AIR21 Back-Pay Mitigation Requires “Reasonable Diligence,” Not a “Gross or Egregious Misconduct” Threshold

1. Introduction

Exclusive Jets, LLC v. United States Department of Labor, Administrative Review Board (4th Cir. Apr. 30, 2026) arises under the whistleblower protections of the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (“Aviation Reform Act” or “AIR21”), 49 U.S.C. § 42121.

The petitioner, Exclusive Jets, LLC d/b/a Fly Exclusive, sought review of an Administrative Review Board (“ARB”) order affirming an Administrative Law Judge’s (“ALJ”) decision that Exclusive Jets unlawfully terminated pilot Michael J. Jones for raising aviation safety concerns. The key issues on appeal were:

  • whether Jones engaged in AIR21-protected activity;
  • whether the protected activity was a “contributing factor” in his termination;
  • whether Exclusive Jets proved a “same-decision” defense by clear and convincing evidence; and
  • whether the ARB applied the correct legal standard to Jones’s duty to mitigate back-pay damages.

The Fourth Circuit affirmed liability but vacated and remanded the damages component because the ARB assessed mitigation under an incorrect, overly demanding standard.

2. Summary of the Opinion

The court denied the petition as to liability, holding that substantial evidence supported the ALJ/ARB findings that Jones engaged in protected activity, that his protected activity contributed to his termination, and that Exclusive Jets failed to prove it would have fired him absent the protected activity.

The court granted the petition in part as to damages, holding that the ARB erred by evaluating mitigation using a “gross or egregious conduct / willful violation of company rules” approach rather than the proper “reasonable diligence” standard. The court vacated the back-pay tolling/mitigation portion and remanded for the agency to apply the correct standard.

3. Analysis

A. Precedents Cited

1) Standards of review: “substantial evidence” and APA arbitrariness

  • Northrop Grumman Sys. Corp. v. U.S. Dep't of Lab., 927 F.3d 226 (4th Cir. 2019): supplied the court’s framework for reviewing ARB decisions under the Administrative Procedure Act and deferring to agency factfinding if supported by “substantial evidence.”
  • Greatwide Dedicated Transp. II, LLC v. U.S. Dep't of Lab., 72 F.4th 544 (4th Cir. 2023): reinforced both the ARB’s substantial-evidence review of ALJ factfinding (citing 29 C.F.R. § 1978.110(b)) and articulated the AIR21 burden-shifting structure.
  • Easterbrook v. Kijakazi, 88 F.4th 502 (4th Cir. 2023): provided the definition of “substantial evidence.”
  • Johnson v. Barnhart, 434 F.3d 650 (4th Cir. 2005) (quoting Craig v. Chater, 76 F.3d 585 (4th Cir. 1996)): anchored the court’s refusal to reweigh evidence or redo credibility assessments.

2) Protected activity under AIR21 and ARB guidance

  • Lawson v. FMR LLC, 571 U.S. 429 (2014): quoted for the proposition that protected activity includes providing information regarding violations relating to air carrier safety to an employer or federal authorities, tracking AIR21’s statutory language.
  • Luder v. Cont'l Airlines, Inc., ARB No. 10-026, 2012 WL 376755 (Dep't of Lab. Jan. 31, 2012): cited for the ARB principle that a “logbook entry in and of itself” is not necessarily protected activity.
  • Sievers v. Alaska Airlines, Inc., ARB No. 05-109, 2008 WL 316012 (Dep't of Lab. Jan. 30, 2008): cited for the idea that merely carrying out safety duties, even aggressively, may not be protected—while related conduct (e.g., informing management, refusing to sign off on airworthiness) can be.
  • Douglas v. Skywest Airlines, Inc., ARB Nos. 08-070, 08-074, 2009 WL 3165859 (Dep't of Lab. Sep. 30, 2009), and Hirst v. Se. Airlines, Inc., ARB Nos. 04-116, 04-160, 2007 WL 352447 (Dep't of Lab. Jan. 31, 2007): further examples of safety-related communications and operational decisions treated as protected activity.
  • Sea "B" Mining Co. v. Addison, 831 F.3d 244 (4th Cir. 2016): supplied the harmless-error principle for administrative adjudications, used to uphold the protected-activity finding despite the ALJ’s overbroad phrasing about logbook entries.

