of Sarbanes-Oxley is 
designated as the Corporate and Criminal Fraud Accountability Act of 
2002. Section 806, codified at 18 U.S.C. 1514A, provides protection to 
employees against retaliation by companies with a class of securities 
registered under section 12 of the Securities Exchange Act of 1934 (15 
U.S.C. 78l) and companies required to file reports under section 15(d) 
of the Securities Exchange Act of 1934 (15 U.S.C. 780(d)), or any 
officer, employee, contractor, subcontractor, or agent of such 
companies, because the employee provided information to the employer or 
a Federal agency or Congress relating to alleged violations of 18 
U.S.C. 1341, 1343, 1344, or 1348, or any rule or regulation of the 
Securities and Exchange Commission, or any provision of Federal law 
relating to fraud against shareholders. In addition, employees are 
protected against discrimination when they have filed, testified in, 
participated in, or otherwise assisted in a proceeding filed or about 
to be filed relating to any such violation or alleged violation. These 
rules establish procedures for the handling of discrimination 
complaints under Title VIII of Sarbanes-Oxley.

II. Summary of Statutory Procedures

    The Sarbanes-Oxley whistleblower provisions provide that a covered 
employee may file, within 90 days of the alleged discrimination, a 
complaint with the Secretary of Labor (``the Secretary'').\1\ The 
statute requires the Secretary to notify the person named in the 
complaint and the employer of the filing of the complaint. The statute 
further provides that proceedings under Sarbanes-Oxley will be governed 
by the rules and procedures and burdens of proof of the Wendell H. Ford 
Aviation Investment and Reform Act for the 21st Century (``AIR21''), 49 
U.S.C. 42121(b). These rules and procedures are described below in 
Section III.
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    \1\ Responsibility for receiving and investigating these 
complaints has been delegated to the Assistant Secretary for OSHA. 
Secretary's Order 5-2002, 67 FR 65008 (Oct. 22, 2002). Hearings on 
determinations by the Assistant Secretary are conducted by the 
Office of Administrative Law Judges, and appeals from decisions by 
administrative law judges are decided by the Administrative Review 
Board. Secretary's Order 1-2002, 67 FR 64272 (Oct. 17, 2002).
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    Sarbanes-Oxley authorizes an award to a prevailing employee of 
make-whole relief, including reinstatement with the same seniority 
status that the employee would have had but for the discrimination, 
back pay with interest, and compensation for any special damages 
sustained, including litigation costs, expert witness fees and 
reasonable attorney's fees. See 18 U.S.C. 1514A(c)(2). If the Secretary 
has not issued a final decision within 180 days of the filing of the 
complaint and there is no showing that there has been delay due to the 
bad faith of the claimant, the claimant may bring an action at law or 
equity for de novo review in the appropriate district court of the 
United States, which will have jurisdiction over such action without 
regard to the amount in controversy.

III. Summary of Regulations and Rulemaking Proceedings

    On May 28, 2003, the Occupational Safety and Health Administration 
published in the Federal Register an interim final rule promulgating 
rules that implemented section 806 of the Sarbanes-Oxley Act of 2002 
(``Sarbanes-Oxley''), Public Law No. 107-204, 68 FR 31860-31868. In 
addition to promulgating the interim final rule, OSHA's notice included 
a request for public comment on the interim rules by July 28, 2003.
    In response, seven organizations and one individual filed comments 
with the agency within the public comment period. Comments were 
received from Siemens Aktiengesellschaft (``Siemens''); Plains All 
American Pipeline, LP (``Plains AAP''); the American Society of Safety 
Engineers (``ASSE''); the Society for Human Resource Management 
(``SHRM''); the Human Resource Policy Association (``HRPA''); the U.S. 
Chamber of Commerce (``the Chamber''); the Government Accountability 
Project (``GAP''); and Mr. Bill Bremer, Director, Risk Manager for TMP 
Resource Solutions. Three organizations--Cleary, Gottlieb, Steen & 
Hamilton; DaimlerChrysler; and the Edison Electric Institute--filed 
comments that were received outside the public comment period.
    OSHA has reviewed and considered the timely comments. The following 
discussion addresses the comments and OSHA's responses in the order of 
the provisions of the rule.

General Comments

    SHRM and the Chamber both commented generally that Sarbanes-Oxley 
is different from other whistleblower laws administered by OSHA, 
because it involves complex matters of corporate securities laws and 
other financial and accountancy laws and practices. As a result, these 
organizations are concerned about OSHA's preparedness to undertake 
Sarbanes-Oxley investigations. OSHA believes that the whistleblower 
provisions of Sarbanes-Oxley are similar to the other 13 whistleblower 
statutes

[[Page 52105]]

that it administers in that it protects employees from adverse 
personnel actions taken in retaliation for their having engaged in 
protected activity. OSHA consequently believes that its investigators 
have ample experience and are well able to investigate the type of 
employment-related disputes that typically arise under Sarbanes-Oxley.
    Both SHRM and the Chamber further commented generally that the 
regulatory time frames are unrealistic. The Sarbanes-Oxley regulatory 
time frames are either mandated by the statute or are designed to 
effectuate Congress's desire for an expedited administrative complaint 
process. OSHA believes that the time frames reasonably balance the 
needs of both employees and employers for timely and fair resolution of 
whistleblower complaints.
    SHRM expressed a general concern about the broad nature of activity 
protected under the whistleblower provision of Sarbanes-Oxley, 
indicating that it might generate complaints based on actions taken in 
the normal course of business. For example, SHRM suggested that an 
employee may mistakenly view an employer's decision to dispose of 
certain documents in the normal course of business to be a violation of 
section 802 of Sarbanes-Oxley, which makes it a felony for a person to 
destroy evidence with the intent to obstruct justice or to fail to 
preserve certain audit papers of companies that issue securities. 
Related to this comment is SHRM's concern that section 806 of Sarbanes-
Oxley requires the employer to meet a higher burden of proof than other 
discrimination laws, in that it requires an employer to establish by 
clear and convincing evidence that it would have taken the unfavorable 
personnel action even absent the protected activity. These rules are 
procedural in nature and are not intended to provide interpretations of 
the Act. Under section 806, Congress chose to protect a broad range of 
disclosures about corporate practices that may adversely affect 
stockholders. Similarly, Congress chose to apply the ``clear and 
convincing'' burden of proof standard, which also applies under the 
whistleblower protection provisions of the Energy Reorganization Act 
(``ERA''), 42 U.S.C. 5851(b)(3)(D); AIR21, 49 U.S.C. 
42121(b)(2)(B)(iv); and the Pipeline Safety Improvement Act of 2002 
(``PSIA''), 49 U.S.C. 60129(b)(2)(B)(iv). OSHA also notes that SHRM's 
concern that innocent business behavior will become the subject of a 
Sarbanes-Oxley complaint is addressed by the statutory requirement that 
an employee ``reasonably believe'' that his or her disclosure is 
related to fraud or a violation of a Securities and Exchange Commission 
rule or regulation. See 18 U.S.C. 1514A(a)(1). The legislative history 
of section 806 indicates that Congress intended to apply to 18 U.S.C. 
1514A(a)(1) the normal ``reasonable person'' standard used and 
interpreted in a wide variety of legal contexts. See 148 Cong. Rec. 
S7420 (daily ed. July 26, 2002) (statement of Senator Leahy). If the 
named person establishes that the disclosures at issue in a complaint 
involve activities that occur in the normal course of business, an 
employee's belief might not be reasonable under that standard.
    The American Society of Safety Engineers commented generally that 
it has no specific concerns with the interim final regulations, but 
that it hopes that OSHA will monitor their effect in encouraging 
corporations to be more accountable and will be flexible and willing to 
make changes should the regulations prove to be inadequate. OSHA 
intends to monitor the effectiveness of these regulations and will make 
any regulatory changes in the future deemed necessary.
    Mr. Bremer commented generally that the regulations should be used 
as an opportunity to bridge a gap between industry and OSHA. OSHA 
always is interested in reaching out to industry and employees to 
ensure effective enforcement of the laws that it administers.
    GAP commented generally that several of the rules evince a bias 
against employees. In this regard, GAP commented that the whistleblower 
provisions of Sarbanes-Oxley are remedial in nature and should be 
broadly construed and that therefore the regulations should not operate 
to deny a complainant the ability to fully and fairly litigate his or 
her complaint. As described more fully below, OSHA believes that these 
regulations appropriately balance a complainant's right to fully and 
fairly litigate his or her complaint before the agency with both the 
due process rights of named persons and Congress's desire for an 
expedited administrative complaint process.

IV. Summary and Discussion of Regulatory Provisions

Section 1980.100 Purpose and Scope

    This section describes the purpose of the regulations implementing 
Sarbanes-Oxley and provides an overview of the procedures covered by 
these new regulations. No comments were received on this section.

Section 1980.101 Definitions

    In addition to the general definitions, the regulations define 
``company'' and ``company representative'' to together include all 
entities and individuals covered by Sarbanes-Oxley. The definition of 
``named person'' includes the employer as well as the company and 
company representative who the complainant alleges in the complaint to 
have violated the Act. Thus, the definition of ``named person'' will 
implement Sarbanes-Oxley's unique statutory provisions that identify 
individuals as well as the employer as potentially liable for 
discriminatory action. We anticipate, however, that in most cases the 
named person likely will be the employer.
    Three comments were received regarding the definitions contained in 
Sec.  1980.101. Siemens commented that the regulatory definition of 
``company'' should exclude foreign issuers to the extent that it 
relates to foreign national employees who do not work in United States 
facilities of the foreign issuers. In support, Siemens noted that many 
foreign industrialized nations already have laws that protect 
whistleblowers, that United States labor laws already apply to 
Siemens's affiliated United States companies, and that labor law forms 
part of the national sovereignty of a foreign country. Similarly, HRPA 
commented that the rule should be revised so as not to apply to 
employees employed outside of the United States by United States 
corporations or their subsidiaries; nor should it apply to foreign 
corporations that have no United States employees. HRPA suggested that 
applying the rule in these situations would divert the Department's 
resources and therefore undermine its fundamental mission. The purpose 
of this rule is to provide procedures for the handling of Sarbanes-
Oxley discrimination complaints; this rule is not intended to provide 
statutory interpretations. Because the regulatory definition of 
``company'' simply applies the language used in the statute, OSHA does 
not believe any changes to the definition are necessary.
    Plains AAP commented that the regulatory definitions of 
``employee'' and ``company representative'' work together to broaden 
the statutory definition of protected employees. Specifically, Plains 
AAP commented that section 806(a) of the Sarbanes-Oxley Act is 
captioned ``Whistleblower protection for employees of publicly traded 
companies,'' yet the definitions of ``employee'' and ``company 
representative'' in the regulations provide protection to employees of 
contractors and subcontractors of publicly traded companies. OSHA 
believes that the definitions in this section accurately reflect the 
statutory

[[Page 52106]]

language. Notwithstanding its caption, section 806(a) expressly 
provides that no publicly traded company, ``or any officer, employee, 
contractor, subcontractor, or agent of such company, may discharge, 
demote, suspend, threaten, harass, or in any other manner discriminate 
against an employee. * * *'' The statute thus protects the employees of 
publicly traded companies as well as the employees of contractors, 
subcontractors, and agents of those publicly traded companies. 
Accordingly, OSHA does not believe that its regulatory definitions 
broaden the class of employees that are protected under the plain 
language of Sarbanes-Oxley.

