Whistleblower Law Blog

17 C.F.R.  §228 1917 C.F.R.

17 C.F.R. § 244 19

v

17 C.F.R. § 249 19

29 C.F.R. § 1978.10 26

29 C.F.R. § 1979.110 26

29 C.F.R. § 1980.11 O(b) 26

148 Congo Rec. S. § 6439 .2,5

148 Congo Rec. S. § 7418 11

148 Congo Rec. S. § 7420 2,10,11,13

148 Congo Rec. S. § 6440 2,5

149 Congo Rec. S. § 1725 21

Corporate and Criminal Fraud Accountability Act of 2002 21

Fed. R. App. P. 29 (a) .4

Fed. R. App. P.29 (b) 4

Management’s Reports on Internal Control Over Financial

Reporting and Certification of Disclosure in Exchange Act

Periodic Reports, June 5, 2003; Final Rule, Release nos.

33-8238; 34-47986 16, 17

S. Rep. No. 107-146 6, 10, 11

Whistleblower Protection Act of 1989,

P.L. 101-12, 103 Stat. 16 (April 10, 1989) 2

Vi

Appeal No. 07-1684

(2003-S0X-15)

IN THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

Petitioner – Appellant,

v.

ELAINE L. CHAO,

SECRETARY OF LABOR,

UNITED STATES DEPARTMENT OF LABOR,

Respondent – Appellee,

and

CARDINAL BANKSHARES CORPORATION,

Intervenor.

and Source of Authority to File

The Government Accountability Project (GAP), the National Whistleblower

Center (NWC) and Taxpayers Against Fraud Education Fund (TAFEF) played

important roles in securing the enactment of Section 806 of the Sarbanes-Oxley

administered by the U.S. Department of Labor upon which Section 806 was

litigating whistleblower claims, amici are particularly well-placed both to explain

the intent of Congress in connection with the SOX whistleblower provisions and to

comment upon the law and facts of the case at bar.

GAP is a non-partisan, non-profit organization specializing in legal and

other advocacy on behalf of whistleblowers. GAP has a 30-year history of working

on behalf of government and corporate employees who expose illegality, gross

waste and mismanagement; abuse of authority; substantial or specific public health

and safety dangers; or other institutional misconduct undermining the public

interest. GAP has substantial expertise on protecting employees’ free speech and

whistleblower rights. GAP is often called upon to comment on proposed laws,

regulations, policies and reforms, and GAP attorneys have testified before

Congress over the last two decades concerning the effectiveness of existing

statutory protection, submitted formal comments on Department of Labor

constitutional and statutory issues relevant to whistleblowers. GAP played a

leading role in advocating the Whistleblower Protection Act of 1989, P.L. 101-12,

103 Stat. 16 (April 10, 1989) (WPA), as well as the WPA’s 1994 amendments.

GAP was also instrumental in passage of the 1992 amendments to the

whistleblower provisions of the Energy Reorganization Act, 42 U.S.C. § 5851.

More recently, GAP played a role in the passage of the whistleblower provisions of

2

the Sarbanes-Oxley Act of 2002, 18 USC §1514A, and is cited in its legislative

Established in 1988, the National Whistleblower Center is a non-profit tax

exempt public interest organization. The Center regularly assists corporate

employees throughout the United States who suffer from illegal retribution for

lawfully disclosing violations of federal law. In 2002 the Center worked closely

with the Senate Judiciary Committee and strongly endorsed its efforts to “prevent

recurrences of the Enron debacle and similar threats to the nation’s financial

markets.” 148 Congo Rec. S. 7420 (daily ed. July 26, 2002) (Remarks of Senator

Leahy, quoting from letter signed by the Center, Taxpayers Against Fraud and the

Government Accountablity Project).

Taxpayers Against Fraud Education Fund is a nonprofit public interest

organization of nearly 400 attorney-members dedicated to protecting America’s

courageous whistleblowers and to combating fraud against federal and state

govemments through the education of the public, the legal community, legislators,

and others about the statutory protections guarding the federal fisc and shielding

whistleblowers. TAFEF has produced and makes available a variety of

educational resources, including online and print publications. In addition, TAFEF

has filed amicus briefs on important legal and policy issues before numerous

federal courts, including the United States Supreme Court. TAFEF possesses

3

extensive knowledge about the origin and purposes of whistleblower laws and

experience with their implementation.

whistleblowers to uncovering and rectifying grave problems facing society at large.

