[N/E Digest XVII]
PROPOSED PILOT TEST OF VOLUNTARY ARBITRATION AND/OR MEDIATION
On February 12, 1997, the Department published in the Federal Register a
notice and
request for comments on an amendment to the DOL's interim policy on the use of
alternative
dispute resolution. Expanded
Use of
Alternative Dispute Resolution in Programs Administered by the Department of
Labor, 62 Fed. Reg. 6690 (1997). The notice seeks public comment
on a
proposed pilot test of voluntary arbitration and/or mediation in six
categories of cases, including
nuclear and environmental whistleblower cases. The notice states:
Under the proposed pilot test, after an employee's complaint had
been
investigated by the Department, DOL would determine whether the case was
suitable for
ADR under the criteria described in this Notice. If ADR was appropriate,
the Department
would offer the employer and the employee the option of mediation and/or
arbitration,
conducted either by a Settlement Judge in DOL's Office of Administrative
Law Judges or
by a private mediator or arbitrator. The Department would not be a party
to, or
participant in, this mediation or arbitration. The Department invites
comment on how best
to coordinate the pilot test with OALJ's existing settlement judge
process.
The Administrative Review Board would not be bound by any
resolution
reached by the parties, but instead would review the results of mediation
or arbitration. If
appropriate (using the same standard now applied in ARB review of certain
environmental-whistleblower settlements between employees and employers),
the parties's
mediated settlement or the arbitrator's decision would be embodied in a
final order of the
Administrative Review Board. The Department would revise or supplement
its existing
regulations for environmental whistleblower cases (29 CFR Part 24), as
necessary, to
incorporate these provisions.
62 Fed. Reg. at 6693.
The notice indicates that the Department is considering contracting with a
nation-wide
contractor to sponsor mediators and arbitrators. 62 Fed. Reg. at 6694.
Parties would share
responsibility for payment of fees and expenses of the mediator or arbitrator.
62 Fed. Reg. at
6694. The Department invites comment on potential conflict-of-interest
problems in
compensation
of mediators or arbitrators where one party is financially unable or unwilling
to pay one-half of
the
neutral's fee. 62 Fed. Reg. at 6695.
In Rogers v. Pregis Innovative Packaging, Inc., 2008-CAA-1 (ALJ Aug. 29, 2008), the Chief ALJ applied the amended Part 24 rules in consideration of an adjudicatory settlement. The Chief ALJ wrote: "These regulations, being procedural rather than substantive, became effective immediately for pending cases upon publication in the Federal Register. See 72 Fed. Reg. at 44962 (Paragraph VI. Administrative Procedure Act)." Slip op. at 3.
[Nuclear & Environmental Digest XVII A] SETTLEMENT UNDER BOTH STAA AND ENVIRONMENTAL STATUTES WHERE NO PARTY APPEALS; ARB REVIEW OF SETTLEMENT IS LIMITED TO THE STAA CLAIM
In Andrews v. Max Trans, LLC, ARB No. 07-065, ALJ No. 2006-STA-45 (ARB May 30, 2007), the parties settled a whistleblower case involving both the Surface Transportation Assistance Act, and the TSCA, SDWA, SWDA, WPCA, and CERCLA. The ARB reviewed and approved the settlement in regard to the STAA because it issues the final order in such cases. The ARB, however, did not review the settlement under the environmental laws because no party had filed an appeal.
The ALJ accepted a settlement agreement between the parties
in which in exchange for resigning as an employee and dropping
all three cases against the Respondent, the Complainant will
receive a consulting contract guaranteeing him 100 hours of
consulting work a month for three years, including health
insurance paid by the Respondent.
[Nuclear & Environmental Digest XVII A]
SETTLEMENTS; SWDA DOES NOT REQUIRE DOL APPROVAL
The SWDA does not require the Secretary to approve a settlement. Jones v. EG&G Defense Materials, Inc., ARB No. 01-039, ALJ No. 1995-CAA-3 (ARB Mar. 13, 2001).
[Nuclear & Environmental Digest XVII A]
SETTLEMENTS; CAA AND TSCA MUST BE APPROVED BY DOL
The CAA and the TSCA require the Secretary of Labor to enter into or otherwise approve a settlement. See 42 U.S.C. §7622(b)(2)(A) (CAA); 15 U.S.C. §2622(b)(2)(A) (TSCA). Jones v. EG&G Defense Materials, Inc., ARB No. 01-039, ALJ No. 1995-CAA-3 (ARB Mar. 13, 2001).
[Nuclear & Environmental Digest XVII A]
SETTLEMENTS; AUTHORITY OF ARB TO APPROVE
The Secretary has delegated to the ARB her authority to approve settlements of cases that are pending before the Board at the time the parties enter into the settlement. Secretary's Order 2-96, 61 Fed. Reg. 19978 (May 3, 1996); 29 C.F.R. §24.8. Jones v. EG&G Defense Materials, Inc., ARB No. 01-039, ALJ No. 1995-CAA-3 (ARB Mar. 13, 2001).
[Nuclear and Environmental Digest XVII.A.]
SETTLEMENTS; WHERE SECRETARIAL APPROVAL IS AND IS NOT REQUIRED
The TSCA, SDWA and CAA require the Secretary of Labor to approve settlements of
whistleblower complaints. The WPCA, SWDA and CERCLA do not. Beliveau v. Naval Undersea Warfare
Center, ARB Nos. 00-073, 01-017, 01-019, ALJ Nos. 1997-SDW-1, 4 and 6
(ARB Nov. 30, 2000).
[Nuclear & Environmental Digest XVII A]
SETTLEMENTS; CERCLA, FWPCA AND SWDA DO NOT REQUIRE SECRETARIAL
APPROVAL OF SETTLEMENT
Neither the Water Pollution Control Act nor the Solid Waste Disposal Act require that the
Secretary of Labor enter into or otherwise approve a settlement. Sayre v. Alyeska Pipeline Service Co.,
ARB Nos. 99-091 and 99-092, ALJ No. 1997-TSC-6, slip op. at 2 n.1 (ARB Sept. 30, 1999) (In
Sayre, however, the complaint also included TSCA and CAA complaints, which do require
Secretarial approval; thus, the ARB reviewed the settlement agreement).
See also Marcus v. U.S. Environmental
Protection Agency, ARB No. 99-027, ALJ Nos. 1996-CAA-3 and 7 (Oct. 29,
1999) (FWPCA, CERCLA and SWDA settlements do not require Secretarial approval).
