Award from ALJ Doesn't Mean Whistleblower Case Is Over

Lora Bentley

The fact that former Washington Mutual VP Theresa Hagman recently received a decision in her favor from the administrative law judge in her Sarbanes-Oxley whistleblower action by no means indicates the end of her journey. In fact, it is more than likely just the beginning.

 

As an attorney involved in whistleblower litigation pointed out in an e-mail to IT Business Edge yesterday, the fact that the ALJ awarded Hagman damages does not guarantee that she will actually receive them. The administrative decision is often the first of many in what is usually a long process.

 

Like the decision from the ALJ in David Welch's case, which we highlighted in October, the ALJ's award in Hagman's case may not be enforced. Moreover, there is always the possibility of appeal -- especially given that the idea of "front pay" in such cases is a new one.



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Dec 28, 2006 12:25 PM Sham Mehta Sham Mehta  says:
I agree with Mr. Zuckerman's view of this case.  The ALJ decision was very well documented and front pay in lieu of reinstatement is not unknown.  Ms. Hagman, like most whistleblowers, would have been unwelcome at her former place of unemployment.Respondent lawyers are well-advised not to keep appealing decisions just because their clients have unlimited funds to spend on attorney fees.  They are better off accepting good decisions and moving on to the next case in the interest of legal fairness. Reply
Dec 28, 2006 12:26 PM Sham Mehta Sham Mehta  says:
I agree with Mr. Zuckerman's view on this case.  The ALJ decision was very well documented and front pay in lieu of reinstatement is not unknown.  Ms. Hagman, like most whistleblowers, would have been unwelcome at her former place of unemployment.Respondent lawyers are well-advised not to keep appealing decisions just because their clients have unlimited funds to spend on attorney fees.  They are better off accepting good decisions and moving on to the next case in the interest of legal fairness. Reply
Dec 28, 2006 12:47 PM Jason Zuckerman Jason Zuckerman  says:
I disagree with two statements in your article.  First, the article also states that “the idea of ‘front pay’ in such cases is a new one.”  This is simply incorrect.  In Kalkunte v. DVI Financial Services, Inc., 2004-SOX-56 (ALJ July 18, 2005), the ALJ awarded the complainant approximately $150,000 in front pay.  The ALJ’s decision to award front pay in the Hagman case is consistent with well-established precedent, including decisions by the ARB under analogous whistleblower protection statutes. The article also states that the “the administrative decision is often the first of many in what is usually a long process.”  Although the DOL’s Administrative Review Board reviews conclusions of law de novo, the ARB’s review of the ALJ’s factual determinations is conducted under the “substantial evidence standard,” 29 C.F.R. § 1980.110(b), a deferential standard that results in few reversals.  Assuming that the ARB agrees with the ALJ’s legal conclusions in this decision, none of which are controversial, the ARB is unlikely to disturb the ALJ’s well-supported factual conclusions.  Reply

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