Opinion ID: 39256
Heading Depth: 3
Heading Rank: 1

Heading: Complaint to the Department of Labor

Text: 11 In October 1984, Willy filed a complaint with the Department of Labor (DOL), alleging that Coastal had violated the whistleblower provisions of several environmental statutes by firing him in retaliation for writing the Belcher Report. Specifically, Willy sued under the Clean Air Act, 1 the Water Pollution Control Act, 2 the Safe Drinking Water Act, 3 the Resource Conservation and Recovery Act, 4 the Toxic Substances Control Act, 5 and the Comprehensive Environmental Response, Compensation Environmental Response, Compensation and Liability Act 6 (collectively, the Acts). 12 The Wage and Hour Division (WHD) of the DOL investigated Willy's complaint and found in his favor. The WHD ordered reinstatement and damages. 13 2. Administrative Law Judge's Order of Production 14 Coastal appealed the WHD's ruling and requested a hearing before a DOL administrative law judge (ALJ). Willy sought extensive discovery, including introduction of the Belcher Report. Coastal objected to the production of the Report and other documents related to it based on the attorney-client and work-product privileges. Willy filed a motion to compel production, which the ALJ granted. The ALJ relied on Doe v. A Corp. 7 in holding that the documents, although confidential, were admissible because Willy could not effectively litigate his claim without access to the documents in question. Coastal refused to comply, and the ALJ ordered Willy to seek enforcement of its order of production in the district court. 3. ALJ's Recommendation of Dismissal 15 Before Willy could do so, however, the ALJ recommended that Willy's complaint be dismissed in light of our then-recent opinion in Brown & Root, Inc. v. Donovan. 8 The ALJ concluded that under the whistleblower provision of the Energy Reorganization Act (ERA), employee conduct which does not involve the employee's contact or involvement with a competent organ of government is not protected. The ALJ found that the language of the ERA's whistleblower provision was substantially identical to the language of those of the Acts under which Willy had sued and that Willy's actions were solely internal. Thus, reasoned the ALJ, Willy's conduct was not protected. 16 4. Secretary's Reversal of Recommended Dismissal 17 On appeal to the DOL Secretary, Willy argued that he was terminated in part because he contacted government environmental agencies. The Secretary ultimately rejected the ALJ's recommended dismissal, reasoning that, notwithstanding Brown & Root, Willy did not have an adequate opportunity to prove that he had contacted government agencies and that the Belcher Report constituted protected activity under the Acts. The Secretary also concluded that, contrary to Coastal's arguments, there was nothing in any of the statutes or their legislative histories to indicate that in-house attorneys are excluded from statutory protection. The Secretary further encouraged us to reconsider our holding in Brown & Root in light of the Tenth Circuit's more recent decision in Kansas Gas & Electric Co. v. Brock. 9 5. Our Refusal to Intervene 18 On remand, the ALJ again ordered Willy to seek enforcement of the production order and resolution of Coastal's privilege claims in district court. Willy instead petitioned us under the All Writs Act to resolve the discovery dispute. We declined review, reasoning that intervention at this time to resolve the discovery would . . . interrupt the administrative process and that [i]ntervention at this time is . . . unnecessary. 10 6. ALJ's Hearing on Remand 19 In a March 1998 hearing on remand before an ALJ, Coastal continued to refuse to produce the Belcher Report, basing its refusal on the attorney-client privilege. The ALJ nevertheless admitted two draft versions of the Report that were in Willy's possession. Based on these drafts, the ALJ found in favor of Willy, reasoning that he was fired both because of Coastal's perception that he had lied about calling the TDWR and for having written the Belcher Report in the first place. Applying a mixed-motive analysis, the ALJ concluded that the animus towards Willy arising from the Belcher Report and Willy's subsequent lie about the phone call are inextricably mixed. Under the circumstances, no finding can be made that Donald Willy would have been fired solely for lying about the phone call had he not engaged in protected activity. The ALJ declined to grant Willy relief, however, because the judge concluded that Willy had offered misleading testimony about his current employment status. 7. Secretary's Review of ALJ's Rulings 20 On automatic review, the Secretary agreed with the ALJ's Recommended Decision and Order that Coastal fired Willy in part because he wrote the Belcher Report. The Secretary also affirmed the ALJ's 1987 holding that writing the Belcher Report constituted protected conduct, notwithstanding our decision in Brown & Root. The Secretary concluded that Brown & Root applied to the ERA only and did not purport to interpret environmental whistleblower statutes. 11 The Secretary relied on, inter alia, various Rules of Professional Conduct and our opinion in Doe in concluding that the Belcher Report was admissible evidence under both federal and Texas law. The Secretary affirmed the ALJ's ruling and remanded the case to the ALJ to calculate back pay. 21 We denied Coastal's interlocutory petition for review of the Secretary's ruling in October 1994, ten years to the month after Willy's original filing. The following July, the DOL Secretary denied reconsideration of his decision. The ALJ then issued a Recommended Decision and Order on Damages, Fees and Costs for $977,513.44 in damages and $68,270 in attorney's fees and expenses. Willy and Coastal both appealed to the Administrative Review Board (ARB), which by then had replaced the Secretary in the decision-making process. 22 In February 2004, the ARB issued its Final Decision and Dismissal Order, which reversed the prior orders of the DOL Secretary and the ALJ on remand. The ARB upheld the ALJ's conclusion that federal law governed the issue of attorney-client privilege, then determined that no exception to the privilege existed to admit the Belcher Report and other related documents. The ARB also concluded that under Texas attorney-client privilege law, the result would prove the same. Willy timely filed his notice of appeal. 8. Willy's Parallel State Court Action 23 Concurrent with his administrative proceedings, Willy pursued his claims against Coastal in the state courts of Texas. In 1985, after the ALJ's first recommendation of dismissal, Willy filed a state-law wrongful discharge claim in state court. In it he alleged that Coastal wrongfully terminated him under the Texas public policy exception to the employment-at-will doctrine, viz., that it fired him for refusing to perform an illegal act. 12 Coastal removed the case to federal court on the basis of federal question jurisdiction. The district court dismissed the case, reasoning that the Texas Canons of Ethics and Disciplinary Rules precluded an attorney from bringing such a cause of action. 13 24 On appeal, we reversed and remanded the matter to the district court with instructions to remand to the state court because removal had been improper. 14 On remand to state court, a jury found in favor of Willy and awarded him actual and punitive damages. 15 The Texas Court of Appeals reversed, reasoning that although Texas's canons of ethics allow in-house counsel to maintain a wrongful termination suit under the public policy exception, they prohibit the use of confidential client information to prove such a claim. The court held that, even under Texas's self-defense provision which allows lawyers to reveal confidences when necessary to defend themselves against an accusation of wrongful conduct, the Belcher Report was privileged and thus inadmissible. Willy petitioned to the Supreme Court of Texas for a writ of error, which that court denied in 1998.