Moder v. Village of Jackson, Wisconsin, 2000-WPC-5 (ALJ Aug. 10, 2001)

USDOL/OALJ Reporter

Moder v. Village of Jackson, Wisconsin, 2000-WPC-5 (ALJ Aug. 10, 2001)

U.S. Department of Labor

Office of Administrative Law Judges
John W. McCormack Post Office & Courthouse - Room 507
Post Office Square
Boston, MA 02109

(617) 223-9355
(617) 223-4254 (FAX)

Case No.: 2000-WPC-0005
File No.: 05-3100-00-29

In the Matter of:

BARRY D. MODER,
Complainant

VILLAGE OF JACKSON, WISCONSIN,
Respondent

APPEARANCES:

Jeffrey P. Sweetland, Esq.
For the Complainant

James R. Scott, Esq.
For the Respondent

Before: DAVID W. DI NARDI
District Chief Judge

RECOMMENDED DECISION AND ORDER

BACKGROUND AND PROCEDURAL HISTORY

This case arises under section 507(a) of the Water Pollution Control Act, also called the Clean Water Act," 33 U.S.C. §1367(a) (CWA or the Act). That section prohibits discrimination against an employee because the employee has filed, instituted, or caused to be filed or instituted any proceeding under the Act or has testified or is about to testify in any proceeding resulting from the administration or enforcement of the provisions of the Act.

On June 8, 2000, the Complainant, Barry D. Moder ("Moder") filed his complaint against the Respondent, Village of Jackson, Wisconsin ("Village") in the local office of the Occupational Safety and Health Administration ("OSHA"). He alleged that the Village discriminated against him in violation of Section 507(a) by denying him a promotion to wastewater supervisor/foreman. (ALJX 1-1B)¹ On July 12, 2000, OSHA issued its letter of determination and referred the matter to the Office of Administrative Law Judges for adjudication. (ALJX 2-6) The Village timely appealed from OSHA's determination by letter dated July 17, 2000. (ALJX 7) Pursuant to notice, the undersigned conducted a hearing on the matter December 11 through 13, 2000, in Milwaukee, Wisconsin. (ALJX 11-12) Both parties were present, and both had a full opportunity to present evidence and to be heard on the merits. The parties timely filed their post-hearing briefs (CX 70A, 70B; RX 103A, 104) and the parties filed their respective replies to the Court's ORDER on May 7, 2001. (CX 71-CX 80; RX 105, RX 106)

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FINDINGS OF FACTS

OVERVIEW OF PROCEEDINGS

A. Summary

Moder, a certified wastewater operator, has been employed by the Village at its wastewater treatment plant ("WWTP") since 1986. Beginning in late 1987 or early 1988 he began suspecting that WWTP Superintendent Brian Schultz ("Schultz") was not performing tests of the water leaving the plant on his duty weekends. In September 1989, Moder notified the Wisconsin Department of Natural Resources ("DNR") that Schultz was falsifying reports submitted to DNR by making up test results for the tests he did not run on his duty weekends.

DNR Warden Winter Hess ("Hess") investigated the report, with the help of Moder and the other operators. Both Schultz and the Village were potential targets of his investigation. Hess concluded that Schultz was indeed submitting false test reports. In January 1990, he informed Schultz, the Village president and Delmore Beaver ("Beaver"), the Village administrator/clerk, of the results of his investigation. DNR revoked Schultz's operator's license, and Schultz was forced to resign from his job with the Village.

The members of the Village's governing Board were furious that DNR had found out about the problem with Schultz before they had been informed. For this they blamed the operators at the WWTP, chiefly Moder. After Schultz's departure, Moder was made lead operator because DNR required that a licensed operator be designated "in direct responsible charge." He was not, however, promoted to replace Schultz as superintendent, although he was the logical candidate in view of his job seniority and technical expertise. That position remained vacant for the next ten years.

In early 2000, the Village posted the position of wastewater supervisor/foreman. Moder and fellow operator Jeff Deitsch applied. The Village Board would make the selection on May 9, 2000. During Deitsch's interview on April 18, 2000, Beaver, who was still the Village administrator, said that the Schultz matter from ten years earlier was still "baggage" for at least one member of the Village and that he would try to steer any discussion in the Village Board away from it.

On May 1 or 2, 2000, David Murphy ("Murphy"), the Village's public works director, told Daniel Goetsch ("Goetsch") that, while Moder and Deitsch were both well-qualified, the Village had a concern that Moder was not a "team player" because he had gone to DNR about Schultz in 1989, rather than keep it inside by bringing it to the Village Board. Goetsch told Moder about Murphy's remarks.

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On May 8, 2000, Moder attempted to discuss the Schultz matter with Murphy. Murphy refused to discuss it, but told Moder to make him a copy of an anonymous tip reported to DNR about Schultz in 1989. After Moder left, Murphy took the report to Beaver. Beaver told Murphy to make copies for distribution to the members of the Village Board at their meeting to decide on the WWTP supervisor/foreman the next night.

At the beginning of the Board's closed session on May 9, 2000, Murphy distributed copies of the anonymous tip to the Board members. Beaver then recited his "history lesson" of the Schultz matter. Murphy told the Board members that Moder and Deitsch were two very qualified candidates. However, when Beaver and the Board members asked Murphy for a recommendation, he recommended Deitsch as more of a "team player." This was the same phrase he had used with Goetsch the week before in describing the Village's concern about Moder taking the Schultz matter to DNR, rather than to the Board. The Board followed Murphy's recommendation and selected Deitsch as the supervisor/foreman.

B. The EPA's NPDES Agreement with Wisconsin's DNR

Since February 4, 1974, the State of Wisconsin Department of Natural Resources ("DNR") has been party to a National Pollution Discharge Elimination System ("NPDES") Memorandum of Agreement with the U.S. Environmental Protection Agency ("EPA") (the "MOA"). The MOA, as amended from time to time, authorizes DNR to issue NPDES permits under the Clean Water Act to "Publicly Owned Treatment Works" ("POTWs") that discharge into navigable waters. As modified on December 24, 1980, the MOA provides:

The State has primary responsibility for: (a) enforcing the prohibited discharge standards contained in 40 CFR Section 403.5; (b) applying and enforcing National Pretreatment Standards established by the U.S. EPA in accordance with Section 307(b) and (c) of the Act; (c) reviewing, approving and overseeing pretreatment programs developed by Publicly Owned Treatment Works (POTW) in accordance with 40 CFR Section 403.11; (d) requiring, as provided for in 40 CFR Section 403.9 and Section 402(b)(8) of the Act, development of a pretreatment program as a condition of NPDES permits issued to POTW's; (e) reviewing and approving modifications of categorical pretreatment standards to reflect removal of pollutants by a POTW and enforcing related conditions in the POTW's NPDES permit. The U.S. EPA will overview State pretreatment program operations consistent with 40 CFR Part 403 regulations and this Memorandum of Agreement.

(CX 1, Appendix D, p.1)

In 1986, EPA and DNR further modified the MOA to clarify that DNR was to issue NPDES general permits "in accordance with applicable Federal regulations [sic]." (CX 1, Dec. 19, 1986 Modification).

B. The Permit Requirements for the Village's Wastewater Treatment Plant

The Village operates a Wastewater Treatment Plant (WWTP). The WWTP receives influent water containing raw human sewage from toilets and treats it with biological, physical and chemical applications. The water is converted into clean effluent water, which is discharged into Cedar Creek. Cedar Creek flows into the Milwaukee River, which in turn empties into Lake Michigan. (Tr 114-115)

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The Village requires a permit from DNR under the Wisconsin Pollution Discharge Elimination System ("WPDES") to operate the WWTP. The most recent permit was issued November 17, 1995 to expire September 30, 2000. (CX 9) In 1989, WWTP operated under a DNR permit issued August 22, 1985 (the "1985 Permit"). (CX 8)

The DNR permits have required WWTP personnel to monitor the quality of effluent water going into Cedar Creek continuously with a variety of tests. These include five-day biological oxygen demand ("BOD" or "BOD5"), pH, residual chlorine and dissolved oxygen ("DO"). (TR 47, 118-122; CX 8, pt. I, p.2) The BOD and DO tests indicate the presence of oxygen-breathing microorganisms in the water. The pH test measures the acidity or alkalinity of the effluent. If the pH of the effluent is too low (high acidity) or too high (high alkalinity), the effluent can damage the stream's ecosystem. WWTP uses one particular high-acid substance, chlorine, to kill e coli and other pathogenic bacteria in the raw sewage. The residual chlorine test is used to measure the levels of chlorine in the effluent, again to prevent injury to downstream aquatic life. (TR 118-123)

The 1985 permit required that the foregoing tests be performed at the following frequencies:

Test	Sample Frequency	Sample Type
BOD5	5 times weekly	24-hour composite
Dissolved Oxygen	Daily	Grab
pH	Daily	Grab
Residual Chlorine	Daily	Grab

(CX 8, pt. I, p.2)

The permit required detailed records of all measurements and samples and the monthly submission of monitoring results to DNR. (TR 129, CX 8, pt. I, p.1; pt. V, p.1; CX 17-23) The monthly report is called a discharge monitoring report ("DMR"). DNR relies on the analytical data in a DMR to ascertain whether the plant is discharging any pollutants in excess of its limits. (TR 49)

C. The Operators' Suspicions about Brian Schultz

Moder began his employment at the WWTP in 1986. (TR 131) At the beginning of 1989, the personnel at the WWTP were Brian Schultz ("Schultz"), the superintendent; Moder, the laboratory technician ("lab tech"); and Carl Radloff ("Radloff"), the operator. In June 1989, a second lab tech, Jeff Deitsch, was hired, and Moder moved into process control and operations, with responsibility for individual treatment processes. (TR 134-136) The WWTP personnel, including Schultz, rotated weekend coverage. The weekend operator was required to perform BOD, DO, pH and chlorine residual tests on Saturday and Sunday. (TR 137-138)

Beginning in late 1987 or early 1988, Moder and Radloff began suspecting that Schultz was not performing the required tests on his duty weekends but was simply "dry-labbing" - writing down false test results without doing the tests. They observed that testing equipment and supplies were left untouched on Schultz's weekends. (TR 45, 138, 261-262)

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In early 1989, they shared their concerns with Mike Wysocki ("Wysocki"), who was then or about to become a Village trustee and member of the Village's governing Board. (TR 142, 262-265, 328, 337; CX 28, p.3) They also told Deitsch of their suspicions after he started in June 1989. Thereafter the three operators continued to monitor Schultz's weekends by setting up the lab equipment and materials on Friday and observing their condition the following Monday. Their observations confirmed their suspicions that Schultz was not doing the required tests on his weekends. (TR 143-144, 373)

Meanwhile, in July 1989, "Becker," an operator at another WWTP, told Jerry Stautz, the Village clerk, "If Brian [Schultz] was having trouble with the DNR over reporting or documenting tests, he (Becker) knew of a good lawyer." Schultz relayed this information to the other three operators and asked them if they knew anything about it. (TR 148-149, 331-332, 337; CX 28, p.3)

Someone who identified himself as "a plant operator" called DNR on July 25, 1989 to report "lab data falsification" at the Village's WWTP and named Schultz as the suspect. The handwritten intake report of the call (the "operator tip") recited:

An operator from Jackson called to complain about his supervisor. He didn't leave a name. The supervisor, Brian Schultz, is reported to not run tests when he has weekend duty. The other operators have apparently rigged the lab equipment and found it has not been calibrated on the weekends when Brian has had to do the testing. Specifically mentioned is Winkler, pH and C1 tests.

(TR 61-62; CX 11)

Moder was unsure what else to do about Schultz. He was also hesitant to do anything else out of concern for his own job. (TR 200) However, in September 1989, Deitsch told him he had contacted DNR about the matter. Moder then decided to call DNR himself to offer his cooperation in any investigation of what he understood was a potential crime. (TR 150)

D. Moder Contacts DNR

Moder called William Mitchell ("Mitchell"), a DNR game warden, in September 1989. Mitchell told him to call Winter Hess ("Hess"), an environmental conservation warden with DNR. (TR 42, 149-150) Mitchell called Hess to relay what Moder had told him. Hess typed up an intake report of Mitchell's call (the "Mitchell tip") as follows:

Informant stated that the Village of Jackson's superintendent of the sanitary treatment plan is falsifying records. Stated the Super does not run the required tests and just makes up data to enter. Caller has photographic evidence of this and has "set up" the equipment and checked later to see that the equipment has not been run. Thus no tests could have been completed. Super is grade 4 operator. Has been going on for years. Caller and others can no longer tolerate it.
Caller stated the super is very close friend with DNR regulator. Wants only warden involved with investigation and wants to be kept out of the matter if possible.

(TR 45, 62-23; RX 101)

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In September or October 1989, Moder called Hess. He told Hess his boss was dry-labbing and that he, Moder, feared his job might be in jeopardy. They arranged to meet at Moder's house on Friday, October 13, 1989, the day before Schultz was scheduled to work the weekend. (TR 45, 151 CX 10, CAR Oct. 13, 1989)²

E. DNR's Investigation of Brian Schultz

Following the meeting at Moder's house, Hess and Moder went to the WWTP to set up the lab for surveillance of Schultz's activities on Saturday and Sunday, October 14 and 15, 1989. Deitsch was also with them that Friday. (TR 46-47, 151-152; CX 10, CAR Oct. 13, 1989)

Hess went to the WWTP the next day to observe Schultz's activities. He saw Schultz take no samples for testing. After Schultz left, Moder let Hess into the lab. They observed that Schultz had not performed any of the required tests, but had nevertheless recorded test results as though he had. (TR 48, 153-154; CX 10, CAR Oct. 14, 1989; CX 18-20).

On October 27, 1989, Hess and DNR Wastewater Supervisor Ted Bosch ("Bosch") met with the three operators and Wysocki, the Village trustee, at the WWTP to discuss the Schultz investigation. The operators all expressed concerns that their work conditions would become extremely difficult if Schultz learned of their involvement and wanted assurances from DNR before they committed themselves to provide further information. Bosch and Hess told them DNR would likely revoke Schultz's operator's license, but warned them there were no guarantees. (TR 57-58, 66-67, 207-209, 337; CX 10, CAR Oct. 27, 1989).

Hess and Moder set up the lab for further surveillance of Schultz's activities the weekend of November 11 and 12, 1989. Again, Hess watched Schultz on Saturday, seeing him draw no samples. Again, Moder let Hess into the lab. Again they observed that no tests had been run. This time BOD5 test results had been entered, but not pH or chlorine residual results. They returned to the lab the next day, Sunday, November 12, to find that entries for both Saturday and Sunday had been made for all of the tests, though it was obvious that no tests had been run. (TR 53-57, 154-159; CX 10, CAR Nov. 10, 11 & 12, 1989; CX 21-23).

