U.S. DEPARTMENT OF LABOR
SECRETARY OF LABOR
WASHINGTON. D.C.
DATE: March 16, 1990
CASE NO. 89-ERA-1
IN THE MATTER OF
JIM STITES,
COMPLAINANT,
v.
HOUSTON LIGHTING & POWER,
RESPONDENT.
CASE NO. 89-ERA-41
IN THE MATTER OF
DORIS I. TEAGUE,
COMPLAINANT,
v.
HOUSTON LIGHTING & POWER COMPANY,
RESPONDENT.
BEFORE: THE SECRETARY OF LABOR
ORDER TO CONSOLIDATE AND TO SHOW CAUSE
The above-captioned cases, arising under the employee
protection provision of the Energy Reorganization Act of 1974, as
amended (ERA), 42 U.S.C. § 5851 (1982), have been
transmitted to me for review of the recommended orders of
dismissal by the administrative law judge (ALJ) assigned to each
case. It appears that each recommended order of dismissal is
based on a single settlement agreement purporting to settle in one document both of
the captioned complaints by the Complainants, husband and wife,
against the same Respondent. In Case No. 89-ERA-1 (Jim Stites,
Complainant), ALJ Richard D. Mills submitted a Recommended Order
[PAGE 2]
of Dismissal on December 5, 1989, recommending dismissal of this
case with prejudice upon finding that the "parties Stipulation
for Dismissal and Settlement Agreement is fair and adequate ...."
In Case No. 89-ERA-41 (Doris I. Teague, Complainant), ALJ Julius
A. Johnson issued a (recommended] Order Dismissing Action Upon
Settlement on October 23, 1989, based on notification by the
parties that they had reached settlement and had agreed to
dismissal of the action.
Although no settlement agreement was made a part of the
record in Case No. 89-ERA-41, it is apparent on the face of the
Settlement Agreement in Case No. 89-ERA-1 that the agreement
covers Case No. 89-ERA-41 and that the parties intend both
complaints to be disposed of together. I find further that it
will be more expedient for the parties to respond to my order
herein to show cause if the cases are combined. Accordingly,
these cases are hereby consolidated for the purpose of reviewing
the dismissals of the captioned cases by a common settlement.
See Fed. R. Civ. P. 42(a), as made applicable by 29 C.F.R.
§ 18.1(a) (1989). A copy of the Settlement Agreement in
Case No. 89-ERA-1 shall be placed in the record of Case No. 89-
ERA-41. [1]
The Settlement Agreement has been carefully reviewed and,
with the exceptions and limitations discussed below, I find it
fair, adequate and reasonable.
Paragraph 6 of the Settlement Agreement broadly prohibits
Complainants from "disclos(ing) any of the facts underlying the
Complaints or any claims that were raised or that could have been
raised in the Complaints." Paragraph 6 also prohibits
Complainants from 'disclosing this settlement or the contents or
terms of this Settlement Agreement and related documents
to any third party or parties, except for disclosure of this
Agreement and related documents to the Court, to the
extent necessary to obtain the Court's approval of this Agreement
and dismissal of the Complaints." (Emphasis added). [2]
Paragraph 6, as such, would appear to restrict Complainants
from providing information or documents obtained in the course of
this case to the Nuclear Regulatory Commission (NRC) or any other
agency. Such information or documents could be relevant and
material to law enforcement investigations by the NRC or other
agencies, including investigation by the Department of Labor
under the ERA or other laws. Paragraph 6 also apparently would
prohibit Complainants from testifying, taking part in or
assisting in any law enforcement proceeding in which alleged
violations of the ERA or events related to this case may arise.
Paragraph 6 of the Settlement Agreement accordingly may
restrict access by the Department of Labor, as well as other
agencies, to information Complainants may be able to provide
relevant to the administration and enforcement of the ERA and
[PAGE 3]
many other laws. So construed, its effect would be to "dry up"
channels of communication which are essential for government
agencies to carry out their responsibilities. See Polizzi
v. Gibbs & Hill, Inc., Case No. 87-ERA-38, Sec. Order, July
18, 1989, slip op. at 3-6. In Polizzi, similar settlement
provisions in an ERA case were held to be void as against public
policy, inasmuch as they would have had the effect of drying up
channels of information for the Department of Labor in ERA cases
and under other laws, as well as for other agencies in carrying
out their responsibilities. See also Macktal v. Brown & Root,
Inc., Case No. 86-ERA-23, Sec. Order, November 14, 1989, slip
op. at 10-13, appeal docketed, No. 90-4029 (5th Cir.
January 12, 1990). For the reasons set forth in Polizzi,
slip op. at 5-7, I hold that Paragraph 6 of the Settlement
Agreement is void to the extent that it would prohibit
Complainants from communicating to federal or state enforcement
authorities as identified above.
I so hold notwithstanding an attempt by the parties,
prefatory to the terms of the agreement, to qualify those terms
and thereby, perhaps, save the provisions of Paragraph 6. In this
regard, the agreement states that "the parties have agreed that
nothing contained herein is in any way intended to restrict
Claimants from presenting information or concerns regarding
nuclear quality or safety to any regulatory authority or any
other person[.]" Settlement Agreement, p. 2. Because this
qualifying provision is limited to information or concerns
regarding "nuclear quality or safety," it does not go far enough
to neutralize the broad prohibitions of Paragraph 6.