Section 1980.102 Obligations and Prohibited Acts

    This section describes the whistleblower activity which is 
protected under the Act and the type of conduct which is prohibited in 
response to any protected activity. Complaints to an individual member 
of Congress are protected, even if such member is not conducting an 
ongoing Committee investigation within the jurisdiction of a particular 
Congressional committee, provided that the complaint relates to conduct 
that the employee reasonably believes to be a violation of one of the 
enumerated laws or regulations.
    Although no comments were received with regard to this section's 
description of adverse action under Sarbanes-Oxley, OSHA has modified 
Sec.  1980.102(b) to eliminate language deemed redundant with that in 
Sec.  1980.102(a). In this regard, unlike other whistleblower statutes 
administered by OSHA, Sarbanes-Oxley specifically describes the types 
of adverse actions prohibited under the Act. Because this statutory 
description appears in Sec.  1980.102(a), Sec.  1980.102(b) no longer 
lists actions deemed actionable under the Act.
    HRPA commented that this section should be clarified to ensure that 
the description of protected activity covers only disclosures of fraud 
that harm shareholders or that relate to securities law. HRPA expressed 
concern that under this section's description of protected activity, 
employees might be able to bring claims based on ordinary business and 
employment disputes that the statute was not intended to address. HRPA 
suggested, therefore, that this section provide that to be protected, a 
reported violation must affect as much as 3% of a company's revenue 
before it is considered an issue that would implicate the securities 
laws. Finally, HRPA also suggested that this section delineate between 
the protected activity covered by Sarbanes-Oxley and that covered under 
some of the more expansive state whistleblower protection statutes.
    The description of protected activity in this section comes from 
the statute. As stated above, the purpose of these regulations is to 
provide procedural rules for the handling of whistleblower complaints 
and not to interpret the statute. Furthermore, determinations as to 
whether employee disclosures concerning alleged corporate fraud are 
protected under Sarbanes-Oxley will depend on the specific facts of 
each case. It is not appropriate therefore for these regulations to 
specify a percentage or formula for use in defining protected activity. 
With regard to HRPA's final comment on this section, because these 
rules are procedural in nature and the description of protected 
activity comes from the statute, a delineation between what is 
protected under Sarbanes-Oxley and what is protected under other laws 
not administered by OSHA is neither necessary nor appropriate.

Section 1980.103 Filing of Discrimination Complaint

    This section explains the requirements for filing a discrimination 
complaint under Sarbanes-Oxley. To be timely, a complaint must be filed 
within 90 days of when the alleged violation occurs. Under Delaware 
State College v. Ricks, 449 U.S. 250, 258 (1980), this is considered to 
be when the discriminatory decision has been both made and communicated 
to the complainant. In other words, the limitations period commences 
once the employee is aware or reasonably should be aware of the 
employer's decision. See Equal Employment Opportunity Commission v. 
United Parcel Service, 249 F.3d 557, 561-62 (6th Cir. 2001). Complaints 
filed under the Act must be made in writing, but do not need to be made 
in any particular form. With the consent of the employee, complaints 
may be made by any person on the employee's behalf.
    Both SHRM and HRPA commented that this section should require 
complaints to allege wrongdoing under Sarbanes-Oxley with greater 
specificity. To ensure that an employee's belief that a reported 
violation is reasonable, HRPA also suggested that this section require 
that complaints contain detailed analyses of the securities laws at 
issue and of how they were violated, and added that OSHA should not 
conduct investigations if the employer demonstrates by clear and 
convincing evidence that the employee's belief was not reasonable. It 
is OSHA's view that these concerns are adequately dealt with in Sec.  
1980.104 herein, the section covering investigations. As set forth at 
Sec.  1980.104(b)(2), and as directed by statute, OSHA will not 
investigate where a complainant has failed to make a prima facie 
showing that the protected behavior was a contributing factor in the 
unfavorable personnel action alleged. To make a prima facie showing, 
the complainant must allege that he or she engaged in protected 
activity. See Sec.  1980.104(b)(1)(i). Activity under Sarbanes-Oxley is 
only protected if the employee provides information that he or she 
``reasonably believes'' constitutes a violation of 18 U.S.C. 1341, 
1343, 1344, or 1348, any rule or regulation of the Securities and 
Exchange Commission, or any provision of Federal law relating to fraud 
against shareholders. OSHA believes that it would be overly restrictive 
to require a complaint to include detailed analyses when the purpose of 
the complaint is to trigger an investigation to determine whether 
evidence of discrimination exists. To the extent that SHRM and HRPA are 
suggesting that a complaint on its face must make a prima facie showing 
to avoid dismissal, OSHA has consistently believed that supplementation 
of the complaint by interviews with the complainant may be necessary 
and is appropriate. Although the Sarbanes-Oxley complainant often is 
highly educated, not all employees have the sophistication or legal 
expertise to specifically aver the elements of a prima facie case and/
or supply evidence in support thereof. The regulations thus recognize 
that supplemental interviews may become part of a complaint. See 
Sec. Sec.  1980.104(b)(1) and (2).

Section 1980.104 Investigation

    Sarbanes-Oxley follows the AIR21 requirement that a complaint will 
be dismissed if it fails to make a prima facie showing that protected 
behavior or conduct was a contributing factor in the unfavorable 
personnel action alleged in the complaint. Also included in this 
section is the AIR21 requirement that an investigation of the complaint 
will not be conducted if the named person demonstrates by clear and 
convincing evidence that it would have taken the same unfavorable 
personnel action in the absence of the complainant's protected behavior 
or conduct, notwithstanding the prima facie showing of the complainant. 
Upon receipt of a complaint in the investigating office, the Assistant 
Secretary notifies the named person of these requirements and the right 
of each named person to seek attorney's fees from an ALJ or the Board 
if the named

[[Page 52107]]

person alleges that the complaint was frivolous or brought in bad 
faith.
    Under this section, the named person has the opportunity within 20 
days of receipt of the complaint to meet with representatives of OSHA 
and present evidence in support of its position. If, upon 
investigation, OSHA has reasonable cause to believe that the named 
person has violated the Act and therefore that preliminary relief for 
the complainant is warranted, OSHA again contacts the named person with 
notice of this determination and provides the substance of the relevant 
evidence upon which that determination is based, consistent with the 
requirements of confidentiality of informants. The named person is 
afforded the opportunity, within 10 business days, to provide written 
evidence in response to the allegation of the violation, meet with the 
investigators, and present legal and factual arguments why preliminary 
relief is not warranted. This section provides due process procedures 
in accordance with the Supreme Court decision under STAA in Brock v. 
Roadway Express, Inc., 481 U.S. 252 (1987).
    Both SHRM and the Chamber commented that OSHA's pressure to 
complete its investigation within 60 days (see Sec.  1980.105(a)) will 
frustrate early settlement attempts. Accordingly, they suggested that 
this rule provide that settlement negotiations between the complainant 
and the named person temporarily curtail the running of the 180-day 
period in which a complainant may elect to go to Federal court under 18 
U.S.C. 1514A(b)(1)(B). OSHA does not believe that the statute 
authorizes such a rule.
    Moreover, it is OSHA's view that early settlements are facilitated 
by the provision that permits a complainant to file a de novo action in 
Federal court 180 days after the filing of his or her administrative 
complaint, because it provides an incentive for the employer to resolve 
quickly meritorious allegations. Of course, there is nothing to prevent 
the complainant from agreeing to delay a filing in Federal court 
pending the outcome of settlement negotiations.
    Plains AAP commented that because the regulations protect employees 
of contractors and subcontractors of a publicly traded company, and 
because under Sec.  1980.104(b), a complainant can make a prima facie 
showing of a violation without alleging that the named person was 
involved in the adverse action, public companies will become involved 
in whistleblower disputes stemming from the employment decisions of 
contractors over which the company had no control. To avoid this 
perceived problem, Plains AAP suggested that Sec.  1980.104(b)(iii) be 
revised to read: ``The employee suffered an unfavorable personnel 
action for which the named person was responsible or in which the named 
person participated.'' Plains AAP commented that this revision would 
provide OSHA with clear grounds to dismiss a case against a person who 
is only being named for its nuisance value. OSHA does not believe that 
the suggested revision is necessary or warranted. Sarbanes-Oxley's 
whistleblower provision is similar to other whistleblower provisions 
administered by the Secretary. Under those provisions, the ARB has held 
that a respondent may be liable for its contractor's or subcontractor's 
adverse action against an employee in situations where the respondent 
acted as an employer with regard to the employee of the contractor or 
subcontractor, whether by exercising control of the work product or by 
establishing, modifying, or interfering with the terms, conditions, or 
privileges of employment. See, e.g., Stephenson v. NASA, ARB No. 96-
080, 1997 WL 166055 *2 (DOL Adm. Rev. Bd. Apr. 7, 1997). Conversely, a 
respondent will not be liable for the adverse action taken against an 
employee of its contractor or subcontractor where the respondent did 
not act as an employer with regard to the employee. Furthermore, the 
statute and this rule provide safeguards to prevent a complainant's 
bringing a complaint against a named person simply for its nuisance 
value. Specifically, a named person may seek from the ALJ or the Board 
an award of reasonable attorney's fees up to $1,000 for a complaint 
determined to be frivolous or brought in bad faith. See 18 U.S.C. 
1514A(b)(2)(A); 29 CFR 1980.109(b); 1980.110(e).
    GAP commented that the regulations are biased in favor of the 
``named party'' because they provide that the ``named party'' may meet 
with OSHA and challenge its findings, but do not have similar 
provisions for the complainant. Specifically, GAP commented that the 
only opportunity for the complainant to meet with OSHA lies in the 
discretion of the OSHA investigators. GAP suggested that in every 
instance that this section provides that the named party may meet with 
OSHA, it should also provide that the complainant may meet with OSHA. 
OSHA believes that such a revision is unnecessary. The regulations are 
drafted to provide named persons with the due process rights to which 
they are entitled under the Supreme Court's decision in Brock v. 
Roadway Express, Inc. Moreover, the language of Sarbanes-Oxley, which 
is similar to that of other whistleblower laws administered by OSHA, 
makes clear that OSHA's initial investigation is to be conducted 
independently for the purposes of establishing the facts and 
facilitating an early resolution of the claim. In the conduct of such 
an independent investigation, complainants are given ample opportunity 
to meet with OSHA concerning the merits of their complaints.
    GAP also commented that Sec.  1980.104(b)(2) should include 
specific language explaining the burden under the ``contributing 
factor'' test. Specifically, GAP suggested that, based on the 
definition of ``contributing factor'' in the legislative history of the 
Whistleblower Procedure Act, 5 U.S.C. 2302(b), the first and second 
sentences of Sec.  1980.104(b)(2) be revised to begin with the 
following language: ``Contributing factor means `any factor, which 
alone or in connection with other factors, tends to affect in any way 
the outcome of the decision.' '' OSHA does not believe that this 
revision is necessary. The ``contributing factor'' language used in 
this section is identical to that used in the employee protection 
provisions of the ERA and AIR21, under which there is sufficient case 
law interpreting the phrase. For example, in Kester v. Carolina Power & 
Light Co., No. 02-007, 2003 WL 22312696, * 8 (Adm. Rev. Bd. Sept. 30, 
2003), the ARB noted:

    [P]rior to the 1992 amendments, the ERA complainant was required 
to prove that protected activity was a ``motivating factor'' in the 
employer's decision. Congress adopted the less onerous 
``contributing factor'' standard ``in order to facilitate relief for 
employees who have been retaliated against for exercising their 
[whistleblower rights].'' 138 Cong. Rec. No. 142 (Oct. 5, 1992). 
Congress may have been recalling that in 1989 it enacted the 
Whistleblower Protection Act, Public Law 101-12, section 3(a)(13), 
103 Stat. 29. The WPA requires a complainant to prove that a 
protected disclosure was a ``contributing factor in the personnel 
action * * *'' 5 U.S.C. 1221(e)(1) (West 1996).

    See also Stone & Webster Eng'g Corp. v. Herman, 115 F.3d 1568, 1573 
(1997) (construing the ``contributing factor'' provision in the ERA).
    GAP also commented that Sec.  1980.104(b)(2) should explicitly 
reaffirm that the ``contributing factor'' standard is met when an 
alleged adverse action is taken after protected activity, but before a 
new performance appraisal is made. It is OSHA's view that what must be 
pled and proven to establish

[[Page 52108]]

discrimination or retaliation under section 806 of Sarbanes-Oxley will 
depend upon the facts and circumstances of each individual case. 
Accordingly, it would not be appropriate to specify in a regulation 
those facts that will automatically establish a prima facie case of 
discrimination.
    GAP further commented that to ensure that OSHA investigators only 
consider the valid reasons proffered by named persons in defense of 
their adverse employment actions, Sec.  1980.104(c) should be revised 
to include the word ``legitimately,'' with an explanation in the 
preamble as to what defenses will be considered legitimate and what 
defenses will not be so considered. Again, OSHA does not believe that 
such a revision is warranted. Its investigators have vast experience 
conducting fair and impartial investigations of whistleblower 
complaints. In evaluating the merits of a complaint, investigators only 
consider explanations for any adverse action taken by a named person 
that they consider to be non-discriminatory and credible. Moreover, for 
the same reasons that it is inappropriate to specify facts that will or 
will not constitute protected activity for purposes of a complainant's 
prima facie showing, it is inappropriate to specify facts that will or 
will not constitute a defense for adverse action.
    GAP also commented that to foster an appearance of fairness, Sec.  
1980.104(c), in addition to stating that the named person has a right 
to seek attorney's fees for a frivolous complaint, should refer to the 
complainant's right to obtain attorney's fees should he or she prevail 
before OSHA. The complainant's right to obtain make-whole relief, 
including the right to recover attorney's fees, is fully described in 
other parts of this rule; therefore, no revision is necessary.
    SHRM commented that under Sec.  1980.104(c), the named person is 
given too short a period, i.e., 20 days, in which to respond to OSHA 
after receiving notice of the complaint. According to SHRM, the 20-day 
period does not allow sufficient time for the named person to conduct 
an internal investigation and to request and prepare for a meeting with 
OSHA. The statute provides only 60 days for OSHA to complete the entire 
investigation and issue findings. Accordingly, OSHA believes that 20 
days provides sufficient time for the named person to research and 
prepare a response, without impeding the agency's ability to complete 
the investigation in a timely manner. Moreover, the 20-day period is 
consistent with that provided under OSHA's regulations for the handling 
of complaints under the Surface Transportation Assistance Act 
(``STAA'') and AIR21, the other whistleblower statutes administered by 
OSHA that have 60-day investigation time frames. See 29 CFR 
1978.103(b); 29 CFR 1979.104(c).
    Regarding Sec.  1980.104(e), GAP objected to allowing the named 
person 10 business days in which to respond to the due process letter 
because it delays OSHA's ordering temporary relief to the complainant. 
GAP also believed that to be fair, the complainant should be given 
another opportunity to rebut the named person's response to the letter. 
In contrast, SHRM commented that 10 business days is too short a time 
in which to expect a named person to prepare an adequate legal response 
to OSHA's reasonable cause determination and that the regulation should 
allow for great flexibility. As noted above, OSHA's investigations are 
conducted independently and under tight time frames, prior to the 
administrative hearing phase of the process, in which all parties 
participate fully. The purpose of Sec.  1980.104(e) is to ensure 
compliance with the Supreme Court's ruling in Brock v. Roadway Express, 
Inc., in which the Court, on a constitutional challenge to the 
temporary reinstatement provision in the employee protection provisions 
of STAA, upheld the facial constitutionality of the statute and the 
procedures adopted by OSHA under the Due Process Clause of the Fifth 
Amendment, but ruled that the record failed to show that OSHA 
investigators had informed Roadway of the substance of the evidence to 
support reinstatement of the discharged employee. OSHA believes that 
this purpose is met by Sec.  1980.104(e) as currently written and that 
no changes are necessary.

Section 1980.105 Issuance of Findings and Preliminary Orders

    This section provides that, on the basis of information obtained in 
the investigation, the Assistant Secretary will issue, within 60 days 
of the filing of a complaint, a finding regarding whether or not there 
is reasonable cause to believe that the complaint has merit. If the 
finding is that there is reasonable cause to believe that the complaint 
has merit, the Assistant Secretary will order appropriate preliminary 
relief. The letter accompanying the findings and order advises the 
parties of their right to file objections to the findings of the 
Assistant Secretary and to request a hearing, and of the right of the 
named person to request attorney's fees from the ALJ, regardless of 
whether the named person has filed objections, if the named person 
alleges that the complaint was frivolous or brought in bad faith. If no 
objections are filed within 30 days of receipt of the findings, the 
findings and any preliminary order of the Assistant Secretary become 
the final findings and order of the Secretary. If objections are timely 
filed, any order of preliminary reinstatement will take effect, but the 
remaining provisions of the order will not take effect until 
administrative proceedings are completed.
    Where the named person establishes that the complainant would have 
been discharged even absent the protected activity, there would be no 
reasonable cause to believe that a violation has occurred. Therefore, a 
preliminary reinstatement order would not be issued. Furthermore, as 
under AIR21, a preliminary order of reinstatement would not be an 
appropriate remedy where, for example, the named person establishes 
that the complainant is, or has become, a security risk based upon 
information obtained after the complainant's discharge in violation of 
Sarbanes-Oxley. See McKennon v. Nashville Banner Publishing Co., 513 
U.S. 352, 360-62 (1995) (reinstatement would not be an appropriate 
remedy for discrimination under the Age Discrimination in Employment 
Act where, based upon after-acquired evidence, the employer would have 
terminated the employee upon lawful grounds). Finally, in appropriate 
circumstances, in lieu of preliminary reinstatement, OSHA may order 
that the complainant receive the same pay and benefits that he received 
prior to his termination, but not actually return to work. Such 
``economic reinstatement'' frequently is employed in cases arising 
under section 105(c) of the Federal Mine Safety and Health Act of 1977. 
See, e.g., Secretary of Labor on behalf of York v. BR&D Enters., Inc., 
23 FMSHRC 697, 2001 WL 1806020 **1 (June 26, 2001).
    Comments on this section were received from SHRM, the Chamber, and 
GAP. Both SHRM and the Chamber commented that the regulatory exceptions 
to preliminary reinstatement should be broadened. They further 
commented that preliminary reinstatement should become effective only 
after the administrative adjudication has been completed, to which SHRM 
added that preliminary reinstatement is unnecessary because Sarbanes-
Oxley's make-whole remedies are sufficient to protect whistleblowers. 
The statute, however, explicitly provides that a preliminary order of 
reinstatement shall be issued upon the conclusion of an investigation 
that determines that there is reasonable