[Nuclear & Environmental Digest XVII A]
SETTLEMENTS OF CAA, TSCA AND SDWA COMPLAINTS REACHED DURING
INVESTIGATIVE STAGE MUST BE REVIEWED AND APPROVED BY THE SECRETARY
OF LABOR
In Beliveau v. U.S. Dept. of
Labor, No. 98-1786 (1st Cir. Mar. 10, 1999), the First Circuit reversed the ARB's
ruling in Beliveau v. Naval Undersea Warfare
Center, 1997-SDW-6 (ARB June 26, 1998), that Secretarial approval of a
settlement of whistleblower complaint under the CAA, TSCA, and SDWA is required only
"where a settlement is reached between the parties after an appeal of a Department of
Labor investigative agency (Wage and Hour or OSHA) finding to the Office of Administrative
Law Judges, or where a settlement is entered after issuance of an ALJ's recommended order and
such matter is before the Board for review." The First Circuit held that settlements
reached during the investigative stage must also be reviewed and approved by the Secretary.
[N/E Digest XVII A]
SETTLEMENT AT PRE-ADJUDICATORY STAGE; NO REQUIREMENT THAT
SECRETARY ENTER INTO AGREEMENT TO TERMINATE PROCEEDING
Where the parties agree to a settlement before the investigatory agency (Wage and Hour or
OSHA) renders its determination, and before a request for a hearing is made by one of the
parties, there is no requirement that the Secretary of Labor enter into the settlement to terminate
the proceeding.
[N/E Digest XVII A]
SETTLEMENT; AUTHORITY OF DOL TO VOID SETTLEMENT REACHED PRIOR TO
ADMINISTRATIVE ADJUDICATORY STAGE
In Beliveau v. Naval Undersea Warfare Center, 97-SDW-6 (ALJ
Sept.
9, 1997), Complainant sought a ruling that a settlement agreement that he had
entered into with
Respondent in 1995 prior to completion of an investigation of the matter by
Wage and Hour was
void ab initio because it was not approved by the Secretary of Labor,
and therefore the
complaint that was the subject of the settlement agreement could be reopened.
The ALJ found
language in an ARB order declining to take jurisdiction of the matter as an
interlocutory appeal
to be controlling. SeeBeliveau v. Naval Undersea Warfare
Center, 97-SDW-6
(ARB Aug. 14, 1997)(Order Denying Interlocutory Appeal). In essence, the ALJ
found that
DOL has no authority to declare a settlement entered into prior to completion
of the investigatory
stage void because such a settlement does not need to be approved by the ALJ
or the ARB.
[N/E Digest XVII A]
SUBMISSION OF SETTLEMENT AGREEMENT IN FWPCA CASES
In Dorsey v. Greenbriar County Public
Service
District #2, 96-WPC-3 (ARB Sept. 29, 1997), the ARB indicated that
where the
parties submit a letter to the ALJ stipulating resolution of their dispute and
requesting dismissal
of the complaint, Fed. R. Civ. P. 41(a)(1)(ii) is applied, and the complaint
is dismissed.
Although the ALJ required submission of the settlement, and reviewed it to
determine whether it
was fair, adequate and reasonable, Dorsey v.
Greenbriar County Public Service District #2, 96-WPC-3 (ALJ July
25, 1997),
there is no indication that the ARB did anything more than accept the
stipulation of dismissal.
In the April newsletter, a casenote reported that
in
James v. Ketchikan Pulp Co., 94-WPC-4 (ARB Mar. 11, 1997), the ARB
ordered the
parties to submit a copy of a settlement agreement to the ARB, so that it
could determine
whether the settlement agreement is fair, adequate and reasonable, in an
apparent departure from
the approach in Biddle v. United States
Dept. of the
Army, 93-WPC-15 (Sec'y Mar. 24, 1995), adopting, Biddle v. United States Dept. of the
Army,
93-WPC-15 (ALJ May 6, 1994), a FWPCA case in which the parties settled, but
the matter was
dismissed pursuant to Fed. R. Civ. P. 41(a)(1)(ii) based on a stipulated
withdrawal without a
review of the settlement by the ALJ or the Secretary. In the final order,
however, the ARB in
James v. Ketchikan Pulp Co., 94-WPC-4 (ARB July 23, 1997),
applied Fed.
R. Civ. P. 41(a)(1)(ii), apparently without review of the underlying
settlement.
Thus, based on Dorsey, and the final order in James, it appears
that the ALJ's
approach in Biddle is still correct.
[N/E Digest XVII A]
SUBMISSION OF SETTLEMENT AGREEMENT IN FWPCA CASES
In James v. Ketchikan Pulp Co., 94-WPC-4 (ARB Mar. 11, 1997),
the
ARB ordered the parties to submit a copy of a settlement agreement to the ARB,
so that it could
determine whether the settlement agreement is fair, adequate and reasonable.
The ARB also
ordered the parties to "provide the settlement documentation for any
other alleged claims
arising from the same factual circumstances forming the basis of the federal
claim, or to certify
that no other such agreements were entered into between the parties,"
citing Biddy v.
Alyeska Pipeline Service Co., 95-TSC-7 (ARB Dec. 3, 1996).
The ALJ's recommended decision indicates that the settlement agreement relates
only to the
amount of Complainant's attorneys' fee application. James v. Ketchikan
Pulp Co.,
94-WPC-4 (ALJ Dec. 13, 1996).
The ARB's order is a departure from the approach in Biddle v. United States
Dept. of
the Army, 93-WPC-15 (Sec'y Mar. 29, 1995), adopting (ALJ May 6,
1994), a
FWPCA case in which the parties settled, but the matter was dismissed pursuant
to Fed. R. Civ.
P. 41(a)(1)(ii) based on a stipulated withdrawal without a review of the
settlement by the ALJ or
the Secretary. Rule 41(a)(1)(ii) was used in Biddlebased on the
reasoning that the
statutory language of the FWPCA, unlike the CAA or the ERA, does not make the
Secretary a
signatory to the settlement.
SETTLEMENT; WITHDRAWAL IN APPARENT ATTEMPT TO AVOID DOL
REVIEW OF SETTLEMENT
[N/E Digest XVII A]
In Wampler v. Pullman-Higgins
Co., 84-ERA-13 (ARB Aug. 16, 1996)(Notice), the Secretary had
disapproved a
settlement and remanded the case. On remand, just prior to hearing,
Complainant withdrew his
complaint and the ALJ recommended approval of the withdrawal. The Board,
stating that the
outcome of any particular ERA case affects not only the parties, but the
public as well, requested
the Associate Solicitor for the Division of Fair Labor Standards to review the
matter. Although it
is not explicitly stated, Board is apparently concerned that the parties
settled and are trying to
avoid DOL review.
