David Sanders v. Energy Northwest , 812 F.3d 1193 ( 2016 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DAVID W. SANDERS, No. 14-35368
Plaintiff-Appellant,
D.C. No.
v. 2:12-cv-00580-
TOR
ENERGY NORTHWEST, a Washington
municipal corporation,
Defendant-Appellee. OPINION
Appeal from the United States District Court
for the Eastern District of Washington
Thomas O. Rice, District Judge, Presiding
Argued and Submitted
November 17, 2015—Richland, Washington
Filed February 12, 2016
Before: Edward Leavy, Susan P. Graber,
and Richard C. Tallman, Circuit Judges.
Opinion by Judge Leavy;
Dissent by Judge Graber
2 SANDERS V. ENERGY NORTHWEST
SUMMARY*
Labor Law
Affirming the district court’s summary judgment on a
claim of whistleblower retaliation in violation of the Energy
Reorganization Act, the panel held that the plaintiff did not
engage in protected activity when he objected to the security
level designation given to an internal “condition report” of a
safety procedure violation concerning access badges.
Dissenting, Judge Graber wrote that the majority wrongly
narrowed the scope of the Energy Reorganization Act by
rejecting the whistleblower claim on the basis that the safety
problems were not overlooked, neglected, or concealed by
management and were not concrete and ongoing issues.
COUNSEL
David Whedbee (argued), MacDonald Hoague & Bayless,
Seattle, Washington, for Plaintiff-Appellant.
William G. Miossi (argued) and Matthew W. Lewis, Winston
& Strawn LLP, Washington, D.C.; Angel D. Rains and
Robert A. Dutton, Office of General Counsel, Energy
Northwest, Richland, Washington, for Defendant-Appellee.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
SANDERS V. ENERGY NORTHWEST 3
OPINION
LEAVY, Senior Circuit Judge:
David W. Sanders appeals the grant of summary
judgment to his former employer, Energy Northwest, on his
claims of retaliation in violation 42 U.S.C. § 5851 of the
Energy Reorganization Act (“the Act”). We have jurisdiction
under 28 U.S.C. § 1291. We review de novo, Keenan v.
Allen, 91 F.3d 1275, 1278 (9th Cir. 1996), and we affirm.
I. Background
Energy Northwest is a Washington municipal corporation
that owns and operates a nuclear power plant in Richland,
Washington. Sanders was a maintenance manager whose
responsibilities included overseeing maintenance contractors
working at the power plant. Sanders also administered
temporary staffing contracts for Energy Northwest. Energy
Northwest terminated Sanders’ employment in April, 2011,
after nineteen years of employment. Energy Northwest
maintains that it terminated Sanders after determining that he
had improperly approved temporary staffing per diem and
travel payments to the father of his daughter’s child. Sanders
maintains that he was terminated for protected behavior under
the whistleblower retaliation provision of 42 U.S.C. § 5851.
Namely, Sanders claims his objection to the severity level
designation of an internal “condition report” constitutes
protected activity under the Act.
A “condition report” is a report generated by employees
when safety procedures may have been violated. Energy
Northwest, as a Nuclear Regulatory Commission licensee, is
required to maintain an internal system for documenting
4 SANDERS V. ENERGY NORTHWEST
potential safety violations. See 10 C.F.R. § 21.21 (requiring
the adoption of reporting procedures for noncompliance with
safety standards, including evaluation and recordkeeping
requirements). Employees are encouraged to create condition
reports on any issue perceived to pose safety concerns. Once
a condition report is created, a condition review group meets
to determine the severity level of the report. The condition
review group is composed of managers in various
departments. This group reviews each condition report and
assigns a severity level in decreasing order of severity:
“Alpha,” “Bravo,” “Charlie,” or “Delta,” with Alpha
requiring the most effort to review and correct. The condition
review group has latitude in its designation decisions. After
a severity designation is made, the condition report is
reviewed in an operational focus meeting to ensure that
remediation is properly undertaken.
Energy Northwest is also required to maintain an “access
authorization program” to regulate access to its nuclear
facility. See 10 C.F.R. § 73.56 (personnel access
authorization requirements for nuclear power plants). Certain
background checks and assessments are required before a
worker is granted unescorted access, and certain procedures
are prescribed for cancellation of access privileges once a
worker is terminated. A worker who has been granted an
unescorted access badge generally must turn in the badge
within a prescribed time frame after his employment has been
completed.
In October, 2010, Sanders learned that several contractors
working in his maintenance department had completed their
employment without turning in their access badges within the
required time frame of seven days. The maintenance
department was cited in an internal condition report, which
SANDERS V. ENERGY NORTHWEST 5
was designated as a “Bravo.” Sanders wanted his
maintenance department to investigate and fix this problem.