Whistleblowers are a bulwark against those who would corrupt government or

corporations and therefore aggressive defense of whistleblowers is crucial to any

effective policy to address corporate wrongdoing or abuse ofpower. Conscientious

employees who point out illegal or questionable practices should not be forced to

choose between their jobs and their silence.

Whistleblowers who take an ethical stand against wrongdoing often do so at

great risk to their careers, financial stability, and personal and familial

relationships. Society should protect and applaud whistleblowers, because they are

saving lives, preserving our health and safety, and preserving vital fiscal resources.

erroneous construction of the standard for protected conduct under Section 806 of

SOX, a standard that is contrary to the plain meaning and intent of Section 806 and

a standard that will essentially eviscerate the protection that Section 806 affords to

whistleblowers.

4

Pursuant to Fed. R. App. P. 29(a)-(b), Amici are contemporaneously filing

with this COUli a motion for leave to file this brief.

The SOX whistleblower provisions are unquestionably remedial in nature

and Congress intended that they be interpreted broadly to encourage reporting and

allow whistleblowers to help enforce securities laws. The ARB, however, has

adopted an extraordinarily narrow interpretation of protected conduct that is

contrary to both the plain meaning and intent of Section 806 of SOX. Despite

unambiguous statutory language protecting an employee who provides information

to management “regarding any conduct which the employee reasonably believes

constitutes a violation of … any rule or regulation of the Securities and Exchange

Commission, or any provision of Federal law relating to fraud against

shareholders,” 18 U.S.C. 1514A (emphasis added), the ARB in the decision under

review has adopted a standard for protected conduct that requires employees to

investors. This standard undermines the prophylactic purpose of the

whistleblower retaliation provision of SOX by depriving employers of the

opportunity to receive an early warning ofpotential violations of Securities and

Exchange Commission (“SEC”) rules that can ultimately result in shareholder

5

fraud. For example, protecting disclosures about deficient internal accounting

controls or misleading financial reporting enables employers to correct these

problems before investors are harmed. Moreover, by speculating about whether

Welch’s disclosures implicated securities laws, rather than consulting the pertinent

SEC rules, the ARB has adopted an “I know it when I see it” standard that will

chill employees from making the disclosures that Congress intended to protect and

encourage.

whistieblower protections were “the single most effective measure possible to

prevent recurrences of the Enron debacle and similar threats to the nation’s

(2002). If allowed to stand, the ARB’s erroneous interpretation of protected

conduct will undermine the clear intent of Congress and inevitably increase the

risks of the very financial disasters that SOX was enacted to prevent.

In enacting the most comprehensive securities law and investor protection

reform in more than half a century, Congress made whistleblower protection a

central tool to improve the accuracy and reliability of corporate disclosures. To

ensure that employees with first-hand knowledge of accounting fraud feel that they

6

can raise concerns without jeopardizing their livelihood, Congress enacted Section

806 of SOX, which was intended to provide broad and robust protection for

laws need to encourage and protect those who repoli fraudulent activity that can

damage illliocent investors in publicly traded companies.” S. Rep. No. 107-146, as

reprinted in 2002 WL 863249 at *19. 1

Congress has long recognized the vital role played by whistleblowers in

government and industry. This recognition has been codified at the federal level in

well over thirty federal statutes, each of which contains explicit provisions to

CERCLA, 42 U.S.C. § 9610; Energy Reorganization Act, 42 U.S.C. § 5851;

Federal Water Pollution Control Act, 33 U.S.C. § 1367; Lloyd-LaFollette Act, 5

in whistleblower laws such as SOX. If the ARB is able to impose ever changing

criteria for determining if an employee’s complaints are “objectively reasonable” as

Board membership changes, such changes will have a chilling effect on

whistleblowing.

7

numerous statutes reflect the importance placed by Congress on encouraging

disclosure of wrongdoing through whistleblower protection.