XVII A SWDA settlement; review by Secretary
required
The Secretary found in Fletcher v. Travi Construction
Corp., 95-SWD-2 (Sec'y Aug. 21, 1995), that a settlement
agreement must be reviewed by him to determine whether the terms
are a fair, adequate and reasonable settlement of the
complaint.
XVII A Assumption that settlement negotiated by
attorneys is fair, adequate and
reasonable
In Bray v. The Hospital Center at Orange, 93-ERA-13
(ALJ May 11, 1993), the ALJ recommended approving a settlement
that had been negotiated by attorneys for both parties. The ALJ
stated:
Each of the parties to this case was represented by an
attorney, who actively participated in the negotiation and
eventual settlement of the matter. It can be assumed that
the lawyers sought and achieved a fair, adequate, and
reasonable resolution of the dispute. In my view, the
agreement has those qualities: it is an arms-length
transaction without undue imposition of one upon the other;
on its face, the cash payment is substantial, and,
therefore, adequate; and, the settlement appears to be a
reasonable resolution of the dispute.
The Secretary approved the settlement without commenting directly
on the ALJ's assumption about a settlement negotiated by an
attorney for each party. Bray v. The Hospital Center at
Orange, 93-ERA-13 (Sec'y June 30, 1993).
XVII A Authority of Secretary to review private
settlement agreement
In Bittner v. Fuel Economy Contracting Co., 88-ERA-
22 (Sec'y Dec. 13, 1989) (order denying request for
reconsideration, dismissal and stay), the Secretary rejected the
respondent's contention that because of a Nuclear Regulatory
Commission (NRC) directive that prohibits inclusion in a
settlement agreement a clause that restricts employees from
providing to the NRC information about safety matters, there
remains no public interest that justifies the Secretary of
Labor's review of a private settlement agreement.
The Secretary stated that the unrestricted ability to provide the
NRC with information is not the only means of assuring that the
public interest is protected. There is a similar public interest
in assuring that settlement agreements do not restrict the flow
of information vital to the investigations and administrative
proceedings that are conducted by the Department of Labor
pursuant to section 210 of the Energy Reorganization Act of 1974,
as amended, 42 U.S.C. § 5851 (1982); See Pollizi v.
Gibbs & Hill, Inc., 87-ERA-38 (Sec'y July 18, 1989), slip
op. at 3-6).
In addition, particular terms of the agreement, such as the
amount of money to be received by the complainant, whether the
employer's records will be expunged of adverse information and
whether the whistleblower is barred from applying for
reemployment, affect not only the individual whistleblower but
impact the public interest as well. Where such terms are not
fair, adequate and reasonable, other employees may be discouraged
from reporting safety violations.
XVII A Why the Secretary must review settlements
Settlements of cases governed by 29 C.F.R. Part 24 must be
reviewed and found to be fair, adequate and reasonable and not
against the public interest before the complaint will be
dismissed. Although it is not necessary that the settlement
agreement be part of the final order, "when a settlement is
not fair and equitable to a complainant, [the Secretary] cannot
approve it for to do so would be an abdication of the
responsibility imposed on [the Secretary] by Congress to
effectuate the purpose of [the Act] . . . ." Macktal v.
Brown & Root, Inc., 86-ERA-23 (Sec'y May 11, 1987) (order
to submit settlement agreement). Heffley v. NGK Metals
Corp., 89-SDW-2 (Sec'y Mar. 6, 1990) (order to submit
settlement).
XVII A Why Secretary reviews terms of settlement
Section 300j-9(i)(2)(B)(i) of the SDWA provides in pertinent part
for termination of a proceeding "on the basis of a
settlement entered into by the Secretary . . . ." In lieu
of being a signatory to the settlement, it has been the
Secretary's practice to review the terms of the settlement
entered into by the private parties. Heffley v. NGK Metals
Corp., 89-SDW-2 (Sec'y Mar. 6, 1990) (order to submit
settlement).
XVII A Settlements generally
In Barrett v. Wallace/Superior, 81-ERA-9 (ALJ Nov.
6, 1981), the parties informed the ALJ that they had resolved
their differences and agreed to post a statement of policy
essentially informing them that they could report deliberate
quality control violations directly to the NRC without fear of
reprisal.
XVII A Settlement must be reviewed & found to be
fair, adequate and reasonable
In Bunn v. MMR/Foley, 89-ERA-5 (ALJ Jan. 26, 1989), the
ALJ dismissed the claim based on the representation of the
complainant's counsel that the proceeding had settled and on the
failure of any party to appear at the scheduled hearing. The
Secretary issued an Order to Submit Settlement Agreement.
Bunn v. MMR/Foley, 89-ERA-5 (Sec'y Aug. 2, 1989)
(order to submit settlement agreement). The Order noted that in
whistleblower cases under the ERA, it is error for the ALJ to
dismiss a case without reviewing the settlement and making a
recommendation of whether the settlement is fair, adequate and
reasonable. 42 U.S.C. § 5851(b)(2)(A); 29 C.F.R. §
24.6(a). Further, the case cannot be dismissed unless the
Secretary finds that the settlement is fair, adequate and
reasonable. Macktal v. Brown & Root, Inc., 86-ERA-23
(May 11, 1987) (order to submit settlement agreement). Although
it is not necessary that the settlement agreement be part of the
final order, "[w]here a settlement is not fair and equitable
to a complainant, [the Secretary] cannot approve it for to do so
would be an abdication of the responsibility imposed upon [the
Secretary] by Congress to effectuate the purposes of section
5851, which is to encourage the reporting of safety violations by
prohibiting economic retaliation against employees reporting such
violatins [sic]." Id., slip op. at 2.
[The settlement agreement was approved in Bunn v.
MMR/Foley, 89-ERA-5 (Sec'y Sept. 29, 1989)]
To the same effect: Lau v. Tennessee Valley
Authority, 88-ERA-12, 13 and 20 (Sec'y Dec. 13, 1990)
(order to submit settlement agreement); Hamka v. The
Detroit Edison Co., 88-ERA-26 (Sec'y Feb. 15, 1990)
(order to submit settlement) (complainant withdrew the complaint
and the respondent requested to withdraw its request for a
hearing "in consideration of having settled an action before
the Michigan Wayne Circuit Court"; Secretary concluded that
the complainant had settled his ERA claim and required the
parties to submit the settlement agreement).
