McClure v. Interstate Facilities, Inc., 92-WPC-2 (ALJ Apr. 17, 1992)

	U.S. Department of Labor Office of Administrative Law Judges

www.oalj.dol.gov

[skip navigational links] Search | A-Z Index

Find It! on DOL | OALJ Home | OALJ Law Library | About Us

September 25, 2008 DOL Home > OALJ Home > Whistleblower Collection

USDOL/OALJ Reporter
McClure v. Interstate Facilities, Inc., 92-WPC-2 (ALJ Apr. 17, 1992)

U.S. Department of Labor
Office of Administrative Law Judges
525 Vine Street, Suite 900
Cincinnati, Ohio 45202

DATE: April 17, 1992
CASE NO: 92-WPC-00002

In the matter of

DONALD W. MCCLURE
Complainant

INTERSTATE FACILITIES, INC. d/b/a
LOUISVILLE SOUTH AUTO/TRUCK PLAZA
Respondent

RECOMMENDED SUMMARY DECISION

This proceeding was initiated by the filing of a complaint with the Secretary of Labor under the employee protection provision of the Federal Water Pollution Control Act, 33 U.S.C. §1367, on September 6, 1991, by Donald W. McClure¹ against his employer, Interstate Facilities, Inc., d/b/a Louisville South Auto/Truck Plaza. McClure alleged that he was unlawfully dismissed from his employment on August 24, 1991, because on the previous day he had reported a diesel fuel spill into Brooks Run Creek, a public waterway, to local authorities.

An investigation of the complaint was undertaken by a compliance officer on the staff of the District Director, Wage

[Page 2]

and Hour Division, U.S. Department of Labor in Louisville. 29 C.F.R. §24.4. The parties reached a settlement of their dispute and executed a written Settlement Agreement on October 4, 1991. The agreement purported to "totally resolve" the discrimination complaint. The employer specifically declined to admit any violation of law, but agreed to reinstate McClure to his former job effective October 2, 1991, with the same working conditions and pay as he had previously enjoyed.²

On October 4, 1991, the District Director issued a notice of determination which was served on the parties by certified mail. 29 C.F.R. §24.4(d)(1). The notice recognized that the parties had agreed to resolve the matter, included a copy of the executed agreement, and required the employer to reemploy McClure in the same job, at the same rate of pay, and under the same working conditions, as had been in effect prior to August 23, 1991. Reemployment was to be effective on October 2, 1991. These, of course, are the terms the parties had voluntarily agreed to. However, the notice also contained the following statement:

Based upon our investigation, the weight of evidence to date indicates that Donald W. McClure was a protected employee engaging in a protected activity within the scope of the Federal Water Pollution Control Act and that discrimination as defined and prohibited by the statute was a factor in the actions which comprise his complaint.

In support of this determination that a violation of the employee protection provision of the statute occurred, the District Director merely cited the circumstance that,

Donald W. McClure was terminated from his employment after reporting a diesel fuel spill into a public waterway to the Disaster Emergency Services of Bullitt County, Kentucky.

Apparently, upon receipt of the notice of determination, the employer promptly requested a hearing. 29 C.F.R. §24.4(d)(3).³

This case was assigned to me for hearing on January 27,

[Page 3]

1992. On February 3, 1992, a telephone conference with all parties was scheduled to explore the matters in dispute in light of the parties' Settlement Agreement, and to discuss whether a formal evidentiary hearing was even necessary in this case. 29 C.F.R. §18.8. The conference was held on the afternoon of February 4. Participants included the complainant, Donald W. McClure; the employer's Vice President, Glenn Culver, and his counsel, Samuel Perkins, Esq. Donald Outland, District Director, Wage and Hour Division, who had issued the determination notice, was also present.

At the conference, it quickly became clear that the only disputed matter was the District Director's finding that discrimination was a factor in Interstate's terminating McClure, despite the parties' agreement to resolve their differences with no admission of guilt, which they had reduced to writing and signed, and which the District Director was well aware of.⁴ Both parties stated that they were satisfied with their settlement and did not believe that a hearing was necessary. The employer sought a hearing only to obtain relief from the finding that a violation of law had occurred. Moreover, the employer maintained that even if it was appropriate to find that a violation had occurred, despite the parties' voluntary settlement, the record contained no factual basis for the finding, and also that the investigation of the complaint had not even been completed. I informed the parties that I would issue an Order to Show Cause, requiring the parties to provide a written explanation of their positions. At that, the conference concluded.