The remedial intent of whistleblower statutes has also been recognized in the

Cir.1996) (upholding Secretary’s broad interpretation of the term “employee” to

construction to remedial statutes such as nondiscrimination provisions in federal

labor laws.”); Deford v. Secretary ofLabor, 700 F.2d 281, 286 (6th Cir. 1983); seealso

1985). Further, these whistleblower statutes should be broadly interpreted in order

to effectuate the legislative purpose of encouraging whistleblowers to report

(Employee protection provisions are intended to encourage employees to aid in the

enforcement of the substantive statute by raising substantiated claims through

8

August 16, 1985), adopted by Sec’y (November 18,1985).

The whistleblower provisions of SOX mirror those of several other federal

whistleblower statutes and should therefore be interpreted in a “parallel manner.”

Remand by SOL, at 5 (April 27, 1987) (Because the federal laws creating

employee protections share similar statutory language and legislative histories,

case law under one of the acts is readily used for interpreting other acts.).

express repeal or amendment, the new provision is presumed in accord with

the legislative policy embodied in those prior statutes. Thus, they all should

be construed together. [footnotes omitted]

2B Sutherland Statutory Construction § 51:2 (6th ed.)

Thus, like other employee protection provisions administered by the

Department of Labor, the SOX whistleblower provisions should be viewed as

9

The legislative history of the Sarbanes-Oxley Act of 2002 (SOX)

underscores the remedial nature of its whistleblower provisions. SOX was passed

in the wake of corporate and accounting scandals that rocked the nation. The

demise of Enron and other financial disasters shattered investor confidence. SOX

was passed in an attempt to restore confidence in the markets by instituting

Session (2002).

The intent of Congress in passing the whistleblower provisions of SOX

(Section 806) could not be clearer – the legislative history explicitly pronounces

the remedial intent “to encourage and protect those who report fraudulent activity

that can damage innocent investors in publicly traded companies.” Legislative

History of Title VIII ofHR 2673: the Sarbanes-Ox1ey Act of 2002, 148 Congo Rec.

S7418, 7420 (daily ed. July 26, 2002). Similarly, Congress intended to rectify the

pervasive corporate culture that discouraged employees from reporting

misconduct:

This’ corporate code of silence’ not only hampers investigations, but also

creates a climate where ongoing wrongdoing can occur with virtual

impunity. The consequences of this corporate code of silence for investors

in publicly traded companies, in particular, and for the stock market, in

general, are serious and adverse, and they must be remedied.

10

S. REP. No. 107-146 at 5 (2002). In sum, the legislative history of Section 806

and well-established precedent construing analogous whistleblower protection

statutes administered by DOL indicate that SOX should be broadly construed.

In order to protect a broad range of disclosures about potential accounting

fraud, securities fraud, and violations of securities laws, Congress specifically

included in the language of Section 806 a “reasonable belief’ test under which a

complainant can engage in protected conduct without disclosing an actual violation

oflaw. The legislative history ofSOX specifically states that the “reasonable

belief’ is “intended to include all good faith and reasonable reporting of fraud, and

there should be no presumption that reporting is otherwise, absent specific

of2002, Congo Rec. S7418, S7420 (daily ed. July 26, 2002), 2002 WL 32054527

disclosed unequivocal, actual violations of securities law and is requiring

complainants to demonstrate that their disclosures pertained to actual investor

fraud. This administrative amendment ofSOX is plain error and should be

reversed.

11

To ensure that employees are able to disclose potential securities law violations

without suffering reprisal, Congress specifically included in Section 806 a “reasonable

belief’ standard under which “the Complainant is not required to show that the

reported conduct actually constituted a violation of the law, but only that she

reasonably believed that the employer violated one of the enumerated statutes or

II, 2005).

