ARB CASE NO. 99-004
ALJ CASE NOS. 97-ERA-26
97-ERA-50
DATE: November 29, 2000
In the Matter of:
ANN P. HARRIS,
COMPLAINANT,
v.
TENNESSEE VALLEY AUTHORITY,
RESPONDENT.
BEFORE: THE ADMINISTRATIVE REVIEW BOARD
Appearances:
For the Complainant:
Lynn Bernabei, Esq., Michael C. Subit, Esq., Bernabei & Katz, Washington,
D.C.
For the Respondent:
Edward S. Cristenbury, Esq., Thomas F. Fine, Esq., Brent R. Marquand, Esq., Linda J.
Sales-Long, Esq., Tennessee Valley Authority, Knoxville, Tennessee
ORDER VACATING ORDERS AND REMANDING CASE
This case presents the question whether under the employee protection
provisions of the Energy Reorganization Act (ERA), 42 U.S.C. §5851 (1994), a
Department of Labor Administrative Law Judge has jurisdiction to award costs, including
attorneys' fees, where the parties have entered into a no-fault settlement agreement.
Complainant Ann P. Harris (Harris) filed a complaint against Respondent Tennessee Valley
Authority (TVA) under the ERA. Following assignment of the case to an ALJ, Harris and
TVA signed a settlement agreement which provided, among other things, that TVA would
"be responsible for payment of Ms. Harris's attorneys' fees and expenses in an amount
[Page 2]
to be determined" by the ALJ. On joint motion of the parties, the ALJ approved the
settlement and dismissed the case. Following briefing on the attorneys' fees issue, the ALJ
then issued an order recommending the award of attorneys' fees in the amount of $217,852
and expenses in the amount of $39,016.54. For the reasons discussed below we
VACATE the ALJ's recommended orders and REMAND the case to the
ALJ for further proceedings.
BACKGROUND
On October 7, 1996, Harris filed an ERA discrimination complaint
claiming that TVA unlawfully had: failed to give her an 8% salary increase; reassigned her
to a job which was below her level; and terminated her employment through a reduction in
force (RIF). The Department of Labor's Wage and Hour Division investigated and
concluded that Harris' complaint could not be sustained. Harris then requested a formal
hearing, which was docketed as Case No. 97-ERA-26 and assigned to an ALJ.
On March 19, 1997, Harris filed a "supplemental complaint of
discrimination" concerning events "that occurred subsequent to, but as a part of
the same continuing course of discriminatory conduct as, the matters raised in [the] October
7, 1996, complaint." Harris claimed that: she was denied performance reviews for
fiscal years 1995 and 1996; a TVA attorney had made a negative comment about her; TVA
had not paid her the full Performance Incentive Plan cash award to which she believed she
was entitled; a TVA official had prevented her from representing another employee in an
unrelated sexual harassment proceeding; and TVA had not paid Harris the full bonus to
which she believed she was entitled for fiscal year 1996. The Department of Labor's
Occupational Safety and Health Administration investigated Harris' supplemental complaint
and found that it had no merit.1
Harris requested another hearing, which was docketed as Case No. 97-ERA-50 and assigned
to the same ALJ who had been assigned Case No. 97-ERA-26.
1 Effective for all complaints received on or
after February 2, 1997, the Secretary of Labor delegated the authority to investigate complaints under the
ERA to the Assistant Secretary of the Occupational Safety and Health Administration. Secretary's Order 6-
96 (62 FR 11, Jan. 2, 1997, as corrected by 62 FR 8085, Feb. 21, 1997).
2 For reasons that are not apparent,
the ALJ purported to award attorneys' fees and costs in this case pursuant to the Equal Access to Justice Act
[EAJA] and its implementing U.S. Department of Labor regulations. 5 U.S.C. §504; 29 C.F.R.
§§16.101-16.308 (1998). And the ALJ determined the amount of the award by resorting to
regulations which are applicable to cases brought under the LHWCA. Any award of attorneys' fees to the
complainant in this case must be pursuant to the ERA attorneys' fees provision; neither EAJA nor the
LHWCA regulations are applicable. See 29 C.F.R. §16.104 (listing Labor Department
proceedings to which EAJA applies); 20 C.F.R. §702.101 (scope of the LHWCA regulations).
3 Under statutes that allow an award
of attorneys' fees to prevailing parties, it is well-established that a party that agrees to settle a case may be
deemed to "prevail." In its analysis of the Civil Rights Attorney's Fees Awards Act of 1976, as
amended, 42 U.S.C. §1988 (which authorizes courts discretion to award attorneys' fees to the
prevailing party in certain civil rights actions), the Supreme Court observed that:
The fact that [the plaintiff] . . . prevailed through a settlement rather than
through litigation does not weaken her claim to [attorneys'] fees. Nothing
in the language of § 1988 conditions the District Court's power to
award fees on full litigation of the issues or on a judicial determination that
the plaintiff's rights have been violated. Moreover, the Senate Report
expressly stated that "for purposes of the award of counsel fees,
parties may be considered to have prevailed when they vindicate rights
through a consent judgment or without formally obtaining relief."