[[Page 52109]]

cause to believe that a violation has occurred. See 18 U.S.C. 1514A(b), 
adopting 49 U.S.C. 42121(b)(2). Moreover, the purpose of interim 
relief, to provide a meritorious complainant with a speedy remedy and 
avoid a chill on whistleblowing activity, would be frustrated if 
reinstatement did not become effective until after the administrative 
adjudication was completed. The named person's due process rights will 
have been fully satisfied under Sec.  1980.104(e). That section 
provides that the named person will be notified of the substance of the 
evidence OSHA has gathered against it establishing reasonable cause to 
believe that a violation has occurred and gives the named person an 
opportunity to respond.
    The Chamber objected to the use of the ``security risk'' language 
in the regulations because it is not defined. In this regard, the 
Chamber noted that a security risk could mean security of trade secrets 
or security of persons or property. Thus, the Chamber suggested that 
the regulations should define more explicitly what constitutes a 
security risk or should allow the employer to determine whether an 
employee presents a security risk. The Chamber also commented that 
preliminary reinstatement should be limited to those situations where 
company disruption would be minimal and the evidence of violation is 
overwhelming.
    GAP also objected to this section's ``security risk'' exception to 
preliminary reinstatement on several grounds. Specifically, GAP 
commented that there is no foundation for the exception in the statute 
or the APA, that the standard for what constitutes a ``security risk'' 
is vague, that the regulation gives OSHA unlimited discretion to cancel 
interim relief, and that it has a chilling effect by permitting after-
the-fact investigations and the potential to create additional 
retaliation. GAP added that the ``security risk'' exception is 
unnecessary because if an employee were a genuine security risk, the 
employer would have had grounds for the action that it took in the 
first instance.
    The ``security risk'' exception was first introduced in OSHA's 
final rule for the handling of whistleblower complaints under AIR21. 
The provision, which was adopted in response to the events of September 
11, 2001, was designed to address situations where after-acquired 
evidence establishes that an employee's reinstatement might pose a 
significant safety risk to the public, notwithstanding the fact that 
the employee's discharge was retaliatory in violation of the Act. We 
have chosen to keep the ``security risk'' exception here in large part 
to make these procedural rules consistent with AIR21's procedural 
rules. The exception is not intended to be broadly construed. Rather, 
it would apply only in situations where the named person clearly 
establishes to the Department that the reinstatement of an employee 
might result in physical violence against persons or property. 
Accordingly, the ``security risk'' language in this section should not 
have a chilling effect on potential whistleblowers or encourage further 
retaliation.
    Both SHRM and the Chamber commented that permitting ``economic 
reinstatement'' in lieu of actual reinstatement would require an 
employer to pay twice for the same position and would work an economic 
hardship on small businesses. They commented that the regulations 
should provide for the reimbursement of the costs of the ``economic 
reinstatement'' should the named person ultimately prevail in the 
litigation. Finally, the Chamber questioned whether the concept of 
``economic reinstatement'' belongs in the context of a Sarbanes-Oxley 
case.
    Congress intended that employees be temporarily reinstated to their 
positions if OSHA finds reasonable cause that they were discharged in 
violation of Sarbanes-Oxley. When a violation is found, the norm is for 
OSHA to order immediate reinstatement. An employer does not have a 
statutory right to choose economic reinstatement. Rather, economic 
reinstatement is designed to accommodate an employer that establishes 
to OSHA's satisfaction that reinstatement is inadvisable for some 
reason, notwithstanding the employer's retaliatory discharge of the 
employee. If the employer can make such a showing, actual reinstatement 
might be delayed until after the administrative adjudication is 
completed as long as the employee continues to receive his or her pay 
and benefits and is not otherwise disadvantaged by a delay in 
reinstatement. The employer, of course, need not request the option of 
economic reinstatement in lieu of actual reinstatement, but if it does, 
there is no statutory basis for allowing the employer to recover the 
costs of economically reinstating an employee should the employer 
ultimately prevail in the whistleblower adjudication.

Section 1980.106 Objections To the Findings and the Preliminary Order

    To be effective, objections to the findings of the Assistant 
Secretary must be in writing and must be filed with the Chief 
Administrative Law Judge, U.S. Department of Labor, Washington, DC, 
within 30 days of receipt of the findings. The date of the postmark, 
facsimile transmittal or e-mail communication is considered the date of 
the filing; if the filing of objections is made in person, by hand-
delivery or other means, the date of receipt is considered the date of 
the filing. The filing of objections is also considered a request for a 
hearing before an ALJ. No comments were received on this section.
    Section 1980.106(b)(1) of this rule has been clarified to provide 
that although the portion of the preliminary order requiring 
reinstatement will be effective immediately upon the named person's 
receipt of the findings and preliminary order, regardless of any 
objections to the order, the named person may file a motion with the 
Office of Administrative Law Judges for a stay of the Assistant 
Secretary's preliminary order. In making this change, OSHA conforms 
this rule to the recently promulgated interim final rule for the 
handling of whistleblower complaints under the Pipeline Safety 
Improvement Act of 2002 (``PSIA''). See 29 CFR 1981.106(b)(1). PSIA's 
legislative history indicates that Congress intended to assure that the 
mere filing of an objection would not automatically stay the 
preliminary order, but that an employer could file a motion for a stay. 
See 148 Cong. Rec. S11068 (Nov. 14, 2002) (section-by-section 
analysis). OSHA believes it would be useful for this rule to contain a 
similar provision. OSHA believes, however, that a stay of a preliminary 
reinstatement order would be appropriate only in the exceptional case. 
In other words, a stay only would be granted where the named person can 
establish the necessary criteria for equitable injunctive relief, i.e., 
irreparable injury, likelihood of success on the merits, and a 
balancing of possible harms to the parties and the public.

Section 1980.107 Hearings

    This section adopts the rules of practice of the Office of 
Administrative Law Judges at 29 CFR part 18, subpart A. In order to 
assist in obtaining full development of the facts in whistleblower 
proceedings, formal rules of evidence do not apply. The section 
specifically provides for consolidation of hearings if both the 
complainant and the named person object to the findings and/or order of 
the Assistant Secretary. In order for hearings to be conducted as 
expeditiously as possible, and particularly in light of the unique 
provision in Sarbanes-Oxley allowing complainants to seek a de novo 
hearing in Federal court if the Secretary has not issued a final 
decision within 180 days

[[Page 52110]]

of the filing of the complaint, this section provides that the ALJ has 
broad authority to limit discovery. For example, an ALJ may limit the 
number of interrogatories, requests for production of documents, or 
depositions allowed. An ALJ also may exercise discretion to limit 
discovery unless the complainant agrees to delay filing a complaint in 
Federal court for some definite period of time beyond the 180-day 
point. If a complainant seeks excessive or burdensome discovery or 
fails to adhere to an agreement to delay filing a complaint in federal 
court, a district court considering a request for de novo review might 
conclude that such conduct resulted in delay due to the claimant's bad 
faith.
    GAP commented that the last sentence of Sec.  1980.107(b), which 
provides ALJs with broad discretion to limit discovery to expedite 
hearings, should be deleted because a full and fair representation by 
the parties is crucial to protecting employees, discovery is a basic 
due process requirement, and OSHA has no justifiable interest in 
expediting whistleblower litigation at the expense of full and fair 
discovery. In this regard, GAP commented that a lack of discovery 
injures the complainant and not the employer, which maintains the 
documents and controls the access to company witnesses. GAP further 
commented that this section is redundant, because the ALJs already 
possess sufficient authority to limit discovery under 29 CFR 18.15 and 
the Federal Rules of Civil Procedure. Thus, GAP stated that OSHA 
instead should consider a regulation that formalizes Federal Rules of 
Civil Procedures 26(a)(1), setting forth pre-discovery disclosure 
requirements.
    In the same vein, GAP objected to the following statement in the 
preamble of the interim final rule:

    An ALJ also may exercise discretion to limit discovery unless 
the complainant agrees to delay filing a complaint in federal court 
for some definite period of time beyond the 180-day point. If a 
complainant seeks excessive or burdensome discovery or fails to 
adhere to an agreement to delay filing a complaint in federal court, 
a district court considering a request for de novo review might 
conclude that such conduct resulted in delay due to the claimant's 
bad faith.

    GAP commented that OSHA has no legitimate interest in attempting to 
preclude complainants from exercising their right to go to district 
court and that exercising such a right cannot be considered ``bad 
faith.''
    OSHA does not believe any changes to this section are necessary. 
The provisions and statements to which GAP objects are merely intended 
by OSHA to implement Congress's command that administrative 
whistleblower hearings under Sarbanes-Oxley ``shall be conducted 
expeditiously.'' See 18 U.S.C. 1514A(b)(2), incorporating 49 U.S.C. 
42121(b)(2)(A). Indeed, as GAP's comments recognize, ALJs already have 
authority under their procedural rules at 29 CFR part 18 to limit 
discovery in appropriate circumstances. It is not OSHA's intent to 
prevent complainants from exercising their right to go to Federal court 
or to equate the desire to conduct reasonable discovery with bad faith. 
To the contrary, OSHA acknowledges that Congress essentially has 
adopted an alternate--administrative or Federal district court--hearing 
scheme. Thus, in these regulations, OSHA is attempting to modulate the 
wasteful consequences of potential duplicative whistleblower 
litigation, while implementing Congress's command for an expedited 
administrative whistleblower process.