Disregarding the plain meaning of Section 806, the ARB is requiring Welch to

prove that he disclosed an actual violation of securities law. Although there is no

dispute that Welch disclosed misclassification of loan recoveries as income (JA at

275) and although SEC rules require that financial statements included in SEC filings

found that Welch did not engage in protected conduct because his disclosure about

Cardinal’s non-compliance with GAAP did not unequivocally harm shareholders. In

particular, the ARB concluded that because Cardinal received loan recoveries,

investors could not have been misled about Cardinal’s financial condition and

therefore Welch could not have reasonably believed that Cardinal was violating any

conclusion that misclassification of income cannot mislead investors and setting aside

12

the fact that the ARB opined on securities law without citing a single SEC rule, the

ARB’s holding severely undermines Section 806 by effectively deleting the

“reasonable belief’ standard that Congress intentionally included in Section 806 and

replacing it with an “actual violation” standard.

The ARB’s “actual violation” standard undermines Section 806 because it

encourages employees to allow a securities law violation to occur before reporting it.

purpose of the “reasonable belief’ standard). This “actual violation” standard defeats

the intent of the Act, which is to provide an early warning of securities law violations,

26,2002) (statement by Senator Leahy) (“U.S. laws need to encourage and protect

those who report fraudulent activity that can damage innocent investors in publicly

traded companies”).

28,2004), noted:

The value of the whistleblower resides in his or her insider

status. These employees often find themselves uniquely

positioned to head off the type of ‘manipulations’ that have a

tendency or capacity to deceive or defraud the public. By

blowing the whistle, they may anticipate the deception buried in

a draft report or internal document, which if not corrected,

could eventually taint the public disclosure. Beyond that, their

reasonable concerns may, for example, address the inadequacy

13

of internal controls promulgated in compliance with SarbanesOxley

mandates or SEC rules that impact on procedures

throughout the organization, or the application of accounting

principles, or the exposure of incipient problems which, if left

unattended, could mature into violations of rules or regulations

of the type an audit committee would hope to forestall.

prophylactic purpose of SOX by deterring employees from making disclosures to

management until they have evidence of an actual violation of securities law.

Without consulting any of the pertinent securities laws setting forth the

SEC’s internal accounting control standards, the ARB concluded that Welch’s

disclosures about Cardinal’s internal control deficiencies do not relate to federal

05-064 at 13. The ARB’s conjecture about SEC internal control rules is simply

incorrect. More importantly, the ARB’s erroneous holding that disclosures about

internal controls do not constitute protected conduct substantially undermines

Section 806 of SOX.

of the Securities Exchange Act, and the SEC’s implementing rules, prohibit any

person from “knowingly circumvent[ing] or knowingly fail[ing] to implement a

14

paIi as “[a] process … to provide reasonable assurance regarding the reliability of

financial reporting and the preparation of financial statements for external purposes

in accordance with generally accepted accounting principles and includes those

Management’s Reports on Internal Control Over Financial Reporting and

Certification of Disclosure in Exchange Act Periodic RepOlis, June 5, 2003; Final

Rule, Release Nos. 33-8238; 34-47986 (“SEC Internal Controls Rules”) (emphasis

added). By disclosing his concerns to management about unqualified personnel

making entries in the general ledger without any supervision by Welch (Cardinal’s

Chief Financial Officer), Welch was complaining about the circumvention of

internal controls, or at a minimum, was disclosing a significant weakness in

Cardinal’s internal controls. Accordingly, Welch’s disclosures specifically related

to a violation of SEC internal accounting rules, thereby constituting protected

conduct under SOX. Without citing any ofthe SEC rules governing internal

15

controls, however, the ARB arbitrarily held that Welch’s disclosures about internal

Excluding disclosures about internal controls from the domain of protected

conduct not only contravenes the plain meaning of Section 806, which by its plain

language unequivocally protects disclosures about what an employee reasonably

to strengthen internal controls as a principal tool to ensure accurate and honest

financial reporting by publicly traded companies.

