Procedures for the Handling of Retaliation Complaints Under Section 806 of the Sarbanes-Oxley Act of 2002, as Amended, 68084-68097 [2011-28274]

Agencies

• DEPARTMENT OF LABOR
• Occupational Safety and Health Administration

[Federal Register Volume 76, Number 213 (Thursday, November 3, 2011)]
[Rules and Regulations]
[Pages 68084-68097]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-28274]


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DEPARTMENT OF LABOR

Occupational Safety and Health Administration

29 CFR Part 1980

[Docket Number: OSHA-2011-0126]
RIN 1218-AC53


Procedures for the Handling of Retaliation Complaints Under 
Section 806 of the Sarbanes-Oxley Act of 2002, as Amended

AGENCY: Occupational Safety and Health Administration, Labor.

ACTION: Interim Final Rule; request for comments.

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SUMMARY: The Occupational Safety and Health Administration (OSHA) is 
amending the regulations governing employee protection (``retaliation'' 
or ``whistleblower'') claims 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''), which was amended by 
sections 922 and 929A of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act of 2010, enacted on July 21, 2010. Public Law 111-203. 
These revisions to the Sarbanes-Oxley whistleblower regulations clarify 
and improve the procedures for handling Sarbanes-Oxley whistleblower 
complaints and implement statutory changes enacted into law as part of 
the 2010 statutory amendments. These changes to the Sarbanes-Oxley 
whistleblower regulations also make the procedures for handling 
retaliation complaints under Sarbanes-Oxley more consistent with OSHA's 
procedures for handling complaints under the employee protection 
provisions of the Surface Transportation Assistance Act of 1982, 29 CFR 
part 1978; the National Transit Systems Security Act and the Federal 
Railroad Safety Act, 29 CFR part 1982; the Consumer Product Safety 
Improvement Act of 2008, 29 CFR part 1983; and the Employee Protection 
Provisions of Six Environmental Statutes and Section 211 of the Energy 
Reorganization Act of 1974, as amended, 29 CFR part 24.

DATES: This interim final rule is effective on November 3, 2011. 
Comments and additional materials must be submitted (post-marked, sent 
or received) by January 3, 2012.

ADDRESSES: You may submit comments and attachments electronically at 
https://www.regulations.gov, which is the Federal eRulemaking Portal. 
Follow the instructions online for making electronic submissions.
    Fax: If your submissions, including attachments, do not exceed 10 
pages, you may fax them to the OSHA Docket Office at (202) 693-1648.
    Mail, hand delivery, express mail, messenger or courier service: 
You must submit your comments and attachments to the OSHA Docket 
Office, Docket No. OSHA-2011-0126, U.S. Department of Labor, Room N-
2625, 200 Constitution Avenue NW., Washington, DC 20210. Deliveries 
(hand, express mail, messenger and courier service) are accepted during 
the Department of Labor's and Docket Office's normal business hours, 
8:15 a.m.-4:45 p.m., e.t.
    Instructions: All submissions must include the Agency name and the 
OSHA docket number for this rulemaking (Docket No. OSHA-2011-0126). 
Submissions, including any personal information you provide, are placed 
in the public docket without change and may be made available online at 
https://www.regulations.gov. Therefore, OSHA cautions you about 
submitting personal information such as social security numbers and 
birth dates.
    Docket: To read or download submissions or other material in the 
docket, go to https://www.regulations.gov or the OSHA Docket Office at 
the address above. All documents in the docket are listed in the https://www.regulations.gov index, however, some information (e.g., 
copyrighted material) is not publicly available to read or download 
through the Web site. All submissions, including copyrighted material, 
are available for inspection and copying at the OSHA Docket Office.

FOR FURTHER INFORMATION CONTACT: Sandra Dillon, Acting Director, Office 
of the Whistleblower Protection Program, Occupational Safety and Health 
Administration, U.S. Department of Labor, Room N-3610, 200 Constitution 
Avenue NW., Washington, DC 20210; telephone (202) 693-2199. This is not 
a toll-free number. This Federal Register publication is available in 
alternative formats. The alternative formats are large print, 
electronic file on computer disk (Word Perfect, ASCII, Mates with 
Duxbury Braille System) and audiotape.

SUPPLEMENTARY INFORMATION:

I. Background

    The Dodd-Frank Wall Street Reform and Consumer Protection Act of 
2010, Public Law 111-203, (Dodd-Frank) amended the Sarbanes-Oxley 
whistleblower provision, 18 U.S.C. 1514A. The regulatory revisions 
described herein reflect these statutory amendments and also seek to 
clarify and improve OSHA's procedures for handling Sarbanes-Oxley 
whistleblower claims. To the extent possible within the bounds of 
applicable statutory language, these revised regulations are designed 
to be consistent with the procedures applied to claims under other 
whistleblower statutes administered by OSHA, including the Surface 
Transportation Assistance Act of 1982 (STAA), 29 CFR part 1978; the 
National Transit Systems Security Act (NTSSA) and the Federal Railroad 
Safety Act (FRSA), 29 CFR part 1982; the Consumer Product Safety 
Improvement Act of 2008 (CPSIA), 29 CFR part 1983; and the Employee 
Protection Provisions of Six Environmental Statutes and Section 211 of 
the Energy Reorganization Act of 1974, as amended, 29 CFR part 24.
    Responsibility for receiving and investigating complaints under 
Sarbanes-Oxley has been delegated to the Assistant Secretary of Labor 
for Occupational Safety and Health (Secretary of Labor's Order No. 4-
2010 (Sept. 2, 2010), 75 FR 55355 (Sept. 10, 2010)). Hearings on 
determinations by the Assistant Secretary are conducted by

[[Page 68085]]

the Office of Administrative Law Judges, and appeals from decisions by 
administrative law judges (ALJs) are decided by the Administrative 
Review Board (ARB) (Secretary of Labor's Order No. 1-2010 (Jan. 15, 
2010), 75 FR 3924 (Jan. 25, 2010)).

