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On August 31, 2012, the Administrative Review Board (ARB) of the U.S. Department of Labor (DOL) liberally interpreted the standard governing when the SOX statute of limitations clock starts ticking, ruling that a letter informing Complainant Kenneth Poli that he was being placed on a “convenience leave” was not a “final, definitive and unequivocal” notice of termination, and therefore did not start the clock. Poli v. Jacobs Engineering Group, Inc., ARB No. 11-051 (Aug. 31, 2012).
Complainant was a project engineer for Respondent Jacobs Engineering Group, Inc. (the Company). On October 26, 2009, after reporting concerns about a subcontractor’s billing practices, Complainant received a letter informing him that he was being placed on a “convenience” leave of absence, effective November 2, 2009, with an anticipated return-to-work date of January 2, 2010. The letter stated, in pertinent part:
When your Company Convenience Leave ends, every reasonable effort will be made to return you to the same position, if it is available, or to an equivalent position for which you are qualified. However, the Company cannot guarantee reinstatement in all cases. If after your leave expires you do not return to work, the Company will assume you have resigned from your position.
Then, in a letter dated January 5, 2010, the Company informed Complainant that there were no positions available and therefore his employment had been terminated effective January 4, 2010. On March 24, 2010, Complainant filed a complaint with OSHA claiming that the Company violated SOX by, among other things, placing him on an extended leave of absence.
The ARB’s Ruling
An ALJ dismissed the complaint as untimely because it was not filed within 90 days of his receipt of the letter placing him on “convenience leave” (this was the statute of limitations period that existed before Dodd-Frank was enacted, and was applicable at the time Complainant initiated this action; Dodd-Frank doubled it).
The ARB reversed, however, noting that SOX’s statute of limitations runs from when an employee receives a “final, definitive and unequivocal notice of an adverse employment decision,” and concluding that the letter informing Complainant of his convenience leave was not “final, definitive and unequivocal” notice of his termination. In so concluding, the ARB noted that the letter: (i) stated that the company would make “every reasonable effort” to return Complainant to his position; (ii) indicated an anticipated return-to-work date; (iii) was “based on the lack of billable work, and was not due to disciplinary action”; and (iv) permitted Complainant to receive benefits during his leave period. Even though the Company informed Complainant that it could not guarantee his reinstatement, the ARB found this was not enough to evince the requisite finality to cause the SOX statute of limitations clock to start ticking.
This decision arguably reflects a step backwards for employers faced with stale SOX whistleblower litigations before the DOL given the narrow construction the ARB gave to the “final, definitive and unequivocal notice” requirement for SOX’s limitations period to begin running. Federal courts faced with the questions at issue in this case may take a different approach, particularly given that the complainant knew or should have known that he may never have returned to active work after receiving the November 2, 2009 letter, which expressly indicated that he had no guarantee of continued employment. Moreover, this decision is arguably at odds with the U.S. Supreme Court’s seminal decision in Ricks v. Delaware State College, 449 U.S. 250 (1980), where the Court held that the statute of limitations for Title VII and §1981 claims runs from when the plaintiff first learned of an adverse action (in that case, when the plaintiff – a college professor – learned he had been denied tenure and, as a result, would be offered a one-year “terminal” contract).