Schultz filed DMRs for October and November 1989 with DNR. The DMRs included the false test data he had entered for the weekends of October 14-15 and November 11-12, 1989. (TR 49-50; CX 10, Inv. Rpt. Jan. 4, 1990; CX 17)

All three operators actively assisted Hess in his investigation. Hess formally interviewed each of them on January 5 and 6. However, Moder was Hess's principal contact and worked much more closely with him than either Deitsch or Radloff. (TR 52-53, 68-69; CX 25-27)

Hess confronted Schultz with his findings on January 4, 1990. Schultz admitted his culpability in falsifying the materials. The two of them then met with Jerry Boldt ("Boldt"), the Village president, to tell him of the situation. (TR 58-59). After Hess left, Boldt and Schultz informed Delmore Beaver ("Beaver"), the new Village Administrator/Clerk. (CX 28 p. 5)

Hess met with Beaver a few days later, on January 8, 1990, at Beaver's office, to tell Beaver what was occurring. He had purposely kept Beaver and the Village "out of the circle" until DNR knew what approach it would take with the Village. At the time, it was considering charges not only against Schultz, but also against the Village. Hess apologized to Beaver for not including him in the earlier meeting with Boldt. (TR 60, 72-73, 294; CX 28 p. 6)

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F. The Village Board's Reaction and Beaver's Investigation.

Beaver became the Village's administrator/clerk on December 4, 1989, one month before he learned of DNR's charges against Schultz. (TR 292). This was his first crisis as Village administrator. (TR 326-327)

Beaver met with Hess on January 8, 1990. The next day, January 9, he met with the Village Board in closed session to inform the Board members of the charges. The Village Board consists of the Village president and six trustees. Two of the trustees were Phil Laubenheimer and John Kruepke. He told the Board the other operators at the WWTP had reported Schultz to DNR. The Board members reacted angrily to this information because the operators had not reported their suspicions to the Board before going to DNR. (TR 294-295, 313, 327, 329-330, 360; CX 28 p. 6)³

Beaver told the Board he intended to interview Schultz and the other three operators at the WWTP to get to the bottom of the matter. On January 10 and 11, 1990, he interviewed the three WWTP operators separately. He learned the details of the DNR investigation. He learned that Wysocki, the Board member, and Stautz, the Village clerk, had known of the suspicions about Schultz even before DNR was called. (TR 328-329, 331-334, 336-337; CX 28 p. 4)

Moder told Beaver candidly about his own role in the DNR investigation. He told Beaver he had called DNR. He told him how he had cooperated with the investigation by setting up the lab and giving Hess access to the WWTP. Beaver understood that, of the three operators, Moder had had the most contact with Hess. (TR 162, 342)

Beaver prepared notes summarizing the results of his investigation. (TR 294-295; CX 28) The first entry stated:

Late 1987 to Early 1988

Barry Moder suspected that tests weren't being run on weekends because dials hadn't been moved on testing equipment.

(CX 28 p. 1)

Beaver presented his notes to the Village Board and discussed his investigation. The Board was still upset that the WWTP operators had not contacted the Village president or the Village legal counsel before going to DNR, even though Beaver's investigation had disclosed that Wysocki and Stautz had both been informed. (TR 330-338) Beaver and the Board were concerned that DNR might bring charges against the Village, as well as against Schultz, that might result in a fine. (TR 294, 297)

In the end, Schultz resigned under pressure from the Village. (TR 297). DNR revoked his operator's license. It did not take any action against the Village. (TR 61, 65; CX 15)

G. Events after Schultz's Resignation

Following Schultz's resignation, a number of Village residents, who were obviously sympathetic to Schultz, complained to Beaver about the way the matter had been handled. They had already formed their own opinions and told Beaver they thought Moder had started the DNR investigation so that he could have Schultz's job. (TR 320, 340-341)

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Wysocki told Moder that Board members were upset about not being notified of the investigation. He also said it was the Board's consensus that Moder had participated in the investigation in order to get Schultz's job. As a result, according to Wysocki, Board members were unwilling to promote Moder to Schultz's position as superintendent. (TR 163-164, 211)

The Village did not fill Schultz's position at the WWTP. The Village engineer, Leo Prusi, was given supervisory responsibility over it, but he was not a certified wastewater operator. (TR 296, 346). Consequently, in May 1990, Moder was promoted to a non-supervisory bargaining-unit position called "lead operator" because DNR required that a certified operator be designated "in direct responsible charge of the facility." (TR 213-214, 297; CX 30). It was unusual for a WWTP in Wisconsin not to have a superintendent. (TR 428) As lead operator, Moder was responsible for the technical day-to-day operation of the plant for the next ten years (TR 170), thereby gaining the technical expertise that is so important herein as most pivotal to the events in May of 2000.

F. Beaver's "History Lessons" about Schultz to Board Members and Murphy

Over the next several years, Beaver periodically fielded questions about the Schultz matter. Some of them were from new Village Board members, others from new Village employees. (TR 324-326, 346)⁴

One such question was from David Murphy, who became the Village's public works director in January 1997. (TR 422). When he came to the Village, Murphy knew nothing about the Schultz matter. Soon after he started, however, Gordy Rose, superintendent of streets and water and thus Murphy's immediate subordinate, told him about it and said the operators at the WWTP had "set Schultz up." Murphy understood that Rose was a friend of Schultz. Murphy then went to Beaver seeking an explanation. Beaver gave him his standard "history lesson" about the incident. (TR 448-450)⁵

I. The New Wastewater Supervisor/Foreman Position

In the fall of 1999, the Village Board authorized the re-creation of a supervisor/foreman position at the WWTP. (TR 171, 300). There had been no supervisory position at the WWTP since Schultz's departure in early 1990. Moder had only been a bargaining-unit "lead operator." All of the WWTP employees had been reporting directly to Murphy, the director of public works, as their immediate supervisor. (TR 168-169, 448)

The Village posted the supervisor/foreman position in early 2000, and two candidates signed up Moder and Deitsch. (TR 171-172:CX 35). Both had the necessary educational and licensure qualifications. Beaver and Murphy developed a number of tests to administer to the two candidates timed and untimed skills tests; four take-home essay questions and a timed "in-basket" exercise. They also interviewed each candidate. The tests and interviews were conducted on Tuesday, April 18, 2000. The answers to the essay questions had to be turned in on Monday morning, April 24, 2000. (TR 177-179).

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J. The In-Basket Exercise

The "in-basket" exercise, developed by Beaver, required the candidates to respond to a timed set of hypothetical memos. Each candidate had to imagine that he was covering for his supervisor, "Fuzzy Philter," who was ill, and had to answer 30 memos in one hour before leaving the country for a week. (TR 181-183, 350-351; CX 45-46). Moder was able to write answers to 24 of the 30 memos in the allotted hour. (TR 183; CX 45)

Deitsch wrote "No response" in answer to 11 of the memos. (CX 46). Beaver was dissatisfied with those answers and asked Murphy to find out what Deitsch had meant. Murphy returned with the answer that Deitsch meant he was going to respond after returning from his trip. (TR 308-309)

On May 3, 2000, Moder learned that Deitsch had been called back to the Village Hall to explain his answers. Moder asked Murphy if that was correct. Murphy confirmed it, telling Moder that Deitsch had answered 11 memos with the same response and that Beaver was not satisfied. (TR 184)⁶

Memo No. 10 of the in-basket exercise was a hypothetical letter to "Philter" confirming his participation in an upcoming job fair. Moder responded to Memo No. 10 as follows: "John, call Marcia Theusch and set up May 2, 2000 for me to be at job fair." Deitsch responded: "To: Jackie Killeen [Receptionist], Call and info that [I] will not be able to make it." (CX 45 [Memo 10]; CX 46 [Memo 10])

Beaver wrote about Moder's answer to Memo #10: "Handled it perfectly." He gave the answer a perfect score of 100. About Deitsch's answer Beaver wrote: "Totally copped out and asked Jackie to do the dirty work." He gave it a zero. Those were the only two numerical scores Beaver assigned to any of the in-basket responses. (TR 350-352; CX 47, p. 2, para. 6)

In his overall evaluation of the responses, Beaver considered the general question, "In handling the memoranda, is the applicant predisposed to 'pass the buck,' or (how) was the situation handled?" He said of Deitsch's answers: "Applicant did not take a very 'I am responsible' position in his responses." In contrast, he said of Moder's: "Applicant generally responded decisively and properly for the memos that were completed." (TR 352-354; CX 47 p. 3 para. 10)

Beaver's written summary of Deitsch's performance on the in-basket exercise was quite terse: "Applicant #203 [Deitsch] fell short of expectations in view of having gone through a similar exercise once." In contrast, he said of Moder's overall performance:

I was impressed by the general responses from #201 [Moder]. Sufficient decisiveness and responsibility recognition was demonstrated. Outside the 'chain of command' situations and the 'recognition' of John Kleener's problem and the 'attitude problem' of Carl Radloff's, he had the best responses of the two applicants.

(TR 354; CX 47 p. 4)⁷

K. The Skills Tests and the Essay Questions

The skills tests were a set of standardized written tests, some timed and some not timed. Moder took them on April 18, 2000. While he was still working on the untimed tests, Murphy came in and told him, "Time's up." When Moder said he was not finished, Murphy said, "Go ahead and finish because we have to move on." Moder then finished what he was doing without having a chance to review it. (TR 178-179). Deitsch got started late, so he was given a chance to come in the next day to finish his test. (TR 377)

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The answers to the essay questions were due Monday morning, April 24, 2000. Moder turned in his answers at approximately 8:30 a.m. Deitsch, however, was still working on his answers on the computer at the lab during the day that Monday. He turned them in at around 3:00 that afternoon. Moder properly called Murphy to complain about another example of disparate treatment, and left a message for him. (TR 180-181)

Moder and Deitsch took different approaches in their answers to the essay questions. The questions were "more of [a] technical nature." (TR 304). Moder took a bulletin approach, going point-by-point over things he would improve at the WWTP. Deitsch's answers were more general. Murphy described them as "manager-style." (TR 433; CX 43, 44)

According to Murphy, whose disappointment was rather apparent to this Administrative Law Judge as all wanted Deitsch to be the clear winner, neither candidate was a clear-cut winner from the tests. Their overall scores were "very, very close," demonstrating that they were "two very qualified candidates." (TR 433)

L. Beaver's Reference to the Schultz Matter at Deitsch's Interview

Beaver and Murphy jointly interviewed both Moder and Deitsch on April 18, 2000. At Deitsch's interview, Beaver said, referring to the Schultz matter, "what happened back in '89" would not be held against them. (TR 378) However, he also stated, "The Village may look at what had transpired at that time and hire one, none or either of the applicants." (TR 319) He said one or the other of the two candidates might not get the job "if any of the board members were carrying some objections because of what had happened in the 1990s" and "there was always a chance that neither would be selected because of perceived baggage." By "perceived baggage," he clearly meant the Schultz matter. (TR 319-320, 366). He said that as far as he was concerned, he was not about to let any of that influence the Board's decision, but added, "It's always carried in some of their heads, or could be carried in some of their heads." (TR 366)

Beaver did not make this statement in response to an inquiry from either Deitsch or Moder. (TR 355). He felt it was important to state that the Schultz matter was still a concern to at least one Board member, Phil Laubenheimer, who had been on the Board in 1990. (TR 343-344). He "was concerned that it would not turn into any kind of a situation where that [the Schultz matter] would be a primary focus in the hiring process." (TR 355-356)

Beaver did not make similar mention of the Schultz matter in Moder's interview. (TR 185, 452)⁸

M. Murphy's Mention of the Schultz Matter to Goetsch on May 1

Daniel Goetsch is a professional engineer employed by Graef, Anhalt, Schloemer & Associates, Inc. ("GAS"), consulting engineers, architects and scientists. GAS has provided architectural, engineering and consulting services to the Village over the years, including particularly design engineering work on the WWTP. Goetsch was the design engineer on the WWTP in 1993 and 1994 and the project manager of its expansion from 1996 through 1999. He has had regular dealings with both Moder and Murphy, as well as with Deitsch. (TR 93-96)

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On May 1 or 2, 2000, Murphy and Goetsch had a telephone conversation about some aspect of the work at the WWTP. The discussion then turned to the selection of the supervisor/foreman. Goetsch told Murphy he had a difficult decision having to choose between two well-qualified candidates. Murphy agreed, adding he was glad he was in that position, rather than having to choose between two unqualified people. Murphy asked Goetsch whom he would recommend. Goetsch demurred, reminding Murphy he would have to work with both Moder and Deitsch. Goetsch did, however, point out some of the strengths of the two candidates, including Moder's greater seniority and slightly higher levels on some of his operator's license classifications, an observation with which this Administrative Law Judge agrees. (TR 99-100, 426-427)

Murphy then told Goetsch "that there was an incident with Mr. Moder that caused the Village some concerns." Murphy said:

[A]pproximately ten years ago there had been an anonymous tip, if you will, to the Wisconsin Department of Natural Resources that the then lead operator which was not Mr. Moder nor Mr. Deitsch was not performing the necessary and required lab work on a daily basis but was still completing the forms that had to be submitted to the Department of Natural Resources with what he claimed to be test results.