II. Summary of Statutory Changes to the Sarbanes-Oxley Whistleblower 
Provision

    Dodd-Frank, enacted on July 21, 2010, amended the Sarbanes-Oxley 
whistleblower provision to make several substantive changes. First, 
section 922(b) of Dodd-Frank added protection for employees from 
retaliation by nationally recognized statistical rating organizations 
(as defined in section 3(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c)) or their officers, employees, contractors, subcontractors, 
and agents.\1\ Second, section 922(c) of Dodd-Frank extended the 
statutory filing period for retaliation complaints under Sarbanes-Oxley 
from 90 to 180 days after the date on which the violation occurs or 
after the date on which the employee became aware of the violation. 
Section 922(c) of Dodd-Frank also provided parties with a right to a 
jury trial in district court actions brought under Sarbanes-Oxley's 
``kickout'' provision, 18 U.S.C. 1514A(b)(1)(B), which provides that, 
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 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 action without regard to the amount in controversy. Third, section 
922(c) amended Sarbanes-Oxley to state that the rights and remedies 
provided for in 18 U.S.C. 1514A may not be waived by any agreement, 
policy form, or condition of employment, including by a predispute 
arbitration agreement, and to provide that no predispute arbitration 
agreement shall be valid or enforceable, if the agreement requires 
arbitration of a dispute arising under this section.
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    \1\ Section 3(a) of the Securities Exchange Act of 1934 defines 
nationally recognized statistical rating organization as a credit 
rating agency that--
    (1) issues credit ratings certified by qualified institutional 
buyers, in accordance with 15 U.S.C. 78o-7(a)(1)(B)(ix), with 
respect to--
    (i) financial institutions, brokers, or dealers;
    (ii) insurance companies;
    (iii) corporate issuers;
    (iv) issuers of asset-backed securities (as that term is defined 
in section 1101(c) of part 229 of title 17, Code of Federal 
Regulations, as in effect on September 29, 2006);
    (v) issuers of government securities, municipal securities, or 
securities issued by a foreign government; or
    (vi) a combination of one or more categories of obligors 
described in any of clauses (i) through (v); and
    (2) is registered under 15 U.S.C. 78o-7.
    15 U.S.C. 78c(a)(62).
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    In addition, section 929A of Dodd-Frank clarified that companies 
covered by the Sarbanes-Oxley whistleblower provision include any 
company with a class of securities registered under section 12 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78l), or that is required to 
file reports under section 15(d) of the Securities Exchange Act of 1934 
(15 U.S.C. 78o(d)) including any subsidiary or affiliate whose 
financial information is included in the consolidated financial 
statements of such company. As explained in Johnson v. Siemens 
Technologies, Inc., ARB No. 08-032, 2011 WL 1247202, at *11 (Mar. 31, 
2011), section 929A merely clarified that subsidiaries and affiliates 
are covered under the Sarbanes-Oxley whistleblower provision. Section 
929A applies to all cases currently pending before the Secretary.
    Dodd-Frank left the remaining requirements of the Sarbanes-Oxley 
whistleblower provision unchanged. Sarbanes-Oxley continues to provide 
that proceedings under the Act 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). Sarbanes-Oxley continues to authorize 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 
retaliation, 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).

III. Summary and Discussion of Regulatory Provisions

    The regulatory provisions in this part are being revised to reflect 
the 2010 Dodd-Frank statutory amendments, to improve the procedures for 
handling Sarbanes-Oxley whistleblower cases, and to make the Sarbanes-
Oxley whistleblower regulations more consistent with the regulations 
that OSHA has promulgated for the administration of other whistleblower 
programs to the extent possible within the bounds of the applicable 
statutory language.
    These regulatory revisions make several non-substantive changes in 
terminology. First, cases under the whistleblower provision of 
Sarbanes-Oxley will now be referred to as actions alleging 
``retaliation'' rather than ``discrimination.'' This change is not 
intended to have substantive effect. It simply reflects the fact that 
claims brought under the whistleblower provisions are prototypical 
retaliation claims. A retaliation claim is a specific type of 
discrimination claim that focuses on the actions taken as a result of 
an employee's protected activity rather than as a result of an 
employee's characteristics (e.g., race, gender, or religion).
    Second, these rules previously referred to persons named in 
Sarbanes-Oxley whistleblower complaints as ``named persons,'' but in 
the revised regulations they will be referred to as ``respondents.'' 
Third, rather than referring to an employer's ``unfavorable personnel 
action,'' these revisions use the term ``adverse action.'' Again, these 
changes are not intended to have any substantive impact on the handling 
of Sarbanes-Oxley whistleblower cases. The revisions simply reflect a 
preference for more conventional terminology. These updated terms are 
already used in OSHA's procedural rules for handling whistleblower 
complaints under several other statutes, including STAA, 29 CFR part 
1978; NTSSA and FRSA, 29 CFR part 1982; CPSIA, 29 CFR part 1983; and 
the Employee Protection Provisions of Six Environmental Statutes and 
Section 211 of the Energy Reorganization Act of 1974, as amended, 29 
CFR part 24. The minor changes here create consistency with these other 
programs and reduce possible confusion.

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

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 regulations. This section has been revised to reflect the 2010 
statutory amendments to Sarbanes-Oxley.
Section 1980.101 Definitions
    This section includes general definitions applicable to Sarbanes-
Oxley's whistleblower provision. The definition of the term ``Act'' has 
been revised to incorporate the 2010 Dodd-Frank statutory amendments 
within that definition. Also, consistent with the recently promulgated 
interim final rules under STAA, 29 CFR part 1978; NTSSA and FRSA, 29 
CFR part 1982; and CPSIA, 29 CFR part 1983, a new definition of 
``business days'' is being

[[Page 68086]]