Maher v. Gagne, 448 U.S. 122, 129 (1980).
4 The ERA's legislative history is not
particularly instructive, but lends some support to our reading of the provision. Thus, the Senate Committee
Report summarizes the whistleblower protection provision as follows:
If the Secretary should find a violation, he would issue orders to abate it,
including, where appropriate, the rehiring of the employee to his former
position with back pay. Also, the person committing the violation could be
assessed the costs incurred by the employee to obtain redress.
This provision would safeguard the rights of employees, but it should not
encourage employees to frivolously allege violations since the employee
would have to pay the cost of the proceedings unless the violation is
proved.
S. Rep. No. 95-848, 95th Cong. 2d Sess. 29-30 (1978).
5 The Secretary and this Board have
routinely and regularly approved settlements which include the payment of attorneys' fees. See, e.g.,
Pillow v. Bechtel Constr. Co., Case No. 87-ERA-35, Sec'y Final Decision and Order (Aug. 16, 1994)
(settlement agreement including payment of attorneys' fees approved without finding of ERA violation);
accord Alcala v. Hanford Envtl. Health Found., ARB Case No. 98-029, ALJ Case No. 97-ERA-55
(Dec. 16, 1997); Jones v. Pac. Gas & Elec. Co., ARB Case No. 98-014, ALJ Case No. 97-ERA-3
(Nov. 4, 1997); James v. Pritts-McEnany Roofing, Inc., ARB Case No. 96-184, ALJ Case No. 96-
ERA-5 (Feb. 11, 1997); Bracken v. Entergy Operations, Inc., ARB Case No. 97-021, ALJ Case No.
96-ERA-18 (Jan. 17, 1997); Norway v. Niagra Mohawk Power Corp., ARB Case No. 97-010, ALJ
Case No. 95-ERA-5 (Nov. 22, 1996); Edzell v. TVA, ARB Case No. 96-142, ALJ Case No. 95-ERA-
39 (Aug. 21, 1996); Thompson v. Houston Lighting & Pow. Co., Case Nos. 93-ERA-2, 95-ERA-48,
Sec'y Final Order Approving Settlement (Dec. 4, 1995). See also Fuchko and Yunker v. Georgia Power
Co., Case Nos. 89-ERA-9, 89-ERA-10, Sec'y Order (June 13, 1994) (withholding approval of settlement
until parties submitted the amount of attorneys' fees to be paid).
6 TVA raised its jurisdictional
defense to the fees award within two months of the settlement which might lead one to question whether
TVA intended to raise that defense at the time it entered into the settlement. We prefer to take a more
charitable view of events and assume that it did not occur to TVA that the ALJ lacked jurisdiction to make
the fees award until after the settlement had been signed.
7 Although not essential to our
disposition of this case, we note also that TVA repeatedly has questioned whether the ALJ ever approved
the settlement agreement, as required by 42 U.S.C. §5851(b)(2)(A). In its initial brief to this Board,
TVA states that it "has never received any order which would show that the ALJ had reviewed and
approved the settlement. It is our understanding that the ERA requires that a complaint may not be dismissed
on the basis of a settlement 'unless the Secretary finds that the settlement is fair, adequate and
reasonable.'" Respondent Tennessee Valley Authority's Brief at 2 n. 2 (citation omitted). This point
is reiterated in TVA's rebuttal brief: "We pointed out in our main brief . . . that an award of fees was
premature since there was no order of dismissal." Rebuttal Brief at 2 n. 1.
Based on the record before us, it appears that the ALJ signed an Order of Dismissal
in the presence of the parties in open court on June 25, 1998, and that the Order had been drafted by TVA
itself. We therefore are not persuaded that TVA credibly can claim that it has "never received an
order" from the ALJ; even if the ALJ failed subsequently to serve the parties with a copy of the Order,
none of the parties could claim to be unaware that the Order had been entered. But if we were to accept
TVA's assertion, TVA's argument would simply reinforce our conclusion that the ALJ's approval of the
settlement (and his dismissal of the case) was defective and lacked finality, and that the case therefore is still
alive.
8 Of course the parties may avail
themselves of all the tools available for resolution of this case, including the use of a settlement judge.
See 29 C.F.R. §18.9. TVA should bear in mind that the amount of attorneys' fees for which
it could become liable can only increase. These fees would include compensation for time spent responding
to TVA's appeal of the ALJ's S.D.&O.
9 We note that we are not ordering
Harris to repay the amount TVA paid to her in conjunction with the voided settlement agreement pending
the outcome of this case. See, e.g., Macktal v. Brown and Root, Case No. 86-ERA-23, Secretary's
Order, slip op. at 4 (July 11, 1995) (no authority in ERA to order restitution of monies paid under partially
performed settlement agreement).