(TR 100)

Murphy said, "[T]he Village felt Mr. Moder should have gone to the Village board with his concerns." He added, "There was concern that Mr. Moder was not a team player, that the events ten years prior could have probably been kept inside the Village and not gone to the Department of Natural Resources." (TR 102, 105). He said the Village "did not view Mr. Moder as a team player." (TR 110-111)

Murphy left Goetsch with the impression that Moder's alleged involvement in the DNR investigation "was not a favorable characteristic." (TR 103). Goetsch understood from Murphy's comments that the situation ten years earlier reduced Moder's chances for selection, even if it did not completely eliminate them. (TR 104)⁹

Later the same day, Goetsch related his conversation with Murphy to Moder. (TR 101, 186-187). Moder then called Russ Krueger, the street superintendent, and asked him to let Moder know if he heard anyone talking about the Schultz matter. (TR 188)

N. Moder's Discussion of the Schultz Matter with Murphy on May 8

The Village Board was scheduled to select the supervisor/foreman on Tuesday, May 9, 2000. On Monday, May 8, 2000, at 7:30 a.m., Moder went to Murphy's office. He knew from Goetsch that Murphy had expressed the Village's "concern" about Moder's role in the DNR investigation. He took with him copies of the two tips to the DNR, the handwritten July 25, 1989 anonymous operator's tip, and the typewritten September 14, 1989 tip from DNR Warden Mitchell, hoping he could use them to start a dialog with Murphy about the matter. On both forms, the complainant box had been completely blacked out. On the operator tip, all identifying information about the informant had been blacked out from the text, as well. (TR 189-190, 228-229; CX 12; RX 101)

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When Moder entered Murphy's office, Murphy was sitting at his desk. Moder said he "believed there was an outstanding issue that I would like to talk about." He handed Murphy the operator tip report. (TR 190-191, 192; CX 12) Murphy looked at it and said, "What is this?" Moder told him it had to do with the Brian Schultz case. Murphy then asked Moder if he had made the call. Moder said no. Murphy then asked, "Who did?" Moder did not respond. Murphy then said, "It was an unfortunate situation," a rather candid admission. (TR 190)

Moder asked Murphy if he wanted a copy of the tip, and Murphy said yes. Moder then copied both tips, the operator's and Mitchell's. He inadvertently gave Murphy the copy of Mitchell's, rather than the operator's. Neither of them noticed the error. Moder told Murphy, if he wanted more information, he could call Winter Hess. Murphy wrote "Winter Hess" on his copy. He did not ask Moder if Moder wanted him to do anything with his copy. Moder did not ask him to do anything specific with it. (TR 193, 238-239)

There was no further discussion. Moder perceived from Murphy's demeanor that Murphy did not wish to talk about the matter further. Moder then left. (TR 193, 237-238)¹⁰

O. Murphy's and Beaver's Handling of the Anonymous Tip Report

Immediately after Moder left his office, Murphy took the tip report, ostensibly without even reading it (perhaps because he already knew what it said), to Beaver. (TR 429, 431) He told Beaver, "Barry gave me this, and he said he didn't make the call." (TR 312, 429, 431, 457) Beaver knew exactly what "call" Murphy meant (because Beaver had joined the Board in December of 1989 and apparently also has a long memory): the call "to inform the Department of Natural Resources to begin an investigation or an accusation that might begin an investigation or whatever, to call the situation at the wastewater plant to the DNR's attention." (TR 312)

Beaver told Murphy to make enough copies of the tip report to distribute to all the Board members at the closed session the next evening, May 9, 2000. The agenda for that closed session was the selection of the wastewater supervisor/foreman. (TR 313, 431, 457) Beaver, of course, had previously said he would do everything he could to steer the Village Board away from any discussion about the Schultz matter, because he knew that one or more Board members still perceived that as "baggage". (TR 322)¹¹

Gordon Bell, the water superintendent, walked into Murphy's office on either Friday, May 5, 2000, or Monday, May 8, 2000.¹² Murphy said he was reviewing Moder's and Deitsch's tests for the supervisor/foreman position. Rather than talk about the tests, however, Murphy held up the tip report and asked Bell if he knew who had made the call about Schultz to DNR in 1989. Bell said he did not know. (TR 80-82, 431-432)

P. The May 9 Closed Session and the Selection of Deitsch as Supervisor/Foreman

The Village Board took up the matter of selecting the wastewater supervisor/foreman at its meeting on Tuesday, May 9, 2000. Early in the meeting, one Board member, John Kruepke, resigned. He had been a member of the Board in 1990 when it was dealing with the Schultz matter. Phil Laubenheimer, who had been on the 1990 Board, was also a Board member at the May 9, 2000 meeting. (TR 313, 345)

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The Board went into closed session to consider the supervisor/foreman issue. Beaver and Murphy remained in the closed session with the Board. Beaver also asked that Kruepke be allowed to remain even though Kruepke was now off the Board. Since the tip report was going to be presented to the Board, Beaver wanted Kruepke, who had been a member of the Board in 1990, to be there to offer information about the Schultz matter.¹³ (TR 314, 345-346, 432, 444)

At the closed session, Murphy distributed copies of the tip report to the Board members. He told the Board members, "Del [Beaver] told me to make copies of this. Barry [Moder] had turned it in to me." Beaver confirmed that he had directed Murphy to make the tip report available to them. (TR 358, 459) Beaver then gave the Board his "history lesson" of the Schultz matter, even though that "history lesson" should have been irrelevant in the selection process. (TR 314-315, 445)

Beaver and Murphy reviewed the two candidates' tests and interview results with the Board. They reluctantly told the Board members that there was no clear-cut winner on the tests. (TR 433). Murphy told the Board members that Moder and Deitsch were two very qualified candidates. (TR 433) Making a recommendation between them was "the most difficult decision [he] made in four years at the Village." (TR 436) According to Beaver, he had to pressure Murphy to make a recommendation after the discussion "went around the mulberry bush about three times," and finally told Murphy, "Pick one." (TR 316-317)

At that point, Murphy recommended awarding the position to Deitsch. (TR 434). He told the Board members that he considered Deitsch to be a better "team player." (TR 446, 460-461, 462). That was the same terminology he had used the week before, when he told Goetsch of the Village's concerns about Moder's involvement in the DNR investigation: "There was concern that Mr. Moder was not a team player, that the events ten years ago could have probably been kept inside the Village and not gone to the Department of Natural Resources." (TR 102-103)

The Board accepted Murphy's recommendation. They returned in open session and voted to appoint Deitsch as the wastewater supervisor/foreman. (TR 197, 379, 446). The following day, Wednesday, May 10, 2000, Murphy and Deitsch signed an "Offer of Employment," whereby Deitsch was to be the "WWTP Utility Superintendent/Foreman" at a starting wage of $43,480 per annum, subject to a 5% raise, plus a cost of living adjustment, upon successful completion of a one-year probationary period beginning May 22, 2000. (TR 384; CX 52)

Under the Collective Bargaining Agreement ("CBA") between the Village and Moder's Union, Moder's wage rate in calendar year 2000 was $18.67 per hour. (TR 198; CX 53, 54). His annualized straight time pay, based on 2,080 hours per year, was $38,833.60. (TR 256-258)

Q. The May 10 Incident with Rathke

Also on May 10, 2000, Dan Rathke, a streets department employee, came to the WWTP lab. Moder, Deitsch and Radloff were all there, Moder at the sink and Deitsch at the far end of the island, next to the flame hood. Rathke asked who got the WWTP supervisor/foreman job. Moder said Deitsch had been selected. Rathke then snickered, walked over to Moder and said, "Well, I guess Barry's our new Union steward." He started touching Moder on the shoulder. Moder pulled away from him and said, "Touch me again and I'll (expletive deleted) kill you." Rathke said, "Come on, Barry," and started touching him again on the shoulder. Moder then repeated his comment (expletive deleted) and left the room. He made no moves or gestures toward Rathke. (TR 239-240, 380, 415-419; CX 69)

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Other employees in the Village's street department say to each other, "Do you want to be dead?" When Moder described the incident with Rathke to Krueger, the street superintendent, a few days later, Krueger told Moder that if Rathke had done that to him, Krueger, he would have hit him. (TR 241-243)

Rathke did not perceive Moder's comment to be a threat. (TR 466). In fact Moder and Rathke were friends before the incident and have been friends since. They both apologized for their actions. (TR 386)

Q. Deitsch's May 12 Warning to Moder

Deitsch said nothing to Moder about his comments to Rathke on either May 10 or 11, 2000. (TR 243, 385). He said nothing to anyone about it until he attended a management staff meeting on Friday, May 12, 2000, and heard Rule say that Rathke was upset about it. Murphy then demanded that Deitsch tell them what had happened. Murphy was furious that no one had told him about it. (TR 381-382, 397-398, 438)

After the staff meeting, Murphy spoke privately with Deitsch about the incident with Moder. Beaver also joined the discussion. They told him that as Moder's supervisor, he was "responsible to note any type of irregularities, anything that might be of importance later but may seem trivial at this time." (TR 439). They told him "to watch and make sure [Moder] wasn't trying to sabotage anything at the treatment plant or wasn't trying to not do his job." (TR 392). Murphy told Deitsch to give Moder a verbal warning. Deitsch said he did not think he could because he was not yet Moder's supervisor. (TR 382)

Deitsch then went to Moder. He told him:

that Murphy wanted Moder written up;
that Moder had to be careful because he was under a microscope;
that he had been told to write Moder up for any little thing;
that Moder shouldn't do "anything stupid";¹⁴
that there was concern that Moder was going to sabotage the WWTP;¹⁵
that women in the front office were afraid Moder would come up there and shoot them all;¹⁶ and
that Moder should leave the Village on his own terms and not on the Village's.

(TR 244-246)

Moder asked Deitsch if the Schultz matter had come up at any time. Deitsch told him it had been brought up in his interview. He also told Moder that Beaver was "spreading bad seed" about him. (TR 245-246)

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Murphy issued Moder a verbal warning for his comments to Rathke on June 2, 2000. (RX 126)

CONCLUSIONS OF LAW

A. Summary of the Argument

Respondent submits that the claim must be dismissed because the complaint filed by Moder "has only a marginal connection to the Act and was not made internally but rather to a state agency" and "simply does not meet the statutory definition." I disagree for the following reasons.

To prevail, Moder must show that he was an employee of the Village; that he engaged in activity protected by Sec. 507(a) of the Clean Water Act; that the Village took adverse action against him; and that the evidence creates a reasonable inference that the adverse action was taken because of Moder's protected activity. See Passaic Valley Sewerage Comm'rs v. DOL, 992 F.2d 474, 479 (3d Cir. 1993). Moder may prove his case either with direct evidence of discrimination or by means of the "burden-shifting" method under McDonnell Douglas v. Green. I note that the Seventh Circuit, in whose jurisdiction this claim arises, authorizes the use of McDonnell-Douglas in "whistle blower" retaliation claims. In this regard, see Kahn v. U.S. Secretary of Labor, 64 F.3d 271, 277 (7th Cir. 1995).

Even though Moder assisted an investigation by the Wisconsin DNR, that investigation was conducted under and in furtherance of the Clean Water Act ("CWA"). By enacting the CWA, Congress intended to occupy the field of water pollution control in all the navigable waters of the United States. The CWA contemplates State participation in the water pollution control program, but only under the superintendence of the Environmental Protection Administration. See Milwaukee v. Illinois, 451 U.S. 304, 322-23 (1981). By contacting DNR and participating in DNR's investigation of Schultz, Moder engaged in activity protected by Sec. 507(a). See Wedderspoon v. City of Cedar Rapids, Case No. 80-WPCA-1 (Sec'y, July 28, 1980).

The Village took adverse action against Moder by denying his application for a promotion to the position of WWTP supervisor/foreman, a position for which he was "very qualified." See Patterson v. McLean Credit Union, 491 U.S. 164, 186-87 (1989).

This is a direct evidence case. Beaver told Deitsch at Deitsch's interview about "perceived baggage" and the possibility that one or both would be rejected because of the Schultz affair ten years earlier. Murphy told Goetsch, a week before the Board met to make the selection, that Moder was not seen as a "team player" because he had gone to DNR about Schultz. Beaver and Murphy collaborated in placing the report of the anonymous tip to the DNR before the Board members when they made their decision. This is all direct evidence that the two key players in the selection decision, Beaver and Murphy, did not want Moder to get the job because of his role in the DNR investigation.

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Respondent concedes that the only arguable direct evidence of unlawful motive is the "Wysocki" comment in 1990. According to Moder, Wysocki relayed to him and others that the Village Board was unhappy with the way the Brian Schultz matter was handled and that he (Moder) had done it to get Schultz's job which the Board would never agree to. On cross-examination, Moder stated that Wysocki told him the Board was unhappy because they had not been notified. (TR 211) The meeting at which this session took place occurred at the Deitsch residence and Moder, Deitsch, and Radloff were present. Id. Moder could not explain why Wysocki, who had been involved for months with the investigation, would be concerned about the lack of notice to the Board. That behavior would simply be irrational. This is particularly true in light of the fact that two months later Moder was promoted to a lead operator position. (TR 213) Co-worker Radloff indicated that Wysocki had been notified because the three "were looking for a little help" and felt that the "Board member should know about it." (TR 264) In fact, Wysocki participated in the marking of the bottles prior to the involvement of the DNR. (TR 268) Co-worker Radloff had no recollection of any meeting at which Moder was threatened by Wysocki. (TR 268-69) Likewise, employee Deitsch had no recollection of any threat by Wysocki. (TR 376) Deitsch also relayed the active involvement of Trustee Wysocki in the investigation, however, Wysocki did so reluctantly and only because he was forced to do so by the Complainant.

Even if this is approached as a McDonnell Douglas "burden-shifting" case, the same direct evidence of discrimination creates Moder's prima facie case of discrimination. The Village's asserted "legitimate, nondiscriminatory reasons" are mere pretexts, phony reasons, lies, to cover up the unlawful discrimination. In any event, in the face of direct evidence proving discrimination without the need for inference or presumption, the Village would have to prove, and it cannot, that it would have selected Deitsch even if Beaver and Murphy had not been motivated by the illegal reason, and I so find and conclude.

To be sure, apparently some members of the then-Village Board felt that the Village President or legal counsel should have been notified prior to going to the DNR, and that fact is the crux of this case.

B. Burden of Proof in Clean Water Act Whistleblower Protection Cases

Section 507(a) of the Clean Water Act ("CWA" or "Act"), 33 U.S.C. Sec. 1367(a), provides:

No person shall fire, or in any other way discriminate against, or cause to be fired or discriminated against, any employee or any authorized representative of employees by reason of the fact that such employee or representative has filed, instituted, or caused to be filed or instituted any proceeding under this chapter, or has testified or is about to testify in any proceeding resulting from the administration or enforcement of the provisions of this chapter.

A plaintiff may prove a case of unlawful whistleblower retaliation in the same way as a case under Title VII of the Civil Rights Act of 1964. He may do so in one of two ways: either directly with direct evidence of retaliation or indirectly through circumstantial evidence establishing a prima facie case of retaliation.

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1. "Burden-shifting" with indirect evidence of retaliation

The Complainant, applying the traditional "burden-shifting" approach established in McDonnell Douglas v. Green, 411 U.S. 492 (1973), may establish a prima facie case of retaliation indirectly by showing that

(1) the plaintiff was an employee of the party charged with discrimination; (2) the plaintiff was engaged in a protected activity under the Clean Water Act; (3) the employer took an adverse action against the plaintiff; and (4) the evidence creates a reasonable inference that the adverse action was taken because of the plaintiff's participation in the statutorily protected activity.

Passaic Valley, 992 F.2d at 480-81; see also Simon v. Simmons Foods, Inc., 49 F.3d 386, 389 (8th Cir. 1995).

Once the employee establishes a prima facie case of discrimination through such indirect means, the burden shifts to the employer to "produce evidence that the plaintiff was [denied a promotion] . . . for a legitimate, nondiscriminatory reason." See Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 254 (1981). The employee then has "the opportunity to prove by a preponderance of the evidence that the legitimate reasons offered by the defendant were not its true reasons, but were a pretext for discrimination." Id. at 253; see also St. Mary's Honor Center v. Hicks, 509 U.S. 502, 507-08 (1993). This Administrative Law Judge, in determining whether the plaintiff has met this burden, "may still consider the evidence establishing the plaintiff's prima facie case 'and inferences properly drawn therefrom ... on the issue of whether the defendant's explanation is pretextual.'" Reeves v. Sanderson Plumbing Products, Inc., 120 S.Ct. 2097, 2106 (2000) (quoting Burdine, 450 U.S. at 255, n. 10).

The plaintiff need not proffer direct evidence that unlawful discrimination was the real motivation. Instead, "it is permissible for the trier of fact to infer the ultimate fact of discrimination from the falsity of the employer's explanation." Reeves, 120 S.Ct. at 2108. As the Court stated in St. Mary's and reiterated in Reeves:

The factfinder's disbelief of the reasons put forward by the defendant (particularly if disbelief is accompanied by a suspicion of mendacity) may, together with the elements of the prima facie case, suffice to show intentional discrimination. Thus, rejection of the defendant's proffered reasons will permit the trier of fact to infer the ultimate fact of intentional discrimination.