added at paragraph 1980.101(c) of these rules to clarify that the term 
means days other than Saturdays, Sundays and Federal holidays.
    The 2010 statutory amendments to Sarbanes-Oxley define ``nationally 
recognized statistical rating organization'' by reference to the 
definition in the Securities Exchange Act of 1934, codified at 15 
U.S.C. 78c(a)(62), and that definition has been included here. 
Similarly, the definition of ``company'' has been revised to reflect 
that ``company'' under the Sarbanes-Oxley whistleblower provision 
includes any subsidiary or affiliate whose financial information is 
included in the consolidated financial statements of a company. Thus 
under these regulations ``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) or any company required to file reports under 
section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(d)) 
including any subsidiary or affiliate whose financial information is 
included in the consolidated financial statements of such company.
    These regulatory revisions also replace the term ``company 
representative'' with the term ``covered person,'' which is defined in 
subparagraph 1980.101(f) as ``any company, including any subsidiary or 
affiliate whose financial information is included in the consolidated 
financial statements of such company, or any nationally recognized 
statistical rating organization, or any officer, employee, contractor, 
subcontractor, or agent of such company or nationally recognized 
statistical rating organization.'' In addition, as noted above, these 
rules have replaced the definition of ``named person'' with a 
definition for ``respondent'' at paragraph 1980.101(k), and define the 
term ``respondent'' as ``the person named in the complaint who is 
alleged to have violated the Act.'' The term ``employee'' in 
1980.101(g) has also been revised consistent with these changes, and 
the term ``person'' in 1980.101(j) has been revised to explicitly 
include ``companies'' in the definition of ``person.'' The order of the 
terms in this section has been changed as necessary to permit the 
inclusion and substitution of the terms described above. These changes 
in terminology were needed to reflect the addition of nationally 
recognized statistical rating organizations and their officers, 
employees, contractors, subcontractors, and agents to the list of 
potential respondents in whistleblower cases under Sarbanes-Oxley. 
These changes in terminology also continue to reflect that Sarbanes-
Oxley's statutory provisions identify individuals, as well as the 
employer, as potentially liable for retaliation. OSHA continues to 
anticipate, however, that in most cases the covered person and the 
respondent likely will be the complainant's employer. The definitions 
in this section also continue to reflect OSHA's longstanding position 
that the statute protects both employees of publicly traded companies 
and employees of contractors, subcontractors, and agents of publicly 
traded companies. See 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, 69 FR 52104, 52106 (Aug. 24, 2004); Brief for the 
Secretary of Labor as Amicus Curiae in Support of Plaintiff-Appellees, 
Lawson v. FMR, LLC, No. 10-2240 (1st Cir. 2011).
Section 1980.102 Obligations and Prohibited Acts
    This section describes the activities that are protected under 
Sarbanes-Oxley and the conduct that is prohibited in response to any 
protected activities. The term ``covered person'' has been substituted 
for ``company or company representative'' throughout this section, and 
other minor changes have been made to make this section consistent with 
OSHA's procedural rules implementing other whistleblower provisions. It 
should be noted that it is the Department's longstanding position that 
complaints to an individual member of Congress under this section are 
protected. The individual member need not be conducting an 
investigation or on a Committee conducting an investigation. The 
critical focus is on whether the employee reported conduct that he or 
she reasonably believed constituted a violation of one of the 
enumerated laws or regulations.
Section 1980.103 Filing of Retaliation Complaints
    This section explains the requirement for filing a retaliation 
complaint under Sarbanes-Oxley. The terminology used in this section 
has been revised to reflect the updated terminology described above. 
The 2010 statutory amendments changed the statute of limitations for 
complaints under the Act from 90 to 180 days. Now, to be timely, a 
complaint must be filed within 180 days of when the alleged violation 
occurs, or after the date on which the employee became aware of the 
violation. This section of the regulations has been updated to reflect 
that statutory change. Under Delaware State College v. Ricks, 449 U.S. 
250, 258 (1980), the time of the alleged violation is considered to be 
when the retaliatory decision has been both made and communicated to 
the complainant.
    Additionally, section 1980.103(b) has been amended to change the 
requirement that whistleblower complaints to OSHA under Sarbanes-Oxley 
``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.'' Consistent with OSHA's procedural rules under other 
whistleblower statutes, complaints filed under Sarbanes-Oxley need not 
be in any particular form. They may be either oral or in writing. When 
a complaint is made orally, OSHA will reduce the complaint to writing. 
If a complainant is not able to file the complaint in English, the 
complaint may be filed in any language. With the consent of the 
employee, complaints may be filed by any person on the employee's 
behalf.
    These changes are consistent with decisions of the ARB, which have 
permitted oral complaints under the environmental statutes. See, e.g., 
Roberts v. Rivas Environmental Consultants, Inc., 1996-CER-1, 1997 WL 
578330, at *3 n.6 (ARB Sept. 17, 1997) (complainant's oral statement to 
an OSHA investigator, and the subsequent preparation of an internal 
memorandum by that investigator summarizing the oral complaint, 
satisfies the ``in writing'' requirement of CERCLA, 42 U.S.C. 9610(b), 
and the Department's accompanying regulations in 29 CFR part 24); 
Dartey v. Zack Co. of Chicago, No. 1982-ERA-2, 1983 WL 189787, at *3 
n.1 (Sec'y of Labor Apr. 25, 1983) (adopting administrative law judge's 
findings that complainant's filing of a complaint to the wrong DOL 
office did not render the filing invalid and that the agency's 
memorandum of the complaint satisfied the ``in writing'' requirement of 
the Energy Reorganization Act (``ERA'') and the Department's 
accompanying regulations in 29 CFR part 24). Moreover, these changes 
are consistent with OSHA's longstanding practice of accepting oral 
complaints filed under Section 11(c) of the Occupational Safety and 
Health Act of 1970, 29 U.S.C. 660(c); Section 211 of the Asbestos 
Hazard Emergency Response Act of 1986, 15 U.S.C. 2651; Section 7 of the 
International Safe Container Act of 1977, 46 U.S.C. 80507; and STAA, 49 
U.S.C. 31105. This change also accords with the Supreme Court's 
decision in Kasten v. Saint-Gobain Performance Plastics Corp., in which 
the Court held that the anti-

[[Page 68087]]