Section 1980.108 Role of Federal Agencies

    The ERA and STAA regulations provide two different models for 
agency participation in administrative proceedings. Under STAA, OSHA 
ordinarily prosecutes cases where a complaint has been found to be 
meritorious. Under ERA and the other environmental whistleblower 
statutes, on the other hand, OSHA does not ordinarily appear as a party 
in the proceeding. The Department has found that in most environmental 
whistleblower cases, parties have been ably represented and the public 
interest has not required OSHA's participation. The Department believes 
this is even more likely to be the situation in cases involving 
allegations of corporate fraud. Therefore, as in the AIR21 regulations, 
this provision utilizes the approach of the ERA regulation at 29 CFR 
24.6(f)(1). The Assistant Secretary, at his or her discretion, may 
participate as a party or amicus curiae at any time in the 
administrative proceedings. For example, the Assistant Secretary may 
exercise his or her discretion to prosecute the case in the 
administrative proceeding before an administrative law judge; petition 
for review of a decision of an administrative law judge, including a 
decision based on a settlement agreement between complainant and the 
named person, regardless of whether the Assistant Secretary 
participated before the ALJ; or participate as amicus curiae before the 
ALJ or in the Administrative Review Board proceeding. Although we 
anticipate that ordinarily the Assistant Secretary will not participate 
in Sarbanes-Oxley proceedings, the Assistant Secretary may choose to do 
so in appropriate cases, such as cases involving important or novel 
legal issues, large numbers of employees, alleged violations which 
appear egregious, or where the interests of justice might require 
participation by the Assistant Secretary. The Securities and Exchange 
Commission, at that agency's discretion, also may participate as amicus 
curiae at any time in the proceedings. OSHA does not believe that its 
decision ordinarily not to prosecute meritorious Sarbanes-Oxley cases 
will discourage employees from making complaints about corporate fraud.
    Three comments were received regarding Sec.  1980.108(a)(1). Both 
SHRM and the Chamber commented that the Assistant Secretary should not 
ordinarily participate in any Sarbanes-Oxley whistleblower case even as 
amicus and that the Department should have no role other than to 
investigate, adjudicate, and enforce the orders that are issued. GAP 
agreed with OSHA that it should not adopt the STAA model, but rather 
should adopt the ERA and AIR21 approach under which OSHA participates 
only in appropriate cases as noted above. As the agency responsible for 
administering Sarbanes-Oxley whistleblower cases, OSHA believes that 
the Assistant Secretary must maintain and exercise his authority to 
participate in appropriate cases either as a party or as amicus curiae 
at any time and at any stage in the administrative proceeding. By the 
same token, experience under Sarbanes-Oxley and the environmental 
whistleblower laws does not suggest that OSHA's participation, as a 
routine matter, is necessary. Accordingly, in consideration of all of 
the comments received, OSHA has determined to leave the language of 
this rule as written.

Section 1980.109 Decision of the Administrative Law Judge

    This section sets forth the content of the decision and order of 
the administrative law judge, and includes the statutory standard for 
finding a violation. The section further provides that the Assistant 
Secretary's determination as to whether to dismiss the complaint 
without an investigation or conduct an investigation pursuant to Sec.  
1980.104 is not subject to review by the ALJ, who hears the case on the 
merits.
    Only one comment was received on this section. GAP commented that 
the word ``legitimately'' should be added to Sec.  1980.109(a) to 
ensure that ALJs only

[[Page 52111]]

consider legitimate proffers from named persons in defense of their 
adverse action. As iterated in the discussion to GAP's similar comment 
regarding Sec.  1980.104(c), OSHA does not believe that the word 
``legitimately'' adds anything to the rule. The Department's ALJs are 
experienced whistleblower adjudicators; as such they only entertain 
credible proffers from named persons.

Section 1980.110 Decision of the Administrative Review Board

    The decision of the ALJ is the final decision of the Secretary 
unless a timely petition for review is filed with the Administrative 
Review Board. Appeals to the Board are not a matter of right, but 
rather petitions for review are accepted at the discretion of the 
Board. Upon the issuance of the ALJ's decision, the parties have 10 
business days within which to petition the Board for review of that 
decision. The parties must specifically identify the findings and 
conclusions to which they take exception, or the exceptions are deemed 
waived by the parties. The Board has 30 days to decide whether to grant 
the petition for review. If the Board does not grant the petition, the 
decision of the ALJ becomes the final decision of the Secretary. If the 
Board grants the petition, the Act requires the Board to issue a 
decision not later than 120 days after the date of the conclusion of 
the hearing before the ALJ. The conclusion of the hearing is deemed to 
be the conclusion of all proceedings before the administrative law 
judge--i.e., 10 days after the date of the decision of the 
administrative law judge unless a motion for reconsideration has been 
filed in the interim. If a timely petition for review is filed with the 
Board, any relief ordered by the ALJ, except for a preliminary order of 
reinstatement, is inoperative while the matter is pending before the 
Board. This section further provides that, when the Board accepts a 
petition for review, its review of factual determinations will be 
conducted under the substantial evidence standard. This standard also 
is applied to Board review of ALJ decisions under the whistleblower 
provisions of STAA and AIR21. See 29 CFR 1978.109(b)(3) and 29 CFR 
1979.110(b).
    As with Sec.  1980.106(b)(1), Sec.  1980.110(b) of this rule has 
been changed to provide that in the exceptional case, the Board may 
grant a motion to stay a preliminary order of reinstatement that 
otherwise will be effective while review is conducted by the Board. As 
explained above, however, OSHA believes that a stay of a preliminary 
reinstatement order would only be appropriate where the named person 
can establish the necessary criteria for equitable injunctive relief, 
i.e., irreparable injury, likelihood of success on the merits, and a 
balancing of possible harms to the parties and the public.
    OSHA received only one comment on this section. GAP commented that 
the time frame for submitting a petition for review to the Board is 
unreasonably short and that it should be changed to allow a party 20 
business days in which to file a petition. OSHA believes that 10 
business days, which also is the time frame under AIR21 (see 29 CFR 
1979.110(a)), is sufficient time to petition for review of an ALJ 
decision, particularly in light of the fact that the rule uses the date 
of filing to determine timeliness rather than the date of the Board's 
receipt of the petition.

Section 1980.111 Withdrawal of Complaints, Objections, and Findings; 
Settlement

    This section provides for the procedures and time periods for 
withdrawal of complaints, the withdrawal of findings by the Assistant 
Secretary, and the withdrawal of objections to findings. It also 
provides for approval of settlements at the investigative and 
adjudicative stages of the case. No comments were received on this 
section.

Section 1980.112 Judicial Review

    This section describes the statutory provisions for judicial review 
of decisions of the Secretary and requires, in cases where judicial 
review is sought, the Administrative Review Board to submit the record 
of proceedings to the appropriate court pursuant to the rules of such 
court. No comments were received on this section.

Section 1980.113 Judicial Enforcement

    This section describes the Secretary's power under the statute to 
obtain judicial enforcement of orders and the terms of a settlement 
agreement. It also provides for enforcement of orders of the Secretary 
by the person on whose behalf the order was issued. No comments were 
received on this section.

Section 1980.114 District Court Jurisdiction of Discrimination 
Complaints

    This section sets forth the Sarbanes-Oxley provision allowing 
complainants to bring an action in district court for de novo review if 
there has been no final decision of the Secretary within 180 days of 
the filing of the complaint and there is no delay due to the 
complainant's bad faith. It provides that complainants will provide 
notice 15 days in advance of their intent to file a Federal court 
complaint. This provision authorizing a Federal court complaint is 
unique among the whistleblower statutes administered by the Secretary. 
This statutory structure creates the possibility that a complainant 
will have litigated a claim before the agency, will receive a decision 
from an administrative law judge, and will then file a complaint in 
Federal court while the case is pending on review by the Board. The Act 
might even be interpreted to allow a complainant to bring an action in 
Federal court after receiving a final decision from the Board, if that 
decision was issued more than 180 days after the filing of the 
complaint. The Secretary believes that it would be a waste of the 
resources of the parties, the Department, and the courts for 
complainants to pursue duplicative litigation. The Secretary notes that 
the courts have recognized that, when a party has had a full and fair 
opportunity to litigate a claim, an adversary should be protected from 
the expense and vexation of multiple lawsuits and that the public 
interest is served by preserving judicial resources by prohibiting 
subsequent suits involving the same parties making the same claims. See 
Montana v. United States, 440 U.S. 147, 153 (1979). When an 
administrative agency acts in a judicial capacity and resolves disputed 
issues of fact properly before it that the parties have had an adequate 
opportunity to litigate, the courts have not hesitated to apply the 
principles of issue preclusion (collateral estoppel) or claim 
preclusion (res judicata) on the basis of that administrative decision. 
See University of Tennessee v. Elliott, 478 U.S. 788, 799 (1986) 
(citing United States v. Utah Construction and Mining Co., 384 U.S. 
394, 422 (1966)). Therefore, the Secretary anticipates that Federal 
courts will apply such principles if a complainant brings a new action 
in Federal court following extensive litigation before the Department 
that has resulted in a decision by an administrative law judge or the 
Secretary. Where an administrative hearing has been completed and a 
matter is pending before an administrative law judge or the Board for a 
decision, a Federal court also might treat a complaint as a petition 
for mandamus and order the Department to issue a decision under 
appropriate time frames.
    Both SHRM and the Chamber submitted comments on this section. SHRM 
commented that because Sarbanes-Oxley permits a complainant to bring a 
de novo action in district

[[Page 52112]]

court if the Secretary has not issued a final decision within 180 days 
after the filing of the complaint, the regulations should specifically 
incorporate preclusion principles to protect employers from having to 
defend multiple law suits. Both SHRM and the Chamber commented that the 
regulations should provide that once a complainant elects to go to 
district court, the Department's administrative procedure should cease 
and further commented that a complainant's decision to end his or her 
administrative adjudication should be a prerequisite to going to 
Federal court. Finally, they commented that the regulations should 
provide that a decision by a complainant to go to district court after 
having sought either an ALJ hearing or ARB review of an ALJ decision 
should constitute a presumption of bad faith.
    There is no statutory basis for including preclusion principles in 
these regulations, nor does the statute delegate authority to the 
Secretary to regulate litigation in the Federal district courts. See 
Adams Fruit Co., Inc. v. Barrett, 494 U.S. 638, 649-50 (1990). 
Similarly, no legislative history suggests that Congress intended to 
require that complainants end their administrative proceedings prior to 
seeking relief in Federal court. In any event, our experience to date 
under Sarbanes-Oxley is that complainants who choose to file in 
district court generally do so before the ALJ conducts the 
administrative hearing. Our experience also is that after the 
complainant files in district court, the ALJs dismiss any pending 
administrative hearing requests by such complainants, often in response 
to a complainant's motion to withdraw. Certainly, nothing in the 
statute or legislative history suggests that a complainant's decision 
to seek de novo relief in Federal court after requesting either an ALJ 
hearing on OSHA's findings or ARB review of an ALJ's decision should 
constitute a presumption of bad faith delay. Accordingly, OSHA does not 
believe that changes to this section are appropriate.

