U.S DEPARTMENT OF LABOR
SECRETARY OF LABOR
WASHINGTON, D.C.
DATE: July 11, 1995
CASE NO.: 86-ERA-23
IN THE MATTER OF
JOSEPH J. MACKTAL, JR.,
COMPLAINANT,
v.
BROWN & ROOT, INC.,
RESPONDENT
BEFORE: THE SECRETARY OF LABOR
ORDER
Under a settlement agreed to by the parties, Respondent paid
Complainant $35,000 for, among other things, discharge of all
claims and dismissal of this case. Numerous issues were raised
by the parties concerning the effect and validity of the
settlement. After tortuous litigation, see Macktal v.
Secretary of Labor, 923 F.2d 1150, 1152-53 (5th Cir. 1991),
the Secretary, exercising her limited authority regarding
settlements, Macktal at 1154, refused to enter into the
settlement because it included a term which the Secretary found
against public policy.[1] She remanded this case to the
Administrative Law Judge "for further proceedings consistent with
[the Secretary's] order and the ERA." The ALJ recommended
dismissal because Complainant failed to comply with his order
directing Complainant to repay the $35,000 before proceeding to a
hearing. The parties have filed briefs in support of and in
opposition to the ALJ's recommendation.
The ALJ engaged in lengthy discussion of the equitable
principles of unjust enrichment and restitution in contract law.
Order Granting Respondent's Motion to Stay Proceedings at 2-5.
He noted that "[w]here one has been unjustly enriched by the
receipt of a benefit to which he is not entitled, equity will
intervene to restore the benefit to its rightful owner."
Id. at
[PAGE 2]
2. The ALJ concluded that "[t]he same principles of equity and
justice which require Complainant to return Respondent's funds
preclude him from proceeding with this action until he does so."
Id. at 4. Complainant's failure to comply with the ALJ's
order to repay the money, the ALJ held, justifies dismissal of
this case. The ALJ apparently assumed, without discussion, that
the Secretary possesses powers under the ERA comparable to those
of a court of equity. Id. at 4-6. After careful
consideration, I conclude that the Secretary's powers under the
ERA are more limited and I will remand this case to the ALJ for a
hearing.
Both parties recognized in their briefs that the crucial
issue here is whether the Secretary has the authority to order
Complainant to return the settlement money. Not surprisingly,
each party urges opposing views of the Secretary's powers under
the ERA. Complainant points out that administrative agencies are
creatures of statute and may not take any action not authorized
by or in violation of statutory mandate.[2] Certainly, no
explicit language in the ERA authorizes the order entered by the
ALJ. But Respondent argues, with some support, that agencies
have considerable latitude in interpreting and applying statutes
they administer.
I find that, in the absence of a broad delegation of
rulemaking authority, neither an ALJ nor the Secretary has the
power to enter such an order.[3] See Mourning v. Family
Publications Service, Inc., 411 U.S. 356, 369 (1973)
("[w]here the empowering provision of a statute states simply
that the agency may 'make . . . such rules and regulations as may
be necessary to carry out the provisions of this Act,' [Section
105 of the Truth in Lending Act, 15 U.S.C. § 1604 (1988)] we
have held that the validity of a regulation promulgated
thereunder will be sustained so long as it is 'reasonably related
to the purpose of the enabling legislation.'") (footnote and
citations omitted); Chevron U.S.A. v. Natural Resources
Defense Council, Inc., 467 U.S. 837, 843 (1984) (when statute
is silent or ambiguous [42 U.S.C. § 7502(b)(6)], courts
should defer to agency's interpretation if it is a "permissible
construction of the statute.")
Lower courts have upheld agency regulations not explicitly
authorized by statute but based on a broad grant of rulemaking
authority in a number of situations, including the following:
* where "they facilitate, in a reasonable manner, its
effective implementation," Alexander v. Trustees of
Boston Univ., 766 F.2d 630, 639 (1st Cir. 1985)
(upholding
[PAGE 3]
regluation, issued under 50 U.S.C. app. § 462(f)(4),
requiring educational institutions to ask applicants for
financial aid if they have registered for draft as reasonable
implementation of statute denying aid to those required to
register who had not done so);
* Oceanair of Florida, Inc. v. U.S. Dep't of Transp.,
876 F.2d 1560, 1565 (11th Cir. 1989) (upholding regulatory
presumption, established under 49 U.S.C. app. §
1354(a), of unfitness of dormant air carrier where agency
has concluded rule "is necessary to perform its statutorily-
mandated regulatory responsibilities unless Congress has
explicitly [restricted its authority]," (paraphrasing
United States v. Storer Broadcasting, Co., 351 U.S.
192, 203 (1956));
* Touche Ross & Co. v. SEC, 609 F.2d 570, 579 (2d Cir.
1979) (upholding SEC regulations, issued under 15 U.S.C.
§ 78(w)(a)(1), establishing procedures for disciplining
and disbarring accountants and attorneys form practicing
before SEC where regulation is "legitimate reasonable and
direct adjunct to the [agency's] explicit statutory power"]
(quoting Trans Alaska Pipeline Rate Cases, 436 U.S.
631, 655 (1978), internal quotes omitted);
* Dir., Office of Wkrs. Comp. Prog. v. National Mines
Corp., 554 F.2d 1267, 1275 (4th Cir. 1977) (upholding
regulation, issued under 30 U.S.C. § 936(a), appointing
hearing officers who were not administrative law judges to
try black lung claims where regulation "is reasonably
related to" purposes of the enabling legislation).
A broad grant of rulemaking power has been described as "a
kind of necessary and proper clause [which] grants considerable
powers to enforce the substantive mandates of federal law . . .
but is tied to and limited by those provisions." Central
Forwarding, Inc. v. I.C.C., 698 F.2d 1266, 1277 (5th Cir.