retaliation provision of the Fair Labor Standards Act, which prohibits 
employers from discharging or otherwise discriminating against an 
employee because such employee has ``filed any complaint,'' protects 
employees' oral complaints of violations of the Fair Labor Standards 
Act. 563 U.S. ----, 131 S.Ct. 1325 (2011).
    OSHA believes that the changes in this section complement the ARB's 
decision in Sylvester v. Parexel International, LLC. Noting that OSHA 
does not require complaints under Sarbanes-Oxley to be in any form and 
that under 29 CFR 1980.104(b) OSHA has a duty, if appropriate, to 
interview the complainant to supplement the complaint, the ARB held 
that the Federal court pleading standards established in Bell Atlantic 
Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 
----, 129 S.Ct. 1937 (2009) do not apply to Sarbanes-Oxley 
whistleblower complaints filed with OSHA. Sylvester v. Parexel Int'l, 
Inc., ARB Case No. 07-123, 2011 WL 2165854, at *9-10 (ARB May 26, 
2011).
Section 1980.104 Investigation
    This section describes the procedures that apply to the 
investigation of Sarbanes-Oxley complaints. The terminology used in 
this section has been updated and the content of each paragraph has 
been reorganized to be consistent with OSHA's investigation procedures 
under other whistleblower statutes, to the extent such parallel 
procedures are consistent with the Act.
    Paragraph (a) of this section outlines the procedures for notifying 
the parties and the Securities and Exchange Commission of the complaint 
and notifying respondents of their rights under these regulations. 
Paragraph (a) also provides that the respondent will receive a copy of 
the complaint, redacted if necessary in accordance with the Privacy Act 
of 1974, 5 U.S.C. 552a, and other applicable confidentiality laws. 
Former paragraphs (b) through (d) described the statutory burdens of 
proof applicable to Sarbanes-Oxley whistleblower complaints. The 
discussion of these burdens has been consolidated without substantive 
change in a single paragraph 1980.104(e), consistent with the approach 
taken in OSHA's procedural rules under other whistleblower statutes. 
Paragraph (b) now describes the procedures for the respondent to submit 
its response to the complaint, which were formerly contained in 
1980.104(c). Paragraph (c) now addresses disclosure to the complainant 
of respondent's submissions to the agency that are responsive to the 
complaint. The revised paragraph (c) newly specifies that throughout 
the investigation the agency will provide to the complainant (or the 
complainant's legal counsel if the complainant is represented by 
counsel) a copy of all of respondent's submissions to the agency that 
are responsive to the complainant's whistleblower complaint, and the 
complainant will have an opportunity to respond to those submissions. 
Before providing such materials to the complainant, the agency will 
redact them in accordance with the Privacy Act of 1974, 5 U.S.C. 552a, 
and other applicable confidentiality laws. The agency expects that 
sharing information with complainants in accordance with this new 
provision will enhance OSHA's ability to conduct full and fair 
investigations and permit the Assistant Secretary to more thoroughly 
assess defenses raised by respondents. Paragraph (d) of this section 
discusses confidentiality of information provided during 
investigations. Paragraph (f), formerly 1980.104(e), describes the 
procedures the Assistant Secretary will follow prior to the issuance of 
findings and a preliminary order when the Assistant Secretary has 
reasonable cause to believe that a violation has occurred. This 
paragraph has been amended to provide that the complainant will be sent 
a copy of the materials that OSHA must send to the respondent before 
OSHA issues a preliminary order of reinstatement should the agency have 
reasonable cause to believe that such an order is appropriate. Before 
providing such materials to the complainant, the agency will redact 
them, if necessary, in accordance with the Privacy Act of 1974, 5 
U.S.C. 552a, and other applicable confidentiality laws.
    As noted above, former paragraphs (b) through (d), which describe 
the statutory burdens of proof applicable to Sarbanes-Oxley complaints, 
have been consolidated in paragraph (e). The Sarbanes-Oxley 
whistleblower provision mandates that an action under the Act is 
governed by the burdens of proof set forth in AIR21, 49 U.S.C. 
42121(b). The statute requires that a complainant make an initial prima 
facie showing that protected activity was ``a contributing factor'' in 
the adverse action alleged in the complaint, i.e., that the protected 
activity, alone or in combination with other factors, affected in some 
way the outcome of the employer's decision. 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. Complainant's 
burden may be satisfied, for example, if he or she shows that the 
adverse action took place shortly after protected activity, giving rise 
to the inference that it was a contributing factor in the adverse 
action.
    If the complainant does not make the prima facie showing, the 
investigation must be discontinued and the complaint dismissed. See 
Trimmer v. U.S. Dep't of Labor, 174 F.3d 1098, 1101 (10th Cir. 1999) 
(noting that the burden-shifting framework of the ERA, which is the 
same as that under Sarbanes-Oxley, serves a ``gatekeeping function'' 
that ``stem[s] frivolous complaints''). Even in cases where the 
complainant successfully makes a prima facie showing, the investigation 
must be discontinued if the employer ``demonstrates, by clear and 
convincing evidence,'' that it would have taken the same adverse action 
in the absence of the protected activity. 49 U.S.C. 42121(b)(2)(B)(ii). 
Thus, OSHA must dismiss a complaint under Sarbanes-Oxley and not 
investigate (or cease investigating) if either: (1) The complainant 
fails to meet the prima facie showing that protected activity was a 
contributing factor in the adverse action; or (2) the employer rebuts 
that showing by clear and convincing evidence that it would have taken 
the same adverse action absent the protected activity.
    Assuming that an investigation proceeds beyond the gatekeeping 
phase, the statutory burdens of proof require an employee to prove that 
the alleged protected activity was a ``contributing factor'' to the 
alleged adverse action. If the employee proves that the alleged 
protected activity was a contributing factor to the adverse action, the 
employer, to escape liability, must prove by ``clear and convincing 
evidence'' that it would have taken the same action in the absence of 
the protected activity. A contributing factor is ``any factor which, 
alone or in connection with other factors, tends to affect in any way 
the outcome of the decision.'' Marano v. Dep't of Justice, 2 F.3d 1137, 
1140 (Fed. Cir. 1993) (Whistleblower Protection Act, 5 U.S.C. 
1221(e)(1)). In proving that protected activity was a contributing 
factor in the adverse action, ``a complainant need not necessarily 
prove that the respondent's articulated reason was a pretext in order 
to prevail,'' because a complainant alternatively can prevail by 
showing that the respondent's ``reason, while true, is only one of the 
reasons for its conduct,'' and that another reason was the 
complainant's protected activity. See Klopfenstein v. PCC Flow Techs.

[[Page 68088]]

