A U.S. Securities and Exchange Commission trial lawyer who was fired in 2009 for sending inappropriate emails will have a chance to get his job back, a federal appeals court ruled Tuesday.
The U.S. Court of Appeals for the Federal Circuit remanded Jeffrey Norris's case back to the arbitrator who upheld his termination last year, ordering that evidence of Norris's improved personal circumstances be considered in weighing whether he is likely to misbehave in the future.
In writing for the unanimous panel, Judge Timothy Dyk added, “We express no opinion as to the weight to be given such mitigating evidence.” The panel also included judges Kimberly Moore and Kathleen O’Malley.
According to the decision, Norris, who worked at the SEC as a lawyer in Fort Worth, Texas, for 17 years, was fired after he sent three unauthorized emails from his SEC account in 2008. One went to the Washington Post “in which he identified himself as Senior Trial Counsel and expressed certain political views.”
Another went to co-workers, ”in which he demeaned the support staff and implied that they were incompetent at performing their job duties,” according to the appellate decision. Finally, on October 23, 2008, Norris emailed a confidential suspicious activity report to an appointed receiver and his counsel in violation of SEC policies.
The emails were not his first offense.
In 2007, Norris was suspended without pay for one day for “exercising poor judgment in emailing an attorney who represented a witness in an ongoing SEC case, and expressing his opinion about the merits of the case,” Dyk wrote.
Norris also exchanged a series of hostile emails with Dallas Mavericks owner Mark Cuban from March to May of 2007. The emails, in which Norris accused Cuban of being unpatriotic, were detailed in an investigation by then-SEC Inspector General H. David Kotz.
Rose Romero, a SEC official, fired Norris in August 2009. “Because of [Norris’s] continued inappropriate and/or unauthorized emails [she had] lost confidence that [he could] effectively perform [his] assigned duties,” according to the appellate decision.
Norris countered that his behavior stemmed from his Attention Deficit Hyperactivity Disorder and stress resulting from the medical conditions of his wife and daughter. Still, Romero concluded that Norris did “not have the potential for rehabilitation because prior disciplinary actions have not prevented [his] impulsive and improper e-mails.”
The SEC workers union submitted Norris’s dismissal to arbitration. Neither side disputed that Norris had engaged in the behavior or that his actions were improper. The question was whether removal was a reasonable penalty. On April 19, 2011, the arbitrator issued a decision affirming Norris’s removal and concluding that “Romero did not abuse her discretion as a manager in making the decision to remove [Norris] from the service.”
But the court of appeals found two procedural problems.
First, during the hearing, Romero testified that “Norris had a confrontation with agency commissioners in 2007 and that he was therefore barred from presenting cases to commissioners in the future.” But this incident was not mentioned in Norris’s notice of proposed removal. Norris testified he had never been barred from presenting cases and had no memory of the confrontation.
On remand, the panel cautioned that the arbitrator “should not consider information not included in the notice of proposed removal in assessing whether the removal was reasonable.”
The bigger issue was whether the arbitrator was bound to consider post-removal evidence presented at the hearing regarding Norris’s AD/HD treatment, the improved medical conditions of his wife and daughter, and Norris’s psychiatrist’s conclusion that the improper conduct was unlikely to be repeated.
“In assessing the reasonableness of the penalty imposed, the arbitrator was required to consider post-removal evidence that was brought to his attention,” the court found. “On remand, we leave to the arbitrator to determine whether, in light of all the evidence, the penalty of removal ‘did strike a responsible balance within tolerable limits of reasonableness.’” Norris was represented by Michael Kator of Kator, Parks & Weiser.