Section 404 of SOX and the SEC’s implementing regulations impose

rigorous internal control standards on publicly-traded companies, the purpose of

which is to “help to identify potential weaknesses and deficiencies in advance of a

system breakdown, thereby facilitating the continuous, orderly and timely flow of

information … [i]mproved disclosure may help companies detect fraudulent,

financial reporting earlier and perhaps thereby deter financial fraud or minimize its

adverse effects.” Management’s Reports on Internal Control Over Financial

Reporting and Certification of Disclosure in Exchange Act Periodic Reports,

Release Nos. 33-8238; 34-47986; and IC-26068 (June 5, 2003). Although

deficient internal accounting controls do not automatically result in harm to

shareholders, Congress and the SEC have determined that weak internal controls

16

often lead to inaccurate financial reporting and therefore one of the primary

focuses of SOX, the most comprehensive reform of securities law since 1934, was

protected disclosures under Section 806 to concerns about actual fraud on

shareholders undermines the statutory scheme and deprives publicly-traded

companies of an early warning of internal control deficiencies that can ultimately

result in shareholder fraud. Moreover, “[i]fthe drafters meant for section 806 to

only protect employees who repOli fraud against shareholders, then they could

have easily done so by inseliing a comma before ‘relating to fraud against

Ga. June 11, 2007). Instead, the drafters chose to protect disclosures about

reasonably perceived violations of “any rule or regulation of the Securities and

Exchange Commission.” 18 U.S.C. § 1514A.

Limiting protected conduct under SOX to actual shareholder fraud would

limit the opportunity for companies and shareholders to learn about financial fraud

before it is too late. Such an anomalous interpretation is contrary to the purpose of

the statute and intent of Congress.

17

failure to prepare financial statements in accordance with generally accepted

accounting principles (“GAAP”) cannot constitute protected conduct because

GAAP is not a securities law. Had the ARB applied the relevant securities law, as

opposed to engaging in speculation about the relationship between GAAP and

federal securities law, the ARB would have reached a contrary conclusion.

companies to ensure that the financial statements they include in filings with the

SEC has promulgated rules requiring issuers to disclose any information that is

calculated on the basis of methodologies other than in accordance with GAAP.

CFR PARTS 228, 229, 244 and 249, Release No. 33-8176; 34-47226; FR-65. In

sum, providing financial statements to the SEC and to shareholders that are not in

accordance with GAAP violates SEC rules.

Cardinal does not dispute the fact that Welch raised concerns to management

about Cardinal misclassifying accounting entries, and it does not deny that these

erroneous accounting errors might have violated GAAP. (JA 197-198, 234-237).

18

Had the ARB consulted the peliinent SEC rules to determine whether filing

financial statements in accordance with GAAP is mandatory or permissive, it

would have found that Cardinal was in fact required to prepare its financial

statements consistent with GAAP. Instead, the ARB incorrectly assumed that

disclosures about non-compliance with GAAP do not implicate any SEC rule and

are therefore not protected. This ruling is especially pernicious because it permits

publicly-traded companies to retaliate against employees who blow the whistle on

unreliable or inaccurate financial statements. Protecting employees with first-hand

knowledge of accounting fraud, however, was a primary purpose of Section 806.

In sum, the ARB’s conclusion that Welch’s disclosures about Cardinal’s

non-compliance with GAAP cannot constitute protected conduct is plain error and

protection to an employee who suffered retaliation due to a disclosure about his

employer’s filing of misleading or inaccurate financial statements.

reversing an ALI’s grant of summary decision, in part, because the ALI failed to

19

rules implicated by the complainant’s disclosures about a material irregularity in

the accounting for in-transit inventory. Id.

Ironically, the ARB has failed to heed its own admonition. Despite taking

more than two years to review the ALl’s January 28, 2004 decision, the ARB

failed to analyze whether Welch’s disclosures relate to securities laws. Instead, the

ARB incorrectly speculated about SEC rules. This is essentially an “I know it

when I see it standard,” one that ALJs are bound to follow. In other words, if a

complainant’s disclosures appear to relate to the ARB’s conjecture about federal

securities law, the complainant may have engaged in protected conduct, but if the

disclosures do not seem to be related to the ARB’s conjecture about securities law,

the complainant did not engage in protected conduct.

This standard will create massive loopholes enabling employers to retaliate

at will against employees who disclose reasonably perceived violations of SEC

rules. In enacting SOX, however, Congress intended “to close the loopholes that

have allowed for continued offenses in America’s corporate community,” not to

of 2002 (July 16,2002), at H4692 (statement of Congresswoman Roukema); seealso

was intentionally written to sweep broadly, protecting any employee of a publicly

traded company who took such reasonable action to try to protect investors and the

20

market.”). Accordingly, this COUli should reverse the ARB’s erroneous and

arbitrary standard for protected conduct under SOX.

