The Same Action Defense Under SOX is a Daunting Burden

Whistleblower retaliation claims under the Sarbanes-Oxley Act (SOX) are governed by a two stage burden-shifting framework. In the first step the whistleblower must prove by a preponderance of the evidence that her protected activity was a contributing factor in the adverse action taken against her. The second step is an affirmative defense, commonly referred to as the “Same-Action Defense.”

The Same-Action Defense

The “same-action defense” is a statutory defense that allows the defendant-employer to avoid liability “if the employer demonstrates by clear and convincing evidence that the employer would have taken the same unfavorable personnel action in the absence of” the protected activity. 49 U.S.C. §42121(b)(2)(B)(iv); see §1514A(b)(2)(A) (claims under §1514A “shall be governed under the rules and procedures set forth in section 42121(b) of title 49,” i.e. AIR-21’s anti-retaliation provision). The “same-action defense” does not involve an analysis of the contributing factor causation standard. See Palmer v. Canadian National Railway, ARB No. 16-035, 2016WL6024269, at *37 (ARB Sept. 30, 2016) (“[t]he question in the same-action defense requires the ALJ to determine whether [the employer] would have terminated Palmer even if Palmer had not [engaged in protected activity], not whether the [protected activity] was a factor in his termination.”).

No Consideration of Associated Facts

Under the “same-action defense,” the employer may not use facts logically connected to the protected activity to establish its affirmative defense. In Speegle v. Stone & Webster Const., Inc. the ARB described the “same-action defense” analysis as “focus[ing] on what would have happened in the ‘absence of’ the protected activity.” ARB Case No. 13-074, 2014WL1758321, *7 (ARB April 25, 2014). The ARB found error when the ALJ “only excis[ed] the protected activity without also removing the facts logically connected to the protected activity.” Id. (emphasis added). Instead, “[t]o properly decide what would have happened in the ‘absence of’ protected activity, one must also consider the facts that would have changed in the absence of the protected activity.” Id. Under this analysis, “there are facts that necessarily become unavailable for [the defendant] as it tries to prove what it ‘would have’ done in the absence of the protected activity” Id. at *8. Thus, the defendant in Speegle was unable to use the context created by the protected activity, the history of events incorporating the protected activity, and the events that would not have occurred but for the protected activity. See id.; see also DeFrancesco v. Union R. Co., ARB Case No. 13-057, 2015WL5781070, *9 (ARB Sept. 30, 2015) (employer’s evidence insufficient because it could not show “through factors extrinsic to DeFrancesco’s protected activity” that it would have taken the same adverse action).

In Cain v. BNSF R. Co., the ARB applied Speegle, holding that “the employer must prove what it ‘would have done’ even in the ‘absence of’ the protected activity, which includes consideration of the facts that would have changed in the absence of the protected activity.” ARB Case No. 13-006, 2014WL4966163, *6 (ARB Sept. 18, 2014) (emphasis added). Subsequently, the Tenth Circuit affirmed the ARB’s decision in Cain. See BNSF R. Co. v. U.S. Dept. of Lab., ARB, 816 F.3d 628 (10th Cir. 2016).

The “Clear and Convincing” Standard is Intentionally Difficult

Further, the “same-action defense” imposes the heightened “clear and convincing” evidentiary burden on defendants. The “clear and convincing evidence” standard is the intermediate burden of proof, in between “a preponderance of the evidence” and “proof beyond a reasonable doubt.” See Addington v. Texas, 441 U.S. 418, 425 (1979). To meet the burden, Porter must show that “the truth of [his] factual contentions are highly probable.” Colorado v. New Mexico, 467 U.S. 310, 316 (1984) (internal quotation omitted). “Quantified, the probabilities might be in the order of above 70% . . .” U.S. v. Fatico, 458 F. Supp. 388, 405 (E.D.N.Y. 1978) (Weinstein, J.), aff’d, 603 F.2d 1053 (2d Cir.1979); see also Palmer, 2016WL6024269, *34 (quoting id.).    “[I]t is not enough to show” that the employee’s conduct “provided a sufficient independent reason to . . . fire him.”  Speegle, 2014WL1758321, *7. Rather, the employer must show that it “would have done so . . . solely based” on the proffered non-retaliatory reason.  Id.

Given the restrictions on the “same-action defense,” it is difficult for defendant employers to avoid liability once the whistleblower establishes that their protected activity was a contributing factor in the adverse action. This extraordinarily difficult standard was no accident. In adopting the AIR-21 standard for SOX retaliation claims Congress expressed its intent that whistleblowers must be afforded significant protection. Coupled with this difficult affirmative defense standard is the “contributing factor” causation standard, which is discussed in other posts on this site. When combined, the “same-action defense” and “contributing factor” causation standard make the SOX anti-retaliation provision a strong tool for whistelblowers who suffer retaliation.