DATE: March 16, 1995
CASE NO: 94-STA-17
IN THE MATTER OF
ASSISTANT SECRETARY OF LABOR FOR
OCCUPATIONAL SAFETY AND HEALTH [1]
PROSECUTING PARTY,
AND
SARA K. O'DOUGHERTY AND THOMAS P. PEER,
COMPLAINANTS,
v.
BJARNE SKJETNE, JR.
d/b/a BUD'S BUS SERVICE
RESPONDENT.
BEFORE: THE SECRETARY OF LABOR
DECISION AND ORDER
Sara K. O'Dougherty and Thomas P. Peer, Complainants, allege
that Bjarne Skjetne, Jr., d.b.a. Bud's Bus Service, Respondent,
violated the employee protection provision of the Surface
Transportation Act of 1982 (STAA), 49 U.S.C.A. § 31105 (West
1994). Complainant O'Dougherty alleges that the STAA was
violated when she was fired after notifying Respondent that she
had filed a complaint with the Vermont Department of
Transportation (VDOT) concerning the safety of Respondent's
school buses. Complainant Peer alleges that the STAA was
violated when he was laid off after expressing support for
O'Dougherty's claim of wrongful discharge to personnel of
Respondent.
[PAGE 2]
In a Recommended Decision and Order (R.D. and O.) filed on
November 14, 1994, the Administrative Law Judge (ALJ) found in
favor of Complainants. The ALJ recommended that Respondent pay
Complainant O'Dougherty for back wages commencing April 3, 1993,
for a period of two months, at a weekly rate of $153.00. The ALJ
further ordered that Respondent pay interest on all back wages.
The ALJ withheld issuing a recommended order regarding payment to
Complainant Peer because Peer did not submit proper employment
documentation. However, the ALJ noted that Complainant Peer's
period of back wages would also be two months.
The findings of fact in the ALJ's R.D. and O. at 2-9, are
supported by substantial evidence on the record as a whole and
therefore are conclusive. 29 C.F.R. § 1978.109(c)(3)(1993).
The ALJ's decision is affirmed, as set out below.
BACKGROUND
I. Factual
Complainants Sara K. O'Dougherty and Thomas P. Peer began
working for Bud's Bus Service in August 1992 as bus drivers.
As such, they were each required to keep logs regarding the
safety of the buses and the need for repairs.
Complainant O'Dougherty kept accurate records regarding the
necessary repairs needed for the buses she operated, and
submitted those lists to Respondent in accordance with company
policy. Mechanical problems occurred frequently and would not
always be properly repaired the first time. On or about
March 30, 1993, Complainant O'Dougherty was assigned to drive a
bus which recently passed an inspection by Respondent. On that
day, O'Dougherty made an anonymous complaint to VDOT because she
was concerned that Respondent's buses were not being maintained
in a safe manner. On April 2, 1993, VDOT conducted an inspection
of Respondent's buses. At that time O'Dougherty identified
herself to VDOT and Respondent as having made the initial
complaint. Complainant O'Dougherty was fired on April 3, 1993.
Respondent alleges that Complainant O'Dougherty was fired for
using a bus for personal purposes in January, 1993.
Complainant Peer claims that he was laid off for expressing
support for Complainant O'Dougherty's claim of wrongful
discharge. After Complainant O'Dougherty was fired Complainant
Peer told personnel of Respondent that he believed she was fired
due to the complaint made to VDOT. Complainant Peer was laid off
by Respondent on April 5, 1993. Respondent alleges that Peer was
laid off due to a consolidation of jobs.
II. Respondent's Bankruptcy Proceedings
On May 3, 1994 a hearing was held before an ALJ in Rutland,
Vermont. At the beginning of the hearing the Attorney for the
Respondent notified the Court that Respondent, Bud Skjetne, was
the owner of Bud's Bus Service. The Court was additionally
[PAGE 3]
informed that Mr. Skjetne was currently in Chapter 11, debtor-in-
possession, bankruptcy. As part of the bankruptcy proceedings
Respondent was in the process of selling his buses and would be
terminating bus service at the end of the school year, sometime
in June, 1994. At no time during the proceedings did Respondent
or his attorney object to proceeding before the ALJ due to the
pending bankruptcy action.
