9thOn February 12, 2016, the Ninth Circuit rejected a former maintenance manger’s whistleblower retaliation claims under the Energy Reorganization Act, 42 U.S.C. § 5851 (“ERA”), concluding that he failed to engage in in a protected activity.  Sanders v. Energy Northwest, No. 14-cv-35368.

Plaintiff David Sanders alleged that Defendant Energy Northwest (Company) terminated his employment after he objected to the “severity level” designation of an internal “condition report” concerning access badges.  A “condition report” is a report generated by employees when safety procedures may have been violated.  The Company maintained that it terminated his employment after determining that he improperly approved temporary staffing per diem and travel payments to the father of his daughter’s child.

The United States District Court for the Eastern District of Washington granted the Company summary judgment, concluding that Plaintiff failed to allege protected activity under the ERA.  The Ninth Circuit affirmed in a 2-1 decision.  The Majority explained that Plaintiff “had no independent knowledge of possible safety violations prior to the creation of the internal condition reports at issue” and the essence of Plaintiff’s complaint merely concerned “what level of inquiry” the condition report warranted.  Thus, Plaintiff’s “single expression of a difference of opinion about the [severity level] designation of one existing internal condition report lacks a sufficient nexus to a concrete, ongoing safety concern.”  The Majority likewise noted that the Company was already aware of the potential safety violations and its internal process for remediation was underway.

This decision is valuable to employers facing ERA whistleblower claims, as it shows that courts may not be willing to characterize as a “protected activity” any complaint that touches on a safety concern. Instead, a plaintiff’s complaint needs to have a sufficient relationship to a concrete, ongoing safety concern.

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Photo of Steven J. Pearlman Steven J. Pearlman

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

Steven’s practice covers the full spectrum of employment law, with a particular…

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

Steven’s practice covers the full spectrum of employment law, with a particular focus on defending companies against claims of employment discrimination, retaliation and harassment; whistleblower retaliation; restrictive covenant violations; theft of trade secrets; and wage-and-hour violations. He has successfully tried cases in multiple jurisdictions, and defended one of the largest Illinois-only class actions in the history of the U.S. District Court for the Northern District of Illinois. He also secured one of only a few ex parte seizures orders that have been issued under the Defend Trade Secrets Act, and obtained a world-wide injunction in federal litigation against a high-level executive who jumped ship to a competitor.

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.

Steven was recognized as 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 describes Steven as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field.” 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 has served on Law360’s Employment Editorial Advisory Board and is a Contributor to Forbes.com. He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is regularly 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.