St. Mary's, 509 U.S. at 511, quoted in Reeves, 120 S.Ct. at 2108.

Thus, consistent with the evidentiary principle that a factfinder may view "a party's dishonesty about a material fact as 'affirmative evidence of guilt,'" "the trier of fact can reasonably infer from the falsity of the explanation that the employer is dissembling to cover up a discriminatory purpose." Reeves, 120 S.Ct. at 2108 (internal citation omitted).

2. Direct evidence of discrimination

If the employee presents direct evidence of discrimination, there is no need to resort to "burden-shifting" analysis under McDonnell Douglas v. Green, supra; TWA v. Thurston, 469 U.S. 111, 121 (1985). Direct evidence of discrimination is:

evidence which, if believed by the trier of fact, will prove the particular fact in question without reliance on inference or presumption... This evidence must not only speak directly to the issue of discriminatory intent, it must also relate to the specific employment decision in question.

Pitasi v. Gartner Group, Inc., 184 F.3d 709, 714 (7th Cir. 1999) (internal quotations and citations omitted).

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Of course, the employee must still prove by a preponderance of the evidence that unlawful discrimination was a substantial factor in the employer's decision. See Price Waterhouse v. Hopkins, 490 U.S. 228, 259 (1989) (White, J., concurring); Id. at 274 (O'Connor, J., concurring); Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 253 (1981). So long as the direct evidence of discrimination is substantial, the employee is entitled to have it weighed and decided by the trier of fact.

C. By Notifying DNR and Cooperating in DNR's Investigation of Schultz, Moder Engaged in Activities Protected by Sec. 507(a) of the Clean Water Act.

1. The DNR proceeding against Schultz was a proceeding to administer or enforce the Clean Water Act.

The Village makes a threshold argument that DNR's proceeding against Schultz in 1989 and 1990 was purely the action of a State agency enforcing State law, and not a "proceeding under" the CWA or a "proceeding resulting from the administration or enforcement of the provisions of" the CWA.

The Federal Water Pollution Control Act, "Clean Water Act" (CWA) amendments to the Federal Water Pollution Control Act were enacted in 1972. The CWA represented a complete overhaul of the Federal water pollution control program. It focused on "effluent limitations," with a "national goal that the discharge of pollutants into the navigable waters be eliminated by 1985." 33 U.S.C. Sec. 1251(a)(1). An "effluent limitation" is "any restriction established by a State or the Administrator [of the Environmental Protection Agency (EPA)] on quantities, rates, and concentrations of chemical, physical, biological, and other constituents which are discharged from point sources into navigable waters ... including schedules of compliance." 33 U.S.C. Sec. 1362(11).

Section 301(a) of CWA, 33 U.S.C. Sec. 1311(a) prohibits "the discharge of any pollutant by any person" except in compliance with certain enumerated sections of the Act. "Person," as defined in the Act, includes any "State, municipality, commission or political subdivision of a State." 33 U.S.C. Sec. 1362(5). By its terms, the Act applies to "publicly owned treatment works" ("POTWs"), such as the Village's WWTP, as well as to private "point sources." See Milwaukee v. Illinois, 451 U.S. 304, 319 (1981) (Milwaukee's municipal sewage treatment plants are subject to effluent limitations established by EPA pursuant to CWA); see also, e.g., 33 U.S.C. Secs. 1281(g), 1311(b)(1)(B), 1317(b), (c).

Section 402(a) of CWA, 33 U.S.C. Sec. 1342(a), creating the National Pollution Discharge Elimination System ("NPDES"), authorizes the EPA to issue permits for the discharge of pollutants. Any such discharges must be strictly controlled and monitored in accordance with standards established by the Act or by the EPA. In particular, the NPDES permittee must comply with applicable effluent limitations. The permit "serves to transform generally applicable effluent limitations and other standards including those based on water quality into the obligations . . . of the individual discharger." EPA v. California ex rel. State Water Resources Control Bd., 426 U.S. 200, 205 (1976). However, the permittee is not limited to the requirements specified in the permit. It remains subject to all standards established by EPA regulations, including new standards promulgated after the issuance of its NPDES permit. See E. I. duPont de Nemours & Co. v. Train, 430 U.S. 112, 126-28 (1977).

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A key component of the CWA's administration and enforcement scheme is State participation. Indeed, the Act states: "It is the policy of the Congress to recognize, preserve and protect the primary responsibilities and rights of States to prevent, reduce and eliminate pollution." 33 U.S.C. Sec. 1251(b). However, States must submit their water quality standards to the EPA for approval, as consistent with the requirements of the Act. If a State fails to obtain EPA approval within a specified period, then EPA will establish the water quality standards for that State. See 33 U.S.C. Sec. 1313.

States are also encouraged to assume primary responsibility for the administration of the NPDES permit system. A State may do this by means of a State permit system approved by the EPA as in compliance with NPDES. See California Water Control Bd., 426 U.S. at 208. The Governor of a State desiring to administer its own permit program must submit a description of the proposed program to EPA, along with a statement from the applicable chief legal counsel that the laws of the State provide adequate authority to carry out the program. The EPA Administrator "shall approve each such submitted program unless he determines that adequate authority does not exist" to ensure compliance with the requirements of the CWA and NPDES. See 33 U.S.C. Sec. 1342(b).

However, even though CWA contemplates significant State participation in the federal water pollution control program, such State activity does not displace CWA's applicability to point sources operating under State-issued permits. CWA represents Congress's clear intent to "occup[y] the field through the establishment of a comprehensive regulatory program supervised by an expert administrative agency." Milwaukee v. Illinois, 451 U.S. at 317 (1981). "Congress' intent in enacting the [CWA] was clearly to establish an all-encompassing program of water pollution regulation. Every point source discharge is prohibited unless covered by a permit, which directly subjects the discharger to the administrative apparatus established by Congress to achieve its goals." Id. at 318. The State agency that participates in the NPDES permit program does so "under the superintendence of the EPA." Id. at 311.

Pursuant to the CWA, Wisconsin enacted its own pollution discharge elimination legislation in 1973. The statute granted the Wisconsin Department of Natural Resources ("DNR") authority to issue permits for the discharge of pollutants into the waters of the State, upon condition that such discharges complied with all applicable effluent limitations and other standards. 1973 Wis. Act 74, currently codified at Wis. Stat. Sec. 283.31. DNR was to establish rules relating to "point source discharges, effluent limitations, water quality related limitations, municipal monitoring requirements, standards of performance and toxic and pretreatment effluent standards [that] comply with and do not exceed the requirements of" the Federal CWA. 1973 Wis. Act 74, currently codified at Wis. Stat. Sec. 283.11(2) (emphasis added). The law's stated purpose was to qualify Wisconsin for participation in NPDES under CWA:

The purpose of this chapter is to grant to [DNR] all authority necessary to establish, administer and maintain a state pollution discharge elimination system... consistent with all the requirements of the federal water pollution control act amendments of 1972, P.L. 92-500, 86 Stat. 816 [the CWA].

1973 Wis. Act 74, currently codified at Wis. Stat. Sec. 283.001(2).

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In November 1973, the Governor of Wisconsin applied to the EPA for authority to conduct a State permit program under NPDES. This application was made pursuant to 33 U.S.C. Sec. 1342(b), as well as in accordance with applicable State law. EPA Administrator Russell E. Train approved the request on February 4, 1974. EPA and DNR thereupon entered a Memorandum of Agreement ("MOA") authorizing DNR to issue NPDES permits in Wisconsin. (CX 1)

Thus DNR derives its authority to issue permits to waste water treatment facilities, such as the Village's WWTP, from the CWA. Its enforcement of the requirements contained in such permits is also enforcement of the CWA and the EPA's implementing regulations. The Supreme Court noted as much in Milwaukee v. Illinois, discussing Milwaukee's municipal sewage treatment plants:

To the extent that the Environmental Protection Agency, charged with administering the Act, has promulgated regulations establishing specific effluent limitations, those limitations are incorporated as conditions of the permit. Permits are issued either by the EPA or a qualifying state agency. Petitioners operated their sewer systems and discharged effluent under permits issued by the Wisconsin Department of Natural Resources (DNR), which had duly qualified under 402(b) of the Act, 33 U.S.C. 1342(b)..., as a permit-granting agency under the superintendence of the EPA.
. . . .
The duly issued permits under which the city Commission discharges treated sewage from the Jones Island and South Shore treatment plants incorporate, as required by the Act . . . the specific effluent limitations established by EPA regulations pursuant to 301 of the Act, 33 U.S.C. 1311[.]
. . . .
It is quite clear from the foregoing that the state agency duly authorized by the EPA to issue discharge permits under the Act has addressed the problem of overflows from petitioners' sewer system. The agency imposed the conditions it considered best suited to further the goals of the Act, and provided for detailed progress reports so that it could continually monitor the situation. Enforcement action considered appropriate by the state agency was brought, as contemplated by the Act, again specifically addressed to the overflow problem.

Milwaukee v. Illinois, 451 U.S. at 311, 320-21, 322-23 (1981), (citations omitted; emphasis added).

When the DNR issued its NPDES permit to the Village for operation of the WWTP, it was issuing a permit under NPDES as the agent of the EPA. When the DNR subsequently enforced the conditions of the permit against Schultz for falsification of test reports required by the permit, it was taking action that "it considered best suited to further the goals of" the CWA, as well as the goals of the parallel State law. In short, its enforcement action against Schultz, including Hess's investigation, was a "proceeding under this chapter" and a "proceeding resulting from the administration or enforcement of the provisions of this chapter," for purposes of Sec. 507(a) of the Act, 33 U.S.C. Sec. 1367(a).

The Secretary reached the same conclusion in Wedderspoon v. City of Cedar Rapids, Iowa, Case No. 80-WPCA-1 (Sobernheim, ALJ, July 11, 1980), aff'd, Sec'y, July 28, 1980), a case very much like this one. The Iowa Department of Environmental Quality ("DEQ") had EPA authority to issue NPDES permits and broad investigatory authority under the implementing state statute. An employee at a municipal sewage treatment facility supplied information about sewage overflows into a river. The information was ultimately reported to the DEQ, which then conducted an investigation. While it found no intentional sewage sludge discharge,

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the DEQ ordered the city to report all future discharges immediately. The city then disciplined the employee for failing to report the discharge internally. In response to the employee's Sec. 507(a) complaint, the city argued that the DEQ investigation was purely a state-law proceeding. The Secretary rejected the city's argument:

DEQ does not enforce, as regards the control of water pollution, purely local regulations but standards, permits and regulations intended to carry out the provisions of the federal statute as well as supplementing or implementing state law. Here, DEQ undertook two investigations to determine whether the City had violated effluent limitations standards and the terms of its permits ... Although DEQ's investigations were not punitive they were undertaken in the administration of the federal statute and in aid of the enforcement of its provisions. They fall, therefore, plainly within the ambit of 33 USC 1367(a) which protects employees who cause, as complainant did, the institution of "any proceeding" resulting from administration or enforcement of the Act. "Any" is a broad term and in the absence of restrictive language applies in the context here to administrative as well as court proceedings, [as] well as appropriate state action, investigation and advice as well as the exaction of penalties.

Wedderspoon, ALJ Decision at 13-14 (emphasis added).

Hess's investigation of Schultz is, if anything, more clearly an "enforcement action" than the Iowa DEQ's investigation of the sludge discharge in Wedderspoon. From its inception, it was targeting deliberate falsification, which potentially carried criminal as well as civil penalties. Even though DNR ultimately decided to forego criminal charges against Schultz, it revoked his operator's license. It exacted the penalty that "it considered best suited to further the goals of" the Federal CWA, as well as the goals of the parallel State law. See Milwaukee v. Illinois, 451 U.S. at 323 (1981).

2. Moder filed, instituted, caused to be filed or instituted and testified in the DNR proceeding against Schultz.

The next question is whether Moder "filed, instituted, caused to be filed or instituted" the DNR investigation or "testified in" it. Moder made direct contact with DNR Game Warden Mitchell to report his suspicions about Schultz in September 1989. Mitchell relayed Moder's information to Environmental Conservation Warden Hess. Moder also called Hess after speaking with Mitchell. Hess began his investigation following his receipt of those two calls one directly from Moder, the other indirectly from Moder through Mitchell. It may be that another unidentified "plant operator" made a call to DNR about Schultz on July 25, 1989, but Hess did not begin his investigation until after Moder's contact with DNR. As there is a note relating to that "tip" in July of 1989, it is obvious that a telephone call was made at that time and while that caller has not been identified in this record, this Administrative Law Judge could infer that that telephone call was also made by Mr. Moder. At the very least it was Moder's telephone call in September of 1989 and his followup that prompted the DNR to conduct an investigation of Schultz.

Moder plainly "caused" Hess's investigation and the proceeding against Schultz "to be filed or initiated." He also made statements to Hess at various times throughout the investigation. Thus Moder "testified" in a "proceeding resulting from the administration or enforcement" of the CWA, for purposes of Sec. 507(a), and I so find and conclude.

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Wedderspoon disposes of any lingering doubt on this point. Wedderspoon did not contact the state agency directly, as Moder did. Rather, he only talked to a friend, who was an environmental "activist." That was the end of Wedderspoon's active initiative. The friend talked to a newspaper reporter, who called Wedderspoon for information. The reporter quoted Wedderspoon by name in his article about the sewage discharge. In response to the newspaper article, the city (Wedderspoon's employer) requested the investigation by the Iowa DEQ. Thus, there was never any direct contact between Wedderspoon and the DEQ. The information about the sewage discharge moved from (a) Wedderspoon to (b) his "activist" friend to (c) the reporter to (d) the newspaper's readership to (e) the city, which learned of the article and then contacted (f) the DEQ for an investigation. Nevertheless, the Secretary concluded that "the causal nexus between what [Wedderspoon] did and the official action which resulted is so close as to [lead to] the conclusion that [Wedderspoon] 'caused to be . . . initiated [a] proceeding under [the CWA].'" Wedderspoon, ALJ Decision at 11-12; see also Passaic Valley, 992 F.2d at 478 (sewage treatment employee's exclusively intracorporate complaint reporting is protected activity under Sec. 507(a)).

D. The Village's Refusal to Promote Moder was "Adverse Action" for Purposes of Discrimination Analysis.

Discrimination means disparate treatment. It means treating one employee less favorably than another for a forbidden reason. See Teamsters v. United States, 431 U.S. 324, 335 n. 15 (1977). An employer may treat one employee less favorably than another in many different ways. Any such less favorable treatment is adverse action. Termination, suspension and discipline are obvious forms of adverse action, but they are not exclusive. Indeed, the seminal case establishing the model for proving discrimination, McDonnell Douglas v. Green, involved none of those. Rather it involved a refusal to hire and spoke of standards equally relevant to a refusal to promote:

The complainant in a Title VII trial must carry the initial burden under the statute of establishing a prima facie case of racial discrimination. This may be done by showing (i) that he belongs to a racial minority; (ii) that he applied and was qualified for a job for which the employer was seeking applicants; (iii) that, despite his qualifications, he was rejected; and (iv) that, after his rejection, the position remained open and the employer continued to seek applicants from persons of complainant's qualifications.