When Congress chose to include the terms “reasonable belief’ in Section

806, it presumably had in mind well-established DOL precedent under analogous

whistleblower protection statutes holding that “reasonable belief’ is a mixed

question of law and fact, and broadly construing “reasonable belief.” By

redefining “reasonable belief,” the ARB has substantially narrowed the scope of

protected conduct under SOX.

In the decision under review, the ARB held that “[b]ecause the analysis for

determining whether an employee reasonably believes a practice is unlawful is an

objective one, the issue may be resolved as a matter oflaw.” Welch slip op. at 10

ARB has relegated the ALJ to the status of a scrivener with respect to the issue of

the reasonableness of an employee’s belief that a practice is unlawful. By so doing,

the ARB has departed, without explanation, from its longstanding policy in

whistleblower cases of reserving for the province of the administrative law judges

the determination of whether a complaint is based upon a reasonable perception of

a violation oflaw.

21

Although SOX is a relatively new whistleblower statute, its employee

protection provisions are analogous to a variety of other whistleblower statutes

falling under the jurisdiction of the Department of Labor. Prior to the issuance of

the decision under review, the Secretary of Labor and the ARB have consistently

found that a whistleblower’s complaint is protected if it is objectively reasonable.

The Secretary and the ARB have consistently addressed the issue of objective

reasonableness as a mixed question of law and fact. The ARB reviews the ALI’s

factual findings as to reasonableness to determine if they are supported by

substantial evidence in the record, contrary to law, or arbitrary and capricious.

(July 29, 2005).

case under the whistleblower provision of the Solid Waste Disposal Act, the

Secretary found that an employee engaged in a protected activity when he

complained to management about the dumping of antifreeze and an oil spill, even

though neither antifreeze nor motor oil is classified as hazardous waste under the

Solid Waste Disposal Act. The Secretary of Labor concluded that the employee

engaged in protected activity because his belief of a violation was objectively

2 Decisions ofthe Administrative Review Board and the Secretary of Labor

may be found online at the website for the Department of Labor’s Office of

Administrative Law Judges at www.oalj.gov.

22

reasonable “given Minard’s training and experience” and the “maze” of regulations

review here, the ARB failed to assess whether Welch had an objectively reasonable

basis to believe that Cardinal was failing to comply with SEC rules. Instead, the

ARB found that whether a belief of a violation of a securities law is objectively

reasonable can be determined as a question of law, with no deference to the ALJ’s

factual and credibility determinations, and without the benefit of observing witness

testimony concerning the facts and circumstances of Welch’s protected

disclosures.

legal question, namely the parameters of a reasonableness standard. However, the

Secretary also recognized that that there is a factual element to determining

whether a whistleblower’s disclosures are based upon a reasonable perception of a

violation, noting that such a determination involves questions such as whether the

employee is acting in good faith and whether the belief is reasonable in light of the

employee’s training and experience. Minard, slip op. at 13 n. 5 citing Pensyl v.

2000) a case under several environmental whistleblower statutes, the ARB held,

consistent with the Secretary’s holding in Minard, that “the reasonableness of a

23

whistleblower’s belief regarding statutory violations by an employer is to be

determined on the basis of ‘the knowledge available to a reasonable [person] in the

circumstances with the employee’s training and experience. ‘” Melendez at 2,0

ARB remanded the case to the AU to determine which of Melendez’s activities

qualified for protection, stating:

On remand, the AU should determine whether Melendez’ failure to

take work permits training by the December 31, 1991 deadline

qualifies as a protected work refusal under Pensyl v. Catalytic, Inc.,

Case No. 83-ERA-l, Sec’y Dec., Jan. 13, 1984, slip op. at 7. In

permits training would expose him to a health hazard, the ALJ mustconsider the relevant testimony

concerning precautions that they believed were appropriate in

response to Dr. Pruett’s recommendation that Melendez be removed

to participate in the field demonstration at the time that he refused

to engage in the work permits training.

whether an employee’s complaint is based on an objectively reasonable perception

of a violation of law involves questions of fact to be resolved by an AU.