However, Bruce Peace, the then-head of the security
department, wanted his department to investigate and fix this
problem. After a heated discussion during the operational
focus meeting, management told Pease and Sanders to resolve
these differences outside the meeting. The next day, Sanders
told management that he and Pease could not agree.
Management sided with Sanders, allowing Sanders’
maintenance group to investigate and remediate this issue.
About two weeks later, the security department received
an internal condition report concerning one employee who
was terminated without turning in his access badge within the
seven-day time frame. The condition review group initially
designated this condition report as a “Bravo.” During the
morning management meeting, Pease offered his opinion that
this condition report should have a “Charlie” designation, and
management agreed. Sanders, however, disagreed, and
opined that this condition report should be designated a
“Bravo.” Management again asked Pease and Sanders to
resolve their differences outside the meeting, but they again
were unable to reach an agreement. The next day, Sanders
told 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.” Sanders maintains that this objection over the
“Charlie” designation constitutes protected activity under the
whistleblower protections of the Act.
On September 1, 2011, Sanders filed a whistleblower
complaint with the Department of Labor. The Department of
Labor failed to issue a final decision within one year, and
6 SANDERS V. ENERGY NORTHWEST
Sanders then filed a complaint in the district court. See
42 U.S.C. § 5851(b)(4) (allowing a complainant to bring an
action in federal district court if the Department of Labor has
not issued a final decision within one year of filing); see also
Tamosaitis v. URS, Inc., 781 F.3d 468, 477–78 (9th Cir.
2015) (explaining the operation of the opt-out provision).
The district court granted summary judgment in favor of
Energy Northwest on the ground that Sanders failed to
establish a prima facie case of retaliation because his activity
did not “rise to the level of protected activity under [the Act]
or the associated case law.” Sanders timely appealed.
II. Retaliation Claim under the Act
The whistleblower retaliation provision of the Act,
42 U.S.C. § 5851,1 protects energy workers who report or
1
42 U.S.C. § 5851 (a) Discrimination against employee:
(1) No employer may discharge any employee or
otherwise discriminate against any employee with
respect to his compensation, terms, conditions, or
privileges of employment because the employee (or any
person acting pursuant to a request of the employee)–
(A) notified his employer of an alleged violation of this
chapter or the Atomic Energy Act of 1954 (42 U.S.C.
2011 et seq.);
(B) refused to engage in any practice made unlawful by
this chapter or the Atomic Energy Act of 1954, if the
employee has identified the alleged illegality to the
employer;
(C) testified before Congress or at any Federal or State
proceeding regarding any provision (or proposed
SANDERS V. ENERGY NORTHWEST 7
otherwise act upon safety concerns. The statute specifically
prohibits employers from discharging or otherwise
discriminating against employees for several enumerated acts,
including notifying an employer of a violation, initiating an
enforcement proceeding, or testifying in a safety or
enforcement proceeding. See 42 U.S.C. § 5851(a)(1)(A–E).
The statute also includes a catch-all provision protecting
employees “in any other action to carry out the purposes of
this chapter . . . .” Id. at § 5851(a)(1)(F).
To establish a prima facie case of retaliation under the
Act, an employee must show that “(1) he engaged in a
protected activity; (2) the respondent knew or suspected . . .
that the employee engaged in the protected activity; (3) [t]he
employee suffered an adverse action; and (4) [t]he
circumstances were sufficient to raise the inference that the
protected activity was a contributing factor in the adverse
provision) of this chapter or the Atomic Energy Act of
1954;
(D) commenced, caused to be commenced, or is about
to commence or cause to be commenced a proceeding
under this chapter or the Atomic Energy Act of 1954, as
amended, or a proceeding for the administration or
enforcement of any requirement imposed under this
chapter or the Atomic Energy Act of 1954, as amended;
(E) testified or is about to testify in any such proceeding
or;
(F) assisted or participated or is about to assist or
participate in any manner in such a proceeding or in
any other manner in such a proceeding or in any other
action to carry out the purposes of this chapter or the
Atomic Energy Act of 1954, as amended.
8 SANDERS V. ENERGY NORTHWEST
action.” Tamosaitis, 781 F.3d at 481 (alternations in original)
(internal quotation marks omitted). “Under the [Act’s]
burden-shifting approach to retaliation claims, if an employee
shows that his participation in protected activity ‘was a
contributing factor in the unfavorable personnel action
alleged,’ the burden shifts to the employer.” Id. (quoting
42 U.S.C. § 5851(b)(3)(C)). An employer can rebut the
employee’s prima facie case under the Act if it introduces
“clear and convincing evidence that it would have taken the
same unfavorable personnel action in the absence of [the
employee’s participation in] such behavior.” 42 U.S.C.