XVII A Large difference in amount District
Director found Complainant entitled to and
amount Complainant settled for
In Rivera v. Bristol-Myers Barceloneta, Inc., 93-
CAA-3 (ALJ Mar. 3, 1993), the ALJ recommended that the Secretary
find the terms of a settlement agreement to be fair, adequate and
reasonable despite the considerable difference in the amount of
money which the District Director concluded the Complainant was
entitled to and the amount agreed upon by the parties ($300,000
versus $8,000). The ALJ noted that there was no basis on which
to recommend that the amount was not fair, adequate or
reasonable, and that the Complainant had been represented by
counsel.
XVII A Settlements found to be "fair, adequate
and reasonable"
Harding v. Case Western Reserve University, 88-ERA-
11 (Sec'y Dec. 7, 1988); Hummer v. Stone & Webster
Engineering Corp., 87-ERA-15 (Sec'y July 18, 1989);
Henderson v. Allied Radiological Control, 91-ERA-39
(Sec'y Nov. 24, 1992); Wood v. Texas Utilities, 92-
ERA-15 (Sec'y Sept. 23, 1992); Fones v. Santa Fe Business
Products, 92-SDW-1 (Sec'y Aug. 31, 1992).
XVII A Authority of Secretary to review settlement
agreement
In Hoffman v. Fuel Economy Contracting, 87-ERA-33
(Sec'y Aug. 4, 1989), the Secretary rejected the respondents'
contention that (to paraphrase) under 29 C.F.R. § 18.9(c)(2)
and Rule 41 of the Federal Rules of Civil Procedure the parties
have a right to enter into an stipulation dismissing the
complaint without review by the Department of Labor.
In ordinary lawsuits brought by one private party against another
private party, where the rights of other persons will not be
affected, "settlement of the dispute is solely in the hands
of the parties." United States v. City of Miami, 614
F.2d 1322, 1330 (5th Cir. 1980), aff'd in part and vacated and
remanded in part on other grounds on rehearing en banc, 664
F.2d 435 (5th Cir. 1981). Thus, under Fed. R. Civ. P.
41(a)(1)(ii), a stipulation signed by all parties who have
appeared in the court action is effective automatically, without
judicial involvement. Gardiner v. A.H. Robins Co., Inc.,
747 F.2d 1180, 1189 (8th Cir. 1984).
However, by its terms Rule 41 does not apply where "any
statute of the United States" establishes other procedures
for dismissal of actions pursuant to settlements. The ERA
requires the Secretary to issue an order resolving the case
"unless the proceeding on the complaint is terminated by the
Secretary on the basis of a settlement entered into by the
Secretary and the person alleged to have committed such
violation. . . ." 42 U.S.C. § 5851(b)(2)(A). In ERA
cases, the case cannot be dismissed on the basis of a settlement
"unless the Secretary finds that the settlement is fair,
adequate and reasonable." Fuchko and Yunker v. Georgia
Power Co., 89-ERA-9 and 10 (Sec'y Mar. 23, 1989) (order to
submit settlement agreement).
Although it is not necessary for the parties' settlement to be
appended to an order approving a settlement and dismissing a case
under the ERA, the Secretary has held that "it is error for
the ALJ to dismiss a case without reviewing the settlement and
making a recommendation of whether the settlement is fair,
adequate and reasonable." Id. at 1-2.
DOL does not simply provide a forum for private parties to
litigate their private employment discrimination suits.
Protected whistleblowing under the ERA may expose not just
private harms but health and safety hazards to the public. The
Secretary represents the public interest by assuring that
settlement adequately protect whistleblowers. Cf. Virginia
Electric and Power Co., 19 FERC ¶ 61,333 (Federal
Regulatory Energy Commission 1982) ("[B]efore approving a
settlement, regardless of whether it is contested or enjoys the
unanimous support of the parties, the Commission is obliged to
make an independent determination that the settlement is just and
reasonable and in the public interest.")
Accord: Bittner v. Fuel Economy Contracting Co.,
88-ERA-22 (Sec'y Dec. 13, 1989) (order denying request for
reconsideration, dismissal and stay); Thompson v. The
Detroit Edison Co., 87-ERA-2 (Sec'y Sept. 29, 1989)
(order denying motion to reconsider).
XVII.B.1.a. Gag provision
In Brown v. Holmes & Narver, Inc., 90-ERA-26
(Sec'y May 11, 1994), a settlement agreement contained a
provision that appeared to prohibit the parties from voluntarily
discussing the facts surrounding the complaint with government
agencies. It provides in relevant part:
Except to carry out the specific covenants of this
Agreement or unless specifically required by court order or
government agency order, none of the parties shall
directly or indirectly, or by any means or manner whatsoever
disclose, urge, encourage, cooperate in, cause or
permit the disclosure of dissemination to any person or
entity the contents or substances of this
Agreement, any consideration given or received hereto,
the claims or demands released herein, and all matters
arising therefrom or relating thereto. * * * PROVIDED
further that H&N, Inc. may discuss the terms of the
settlement with the United States Department of Energy.
(Emphasis added.)
The Secretary found that this was void as contrary to public
policy and unenforceable to the extent that they could be
construed as restricting Complainant from communicating
voluntarily with, and providing information to, any Federal or
state government agencies. Because the agreement also contained
a savings provision, however, the Secretary was able to approve
the remainder of the Agreement without the offending language
prohibiting the parties from discussing the facts surrounding the
complaint with government agencies without violating Macktal
v. Secretary of Labor, 923 F.2d 1150, 1155-1156 (5th Cir.
1991).
[N/E Digest XVII B 1 a]
SETTLEMENT PRIOR TO FILING OF WHISTLEBLOWER COMPLAINT;
PROPER
AS GROUND FOR AFFIRMATIVE DEFENSE; HOWEVER, PROVISION BARRING ERA
COMPLAINT VOID AS AGAINST PUBLIC POLICY
In Khandelwal v. Southern California
Edison, 97-ERA-6 (ARB Mar. 31, 1998), Complainant executed a
severance
agreement with Respondent, and accepted early retirement. Thereafter, he filed an ERA
whistleblower complaint alleging that the employment severance and several earlier personnel
actions were retaliatory and unlawful under the ERA. The ARB held that an employer named
in
an ERA complaint should be allowed to raise, as an affirmative defense, an agreement reached
before the complaint was filed.