Holdings, Inc., ARB No. 04-149, 2006 WL 3246904, at *13 (ARB May 31, 
2006) (citing Rachid v. Jack in the Box, Inc., 376 F.3d 305, 312 (5th 
Cir. 2004)) (discussing contributing factor test under the Sarbanes-
Oxley whistleblower provision), aff'd sub nom. Klopfenstein v. Admin. 
Review Bd., U.S. Dep't of Labor, 402 F. App'x 936, 2010 WL 4746668 (5th 
Cir. 2010).
    Sarbanes-Oxley's burdens of proof do not address the evidentiary 
standard that applies to a complainant's proof that protected activity 
was a contributing factor in an adverse action. Sarbanes-Oxley simply 
provides that the Secretary may find a violation only ``if the 
complainant demonstrates'' that protected activity was a contributing 
factor in the alleged adverse action. See 49 U.S.C. 
42121(b)(2)(B)(iii). It is the Secretary's position that the 
complainant must prove by a ``preponderance of the evidence'' that his 
or her protected activity contributed to the adverse action; otherwise 
the burden never shifts to the employer to establish its defense by 
``clear and convincing evidence.'' See, e.g., Allen v. Admin. Review 
Bd., 514 F.3d 468, 475 n.1 (5th Cir. 2008) (``The term `demonstrate' 
[under 42121(b)(2)(B)(iii)] means to prove by a preponderance of the 
evidence.''). Once the complainant establishes that the protected 
activity was a contributing factor in the adverse action, the employer 
can escape liability only by proving by clear and convincing evidence 
that it would have reached the same decision even in the absence of the 
prohibited rationale. The ``clear and convincing evidence'' standard is 
a higher burden of proof than a ``preponderance of the evidence'' 
standard.
Section 1980.105 Issuance of Findings and Preliminary Orders
    As provided in the previous procedures for handling retaliation 
complaints under Sarbanes-Oxley, 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, 
written findings regarding whether or not there is reasonable cause to 
believe that the complaint has merit. If the findings are that there is 
reasonable cause to believe that the complaint has merit, in accordance 
with the statute, 18 U.S.C. 1514A(c), the Assistant Secretary will 
order ``all relief necessary to make the employee whole,'' including 
preliminary reinstatement; back pay with interest; and compensation for 
any special damages sustained as a result of the retaliation, including 
litigation costs, expert witness fees, and reasonable attorney's fees.
    In ordering interest on back pay under Sarbanes-Oxley, the 
Secretary has determined that, instead of computing the interest due by 
compounding quarterly the Internal Revenue Service (``IRS'') interest 
rate for the underpayment of taxes, which under 26 U.S.C. 6621 is 
generally the Federal short-term rate plus three percentage points, the 
Secretary will instead compound such interest daily. This is a change 
from the way interest has been calculated. See Doyle v. Hydro Nuclear 
Services, ARB Nos. 99-041, 99-042, and 99-012, 2000 WL 694384, at *15-
16 (ARB May 17, 2000). The Secretary believes that daily compounding of 
interest better achieves the make-whole purpose of a back pay award. 
Daily compounding of interest has become the norm in private lending 
and recently was found to be the most appropriate method of calculating 
interest on back pay by the National Labor Relations Board. See Jackson 
Hospital Corp. v. United Steel, Paper & Forestry, Rubber, Mfg., Energy, 
Allied Indus. & Serv. Workers Int'l Union, AFL-CIO-CLC, 356 NLRB No. 8, 
2010 WL 4318371, at *3-4 (Oct. 22, 2010). Additionally, interest on tax 
underpayments under the Internal Revenue Code, 26 U.S.C. 6621, is 
compounded daily pursuant to 26 U.S.C. 6622(a).
    As in the previous procedures for handling retaliation complaints 
under Sarbanes-Oxley, the findings and, where appropriate, preliminary 
order, advise the parties of their right to file objections to the 
findings of the Assistant Secretary and to request a hearing. The 
findings and, where appropriate, preliminary order, also advise the 
respondent of the right to request attorney's fees not exceeding $1,000 
regardless of whether the respondent has filed objections, if the 
respondent 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 decision 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.
    Finally, the statement that reinstatement would not be appropriate 
where the respondent establishes that the complainant is a security 
risk has been removed from 1980.105(a)(1). OSHA believes that the 
determination of whether reinstatement is inappropriate in a given case 
is best made on the basis of the facts of each case and the relevant 
case law, and thus it is not necessary in these procedural rules to 
define the circumstances in which reinstatement is not a proper remedy. 
This amendment also makes these procedural regulations consistent with 
the recent interim final rules under STAA, NTSSA, FRSA, and CPSIA, 
which do not contain this statement.
    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'' is akin to an order of front pay 
and is frequently employed in cases arising under Section 105(c) of the 
Federal Mine Safety and Health Act of 1977. See, e.g., Sec'y of Labor 
on behalf of York v. BR&D Enters., Inc., 23 FMSHRC 697, 2001 WL 
1806020, at *1 (June 26, 2001). Front pay has been recognized as a 
possible remedy in cases under Sarbanes-Oxley and other whistleblower 
statutes enforced by OSHA in circumstances where reinstatement would 
not be appropriate. Hagman v. Washington Mutual Bank, Inc., 2005-SOX-
73, 2006 WL 6105301, *32 (Dec. 19, 2006) (noting that while 
reinstatement is the ``preferred and presumptive remedy'' under 
Sarbanes-Oxley, ``[f]ront pay may be awarded as a substitute when 
reinstatement is inappropriate due to: (1) An employee's medical 
condition that is causally related to her employer's retaliatory action 
* * *; (2) manifest hostility between the parties * * *; (3) the fact 
that claimant's former position no longer exists * * *; or (4) the fact 
that employer is no longer in business at the time of the decision''); 
see, e.g., Hobby v. Georgia Power Co., ARB No. 98-166, ALJ No. 1990-
ERA-30 (ARB Feb. 9, 2001), aff'd sub nom. Hobby v. U.S. Dept. of Labor, 
No. 01-10916 (11th Cir. Sept. 30, 2002) (unpublished) (noting 
circumstances where front pay may be available in lieu of reinstatement 
but ordering reinstatement); Brown v. Lockheed Martin Corp., 2008-SOX-
49, 2010 WL 2054426, at *55-56 (Jan. 15, 2010) (same). Congress 
intended that employees be preliminarily reinstated to their positions 
if OSHA finds reasonable cause to believe that they were discharged in 
violation of Sarbanes-Oxley. When a violation is found, the norm is for 
OSHA to order immediate preliminary reinstatement. An employer does not 
have a statutory right to choose economic reinstatement. Rather, 
economic reinstatement is designed to accommodate situations in which 
evidence establishes to OSHA's

[[Page 68089]]

satisfaction that reinstatement is inadvisable for some reason, 
notwithstanding the employer's retaliatory discharge of the employee. 
In such situations, 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. 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.