§ 5851(b)(3)(D).
We have held that the Act serves a “broad, remedial
purpose of protecting workers from retaliation based on their
concerns for safety and quality.” Mackowiak v. Univ.
Nuclear Sys., Inc., 735 F.2d 1159, 1163 (9th Cir. 1984). The
Eleventh Circuit has noted that a broad interpretation is
“appropriate” because it “promotes the remedial purposes of
the statute and avoids the unwitting consequence of
preemptive retaliation, which would allow the whistleblowers
to be fired or otherwise discriminated against with impunity
for internal complaints before they have a chance to bring
them before an appropriate agency.” Bechtel Constr. Co. v.
Sec’y of Labor, 50 F.3d 926, 932-33 (11th Cir. 1995).
In Bechtel, an employee carpenter disagreed with his
foreman about the safety procedures for measuring the
amount of radioactive contamination of the carpentry tools.
Id. at 929. The carpenter raised his concerns initially with his
foreman, and then with the foreman’s supervisor. Id. at 931.
The Eleventh Circuit held that the carpenter’s conduct
qualified as protected activity, noting that he “did not merely
make general inquiries regarding safety but, rather, he raised
SANDERS V. ENERGY NORTHWEST 9
particular, repeated concerns about safety procedures for
handling contaminated tools.” Id. The court also noted that
“questioning one’s supervisor’s instructions on safety
procedures [is] ‘tantamount to a complaint.’” Id.The Eleventh Circuit has also stated that “Section 5851
does not protect every act that an employee commits under
the auspices of safety,” and that “[w]histleblowing must
occur through prescribed channels.” Stone & Webster Eng’g
Corp. v. Herman, 115 F.3d 1568, 1574 (11th Cir. 1997). In
Stone & Webster, Harrison, an employee ironworker, was
responsible for holding a weekly safety meeting. Id. at 1570.
Ironworkers had recently been assigned a new responsibility,
ensuring fire safety. Id. At the weekly safety meeting, the
ironworkers complained that this procedure was unsafe. Id.Harrison, as foreman, raised the safety issue with the
company’s fire marshal and also filed a complaint with the
Nuclear Regulatory Commission. Id. at 1570–71. The
Eleventh Circuit concluded, “If an employee talks about
safety to a plant fire official, an employer and an industry
regulator, he or she acts squarely within the zone of conduct
that Congress marked out under 42 U.S.C. § 5851(a)(1).” Id.
at 1573.
III. Sanders’ Conduct
Sanders maintains that his difference in opinion about the
“Charlie” designation of a condition report was an objection
to a specific practice, policy, or occurrence that he reasonably
believed was a nuclear safety issue, similar to the employees’
complaints in Bechtel and Stone & Webster. Sanders’
conduct, however, is distinguishable. Unlike the carpenter
and the ironworker employees who raised first-hand safety
concerns with their supervisors, Sanders had no independent
10 SANDERS V. ENERGY NORTHWEST
knowledge of possible safety violations prior to the creation
of the internal condition reports at issue. Sanders did not
generate these condition reports. His employer, Energy
Northwest, was already aware of the potential safety
violations, and its internal process for remediation was
underway.
The essence of Sanders’ complaint concerned which
department - maintenance or security - would take
responsibility for the internal condition reports about access
badges, and at what level of inquiry - “Bravo” or “Charlie.”
Sanders was given the responsibility for a “Bravo” condition
report involving access badges for several maintenance
contractors. Two weeks later, Pease was given responsibility
for a “Charlie” condition report that involved the access
badge of one terminated employee. Sanders objected to this
“Charlie” designation, but ultimately “let it go as a Charlie.”
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. Nor is there any
suggestion of any safety concern that was overlooked,
neglected, or concealed by management.
The designation process for condition reports involved the
managers’ collaborative opinions as to the assigned severity
level. The record indicates that if two managers disagreed,
they were asked to resolve their different opinions, and if they
couldn’t agree, other managers would assign the severity
designation. Here, Sanders expressed a different opinion
from a co-manager, then “let it go.” Under these facts,
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. See Am. Nuclear Res. Inc. v. U.S. Dep’t. of Labor,
SANDERS V. ENERGY NORTHWEST 11
134 F.3d 1292, 1296 (6th Cir. 1998) (employee never alleged
that employer was ignoring safety procedures; employee
complained about an isolated incident, not a concrete and
continuing safety concern).
Because Sanders’ conduct falls outside the scope of the
Act’s protection, the district court properly granted summary
judgment.