McDonnell Douglas v. Green, 411 U.S. 792, 802 (1973).

Discrimination in promotion, like discrimination in hiring, involves nonselection. Four elements are common to both hiring and promotion cases: (i) the employee is qualified for the vacant position; (ii) the employee applies for it; (iii) the employer rejects the employee; and (iv) the employer fills the position with another applicant under circumstances that create a reasonable inference of unlawful discrimination. The plaintiff need not prove, as part of his prima facie case, that he was more qualified than the successful applicant. See Patterson v. McLean Credit Union, 491 U.S. 164, 186-87 (1989) (promotion case); see also, e.g., Hughes v. Derwinski, 967 F.2d 1168, 1173 (7th Cir. 1992)(Title VII plaintiff alleging discriminatory denial of promotion need only prove he was minimally qualified for position to establish a prima facie case).

Here there is no serious dispute that the Village took an adverse action against Moder by rejecting his application for promotion to the supervisor/foreman position. He was unquestionably qualified for the position. He had been an operator at the WWTP for nearly 14 years and the lead operator for ten. He had all the necessary certifications on his license. Finally, Murphy never denied Moder's qualifications. Right up until the moment he recommended Deitsch to the Board, Murphy repeatedly acknowledged that both Moder and Deitsch were "very qualified" for the position. He said that to Goetsch on May 1 or 2, and he said it to the Board on May 9.

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I observed both Mr. Deitsch and Mr. Moder in the courtroom, both testified credibly before me on the issues in this case and on certain technical aspects of their jobs, but it is most apparent to this Administrative Law Judge that Mr. Moder, based upon his credible testimony and his responses to the essay questions and the so-called "in-basket" timed test (I note that Mr. Deitsch was given an additional six-and-one-half hours to complete the essay questions at his office computer, additional time that was not given to Mr. Moder), was the more qualified as he clearly had more seniority with the Village and more technical expertise in the job that he sought and was denied, and I so find and conclude.

E. There Is Substantial Direct Evidence that the Decision Not to Promote Moder in 2000 Was in Retaliation for His Involvement in the DNR Investigation in 1989 and 1990.

Respondent submits it had legitimate, non-discriminatory reasons in not selecting Moder for the position, and even if Moder has established a prima facie case, the Village has articulated a legitimate reason for its decision. It is important to remember that this was a very difficult choice between two qualified candidates. Given that fact, the subjective difference will invariably be slight. Murphy's perception was that Deitsch was slightly more qualified to handle the supervisory responsibility. (TR 459-61) Minor flaws in the performance of one's job can serve as a legitimate non-discriminatory basis for an employer's decisions, according to Respondent. Wolf v. Buss (America), 77 F.3d 914, 924 (7th Cir. 1996).

Moder is required to prove Murphy's explanation is a phony, i.e., a lie. The Village's selection process need not be perfect. Indeed, a subjective, even arbitrary process is not proof of discrimination. Baron v. Highland Park, 195 F.3d 333, 341 (7th Cir. 1999). Like the plaintiff in Baron, Moder has not demonstrated that the selection process was a "sham". An incorrect or undesirable reason does not demonstrate pretext, according to Respondent. Id.

However, I disagree for the following reasons. Initially, I note that Moder throughout his many years with the Respondent, has been an excellent, dedicated and conscientious worker and his only "flaw," to use Respondent's term, is that he is not a "team player."

This is a direct-evidence case, with substantial evidence that both "speak[s] directly to the issue of discriminatory intent" and "relate[s] to the specific employment decision in question." No inference or presumption is needed. See Pitasi, 184 F.3d at 714. Beaver's and Murphy's statements and actions leading up to the decision to promote Deitsch rather than Moder leave no room for doubt that Moder's involvement in the DNR investigation more than ten years before was the deciding factor, and I so find and conclude.

Beaver said on April 18, 2000, three weeks before the Village Board meeting, that he expected the DNR investigation to be "perceived baggage" for one or more Board members and that "there was always a chance that neither would be selected because of perceived baggage," meaning the DNR investigation. (TR 319-320, 366) Beaver was flatly admitting that discrimination based on the DNR investigation might affect the selection of the supervisor/foreman, that is, "the specific employment decision in question," and I so find and conclude.

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Even more incriminating is Murphy's statement to Goetsch on May 1 or 2, 2000, only a week before the Village Board met to make the selection. Murphy, in discussing the qualifications of the two candidates, told Goetsch bluntly that "there was concern that Mr. Moder was not a team player, that the events ten years prior could have probably been kept inside the Village and not gone to the Department of Natural Resources." (TR 105). This was the only negative comment he made about either of the two candidates, and he explicitly tied it to Moder. He was telling Goetsch that, if Moder were not selected, it would be because he had gone to DNR rather than the Board ten years earlier. Like Beaver two weeks before, he was candidly admitting that discrimination based on the DNR investigation was going to affect "the specific employment decision in question." Goetsch needed no inference or presumption to understand what Murphy was saying, since Murphy spelled it right out, and I so find and conclude.

Finally, there was the anonymous tip report that Moder left with Murphy on May 8, 2000, the day before the Village Board met.¹⁷ Murphy is correct on one point: that tip report and the Schultz affair should have been irrelevant to a promotion decision to be made in 2000. But Murphy and Beaver saw it as the single most relevant piece of information to present to the Board. In fact, I characterize that tip report as the so-called "smoking gun" in this case.

As soon as Moder left the room, Murphy rushed it to Beaver. Without skipping a beat, Beaver ordered Murphy to make copies to hand out to the Board members in their closed session, even though he had previously told Deitsch he would try to steer any discussion away from the Schultz affair because of its continuing sensitivity. Murphy, annoyed that Moder had rebuffed his question about who had called DNR, continued to pursue it with Gordy Bell the same day. The next evening, as the Board began its closed session to decide between Moder and Deitsch, Murphy passed out copies of the tip report and told the members Moder had given it to him. Beaver then reminded them of the "history lesson" and specifically asked that ex-Member John Kruepke stay for the meeting in case he wanted to add anything about the Schultz affair.¹⁸

If, as Beaver had said to Deitsch and Murphy had said to Goetsch, either they or Village Board members harbored lingering resentments toward Moder because of the DNR investigation, what more incendiary document could they have presented to the Board than the tip report? This was the smoking gun, the handiwork of someone who could never be trusted as a "team player," and it had come from Moder. What more needed to be said? Moder clearly wore the Scarlet Letter of a whistleblower.

Beaver and Murphy had both recently admitted that discrimination based on the DNR investigation was likely to be a factor in the selection decision. Knowing that, they deliberately injected the tip report into the discussion, making sure every Board member had a copy and making sure every Board member knew it had come from Moder. By doing this, they made sure that the DNR investigation would indeed be a critical factor in the "specific employment decision in question."

If nothing else, Beaver and Murphy are politically-astute individuals, with a sensitive ear for the opinions and feelings of the people for whom they work, the Village Board members and the Village residents who vote for them. Both Beaver and Murphy knew that people in the Village had long memories. Even ten years later, they had neither forgotten Moder's role in the DNR investigation nor forgiven him for it. Moreover, even if Deitsch had also cooperated in the DNR investigation, the lingering resentment was directed at Moder. He had been the senior operator, while Deitsch had been the rookie. Moder was the one accused of orchestrating the entire affair so that he could have Schultz's job.

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It is not necessary to inquire into the intent of each Board member involved in the decision to select Deitsch. It is enough to know Beaver's and Murphy's intent. See, e.g., Reeves, 120 S.Ct. at 2111 (focusing on discriminatory animus of vice president who recommended plaintiff's termination as principal decision-maker, even though decision was formally made by president). Beaver was not simply a bystander expressing a personal opinion. He was the Village's chief administrative officer, who, together with Murphy, his subordinate, conducted the tests and interviews for the supervisor/foreman position, prepared the materials for presentation to the Board and met with the Board at closed session to discuss the two candidates and obtain a recommendation from Murphy. He may have couched his warnings about "perceived baggage" in assurances that he personally did not believe it was right, but there it was. He controlled the meeting agenda, and he was going to make sure the DNR investigation was mentioned in the Board meeting before the selection decision was made. He was, in short, a key participant in the selection decision, and I so find and conclude.

It was Murphy, of course, who, in addition to coordinating the interview and testing process, recommended that Deitsch be given the job because Deitsch was, in Murphy's words, a "team player." Clearly, his recommendation weighed heavily in the Board's decision, since both Board members and Beaver insisted that Murphy make his recommendation in order to close the discussion. Thus, he too, was a key participant in the selection decision.

None of Beaver's or Murphy's actions were a bolt out of the blue. Beaver's comments to Deitsch and Murphy's remark to Goetsch reflected mindsets that had been developing for years. Beaver had felt blindsided by the DNR investigation. He first learned of it only a month after he took over as Village administrator, and quickly discovered that, although Moder had suspected Schultz for two years, he and the other operators had gone to the DNR. He also learned that, although the others had also participated, Moder had been the DNR's principal contact. He had to avert the threatened issuance of charges not only against Schultz but against the Village, as well. As he reported these things to the Village Board, he quickly came to understand that the Board members were particularly upset that Moder and the other operators had not come to them about Schultz, but had gone outside, to DNR. After Schultz departed and the threat of DNR charges against the Village subsided, Beaver continued to hear complaints that Moder had set up the whole thing so he could have Schultz's job. Years later, he was still having to recite the "history lesson" whenever a new Board member or a new employee, like Murphy, asked about it.

Murphy had not been on the scene when the Schultz matter was being played out. He did not arrive until 1997. However, he quickly learned from Gordy Rose, the streets superintendent and a friend of Schultz, how Schultz had been "set up" by Moder and the other operators. He also heard about it from "numerous" other people (his words, though he now insists he cannot remember who any of them were). When he asked Beaver about it, Beaver gave him the "history lesson."

By the time Murphy spoke to Goetsch on May 1 or 2, 2000, he had also heard from Beaver at Deitsch's interview that Board members continued to carry "perceived baggage" about the DNR investigation that might affect the selection. By May 9, 2000, he was as focused on the Schultz affair as anyone who had been there in 1990.

The Village has asserted what it calls "legitimate, nondiscriminatory reasons" for selecting Deitsch rather than Moder. In this regard, see McDonnell Douglas v. Green, supra, and its progeny. However, to the extent that those purported reasons are asserted in contravention of the direct evidence of discrimination, it is not enough for the employer simply to articulate them. If an employee proves unlawful discriminatory or retaliation, but the employer contends that its adverse action against the employee was motivated

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instead by a legitimate, non-discriminatory reason, dual-motive analysis applies. The employer must prove, by a preponderance of the evidence, that it would have reached the same decision even if the employee had not engaged in protected conduct. See Mt. Healthy City Bd. of Ed. v. Doyle, 429 U.S. 274, 287 (1977); Passaic Valley, 992 F.2d at 481 (Sec. 507(a) case); see also Price Waterhouse, 490 U.S. at 252-53 (Brennan, J., for 4 justices); Id. at 259-60 (White, J., concurring); Id. at 261 (O'Connor, J., concurring).

In such a "dual-motive" situation, it is not enough that the employer simply articulate a lawful reason for the employee then to disprove. See Martin v. Department of the Army, 93-SDW-1 (Sec'y July 13, 1995). Rather, "the employer's burden is most appropriately deemed an affirmative defense: the plaintiff must persuade the factfinder on one point, and then the employer, if it wishes to prevail, must persuade it on another." Price Waterhouse, 490 U.S. at 245 (Brennan, J.). The employer bears the risk that the influence of legal and illegal motives cannot be separated. Mandreger v. Detroit Edison Co., 88-ERA-17 (Sec'y March 30, 1994).

In short, Moder has proven by direct evidence that unlawful discrimination in violation of Section 507(a) was a substantial motivating factor in the decision not to promote him to supervisor/foreman, and I so find and conclude. The Village bears the burden of proving, by a preponderance of the evidence, that it would have selected Deitsch anyway for legitimate, nondiscriminatory reasons even if it had not also been motivated by Moder's role in the DNR investigation. For the reasons discussed more fully below, all such asserted reasons are mere pretexts.

F. Even if the "Burden-Shifting Approach Is Used, Moder Has Made a Prima Facie Case of Discrimination.

Even if "burden-shifting" analysis under McDonnell Douglas v. Green were applied, the result would be the same. Moder was an employee of the Village. His involvement in DNR's investigation of Schultz was activity protected by Sec. 507(a) of the Clean Water Act. The Village took adverse action against Moder by rejecting his application for the WWTP supervisor/foreman position, even though he was, in Murphy's words, "very qualified" for it. Thus, the only remaining question for McDonnell Douglas analysis is whether "the evidence creates a reasonable inference that the adverse action was taken because of the plaintiff's participation in the statutorily protected activity." See Passaic Valley, 992 F.2d at 481.

The direct evidence of discrimination found herein is more than sufficient to establish the even less burdensome "reasonable inference of discrimination" for McDonnell Douglas purposes. The Village, however, suggests that Moder cannot show the fourth element of the prima facie case because (a) too much time had elapsed since the Schultz matter (ten years) to permit an inference of causation; and (b) it selected Deitsch, who was also involved in the DNR investigation in 1990.

Remoteness in time does defeat an inference of causation if there is no other evidence tying the adverse action to the past protected activity. However, such other evidence may raise the necessary inference no matter how distant in the past the protected conduct may have occurred. See Chavez v. City of Arvada, 88 F.3d 861, 866 (10th Cir. 1996). In this case, the three most revealing facts bearing on causation are Beaver's statement to Deitsch; Murphy's statement to Goetsch; and their presentation of the anonymous tip report to the Board at the meeting to select the supervisor/foreman. Both men stated unequivocally that the Schultz matter was going to be a factor in the selection of the WWTP Supervisor/Foreman even though more than ten years had elapsed. Further, the temporal remoteness of the DNR investigation was completely obliterated when they placed the anonymous tip report before the eyes of every Board member minutes before the vote was taken,¹⁹ and I so find and conclude.

[Page 27]

Murphy's statement to Goetsch also overcomes the fact that Deitsch also assisted the DNR investigation. Although he and Goetsch were discussing the relative qualifications of both candidates, Murphy pointedly directed the complaint about notifying DNR and not being a "team player" only at Moder, not at Deitsch.

Other evidence undercuts the importance of Deitsch's involvement in the Schultz investigation. As Beaver has indicated, the Village Board saw Moder as the more responsible, and thus the more blameworthy, of the two in connection with the DNR investigation. After all, Moder was the one who had been tracking Schultz's weekends for two years, whereas Deitsch was a mere rookie when DNR was brought in. Even if Deitsch made the mysterious first call to DNR, and I am not totally persuaded thus far, especially as it took a second phone call to prompt into action the DNR, it was not until after Moder and Radloff had told him of their suspicions about Schultz. Beaver knew from his interview with Moder that Moder had been the DNR investigator's principal contact at the WWTP.

