Nelson v. Walker Freight Lines, Inc., 87-STA-24 (Sec'y July 26, 1988)

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Nelson v. Walker Freight Lines, Inc., 87-STA-24 (Sec'y July 26, 1988)

U.S. DEPARTMENT OF LABOR
SECRETARY OF LABOR
WASHINGTON, D.C.

DATE: July 26, 1988
CASE NO. 87-STA-24

IN THE MATTER OF

ROBERT H. NELSON,
COMPLAINANT,

WALKER FREIGHT LINES, INC.,
D/B/A PACKAGE EXPRESS,
RESPONDENT.

BEFORE: THE SECRETARY OF LABOR

DECISION AND ORDER

Before me for review is the recommended Decision and Order On Remand (R.D. and 0.) issued, on April 1, 1988, by Administrative Law Judge (ALJ) Edward C. Burch in the above-captioned case, which arises under the Surface Transportation Assistance Act of 1982 (STAA), 49 U.S.C. app.§ 2305 (1982).

The ALJ's R.D. and 0. was issued pursuant to my Decision and order of Remand of January 15, 1988, finding that Respondent had violated Section 2305(b) of the STAA but remanding for a determination of the amount due Complainant as lost wages or backpay. After a hearing on the backpay issue, the ALJ recommended that Respondent be ordered to pay Complainant the sum of $7,380.72 as backpay. R.D. and 0. at 2.

On April 21, 1988, having noted that the record of this case contained copies of an order of the United States Bankruptcy Court in San Bernardino, California, discharging Braxton Bragg Walker from all dischargeable debts and declaring null and void any judgment thereafter obtained against Mr. Walker,¹ I requested the parties to brief the issue of whether further proceedings in this case had to be stayed. In response to this request, the Associate Solicitor for occupational Safety and Health,² submitted a brief. The Associate Solicitor's position is that the Bankruptcy Court order does not stay this proceeding because: (1) the bankruptcy order was based on a petition for the personal bankruptcy of Braxton Bragg Walker and did not directly involve the corporate entity of Walker Freight Lines, Inc.; (2) it does

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not appear that either Complainant or the United States Department of Labor was given proper notice of Mr. Walker's petition for bankruptcy, or that debts to them were listed on the schedule of liabilities which Respondent was required to file with the Bankruptcy Court; and, (3) that the automatic stay provision of the Bankruptcy Code does not bar governmental action to enforce the STAA. No brief or comment was filed by Respondent.

Impact of Bankruptcy Order

The first issue before me then is whether the Bankruptcy Court order operates to stay any further proceedings in this case. Upon examination of the applicable statutory provisions and relevant case law, I conclude that it does not.

In reaching this conclusion, I agree with the Associate Solicitor that, on its face, the Bankruptcy Court order applies only to the personal liabilities of Braxton Bragg Walker, an individual, and that the order neither mentions Walker Freight Company or Package Express nor contains anything else to suggest that a judgment against either of these entities is null and void.³

More importantly, I find that even if the Bankruptcy Court order applies to Respondent, the automatic stay provision of the Bankruptcy Code, 11 U.S.C. § 362(a), does not operate to stay the resolution of Complainant's Section 2305 claim. Section 362(a) of the Bankruptcy Code provides, inter alia, that the filing of the petition for bankruptcy operates to stay the commencement or continuation of any administrative proceeding against the debtor that was or could have been commenced prior to the bankruptcy case. Subsection (b)(4) of Section 362 specifically exempts from this automatic stay provision "the commencement or continuation of an action or proceeding by a governmental unit to enforce such governmental unit's police or regulatory power." Several federal courts have found this exemption applicable to proceedings arising under various Federal statutes. Thus, the courts have refused to stay proceedings by administrative agencies under the Fair Labor Standards Act, Brock v. Rusco Industries Inc., 842 F.2d 270 (11th Cir. 1988), under the National Labor Relations Act, N.L.R.B. v. Evans Plumbing Co., 639 F.2d 291 (5th Cir. 1981), under the Migrant and Seasonal Agricultural Worker Protection Act, In Re: Perez d/b/a Perez Farm Labor Contractor, 104 LC para. 34,761 (Bankr. E.D. Cal. 1986), or under Title VII of the Civil Rights Act of 1964, E.E.O.C. v. Rath Packing Co., 787 F.2d 318 (8th Cir. 1986). In exempting such governmental actions, these courts have relied on the statement in the legislative history of the Bankruptcy Act of 1978 to the effect that:

Paragraph (4) excepts commencement or continuation of actions and proceedings by governmental units to enforce police or regulatory powers. Thus, where a governmental unit is suing a debtor to prevent or stop violation of fraud, environmental protection, consumer protection, safety, or similar police or regulatory laws, or attempting to fix damages for violation of such a law, the action or proceeding is not stayed under the automatic stay.

H.R. Rep. No. 95-595, 95th Cong., 2d Sess. 343, reprinted in 1978 U.S. Code Cong. & Admin. News, 5787, 6299. See also S. Rep. No. 95-989, 95th Cong., 2d Sess. 52, reprinted in 978 U.S. Code Cong. & Admin. News, 5787, 5838. This expression of Congressional intent has been held to encompass governmental action enforcing

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employment discrimination provisions of the National Labor Relations Act (NLRA), N.L.R.B. v. Evans Plumbing Co., 639 F.2d at 292, and of Title VII, E.E.O.C. v. Rath Packing Co., 787 F.2d at 323-325, and to permit the entry of judgments for injunctive relief and for backpay. NLRB v. Evans, 639 F.2d. at 293; EEOC v. Rath Packing Co., 787 F.2d at 326.

