Nuclear Whistleblower Receives Favorable Ruling from Department of Labor

WASHINGTON--(BUSINESS WIRE)--In an important victory for nuclear whistleblowers, a U.S. Department of Labor appeals panel has ruled for the second time that a major nuclear contractor fired Katz, Marshall & Banks client James Speegle, a foreman at the Tennessee Valley Authority’s Browns Ferry Nuclear Plant near Florence, Alabama, in May 2004 because Speegle raised concerns about the safety of the plant’s reactor cooling systems. Speegle alleged that his employer, Stone & Webster Construction, Inc. (“S&W”), a subsidiary of the Shaw Group, was improperly applying protective coatings in critical areas where paint debris could clog emergency cooling pumps and prevent safe shutdown of the reactor during an accident.

“I don’t believe that’s possible. The record is crystal-clear that James Speegle was by all accounts a valued employee with an excellent performance record.”

Browns Ferry was shut down in 1985 due to safety problems. Speegle worked at the nuclear power plant in 2004, when S&W was rushing to complete work under an $800 million contract with TVA to restart the Unit 1 reactor. As Speegle repeatedly told his supervisors, S&W was endangering the plant and surrounding communities by applying substandard coatings in critical areas. The company fired Speegle after he raised this issue in a number internal safety meetings and just two days after he reported it to the Nuclear Regulatory Commission. TVA later made S&W re-do the coatings work Speegle complained about at its own expense. In late 2008, the company paid $6.2 million to settle a False Claims Act case with the U.S. government, which had accused the company of widespread fraud on TVA in construction contracts at nuclear plants, including the one at Browns Ferry.

Speegle's termination in May 2004 has been the focus of nine years of litigation. After a week-long trial in 2005, an administrative law judge (“ALJ”) ruled in 2006 that Speegle had failed to prove that his raising of safety concerns was a "contributing factor" to his termination, which S&W decision makers attributed in their testimony to a single comment Speegle made at an employee meeting. The Department of Labor’s Administrative Review Board (“ARB”) reversed this ruling in 2009 and found in Speegle’s favor. S&W then appealed the ARB’s ruling to the U.S. Court of Appeals for the Eleventh Circuit. That court reversed the ARB’s decision last year and sent the case back to the ARB for further review, prompting the ARB to issue its January 31, 2013 decision. After reviewing the hearing record, the ARB again ruled that Speegle’s raising of nuclear safety issues led to his firing.

In its January 31 ruling, which the ARB published on its website last week, the ARB noted that the S&W decision-makers admitted in their testimony that Speegle's raising of safety concerns influenced their view of what they viewed as an insubordinate comment – a comment which, the ARB pointed out, Speegle made during a heated discussion with management about practices he reasonably believed to be unsafe. The ARB found that the ALJ who presided over the trial in 2006 misapplied the standard prohibiting an employer in the nuclear industry from giving “any weight” to an employee’s whistleblowing activity when deciding to discipline the employee. The ARB has now asked an ALJ to review the record again to determine whether S&W met a heightened standard of proving by “clear and convincing evidence” that it would have fired Speegle even if he had not raised nuclear-safety concerns. Proceedings before the ALJ are expected to begin shortly.

Speegle welcomed the ARB’s decision and said he was looking forward to winning his case once and for all. “I’ve been fighting my unlawful termination for almost a decade,” Speegle said, “and I’m not going to stop until justice is done. Companies in the nuclear power industry have to understand that they can’t fire workers for standing up to unsafe work practices.”

Speegle’s attorney, David J. Marshall of the Washington, D.C., law firm of Katz, Marshall & Banks, expressed confidence that Speegle would ultimately win his case. “The issue that remains is whether the company proved at trial that it would have fired James Speegle even if he had not blown the whistle on Stone & Webster’s unsafe practices,” Marshall said. “I don’t believe that’s possible. The record is crystal-clear that James Speegle was by all accounts a valued employee with an excellent performance record.” Marshall observed, “There was nothing at trial to show that the company would have fired such an employee under the same circumstances. In fact, the evidence at trial proved that the opposite was true.”

According to Mr. Marshall's co-counsel, Lisa J. Banks, “the record is replete with evidence that Stone & Webster did not fire other employees who engaged in truly egregious misconduct, including an employee who engaged in a protracted campaign of insulting and demeaning Stone & Webster and TVA's nuclear safety managers, but suffered no consequences until he was given repeated warnings and refused to stop his misconduct. Speegle was given no such warning but instead was fired within two days of reporting safety concerns to the NRC.”

Based in Washington, DC, the lawyers of Katz, Marshall & Banks are nationally recognized for their expertise in the areas of employment law, whistleblower law, sexual harassment law, and claims with the whistleblower reward programs of the Securities and Exchange Commission and the Internal Revenue Service. They provide expert advice and representation on a wide range of whistleblower and employment-related matters. They are dogged advocates for their clients and highly regarded adversaries by their opposing counsel.