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Ninth Circuit Affirms that ERA Protected Activity Must Have Sufficient Tie to Nuclear Safety and Highlights Importance of Proper Corrective Action Documentation and Implementation
Timothy J. V. Walsh, Special Counsel, Pillsbury Winthrop Shaw Pittman

On February 12, 2016, a divided panel of the U.S. Court of Appeals for the Ninth Circuit rejected a plaintiff’s whistleblower claim, ruling that he did not engage in protected activity under the Energy Reorganization Act (“ERA”) because his alleged protected conduct “lack[ed] a sufficient nexus to a concrete, ongoing safety concern.” Sanders v. Energy Northwest, 812 F.3d 1193 (Feb. 12, 2016), slip op. at p. 12 (en banc review denied, Mar. 25, 2016). The Sanders decision is important because it adds to other Federal Circuit Court precedent holding that not just any conduct can be protected activity under the ERA. For example, the Sanders decision cited precedent from the Sixth Circuit in American Nuclear Resources Inc. v. U.S. Dept. of Labor, 134 F.3d 1296 (6th Cir. 1998), which among other things holds that, to be protected, conduct “must implicate safety definitively and specifically.” The Sanders decision will raise the bar whistleblower plaintiffs will have to meet in order to prove a claim of retaliation. In addition, this decision also demonstrates the importance of properly documenting issues in your corrective action system and ensuring that they are promptly addressed. As demonstrated in this case, when an issue is properly documented in a corrective action program and is being addressed by management, a reviewing court will be less likely to find protected activity where the individual merely disagreed with the level of emphasis management placed on addressing the issue at hand.

In Sanders, Energy Northwest terminated plaintiff Sanders’ employment after it determined that Sanders “improperly approved temporary staffing per diem and travel payments to the father of his daughter’s child.” Sanders, 812 F.3d 1193, slip op. at 3. Plaintiff Sanders contended that he was terminated for engaging in protected activity.

Specifically, Sanders claimed that his protected activity consisted of his internal complaints over the severity level assigned to a condition report that he did not initiate, and of which plant management was aware. Several contractors who worked in Sanders’ Maintenance Department completed their employment without turning in their access badges. Sanders, 812 F.3d 1193, slip op. at 4. Sanders’ Maintenance Department (rather than the Security Department) was charged with investigating the matter. Id., slip op at 5. The Security Department later received a condition report about one of the contractors who was terminated without turning in his badge. Id. The condition report review group initially designated this condition report as “Bravo,” the second highest of four designations and therefore requiring the second highest amount of effort to review and correct. Id., slip op. at 4-5. The Security Department head objected, believing the condition report should be designated as “Charlie,” and thus requiring less effort to review and correct. Id., slip op at 5. Sanders objected to the reduced designation, telling the Plant Manager “Well, I don’t agree with their standards. I believe that they’re lower standards than what we’re expecting from the plant. If you guys want to let it go as a Charlie, I’ll let it go as a Charlie, but I’m not in agreement.” Id. It is this statement that plaintiff Sanders claimed was protected activity under the ERA.

The Federal District Court reviewing Sanders’ claim granted Energy Northwest’s motion for summary disposition of the case because it found that Sanders’ alleged protected activity did not “rise to the level of protected activity under [the ERA] or the associated case law.” The majority of the Ninth Circuit panel agreed and affirmed the District Court.

The Court majority distinguished Sanders’ case from other case law where courts found protected activity because, unlike in those cases, Sanders “had no independent knowledge of possible safety violations prior to the creation of the internal condition reports at issue” and “did not generate these condition reports.” Id., slip op at 9-10. In addition, the Court found that Energy North “was already aware of the potential safety violations, and its internal process for remediation was underway.” Id., slip op at 10.

The Court also found that “there is no suggestion in the record that because these condition reports were labeled a “Bravo” or a “Charlie,” they would not be remedied in due course.” Id. Further, there was no “suggestion of any safety concern that was overlooked, neglected, or concealed by management.” Id. Moreover, the Court found that Sanders’ “single expression of a difference of opinion about the ‘Charlie’ designation of one existing internal condition report lacks a sufficient nexus to a concrete ongoing safety concern.” Id. Having found that Sanders’ conduct did not amount to protected activity, the Ninth Circuit affirmed the District Court’s grant of summary disposition.

One member of the Ninth Circuit panel dissented. The minority opinion said that the majority had improperly narrowed the scope of protected activity in requiring that a safety issue be overlooked or neglected, or ongoing in some way. Id., slip op. at 12. In addition, the minority opinion said that the grant of summary disposition was improper because a reasonable jury could have found that the dispute over the condition report was protected activity because Sanders “strongly maintained his complaint that the facility was not living up to appropriate safety standards.” Id.

On Friday, March 25, 2016, the full Ninth Circuit Court of Appeals declined Mr. Sanders’ petition to review the panel’s decision en banc (i.e., by all of the Circuit Judges). In light of the small prospect that the U.S. Supreme Court would grant review of the decision were Mr. Sanders to request it, the Sanders decision is likely to remain good law in the Ninth Circuit, and provide persuasive precedent in other circuits.

This decision is certainly a win for employers because it means that not every minor complaint can become the basis for a potential post-employment whistleblower lawsuit. The more important take away is that the decision reinforces the importance of properly documenting and implementing corrective actions. When issues are properly documented and promptly addressed, a reviewing court is less likely to find a basis for protected activity when the only dispute is whether management put enough emphasis on the issue.


Tim Walsh is a Special Counsel in the Energy Practice of Pillsbury Winthrop Shaw Pittman. For the past twelve years, Mr. Walsh has served as outside counsel to the nuclear industry on a variety of matters, including defense of whistleblower claims and other issues relating to the safety culture of nuclear facilities. Mr. Walsh’s full bio and contact information are available at http://www.pillsburylaw.com/timothy-walsh
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