3) Causation: the low-threshold “contributing factor” test

  • Feldman v. L. Enf't Assocs. Corp., 752 F.3d 339 (4th Cir. 2014) (quoting Allen v. Admin. Rev. Bd., 514 F.3d 468 (5th Cir. 2008) and Marano v. Dep't of Just., 2 F.3d 1137 (Fed. Cir. 1993)): defined “contributing factor” broadly and emphasized that Congress intended to displace stricter motivating-factor formulations.
  • Murray v. UBS Sec., LLC, 601 U.S. 23 (2024): quoted for the Supreme Court’s clarification that personnel actions should not be based on protected whistleblowing activities “not even a little bit,” reinforcing the breadth of “contributing factor.”

4) Same-decision defense: “would have,” not “could have”

  • Parker v. BNSF Ry. Co., 137 F.4th 957 (9th Cir. 2025): cited for the proposition that the employer must show it would have taken the action absent protected conduct, not merely that it could have.
  • Murray v. UBS Sec., LLC (quoting Bostock v. Clayton County, 590 U.S. 644 (2020)): used to describe the proper same-action causation analysis—change one thing at a time and see if the outcome changes.

5) Mitigation of damages: correcting the ARB’s standard

  • O'Neal v. Gresham, 519 F.2d 803 (4th Cir. 1975), and Brady v. Thurston Motor Lines, Inc., 753 F.2d 1269 (4th Cir. 1985): established and articulated the general employment-law duty to mitigate (including that the claimant must use “reasonable diligence” to obtain and maintain suitable employment, and the employer bears the burden to show failure). Crucially, Brady rejected a narrow rule that would deny back pay only for “wanton” or “wilful” misconduct.
  • N.L.R.B. v. Pepsi Cola Bottling Co. of Fayetteville, 258 F.3d 305 (4th Cir. 2001): the ARB invoked this case’s language about willful/deliberate/gross misconduct, but the Fourth Circuit clarified that such misconduct may be sufficient to show failure to mitigate, not necessary.
  • Ford Motor Co. v. EEOC, 458 U.S. 219 (1982): used to explain that Title VII’s mitigation principle is rooted in the general law of damages—supporting application of the same “reasonable diligence” concept to AIR21 back pay.
  • Downey v. U.S. Dep't of the Army, 685 F. App'x 184 (4th Cir. 2017): invoked for harmless-error analysis where the wrong standard might not matter—then distinguished because, here, the ARB did not conduct the “reasonable diligence” analysis.

B. Legal Reasoning

1) Protected activity: no per se logbook rule, but broader safety reporting qualifies

The court accepted the ARB’s refinement of the ALJ’s language: while “logbook entries” are not automatically protected, Jones’s February 5–8 conduct included far more—emails to maintenance control and executives, reporting software compatibility concerns, contacting a manufacturer, and raising weather/test-flight safety concerns. Under the statute’s focus on reporting violations “relating to air carrier safety,” that body of conduct “unquestionably” supported protected activity.

Importantly, the court treated the ALJ’s overbroad statement as harmless error because the ALJ’s factual findings supported protected activity even without a per se logbook rule, consistent with Sea "B" Mining Co. v. Addison.

2) Contributing-factor causation: “malicious compliance” testimony and corroboration

The ALJ/ARB relied heavily on testimony that a “secondary reason” for termination was Jones’s alleged “malicious compliance” (described as strategically delaying write-ups). Exclusive Jets argued that this admitted only a problem with “delay,” not the protected “reporting” itself.

The Fourth Circuit agreed with the ALJ’s reading that “malicious compliance” necessarily contains “compliance” and that the ALJ permissibly found no credible evidence Jones delayed reports for improper reasons. The court further emphasized corroborating record evidence—management emails expressing frustration that Jones might not “make his flights today” due to continued reporting, and testimony that Jones was viewed as producing unusually many safety reports. Under the intentionally low threshold described in Feldman v. L. Enf't Assocs. Corp. and Murray v. UBS Sec., LLC, this was enough.

3) Same-decision defense: failure to meet the “clear and convincing” “would have” requirement

The ALJ found Exclusive Jets proved only that it “could have” fired Jones, not that it “would have” done so absent protected activity—an important distinction reinforced by Parker v. BNSF Ry. Co. and the “change one thing at a time” causation framing drawn from Murray and Bostock v. Clayton County.

The court rejected the argument that the agency improperly second-guessed the merits of the termination. Instead, it treated the employer’s lack of prior discipline, retraining, or reassignment as probative that the employer had not carried its heightened, clear-and-convincing burden to show it would have fired Jones anyway.