People in the Village have long memories. The Schultz affair, for whatever reason, was still viewed by Village authorities and Village residents as an "unfortunate situation" (Murphy's words to Moder), years after it happened, and Moder was held chiefly responsible for it. Murphy knew that and was not going to buy into the problem by making Moder the supervisor at the WWTP, and I so find and conclude.

F. The Reasons Advanced by the Village for Selecting Deitsch over Moder Are More Pretexts for Discrimination.

The defendant, of course, is entitled to proffer a "legitimate, nondiscriminatory reason," returning to the plaintiff "the opportunity to prove by a preponderance of the evidence that the legitimate reasons offered by the defendant were not its true reasons, but were a pretext for discrimination." Burdine, 450 U.S. at 253. Pretext is "a lie, specifically a phony reason for some action." Russell v. Acme-Evans Co., 51 F.3d 64, 68 (7th Cir. 1995).

A plaintiff can establish pretext either directly, with evidence suggesting that retaliation or discrimination was the most likely motive for the termination, or indirectly, by showing that the employer's proffered reason was not worthy of belief. The indirect method requires some showing that (1) the defendant's explanation has no basis in fact, or (2) the explanation was not the "real reason", or (3) ... the reason stated was insufficient to warrant the termination.

Sanchez v. Henderson, 188 F.3d 740, 746 (7th Cir. 1999) (internal citations and quotations omitted).

Furthermore, the Supreme Court has emphasized:

The factfinder's disbelief of the reasons put forward by the defendant (particularly if disbelief is accompanied by a suspicion of mendacity) may, together with the elements of the prima facie case, suffice to show intentional discrimination. Thus, rejection of the defendant's proffered reasons will permit the trier of fact to infer the ultimate fact of intentional discrimination.

Reeves, 120 S.Ct. at 2108; St. Mary's v. Hicks, 509 U.S. at 511.

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Beaver's statement to Deitsch, Murphy's statement to Goetsch and their collaboration in injecting the anonymous tip to the DNR into the Village Board's deliberations are also substantial evidence that the alleged "legitimate non-discriminatory reasons" offered by the Village are mere pretexts. This alone, coupled with the evidence creating the prima facie case, is enough to preclude summary judgment and leave it to the trier of fact to determine if retaliation was the real reason for Deitsch's selection. See Reeves, 120 S.Ct. at 2108. They, of course, go much farther than that. They are evidence, in and of themselves, that the asserted legal reasons are mere pretexts for discrimination, and I so find and conclude. See St. Mary's, 509 U.S. at 511.

The Village's effort to articulate now a legitimate, nondiscriminatory reason for selecting Deitsch is hampered by Murphy's apparent inability to articulate such a reason to the Board right up until the moment he recommended Deitsch. When the Board members tried to get a recommendation from him, he kept "going around the mulberry tree three times" telling them basically that he had no good reason why they should prefer one over the other. (TR 316). Trustee Corey Will did ask him who was the better "team player," but that simply fed into Murphy's perception that Moder lost hands-down on that score because of his involvement in the DNR investigation. Murphy and Beaver assert that Murphy had two "legitimate non-discriminatory reasons" for recommending Deitsch. They claim that he perceived Moder as not being a "team player," in contrast to Deitsch, and that Moder failed to demonstrate leadership abilities.

The first reason can be addressed in very short order. The "team player" argument was not a nondiscriminatory reason. Instead it was at the core of the discrimination. Beaver testified that Moder was not a "team player" because he did not go to Christmas parties. Murphy, however, told Goetsch why Moder was not a team player. It was because he took the problem with Schultz to the DNR rather than keep it in-house with the Board, a point that was underscored by laying the offending "tip report" under the Board members' noses.²⁰

The leadership argument is equally vacuous. Murphy says Moder did not assume supervisory responsibilities as lead worker and told the others, "I'm not your boss," even though such responsibilities were not part of Moder's job and Moder, in fact, was not their boss (Murphy was their direct supervisor). Murphy never shared any such concerns with Moder. Indeed, when Moder asked him if he had any concerns bearing on Moder's qualifications, he simply answered "No." (TR 468-69). In any event, Murphy could not recall Deitsch demonstrating leadership abilities either. (TR 468)

The Village, lacking anything more substantial, puffs up one answer to a test question and two testy comments made after Deitsch had been selected as "proof" that Moder lacked the necessary leadership qualities. However, Beaver's claimed discomfort over Moder's answer to Memo #14 was an after-the-fact epiphany. When he reviewed the two candidates' answers to all of the memos, including Memo #14, he found Moder's to reflect "decisiveness and responsibility recognition," while Deitsch's reflected someone who "copped out completely" and "did not take a very 'I am responsible' position." (CX 47) As also noted above, Moder was treated in a disparate manner because Deitsch was given an additional six-and-one-half hours to complete the essay portion of the testing process.

Therefore, the Village, lacking anything else of any substance, is left to say that Moder demonstrated his unfitness for leadership the day after Deitsch was selected, by saying (twice), "Touch me again and I'll (expletive) kill you," to Rathke and then walking away. Rathke had been teasing him about not getting the job and persisted in touching him even after he had told Rathke to stop the first time. Moder did not make any threatening gestures or moves toward Rathke, and Rathke never understood that he being threatened, and both apologized and are still good friends.

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Deitsch was right there and heard Moder's remarks to Rathke. He testified that he considered it to be a "severe incident." (TR 385). However, when it happened in front of his eyes, he said nothing. He also said nothing about it to Moder the next day. Not until Bell mentioned Rathke's being upset at a staff meeting and Murphy chewed him out for not saying anything about it did Deitsch recognize it as a "severe incident" (TR 397, 438), given the fact that he is an acknowledged "team player."

Murphy would have this Court understand that the incident reflected only on Moder's leadership abilities, not on Deitsch's. Moder was now out of the running altogether, but, says Murphy, his actions on May 10 still reflected "poorly on his part." Deitsch was about to be the supervisor, but Murphy tells us that nothing Deitsch did or did not do on May 10 should be seen as reflecting on his leadership. After all, "he wasn't, at that point, Barry's supervisor." (TR 463-465)

In the end, Murphy said that Deitsch's inaction could not have shown any leadership problems because "it was made after the [selection] decision was made, so it couldn't be taken into effect." The same was true of Moder, as Murphy acknowledged. (TR 467). It was the Village that insisted that the May 10 incident was somehow relevant to the decision made on May 9. It was the Village's own witness who said it was irrelevant, both as to Deitsch and as to Moder.

In sum, there is nothing to explain Beaver's and Murphy's actions and Murphy's recommendation of Deitsch except Moder's role in the DNR investigation. Nothing else holds up. The reasons asserted by Beaver and Murphy were nothing but pretexts, phony reasons, lies, made up after they came to realize that it might have been unlawful to retaliate against Moder because of what he had done ten years earlier, and I so find and conclude.

I note with considerable interest the reply brief of the Respondent wherein counsel posits that "Complainant's Elaborate Conspiracy Theory Defies Logic," that the "entire claim is built upon an elaborate conspiracy theory, based upon an inflated view of his own importance," that "(n)obody's water was contaminated, no one contracted life threatening diseases, and not one trout sacrificed his life" and, finally, "this (claim) is hardly the stuff of Erin Brockovitch."

At the outset I would note that while Moder's travails might not rise to the level of intrigue experienced by Ms. Brockovitch, at least as glamorized by Hollywood, Moder, in my judgment, is following in the footsteps of A. Ernest Fitzgerald (who blew the whistle on the B-1 bomber overruns), Karen Silkwood, Erin Brockovitch, Casey Ruud (who blew the whistle about the Hanford Nuclear Plant), Jeffrey Wigand (the scourge of the tobacco industry), Frank Serpico (who needs no further identification) and those other brave, dedicated and conscientious public-spirited citizens who are not reluctant to put the public interest ahead of their own careers and who, in the last thirty (30) years or so have elevated the term "whistleblower" to the level of having a secondary meaning. To that pantheon will now be added the name of Barry W. Moder. Moreover, the concept of "a team player," as the term was used by Respondents' agents and employees, will soon be raised to that level. While in sports the appellation of being a team player is a compliment, the term as used to describe a whistleblower is highly pejorative.

I completely agree with the Complainant that the people of the Village of Jackson do have "long memories" and while Respondent's counsel points to the small population as opposed to Milwaukee, for example, it is that smallness that has added to the intrigue in this case and, in keeping with the Hollywood analogy, that smallness added to the scandals of that small town in New Hampshire, likewise glamorized in Peyton Place.

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I have extensively reviewed the record and I am unable to draw the inferences that the Respondent seeks herein. Schultz was a local citizen who had that job for several years and when an "outsider" like Moder came along, blew the whistle on Schultz and "Schultz quietly rode off into the sunset sans license and job, never to be heard from again,." Yes, Schultz did ride off but, again in Hollywood terms, he was wearing the black hat and Moder the white hat.

A certain group did have long memories, concluded that Moder did what he did out of sinister motives, i.e., he wanted Schultz's job, and this group waited until the right time for payback. There is testimony that these people would ask and talk about the "Schultz Affair" whenever they went to the Village Offices to pay their water bills, for example. As I have found above, payback occurred at the meeting held to select Deitsch. Furthermore, while counsel refers to the job sought by Moder and Deitsch as "foreman of a two-man crew, with a probability of no increase in pay," there is an approximately $5,000.00 wage differential, plus that five (5%) percent bonus after one year of service. I do realize that the "successful candidate gives up the protection of a union contract and loses the right to overtime." The hiring process, in my judgment, was set up and it was manipulated in such a way as to guarantee that Deitsch would be selected. Witness the disparate treatment and additional time given Deitsch to ensure that he would be selected.

I disagree that the testimony of Goetsch "is replete with errors and contradictions." He testified credibly before me and it was obvious that Murphy was "feeling him out" to see what he could learn from Goetsch about Moder. Mr. Goetsch testified forthrightly before me and I note in passing that he and his company have the most to lose in this case because of their longstanding relationship with the Village. Time will tell if those "long memories" have been quieted by this proceeding.

In conclusion, I have accepted Complainant's credible, probative and persuasive testimony as to the inferences to be drawn from his May 8th meeting with Murphy and as to the May 9th meeting, especially as a Board member, who had resigned from the Board earlier that evening, was allowed to remain at the closed executive session to give that "history lesson" from first-hand knowledge. There was no need for him to remain as there was one Board member who could also give the "history lesson" from first-hand knowledge. Then why was he allowed to remain? The only logical inference is that two history lessons, from first-hand knowledge, are better than one.

On the basis of the totality of this closed record, this Administrative Law Judge, having observed the demeanor and having heard the testimony of a most credible Complainant, finds and concludes that there was never any other reason for recommending Deitsch over Moder, other than Moder's protected activity. Beaver and Murphy were concerned about perceptions that Moder was not a "team player" because he had gone to the DNR in 1989 rather than keep the Schultz affair in-house as a true "team player" would have done. They themselves shared those perceptions and encouraged them by placing copies of the incendiary anonymous "tip report" before the Board while it was deciding whom to select as WWTP supervisor/foreman. Moder's "perceived baggage" resulted in his non-selection, and I so find and conclude.

The Village violated Section 507(a) of the Clean Water Act by denying Moder the promotion to WWTP supervisor/foreman because he had "filed, instituted, caused to be filed or instituted" the DNR investigation or "testified in" it, and I so find and conclude.

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As a remedy, the Village will be ordered make Complainant whole for wages and benefits lost as a result of the discrimination. This includes back pay beginning on the date Deitsch assumed the position of WWTP supervisor/foreman. Back pay is calculated by subtracting from an amount equal to the earnings Deitsch has received at the annual salary of $43,480, plus any increases that have been granted, less Moder's interim earnings as an operator at the hourly rate of $18.67," or at the annual rate of $38,833.60, as further discussed below.

On May 3, 2001, Complainant advised this Court that, as the result of a reorganization of the Respondent's Department of Public Works, the Complainant has been promoted to the position of Wastewater Supervisor/Lead Worker. In addition, Mr. Deitsch has been promoted to the position of Utility Superintendent. While both positions are in management, Claimant contends that under this new scheme, the Complainant will be required to report directly to Mr. Deitsch, "precisely the same situation the Village created a year ago by awarding the Wastewater Supervisor/Foreman position to Mr. Deitsch, rather than Mr. Moder." Complainant requests further hearing on this issue and asserts that he can "only be 'made whole'" by re-instating him to the position awarded to Mr. Deitsch. (CX 71)

Respondent filed its reply on May 3, 201, stating that since Mr. Moder has now been awarded a position which he testified to as his "dream job," no hearing is warranted and furthermore that Complainant is not entitled to every position obtained by Mr. Deitsch. (RX 105)

This Court was very surprised at this recent turn of event where the Court was ready to issue its Decision in a matter under active deliberation and Respondent has now made certain significant personnel changes. In view of these changes, this Court directed that Respondent file immediately with this Court the job descriptions for the new positions offered to Mr. Deitsch and Mr. Moder, together with their annual salaries. Respondent was also directed to advise whether or not Mr. Deitsch will receive the 5% bonus for the completion of his one year of service on and after May 22, 2000, and shall further advise as to what the COLA was for both Mr. Deitsch and Mr. Moder for the last year.

The parties timely filed their replies and Complainant, by letter dated May 18, 2001 (CX 71A), filed certain documentation in support of his complaint. That evidence has been identified and admitted as CX 73-CX 80. The brief on remedies will be identified as CX 72. Respondent, by letter dated May 18, 2001 (RX 106), has filed a response and certain documentation. Respondent's brief has been identified as RX 106A and the documentation has been identified by Respondent as RX 37, RX 38, RX 1, RX 2, RX 3, RX 4, RX 5, RX 6 and RX 7, and those documents as identified are admitted into evidence.

As noted above, I have already found and concluded that the Respondent selected Deitsch instead of Moder for the position of WWTP Supervisor/Foreman solely because Moder engaged in activities protected by Sec. 507(a) of the Clean Water Act, 33 U.S.C. Sec. 1367(a). In such a non-selection case, the usual remedy would be to require the Village to award the position retroactively to Moder, even if it means "bumping" Deitsch. See Franks v. Bowman Transp. Co., 424 U.S. 747, 774-75 (1976); Doll v. Brown, 75 F.3d 1200, 1205 (7th Cir. 1996); Lander v. Lujan, 888 F.2d 153, 156 (D.C. Cir. 1989).

The Village, however, has recently changed the operative facts, promoting Deitsch to a new position. Utility Superintendent, between Murphy, the Director of Public Works, and the renamed Supervisor/Lead Workers at WWTP and the Water Department. Deitsch's new position pays an annual starting salary of $49,500. Moder has accepted the position of WWTP Supervisor/Lead Worker, while Dan Rathke has accepted the Water Department position, both at an annual starting salary of $43,500. In this regard, see CX 73-CX 80)

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Under this arrangement, even if Moder were to be awarded the WWTP position (which he now occupies anyway) as a remedy for discrimination, he would still be subordinate to Deitsch. Deitsch would also continue to earn $6,000 more than Moder annually. Since this would perpetuate the rankings created by the Village's discriminatory conduct a year ago, Moder has requested further hearing on the remedy question and reinstatement as Utility Superintendent, in Deitsch's place, as a remedy for the discrimination. The Village has opposed the request for further hearing. In his Order dated May 5, 2001 this Administrative Law Judge denied the request for further hearing, but called for further briefing on the issue and the Village's submission of information about Deitsch's new position.