Respondent initially filed for bankruptcy protection under
Chapter 11 prior to the hearing held on May 3, 1994. On
March 24, 1994 Complainants, through the Prosecuting Party, filed
Proofs of Claims in the bankruptcy court.
On May 24, 1994 Respondent filed a Plan for Reorganization
in Bankruptcy Court. Respondent's Modified Plan for
Reorganization in Federal Bankruptcy Court, submitted on July 18,
1994, states that "the contingent, disputed, and unliquidated
claims of Sara K. O'Dougherty and Thomas Peer are not allowed
claims and are dischargeable because they have missed the
objection to discharge date." Modified Plan at 7, 14. On
July 21, 1994, the Honorable Francis G. Conrad, United States
Bankruptcy Judge, signed a Final Confirmation Order conditionally
accepting Respondent's plan for reorganization. The Final Decree
was issued on November 11, 1994. [2]
DISCUSSION
I. Jurisdiction to Adjudicate
According to 11 U.S.C. § 362(a)(1), a bankruptcy
petition generally stays proceedings against a debtor. However,
11 U.S.C. § 362(b)(4) provides that a bankruptcy petition
does not act as a stay
under subsection (a)(1) of this section, of the
commencement or continuation of an action
or proceeding by a governmental unit to enforce
such governmental unit's police or regulatory power.
Courts have held that this section permits the National Labor
Relations Board (NLRB) to prosecute unfair labor practice charges
against employers who have petitions pending in Federal
Bankruptcy Court. NLRB v. Continental Hagen Corporation,
932 F.2d 829, 831-35 (9th Cir. 1991); NLRB v. Evans Plumbing
Co., 639 F.2d 291, 293 (5th Cir.1981). Complaints pursued by
the Department of Labor to enforce its regulatory power under the
STAA should be treated in the same manner. Therefore, it was
appropriate for the ALJ to hear the above-entitled case because
the bankruptcy petition did not act as a stay in accordance with
11 U.S.C. § 362(b)(4). [3]
II. Determination of Interest
The ALJ ordered Respondent to pay interest on the back pay
award at a rate consistent with 29 U.S.C. § 1961. In STAA
cases
[PAGE 4]
the Secretary consistently has required calculation of
prejudgment interest on back pay at the rate specified for
underpayment of Federal income tax in 26 U.S.C. § 6621.
See, e.g., Gregory A. Dutile v. Tighe Trucking,
Inc., Case No. 93-STA-31, Sec. Order, March 30, 1994, slip
op. at 2. at 21. With the correction of the interest rate,
I adopt the appended, well- reasoned R.D. and O. [4]
CONCLUSION
I adopt and affirm the ALJ's Recommended Decision with the
one above noted exception. Accordingly, it is ORDERED that
Respondent shall:
1. Pay Complainant O'Dougherty back wages at the rate of
$153.00 per week for a period of two months beginning April 3,
1992.
2. Respondent shall pay prejudgment interest on the back
pay award calculated pursuant to 26 U.S.C. § 6621.
SO ORDERED.
ROBERT B. REICH
Secretary of Labor
Washington, D.C.
[ENDNOTES]
[1] The caption is corrected to reflect the Assistant
Secretary's full title.
[2] There is no evidence that Complainants individually, or
through the Prosecuting Party, objected to Respondent's
Reorganization Plan or the Final Confirmation Order of the
Bankruptcy Judge.
[3] Though the effect of the Final Decree in bankruptcy
on these claims may be fatal to Complainants ability to collect
damages, 11 U.S.C. § 524, that decision is not within my
jurisdiction.
[4] If the ALJ has issued, or within 30 days of the date of this
Final Decision and Order issues a supplemental order regarding
back pay for Complainant Peer, that supplemental order will be
treated as a new Recommended Decision and Order. If no such
supplemental decision is issued within 30 days of this order, the
case will be closed.