Sanders moved to amend his complaint to include state-
law disability and retaliation claims. This motion was made
less than three weeks before the close of discovery and a year
after filing the complaint. The district court did not abuse its
discretion in denying the motion. See Royal Ins. Co. of Am.
v. Sw. Marine, 194 F.3d 1009, 1016–17 (9th Cir. 1999) (“Late
amendments to assert new theories are not reviewed
favorably when the facts and the theory have been known to
the party seeking amendment since the inception of the cause
of action.” (internal quotation marks and brackets omitted)).
Because we affirm the district court’s grant of summary
judgment to Energy Northwest, we need not decide whether
Sanders waived the jury trial issue by failing to include the
correct order in his notice of appeal.
AFFIRMED.
12 SANDERS V. ENERGY NORTHWEST
GRABER, Circuit Judge, dissenting:
I respectfully dissent with respect to the claim of
retaliation under the Energy Reorganization Act of 1974,
42 U.S.C. § 5851, on two grounds.1
First, the majority rejects Sanders’ claim because the
safety problems were not “overlooked, neglected, or
concealed by management” and were not “concrete [and]
ongoing” issues. Maj. op. at 10–11. But the statute does not
require management to overlook, neglect, or conceal a safety
issue before the protection against retaliation comes into play.
Nor does the statute require the safety concern to be concrete
and ongoing when the complaint is made.2 Section
5851(a)(1)(F) casts a wide net; it forbids discrimination
against an employee who engages “in any other action to
carry out the purposes of this chapter.” (Emphasis added.)
See Bechtel Constr. Co. v. Sec’y of Labor, 50 F.3d 926 (11th
Cir. 1995) (holding that the plaintiff’s complaint that
procedures the employer was using to handle an already
identified safety risk was protected activity).
1
I concur in the portion of the opinion that affirms the district court’s
ruling on the motion to amend the complaint.
2
Indeed, the Sixth Circuit case that the majority cites, in support of the
“concrete [and] ongoing” standard, notes that “concrete and continuous”
are not requirements, but only characteristics “typically” found in acts
covered by the statute. Am. Nuclear Res., Inc. v. U.S. Dep’t of Labor,
134 F.3d 1292, 1296 (6th Cir. 1998). The opinion goes on to emphasize
that “[a] single act or inquiry may, of course, fall under the [Energy
Reorganization Act’s] scope,” so long as it bears a close nexus to safety.
Id.SANDERS V. ENERGY NORTHWEST 13
The majority is wrong to narrow the scope of the statute.
The majority fails to follow Mackowiak v. University Nuclear
Systems, Inc., 735 F.2d 1159, 1163 (9th Cir. 1984), which
held that the statute serves the “broad, remedial purpose of
protecting workers from retaliation based on their concerns
for safety and quality.” In my view, insisting on a faster or
more complete solution to a safety problem about which the
employer is aware plainly falls within the terms of the
statutory “catch-all,” as well as the purpose of the law. In
short, Sanders engaged in protected activity.
Second, the majority improperly resolves factual issues
against the non-moving party, Sanders. The district court
granted summary judgment to the employer. Accordingly, on
de novo review we must construe all facts in favor of
Sanders. Nordstrom, Inc. v. Chubb & Son, Inc., 54 F.3d
1424, 1429 (9th Cir. 1995).
The majority states that, although Sanders initially
objected to the “Charlie” designation because he believed that
the safety problem deserved a “Bravo” designation requiring
faster and more complete action, he ultimately “let it go as a
Charlie.” Maj. op. at 10. That characterization tells only half
the story. Sanders told 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.
Thus, Sanders began by stating his disagreement and ended
by emphasizing his disagreement. A better reading of this
statement to the plant manager is that Sanders gave up trying
14 SANDERS V. ENERGY NORTHWEST
to change the outcome, but strongly maintained his complaint
that the facility was not living up to appropriate safety
standards. A reasonable jury could find that the dispute over
the condition report was protected activity.
Additionally, a reasonable jury could find that this
activity was a contributing factor in Sanders’ termination and
that the reason given was pretextual. See Tamosaitis v. URS
Inc., 781 F.3d 468, 481 (9th Cir. 2015) (describing elements
of proof and burden-shifting; holding that protected activity
need only be a contributing factor in the unfavorable
personnel action). For example, Pease confronted Sanders
over the policy change and threatened: “That’s twice and I
owe you one.” The timing of the investigation also is
suspect, as is Pease’s involvement and his testimony that
contradicted Atkinson’s testimony.
For the foregoing reasons, I would reverse the grant of
summary judgment on Sanders’ retaliation claim. I dissent
from the majority’s contrary holding.