[Editor's note: The correct Case No. for this document is 86-
SDW-1]
DATE: August 17, 1993
CASE NO. 86-SWD-00001
IN THE MATTER OF
FRED AND JOYCE McFARLAND
COMPLAINANTS,
v.
CITY OF NEW FRANKLIN, MISSOURI,
RESPONDENT.
BEFORE: THE SECRETARY OF LABOR
ORDER APPROVING SETTLEMENT AND
DISMISSING CASE
After the Administrative Law Judge (ALJ) submitted his
Recommended Decision and Order (R. D. and O.) in this case
arising under the employee protection provision of the Safe
Drinking Water Act (SDW or the Act), 42 U.S.C. § 300j-9(i)
(1988), the parties, through their counsel, exchanged
correspondence concerning settlement. On October 3, 1986,
counsel for Respondent wrote to counsel for Complainants
indicating that Respondent would not except to the ALJ's R. D.
and O. and would pay Complainants back wages, less interim
earnings, attorney's fees and expenses, in exchange for
Complainants' submission of their resignations. Attached to the
letter was an itemization of back wages with applicable
deductions, and fees and expenses. Complainants' counsel
responded by letter of October 8, 1986 that "the proposal for
settlement . . . is acceptable." The letter itemized some
interim earnings to be deducted from back pay and adjustments to
the amount of attorney's fees and costs. The letter stated that
"[t]he letters of resignation will shortly be delivered to the
City . . . effective October 6, 1986 . . . ."
Respondent's counsel sent checks for the back wages and
[PAGE 2]
attorney's fees to Complainants' counsel on November 10, 1986,
with a request that the resignations be submitted. On
January 26, 1987, Respondent's counsel again requested by letter
to Complainants' counsel that Complainants provide their written
resignations including acknowledgement that the ALJ's order had
been satisfied. Complainants' counsel responded on January 28,
1987 that Complainants were not satisfied with his representation
and refused to follow his advice about submission of their
resignations. The letter concluded "I know, and you know, what
the agreement was, and that was that [Complainants] were to
resign."
The Secretary issued a briefing schedule in this case on
June 25, 1988, and also gave notice that Complainants had
substituted counsel for the attorney who had represented them
before the ALJ and engaged in the settlement correspondence
described above. Complainants filed a brief pro se on
August 14, 1987, in which they acknowledged receiving $14,891.57
in "partial attorney fees, backpay and insurance plus interest."
Complainants asserted, however, that they were entitled to
receive an additional $210 in attorney's fees and "sick leave,
vacation pay, comp time, and expenses" to the date of their
reinstatement, as well as compensatory and punitive damages.
Complainants refused to submit their resignations because "the
city did not go according to Judge Mills [sic] decision."
Complainants' brief at 2. Counsel for Respondent wrote to the
Secretary on August 20, 1987 that this case had been settled but
that Complainants' had refused to comply with their agreement to
submit their resignations and were seeking to "disregard the
agreement . . . and seek . . . more money."
The Secretary issued an Order to Show Cause on August 9,
1989, which reviewed the procedural history of this case and
ordered the parties to show cause "why review of this case should
not proceed in accordance with [29 C.F.R. § 24.6 (1991)]."
Respondent replied to the order to show cause on August 22, 1989
that Respondent had complied with the recommended order of the
ALJ and requested that this case be closed. Complainants replied
to the order to show cause on August 28, 1989, asserting that
"review should proceed because proper procedures were not
followed by [Respondent] on job reinstatement [and Complainants]
received nothing for sick leave, vacation pay, comp time,
reasonable expenses, and $210 additional attorney fees."
Complainants requested that the ALJ's decision be affirmed, but
if they were not reinstated they should receive punitive damages
and letters of reference in addition to the above relief.
On July 17, 1990, the Secretary issued a Notice of Review
and Briefing Schedule which rejected Respondent's request that
this case be closed and established a new briefing schedule. The
[PAGE 3]
Notice of Review stated in a footnote that "[n]either party
asserted . . . that a settlement had been reached . . . ."
Notice of Review and Briefing Schedule at 1 n. 1. Complainants,
by their new counsel, filed a Brief in Support of Complainants on
August 14, 1990, asserting that this case has not been resolved
and that the Respondent has not complied with the ALJ's
recommended order because Complainants have not been reinstated
or received vacation pay, comp time, sick leave and legal fees.
In addition, Complainants requested punitive damages.
Respondent's attorney wrote to the Secretary on August 14, 1990
asserting that an agreement had been reached in this case because
"[Complainants'] attorney settled this matter with the City and
the City has paid money to the McFarland's [sic] in a good faith
response to that settlement." On September 11, 1990, Respondent
filed a Suggestion in Opposition to Complainants asserting that
Respondent had reached an agreement with Complainants as
evidenced by the correspondence discussed above.
