ACADEMY GEOTECHNICAL ENGINEERING INC., WAB Case No. 93-03 (WAB May 26, 1993)
CCASE:
ACADEMY GEOTECHNICAL ENGINEERING INC.
DDATE:
19930526
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
ACADEMY GEOTECHNICAL WAB Case No. 93-03
ENGINEERING, INC.
Contractor
FRED JALEH
President
FLEURA J. TEHRANI
DeETTE ARDIEL
Accounting Manager
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Anna Maria Farias, Member
DATED: May 26, 1993
DECISION OF THE WAGE APPEALS BOARD
This matter is before the Wage Appeals Board on the petition
of the Acting Administrator of the Wage and Hour Division for
review of a February 8, 1993 order issued by Administrative Law
Judge ("ALJ") Alfred Lindeman. The order granted a petition for
rehearing filed by Respondents Academy Geotechnical Engineering,
Inc.; Fred Jaleh, president; Fleura J. Tehrani; and DeEtte Ardiel,
accounting manager (collectively referred to as "Academy" or
"Respondents"), and set aside the ALJ's December 23, 1992 decision
and order approving a settlement signed by counsel for Respondents
and the Department of Labor. For the reasons stated below, the
petition for review is granted, and the ALJ's February 8, 1993
order is reversed. [1]
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[2] I. BACKGROUND
On May 3, 1991 the Acting Administrator filed an order of
reference with the Office of Administrative Law Judges. The order
of reference alleged that Respondents had violated the Davis-Bacon
Act (40 U.S.C. [sec] 276a et seq.) and the Contract Work Hours and
Safety Standards Act (40 U.S.C. [sec] 327 et seq.) ("CWHSSA"), were
liable for back wages and should be debarred.
An ALJ hearing was scheduled for December 12, 1992. The
parties to this case held a settlement conference on November 23,
1992. Settlement conference participants were J. Mark Ogden, the
attorney representing the Acting Administrator; Fred Jaleh, and
John R. McCabe, the attorney representing Academy. The documents
filed in support of and in opposition to the petition for rehearing
in this matter indicate that counsel for the Acting Administrator
and counsel for the Academy both recall that monetary and debarment
issues were discussed at the conference; Jaleh states that he does
not recall debarment being discussed. No final agreement was
reached at the November 23 conference.
Ogden and McCabe did reach a tentative settlement agreement,
encompassing debarment, on about December 1, 1992. The agreement
was communicated to the ALJ in a conference phone call on December
2, 1992. A written settlement agreement, accompanied by an order
setting forth the terms that had been consented to orally, was
signed by McCabe on December 11, 1992 and by Ogden on December 15,
1992. The signed agreement stated that Academy was liable for back
wage payments totaling $14,960.34 for Davis-Bacon Act violations
and unpaid overtime compensation totaling $39.66 for CWHSSA
violations. The signed agreement also contained a provision
recommending debarment of Academy for three years. Ogden forwarded
the settlement agreement to the ALJ for issuance of a decision and
order adopting the agreement's terms.
After the agreement had been sent to the ALJ, McCabe told
Ogden in a December 17, 1992 letter that "[b]ased upon a previous
telephone conversation with my client . . . the form and content of
the settlement met with their approval." McCabe further stated,
"Earlier today, Fred Jaleh (Jaleh) telephoned and stated that he
had misunderstood the settlement and that reference to him as
president of Academy was inaccurate and that debarment was not
appropriate." McCabe added, "I respectfully request that until we
are able to further discuss Jaleh's inclusion that you assist in
requesting that Judge Lindeman not sign the order." Ogden
responded to McCabe by letter dated December 18, 1992, stating that
"this office is unwilling to alter the terms of the signed
Settlement Agreement in any manner." [2]
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[3] The ALJ issued a decision and order on December 23, 1992,
which incorporated, verbatim, the signed settlement agreement.
Academy, through McCabe, filed a petition for rehearing on January
21, 1993. The basis given for requesting rehearing was that
the Settlement agreement was mistakenly executed.
Additionally, as set forth in the declaration of Fred
Jaleh, had he fully understood the potential impact that
a debarment would have on the Petitioners he would not
have settled. He mistakenly believed that only the
monetary issue remained unsettled, that debarment would
not result. Upon a complete review of the Settlement
Agreement and a review of applications for bids on other
Federal and State contracts it was apparent that
debarment would significantly impact Petitioners. The
pecuniary loss by payment of the alleged unpaid wages,
although a consideration, paled in comparison to the
indeterminable impact on the Petitioners in lost business
by that which may impugn his character resulting from
debarment.
The petition further stated that the "mistake of agreeing to the
Settlement Document was not the result of misrepresentation by
Petitioner or Respondents [sic] counsel, but the failure of the
Petitioners to fully understand the settlement and its impact."