In the instant case, however, a provision of the severance agreement had the effect of
barring Complainant from filing an ERA whistleblower complaint, and the ARB concluded that
such a provision was void as against public policy, citing EEOC v. Cosmair, Inc.,
821
F.2d 1085, 1088-89 (5th Cir. 1987) (age discrimination case). The Board wrote that
"[t]he
public interest in the Department of Labor's administration of the ERA greatly outweighs the
public interest in dispute resolution through settlement." 97-ERA-6 @ 4.
The ARB also rejected the argument that Complainant ratified the void provision by
retaining the monetary consideration, holding that "provisions which are contrary to
public
policy cannot be validated by ratification." Id. @ 5.
[N/E Digest XVII B 1 a]
GAG PROVISION; EFFECT OF "SUBPOENA" EXCEPTION
A settlement term providing that --
Complainant agrees not to make further additional remarks or comments,
either verbally or in writing, concerning his employment at Respondent or concerning the
safety of operations at Respondent to anyone, provided that if Complainant is subpoenaed
by a court, administrative body, or congressional committee or subcommittee or similar
entity under force of law, then the parties agree that Complainant may testify regarding
his employment at Respondent or concerning the safety of operations at Respondent
is not saved from being a unlawful gag provision by the exception permitting
Complainant to respond to a lawful subpoena because not all regulatory agencies possess the
authority to issue subpoenas. Ruud v.
Westinghouse Hanford Co., 88-ERA-33 @ n12 (ARB Nov. 10, 1997).
SETTLEMENT; CONFIDENTIALITY PROVISION; NOTIFICATION
CLAUSE
[N/E Digest XVII B 1 a]
In Gillilan v. Tennessee Valley Authority, 89-
ERA-40, 91-ERA-31, 94-ERA-5 and 9, 95-ERA-26 and 32 (ARB May 30,
1996), the parties included a confidentiality provision in their
settlement that requires Complainant and his counsel to timely
notify the Respondent's counsel if they receive legal process or
an order purporting to require disclosure of the agreement. The
Board, citing McGlynn v. Pulsair Inc., 93-CAA-2 (Sec'y
June 28, 1993), found that the notification requirement was not
violative of public policy because it did not restrict or impinge
upon the Complainant or his counsel from such disclosure after
appropriate legal process.
To the same effect: Davidson v. Temple
University, 94-ERA-25 (ARB June 24, 1996); Abbasi
v. Bechtel Power Corp., 96-ERA-4 (ARB May 31, 1996)
SETTLEMENT AGREEMENT; EFFECT OF GAG PROVISION
[N/E Digest XVII B 1 a]
The Second Circuit in The Connecticut Light &
Power Co. v. Secretary of the United States Dept. of
Labor, No. 95-4094 (2d Cir. May 31, 1996)(available
at 1996 U.S. App. LEXIS 12583)(case below 89-ERA-38), affirmed
the Secretary's holding that proffering a settlement agreement
containing a provision that attempts to restrict an employee's
ability to cooperate with administrative and judicial bodies
violates section 210 of the ERA. The court observed that
"[a]lthough the act of inducing an employee to relinquish
his rights as provided by the ERA through means of a settlement
agreement is less obvious than more direct action, such as
termination, it is certainly aimed at the same objective:
keeping an employee quiet." 1996 U.S. App. LEXIS at *17.
XVII B 1 a Interpretation of confidentiality provision
as not restricting disclosure
required by law
In Bragg v. Houston Lighting & Power Co.,
94-ERA-38 (Sec'y June 19, 1995),
the Secretary interpreted a settlement provision that the parties
and their attorneys shall keep the
terms of the Settlement Agreement confidential except to family
members, attorneys and financial
advisors, as not restricting any disclosure where required by
law.
XVII B 1 a Limited savings clause concerning gag provision
does not neutralize the
impropriety of the gag provision
In Stites v. Houston Lighting & Power, 89-ERA-1
and 41 (Sec'y Mar. 16, 1990)
(order to consolidate and to show cause), the parties attempted
to "save" a gag provision
by a provision stating that "the parties have agreed that
nothing contained herein is in any way
intended to restrict Claimants from presenting information or
concerns regarding nuclear quality or
safety to any regulatory authority or any other person[.]"
Slip op. at 5, quoting settlement
agreement.
The Secretary held that the qualifying provision did not
neutralize the gag provision because it was
limited to information or concerns regarding "nuclear
quality or safety." The Secretary held
that the provision was void as against public policy because it
did not "alter the prohibition on the
disclosure of information or documents relevant to governmental
investigations or proceedings under
other environmental whistleblower statutes, or under other
federal or state laws, rules or
regulations." Slip op. at 6.
XVII. B. 1. a. Confidentiality provision/limitation on
complainant's ability to provide information
to DOL or other authorities
In Armijo v Wackenhut Services, Inc., 94-ERA-7
(Sec'y Aug. 22, 1994), a provision of the parties' settlement
agreement stated that they "will keep confidential and not
divulge the payment amounts listed in attachment 1, unless
required to do so by law." The Secretary noted that
agreement and attachment were subject to FOIA, and that the
parties could request treatment of the information as
confidential commercial information pursuant to 29 C.F.R. §
70.26(b).
XVII B 1 a Additional cases; confidentiality
provision
Confidentiality provision does not restrict disclosure of terms
of agreement where required by law. Rivera v. Bristol-
Myers Barceloneta, Inc., 93-CAA-3 (Sec'y June 28, 1993)
(citing Anderson v. Waste Management of New Mexico, 88-
TSC-2 (Sec'y Dec. 18, 1990)); McGlynn v. Pulsair
Inc., 93-CAA-2 (Sec'y June 28, 1993); Ratliff v.
Airco Gases, 93-STA-5 (Sec'y June 25, 1993);
Mitchell v. Arizona Public Service Co., 91-ERA-9
(Sec'y June 28, 1993) (noting that the parties requested that the
settlement agreement be kept confidential and under seal);
Davis v. Valley View Ferry Authority, 93-WPC-1 (Sec'y June
28, 1993).