The Fifth Circuit reasoned in E.E.O.C. v. Rath Packing Co. that:

"EEOC does not function simply as a vehicle for conducting litigation on behalf of private parties; it is a federal administrative agency charged with the responsibility of investigating claims of employment discrimination and settling disputes." Occidental Life Insurance Co. v. EEOC, 432 U.S. 355, 368, 97 S.Ct. 2447, 2455, 53 L. Ed.2d 402 (1977). Thus, "(w)hen the EEOC acts, albeit at the behest of and for the benefit of specific individuals, it acts also to vindicate the public interest in preventing employment discrimination." General Telephone Co. v. EEOC, 446 U.S. at 326, 100 S.Ct. at 1704. When EEOC sues to enforce Title VII it seeks to stop a harm to the public - invidious employment discrimination which is as detrimental to the welfare of the country as violations of environmental protection and consumer safety laws, which are expressly exempt from the automatic stay. We therefore hold that the automatic stay provision did not apply to this Title VII action brought by EEOC.

787 F.2d at 325.

There is no question that the STAA is a safety law nor that the Congressional intent in providing for Section 2305 discrimination actions was to "vindicate the public interest" in promoting safety on the nations' highways. This was made clear in the section by section analysis of the STAA, prepared by the Senate Commerce Committee, which reported out the legislation. There it was stated that Section 2305 "was considered necessary to encourage whistleblowing by employees. Enforcement of commercial vehicle safety laws and regulations is possible only through an effort on the part of employers, employees, State safety agencies, and the Department of Transportation". 128 Cong. Rec. S14,028 (daily ed. December 7, 1982). The analysis further noted that "the Committee believes that section [2305] provides one more incentive to employers to comply with rules, regulations standards and orders issued under the title". Id. Thus, actions undertaken to enforce Section 2305 are an exercise of our national safety policy. As such, they are excepted from the bankruptcy automatic stay provision. NLRB v. Edward Cooper Painting, Inc., 804 F.2d 934, 942 (6th Cir. 1986).

Although Section 2305 actions, unlike NLRA and Title VII discrimination suits, do not require the filing of a complaint by a Federal administrative unit, they nevertheless can be considered "proceedings by a governmental unit" within the meaning of the automatic stay exemption. The regulations implementing Section 2305 specifically provide that the prosecuting party shall be the Assistant Secretary for Occupational Safety and Health in any case in which either the employer alone or both the employer and the Complainant object to the Secretary's preliminary findings.⁴ 29 C.F.R. 1978.107(a) and (c). In the case before me, Respondent objected to

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the Secretary's Finding's and Preliminary Order of-June 2, 1987, which found that Respondent's discharge of complainant was in violation of Section 2305 of the STAA, and the case was prosecuted by the Associate Regional Solicitor on behalf of the United States Department of Labor as well as the Complainant. Transcript of Hearing, August 21, 1987, at 4; Transcript of Hearing, March 3, 1988, at 4. I, therefore, find that the case before me falls within the exemption of section 362(b)(4) of the Bankruptcy Code.

For the reason that the order of the San Bernardino Bankruptcy Court applies only to Braxton Bragg Walker as an individual, and because I find that the Section 2305 action based on Complainant Nelson's complaint of unlawful discharge falls within the exemption of Section 362(b)(4) of the Bankruptcy Code, I conclude that a valid judgment as to back wages to be paid to Complainant may be entered in this case.

Amount of Back Wages Due Complainant

In his D. and 0. on Remand, the ALJ recommended that Complainant be awarded the sum of $7,380.72. The basis for this dollar amount was the Complainant's testimony at the March 3, 1988, hearing, that, had he not been discharged by Respondent, he would have earned, after deduction of his interim earnings, a total of $7,380.72 in wages from Package Express and in supplemental earnings from other employers. The record reveals that counsel for Respondent withdrew prior to the March 3, 1988, hearing and that Respondent neither appeared at the hearing nor submitted any documentary evidence. Complainant's testimony, therefore, was uncontradicted.

Based upon my review of the record, I accept the ALJ's recommendation and find that, as a result of his unlawful discharge by Respondent, Complainant is entitled to back wages in the amount of $7,380.72.

Therefore, Respondent is ordered to:

1. Pay to Complainant the sum of $7,380.72 for lost wages from his discharge on December 12, 1986 to May 23, 1987, the date on which Complainant obtained new full-time employment, with interest on this sum, the rate of interest to be determined in accordance with the procedure of 28 U.S.C. § 1961(a) (1982); and,

2. Expunge from Respondent's records all material and references relative to Complainant's discharge.

SO ORDERED

Ann McLaughlin
Secretary of Labor

Washington, D.C.

[ENDNOTES]

¹One copy of this order is addressed to Robert Nelson, care of the ALJ's office, and another copy is addressed to the "San Francisco Department of Labor" at the same address.

²The Regional Solicitor represented the Complainant before the ALJ.

³It is also true, as pointed out by the Associate Solicitor, that the record before me contains nothing to indicate that Complainant or the Department of Labor was ever given notice of Braxton Bragg Walker's petition for bankruptcy, or that any liability that he might have with respect to Complainant, as a result of any financial interest Mr. Walker has in Walker Freight and Package Express, was listed on his schedule of debts. Under section 523(a)(3) of the Bankruptcy Code, 11 U.S.C. § 523(a)(3) (1982), a debtor is not discharged from any debt not listed nor on the schedule of liabilities which the debtor must file with the Bankruptcy Court, unless the creditor had timely notice or actual knowledge of the bankruptcy proceeding. In the absence of any evidence in this record as to whether or not there was notice or actual knowledge, I make no finding to this effect.

⁴It is only when Complainant objects to the preliminary finding that the complaint lacks merit that the Assistant Secretary is not the prosecuting party, although the Assistant Secretary retains the right to intervene as a party. 29 C.F.R. § 1978.107(b).