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, Restrictive Covenant & Trade Secret, and Whistleblower…

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, Restrictive Covenant & Trade Secret, and Whistleblower Practice. Steven’s national practice focuses on defending companies in federal and state courts and in arbitration fora against the full spectrum of employment-related claims, including claims of executives; restrictive covenant violations; employee raiding; theft of trade secrets; whistleblower retaliation under the Sarbanes-Oxley Act, the Dodd-Frank Act and similar state laws; and wage-and-hour violations, including class, collective and PAGA actions.

Steven has successfully handled trials in multiple jurisdictions; prevailed in seeking and defending against applications for temporary restraining orders and preliminary injunctions; defended one of the largest Illinois-only class actions in the history of the federal courts in Illinois (over 90k putative class members); and prevailed following his oral arguments before federal and state appellate courts. He brings his litigation experience (beginning in 1998) 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 the unusual experience of testifying in federal court in connection with investigations. 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 is a Fellow of the College of Labor and Employment Lawyers. Chambers has reported:

  • Steven is “one of the best in the country and has a lot of experience”;
  • Steven is as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field”;
  • He is thoughtful, attentive and demonstrates an acute understanding of matters top of mind for business-minded general counsel; and
  • “He is someone who can navigate the twists and turns of litigation without difficulty.”

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 U.S. Library of Congress Burton Award Winner 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.

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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