Section 1980.115 Special Circumstances; Waiver of Rules

    This section provides that in circumstances not contemplated by 
these rules or for good cause the Secretary may, upon application and 
notice to the parties, waive any rule as justice or the administration 
of the Act requires.
    GAP commented that this section should be omitted because it is 
ambiguous and contains no standards for application. GAP also commented 
that the section is redundant because 29 CFR 18.29 already provides 
ALJs with the necessary powers to conduct fair and impartial hearings. 
OSHA believes that because these procedural rules cannot cover every 
conceivable contingency, there may be occasions when certain exceptions 
to the rules are necessary. Furthermore, this section is not redundant 
by virtue of 29 CFR 18.29, because that regulatory provision applies 
only to the ALJs. Also, unlike 29 CFR 18.29, this section requires that 
the parties be notified at least three days before the ALJ or the Board 
waives any rule or issues any special order. Indeed, OSHA notes that a 
similar section appears in the regulations for handling complaints 
filed under the whistleblower provisions of STAA and AIR21 and that 
both the ALJs and the Board have relied upon the rule on occasion. See, 
e.g., Caimano v. Brink's, Inc., No. 97-041, 1997 WL 24368 *2 (Adm. Rev. 
Bd. Jan. 22, 1997).

V. Paperwork Reduction Act

    This rule contains a reporting requirement (Sec.  1980.103) which 
was previously reviewed and approved for use by the Office of 
Management and Budget (``OMB'') under 29 CFR 24.3 and assigned OMB 
control number 1218-0236 under the provisions of the Paperwork 
Reduction Act of 1995 (Pub. L. 104-13).

VI. Administrative Procedure Act

    This is a rule of agency procedure and practice within the meaning 
of section 553 of the Administrative Procedure Act (``APA''), 5 U.S.C. 
553(b)(A). Therefore, publication in the Federal Register of a notice 
of proposed rulemaking and request for comments was not required for 
these regulations, which provide procedures for the handling of 
discrimination complaints. The Assistant Secretary, however, sought and 
considered comments to enable the agency to improve the rules by taking 
into account the concerns of interested persons.
    Furthermore, because this rule is procedural rather than 
substantive, the normal requirement of 5 U.S.C. 553(d) that a rule be 
effective 30 days after publication in the Federal Register is 
inapplicable. The Assistant Secretary also finds good cause to provide 
an immediate effective date for this rule. It is in the public interest 
that the rule be effective immediately so that parties may know what 
procedures are applicable to pending cases.

VII. Executive Order 12866; Unfunded Mandates Reform Act of 1995; Small 
Business Regulatory Enforcement Fairness Act of 1996; Executive Order 
13132

    The Department has concluded that this rule should be treated as a 
``significant regulatory action'' within the meaning of section 3(f)(4) 
of Executive Order 12866 because Sarbanes-Oxley is a new program and 
because of the importance to investors that ``whistleblowers'' be 
protected from retaliation. E.O. 12866 requires a full economic impact 
analysis only for ``economically significant'' rules, which are defined 
in section 3(f)(1) as rules that may ``have an annual effect on the 
economy of $100 million or more, or adversely affect in a material way 
the economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities.'' Because the rule is procedural in nature, it is not 
expected to have a significant economic impact; therefore no economic 
impact analysis has been prepared. For the same reason, the rule does 
not require a section 202 statement under the Unfunded Mandates Reform 
Act of 1995 (2 U.S.C. 1531 et seq.). Furthermore, because this is a 
rule of agency procedure or practice, it is not a ``rule'' within the 
meaning of the Small Business Regulatory Enforcement Fairness Act of 
1996 (5 U.S.C. 801 et seq.), and does not require Congressional review. 
Finally, this rule does not have ``federalism implications.'' The rule 
does not have ``substantial direct effects on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government'' and therefore is not subject to Executive Order 13132 
(Federalism).

VIII. Regulatory Flexibility Analysis

    The Department has determined that the regulation will not have a 
significant economic impact on a substantial number of small entities. 
The regulation simply implements procedures necessitated by enactment 
of Sarbanes-Oxley, in order to allow resolution of whistleblower 
complaints. Furthermore, no certification to this effect is required 
and no regulatory flexibility analysis is required because no proposed 
rule has been issued.
    Document Preparation: This document was prepared under the 
direction and control of the Assistant Secretary, Occupational Safety 
and

[[Page 52113]]

Health Administration, U.S. Department of Labor.

List of Subjects in 29 CFR Part 1980

    Administrative practice and procedure, Corporate fraud, Employment, 
Investigations, Reporting and Recordkeeping requirements, 
Whistleblowing.

    Signed in Washington, DC, this 17th day of August, 2004.
John L. Henshaw,
Assistant Secretary for Occupational Safety and Health.

0
Accordingly, for the reasons set out in the preamble part 1980 of title 
29 of the Code of Federal Regulations is revised to read as follows:

PART 1980--PROCEDURES FOR THE HANDLING OF DISCRIMINATION COMPLAINTS 
UNDER SECTION 806 OF THE CORPORATE AND CRIMINAL FRAUD 
ACCOUNTABILITY ACT OF 2002, TITLE VIII OF THE SARBANES-OXLEY ACT OF 
2002

Subpart A--Complaints, Investigations, Findings and Preliminary Orders
Sec.
1980.100 Purpose and scope.
1980.101 Definitions.
1980.102 Obligations and prohibited acts.
1980.103 Filing of discrimination complaint.
1980.104 Investigation.
1980.105 Issuance of findings and preliminary orders.
Subpart B--Litigation
1980.106 Objections to the findings and the preliminary order and 
request for a hearing.
1980.107 Hearings.
1980.108 Role of Federal agencies.
1980.109 Decision and orders of the administrative law judge.
1980.110 Decision and orders of the Administrative Review Board.
Subpart C--Miscellaneous Provisions
1980.111 Withdrawal of complaints, objections, and findings; 
settlement.
1980.112 Judicial review.
1980.113 Judicial enforcement.
1980.114 District Court jurisdiction of discrimination complaints.
1980.115 Special circumstances; waiver of rules.

    Authority: 18 U.S.C. 1514A; Secretary of Labor's Order No. 5-
2002, 67 FR 65008 (October 22, 2002).

Subpart A--Complaints, Investigations, Findings and Preliminary 
Orders


Sec.  1980.100  Purpose and scope.

    (a) This part implements procedures under section 806 of the 
Corporate and Criminal Fraud Accountability Act of 2002, Title VIII of 
the Sarbanes-Oxley Act of 2002 (``Sarbanes-Oxley'' or ``Act''), enacted 
into law July 30, 2002. Sarbanes-Oxley provides for employee protection 
from discrimination by companies and representatives of companies 
because the employee has engaged in protected activity pertaining to a 
violation or alleged violation of 18 U.S.C. 1341, 1343, 1344, or 1348, 
or any rule or regulation of the Securities and Exchange Commission, or 
any provision of Federal law relating to fraud against shareholders.
    (b) This part establishes procedures pursuant to Sarbanes-Oxley for 
the expeditious handling of discrimination complaints made by 
employees, or by persons acting on their behalf. These rules, together 
with those rules codified at 29 CFR part 18, set forth the procedures 
for submission of complaints under Sarbanes-Oxley, investigations, 
issuance of findings and preliminary orders, objections to findings and 
orders, litigation before administrative law judges, post-hearing 
administrative review, and withdrawals and settlements.


Sec.  1980.101  Definitions.

    Act means section 806 of the Corporate and Criminal Fraud 
Accountability Act of 2002, Title VIII of the Sarbanes-Oxley Act of 
2002, Public Law No.107-204, July 30, 2002, codified at 18 U.S.C. 
1514A.
    Assistant Secretary means the Assistant Secretary of Labor for 
Occupational Safety and Health or the person or persons to whom he or 
she delegates authority under the Act.
    Company means any company with a class of securities registered 
under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 78l) 
and any company required to file reports under section 15(d) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o(d)).
    Company representative means any officer, employee, contractor, 
subcontractor, or agent of a company.
    Complainant means the employee who filed a complaint under the Act 
or on whose behalf a complaint was filed.
    Employee means an individual presently or formerly working for a 
company or company representative, an individual applying to work for a 
company or company representative, or an individual whose employment 
could be affected by a company or company representative.
    Named person means the employer and/or the company or company 
representative named in the complaint who is alleged to have violated 
the Act.
    OSHA means the Occupational Safety and Health Administration of the 
United States Department of Labor.
    Person means one or more individuals, partnerships, associations, 
corporations, business trusts, legal representatives or any group of 
persons.
    Secretary means the Secretary of Labor or persons to whom authority 
under the Act has been delegated.


Sec.  1980.102  Obligations and prohibited acts.

    (a) No company or company representative may discharge, demote, 
suspend, threaten, harass or in any other manner discriminate against 
any employee with respect to the employee's compensation, terms, 
conditions, or privileges of employment because the employee, or any 
person acting pursuant to the employee's request, has engaged in any of 
the activities specified in paragraphs (b)(1) and (2) of this section.
    (b) An employee is protected against discrimination (as described 
in paragraph (a) of this section) by a company or company 
representative for any lawful act:
    (1) To provide information, cause information to be provided, or 
otherwise assist in an investigation regarding any conduct which the 
employee reasonably believes constitutes a violation of 18 U.S.C. 1341, 
1343, 1344, or 1348, any rule or regulation of the Securities and 
Exchange Commission, or any provision of Federal law relating to fraud 
against shareholders, when the information or assistance is provided to 
or the investigation is conducted by--
    (i) A Federal regulatory or law enforcement agency;
    (ii) Any Member of Congress or any committee of Congress; or
    (ii) A person with supervisory authority over the employee (or such 
other person working for the employer who has the authority to 
investigate, discover, or terminate misconduct); or
    (2) To file, cause to be filed, testify, participate in, or 
otherwise assist in a proceeding filed or about to be filed (with any 
knowledge of the employer) relating to an alleged violation of 18 
U.S.C. 1341, 1343, 1344, or 1348, any rule or regulation of the 
Securities and Exchange Commission, or any provision of Federal law 
relating to fraud against shareholders.


Sec.  1980.103  Filing of discrimination complaint.