XVII. B. 1. a. Confidentiality provision/limitation on
complainant's ability to provide
In Caballa v. Arizona Public Service Co., 94-ERA-9
(Sec'y July 28, 1994), clarified,Gaballa v. Arizona
Public Service Co., 94-ERA-9 (Sec'y Sept. 7, 1994)
(clarifying order), the parties submitted a settlement agreement
for the Secretary's review. One provision of the agreement
preserved Complainant's right to pursue other claims; another
provision provided that parties shall maintain the
"strictest of confidence" concerning the agreement,
with certain specific exceptions; another provision provided that
the agreement does not prohibit or restrict the Complainant from
reporting or providing information to any Federal or state
governmental agency. The parties designated the documents in the
case as confidential and commercial information for purposes of
FOIA, and the ALJ issued an order requiring disclosure
notification in that regard.
The Secretary noted that the agreement and attachments become
part of the record of the case, and that FOIA requires agencies
to disclose requested records unless they are exempt from
disclosure. He then found that, "as here construed,"
the agreement was fair, adequate and reasonable.
XVII B 1 a Confidentiality provision
Where a settlement agreement included a provision for
confidentiality of the terms, except with family, attorneys, and
as required by legal process, the Secretary noted that the
parties' submissions become part of the record in the case and
that the Freedom of Information Act, 5 U.S.C. § 552,
requires federal agencies to disclose requested records unless
they are exempt from disclosure under the Act. See Hamka v.
The Detroit Edison Co., 88-ERA-26 (Sec'y Dec. 9, 1991) (order
to submit attachments). Reid v. Tennessee Valley
Authority, 91-ERA-17 (Sec'y Aug. 31, 1992).
To the same effect: Henderson, et al. v. Tennessee Valley
Authority, 90-ERA-25, 50, 51 and 91-ERA-5, 6, 26, 43, 44
(Sec'y Aug. 5, 1992); McCuistion v. Tennessee Valley
Authority, 90-ERA-44 (Sec'y Aug. 31, 1992).
See also O'Sullivan v. Northeast Nuclear Energy
Co., 88-ERA-37, 38, 89-ERA-34, 90-ERA-4, 33, 34, 91-ERA-
51, 92-ERA-3 (Sec'y June 17, 1992) (order of consolidation and
order to submit attachments) (noting that settlement agreements
must be submitted to the Secretary for review, and therefore
become part of the case record subject to FOIA).
XVII.B.1.a. Confidentiality that does not prevent
communication with government
In Dupre' v. Tru-Tech Division of Koch Engineering Co.,
Inc., 93-ERA-39 (Sec'y June 1, 1994), the parties
included in a settlement agreement provisions that the parties
will keep the information that each has obtained confidential
with regard to the general public and that neither will use such
information in a way that is detrimental to the other. The
Secretary interpreted this language in conjunction with the
limiting language of another provision as not preventing the
Complainant, either voluntarily or pursuant to an order or
subpoena, from communicating with, or providing information to,
state and Federal government agencies about suspected violations
of law involving the Respondent.
See Corder v. Bechtel Energy Corp., 88-ERA-9
(Sec'y Feb. 9, 1994), slip op. at 6-8 (finding void as
contrary to public policy a settlement agreement provision
prohibiting the complainant from communicating with federal
or state agencies concerning possible violations of
law).
XVII. B. 1. a. Confidentiality provision/limitation on
complainant's ability to provide information
to DOL or other authorities
In Webb v. Quantum Resources, Inc., 93-ERA-42A
(Sec'y June 29, 1994) (order), the parties entered into a
settlement, and Complainant filed with the ALJ a Notice of
Withdrawal with Prejudice. The notice stated that the parties
had agreed to keep the terms of the settlement and the settlement
agreement confidential and submitted a copy of the agreement to
the ALJ for in camera review. In addition, Complainant's
Notice requested, on behalf of Respondent as well as Complainant,
that the settlement agreement be maintained in a restricted
access portion of the record.
The ALJ submitted a Recommended Decision and Order Rejecting
Release and Settlement Agreement (R. D. and O.). He noted that
he had "no reason to believe that the agreement is not fair,
adequate or reasonable," R. D. and O. at 2, but recommended
rejecting the agreement because it contained the above
confidentiality provision which he interpreted as being in
conflict with previous Secretary's decisions. Under Macktal
v. Secretary of Labor, 923 F.2d 1150 (5th Cir. 1991), the
Secretary may only approve a settlement as written or reject it.
The Secretary agreed with the ALJ that it is settled law that the
Freedom of Information Act applies to case records in ERA cases,
but he did not agree that the confidentiality provision of this
settlement agreement conflicted with prior decisions of the
Secretary. The provision stated
"[t]he parties agree that the settlement . . . is
to remain confidential and neither party shall make any
reference to the case . . . the Release and Settlement
Agreement . . . or the contents of this Agreement to anyone
except the attorneys and accountants advising the
parties."
The Secretary held that this language does not purport to bind
the Secretary to maintain the confidentiality of the agreement,
nor does it provide that if the Secretary denies the request to
restrict access to the settlement the agreement is void or
voidable.
The Secretary also made a distinction based on whether the
settlement itself, or some other document contains a request to
place the settlement under seal. He noted that the settlement
itself in DeBose v. Carolina Power & Light Co., 92-
ERA-14 (Sec'y Feb. 7, 1994), slip op. at 2, provided that the
settlement must be placed in a restricted access portion of the
record and that refusal of the Secretary to grant the parties'
request for confidentiality made the agreement voidable.
Id. at 4. For the reasons discussed in DeBose and
the cases cited therein, id. at 2-4, the Secretary denied
the parties' request to restrict access to the settlement.
XVII B 1 a Confidentiality
provision/communication with government
authority not prevented
Murray v. Protection Technology, 92-ERA-27
(Sec'y May 11, 1994)
The Secretary determined the parties' settlement agreement
to be fair, adequate, and reasonable; however, the Secretary
limited his review to encompass only the ERA. The approval of
the agreement is based on a limited interpretation of the
provisions such that the Complainant is not prevented, either
voluntarily or pursuant to an order or subpoena, from
communicating with state or Federal government agencies about
future suspected violations by the Respondent. Additionally, the
Secretary interpreted the provision which states that the
agreement is governed by the laws of Pennsylvania as not limiting
the authority of the Secretary or a Federal court under the ERA.
The Secretary also noted that the confidentiality provision
in the agreement was broad enough to satisfy the Freedom of
Information Act. SeeDebose v. Carolina Power &
Light Co., 92-ERA-14, Order Disapproving Settlement and
Remanding Case (Sec'y Feb. 7, 1994), slip op. at 2-3 and cases
cited therein.
