On May 15, 2013, OSHA determined that Enercon Services Inc. (Company), an engineering firm that provides nuclear power facilities with engineering support services, violated the whistleblower provisions of the Energy Reorganization Act (ERA).  OSHA Regional News Release, 13-822-KAN (May 20, 2013).  As a result, it ordered reinstatement and a host of other severe penalties.  The Company announced its intent to appeal.

Background

During the spring and summer of 2011, in response to Nuclear Regulatory Commission (NRC) security enhancement requirements, Wolf Creek Generating Station (Wolf Creek), a nuclear power plant and generating station in Kansas City, Missouri, began constructing a security fence around its Essential Service Water (ESW) Pump House, which circulates water to cool the plant.  Regulations require a minimum 4 foot 6 inch soil coverage zone over all ESW piping.

Wolf Creek contracted with the Company to provide engineering support for construction of the fence.  Despite an Enercon engineer’s report that highlighted the minimum soil coverage zone, a work order and fence construction purportedly failed to adhere to soil coverage requirements.  The engineer reported the violation to two project managers who relayed the information to a Wolf Creek engineering supervisor.  The engineer also allegedly informed the Company that the Company’s plan to backfill concrete over the ESW pipes, in an attempt to remedy the soil coverage zone deficiency, was insufficient to satisfy safety requirements.  Shortly thereafter, according to OSHA’s findings, Wolf Creek requested that the Company relieve the engineer of his duties as civil/structural engineer … .”  The next day, the Company terminated the engineer’s employment.

According to OSHA’s findings, the Company asserted that the engineer bore the ultimate responsibility for the engineering errors, and the engineer “disengaged himself from [the Company’s] effort to fix the problem he created.”  OSHA was not persuaded, and emphasized that the work order ignored or failed to incorporate the engineer’s soil coverage instructions, and that a witness confirmed that superintendents, not the engineer, caused the errors.  In addition, OSHA determined that the engineer engaged in protected activity when he reported the soil coverage and backfill violations.  OSHA also found that the engineer attempted to remedy the backfill violation up until his employment termination, and that those efforts also constituted protected activity.  OSHA determined that the temporal proximity between the engineer’s protected activities and his employment termination supported a finding that the Company violated the ERA whistleblower provisions.

OSHA awarded reinstatement, back pay, interest, compensatory damages and attorneys’ fees of more than $260,000 to the engineer.  The Company issued a statement indicating its intent to appeal and reasserted that the Company terminated the engineer’s employment for legitimate business reasons unrelated to the engineer’s alleged safety concerns.

Implications

OSHA’s preliminary order and harsh penalties in this matter reflect its vigilant enforcement of myriad whistleblower laws.   We will monitor the appeal of this decision and keep a close eye on whether OSHA seeks to enforce its preliminary reinstatement order in federal court.

Posted in OSHA Administration
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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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