The Secretary established the principles for evaluating
whether settlements had been reached in whistleblower cases in
Macktal v. Brown & Root, Inc., Case No. 86-ERA-23, Sec.
Dec.
Nov. 14, 1989, rev'd on other grounds, Macktal
v. Secretary of Labor, 923 F.2d 1150 (5th Cir. 1991). Among
other things, Complainant in that case claimed that the Secretary
should not approve a settlement he had entered into allegedly
because he was under duress exerted by his own counsel who he
claimed had misled him, and because, by the time of the
Secretary's review, he no longer agreed to the settlement.
The Secretary held that a "settlement is a contract, and its
construction and enforcement are governed by principles of
contract law. . . . There must be a meeting of the minds on all
essential terms . . . 'and the employee's consent [must have
been] voluntary and knowing.'" Macktal v. Secretary of
Labor, slip op. at 4-5 (quoting Alexander v. Gardner-
Denver Co., 415 U.S. 36, 52 n.15 (1974). Furthermore, the
Secretary said
[w]hen a litigant voluntarily accepts an offer of
settlement, either directly or indirectly through the duly
authorized actions of his attorney, the integrity of the
settlement cannot be attacked on the basis of inadequate
representation by the litigant's attorney . . . . [A]ny
remaining dispute is purely between the party and his
attorney . . . . Unless the resulting settlement is
substantially unfair, judicial economy demands that a party
be held to the terms of a voluntary settlement.
* * * *
A litigant who enters the judicial process through the
agency of freely chosen counsel always assumes a certain
risk that the result achieved will not be satisfactory.
[PAGE 4]
Defeated expectations do not, therefore, entitle the litigant to
repudiate commitments made to opposing parties or to the court.
Id. at 7-8 (quoting Petty v. Timken Corp., 849 F.2d
130, 133 (4th Cir. 1988)).
In addition, the Secretary held in Macktal that a
party cannot withdraw from a settlement after agreeing to it or
oppose approval of it at any time up to the time the Secretary
approves it. A settlement is an executory contract which is
binding on the parties until the Secretary acts on it.
Id. at 14. All these findings in Macktal were
affirmed by the court of appeals. Macktal v. Secretary of
Labor, 923 F.2d at 1156-58.
It is clear the parties reached a settlement agreement here
which Complainants have attempted to repudiate because it did not
provide all the relief they might have been entitled to under the
Act. The parties' representatives, their counsel, exchanged
correspondence in October 1986 which is sufficient evidence of a
settlement. Respondent's counsel made an offer by letter of
October 3, 1986 setting forth all the essential terms of a
settlement and Complainants' counsel accepted that offer on
October 8, 1986, saying "the proposal for settlement . . . is
acceptable."
Complainants apparently were dissatisfied with their
counsel's representation and later discharged him. See
letter of January 28, 1987 from Mr. Cullen Cline to Mr. Larry E.
Tate, and June 25, 1988 Briefing Schedule and Notice of
Substitution of Counsel. However, there has been no suggestion
that, at the time Complainants' counsel entered into the
settlement on their behalf, he did not have full authority to do
so. Complainants may have believed they were entitled to more
relief under the ALJ's decision, such as payment for accrued
leave, compensatory (comp) time, expenses, and compensatory and
punitive damages which should have been included in a settlement.
But it is in the nature of a settlement that each party
compromises some aspect of its position to avoid the
uncertainties and expense of further litigation. As pointed out
in the July 17, 1990 Notice of Review and Briefing Schedule, the
ALJ's R. D. and O. is only a recommended decision; the Secretary
issues the final decision in all cases arising under the SDW. 29
C.F.R. § 24.6 (1991). [1] Without intimating any
conclusions about the merits of this case, I simply note that,
when Complainants' attorney agreed to this settlement on their
behalf, there was no judgment or order outstanding in favor of
Complainants nor were they in any sense entitled to any relief.
It is unfortunate that Complainants apparently misunderstood the
status of their case, but that is not grounds for rejecting a
settlement fairly entered into.
The terms of the settlement described in the correspondence
discussed above are fair, adequate and reasonable and I approve
[PAGE 5]
it. Accordingly, this case is DISMISSED.
SO ORDERED.
ROBERT B. REICH
Secretary of Labor
Washington, D.C.
[ENDNOTES]
[1] There is no provision in the SDW or the regulations by
which a recommended decision of an ALJ becomes a final agency
decision after 90 days, unless modified or vacated by the
Secretary. As discussed in the text, only the Secretary issues
final decisions. The Secretary has held, moreover, that failure
to issue a decision within the 90 day time limit in the
environmental whistleblower statutes does not deprive the
Secretary of jurisdiction. Poulos v. Ambassador Fuel Oil
Co., Case No. 86-CAA-1, Sec. Dec. Apr. 27, 1987, slip op. at
12; Lockert v. Pullman Power Products Corp., 84-ERA-15,
Sec. [Remand] Dec. Aug. 19, 1985, slip op. at 1 n.1.