XVII B 1 a Clause that permits disclosure required by law
is acceptable
Saporito v. Arizona Public Service
Co.,
93-ERA-26 (ALJ Feb. 8, 1994)
The ALJ submitted a Recommended Decision and Order approving
settlement and dismissing the claim.
The Agreement contained a confidentiality provision which
restricted disclosure of the terms of the agreement except as
required by law. The Agreement also permitted the Claimant to
freely contact any government agency in the future. Thus, the
ALJ found the agreement to be fair, adequate and reasonable.
XVII B 1 a Settlement; confidentiality of
agreement; subject to FOIA
In McCuistion v. Tennessee Valley Authority, 90-
ERA-44 (Sec'y Aug. 31, 1992), the Secretary found that a
settlement agreement was fair, adequate and reasonable. One
provision of the agreement provided for "confidentiality of
the terms of Complainant's awards, except with family and
attorney, and as required by legal process." The Secretary
noted that the parties' submission become part of the record, and
that the Freedom of Information Act, 5 U.S.C. § 552 requires
federal agencies to disclose requested records unless they are
exempt from disclosure under the Act. See Hamka v. The
Detroit Edison Co., 88-ERA-26 (Sec'y Dec. 9, 1991) (Order to
submit attachments), slip op. at 2, n.1.
To the same effect: White v. Tennessee Valley
Authority, 92-ERA-2 (Sec'y Sept. 23, 1992); Reid v.
Tennessee Valley Authority, 91-ERA-17 (Sec'y Aug.31,
1992); Smith v. Tennessee Valley Authority, 92-ERA-
23 and 24 (Sec'y Aug. 31, 1992).
XVII B 1 a Provision limiting complainant's ability
to provide information to DOL or other
authorities
The Department of Labor does not simply provide a forum for
private parties to litigate their private employment
discrimination suits.
In ordinary lawsuits brought by one private party
against another private party, where the rights of other
persons will not be affected, "settlement of the
dispute is solely in the hands of the parties."
United States v. City of Miami, 614 F.2d 1322, 1330
(5th Cir. 1980), aff'd in part and reversed in part on
rehearing en banc, 664 F.2d 435 (1981). Thus, under
Fed. R. Civ. P. 41(a)(1)(ii), a stipulation signed by all
parties who have appeared in the court action is effective
automatically, without judicial involvement. Gardiner v.
A.H. Robbins Co., Inc., 747 F.2d 1180, 1189 (8th Cir.
1984). The trial court judge must "'stand[]
indifferent,'" and not interfere with the parties'
"unconditional right" to a dismissal by
stipulation. Id. at 1189-1190 (citation omitted).
See also Janus Films, Inc. v. Miller, 801 F.2d 578,
582, 585 (2d Cir. 1986); City of Miami, 614 F.2d at
1332.
Protected whistleblowing under the ERA may expose not just
private harms, but health and safety hazards to the public. The
Secretary represents the public interest in keeping channels of
information open by assuring that settlements adequately protect
whistleblowers.
Cf. Virginia Electric and Power Co., 19 FERC
¶ 61,333 (Federal Energy Regulatory Commission 1982)
("[B]efore approving a settlement, regardless of
whether it is contested or enjoys the unanimous support of
the parties, the Commission is obliged to make an
independent determination that the settlement is just and
reasonable and in the public interest.")
In Polizzi v. Gibbs & Hill, Inc., 87-ERA-38
(Sec'y July 18, 1989), the parties included in their settlement
agreement a provision that prohibited the complainant, among
other things, from providing information to, or assisting or
cooperating with, the Department of Labor in investigations of
complaints against the respondent, or related companies, under
the ERA or any other environmental whistleblower protection
statute. The provision also prohibited the complainant from
providing information or assisting or cooperating with the
Department of Labor or any other federal or state agency in the
investigation or prosecution of any charge of discrimination or
wrongful employment practices, in violation of any federal or
state law, rule, or regulation. In addition, the provision
prohibited the complainant from voluntarily testifying or
otherwise participating in any proceeding or investigation
involving a certain power station, including Nuclear Regulatory
Commission licensing or safety proceedings or investigations, or
state regulatory or rate proceedings or investigations.
The respondent provided a letter waiving this provision,
but because there was some ambiguity in the letter, the
Secretary reviewed the provision as though it was not
waived.
The Secretary concluded that the provision significantly
restricts access by the Department of Labor, as well as other
agencies, to information the complainant may be able to provide
relevant to the administration and enforcement of the ERA and
many other laws. Its effect, to a large degree, would be to
"dry up" channels of communication which are essential
for government agencies to carry out their responsibilities.
NLRB v. Scrivener, 405 U.S. 117, 122 (1972). As such, she
found it to be against public policy.
A settlement is a contract, and its construction and
enforcement are governed by principles of contract law.
United States v. ITT Continental Baking Co., 420 U.S.
223, 238 (1975); Schwartz v. Florida Bd. of Regents,
807 F.2d 901, 905 (11th Cir. 1987); Orr v. Brown &
Root, Inc., 85-ERA-6 (Sec'y Oct. 2, 1985). The doctrine
that a promise or term of an agreement is unenforceable if
against public policy encompasses more than illegality; it
includes promises which are injurious to the public
interest. Shadis v. Beal, 685 F.2d 824, 833 n.15 (3d
Cir. 1982), cert. denied, 459 U.S. 970 (1982).
"Contracts contrary to public policy, that is those
which tend to be injurious to the public or against the
public good, are illegal and void, even though actual injury
does not result therefrom." 17 C.J.S. Contracts
§ 211, p. 1013 (1963).
There is a distinction between the waiver of the right to file a
charge and waiver of the right to recover personally on a cause
of action. "Waiver of a right to file a charge is void as
against public policy."
Although the Secretary found the provision unenforceable as
against public policy, she found that the remainder of the
agreement was enforceable.
EEOC v. Cosmair, Inc., 821 F.2d at 1091. See
also Nichols v. Anderson, 837 F.2d 1372, 1375 (1988);
McCall v. United States Postal Service, 839 F.2d 664
(Fed. Cir. 1988).
The provision appeared to be collateral to the central dispute
which the agreement purported to settle, alleged retaliation by
the respondent against the complainant for protected activities,
in violation of the ERA. The Secretary attached primary
significance in reaching this conclusion to the fact that the
respondent had expressed waived in a letter to the Secretary any
right to enforce the provision. In addition, most, if not all,
of the restrictions placed on the complainant by the provision
would apply in matters only remotely related, if at all, to the
ERA dispute.
