Horn v. University First Federal Credit Union (agency decision, June 18, 2020)

Plain-English summary

Credit union loan representative Bryan Horn suggested operational improvements, raised internal process concerns, and objected after another branch took credit for a loan he had worked on. He later resigned after the credit union told him he could resign or be terminated. The ALJ did not credit Horn's testimony that he reported legal violations or was encouraged to ignore required disclosures. The Board held that general suggestions and theoretical concerns about possible mistakes were too remote to show a reasonable belief that consumer-finance law had been violated. It affirmed the finding that Horn did not engage in protected activity and denied the complaint.

Decision snapshot

• Cited authorities: 12 U.S.C. § 5567; 29 C.F.R. §§ 1985.109(a) and 1985.110
• Outcome: The ALJ's denial of the consumer-finance retaliation complaint was affirmed.
• Key point: General criticism of internal procedures is not protected whistleblowing unless it communicates a reasonable belief that conduct violates a law or rule enforced by the Consumer Financial Protection Bureau.

Full text (DOL official public release)

U.S. Department of Labor Administrative Review Board
200 Constitution Ave. NW
Washington, DC 20210-0001

  In the Matter of:


  BRYAN HORN,                                   ARB CASE NO.      2018-0033

              COMPLAINANT,                      ALJ CASE NO.      2017-CFP-00003

        v.                                      DATE: June 18, 2020

  UNIVERSITY FIRST
  FEDERAL CREDIT UNION,

              RESPONDENT.

  Appearances:

  For the Complainant:
        David J. Holdsworth, Esq.; Law Office of David J. Holdworth; Sandy,
  Utah

  For the Respondent:
        Bruce L. Richards, Esq.; Bruce L. Richards and Associates; Salt Lake
        City, Utah

  Before: Heather C. Leslie, James A. Haynes, and James D. McGinley,
  Administrative Appeals Judges


                              DECISION AND ORDER

         PER CURIAM. This case arises under the employee protection provisions of the
  Consumer Financial Protection Act of 2010, Section 1057 of the Dodd-Frank Wall
  Street Reform and Consumer Financial Protection Act of 2010, 12 U.S.C. § 5567
  (2010) (CFPA) and its implementing regulations at 29 C.F.R. Part 1985 (2019). On
  June 21, 2016, Bryan Horn filed a complaint with the Department of Labor’s
  Occupational Safety and Health Administration (OSHA) alleging that he engaged in
  activities protected by the CFPA, and those activities contributed to his discharge
  from employment with University First Federal Credit Union (UFFCU). OSHA
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determined that Horn did not engage in CFPA-protected activity during his employment, and Horn thereafter requested a hearing on his complaint.

   An Administrative Law Judge (ALJ) held a hearing on the complaint on

November 1, 2017. On February 27, 2018, the ALJ issued a Decision and Order (D.
& O.) in which he also concluded that Horn did not engage in CFPA-protected activity during his employment at UFFCA. Horn appealed the ALJ’s D. & O. to the Administrative Review Board (ARB). For the following reasons we affirm the D. & O.

                               BACKGROUND

  The ALJ’s findings of fact are not in dispute. To summarize, UFFCU hired

Horn as a Financial Service Representative (FSR) at its Sandy, Utah branch on August 31, 2015. His duties included selling real estate, auto, and personal loans. During his employment he expressed dissatisfaction with some of UFFCU’s internal procedures, and he considered them inadequate compared to his previous employer. As an FSR, Horn was required to follow procedures under the Truth in Savings Act (TISA). D. & O. at 2-3.

    In early December 2015, Susan Toole, a UFFCU Auditor, visited the Sandy

office and Horn discussed with her his concerns about UFFCU’s procedures. Horn and Toole spoke for approximately forty minutes. Horn suggested ways to improve customer service, expressed concerns about UFFCU’s alarm system, and offered to help create an online procedural manual for employees. On December 8, 2015, Horn sent Toole an email summarizing his suggestions to “improve operational errors and clarify procedure.” D. & O. at 2-3, citing Complainant’s Exhibit (CX) 4; Transcript (Tr.) at 32.

   On February 2, 2016, a credit union member contacted Horn to apply for an

auto loan. Horn worked on the loan for approximately ten days. On February 12th, the member told Horn she was ready to purchase a car but, on February 13th she closed the loan at UFFCU’s Brickyard branch. The Acting Manager of the Brickyard branch changed the name of the loan’s processor so she and the branch would get credit for processing the loan. D. & O. at 3.