Academy requested that the decision and order be set aside and that
a hearing be granted on all issues in the proceeding. The Acting
Administrator opposed the petition for rehearing.
On February 8, 1993, the ALJ granted Academy's petition for
rehearing and set aside the previous decision and order which had
incorporated the parties' settlement agreement. The ALJ stated,
"Having considered the circumstances presented, particularly
respondents' assertion that there was a material mistake regarding
including the significant element of debarment in the agreement
against their intended wishes, I conclude that good cause has been
shown for granting the Petition for Rehearing." The case was
returned to the docket for reassignment and notice of a new date
for a hearing on all issues listed in the order of reference.
II. DISCUSSION
The first issue that must be addressed in this matter is
whether this Board has jurisdiction to review the ALJ's
interlocutory order setting aside the parties' signed settlement
agreement. The regulations pertaining to practice before the Wage
Appeals Board provide at 29 C.F.R. 7.1(b) that the Board shall have
jurisdiction "to hear and decide appeals concerning questions of
law and fact from final decisions. . . ." (Emphasis supplied.) The
Board -- at the behest of [3]
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[4] the Acting Administrator -- has dismissed a petition for review for
lack of jurisdiction when the petitioner sought review of an
interlocutory order of an ALJ. Bechtel Constructors Corporation, WAB
Case No. 93-02 (Feb. 23, 1993) (subcontractor The Tanner Companies
sought review of ALJ order denying summary judgment). See also,
Cleveland B. Sparrow, Sr., WAB Case No. 86-09 (Mar. 18, 1986) (the Board
refused to entertain a petition to stay an ALJ hearing because "the Wage
Appeals Board cannot assert jurisdiction over a petition until a final
decision has been rendered").
The Acting Administrator describes the Board's jurisdiction
over appeals from "final decisions" as analogous to the
jurisdiction of federal courts of appeals under 28 U.S.C. [sec]
1291 to hear "appeals from all final decisions of the district
courts of the United States. . . ." In addition, the Acting
Administrator notes that an exception to the "final order rule" has
been recognized -- the "collateral order doctrine," which permits
an interlocutory appeal if the interlocutory order conclusively
determines the disputed question, resolves an important and
separable issue, and would otherwise be unreviewable upon appeal.
Analogizing to the instant case, which involves a request for
review of an ALJ order setting aside a settlement agreement, the
Acting Administrator further notes that the collateral order
doctrine has been invoked to permit appeal from a district court's
denial of a motion to enforce a settlement agreement. Janneh v.
GAF Corporation, 887 F.2d 432 (2d Cir. 1989), cert. denied, 498
U.S. 865 (1990) ("Janneh").
The Acting Administrator urges the Board to apply the
collateral order doctrine to decisions of administrative law
judges, and to assert jurisdiction in this case. Upon full
consideration of the issue, the Board concludes that it is
appropriate to assert jurisdiction. As the Second Circuit noted in
Janneh, the first criterion for application of the collateral order
doctrine is met because the order below conclusively determined the
question of whether a settlement was reached. Given the policy
considerations favoring settlements, it is also apparent that the
order below resolved an important issue that is separable from the
merits of the case. Finally, the ALJ's decision to set aside the
settlement agreement would be essentially unreviewable upon an
appeal to the Board after a full evidentiary hearing. Accordingly,
the Board asserts jurisdiction in this matter, and will proceed to
consider the merits of the Acting Administrator's petition for
review.
The Board concludes that the ALJ abused his discretion when he
set aside his previous decision and order which had incorporated
the terms of the parties' signed settlement agreement. As noted by
the Acting Administrator, enforcement of settlement agreements
knowingly and voluntarily entered into by the parties is strongly
favored. See, e.g., Jeff D. v. Andrus, 899 F.2d 753 (9th Cir.
1989). Further, an agreement entered into by an attorney for a
client will be upheld if the attorney had apparent authority to
reach a settlement and the opposing party had no reason to doubt
that authority. See Janneh, 887 F.2d at 436. In this [4]
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[5] case, the parties' attorneys signed a written settlement agreement.
The record indicates no reason that the attorney for the Acting
Administrator should have doubted the authority of McCabe, attorney for
Academy, to enter into a settlement. Nor does the record indicate that
McCabe in any way exceeded his authority by agreeing to the settlement.
Rather, as noted by the Acting Administrator, the record "points to the
contractor's mere reconsideration, after the fact of settlement, of
whether it should have entered into the agreement in the first place."
Such an apparent change of heart not provide an appropriate basis for
setting aside a settlement agreement, and the ALJ greatly exceeded his
discretion in so doing.
Accordingly, the February 8, 1993 order of the ALJ is vacated;
the December 23, 1992 decision and order of the ALJ incorporating
the parties' signed settlement agreement is reinstated.
BY ORDER OF THE BOARD:
Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Anna Maria Farias, Member
Gerald F. Krizan, Esq.
Executive Secretary [5]