ARGUMENT

a. Remedies for Violations of Sec. 507(a) of the Clean Water Act Are to Make the Victim of Discrimination Whole and Bar Similar Violations in the Future

Section 507(b) of the Clean Water Act (CWA), 33 U.S.C. Sec. 1367(b), provides in pertinent part: "If [the Secretary] finds that ... a violation did occur, he shall issue a decision, incorporating an order therein and his findings, requiring the party committing such violation to take such affirmative action to abate the violation as the Secretary of Labor deems appropriate[.]" "Affirmative action to abate [a] violation" of an environmental whistleblower statute, such as Sec. 507(a), includes retroactive promotion into a position the discriminatee would occupy but for the discrimination. See Thomas v. Arizona Public Svs. Co., No. 89-ERA-19, slip op. at 13 (Sec'y Sept. 17, 1993). "Making a victim whole ... include[s] his reinstatement to the position he would have held but for the discrimination." Lander, 888 F.2d at 156; see also Malarkey v. Texaco, Inc., 983 F.2d 1204, 1214 (2d Cir. 1993).

Cases under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Sec. 2000e-5, have guided the Secretary and the Administrative Review Board (ARB) in fashioning remedies appropriate to abate violations. Hobby v. Georgia Power Co., No. 90-ERA-30, slip op. at 15 (ARB Feb. 9, 2001). Like the remedies under Title VII, those available under the environmental whistleblower laws serve a twofold purpose. First, they are intended to make the complainant whole by placing him, "as near as may be, in the situation he would have occupied if the wrong had not been committed." Albemarle Paper Co. v. Moody, 422 U.S. 405, 418-19 (1975). Second, they must "so far as possible eliminate the discriminatory effects of the past as well as bar like discrimination in the future." Id. at 418, quoted in Hobby at 7 (ARB's emphasis). This goes beyond the interest of employees in protection from discrimination. It also serves the public interest in assuring exposure of threats to public health and safety, such as the discharge of sewage into streams, rivers and lakes. See Beliveau v. DOL, 170 F.3d 83, 88 (1st Cir. 1999).

Thus, the remedy for discrimination against whistleblowing must "provide concrete evidence to other employees that the legal protections of the whistleblower statutes are real and effective." Hobby at 7. As the Sixth Circuit observed in considering whether an unlawfully demoted school employee should be reinstated in his former position:

If the employer is allowed to redress his violation of an employee's First Amendment rights through mere money damages, the message to other employees is that they may lose their jobs if they speak out against their employer[.] The prospect of money damages will not be sufficient for many employees to overcome the otherwise chilling effect that accompanies the threat of termination. Moreover, employment, especially in a career such as education, is more than a way to make money, it is profession with significant non-monetary rewards. For such professions, money damages may be hollow victory.

Banks v. Burkich, 788 F.2d 1161, 1164 (6th Cir. 1986) (employee unlawfully demoted for protected free speech; reinstatement proper even if replacement has to be bumped); see also, e.g. Lee v. Macon Cty. Bd. of Edu., 453 F.2d 1104, 1109 (5th Cir. 1971) ("The real gist of demotion is a reduction in responsibility, not in salary.")

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B. In an Appropriate Case, Make-Whole Relief Includes Promotion and "Bumping" in order to Restore a Discriminatee to his Rightful Place in the Hierarchy.

The courts have long recognized that make-whole relief includes restoration of a discriminatee to his rightful place in the organizational hierarchy vis-a-vis other employees. Usually this takes the form of retroactive competitive seniority. As the Supreme Court observed in Franks:

Without an award of seniority dating from the time he was discriminatorily refused employment, an individual who applies for and obtains employment as an OTR driver pursuant to the District Court's order will never obtain his rightful place in the hierarchy of seniority according to which these various employment benefits are distributed. He will perpetually remain subordinate to persons who, but for the illegal discrimination, would have been in respect to entitlement to these benefits his inferiors.

Id., 424 U.S. at 767-68 (emphasis added)

Where the discriminatory action is a refusal to promote, an employer may be required to promote the discriminatee in order to abate its unlawful conduct. See, e.g., Thomas, No. 89-Era-19, at 13. A promotion remedy is not limited to the position or pay grade that was unlawfully denied to the employee. If, but for the initial discrimination, the employee would have advanced even further in the organizational hierarchy, the make-whole remedy may include promotion to the level which he or she would currently occupy. See Malarkey, 983 F.2d at 1214. The hypothetical advancement may be measured by the actual advancement of the employee who was awarded the initial promotion at the discriminatee's expense. See id. (where plaintiff was unlawfully passed over for grade 12 position in 1981 in favor of another employee, promotion to grade 14 was properly ordered as a remedy following 1991 trial, since other employee had subsequently advanced to grade 14).

Promotion may also be ordered even if an incumbent must be "bumped" to accommodate the discriminatee, where there is only one position to be filled. "The necessity for the bumping remedy only arises with unique, typically higher-level, jobs that have no reasonable substitutes." Lander, 888 F.2d at 156.

Where one candidate for a promotion is selected over another for discriminatory reasons, redress of the discrimination may require the ouster of the successful candidate. As the Seventh Circuit has stated, "No one has a right to occupy a position that he obtained as a result of unlawful discrimination, even if he himself was not complicit in the discrimination." Doll v. Brown, 75 F.3d 1200, 1205 (7th Cir. 1996). Bumping may be ordered even if the incumbent is otherwise "innocent," not chargeable with knowledge of the discriminatee's claim. Lander at 157.

[Page 34]

Bumping as a remedy for discrimination is particularly appropriate where the discrimination is characterized by "recalcitrance." Lander at 156. Such recalcitrance is demonstrated when the employer fills a vacancy with another employee after it has knowledge of the victim's claims of past illegal discrimination. Id., citing Walters v. City of Atlanta, 803 F.2d 1135, 1149 (11th Cir. 1986) (where incumbent was placed after plaintiff asserted discrimination claims based on past denials of promotion, bumping was appropriate); Lee, 453 F.2d at 1114 (bumping authorized since school board hired incumbent after it had knowledge of victim's claims).

In Lander, the Title VII plaintiff occupied a federal bureau's top administrative job, reporting only to the bureau director. After the plaintiff criticized the bureau's affirmative action plan, the bureau created a new position above the plaintiff's, called "Management Services Officer" ("MSO") (later renamed as "Assistant Director - Finance and Management") ("AD-FM"); placed someone else in the MSO position, renamed plaintiff's position and reduced its duties. The district court found that "but for the retaliatory demotion, appellee would now occupy the AD-FM position[.]" Lander, 888 F.2d at 155. It ordered the bureau to place him in the top administrative position, even though that meant bumping an innocent incumbent because "absent 'bumping' the plaintiff's relief would be unjustly inadequate." Id. The Court of Appeals for the District of Columbia Circuit affirmed, finding that the bureau's actions reached the necessary level of "recalcitrance" to support a bumping order:

It may well be appropriate, perhaps even required, that a district court consider the impact of a bumping remedy on incumbents who are innocent beneficiaries of the employer's discrimination. This the district court plainly did. But we see no indication in the statute nor in logic to lead us to conclude that ordinarily the innocent beneficiary has a superior equitable claim to the job vis-a-vis the victim of discrimination. Therefore, if the district court must choose between the two, we do not see how the court can be reversed for choosing complete relief for the victim.

Id. at 58.

C. Only a Promotion to the Position of Utilities Superintendent will Make Moder Whole for the Initial Discriminatory Denial of a Promotion to WWTP Supervisor/Foreman in May 2000.

1. The principal injury which Moder suffered as a result of the Village's discriminatory conduct was the elevation of Deitsch over him in the organizational hierarchy.

Moder worked at the WWTP for three years before Deitsch's arrival. For ten years after Schultz's departure, Moder was the lead operator. He, not Deitsch, was "in direct responsible charge" of the WWTP for purposes of compliance with applicable EPA and DNR rules and the Village's WPDES permit for operation of the WWTP.

It was only with his promotion to WWTP Supervisor-Foreman in May 2000, that Deitsch became Moder's supervisor, his superior in the Village's organizational hierarchy. Had the Village not disqualified Moder in the end because of his protected involvement in the DNR investigation, he would have remained Deitsch's superior, not as lead operator, but as supervisor-foreman.

[Page 35]

This was the critical change in working conditions that Moder suffered as a result of the Village's discrimination. As the Village has noted, the pay difference between lead operator and supervisor-foreman was not great. The real loss was the down-grading of Moder's status in the hierarchy. Where before, he had reported directly to Murphy, the Director of Public Works, now he reported to Deitsch, his erstwhile inferior in the hierarchy.

The Village has now moved to insulate Deitsch from a possible bumping remedy by creating yet another reporting level between Murphy and the WWTP and summarily promoting Deitsch to that level. Thus, even if the Village is ordered to award the WWTP supervisor position to Moder as a remedy for discrimination, Moder will still be in exactly the same position vis-a-vis Murphy and Deitsch that he has occupied for the last year as a result of the unlawful discrimination. He "will never obtain his rightful place in the hierarchy ... He will perpetually remain subordinate to [Deitsch] who, but for the illegal discrimination, would have been ... his inferior[]." See Franks 424 U.S. at 767-68.

2. Only a promotion to Deitsch's present position, as a remedy, will make Moder whole and send a sufficiently clear message to the Village and its employees as to bar future discrimination against whistleblowers.

If "recalcitrance" is an appropriate basis for requiring promotion as a remedy, there is plenty of it here. The actions of Beaver and Murphy leading up to the may 9, 2000 decision, reflect a view whereby Village employees are expected to "go along and get along" and certain things are simply "not done." One apparently unforgivable transgression is taking a problem outside rather than dealing with it in-house. Moder had violated that rule in 1989 and 1990 by contacting and assisting DNR. Ten years later Beaver and Murphy tested the local political winds and concluded the Village was still not ready to forgive and forget, as Beaver told Deitsch and Murphy told Goetsch.

To that end, they took deliberate action to ensure that the question about who contacted DNR in 1989 was placed squarely before the Village Board as it deliberated over the promotion decision on May 9, 2000. their recalcitrance has continued unabated after Deitsch's selection. First they instructed Deitsch to watch for any "sabotage" on Moder's part, for which they could fire him. Now they have moved to preserve the fruits of their discrimination by creating an even higher position for Deitsch so that he would remain as Moder's superior even if Moder is ordered into the WWTP supervisor position.

Deitsch is the direct beneficiary of the discrimination against Moder. But for that discrimination, Moder, not he, would have been selected as supervisor-foreman in May 2000. In a similar situation, the Eleventh Circuit noted: "To not allow the "bumping" of a direct beneficiary of repeated discrimination by the direct victim of the same acts of discrimination would penalize the plaintiff who won his suit but lost the race to fill the position he had been unlawfully denied." Walters, 803 F.2d 1149.

Nor is Deitsch an "innocent incumbent" who just happens to have benefitted from the Village's unlawful discrimination against Moder. Even before the selection, Deitsch alone received Beaver's promise to see that the DNR investigation did not prejudice his chances Moder did not receive similar assurances. Deitsch was given the extra opportunity to explain his answers to the in-basket exercise. Moder was not. Three days after his promotion, Deitsch participated in the discussion with Beaver and Murphy about watching for "sabotage."

An "innocent incumbent" is one who comes into his position without notice that it is the subject of a discrimination claim. See Lander, 888 F.2d at 155 & n. 1; Walters, 803 F.2d at 1148-49 & N. 12. Deitsch, of course, is fully aware of Moder's claim that Deitsch's selection as supervisor/foreman violated Sec. 507(a) of the CWA, having testified in the hearing last December. When he accepted his new position last month, he did so with full knowledge of Moder's claim and the threat that it posed to his own position as Moder's superior. He is not an "innocent incumbent" of the utility superintendent position.

[Page 36]

The Village unlawfully punished Moder for his cooperation with DNR by making him subordinate to Deitsch, his erstwhile inferior in the hierarchy. Moder can be made whole only by reversing that relationship, placing Moder in the superior position that reports directly to the Director of Public Works.

Not only is this necessary to make Moder whole, but it is the only way to impress both the Village and its employees that such bald-faced discrimination is not tolerated. As the ARB recently commented in Hobby, remedies for violations of the environmental whistleblower laws must "provide concrete evidence to other employees that the legal protections of the whistleblower statutes are real and effective." Hobby, No. 90-ERA-30, slip op. at 7.

The Village's most recent actions seek to make a mockery of this entire process. It wants to ensure that all of Moder's efforts to vindicate his rights under Sec. 507 have been in vain. Rather than show that "the legal protections of the whistleblower statutes are real and effective," it wants to send Moder precisely the opposite message: your resort to relief under Sec. 507 will do you no good; we chose Deitsch to be your boss; nothing you do now is going to change that, even if we did choose him for an illegal reason; there is only one way to advance in this Village, and that is to "go along and get along"; you and all the others need to understand you'll never advance by blowing the whistle on things that should stay in-house, and certainly not by bringing federal lawsuits against us.

If the Village does not want to return Deitsch to a position subordinate to Moder, it can certainly keep him in an equal position, if it wants to incur the extra expense. That expense would be "a dilemma of the [Village's] own making," the necessary result of its unlawful conduct. See Davis v. City of Waterloo, 551 N.W. 2d 876, 886 (Iowa 1996) (affirming order that Title VII discriminatee be promoted into foreman position for which he was unlawfully passed over).

Indeed, the Village could not avoid the monetary liability for its failure to promote Moder even if this were in the Fourth Circuit, where bumping an incumbent is now an allowed remedy. In Spagnuolo, that court ordered that, even though the immediate displacement or bumping of incumbent employees was unavailable, the discriminatee was to be offered the next available vacancy and "in the interim period be awarded back pay to compensate for lost earnings." Spagnuolo, 717 F.2d at 121; see also Doll, 75 F.3d at 1205 (if bumping is not ordered, front pay in lieu of the promotion should be ordered). Thus, even if Moder were not promoted to Deitsch's current position, to avoid a "bumping" situation, at the very least the Village should be required to pay him at Deitsch's new rate until such a promotion occurs.

Respondent's counsel's brief regarding the subsequent post-hearing personnel changes in the Department of Public Works - especially while this particular complaint is under advisement by this Court - is certainly a valiant but failed attempt to justify those very important changes by the Respondent in disturbing the status quo prior to a decision by this Court and a final decision by the ARB. I am quite surprised at this turn of events and I also note in passing that my Recommended Decision and Order was ready to be issued on May 7, 2001. Thus, all issues had been resolved in Complainant's favor and the Respondent's subsequent actions have not affected in any way those resolutions.

