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Alert

UPDATE: NRC Rescinds Entire Enforcement Action Against Pillsbury Client Tennessee Valley Authority

By Timothy J. V. Walsh, Michael G. Lepre, Anne Leidich, Meghan Claire Hammond

Alert

By Timothy J. V. Walsh, Michael G. Lepre, Anne Leidich, Meghan Claire Hammond

Takeaways

NRC staff unilaterally rescinds remaining violation in TVA discrimination case.
Staff also rescinds entire enforcement order and civil penalty; NRC board terminates the proceeding.

11.12.21

The Nuclear Regulatory Commission (NRC) has rescinded in its entirety an enforcement action against Pillsbury’s client Tennessee Valley Authority (TVA). The NRC Office of Enforcement rescinded four violations of the NRC’s employee protection rule and an order imposing civil penalty based on those violations, which were issued to TVA in 2020. This rescission comes on the heels of a unanimous decision last week by an NRC Atomic Safety and Licensing Board (the Board) granting summary disposition as a matter of law in favor of TVA on three of those violations.

Rather than continue to litigate the fourth violation, or seek an appeal of the Board’s ruling in TVA’s favor on the other three, the NRC staff abandoned its enforcement action against TVA. By letter dated November 8, 2021, the NRC Office of Enforcement informed TVA that, “[a]fter review of the Board’s Order, the NRC staff is hereby rescinding the Notice of Violation issued on August 24, 2020, in its entirety (i.e., to also include the entirety of Violation 4) and is also rescinding the October 29, 2020, order imposing a civil monetary penalty.” A copy of the NRC letter is linked here. That same day, the NRC staff and TVA jointly moved the Board to terminate the adjudicatory proceeding on the Order as moot, which motion the Board granted on November 10, 2021. A copy of the Board order is linked here.

This action by the NRC staff serves to confirm the precedent set by the Board in last week’s ruling:

  1. An employee’s act of filing an internal hostile work environment complaint is not an adverse employment action. No employee should hesitate in speaking up about inappropriate workplace conduct for fear of eliciting a violation from the NRC.
  2. It is incumbent on employers to investigate complaints of inappropriate workplace conduct. Such investigation is not an adverse employment action and therefore, in and of itself, cannot be an act of discrimination under the NRC’s employee protection rule.
  3. Placing an employee on paid administrative leave for a reasonable time period as a result of an employer’s investigation into an internal complaint does not constitute an adverse employment action. No employer should have to choose between allowing a potential harasser to remain in the workplace or risk a violation from the NRC.

Below is the client alert Pillsbury published on the Board’s ruling last week.

NRC Board Issues Key Ruling on Adverse Employment Actions in Discrimination Cases

Takeaways

  • Nuclear Regulatory Commission’s Atomic Safety and Licensing Board finds that investigating an employee’s discrimination complaint does not, in itself, constitute a violation under the NRC’s employee protection regulations.
  • Ruling clarifies that placing an employee on paid administrative leave for a reasonable time period does not constitute an adverse employment action.

On Wednesday, November 3, 2021, a Nuclear Regulatory Commission (NRC) Atomic Safety and Licensing Board (the Board) issued a unanimous decision in favor of Pillsbury’s client Tennessee Valley Authority (TVA) granting summary disposition as a matter of law on three employee discrimination violations charged by the Commission’s Office of Enforcement.

In a significant and critical win for the nuclear industry, the Board agreed with TVA’s arguments that an employee’s submission of a complaint and the employer’s ensuing investigation are not, in and of themselves, adverse employment actions that can form the basis of a discrimination violation under the NRC’s employee protection regulations, such as 10 C.F.R. § 50.7. Equally significant, the Board also rejected the Staff’s position that placing an employee on paid administrative leave is an adverse employment action per se. A copy of the ruling is available at this link.

Two of the dismissed violations (Violations 1 and 3) charged that TVA violated 10 C.F.R. § 50.7 because a TVA manager filed a hostile work environment complaint, which TVA then investigated. The NRC Staff asserted that both the manager’s complaint and TVA’s investigation into the complaint were “adverse employment actions” under Section 50.7 because the actions “could well have dissuaded a reasonable worker from engaging in protected activity.” According to the Board, the Staff applied the wrong standard. Instead, the Board agreed with TVA that applying the Staff’s “dissuasion” standard would impermissibly read out of existence the explicit requirement in Energy Reorganization Act (ERA) Section 211 and Section 50.7 that an adverse employment action must be one that adversely alters an employee’s “compensation, terms, conditions, or privileges of employment.”

For similar reasons, the Board also ruled that an investigation into a complaint, with no tangible impacts to any employee’s compensation, terms, conditions, or privileges of employment, is also not an adverse employment action under ERA Section 211 and Section 50.7. Indeed, the Board found that the complaint itself had alleged retaliatory conduct and “that it was incumbent on TVA to investigate.”

Were the Staff’s incorrect “dissuasion” interpretation allowed to stand, nearly any action taken in the workplace, no matter how minor or discrete, could be deemed by the NRC Staff an “adverse employment action” resulting in a violation of Section 50.7.

The Board also dismissed Violation 2, which alleged that TVA violated 10 C.F.R. § 50.7 because placing an employee on paid administrative leave based on the findings of its investigation was an adverse employment action. The Board rejected the Staff’s position, ruling that “overwhelming caselaw” directs that paid administrative leave does not amount to an adverse employment action. While the Board noted that an employer’s “imposition of administrative leave must be ‘reasonable’” and cautioned that an “‘exceptionally dilatory’ investigation while an employee is on leave might give rise to a violation,” the Board’s ruling effectively overturned the NRC Office of Enforcement’s position that paid administrative leave is a per se adverse employment action.

To summarize, in light of the Board’s ruling:

  • An employee who believes she or he is suffering unprofessional and inappropriate workplace conduct can complain about such conduct and not fear eliciting a violation of Section 50.7 for her or his employer. No employee should hesitate in raising such concerns because the NRC Staff might one day think that the employee complained about the wrong things, or believe that the employee was not harassed enough.
  • An employer can investigate inappropriate workplace conduct concerns without fear of eliciting a violation of Section 50.7. The alternative would place an employer in the untenable position having to decide whether to investigate a concern at all, even though failing to investigate that same concern could open up the employer to other legal liability.
  • An employer can place an employee that may have engaged in inappropriate workplace conduct on administrative leave with full pay and benefits for a reasonable time period without fear of eliciting a violation of Section 50.7 while the employer determines what next steps to take. Otherwise, an employer would have to choose between allowing a potential harasser to remain in the workplace or risk a violation of Section 50.7.  

For further information, contact the authors or the Pillsbury attorneys with whom you regularly work.

Tags
Energy, Employment Law
These and any accompanying materials are not legal advice, are not a complete summary of the subject matter, and are subject to the terms of use found at: https://www.pillsburylaw.com/en/terms-of-use.html. We recommend that you obtain separate legal advice.

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