The Department of Labor has specifically adopted rules applying an

appellate standard of review in whistleblower cases under the whistleblower

provisions of the Surface Transportation Assistance Act, (“STAA”), 49 U.S.C. §

24

1979.110 and 1980.11 O(b). In cases involving the STAA and AIR21, the ARB has

found that determination of objective reasonableness involves questions of fact.

AIR21 case, the ARB first noted that protected activity under AIR21 requires two

elements: “(I) the complaint itself must involve a purported violation of a

regulation relating to air carrier safety, and (2) the complainant’s belief must be

the findings ofthe ALJ that Rooks engaged in protected activity, the ARB stated as

follows:

Rooks testified that he believed that flying with a fatigued crew was

TR at 422-24. The evidence supports the ALJ’s findings that Rooks

and the crew members who testified were credible witnesses. The

crew members’ testimony consistently supported that of Rooks

concerning the events of August 29. Rooks’s belief was reasonable

under the circumstances. Three flight attendants had been up all

night on August 27 tending to a sick colleague, they had flown all

day on August 28, and then they wait around for almost 12 hours

on August 29 because of delays caused by Planet. Accordingly,

25

decision under the STAA finding that a truck driver who refused to operate a

commercial vehicle in a snowstorm engaged in protected activity because he had a

reasonable apprehension of injury to himself or members of the public due to road

conditions. The ARB affirmed the AU’s finding that Eash reasonably believed

that weather conditions rendered driving unsafe and that Eash engaged in a

When Congress enacted a whistleblower provision in SOX modeled upon

AIR21, it presumably was cognizant of the DOL’s interpretation of AIR21 and

analogous whistleblower protection statutes administered by DOL, and it chose not

to enact a different statutory scheme. There is nothing in the plain meaning of

Section 806 or in the legislative history indicating a Congressional intention to

overturn longstanding DOL construction of whistleblower statutes. Accordingly,

especially reluctant to reject this presumption [of adherence to precedent] in an

area that has seen careful, intense, and sustained congressional attention”); accordCalifornia v. FERC,

overturned a decision of the Board wherein the Board “applied a different standard

than formally announced and breached the requirement of reasoned decisionmaking

requirement of reasoned decision-making in the same fashion.

26

If allowed to stand, the ARB’s administrative amendment of Section 806

will discourage employees from disclosing securities law violations, thereby

reverse the ARB’s erroneous decision.

Respectfully submitted,

THE EMPLOYMENT LAW GROUP, P.C.

Suite 900

Washington, D.C. 20006-3307

(202) 261-2810

(202) 261-2835 Facsimile

jzuckerman@employmentlawgroup.net

Paul Taylor, Esq.

900 West 128th Street, Suite 101

Burnsville, MN 55337

(651) 454.5800

paul@truckersjusticecenter.com

Dated: November 7, 2007

27

Microsoft Word 2007;

Times New Roman;

14 Point Type Space.

Filing and Service, and this Certificate of Compliance, this brief contains 5075

words.

I understand that a material misrepresentation can result in the Court’s

striking the brief and imposing sanctions.

28

Office of the United States Court of Appeals for the Fourth Circuit, and fUliher

certify that I served, via by United States Mail with sufficient postage the required

number of copies of said brief upon:

Ellen R. Edmond, Esq.

Barbara E. Racine, Esq.

U.S. Department of Labor

Frances Perkins Building

200 Constitution Avenue, NW

Room N-2716

Washington, DC 20210

(202) 693-5555

Douglas W. Densmore, Esq.

Joseph M. Rainsbury, Esq.

LeClair Ryan, PC

1800 Wachovia Tower, Drawer 1200

Roanoke, VA 24006

(540) 510-3011

Betty Murphy, Esq.

Baker & Hostetler, LLP

1050 Connecticut Avenue, NW

Suite 1100

Washington, DC 20036-5304

(202) 861-1500

29

Bruce Shine, Esq.

Shine and Mason

433 East Center Street

Suite 201

KingspOli, Tennessee 37660-4858