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Employers Guilty Until Proven Innocent? Third Circuit Lowers the Bar for Employees Claiming Retaliation for Certain Protected Whistleblower Activities

In a decision that may have far-ranging impact for employers accused of retaliating against whistleblower-employees, the Third Circuit Court of Appeals recently held that an employee whose evidence was “entirely circumstantial,” and who did not provide “any evidence” of his employer’s alleged retaliatory motive, nonetheless presented enough evidence to survive summary judgment. Araujo v. NJ Transit Rail Operations, Inc., No. 12-2148 (3rd Cir. February 19, 2013). While the Araujo decision itself comes specifically from the federal whistleblower laws applicable to the railroad industry, the Third Circuit’s analysis of the applicable legal burdens may well apply to employers in such diverse industries as commercial trucking, airlines, maritime, automobile manufacture, and consumer products generally, as well as any employer covered by Sarbanes-Oxley.

Plaintiff Anthony Araujo was a conductor-flagman, employed by NJ Transit, whose primary responsibility was to protect rail-line repairmen from oncoming trains. On February 25, 2008, Araujo witnessed a fatal accident when a repairman came in contact with a live, high voltage “catenary wire” and was electrocuted. Araujo was interviewed the same day by his superintendent, and at the time no disciplinary charges were leveled against him. The next day, Araujo went to NJ Transit’s Employee Assistance Program to report symptoms of an emotional injury he claimed to have sustained from witnessing the fatal accident. 

About a week later, on March 5, 2008, Araujo’s superintendent prepared disciplinary charges, asserting that Araujo violated several provisions of NJ Transit’s “TRO-3 Rules” in connection with the February 25 incident, for which Araujo was temporarily suspended without pay. The superintendent later admitted that, as of the evening of February 25, 2008, he knew of all the information on which he had based his subsequent disciplinary charges against Araujo. It was also uncontested that NJ Transit did not require Araujo to undergo a drug test on February 25, even though both Federal Rail Administration and NJ Transit rules required such testing for any employee NJ Transit had “reasonable cause” to believe might have committed a rule violation contributing to an accident.

After exhausting his administrative remedies before the Occupational Safety & Health Administration, Araujo filed a complaint in New Jersey District Court under the whistleblower protections of the Federal Rail Safety Act (FRSA), alleging that NJ Transit disciplined him in retaliation for his reporting an emotional injury stemming from the February 25 incident. The District Court granted summary judgment in favor of NJ Transit, finding that Araujo failed to present sufficient evidence to conclude that the discipline was retaliatory. The Third Circuit reversed.

The Court of Appeals began with the observation that the FRSA expressly adopts and incorporates the procedural rules and burden-shifting standards set forth in the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (“AIR-21”), which the Court stressed was both “employee-friendly” and “much more protective of plaintiff-employees than theMcDonnell Douglas [burden-shifting] framework” applied to Title VII claims of discrimination and retaliation. Under the AIR-21 framework, an employee must demonstrate, by a preponderance of the evidence, that (i) he or she engaged in statutorily protected activity, (ii) that the employer knew of the statutorily protected activity, (iii) that he or she suffered an unfavorable employment action, and (iv) that the protected activity was a “contributing factor” in the unfavorable employment action.

The Court stressed that Araujo “need only show that his protected activity was a ‘contributing factor’ in the retaliatory [employment action], not the sole or even predominant cause.” In other words, the employee’s protected activity need only be a “factor which, alone or in connection with other factors, tends to affect in any way the outcome of the decision.” Although “Araujo ha[d] not articulated an overwhelming case of retaliation[,]” the Court of Appeals concluded that he showed enough to survive NJ Transit’s motion for summary judgment.

The Third Circuit’s analysis in Araujo will not likely confine itself to railroad industry whistleblower claims brought under the FRSA. The whistleblower protection provision of the Surface Transportation Assistance Act (STAA), for example, applicable to commercial motor vehicles and the trucking industry, like the FRSA expressly adopts and incorporates AIR-21’s procedural rules and burden-shifting standards. Further, the whistleblower protection provision of the Seaman’s Protection Act (SPA) incorporates the standards of the STAA, and thus indirectly incorporates AIR-21. And of course, there is the AIR-21 statute itself, governing whistleblower claims in the airline industry.  

Perhaps most expansively, the AIR-21 standards are expressly incorporated into the whistleblower protection provision of the Sarbanes-Oxley Act of 2002 (“SOX”), which applies to virtually every publicly-traded corporate employer.  Covering claims relating to various types of securities and shareholder fraud, SOX has accounted for anywhere from 5 to 15 percent of the total claims handled annually by the Department of Labor’s Whistleblower Protection Program from 2005 through 2012. (Based on statistics published athttp://www.whistleblowers.gov/wb_data_FY05-12.pdf, last viewed on February 22, 2013.)

Other federal whistleblower statutes, while not expressly incorporating AIR-21’s precise procedures and standards, nevertheless articulate the same essential “contributing factor” framework. These include, for example, the whistleblower provisions of the Moving Ahead for Progress in the 21st Century Act (“Map-21,” applicable to the automobile industry), the Consumer Product Safety Improvement Act (CPSIA), and the Consumer Financial Protection Action of 2010 (§ 1057 of “Dodd-Frank”).

Employers should expect the Third Circuit’s decision in Araujo to impact whistleblower claims under any of these statutes, and perhaps others as well. Henceforth, even plaintiff-employees with nothing more than “entirely circumstantial” evidence may nonetheless have their day in court.

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About this Author

Wendy Johnson Lario, Greenberg Traurig Law Firm, New Jersey, Labor and Employment Attorney

Wendy Johnson Lario is an attorney at the New Jersey Labor & Employment Practice and represents employers in litigation involving claims of discrimination, harassment, retaliation, wrongful termination and whistleblowing, among others. She appears regularly in federal and state courts in New Jersey and New York and defends employers against charges filed with the Equal Employment Opportunity Commission (EEOC), the New Jersey Division on Civil Rights (NJDCR) and the New York Division of Human Rights (NYDHR). Wendy also provides advice and training to management and in...

Michael Slocum, Greenberg Traurig Law Firm, New Jersey, Labor and Employment, Litigation Attorney
Of Counsel

Michael J. Slocum focuses his practice on labor and employment law, including the defense of discrimination, retaliation, wrongful discharge and whistleblower claims. Michael has represented employers in a broad array of industries, including health care and life sciences, pharmaceutical, private security, and retail, and has experience defending against both individual employee claims and class actions.

Prior to joining the firm, Michael practiced in the litigation department of a national firm focused on labor and employment matters in the life sciences industry, where he served as Editor of that firm's "False Claims Act Quarterly." He has experience representing clients at the trial and appellate levels in state and federal courts, as well as before a variety of state and federal administrative agencies.

Michael served as Law Clerk to the Honorable Donald S. Coburn of the New Jersey Appellate Division before entering private practice.

Michael has written and spoken numerous times on a multitude of issues facing employers in diverse industries. In addition to many client alerts and online articles, Michael was a contributing author to "Avoiding Liability for Unconscious Bias and Subtle Discrimination" published in the New Jersey Law Journal in December 2008, as well as a chapter on the False Claims Act in the 2010 edition of "Health Law and Compliance Update."  Michael was a speaker at a September 2008 seminar "The New Jersey FCA: Perspectives and Insight," as well as the firm's May 2013 "Taking Care of Business: An Annual Update on Labor and Employment Law" seminar. 


  • Labor and employment litigation and counseling

  • Federal and state False Claims Acts

  • Whistleblower claims