The stakes increase and the landscape changes tremendously in a whistleblower case when the Secretary of Labor (Secretary) issues a preliminary reinstatement order.  The specter of reinstatement could in some cases – especially where the whistleblower is an executive and/or there is serious acrimony – eclipse the risk of monetary awards.  And the Secretary is apt to become vigilant in seeing that the order gets enforced, the whistleblower feels empowered, and the employer scratches its head wondering how such dramatic relief could be ordered in the absence of a meaningful evidentiary hearing.  Fortunately for employers, the U.S. District Court for the District of Idaho recently held that it lacked jurisdiction to enforce a preliminary order of reinstatement in Solis v. Union Pacific Railroad Co., No. 12-cv-00394 (D. Idaho Jan. 11, 2013), an action brought under the Federal Railroad Safety Act, 49 U.S.C. § 20109 (FRSA).  This decision could have wide reaching effects because the applicable enforcement provisions are adopted by a range of whistleblower protection statutes, such as Section 806 of the Sarbanes-Oxley Act of 2002. 

More specifically, the enforcement provisions at issue in this lawsuit are found in the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century, 49 U.S.C. § 42121, et seq. (AIR 21), which the FRSA imports.  AIR 21 authorizes OSHA to issue a preliminary order of reinstatement and only authorizes the Secretary to file a civil action to enforce final – not preliminary – orders.  Section 42121(b), sub-section (5) provides that the Secretary may file a civil action in district court “[w]henever any person has failed to comply with an order issued under paragraph (3)” and “an order issued under paragraph (3)” refers to final orders, given that sub-paragraph (b)(3) is titled “Final Order.”  In this regard, the court stressed:

Within § 42121, Congress used the language ‘order issued under paragraph (3)’ or similar language, to refer to final – not preliminary – orders.  For example, AIR 21 provides that aggrieved parties may appeal an ‘order issued under paragraph (3)’ to a federal circuit court of appeals.  See 49 U.S.C. § 42121(b)(4).  It also provides that the Secretary must assess costs and expenses against the losing party after’such order is issued under this paragraph’ (i.e., the final-order paragraph).  In both of these contexts – an appeal and a costs award – Congress was referring [to] final orders only – not preliminary orders, which are addressed in subparagraph (b)(2). …  Congress easily could have included preliminary orders by including orders ‘issued under paragraph (2).

(emphasis in original).

This decision will not be well-received by the U.S. Department of Labor (DOL), which has long (and vigorously) taken the position that preliminary reinstatement orders are not enforceable in multiple contexts, including in multiple cases and in the Interim Final Rules for the Handling of Retaliation Complaints under Section 806 of the Sarbanes-Oxley Act of 2002.  Will the Secretary appeal?  If so, how will the Ninth Circuit rule?  Although two federal circuit courts of appeal (the Second and Sixth Circuits) have refused to enforce preliminary reinstatement orders in whistleblower cases, the Secretary has argued that those decisions do not definitively address the question of whether a federal court has jurisdiction to enforce such orders.  Stay tuned … we’ll monitor this one closely.

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Photo of Steven J. Pearlman Steven J. Pearlman

Steven J. Pearlman is a partner in the Labor & Employment Law Department, where he is Head of the Restrictive Covenants, Trade Secrets & Unfair Competition Group and Co-Head of the Whistleblowing & Retaliation Group.

Employment, Whistleblower, Restrictive Covenant and Trade Secret Practice.…

Steven J. Pearlman is a partner in the Labor & Employment Law Department, where he is Head of the Restrictive Covenants, Trade Secrets & Unfair Competition Group and Co-Head of the Whistleblowing & Retaliation Group.

Employment, Whistleblower, Restrictive Covenant and Trade Secret Practice. Steven’s national practice focuses on defending companies in federal and state courts and arbitration against claims of: discrimination, retaliation and harassment, including claims brought by high-level executives; whistleblower retaliation; restrictive covenant violations; theft of trade secrets; and wage-and-hour violations (including class, collective and PAGA actions).

Illustrating his versatility, Steven has successfully handled bench and jury trials in multiple jurisdictions (e.g., Illinois, California, Florida and Texas); defended one of the largest Illinois-only class actions in the history of the federal courts in Chicago; and prevailed following his oral arguments before the Seventh Circuit and state appellate courts. Steven brings his litigation experience to bear in counseling clients to minimize risk and avoid or prepare for success in litigation.

Investigations. Reporting to boards of directors, their audit committees, CEOs and in-house counsel, Steven conducts sensitive investigations and has testified in federal court. His investigations have involved complaints of sexual harassment involving C-suite officers; systemic violations of employment laws and company policies; and fraud, compliance failures and unethical conduct.

Thought Leadership and Accolades. Steven was named Lawyer of the Year for Chicago Labor & Employment Litigation in the 2023 edition of The Best Lawyers in America. He was also named as One of the Top 10 Impactful Labor & Employment Lawyers in Illinois for 2023 by Business Today. He is a Fellow of the College of Labor and Employment Lawyers. Chambers describes Steven as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field.” Chambers also reports that “He is someone who can navigate the twists and turns of litigation without difficulty. Steven is great with brief-writing, crafting arguments, and making sure the client is always happy.”

Steven was 1 of 12 individuals selected by Compliance Week as a “Top Mind.” Earlier in his career, he was 1 of 5 U.S. lawyers selected by Law360 as a “Rising Star Under 40” in the area of employment law and 1 of “40 Illinois Attorneys Under Forty to Watch” selected by Law Bulletin Publishing Company. Steven is a Burton Award Winner (U.S. Library of Congress) for “Distinguished Legal Writing.”

Steven was appointed to Law360’s Employment Editorial Advisory Board and selected as a Contributor to Forbes.com. He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is often quoted in leading publications such as The Wall Street Journal.

The U.S. Chamber of Commerce has engaged Steven to serve as lead counsel on amicus briefs to the U.S. Supreme Court and federal circuit courts of appeal. He was appointed to serve as a Special Assistant Attorney General for the State of Illinois in employment litigation matters. He has presented with the Solicitor of the DOL, the Acting Chair of the EEOC, an EEOC Commissioner, Legal Counsel to the EEOC, and heads of the SEC, CFTC and OSHA whistleblower programs. He is also a member of the Sedona Conference, focusing on trade secret matters.

In 2024, Steven received the Excellence in Pro Bono Service Award from the United States District Court for the Northern District of Illinois and the Chicago Chapter of the Federal Bar Association.

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