[Page 37]

While Respondent submits that Moder is not qualified for the position as WWTP/Utility Superintendent, I disagree with that self-serving argument. Complainant is definitely qualified for that position, based upon his education and employment history, and he has been denied that position solely because he is a "whistleblower" and, in Respondent's parlance, is not a team player. Respondent's actions, in my judgment, are simply a "pre-emptive" strike to avoid the ORDER that was about to be issued on May 7, 2001, especially as Respondent should have anticipated a favorable ruling in favor of the Complainant, after even a cursory review of ARB decisions on its website.

However, be that as it may, this case is further complicated by the sudden resignation of the Complainant from his employment with the Respondent. I can readily sympathize with the Complainant's decision because he sat through the formal hearings and heard Respondent's witnesses testify under oath what they thought of him and his actions. It is apparent to this observer that Respondent did not want Complainant to continue as an employee and they certainly sent him enough signals that they would not be upset if he were to leave.

I note counsel muses about the proverbial "Catch 22" situation and wonders "what would the Complainant have said had he not been offered the position?" I imagine he would have filed another complaint with OSHA and one of my colleagues would have been assigned to preside over that complaint.

As Complainant resigned his employment effective as of June 21, 2001 and while I understand why he did so, i.e., a continued hostile environment, back pay liability ends as of that date. Respondent submits that the wage differential between the salaries paid to Mr. Deitsch and Complainant from May 22, 2000 through May 7, 2001 amounted to ,459.44, plus a 3% COLA paid to Mr. Deitsch for the completion of one year in that position. (Exhibit 7) Thus, Complainant is entitled to an award of ,459.44, plus the 3% COLA paid to Mr. Deitsch, as well as the difference in their respective salaries between May 22, 2001 and June 21, 2001.

Complainant has submitted no information as to where he is now working and what he is earning. In view of this treatment by Respondent throughout the pendency of this proceeding - especially the recent post-hearing events, I find and conclude that Complainant is entitled as of June 22, 2001 to an award of front pay for two years, i.e., the difference between Mr. Deitsch's current salary of $59,500.00 and the wages that Moder's new job will pay for the next two years. That amount should be submitted to the ARB as part of Complainant's brief to the Board.

Moreover, Complainant is also entitled to the award of $25,000.00 for the emotional suffering caused him by the egregious, disparate, discriminatory and hostile treatment by the Respondent. Complainant testified credibly as to the effects of Respondent's actions upon him and the situation was so unbearable that Complainant suddenly was forced to resign his employment. As noted above, I can readily sympathize with the Complainant and understand the reasons for his actions. He has been told over and over that the Respondent no longer wishes to have his services.

As noted, this Court was advised by Respondent's June 21, 2001 letter (RX 8) that Complainant had "voluntarily resigned his employment with the Village of Jackson effective June 18, 2001." As this Court heard no reply from Complainant about RX 8, the parties were given an additional thirty (30) days to file a status report by ORDER issued on July 11, 2001. (ALJ EX 24) Complainant's reply (CX 80) was timely filed.

An appropriate ORDER effectuating those awards will now be issued.

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ORDER

1. The Village of Jackson, Wisconsin (Respondent), shall immediately pay Complainant back pay in the amount of ,459.44, plus the 3% COLA paid to Mr. Deitsch but not to the Complainant, as well as the difference in their respective salaries between May 22, 2001 and June 21, 2001.

2. Respondent shall also pay to the Complainant, for a two year period of time, an award of front pay based upon the difference between Complainant's current salary and that of Mr. Deitsch for that period of time beginning on June 22, 2001. Complainant shall submit that amount to the ARB for consideration as part of the Board's final decision herein.

3. Respondent shall also pay immediately to the Complainant the amount of $25,000.00 for the emotional suffering and distress caused to him by the Respondent's actions herein.

4. Consistent with this Recommended Decision and Order, Respondent shall pay Complainant back pay plus interest at the rate specified in 26 U.S.C. §6621 (1988). In this regard, see Van Beck v. Daniel Construction Co., 86-ERA-26 (Sec'y Aug. 3, 1993).

5. (a) Counsel for Complainant shall file a Petition for Fees and Costs within 30 days after the filing of the Recommended Decision and Order for all legal services rendered with service on Counsel for Respondent. Such submission shall be on a line item basis and shall separately itemize the time billed for each service rendered and costs incurred. Each such item shall be separately numbered.

(b) Respondent may file objections, if any, to said application for fees and costs within 15 days of receipt, but all objections to said Counsel's petition shall be on a line item basis using Complainant's numbering system, and any item not objected to in such manner and within such time required shall be deemed acquiesced in by Respondent.

(c) Within 10 days after receipt of any such objections from Respondent, Counsel for Complainant may file a response thereto. Such submission shall be in the form of a line item response. Any objections not responded to in such manner and within such time will be deemed acquiesced in by Counsel for Complainant.

DAVID W. DI NARDI
District Chief Judge

Boston, Massachusetts
DWD:jl

NOTICE: This Recommended Decision and Order will automatically become the final order of the Secretary unless, pursuant to 29 C.F.R. §24.8, a petition for review is timely filed with the Administrative Review Board, United States Department of Labor, Room S-4309, Frances Perkins Building, 200 Constitution Avenue, NW, Washington, DC 20210. Such a petition for review must be received by the Administrative Review Board within ten business days of the date of this Recommended Decision and Order, and shall be served on all parties and on the Chief Administrative Law Judge. See 29 C.F.R. §§ 24.7(d) and 24.8.

[ENDNOTES]

¹The following abbreviations are used in this brief: TR for the hearing transcript; ALJX for an exhibit offered by the Administrative Law Judge; CX for a Complainant's Exhibit; and RX for a Respondent's Exhibit.

²With respect to Hess' report of his investigation of Schultz (CX 10), the abbreviation "CAR" means case activity report.

³Beaver described the Board members variously as "disgusted," "surprised," "dismayed," "dumbfounded," "frustrated" and "extremely disappointed" when they learned that "the treatment plant operators didn't see fit to bring it to their [the Board's] attention." They were, according to Beaver, "dismayed to have heard it first from myself through the Department of Natural Resources." (TR 327, 329-330)

⁴Beaver was studiously vague about his discussions of the Schultz matter with Village Board members. At first he said he could not "remember a specific trustee or an elected official asking about it." He was reminded that he had said in his deposition that he had discussed the Schultz matter in the intervening years with "different people" and that "'different people' . . . mean[t] board members." To that, he said, "I'm sure they did ask me about it. I just can't recollect a specific instance." He also said he could not recollect what he told them. Reminded again that, in his deposition, he had said, "I told them exactly what was in my notes," he now said that he was referring to mental "notes that I would have as recollections in my mind," and not notes written on a piece of paper. (TR 325-326). He also insisted the questions stopped by August 1994, when Paul Lohmiller became public works director. (TR 325, 343). However, he agreed that questions about it came up whenever a new person, such as David Murphy, Lohmiller's successor, was hired. (TR 346). Murphy testified that he asked Beaver about it in 1997. (TR 448-450)

⁵Beaver testified that Murphy never asked why there was no superintendent at the WWTP, saying it was just part of Murphy's job description. (TR 298-299). Such complete absence of curiosity is remarkable, given Murphy's insistence that Daniel Goetsch should have been asking the same question because "there was no superintendent at the plant, and it's very typical in the state of Wisconsin that a wastewater treatment plant would have a superintendent at the plant." (TR 427-428).

Like Beaver, Murphy became remarkably hazy in his recollection of discussions about the Schultz matter between his deposition and the hearing. At the hearing he testified that, besides Rose and Beaver, he could not "recall talking to anybody else." When reminded that in his deposition, he had said, "Started off with Gordy Rose and numerous people in the organization told me about it," he said he could not recall who any of those "numerous people" were. At the hearing all he could remember was that "it just came up now and then," and he could not remember the substance of any of those "now and again" conversations. (TR 450-451)

This "history lesson" is most important herein because it, in effect, acknowledges and recognizes that Moder is a "whistleblower" who had engaged in protected activity and all those who receive that "history lesson" become knowledgeable about such protected activity.

⁶This call-back is another example of disparate treatment of Moder as he was not given a further opportunity to explain and elaborate upon his answers.

⁷At the hearing, Beaver insisted that the one response by either candidate that stood out in his mind as a "red flag" was Moder's response to Memo #14, concerning employee verification of payroll and withholding data. However, in his written evaluation of the in-basket responses, Beaver expressed no such heightened concern about Moder's answer. He was critical of both candidates' answers to Memo #14, but did not mention Memo #14 in his list of the few answers that detracted from Moder's overall demonstration of "decisiveness and responsibility recognition." It was Deitsch, not Moder, who failed to demonstrate "an 'I am responsible' position," and I so find and conclude. (TR 354; CX 47)

⁸Beaver insisted that he made his statements about the Schultz matter to both Deitsch and Moder in their interviews. (TR 319). Deitsch recalled him saying that "what happened back in '89" would not be held against them in his interview. (TR 378). However, Murphy did not recall any discussion of the issue in either interview, and Moder testified that Beaver did not mention it in his. (TR 185, 452). Thus, Beaver's testimony is corroborated as to Deitsch's interview but completely uncorroborated as to Moder's.

⁹Murphy's recollection of the conversation was practically identical to Goetsch's, up to the references to the DNR investigation ten years earlier. As to that part, he testified only that he did not recollect it. (TR 427) Goetsch, of course, had no reason to come forward with his account of the conversation unless it was true, particularly since his employment status appears to depend on his employer's continuing in the Village's good graces. (TR 93-98) As for Murphy, he admitted to being less than candid when he is asked to disclose information that he "just doesn't feel like sharing." (TR 469)

¹⁰Murphy's account of the conversation casts Moder as a tattle-tale coming in to tell Murphy, completely out of the blue, that someone else called DNR about Schultz. Murphy further declaims, "[I]n my mind, that incident back in 1989 had no bearing on the decision I was about to make, and felt it was irrelevant in the interview process." (TR 430) Murphy's account, of course, completely overlooks Goetsch's testimony that it was Murphy who had raised the issue only one week before. It also bears little correlation with Murphy's own actions immediately after Moder left his office. (TR 431)

¹¹Beaver and Murphy fall all over themselves in explaining why it was now so important to show the tip report to the Village Board in connection with the selection of the wastewater supervisor/foreman. Murphy, who insisted the whole Schultz matter was irrelevant, testified as follows:

Q [R]ight after Mr. Moder left, you went into Mr. Beaver's office and said, Barry just gave this to me, or words to that effect.

A That's correct.

Q And you said, Barry says he didn't make this call.

A That's correct.

Q And then Mr. Beaver told you and this is something that you felt dealt with something that was irrelevant.

A That's correct.

Q And Mr. Beaver said to you, Well, let's make copies to give to the board members.

A Yes.

Q Copies of something that you believed was irrelevant.

A That's correct.

Q Did you tell him you thought it was irrelevant?

A I don't believe I did. I don't recall.

(TR 457)

Beaver initially claimed he had Murphy make copies of the tip report for the Board members because "this was important to Barry" to show it to the Board. He claimed "I believed this was information that Barry wanted to share with the Board." (TR 355). Murphy, of course, had simply told Beaver that Moder had given the tip report to him. It was Beaver who ordered that it be distributed, even though neither he nor Murphy ever asked Moder if he wanted them to pass it along:

Q Did you tell Murphy you didn't think it was a good idea to put this in front of the board?

A No.

Q Did you tell Murphy that he should go back to Moder and tell him that you didn't think it was a good idea to put it in front of the board?

A I didn't tell him that. No.

Q Did you ask Mr. Murphy if Mr. Moder had said, I want this presented to the board?

A No. The extent of what Dave said was, Barry gave me this, and handed it to me to read, and I just responded.

(TR 357)

Murphy picked up on the same theme, saying that the board should have looked on Moder's good-citizen cooperation with the DNR "as more of a positive thing in my mind than a negative." (TR 454). This assertion strains credulity, since Murphy knew that at least one person, Gordy Rose, viewed it as a negative and Murphy had told Goetsch of the Village's misgivings only days before.

In the end, Beaver threw his feigned solicitude for Moder's wishes aside and said that once Moder handed the tip report to Murphy, it became a public record that Beaver was free to share with the Board:

Q [D]id you tell Moder, Listen, unless you tell me otherwise, I'm going to give this to the board?

A No. I didn't call Barry and say that. No. He had submitted it. As far as I'm concerned, it was a public document.

(TR 357-358)

¹² Bell was not sure of the date, but testified it was on or about May 5. He also testified that Murphy had a piece of paper similar to the Mitchell tip report. (TR 77, 79). Murphy testified the conversation occurred on Monday, May 8. (TR 431). Moder recalled that Russ Krueger, the street superintendent, told him on Friday, May 5, that Murphy had brought up the Schultz matter with Bell. (TR 189). In any event, all agree that it occurred prior to the Village Board's meeting on May 9, 2000.

¹³Another example of disparate treatment because Kruepke had resigned from the Board earlier that evening and was prevented from voting on the election of Deitsch but who was allowed to remain because he was able to give that "history lesson" from first-hand knowledge.

¹⁴Deitsch claimed that "don't do anything stupid" were his words, not Beaver's or Murphy's. However, he admitted having a "gut feeling that [Beaver and Murphy] were looking for [Moder] to do something stupid." (TR 390-391)

¹⁵Deitsch testified variously that Murphy and Beaver told him to watch out for "sabotage"; that they never used the word "sabotage"; that "sabotage" was his word; and that he never used the word "sabotage," either. (TR 392-394)

¹⁶Deitsch claimed he never mentioned this to Moder, but said "some of the girls... were joking about it" and "just saying it to me." (TR 382)

¹⁷Moder had initially shown Murphy a report that said "Lab Data Falsification," "Jackson Wastewater Plant" and "Brian Schultz." It also said, "[Blank] called to complain about his supervisor. He didn't leave his name. The supervisor, Brian Schultz, is reported to not run tests when he has weekend duty." (CX 12) The one that he left with Murphy said, "Falsifying Treatment Records" and "Village of Jackson," and recited: "Informant stated that the Village of Jackson's superintendent of the sanitary treatment plant is falsifying records. Stated the Super does not run the required tests and just makes up data to enter. . . . Has been going on for years. Caller and others can no longer tolerate it." (RX 101)

¹⁸I am somewhat surprised that Mr. Kruepke, who had resigned from the Board earlier that evening, was asked to remain and it is rather obvious to any impartial observer that he was asked to remain so that he and Phil Laubenheimer, who also had been on the Board in 1990, could give first-hand accounts of "the history lesson," an issue, in my judgment, that was totally irrelevant in the selection process, except to those with long memories.

¹⁹In contrast, the employee in Chavez, who was also claiming retaliation for protected activity occurring 10 years earlier, could only show that one of the supervisors testing him said, "Oh no, you're not going to pull that one again on me." The Tenth Circuit concluded, "This statement itself is in our view equivocal; whether it refers to the 1977 episode or something occurring in the intervening ten years is pure guesswork." Chavez, 88 F.3d 866. Here Beaver and Murphy left no room for guesswork. They both made it clear that they were referring to the Schultz matter.

²⁰As found above, that "tip report" is the "smoking gun" herein.