July 26, 2010: The Labor Department's Administrative Review Board properly concluded that Roadway Express Inc. failed to show it would have fired a truck driver even if he had not testified in a co-worker's grievance hearing, the U.S. Court of Appeals for the Seventh Circuit ruled July 22 in the case's second trip to the appeals court (Roadway Express Inc. v. DOL, 7th Cir., No. 09-1315, 7/22/10).

Writing for the unanimous three-judge panel in denying Roadway's petition for review of the board's order reinstating Peter Cefalu, Judge Diane P. Wood found that the ARB's decision to exclude Roadway's evidence that it would have fired Cefalu for lying about his prior safety record was supported by substantial evidence and was neither arbitrary nor capricious.

Although the Seventh Circuit had remanded the case to allow Roadway to present previously excluded evidence about why it had fired Cefalu, Wood wrote that the company erroneously construed this as an invitation to rely on Cefalu's dishonesty as its explanation for the firing. “As impracticality is the guiding principle for limitations on reinstatement, there is little reason to allow Roadway to argue about Cefalu's dishonesty,” Wood wrote.

Trucker Fired After Testifying in Grievance Hearing

Cefalu worked as a truck driver for Roadway Express. On Feb. 21, 2002, he testified at a grievance hearing on behalf of a co-worker who had been fired for falsifying his driving log. Cefalu testified a supervisor had told the co-worker to do so. The grievance panel then ordered the co-worker's reinstatement. Roadway fired Cefalu later the same day of the hearing, claiming he had lied on his job application about having been fired from two prior jobs for reckless driving.

Cefalu filed a whistleblower complaint with the Occupational Health and Safety Administration claiming he had been fired in retaliation for testifying at the grievance hearing in violation of the Surface Transportation Assistance Act. After OSHA dismissed Cefalu's complaint, he appealed to a Labor Department administrative law judge.

The ALJ sanctioned Roadway for refusing to reveal where it had obtained the information about Cefalu's prior jobs. The ALJ found that Roadway did not show it would have fired him in the absence of his participation in the grievance hearing and ordered it to reinstate Cefalu. The ARB affirmed the ALJ's decision.

Roadway petitioned the Seventh Circuit for review of the agency's decision. The appeals court affirmed the ARB's decision to exclude the evidence during the discovery phase of the proceedings but ruled that Roadway should not have been prevented from arguing that Cefalu should not be reinstated because of public safety concerns (495 F. 3d 477, 26 IER Cases 654 (7th Cir. 2007); 150 DLR A-13, 8/6/07). The appeals court remanded the case for the ALJ to decide if Roadway would have fired Cefalu in the absence of his protected activity.

On remand, the ALJ declined to consider Roadway's evidence that it would have fired Cefalu for lying about his previous driving record. It considered only whether Roadway presented sufficient evidence that it would have fired Cefalu because of his trucking accidents and found the company failed to do so. The ARB agreed, finding that Cefalu's driving accidents were relatively minor and his reinstatement would not seriously endanger the public.

The ARB properly construed the remand order as limited to whether Cefalu's reinstatement would pose a serious risk to public safety, Wood wrote for the appeals court.

Appeals Court Applies Mt. Healthy Framework

Roadway petitioned the Seventh Circuit to review the second ARB ruling, arguing that it should have been allowed to present its contention that it would have fired Cefalu for dishonesty. Roadway also alleged that Cefalu's five prior trucking accidents were evidence that his reinstatement would endanger public safety.

Wood wrote that the company misunderstood the scope of the appeals court's remand order. Under the STAA, employees who have been fired for engaging in protected activity must be reinstated, Wood wrote. However, the act includes an exception where this would result in the reinstatement of an incompetent or unqualified employee.

The ARB properly construed the remand order as limited to whether Cefalu's reinstatement would pose a serious risk to public safety, Wood wrote, citing the U.S. Supreme Court's ruling in Mt. Healthy City School District Board of Education v. Doyle, 429 U.S. 274, 1 IER Cases 76 (1977).

In Mt. Healthy, the Supreme Court held that once an employee shows that his protected conduct was a substantial factor behind the employer's adverse action, the burden shifts to the employer to show that it would have taken the same adverse action even without the protected conduct, Wood explained.

Applying this burden-shifting framework, Wood found that Roadway should have been given the opportunity to argue that it would have terminated Cefalu because of his record of trucking accidents. But this did not mean that Roadway was entitled to argue that it would have fired him because of his dishonesty about the accidents, Wood said.

“While Roadway believes that our reliance on the Mt. Healthy framework opened the door for its dishonesty arguments, our emphasis on public safety belies the idea that we intended to open the door for Roadway to offer other reasons for firing Cefalu,” Wood wrote. She found that public safety concerns provided only a limited carve-out to the STAA's mandatory reinstatement provision.

No Carve-Out for Dishonesty Under Act, Court Says

“[T]here is little reason to allow Roadway to argue about Cefalu's dishonesty,” Wood wrote. “While Roadway may not like to employ truck drivers who have been dishonest, it is difficult to say that requiring Roadway to retain these drivers is not feasible.”

Wood said the agency on remand was required to apply the Mt. Healthy framework in considering whether Roadway showed it would have fired Cefalu because of his driving record, and was not allowed to consider other possible reasons for the company's decision.

“[W]e are interested only in what Roadway would have done with a person with Cefalu's driving record who had not engaged in protected activity,” Wood wrote. “That inquiry serves as a useful proxy for determining whether Cefalu's reinstatement would present a public-safety hazard.”

The company had failed on remand to meet its burden to show that it had fired other drivers because of similar accident records, Wood said. In contrast, she found that Cefalu presented evidence that Roadway retained a number of drivers who had much worse driving records.

In addition, Wood rejected Roadway's argument that reinstating Cefalu would violate the public policy underlying the STAA. “Roadway routinely retains drivers even though they have some safety problems in their record,” Wood wrote.

“The ARB was entitled to conclude that Roadway failed to demonstrate that Cefalu's reinstatement puts the public in harm's way,” Wood said. “We therefore conclude that the ARB was entitled to find that reinstatement was an appropriate remedy in this case.”

Judges Richard A. Posner and Kenneth F. Ripple joined in the opinion.

Gary K. Stearman in the DOL solicitor's office in Washington, D.C., represented the agency. Lisa A. McGarrity and Thomas J. Posey of Franczek Radelet in Chicago represented Roadway.

By Janet Cecelia Walthall