Subpart B--Litigation

Section 1980.106 Objections to the Findings and the Preliminary Order 
and Request for a Hearing
    As under the prior procedures for whistleblower complaints under 
Sarbanes-Oxley, 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 
20001, within 30 days of receipt of the findings. The date of the 
postmark, facsimile transmittal, or email communication is considered 
the date of the filing; if the objection is filed in person, by hand-
delivery or other means, the objection is filed upon receipt. The 
filing of objections also is considered a request for a hearing before 
an ALJ. Although the parties are directed to serve a copy of their 
objections on the other parties of record, as well as the OSHA official 
who issued the findings and order, the Assistant Secretary, and the 
Associate Solicitor, Division of Fair Labor Standards, U.S. Department 
of Labor, the failure to serve copies of the objections on the other 
parties of record does not affect the ALJ's jurisdiction to hear and 
decide the merits of the case. See Shirani v. Calvert Cliffs Nuclear 
Power Plant, Inc., ARB No. 04-101, 2005 WL 2865915, at *7 (ARB Oct. 31, 
2005). Paragraph (b) has been revised to note that a respondent's 
motion to stay OSHA's preliminary order of reinstatement will be 
granted only based on exceptional circumstances. This revision 
clarifies that a stay is only available in ``exceptional 
circumstances,'' because the Secretary believes that a stay of the 
Assistant Secretary's preliminary order of reinstatement under 
Sarbanes-Oxley would be appropriate only where the respondent 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 favors a 
stay.
Section 1980.107 Hearings
    As under the prior procedures for whistleblower complaints under 
Sarbanes-Oxley, this section adopts the rules of practice and procedure 
for administrative hearings before the Office of Administrative Law 
Judges at 29 CFR part 18 subpart A. It specifically allows hearings to 
be consolidated if both the complainant and respondent object to the 
findings and/or order of the Assistant Secretary. This section 
continues to provide that 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 continue to have broad discretion to limit 
discovery where necessary to expedite the hearing. As under the prior 
procedures, 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. Minor revisions have 
been made throughout this section to update the terminology used.
Section 1980.108 Role of Federal Agencies
    As noted in this section, 1980.108(a)(1) previously, the Assistant 
Secretary, at his or her discretion, may participate as a party or 
amicus curiae at any time in the administrative proceedings under 
Sarbanes-Oxley. For example, the Assistant Secretary may exercise his 
or her discretion to prosecute the case in the administrative 
proceeding before an ALJ; petition for review of a decision of an ALJ, 
including a decision based on a settlement agreement between the 
complainant and the respondent, regardless of whether the Assistant 
Secretary participated before the ALJ; or participate as amicus curiae 
before the ALJ or in the ARB proceeding. Although OSHA anticipates that 
ordinarily the Assistant Secretary will not participate, 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 that appear egregious, or where the interests of 
justice might require participation by the Assistant Secretary.
    Consistent with OSHA's procedural rules under other whistleblower 
statutes, paragraph (a)(2) has been amended to require the parties to 
send all documents to each other, in addition to the Assistant 
Secretary.
    Paragraph (b) has been revised to state that ``The Securities and 
Exchange Commission, if interested in a proceeding, may participate as 
amicus curiae at any time in the proceeding, at the Commission's 
discretion.'' This revision makes this provision consistent with the 
analogous provisions in the Secretary's procedural rules under other 
whistleblower statutes. However, the revision is not intended to 
materially change the circumstances in which the Securities and 
Exchange Commission may participate in proceedings under Sarbanes-
Oxley. The Securities and Exchange Commission may participate as amicus 
curiae at any time in the proceedings.
Section 1980.109 Decision and Orders of the Administrative Law Judge
    Revisions have been made to this section to make it consistent with 
OSHA's procedural rules for handling complaints under other 
whistleblower statutes. This section sets forth the requirements for 
the content of the decision and order of the ALJ, and includes the 
standard for finding a violation under Sarbanes-Oxley. Former paragraph 
(a) has been divided into three paragraphs--(a), (b) and (c). Paragraph 
(a) now states that a determination that a violation has occurred may 
be made only if the complainant has demonstrated by a preponderance of 
the evidence that protected activity was a contributing factor in the 
adverse action alleged in the complaint. Paragraph (b) now explains 
that if the complainant has satisfied this burden, relief may not be 
ordered if the respondent demonstrates by clear and convincing evidence 
that it would have taken the same adverse action in the absence of any 
protected activity. A full discussion of the burdens of proof used by 
the Department of Labor to resolve whistleblower cases under this part 
is presented above in the discussion of section 1980.104. Paragraph (c) 
now provides that the Assistant Secretary's determination to dismiss 
the complaint without an investigation or without a complete 
investigation pursuant to section 1980.104 is not subject to review. 
Thus, paragraph (c) of section 1980.109 clarifies that the Assistant 
Secretary's determinations on whether to proceed with an investigation 
under Sarbanes-Oxley and whether to make particular investigative 
findings are discretionary decisions not subject to review by the ALJ. 
The ALJ hears cases de novo and, therefore, as a general

[[Page 68090]]

matter, may not remand cases to the Assistant Secretary to conduct an 
investigation or make further factual findings. Paragraph (c) now also 
clarifies that the ALJ can dispose of a matter without a hearing if the 
facts and circumstances warrant. The provisions formerly contained in 
paragraph (b) have been moved to new paragraphs (d)(1) and (2). 
Paragraph (d)(1) additionally provides that interest on back pay will 
be calculated using the interest rate applicable to underpayment of 
taxes under 26 U.S.C. 6621 and will be compounded daily. The provisions 
formerly contained in paragraph (c) have been moved to new paragraph 
(e), which also requires that the ALJ's decision be served on the 
Assistant Secretary and the Associate Solicitor of the Division of Fair 
Labor Standards.
Section 1980.110 Decision of the Administrative Review Board
    As in section 1980.110(a) previously, upon the issuance of the 
ALJ's decision, the parties have 10 business days within which to 
petition the ARB for review of that decision. Subsection (b) has been 
revised to clarify that if no timely petition for review is filed with 
the ARB, the decision of the ALJ becomes the final decision of the 
Secretary and is not subject to judicial review. The date of the 
postmark, facsimile transmittal, or email communication is considered 
the date of filing of the petition; if the petition is filed in person, 
by hand delivery or other means, the petition is considered filed upon 
receipt.
    The appeal provisions in this part provide that an appeal to the 
ARB is not a matter of right but is accepted at the discretion of the 
ARB. The parties should identify in their petitions for review the 
legal conclusions or orders to which they object, or the objections may 
be deemed waived. The ARB has 30 days to decide whether to grant the 
petition for review. If the ARB does not grant the petition, the 
decision of the ALJ becomes the final decision of the Secretary. If a 
timely petition for review is filed with the ARB, any relief ordered by 
the ALJ, except for that portion ordering reinstatement, is inoperative 
while the matter is pending before the ARB. When the ARB accepts a 
petition for review, the ALJ's factual determinations will be reviewed 
under the substantial evidence standard.
    This section also provides that based on exceptional circumstances, 
the ARB may grant a motion to stay an ALJ's preliminary order of 
reinstatement under Sarbanes-Oxley, which otherwise would be effective, 
while review is conducted by the ARB. Subsection (b) has been amended 
to clarify that a stay is only available in ``exceptional 
circumstances,'' because the Secretary believes that a stay of an ALJ's 
preliminary order of reinstatement under Sarbanes-Oxley would be 
appropriate only where the respondent 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 favors a stay.
    Finally, paragraph (d) has been revised to provide that interest on 
back pay ordered under this section will be calculated using the 
interest rate applicable to underpayment of taxes under 26 U.S.C. 6621 
and will be compounded daily.