  Horn contacted UFFCU Branch Manager Bret Carter on February 17th to

discuss the auto loan because he believed it was not “legally and ethically right for someone to steal someone’s work.” Tr. at 46. Horn indicated that he could no longer work at UFFCU “due to a number of issues” and would resign that evening if UFFCU would “allow him to apply for unemployment.” CX 11. Horn asked for 24 hours to consult with an attorney, and he and Carter agreed to talk the following day. D. & O. at 4; Tr. 48.
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   On February 18, 2016, Horn sent an email to Carter, Human Resource

Manager Scott Mann, and Regional Manager Verl Tidwell expressing his desire to continue his employment. Later that day, Mann gave Horn a letter in which he stated that “we do not feel that having an employee in a sensitive member position, who does not have the desire to be with us, is in the best interest of all parties. Subsequently you can resign or we will have to terminate employment with you.” CX 15. Horn agreed to resign that day and before leaving the premises he completed a letter in which he resigned from employment and accused UFFCU of violating “ethics and banking laws.” CX 16 at 2.

                 JURISDICTION AND STANDARD OF REVIEW

    The Secretary of Labor has delegated to the ARB authority to hear appeals

from ALJ decisions and issue agency decisions in cases arising under the CFPA. Secretary’s Order No. 01-2020 (Delegation of Authority and Assignment of Responsibility to the Administrative Review Board (Secretary’s discretionary review of ARB decisions)), 85 Fed. Reg. 13,186 (Mar. 6, 2020); 29 C.F.R. § 1985.110(a). The ARB reviews questions of law presented on appeal de novo, but is bound by the ALJ’s factual determinations as long as they are supported by substantial evidence. 29 C.F.R. §1985.110(b); Jacobs v. Liberty Logistics, Inc., ARB No. 2017-0080, ALJ No. 2016-STA-00007, slip op. at 2 (ARB Apr. 30, 2019) (reissued May 9, 2019) (citation omitted).

                                DISCUSSION

   The CFPA protects employees from retaliation for engaging in activities

related to the offering or provision of consumer financial products or services:

         (a) In general - No covered person or service provider
             shall terminate or in any other way discriminate
             against, or cause to be terminated or discriminated
             against, any covered employee or any authorized
             representative of covered employees by reason of the
             fact that such employee or representative, whether at
             the initiative of the employee or in the ordinary course
             of the duties of the employee (or any person acting
             pursuant to a request of the employee), has-

               (1) provided, caused to be provided, or is about to
                   provide or cause to be provided, information to
                   the employer, the Bureau, or any other State,
                   local, or Federal, government authority or law
                   enforcement agency relating to any violation of,
                   or any act or omission that the employee
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                   reasonably believes to be a violation of, any
                   provision of this title 1 or any other provision of
                   law that is subject to the jurisdiction of the
                   Bureau, or any rule, order, standard, or
                   prohibition prescribed by the Bureau;

               (2) testified or will testify in any proceeding
                   resulting from the administration or
                   enforcement of any provision of this title 1 or
                   any other provision of law that is subject to the
                   jurisdiction of the Bureau, or any rule, order,
                   standard, or prohibition prescribed by the
                   Bureau;

               (3) filed, instituted, or caused to be filed or
                   instituted any proceeding under any Federal
                   consumer financial law; or

               (4) objected to, or refused to participate in, any
                   activity, policy, practice, or assigned task that
                   the employee (or other such person) reasonably
                   believed to be in violation of any law, rule,
                   order, standard, or prohibition, subject to the
                   jurisdiction of, or enforceable by, the Bureau.

12 U.S.C. § 5567(a). To prevail on retaliation complaint, a complainant must prove that he or she engaged in CFPA-protected activity, was subjected to an adverse employment action, and the protected activity contributed to the adverse action. 29 C.F.R. § 1985.109(a). The ALJ held that Horn failed to prove that he engaged in CFPA-protected activity. We agree.

   The ALJ found that Horn criticized UFFCU’s loan closing procedures and

accused the company of engaging in unethical conduct. D. & O. at 7. But the ALJ did not credit Horn’s testimony stating that he raised concerns about violations of law or was “actively encouraged” not to print out disclosures required under the TISA. Id. at 6. The ALJ acknowledged that Horn spoke to Toole about TISA disclosures and found that Horn made suggestions for improving customer service. But in doing so Horn did not raise concerns about UFFCU’s compliance with disclosure laws. Id. at 6-7.

   On appeal Horn’s counsel does not point to any record evidence indicating

that Horn engaged in CFPA-protected activity. Instead, he merely claims that if “Mr. Horn was complaining . . . that the lack of written or standardized or internal policies and procedures could lead to mistakes and violations of Dodd-Frank, then
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such complaints should be entitled to protection.” Complainant’s Brief at 5. This is incorrect because an employee does not engage in whistleblower activity by describing merely theoretical situations. Such a belief is too attenuated from the standard to be a reasonable belief of a violation of law and therefore failed to satisfy one of the required elements of his retaliation claim. Stated another way, mere speculation does not satisfy Horn’s burden.

                                 CONCLUSION

  The record supports the ALJ’s conclusion that Horn did not engage in CFPA-

protected activity during his employment at UFCCU. Accordingly, we AFFIRM the ALJ’s D. & O. and the complaint in this matter is DENIED.

  SO ORDERED.