McGavock v. Elbar, Inc., 86-STA-5 (Sec'y Nov. 25, 1986)

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McGavock v. Elbar, Inc., 86-STA-5 (Sec'y Nov. 25, 1986)

U.S. DEPARTMENT OF LABOR

SECRETARY OF LABOR
WASHINGTON, D.C.

Case No. 86-STA-5

In the Matter of

JAMES McGAVOCK,
Complainant

ELBAR, INC.,
Respondent

ORDER

On July 9, 1986, I issued my Final Decision and Order in the above-captioned case finding that Respondent had violated the employee protection provision of the Surface Transportation Assistance Act (STAA) 49 U.S.C. app. § 2305 (1982), and ordering, among other things, that Respondent Elbar reinstate Complainant McGavock and pay to him back wages. Respondent did not appeal this decision and, on September 8, 1986, the time period for appeal expired. See 49 U.S.C. § 2305(d); Fed. R. App. P. 26.

By letter of September 9, 1986, Complainant requested that I take action to enforce my final order. Later that same date, Complainant sent me another letter advising that, after he had mailed his first letter, he entered into a settlement with Respondent. Subsequently, under date of September 16, 1986, Respondent's counsel submitted a copy of a Settlement Agreement and Release of All Claims, which was entered into by the parties and Complainant's attorney on September 9, 1986 and which was signed by Complainant and his attorney on that date and by Respondent on September 15, 1986.¹ This settlement agreement is now before me for approval.

The usual standard for approval of a settlement agreement is that the terms of the agreement must be fair, adequate and reasonable. Johnson v. Transco Products, Case No. 85-ERA-7, slip op. at 1, August 8, 1985. Compare Young v. Hake, Case No. 83-ERA-11, slip op., January 18, 1985 ("fair and equitable"); Eggers v. Cincinnati Drum Services, Inc., Case No. 84-TSC-2, slip op. of ALJ, March 6, 1984 ("reasonable and proper and that a dismissal is not against the public interest"), approved by Secretary, June 5, 1984; and Chan Van Vo v. Carolina Power Light Company, Case No. 85-ERA-3, slip op. April 12, 1985

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("equitable"). Where a settlement is not fair and equitable to a complainant, I cannot approve it for to do so would be an abdication of the responsibility imposed upon me by Congress to effectuate the purpose of section 2305, which is to encourage the reporting of safety violations by prohibiting economic retaliation against employees reporting such violations. Settlements which are economically disadvantageous to such employees obviously have a chilling effect on other employees and do nothing to encourage the reporting of safety violations.

Here, before the settlement was entered into, there had already been a final adjudication of Complainant's complaint, a violation by Respondent had been established, and the period within which to appeal my Final Decision and Order had expired. Consequently, Complainant was entitled to enforcement of my order compelling Respondent to restore Complainant to the position he would have been in had he not been discriminated against.

Where there is a failure to comply with one of my orders in an STAA case, I am required by the statute to institute proceedings to enforce that order. 49 U.S.C. app. § 2305(e). In view of this, any settlement after final adjudiction of the complaint and expiration of the applicable appeal period must not only be fair and equitable to the complainant, but must be carefully scrutinized to determine that there exists some compelling reason why my final order should not be enforced. Otherwise, one who has already been found to have illegally engaged in economic retaliation against a particular employee can cause further economic loss to that employee by deliberately delaying the ordered reinstatement and payment of compensation in order to force the employee to settle for something less than legally entitled to receive.

I have examined the settlement agreement submitted by Respondent, and have concluded that the terms of this agreement do not contain sufficient information for me to determine whether the settlement meets the above standards for approval. Accordingly, the parties are ordered to submit the following information:

1. The dollar amount of back wages which Complainant would receive under the formula set forth in the Final Decision and Order issued on July 9, 1986, in this case, accompanied by an explanation of how this amount was computed. The computation should set forth separately the amounts due as back wages from June 1-3, 1985, until the date of settlement, any deductions therefrom and any interest added thereon.

2. An explanation of what is represented by the sum of twenty four thousand dollars ($24,000.00) which Respondent Elbar agrees, in paragraph 1 of the settlement agreement, to pay to Complainant McGavock. 3. A statement as to whether, under the terms of the settlement agreement, Complainant McGavock is compensated, and if so, in what amount, for the waiver of reinstatement to his former position as ordered in the Final Decision and Order of July 9, 1986.

4. A statement as to the circumstances which led to the signing of the agreement subsequent to the issuance of the Final Decision and Order of July 9, 1986 and the expiration of the period for appeal of that Order.

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The parties may file a joint stipulation containing the above information.

SO ORDERED.

WILLIAM E. BROCK
Secretary of Labor

Dated: NOV 25 1986
Washington, D.C.

[ENDNOTES]

¹Following receipt of the settlement agreement, I received from Complainant a copy of his letter of October 4, 1986 to his attorney in which Complainant states that he agreed to settle "at a substantial reduction of what . . . actual losses were' because his attorney informed him that, if he did not settle, Respondent 'would appeal and delay settlement for up to two years." McGavock to Ronald P. McClusky, October 4, 1986. A copy of this letter, with enclosures, is herewith made a part of the record of this case, and, for purposes of service, is attached to this order.