Subpart C--Miscellaneous Provisions

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 and/or preliminary 
orders by the Assistant Secretary, and the withdrawal of objections to 
findings and/or orders. It also provides for approval of settlements at 
the investigative and adjudicative stages of the case.
    Paragraph (a) has been revised to allow the complainant to notify 
the Assistant Secretary of his withdrawal orally or in writing. Minor 
revisions also have been made to this section to make it consistent 
with the procedural rules under other whistleblower statutes. These 
minor revisions do not reflect substantive changes in the requirements 
for withdrawals of complaints, objections or petitions for review, or 
substantive changes in the requirements for submission and Departmental 
approval of settlement agreements. Rather, these amendments simply 
incorporate the procedures that the Department has been using under 
Sarbanes-Oxley. Paragraph (a) now notes that complainant may not 
withdraw a complaint after filing objections to an ALJ's order. 
Paragraph (d)(1) now notes that the Assistant Secretary's approval of a 
settlement reached by the respondent and the complainant demonstrates 
his or her consent and achieves the consent of all three parties.
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 that the ARB submit the record of proceedings to the 
appropriate court pursuant to the rules of such court. The section has 
been renumbered for clarity and consistency with OSHA's other 
whistleblower protection regulations. Paragraph (c) has been revised to 
clarify that ``rules of the court'' refers to the Federal Rules of 
Appellate Procedure and local rules of the relevant Federal court of 
appeals.
Section 1980.113 Judicial Enforcement
    This section describes the Secretary's power under Sarbanes-Oxley 
to obtain judicial enforcement of orders and the terms of a settlement 
agreement. It has been amended for consistency with OSHA's other 
whistleblower programs and clarifies that Federal district courts have 
authority to grant all appropriate relief in an action to enforce a 
preliminary order of reinstatement or a final order of the Secretary, 
including a final order approving a settlement agreement.
    While some courts have declined to enforce preliminary orders of 
reinstatement under Sarbanes-Oxley, the Secretary's consistent position 
has been that such orders are enforceable in Federal district court. 
See Solis v. Tenn. Commerce Bancorp, Inc., No. 10-5602 (6th Cir. 2010) 
(order granting stay of preliminary injunction); Bechtel v. Competitive 
Technologies, Inc., 448 F.3d 469 (2d Cir. 2006); Welch v. Cardinal 
Bankshares Corp., 454 F. Supp. 2d 552 (W.D. Va. 2006) (decision 
vacated, appeal dismissed, No. 06-2295 (4th Cir. Feb. 20, 2008)).
    By incorporating the procedures of AIR21, Sarbanes-Oxley authorizes 
district courts to enforce orders, including preliminary orders of 
reinstatement, issued by the Secretary under the Act. See 18 U.S.C. 
1514A(b)(2)(A) (adopting the rules and procedures set forth in AIR21, 
49 U.S.C. 42121(b)). The Secretary consistently has interpreted 
Sarbanes-Oxley to permit her to obtain civil enforcement of preliminary 
orders of reinstatement. See Brief for the Intervenor/Plaintiff-
Appellee Secretary of Labor, Solis v. Tenn. Commerce Bancorp, Inc., No. 
10-5602 (6th Cir. 2010); Brief for the Intervenor/Plaintiff-Appellant 
United States of America, Welch v. Cardinal Bankshares Corp., No. 06-
2295 (4th Cir. Feb. 20, 2008); Brief for the Intervenor/Plaintiff-
Appellee Secretary of Labor, Bechtel v. Competitive Technologies, Inc., 
448 F.3d 469 (2d Cir. 2006) (No. 05-2402).
    Under 49 U.S.C. 42121(b), which provides the procedures applicable 
to investigations of whistleblower complaints under Sarbanes-Oxley, the

[[Page 68091]]