On February 7, 1992, I issued an Order to Show Cause requiring the parties to address three points:

1. Why a summary decision should not issue without a formal hearing;

2. Why the parties' settlement agreement should not be given full force and effect; and

3. Why the notice of determination should not be withdrawn from the record since it is at variance with the settlement agreement, which admits no wrongdoing, and because the finding that discrimination was a factor in McClure's discharge was not supported by any reasoning.

[Page 4]

The parties, and the Office of the Solicitor on behalf of the Secretary of Labor, filed responses. The complainant stated that he was satisfied with the settlement agreement he had signed with the employer and had "no problem with...changing the decision about their being in violation." The employer's response states that a summary decision should issue without a hearing, that the settlement agreement should be given full force and effect, but that the notice of determination should be withdrawn from the record. The Secretary's response states that she has no opposition to a summary decision or my accepting the settlement agreement but does oppose withdrawal of the notice of determination from the record. In response to the Secretary, the employer reiterates its position that the notice of determination should be withdrawn as unlawfully issued since the factual investigation was never completed.

Considering the submissions by the parties and the Secretary, an oral hearing in this matter is not necessary, 29 C.F.R. §§18.39, 24.5, and a summary decision on the legal issues presented is appropriate, 29 C.F.R. §§18.40, 18.41.

ISSUES

1. Whether, in view of the parties' settlement agreement, which was accepted by the agency's District Director, there is a reviewable order before me;

2. Whether the parties' settlement agreement should be accorded full force and effect;

3. Whether the District Director's finding that discrimination was a factor in the employer's terminating McClure should be vacated and the notice of determination stricken from the record.

Conclusions of Law

The respondent employer, Interstate Facilities, Inc. d/b/a Louisville South Auto/Truck Plaza, requested a hearing in this matter pursuant to the Secretary's regulation of 29 C.F.R. 24.4(d)(3)(i), because the Administrator had determined that it had violated the employee protection provision of the Water Pollution Control Act, 33 U.S.C. §1367. In this proceeding, the employer, joined by the complainant, asks that the settlement

[Page 5]

agreement they reached during the investigation of the employee's complaint be recognized as the final resolution of their dispute and that the Administrator's notice of determination, finding that a violation of the statute had occurred, be withdrawn from the record.

The Administrator is obliged to investigate a complaint, determine whether a violation has occurred and "give notice of the determination which shall contain a statement of reasons for the findings and conclusions therein," 29 C.F.R. §24.4(d)(1). That determination becomes the final order of the Secretary unless the adversely affected party timely files a request for hearing. 29 C.F.R. §24.4(d)(2), (d)(3). Thus, the Administrator is required to both investigate and adjudicate the complaint in the first instance.

The regulations at 29 C.F.R. Part 24 are silent on the question of whether the parties may resolve a discrimination complaint by an agreed settlement or by the complainant's withdrawing his complaint; and if informal resolution is available, whether their agreement must be approved by the Administrator once a complaint has been filed and an investigation initiated. However, assuming that approval is required, the Administrative Procedure Act authorizes the agency's representative to consider "offers of settlement...when time, the nature of the proceeding, and the public interest permit .... " 5 U.S.C. §554(c)(1). There is no question in this case that the Administrator was aware that the parties were discussing a settlement at some point during his investigation of the complaint and that the parties submitted their executed agreement to him. The executed agreement was attached to the notice of determination and the notice itself acknowledged that the parties had agreed to resolve the matter and ordered the respondent to afford the employee exactly the relief that the parties had voluntarily agreed to. I conclude that the Administrator accepted and endorsed the parties' voluntary resolution of the complaint.⁵

Given his acceptance of the parties' agreement, which specifically disavows any wrongdoing by the employer, I am at a loss to understand why the District Director included a finding that the employer had violated the employee protection provision of the statute, and issued an abatement order, in his notice of determination. The parties' settlement resolved their dispute; the complaint, in effect, was withdrawn (see Sherrill Nolder v. Raymond Kaiser Engineers, Inc., Case No. 84-ERA-5, Sec. decision,

[Page 6]