    (a) Who may file. An employee who believes that he or she has been 
discriminated against by a company or company representative in 
violation of the Act may file, or have filed by any person on the 
employee's behalf, a complaint alleging such discrimination.
    (b) Nature of filing. No particular form of complaint is required, 
except that a

[[Page 52114]]

complaint must be in writing and should include a full statement of the 
acts and omissions, with pertinent dates, which are believed to 
constitute the violations.
    (c) Place of filing. The complaint should be filed with the OSHA 
Area Director responsible for enforcement activities in the 
geographical area where the employee resides or was employed, but may 
be filed with any OSHA officer or employee. Addresses and telephone 
numbers for these officials are set forth in local directories and at 
the following Internet address: http://www.osha.gov.
    (d) Time for filing. Within 90 days after an alleged violation of 
the Act occurs (i.e., when the discriminatory decision has been both 
made and communicated to the complainant), an employee who believes 
that he or she has been discriminated against in violation of the Act 
may file, or have filed by any person on the employee's behalf, a 
complaint alleging such discrimination. The date of the postmark, 
facsimile transmittal, or e-mail communication will be considered to be 
the date of filing; if the complaint is filed in person, by hand-
delivery or other means, the complaint is filed upon receipt.


Sec.  1980.104  Investigation.

    (a) Upon receipt of a complaint in the investigating office, the 
Assistant Secretary will notify the named person (or named persons) of 
the filing of the complaint, of the allegations contained in the 
complaint, and of the substance of the evidence supporting the 
complaint (redacted to protect the identity of any confidential 
informants). The Assistant Secretary also will notify the named person 
of its right under paragraphs (b) and (c) of this section and paragraph 
(e) of Sec.  1980.110. A copy of the notice to the named person will 
also be provided to the Securities and Exchange Commission.
    (b) A complaint of alleged violation shall be dismissed unless the 
complainant has made a prima facie showing that protected behavior or 
conduct was a contributing factor in the unfavorable personnel action 
alleged in the complaint.
    (1) The complaint, supplemented as appropriate by interviews of the 
complainant, must allege the existence of facts and evidence to make a 
prima facie showing as follows:
    (i) The employee engaged in a protected activity or conduct;
    (ii) The named person knew or suspected, actually or 
constructively, that the employee engaged in the protected activity;
    (iii) The employee suffered an unfavorable personnel action; and
    (iv) The circumstances were sufficient to raise the inference that 
the protected activity was a contributing factor in the unfavorable 
action.
    (2) For purposes of determining whether to investigate, the 
complainant will be considered to have met the required burden if the 
complaint on its face, supplemented as appropriate through interviews 
of the complainant, alleges the existence of facts and either direct or 
circumstantial evidence to meet the required showing, i.e., to give 
rise to an inference that the named person knew or suspected that the 
employee engaged in protected activity and that the protected activity 
was a contributing factor in the unfavorable personnel action. Normally 
the burden is satisfied, for example, if the complaint shows that the 
adverse personnel action took place shortly after the protected 
activity, giving rise to the inference that it was a factor in the 
adverse action. If the required showing has not been made, the 
complainant will be so advised and the investigation will not commence.
    (c) Notwithstanding a finding that a complainant has made a prima 
facie showing, as required by this section, an investigation of the 
complaint shall not be conducted if the named person, pursuant to the 
procedures provided in this paragraph, demonstrates by clear and 
convincing evidence that it would have taken the same unfavorable 
personnel action in the absence of the complainant's protected behavior 
or conduct. Within 20 days of receipt of the notice of the filing of 
the complaint, the named person may submit to the Assistant Secretary a 
written statement and any affidavits or documents substantiating its 
position. Within the same 20 days, the named person may request a 
meeting with the Assistant Secretary to present its position.
    (d) If the named person fails to demonstrate by clear and 
convincing evidence that it would have taken the same unfavorable 
personnel action in the absence of the behavior protected by the Act, 
the Assistant Secretary will conduct an investigation. Investigations 
will be conducted in a manner that protects the confidentiality of any 
person who provides information on a confidential basis, other than the 
complainant, in accordance with part 70 of this title.
    (e) Prior to the issuance of findings and a preliminary order as 
provided for in Sec.  1980.105, if the Assistant Secretary has 
reasonable cause, on the basis of information gathered under the 
procedures of this part, to believe that the named person has violated 
the Act and that preliminary reinstatement is warranted, the Assistant 
Secretary will again contact the named person to give notice of the 
substance of the relevant evidence supporting the complainant's 
allegations as developed during the course of the investigation. This 
evidence includes any witness statements, which will be redacted to 
protect the identity of confidential informants where statements were 
given in confidence; if the statements cannot be redacted without 
revealing the identity of confidential informants, summaries of their 
contents will be provided. The named person will be given the 
opportunity to submit a written response, to meet with the 
investigators to present statements from witnesses in support of its 
position, and to present legal and factual arguments. The named person 
will present this evidence within 10 business days of the Assistant 
Secretary's notification pursuant to this paragraph, or as soon 
afterwards as the Assistant Secretary and the named person can agree, 
if the interests of justice so require.


Sec.  1980.105  Issuance of findings and preliminary orders.

    (a) After considering all the relevant information collected during 
the investigation, the Assistant Secretary shall issue, within 60 days 
of filing of the complaint, written findings as to whether or not there 
is reasonable cause to believe that the named person has discriminated 
against the complainant in violation of the Act.
    (1) If the Assistant Secretary concludes that there is reasonable 
cause to believe that a violation has occurred, he or she shall 
accompany the findings with a preliminary order providing relief to the 
complainant. The preliminary order shall include all relief necessary 
to make the employee whole, including, where appropriate: reinstatement 
with the same seniority status that the employee would have had but for 
the discrimination; back pay with interest; and compensation for any 
special damages sustained as a result of the discrimination, including 
litigation costs, expert witness fees, and reasonable attorney's fees. 
Where the named person establishes that the complainant is a security 
risk (whether or not the information is obtained after the 
complainant's discharge), a preliminary order of reinstatement would 
not be appropriate.
    (2) If the Assistant Secretary concludes that a violation has not 
occurred, the Assistant Secretary will notify the parties of that 
finding.

[[Page 52115]]

    (b) The findings and the preliminary order will be sent by 
certified mail, return receipt requested, to all parties of record. The 
letter accompanying the findings and order will inform the parties of 
their right to file objections and to request a hearing, and of the 
right of the named person to request attorney's fees from the ALJ, 
regardless of whether the named person has filed objections, if the 
named person alleges that the complaint was frivolous or brought in bad 
faith. The letter also will give the address of the Chief 
Administrative Law Judge. At the same time, the Assistant Secretary 
will file with the Chief Administrative Law Judge, U.S. Department of 
Labor, a copy of the original complaint and a copy of the findings and 
order.
    (c) The findings and preliminary order will be effective 30 days 
after receipt by the named person pursuant to paragraph (b) of this 
section, unless an objection and a request for a hearing has been filed 
as provided at Sec.  1980.106. However, the portion of any preliminary 
order requiring reinstatement will be effective immediately upon 
receipt of the findings and preliminary order.

Subpart B--Litigation


Sec.  1980.106  Objections to the findings and the preliminary order 
and request for a hearing.

    (a) Any party who desires review, including judicial review, of the 
findings and preliminary order, or a named person alleging that the 
complaint was frivolous or brought in bad faith who seeks an award of 
attorney's fees, must file any objections and/or a request for a 
hearing on the record within 30 days of receipt of the findings and 
preliminary order pursuant to paragraph (b) of Sec.  1980.105. The 
objection or request for attorney's fees and request for a hearing must 
be in writing and state whether the objection is to the findings, the 
preliminary order, and/or whether there should be an award of 
attorney's fees. The date of the postmark, facsimile transmittal, or e-
mail communication will be considered to be the date of filing; if the 
objection is filed in person, by hand-delivery or other means, the 
objection is filed upon receipt. Objections must be filed with the 
Chief Administrative Law Judge, U.S. Department of Labor, Washington, 
DC 20001, and copies of the objections must be mailed at the same time 
to the other parties of record, the OSHA official who issued the 
findings and order, and the Associate Solicitor, Division of Fair Labor 
Standards, U.S. Department of Labor, Washington, DC 20210.
    (b)(1) If a timely objection is filed, all provisions of the 
preliminary order will be stayed, except for the portion requiring 
preliminary reinstatement, which shall not be automatically stayed. The 
portion of the preliminary order requiring reinstatement will be 
effective immediately upon the named person's receipt of the findings 
and preliminary order, regardless of any objections to the order. The 
named person may file a motion with the Office of Administrative Law 
Judges for a stay of the Assistant Secretary's preliminary order of 
reinstatement.
    (2) If no timely objection is filed with respect to either the 
findings or the preliminary order, the findings or preliminary order, 
as the case may be, shall become the final decision of the Secretary, 
not subject to judicial review.


Sec.  1980.107  Hearings.

    (a) Except as provided in this part, proceedings will be conducted 
in accordance with the rules of practice and procedure for 
administrative hearings before the Office of Administrative Law Judges, 
codified at subpart A, part 18 of title 29 of the Code of Federal 
Regulations.
    (b) Upon receipt of an objection and request for hearing, the Chief 
Administrative Law Judge will promptly assign the case to a judge who 
will notify the parties, by certified mail, of the day, time, and place 
of hearing. The hearing is to commence expeditiously, except upon a 
showing of good cause or unless otherwise agreed to by the parties. 
Hearings will be conducted de novo, on the record. Administrative law 
judges have broad discretion to limit discovery in order to expedite 
the hearing.
    (c) If both the complainant and the named person object to the 
findings and/or order, the objections will be consolidated and a single 
hearing will be conducted.
    (d) Formal rules of evidence will not apply, but rules or 
principles designed to assure production of the most probative evidence 
will be applied. The administrative law judge may exclude evidence that 
is immaterial, irrelevant, or unduly repetitious.


Sec.  1980.108  Role of Federal agencies.