Secretary must investigate complaints under the Act and determine 
whether there is reasonable cause to believe that a violation has 
occurred. ``[I]f the Secretary of Labor concludes that there is a 
reasonable cause to believe that a violation * * * has occurred, the 
Secretary shall accompany the Secretary's findings with a preliminary 
order providing the relief prescribed by paragraph (3)(B),'' which 
includes reinstatement of the complainant to his or her former 
position. 49 U.S.C. 42121(b)(2)(A) and (b)(3)(B)(ii). The respondent 
may file objections to the Secretary's preliminary order and request a 
hearing. However, the filing of such objections ``shall not operate to 
stay any reinstatement remedy contained in the preliminary order.'' 49 
U.S.C. 42121(b)(2)(A).
    Paragraph (5) of 49 U.S.C. 42121(b) provides for judicial 
enforcement of the Secretary's orders, including preliminary orders of 
reinstatement. That paragraph states ``[w]henever any person has failed 
to comply with an order issued under paragraph (3), the Secretary of 
Labor may file a civil action in the United States district court for 
the district in which the violation was found to occur to enforce such 
order. In actions brought under this paragraph, the district courts 
shall have jurisdiction to grant all appropriate relief including, but 
not limited to, injunctive relief and compensatory damages.'' 49 U.S.C. 
42121(b)(5). Preliminary orders that contain the relief of 
reinstatement prescribed by paragraph (3)(B) are judicially enforceable 
orders, issued under paragraph (3). Brief for the Intervenor/Plaintiff-
Appellee Secretary of Labor, Solis v. Tenn. Commerce Bancorp, Inc., No. 
10-5602 at 23-25 (6th Cir. 2010).
    This analysis is not altered by the fact that paragraph (3) bears 
the heading ``Final Order.'' See United States v. Buculei, 262 F.3d 
322, 331 (4th Cir. 2001) (a statute's title cannot limit the plain 
meaning of its text), cert. denied, 535 U.S. 962 (2002). Focusing on 
the title to subsection (b)(3) instead of reading section 42121(b) as a 
coherent whole negates the congressional directives that preliminary 
reinstatement must be ordered upon a finding of reasonable cause and 
that such orders not be stayed pending appeal.
    Sections of a statute should not be read in isolation, but rather 
in conjunction with the provisions of the entire Act, considering both 
the object and policy of the Act. See, e.g., Brown & Williamson Tobacco 
Corp. v. FDA, 153 F.3d 155, 162 (4th Cir. 1998), aff'd, 529 U.S. 120 
(2000). 49 U.S.C. 42121(b)(2)(A)'s clear statement that objections 
shall not stay any preliminary order of reinstatement demonstrates 
Congress's intent that the Secretary's preliminary orders of 
reinstatement be immediately effective. Reading 49 U.S.C. 42121(b)(5) 
to allow enforcement of such orders is the only way to effectuate this 
intent.
    The Secretary's interpretation is buttressed by the legislative 
history of Sarbanes-Oxley and AIR21. Before Congress enacted Sarbanes-
Oxley, the Department of Labor had interpreted this AIR21 provision to 
permit judicial enforcement of preliminary reinstatement orders. 
Accordingly, Congress is presumed to have been aware of the 
Department's interpretation of 49 U.S.C. 42121(b)(5) and to have 
adopted that interpretation when it incorporated that provision by 
reference. See Lorillard v. Pons, 434 U.S. 575, 580-81 (1978) 
(``[W]here * * * Congress adopts a new law incorporating sections of a 
prior law, Congress normally can be presumed to have had knowledge of 
the interpretation given to the incorporated law, at least insofar as 
it affects the new statute''). The Secretary's interpretation is 
further supported by the legislative history of AIR21, which makes 
clear that Congress regarded preliminary reinstatement as crucial to 
the protections provided in the statute. Brief for the Intervenor/
Plaintiff-Appellee Secretary of Labor, Solis v. Tenn. Commerce Bancorp, 
Inc., No. 10-5602, at 41-44 (6th Cir. 2010) (reviewing legislative 
history of AIR21). Interpreting 49 U.S.C. 42121(b)(5) to permit 
judicial enforcement of the Secretary's preliminary orders of 
reinstatement is necessary to carry out Congress' clearly expressed 
intent that whistleblowers be immediately reinstated upon the 
Secretary's finding of reasonable cause to believe that retaliation has 
occurred.
    Sarbanes-Oxley also permits the person on whose behalf the order 
was issued under Sarbanes-Oxley to obtain judicial enforcement of 
orders and the terms of a settlement agreement. 18 U.S.C. 
1514A(b)(2)(A) incorporating 49 U.S.C. 42121(b)(6).
Section 1980.114 District Court Jurisdiction of Retaliation Complaints
    This section sets forth Sarbanes-Oxley's provisions allowing a 
complainant to bring an original de novo action in district court, 
alleging the same allegations contained in the complaint filed with 
OSHA, if there has been no final decision of the Secretary within 180 
days of the filing of the complaint. This section has been amended to 
reflect the 2010 statutory amendments which afford parties bringing 
cases under 18 U.S.C. 1514A(b)(1)(B) the right to a trial by jury.
    This section also has been amended to require complainants to 
provide file-stamped copies of their complaint within seven days after 
filing a complaint in district court to the Assistant Secretary, the 
ALJ, or the ARB, depending on where the proceeding is pending. A copy 
of the complaint also must be provided to the Regional Administrator, 
the Assistant Secretary, Occupational Safety and Health Administration, 
and the Associate Solicitor, Division of Fair Labor Standards, U.S. 
Department of Labor. This provision is necessary to notify the agency 
that the complainant has opted to file a complaint in district court. 
This provision is not a substitute for the complainant's compliance 
with the requirements for service of process of the district court 
complaint contained in the Federal Rules of Civil Procedure and the 
local rules of the district court where the complaint is filed.
    It is the Secretary's position that complainants may not initiate 
an action in Federal court after the Secretary issues a final decision, 
even if the date of the final decision is more than 180 days after the 
filing of the complaint. The purpose of the ``kick-out'' provision is 
to aid the complainant in receiving a prompt decision. That goal is not 
implicated in a situation where the complainant already has received a 
final decision from the Secretary. In addition, permitting the 
complainant to file a new case in district court in such circumstances 
could conflict with the parties' rights to seek judicial review of the 
Secretary's final decision in the court of appeals.
Section 1980.115 Special Circumstances; Waiver of Rules
    This section provides that in circumstances not contemplated by 
these rules or for good cause the ALJ or the ARB may, upon application 
and notice to the parties, waive any rule as justice or the 
administration of Sarbanes-Oxley requires.
    No substantive changes have been made to this section.

IV. Paperwork Reduction Act

    This rule contains a reporting provision (filing a retaliation 
complaint, section 1980.103) which was previously reviewed and approved 
for use by the Office of Management and Budget (``OMB'') and assigned 
OMB control number 1218-0236 under the provisions

[[Page 68092]]

of the Paperwork Reduction Act of 1995 (Pub. L. 104-13).

V. Administrative Procedure Act

    The notice and comment rulemaking procedures of Section 553 of the 
Administrative Procedure Act (``APA'') do not apply ``to interpretative 
rules, general statements of policy, or rules of agency organization, 
procedure, or practice.'' 5 U.S.C. 553(b)(A). This is a rule of agency 
procedure and practice within the meaning of that section. Therefore, 
publication in the Federal Register of a notice of proposed rulemaking 
and request for comments are not required for these regulations, which 
provide the procedures for the handling of retaliation complaints. 
Although this is a procedural rule not subject to the notice and 
comment procedures of the APA, we are providing persons interested in 
this interim final rule 60 days to submit comments. A final rule will 
be published after the agency receives and reviews the public's 
comments.
    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 interim final 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.

VI. 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 this rule adds new provisions and 
updates the language of the former regulations to implement the 
statutory changes made by Dodd-Frank. Executive Order 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 (adjusted annually 
for inflation), 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 expected to have a negligible 
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 and 
practice, it is not a ``rule'' within the meaning of the Small Business 
Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 804(3)(C)), 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).

VII. 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 updates existing procedures and implements 
changes necessitated by enactment of Dodd-Frank. 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 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, 
Whistleblower.

    Signed at Washington, DC, on October 26, 2011.
David Michaels,
Assistant Secretary of Labor for Occupational Safety and Health.

    Accordingly, for the reasons set out in the preamble, 29 CFR part 
1980 is revised to read as follows:

PART 1980--PROCEDURES FOR THE HANDLING OF RETALIATION COMPLAINTS 
UNDER SECTION 806 OF THE SARBANES-OXLEY ACT OF 2002, AS AMENDED

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 retaliation complaints.
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 retaliation complaints.
1980.115 Special circumstances; waiver of rules.

    Authority:  18 U.S.C. 1514A, as amended by the Dodd-Frank Wall 
Street Reform and Consumer Protection Act of 2010, Pub. L. 111-203 
(July 21, 2010); Secretary of Labor's Order No. 4-2010 (Sept. 2, 
2010), 75 FR 55355 (Sept. 10, 2010); Secretary of Labor's Order No. 
1-2010 (Jan. 15, 2010), 75 FR 3924 (Jan. 25, 2010).

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, as amended by the Dodd-Frank Wall Street Reform and 
Consumer Protection Act of 2010, enacted into law July 21, 2010. 
Sarbanes-Oxley provides for employee protection from retali