1983). The Fifth Circuit held in Central Forwarding that
the "enormous powers" granted by Congress to the I.C.C. to
regulate the interstate transportation industry, 49 U.S.C. §
10321(a), did not include authority to regulate compensation paid
by carriers to owner-operators. Id. at 1281.
Congress has not granted broad rulemaking authority to the
Secretary under the ERA. Any rule or order issued by the
Secretary under the Act, therefore, must be directly related to a
specific provision of the statute and clearly necessary to
implement express statutory terms. For example, the Secretary
has interpreted the 30 day time limit for filing a complaint
[PAGE 4]
under the ERA, 42 U.S.C. § 5851(b)(1),[4] as a statute of
limitations subject to waiver, estoppel and equitable tolling,
rather than a jurisdictional requirement. See, e.g., Doyle v.
Alabama Power Co., Case No., 87-ERA-43, Sec. Dec. Sep. 29,
1989, slip op. at 2; Bonanno v. Northeast Nuclear Energy
Co., Case Nos. 92-ERA-40 and 41, Sec. Dec. Aug. 25, 1993,
slip op. at 7; Lastre v. Veterans Administration Lakeside
Medical Center, Case No. 87-ERA-42, Sec. Dec. Mar. 31, 1988,
slip op. at 3; cf., School District of the City of Allentown
v. Marshall, 657 F.2d 16, 19 (3d Cir. 1981) (affirming
Secretary's interpretation of 30 day time limit in Toxic
Substances Control Act). Even in this example, where the
Secretary was required to interpret a specific statutory term in
order to implement the whistleblower laws, the Third Circuit
narrowly circumscribed the Secretary's authority, holding that
"restrictions on equitable tolling . . . must be scrupulously
observed." Id. at 19; see discussion id. at
20-21.
I find no authority in the ERA for me to rectify inequitable
bargains or order restitution of monies unfairly retained simply
because the parties' dispute concerns, among other things, the
whistleblower provision of the ERA.[5] To begin with, no
agreement cognizable under the Act settling Complainant's ERA
claim has ever been reached because the Secretary never approved
it. 42 U.S.C. § 5851(b)(2)(A) (proceeding may be terminated
"on the basis of a settlement entered into by the
Secretary and the person alleged to have committed [the]
violation . . . [with the] participation and consent of the
complainant;" Macktal v. Secretary of Labor, 923 F.2d at
1153-54 (emphasis added) (statutory language only authorizes
three options, one of which is a "consensual agreement involving
all three parties" and there is no exception for cases in which
the complainant and the respondent reach an independent
settlement).
In addition, the settlement agreement here released
Respondent from any claims by Complainant arising out of his
employment with Respondent, his termination from employment in
January 1986 and his resignation from his position with
Respondent, no just his claim under the ERA. Settlement
Agreement ¶ 2; General Release pp. 1-2. The parties have an
active dispute pending before me under the ERA which I must
resolve as provided in the Act. I have no power to resolve their
dispute over an alleged partially performed contract to which I
am not a party and which addresses many other matters over which
I have no jurisdiction. Poulos v. Ambassador Fuel Oil Co.,
Inc., Case No. 86-CAA-1, Sec. Ord. Nov. 1, 1987, slip op. at
2.
This case is REMANDED to the ALJ for a hearing.
[PAGE 5]
SO ORDERED.
ROBERT B. REICH
Secretary of Labor
Washington, D.C.
[ENDNOTES]
[1] The Fifth Circuit held that resolution of ERA cases by
agreement "is a consensual settlement process involving all three
parties," that is, Complainant, Respondent and the Secretary, and
that the Secretary may either approve a settlement as written or
reject it. Macktal v. Brown & Root, 923 F.2d at 1154-55.
When Respondent paid Complainant the $35,000, the Secretary had
not taken action on the settlement and later disapproved it, as
described above.
[2] I note that FTC v. Eastman Kodak Co., 274 U.S. 619
(1927), cited by Complainant as the progenitor of a "long line of
cases" restricting administrative agencies to their explicitly
granted powers, "has been repudiated." FTC v. Dean Foods,
Inc., 384 U.S. 597, 607 n. 4 (1966).
[3] Although the issue here is whether the Secretary has the
authority to order repayment of the settlement proceeds in the
context of an adjudicatory proceeding, rather than by regulation,
the Supreme Court has held that a "unitary agency," one combing
policymaking, legislative and adjudicatory powers, may use
adjudication to engage in lawmaking and policymaking where it has
been delegated powers to make law and policy through rulemaking
and necessarily interprets the rules it promulgated. Martin
v. Occupational Safety and Health Review Comm'n, 499 U.S.
144, 153 (1991)
[4] The 30 day time limit was extended to 180 days by the
Comprehensive National Energy Policy Act of 1992, Pub. L. No.
102-486, 106 Stat. 2776, 42 U.S.C.A. § 5851(b)(1) (West
1994).
[5] I cannot agree with Respondent's assertion that, absent an
express or clearly implied delegation of power by Congress,
administrative agencies can routinely exercise equitable powers.
In Niagara Mohawk Power Corp. v. FPC, 379 F.2d 153, 160
(D.C. Cir. 1967), cited by Respondent as authority for that
proposition, the court held that the FPC "did not suppose it had
a broad equity charter," but only referred to equitable
principles to show that "its course was reasonable." In
contrast, the overpayment recovery provisions of the Black Lung
Benefits Act under consideration in Napier v. Dir., Off. of
Wkrs. Comp. Progs., 999 F.2d 1032, 1034 n. 3 (6th Cir. 1993),
explicitly provide that "[t]here shall be no adjustment or
recovery of an overpayment in any case [where it would] [b]e
against equity or good conscience."