As stated in Polizzi, slip op. at 4, involving
similar settlement agreement provisions, public policy is
violated where government agencies are prevented by the terms of a
settlement agreement from carrying out their responsibilities under the
ERA, under other environmental whistleblower statutes, see 29
C.F.R. § 24.1, or under any federal or state law, rule or
regulation. Thus, while the cited prefatory provision appears to
eliminate the prohibition in paragraph 6 on disclosing
information or documents to the authorities under the ERA, it
does not alter the prohibition on the disclosure of information
or documents relevant to governmental investigations or
proceedings under other environmental whistleblower statutes, or
under other federal or state laws, rules or regulations. For
this reason, I find that the provisions of Paragraph 6 continue
to violate public policy and are void.
The remainder of the Agreement may be enforceable if
"performance as to which the agreement is unenforceable is not an
essential part of the agreed exchange." EEOC v. Cosmair.
Inc., 821 F. 2d 1085, 1091 (5th Cir. 1987) (quoting the
Restatement (Second) of Contracts, § 184(l) (1981)). See
also Nicholas v.
[PAGE 4]
Anderson, 837 F.2d 1372, 1375 (5th Cir. 1988) ("[I]f less
than all of a contract violates public policy, the rest of the
contract may be enforced unless the unenforceable term is an
essential part of the contract."). Thus, in McCall v. United
States Postal Service, 839 F.2d 664 (Fed. Cir. 1988), an
employee had settled an action challenging his removal by
agreeing that, upon reinstatement for a one year probationary
period, he would not appeal any disciplinary action taken against
him and also waived his right to file a charge with EEOC. The
court held that "even if (the employees] attempted waiver of his
right to file EEOC charges is void, that would not affect the
validity of other portions of the agreement." 839 F.2d at 666.
Unlike the record before me in Polizzi, there is no
information in this record from which I can determine whether the
Respondent, the party in whose favor the invalid provisions of
Paragraph 6 would run, intended to agree to the remainder of the
settlement if the provisions I have found void, as discussed
above, are severed. Accordingly, Respondent will be given an
opportunity to show cause why the remainder of the agreement
should not be approved and the case dismissed.
Paragraph 7 provides in part that the parties agree "that
any civil action or other litigation arising out of or resulting
from a breach or violation or alleged breach or violation of this
(Settlement) Agreement, shall be controlled by the laws of the
State of Texas." I note that the Secretary has the discretionary
authority to bring an action in United states district court to
enforce an order issued pursuant to the ERA whenever a person has
failed to comply with such order. See 42 U.S.C. §
5851(d). In such an action, moreover, the district court has
jurisdiction to grant all appropriate relief, including, but not
limited to, injunctive relief, and compensatory and exemplary
damages. Id. I interpret Paragraph 7 as not restricting
in any way the authority of the Secretary to bring an enforcement
action under 42 U.S.C. § 5851(d), nor as limiting in such
action the jurisdiction Of the district court to grant all
appropriate relief as identified in the statute.
It is evident from the Settlement Agreement that both the
Complainants and the Respondent have an interest in the
provisions of Paragraph 7. Therefore, in order to ensure that the
interpretation I have attached to Paragraph 7 does not conflict
with the intention of the parties, Complainants and Respondent
will be permitted to show cause why Paragraph 7 should not be
approved as interpreted in this order.
Accordingly, Respondent may show cause within 30 days of
receipt of this order why the provisions of Paragraph 6 of the
Settlement Agreement, to the extent that they may prohibit
Complainants from communicating to the authorities as identified
[PAGE 5]
above, should not be severed and the remainder of the settlement
approved. Complainants and Respondent may show cause within 30
days of receipt of this order why the provisions of Paragraph 7
as interpreted in this order should not be approved. If no cause
is shown by the parties within 30 days as indicated, a final
order will be issued approving the settlement, as severed and
interpreted in this order, and this case will be dismissed with
prejudice.
SO ORDERED.
ELIZABETH DOLE
Secretary of Labor
Washington, D.C.
[ENDNOTES]
[1] If Case No. 89-ERA-41 were reviewed separately it would
have been necessary to issue an order to submit the settlement
agreement for the record, see Fuchko and Yunker v. Georgia
Power Co., Case Nos. 89-ERA-9, 89-ERA-10, Sec. Order, March
23, 1989, slip op. at 1-2, so that I would be able to determine
whether the terms of the settlement are fair, adequate and
reasonable. SeeMacktal v. Brown & Root, Inc.,
Case No. 86-ERA-23, Sec. Order, May 11, 1987, slip op. at 2-3.
In view of the consolidation, that procedure is unnecessary.
[2] The term "related documents" appears susceptible to varying
interpretations. Read narrowly, the term may encompass only
those documents directly related to the Settlement Agreement,
such as the Stipulation of Dismissal, the parties' Proposed Order
for the ALJ and related cover letters from the parties'
attorneys. Read broadly, however, the term "related documents"
could encompass all documents related to the entire case covered
by the Settlement Agreement. It is the latter interpretation
which brings into play the public policy concerns discussed
below, and which renders the provision void to the extent that it
is so interpreted.