4) Mitigation: the core holding—“reasonable diligence” governs AIR21 back pay

The court’s central doctrinal contribution is its correction of the ARB’s mitigation framework. The ARB required Exclusive Jets to show Jones committed “gross or egregious” misconduct or a willful rules violation to toll back pay. The Fourth Circuit held that this is the wrong question: mitigation turns on whether the employee exercised reasonable diligence to find and maintain suitable work, as set out in Brady v. Thurston Motor Lines, Inc.. Gross or deliberate misconduct may be sufficient to establish a mitigation failure in some circumstances, but it is not the necessary threshold.

The court also rejected the contention that AIR21 differs materially from Title VII on mitigation, citing Ford Motor Co. v. EEOC for the principle that mitigation is rooted in general damages law and thus applies across employment remedial schemes.

Finally, the court found the error not harmless because the ARB never analyzed whether Jones failed to exercise “reasonable diligence”; it only affirmed findings on “gross or egregious misconduct.” The case was therefore remanded for the agency to apply the correct standard in the first instance.

C. Impact

  • Aligns AIR21 back-pay mitigation with traditional employment damages doctrine: The decision directs the ARB (and litigants) to apply the reasonable diligence test, preventing an unduly employer-friendly or employee-friendly distortion depending on the case posture. The inquiry becomes practical: job-search efforts, responsiveness to offers, retention of suitable employment, and reasonableness under the circumstances.
  • Constrains agency use of NLRB-style “gross misconduct” framing: By clarifying that N.L.R.B. v. Pepsi Cola Bottling Co. of Fayetteville does not displace Brady v. Thurston Motor Lines, Inc., the Fourth Circuit reduces the risk that mitigation devolves into a quasi-disciplinary “misconduct” trial rather than a diligence-based damages analysis.
  • Reinforces AIR21’s pro-complainant causation design while preserving the demanding same-decision defense: The court’s handling of “contributing factor” and “clear and convincing” proof underscores that AIR21 cases often turn less on whether an employer had some plausible non-retaliatory rationale and more on whether the employer can prove it would have acted identically absent protected activity.
  • Practical litigation effect on damages presentation: On remand and in future cases, employers will likely focus on concrete evidence of unreasonable job-search gaps, failure to pursue comparable positions, and avoidable loss of interim employment; employees will respond by documenting applications, follow-ups, training/licensing steps, and reasons for any delays.
  • Precedential weight caveat: The opinion is “UNPUBLISHED” and “not binding precedent in this circuit,” but it is a detailed signal of how the Fourth Circuit expects the ARB to frame mitigation in AIR21 remedies.

4. Complex Concepts Simplified

  • Protected activity (AIR21): Reporting, internally or to authorities, information about violations relating to air-carrier safety. Routine paperwork (like a logbook entry) is not automatically protected, but safety communications and refusals/concerns tied to safety can be.
  • Contributing factor: A very low causation threshold—if protected activity tended to affect the decision in any way, it can satisfy causation. It is designed to be easier than “motivating factor” or “substantial factor.”
  • Same-decision defense (clear and convincing evidence): Even if retaliation contributed, the employer can avoid liability only by proving it would have taken the same action anyway, and the proof must be highly persuasive (“clear and convincing”).
  • Duty to mitigate: A damages rule limiting back pay. The employee must act reasonably to find and keep suitable work; the employer must prove the employee did not.
  • Harmless error: A legal mistake does not require reversal if it likely did not affect the outcome. Here, the protected-activity misstatement was harmless, but the mitigation-standard error was not.
  • Substantial evidence: Not “the best evidence,” and not “more likely than not”—just enough relevant evidence that a reasonable person could accept the agency’s conclusion.
  • “Malicious compliance” (as used in the record): Allegedly complying with safety reporting requirements in a way said to be strategically timed to create operational disruption. The ALJ found no credible proof Jones did this, and the court deferred to that credibility determination.

5. Conclusion

The Fourth Circuit’s decision leaves the AIR21 retaliation liability findings intact but makes a pointed correction to damages doctrine: back-pay mitigation in AIR21 cases must be evaluated under the “reasonable diligence” standard, not under a heightened requirement that the employer prove “gross or egregious” employee misconduct.

The remand directs the ARB to perform the proper, diligence-centered mitigation inquiry—reinforcing that, in whistleblower cases, robust liability protections coexist with traditional limits on economic remedies grounded in general damages principles.