June 28, 1985, slip op. at 4), leaving nothing for the District Director to adjudicate.⁶ I recognize that, unlike a court, an agency adjudicator is not limited to resolving a "case or controversy," but may issue a declaratory order in appropriate circumstances. 5 U.S.C. §554(e). E.g. Climax Molybdenum Co. v. Secretary of Labor, 703 F.2d 447, 451 (10 Cir. 1983). However, that provision of the Administrative Procedure Act authorizes discretionary issuance of a declaratory order only to "terminate a controversy or remove uncertainty," and in exercising that discretion, the agency is guided by the policies which underlie the "case or controversy" requirement of Article III of the Constitution. Climax Molybdenum, 703 F.2d at 451. Neither basis for issuance of a declaratory order is present here since the approved settlement agreement terminated the controversy and left no uncertainty between the parties.⁷

The parties' settlement of the complaint, accepted by the District Director, rendered a ruling on the merits of the complaint unnecessary. Therefore, in my view, the determination, finding that a violation had occurred and ordering abatement, rather than simply approving the settlement, was improvidently issued. The complaint was rendered moot by the settlement. The employer argues that the finding of violation should be vacated; the complainant does not object. The Secretary argues that the finding must stand and that the legal sufficiency of the notice of determination is not at issue; rather, it is asserted that only the complaint is at issue once a hearing is requested.

In this case, the complaint is moot. Neither party wishes to pursue the complaint. As far as they are concerned, the complaint has been finally disposed of through the voluntary Settlement Agreement.

This is a case where the agency should not have ruled on the issue of whether a violation of the statute had occurred because the issue was rendered moot by the settlement. The "case or controversy" requirement which limits the authority of Article III courts has been extended to the administrative context by the Supreme Court in Mechling Barge Lines v. United States, 368 U.S. 324, 329 (1961); see also United States v. Munsingwear, 340 U.S. 36 (1950). In this situation, where the validity of the finding of a violation and abatement order cannot be reviewed,⁸ the appropriate remedy is to vacate the order of abatement and the

[Page 7]

finding on which it is premised. Mechling, supra 368 U.S. at 329; Northwest Pipeline Corp. v. F.E.R.C., 863 F.2d 73, 76-79 (D.C. Cir. 1988); Climax Molybdenum Co. v. Secretary of Labor, 703 F.2d 442, 450-52 (10th Cir. 1983); Tennessee Gas Pipeline Co. v. Federal Power Commission, 606 F.2d 1373, 1382-83 (1979).

That the appropriate disposition of a case such as this is to vacate the determination made by the District Director has been recognized by the Secretary in the case of Sherrill J. Nolder v. Raymond Kaiser Engineers, Inc., Case No. 84-ERA-5, Sec. decision, June 28, 1985, slip op. at 14. Nolder involved a complaint of discrimination under the employee protection provision of the Energy Reorganization Act of 1974, 42 U.S.C. §5851. The Administrator issued a notice of determination that a violation of section 5851 had occurred. The employer requested a hearing. While the matter was pending before an Administrative Law Judge, the complainant requested that she be permitted to dismiss her complaint without prejudice and upon no conditions so that she could pursue an alternative remedy in state court. The employer responded that if the complaint was dismissed without prejudice, the dismissal should be conditioned, in part, on vacating the Administrator's adverse determination. In his discussion of the appropriateness of granting dismissal of the case without prejudice, the Secretary observed,

Accordingly, with dismissal of the complaint without prejudice in this case, the determination of the Wage and Hour Division, based upon the complaint and made subsequent to the filing of the complaint, would be automatically vacated. [Emphasis added.]

Nolder, slip op. at 14. The Secretary further noted that,

[R]espondent apparently recognized that, should the determination not be vacated automatically, it nevertheless could be vacated by order of the Administrative Law Judge and that any prejudice to Respondent could be removed. (Emphasis added.)

Nolder, slip op. at 14, n. 12. The Secretary ultimately held that the complainant must be allowed to withdraw her complaint

[Page 8]

without prejudice and remanded to the Administrative Law Judge for a determination of what conditions, if any, should be imposed on the complainant. However, vacating the Administrator's determination was not a condition to be considered; the Secretary noted that that condition "is moot for the reasons given." Nolder, slip op. at 16, n.14. Thus, the language quoted from page 14 of the Secretary's decision, i.e. the Administrator's determination "would be automatically vacated" or "could be vacated by order of the Administrative Law Judge," is not merely dictum, but in fact expresses the Secretary's legal conclusion and resolves the question. Therefore, the position advocated by the Secretary's counsel in this case is not well taken. The determination of the District Director must be vacated.