    (a)(1) The complainant and the named person will be parties in 
every proceeding. At the Assistant Secretary's discretion, the 
Assistant Secretary may participate as a party or as amicus curiae at 
any time at any stage of the proceedings. This right to participate 
includes, but is not limited to, the right to petition for review of a 
decision of an administrative law judge, including a decision approving 
or rejecting a settlement agreement between the complainant and the 
named person.
    (2) Copies of pleadings in all cases, whether or not the Assistant 
Secretary is participating in the proceeding, must be sent to the 
Assistant Secretary, Occupational Safety and Health Administration, and 
to the Associate Solicitor, Division of Fair Labor Standards, U.S. 
Department of Labor, Washington, DC 20210.
    (b) The Securities and Exchange Commission may participate as 
amicus curiae at any time in the proceedings, at the Commission's 
discretion. At the request of the Securities and Exchange Commission, 
copies of all pleadings in a case must be sent to the Commission, 
whether or not the Commission is participating in the proceeding.


Sec.  1980.109  Decision and orders of the administrative law judge.

    (a) The decision of the administrative law judge will contain 
appropriate findings, conclusions, and an order pertaining to the 
remedies provided in paragraph (b) of this section, as appropriate. A 
determination that a violation has occurred may only be made if the 
complainant has demonstrated that protected behavior or conduct was a 
contributing factor in the unfavorable personnel action alleged in the 
complaint. Relief may not be ordered if the named person demonstrates 
by clear and convincing evidence that it would have taken the same 
unfavorable personnel action in the absence of any protected behavior. 
Neither the Assistant Secretary's determination to dismiss a complaint 
without completing an investigation pursuant to Sec.  1980.104(b) nor 
the Assistant Secretary's determination to proceed with an 
investigation is subject to review by the administrative law judge, and 
a complaint may not be remanded for the completion of an investigation 
or for additional findings on the basis that a determination to dismiss 
was made in error. Rather, if there otherwise is jurisdiction, the 
administrative law judge will hear the case on the merits.
    (b) If the administrative law judge concludes that the party 
charged has violated the law, the order will provide all relief 
necessary to make the employee whole, including reinstatement of the 
complainant to that person's former position with the seniority status 
that the complainant would have had but for the discrimination, back 
pay with interest, and compensation for any special damages sustained 
as a result of the discrimination, including litigation

[[Page 52116]]

costs, expert witness fees, and reasonable attorney's fees. If, upon 
the request of the named person, the administrative law judge 
determines that a complaint was frivolous or was brought in bad faith, 
the judge may award to the named person a reasonable attorney's fee, 
not exceeding $1,000.
    (c) The decision will be served upon all parties to the proceeding. 
Any administrative law judge's decision requiring reinstatement or 
lifting an order of reinstatement by the Assistant Secretary will be 
effective immediately upon receipt of the decision by the named person, 
and will not be stayed. All other portions of the judge's order will be 
effective 10 business days after the date of the decision unless a 
timely petition for review has been filed with the Administrative 
Review Board.


Sec.  1980.110  Decision and orders of the Administrative Review Board.

    (a) Any party desiring to seek review, including judicial review, 
of a decision of the administrative law judge, or a named person 
alleging that the complaint was frivolous or brought in bad faith who 
seeks an award of attorney's fees, must file a written petition for 
review with the Administrative Review Board (''the Board''), which has 
been delegated the authority to act for the Secretary and issue final 
decisions under this part. The decision of the administrative law judge 
will become the final order of the Secretary unless, pursuant to this 
section, a petition for review is timely filed with the Board. The 
petition for review must specifically identify the findings, 
conclusions or orders to which exception is taken. Any exception not 
specifically urged ordinarily will be deemed to have been waived by the 
parties. To be effective, a petition must be filed within 10 business 
days of the date of the decision of the administrative law judge. The 
date of the postmark, facsimile transmittal, or e-mail communication 
will be considered to be the date of filing; if the petition is filed 
in person, by hand-delivery or other means, the petition is considered 
filed upon receipt. The petition must be served on all parties and on 
the Chief Administrative Law Judge at the time it is filed with the 
Board. Copies of the petition for review and all briefs must be served 
on the Assistant Secretary, Occupational Safety and Health 
Administration, and on the Associate Solicitor, Division of Fair Labor 
Standards, U.S. Department of Labor, Washington, DC 20210.
    (b) If a timely petition for review is filed pursuant to paragraph 
(a) of this section, the decision of the administrative law judge will 
become the final order of the Secretary unless the Board, within 30 
days of the filing of the petition, issues an order notifying the 
parties that the case has been accepted for review. If a case is 
accepted for review, the decision of the administrative law judge will 
be inoperative unless and until the Board issues an order adopting the 
decision, except that a preliminary order of reinstatement will be 
effective while review is conducted by the Board, unless the Board 
grants a motion to stay the order. The Board will specify the terms 
under which any briefs are to be filed. The Board will review the 
factual determinations of the administrative law judge under the 
substantial evidence standard.
    (c) The final decision of the Board shall be issued within 120 days 
of the conclusion of the hearing, which will be deemed to be the 
conclusion of all proceedings before the administrative law judge--
i.e., 10 business days after the date of the decision of the 
administrative law judge unless a motion for reconsideration has been 
filed with the administrative law judge in the interim. The decision 
will be served upon all parties and the Chief Administrative Law Judge 
by mail to the last known address. The final decision will also be 
served on the Assistant Secretary, Occupational Safety and Health 
Administration, and on the Associate Solicitor, Division of Fair Labor 
Standards, U.S. Department of Labor, Washington, DC 20210, even if the 
Assistant Secretary is not a party.
    (d) If the Board concludes that the party charged has violated the 
law, the final order will order the party charged to provide all relief 
necessary to make the employee whole, including reinstatement of the 
complainant to that person's former position with the seniority status 
that the complainant would have had but for the discrimination, back 
pay with interest, and compensation for any special damages sustained 
as a result of the discrimination, including litigation costs, expert 
witness fees, and reasonable attorney's fees.
    (e) If the Board determines that the named person has not violated 
the law, an order will be issued denying the complaint. If, upon the 
request of the named person, the Board determines that a complaint was 
frivolous or was brought in bad faith, the Board may award to the named 
person a reasonable attorney's fee, not exceeding $1,000.

Subpart C--Miscellaneous Provisions


Sec.  1980.111  Withdrawal of complaints, objections, and findings; 
settlement.

    (a) At any time prior to the filing of objections to the findings 
or preliminary order, a complainant may withdraw his or her complaint 
under the Act by filing a written withdrawal with the Assistant 
Secretary. The Assistant Secretary will then determine whether to 
approve the withdrawal. The Assistant Secretary will notify the named 
person of the approval of any withdrawal. If the complaint is withdrawn 
because of settlement, the settlement will be approved in accordance 
with paragraph (d) of this section.
    (b) The Assistant Secretary may withdraw his or her findings or a 
preliminary order at any time before the expiration of the 30-day 
objection period described in Sec.  1980.106, provided that no 
objection has yet been filed, and substitute new findings or 
preliminary order. The date of the receipt of the substituted findings 
or order will begin a new 30-day objection period.
    (c) At any time before the findings or order become final, a party 
may withdraw his or her objections to the findings or order by filing a 
written withdrawal with the administrative law judge or, if the case is 
on review, with the Board. The judge or the Board, as the case may be, 
will determine whether to approve the withdrawal. If the objections are 
withdrawn because of settlement, the settlement will be approved in 
accordance with paragraph (d) of this section.
    (d)(1) Investigative settlements. At any time after the filing of a 
complaint, and before the findings and/or order are objected to or 
become a final order by operation of law, the case may be settled if 
the Assistant Secretary, the complainant and the named person agree to 
a settlement.
    (2) Adjudicatory settlements. At any time after the filing of 
objections to the Assistant Secretary's findings and/or order, the case 
may be settled if the participating parties agree to a settlement and 
the settlement is approved by the administrative law judge if the case 
is before the judge, or by the Board if a timely petition for review 
has been filed with the Board. A copy of the settlement will be filed 
with the administrative law judge or the Board, as the case may be.
    (e) Any settlement approved by the Assistant Secretary, the 
administrative law judge, or the Board, will constitute the final order 
of the Secretary and may be enforced pursuant to Sec.  1980.113.

[[Page 52117]]

Sec.  1980.112  Judicial review.

    (a) Within 60 days after the issuance of a final order by the Board 
(Secretary) under Sec.  1980.110, any person adversely affected or 
aggrieved by the order may file a petition for review of the order in 
the United States Court of Appeals for the circuit in which the 
violation allegedly occurred or the circuit in which the complainant 
resided on the date of the violation. A final order of the Board is not 
subject to judicial review in any criminal or other civil proceeding.
    (b) If a timely petition for review is filed, the record of a case, 
including the record of proceedings before the administrative law 
judge, will be transmitted by the Board to the appropriate court 
pursuant to the rules of the court.


Sec.  1980.113  Judicial enforcement.

    Whenever any person has failed to comply with a preliminary order 
of reinstatement or a final order or the terms of a settlement 
agreement, the Secretary or a person on whose behalf the order was 
issued may file a civil action seeking enforcement of the order in the 
United States district court for the district in which the violation 
was found to have occurred.


Sec.  1980.114  District Court jurisdiction of discrimination 
complaints.

    (a) If the Board has not issued a final decision within 180 days of 
the filing of the complaint, and there is no showing that there has 
been delay due to the bad faith of the complainant, the complainant may 
bring an action at law or equity for de novo review in the appropriate 
district court of the United States, which will have jurisdiction over 
such an action without regard to the amount in controversy.
    (b) Fifteen days in advance of filing a complaint in federal court, 
a complainant must file with the administrative law judge or the Board, 
depending upon where the proceeding is pending, a notice of his or her 
intention to file such a complaint. The notice must be served upon all 
parties to the proceeding. If the Assistant Secretary is not a party, a 
copy of the notice must be served on the Assistant Secretary, 
Occupational Safety and Health Administration, and on the Associate 
Solicitor, Division of Fair Labor Standards, U.S. Department of Labor, 
Washington, DC 20210.


Sec.  1980.115  Special circumstances; waiver of rules.

    In special circumstances not contemplated by the provisions of this 
part, or for good cause shown, the administrative law judge or the 
Board on review may, upon application, after three days notice to all 
parties and interveners, waive any rule or issue any orders that 
justice or the administration of the Act requires.

[FR Doc. 04-19197 Filed 8-23-04; 8:45 am]
BILLING CODE 4510-26-P