Conclusion
and
Recommended Order

Because the voluntary settlement agreement between the parties, accepted and approved by the District Director, resolved McClure's complaint in all respects to the complete satisfaction of both parties, the complaint became moot and the District Director's determination that discrimination was a factor in McClure's termination was entirely inappropriate and cannot be allowed to stand. The determination that the employer violated section 1367 of the Federal Water Pollution Control Act, 33 U.S.C. §1367, is vacated. The parties' Settlement Agreement remains in effect as the sole and proper disposition of the complaint.

J. MICHAEL O'NEILL
Administrative Law Judge

[ENDNOTES]

¹ Section 1367 prohibits an employer from firing or in any other way discriminating against an employee for engaging in protected activity to prevent pollution of the nation's waters.

² Apparently, McClure had returned to work prior to formally executing the agreement.

³ The request for hearing is not in the file which was forwarded to this office. In a letter to the Chief Administrative Law Judge dated January 3, 1992, and post-marked on January 7, 1992, Mr. Glenn A. Culver, the employer's Vice President of operations, inquired about the status of this matter, stating that "On October 10, 1991, we filed a timely exception to the ruling in the case of Donald W. McClure .... it Apparently in response to this inquiry, the case was docketed on January 13, 1992. The file was received in this office on January 23. No one disputes that the request for hearing was timely. See generally Rose v. Secretary of the Department of Labor, 800 F.2d 563 (6th Cir. 1986).

⁴ The conference was not reported and transcribed. 29 C.F.R. §18.8(b).

⁵ The statute affords the Secretary or her representative broad discretion to fashion an appropriate remedy. 33 U.S.C. §1367(b). The regulations provide that the Secretary can order a party which has violated the statute to reinstate the employee at the same wage and other employment conditions as previously existed, award back pay and provide compensatory damages. 29 C.F.R. §24.6(b)(2). These remedies appear to be derived from the employee protection provision of the Energy Reorganization Act of 1974, 42 U.S.C. §5851(b)(2)(B). While the regulations explicitly authorize the Administrator merely to issue a "notice of determination [which] shall include an appropriate order to abate the violation...," it is my understanding that the Administrator, as the Secretary's delegate, can order relief as provided in 29 C.F.R. §24.6(b)(2), since absent such authority, all successful complainants would have to request a hearing and go through time-consuming and expensive litigation in order to get effective relief; merely ordering the employer to "stop discrimination' is of little benefit to the injured employee. The fact that the District Director did not order relief beyond what the parties agreed to between themselves (e.g. he did not order back pay for the 6 week period between McClure's termination and reinstatement) further supports the inference that he accepted and approved the parties' settlement.

⁶ The District Director may have been misled by the regulations' silence on settlements or withdrawal of complaints and believed that he was bound to issue an abatement order of some sort in accordance with the statute, 33 U.S.C. §1367(b), and regulation, 29 C.F.R. §24.4(d).

⁷ A notice of determination issued by an individual District Director could hardly be considered an appropriate vehicle for the Secretary's announcement of a far-reaching policy to the effect that voluntary settlement at the investigation and preliminary adjudication stage of complaint processing does not necessarily preclude the agency's determining that a violation of the law had occurred, even if there is uncertainty among employers subject to the Act as to whether an executed settlement agreement forever disposes of a complaint arising from a particular incident. There is, of course, no suggestion in this record that such uncertainty is a pervasive problem which the agency is compelled to address.

⁸ The District Director's finding of a violation and the abatement order premised on that finding, are invalid in any event because they do not comply with regulatory requirements at 29 C.F.R. §24.4(d)(1), which specifies that a notice of determination shall be issued only after completion of the investigation and that it "shall contain a statement of reasons for the findings and conclusions therein." It is unclear from the record whether the investigation was completed; the employer maintains that it was aborted because the District Director was aware of the settlement negotiations. The notice of determination is ambiguous, "the weight of evidence to date indicates .... " More significantly, no reasons for the discrimination finding appear in the notice and no recitation of the evidence supporting the finding is provided. An agency is under an obligation to follow its own regulations. Rose v. Secretary of Department of Labor, 800 F.2d 563, 566 (6th Cir. 1986) (Edward, Sr. J., concurring); Morton v. Ruiz, 415 U.S. 199, 235 (1974) (Where the rights of individuals are affected, it is incumbent on agencies to follow their own procedures.)