XVII. B. 1. a. Confidentiality provision/limitation on
complainant's ability to provide
In Caballa v. Arizona Public Service Co., 94-ERA-9
(Sec'y July 28, 1994), clarified,Gaballa v. Arizona
Public Service Co., 94-ERA-9 (Sec'y Sept. 7, 1994)
(clarifying order), the parties submitted a settlement agreement
for the Secretary's review. One provision of the agreement
preserved Complainant's right to pursue other claims; another
provision provided that parties shall maintain the
"strictest of confidence" concerning the agreement,
with certain specific exceptions; another provision provided that
the agreement does not prohibit or restrict the Complainant from
reporting or providing information to any Federal or state
governmental agency. The parties designated the documents in the
case as confidential and commercial information for purposes of
FOIA, and the ALJ issued an order requiring disclosure
notification in that regard.
The Secretary noted that the agreement and attachments become
part of the record of the case, and that FOIA requires agencies
to disclose requested records unless they are exempt from
disclosure. He then found that, "as here construed,"
the agreement was fair, adequate and reasonable.
XVII. B. 1. a. Confidentiality provision/limitation on
complainant's ability to provide information to
DOL or other authorities
In Webb v. Quantum Resources, Inc., 93-ERA-42A
(Sec'y June 29, 1994) (order), the parties entered into a
settlement, and Complainant filed with the ALJ a Notice of
Withdrawal with Prejudice. The notice stated that the parties
had agreed to keep the terms of the settlement and the settlement
agreement confidential and submitted a copy of the agreement to
the ALJ for in camera review. In addition, Complainant's
Notice requested, on behalf of Respondent as well as Complainant,
that the settlement agreement be maintained in a restricted
access portion of the record.
The ALJ submitted a Recommended Decision and Order Rejecting
Release and Settlement Agreement (R. D. and O.). He noted that
he had "no reason to believe that the agreement is not fair,
adequate or reasonable," R. D. and O. at 2, but recommended
rejecting the agreement because it contained the above
confidentiality provision which he interpreted as being in
conflict with previous Secretary's decisions. Under Macktal
v. Secretary of Labor, 923 F.2d 1150 (5th Cir. 1991), the
Secretary may only approve a settlement as written or reject it.
The Secretary agreed with the ALJ that it is settled law that the
Freedom of Information Act applies to case records in ERA cases,
but he did not agree that the confidentiality provision of this
settlement agreement conflicted with prior decisions of the
Secretary. The provision stated
"[t]he parties agree that the settlement . . . is
to remain confidential and neither party shall make any
reference to the case . . . the Release and Settlement
Agreement . . . or the contents of this Agreement to anyone
except the attorneys and accountants advising the
parties."
The Secretary held that this language does not purport to bind
the Secretary to maintain the confidentiality of the agreement,
nor does it provide that if the Secretary denies the request to
restrict access to the settlement the agreement is void or
voidable.
The Secretary also made a distinction based on whether the
settlement itself, or some other document contains a request to
place the settlement under seal. He noted that the settlement
itself in DeBose v. Carolina Power & Light Co., 92-
ERA-14 (Sec'y Feb. 7, 1994), slip op. at 2, provided that the
settlement must be placed in a restricted access portion of the
record and that refusal of the Secretary to grant the parties'
request for confidentiality made the agreement voidable.
Id. at 4. For the reasons discussed in DeBose and
the cases cited therein, id. at 2-4, the Secretary denied
the parties' request to restrict access to the settlement.
XVII B 1 a Offending provisions may not simply be
severed; Secretary may only approve or reject
as written
In Macktal v. Brown & Root, Inc., 86-ERA-23
(Sec'y Oct. 13, 1993), the Secretary disapproved a settlement
agreement that had a provision in it that restricted
Complainant's right to provide information to government agencies
-- a provision that was void as against public policy.
When originally presented with the settlement, the Secretary
ordered the offending paragraph severed and found the remainder
of the agreement valid and enforceable (despite Complainant's
attempt to repudiate the agreement). Macktal v. Brown &
Root, Inc., 86-ERA-23 (Sec'y Nov 14, 1989). On appeal to the
Fifth Circuit, however, the Secretary was found to have only the
authority to consent or not consent to a settlement as written.
Macktal v. Secretary of Labor, 923 F.2d 1150 (5th Cir.
1991). The Fifth Circuit remanded the case directing the
Secretary either to enter into the settlement or refuse to enter
into it by rejecting it. The Fifth Circuit affirmed the
Secretary's ruling that Complainant could not repudiate the
agreement he had entered into.
On remand, the Secretary affirmed that the provision was against
public policy. The Secretary noted Respondent's contention that
the provision was moot (because Complainant had already all
information he possessed to government agencies) and
unenforceable (because of an NRC directive dated April 27, 1989
that such provisions would not be enforced; see also 55
Fed. Reg. 10, 397 (1990) and 10 C.F.R. §§ 30.7(g),
40.7(g), 50.7(f), 60.9(f), 61.9(f), 70.7(g), 72.10(f) (1991)).
He rejected that contention as "no more than a prediction of
the action a court might take in a suit to enforce the
settlement" and found, more fundamentally, that approval of
a settlement with this term could cast doubt on a whistleblower's
right to contact government agencies without any restriction.
The Secretary concluded that "a prophylactic approach to
settlements which include questionable language will more
faithfully carry out Congressional intent on the role of the
Secretary under the ERA."
The Secretary also rejected Respondent's contention that under
contract law the settlement could be approved because (1)
Complainant accepted Respondent's payment of $35,000 which
"worked an accord and satisfaction of his ERA claim, (2)
Complainant ratified the settlement without the offending
paragraph by retaining the money after both the NRC and the
Secretary had declared the provision unenforceable and after
Respondent waived any right to enforce it, and (3) Complainant
executed release separate and distinct from the settlement
releasing Respondent of any claims arising out of his employment.
The Secretary concluded that the Fifth Circuit's remand order
limited him to considering the agreement as written. In
addition, he concluded that the general release was clearly
related to the settlement agreement.
XVII. B. 1. a. Confidentiality provision/limitation on
complainant's ability to provide information to
DOL or other authorities
In Armijo v Wackenhut Services, Inc., 94-ERA-7
(Sec'y Aug. 22, 1994), a provision of the parties' settlement
agreement stated that they "will keep confidential and not
divulge the payment amounts listed in attachment 1, unless
required to do so by law." The Secretary noted that
agreement and attachment were subject to FOIA, and that the
parties could request treatment of the information as
confidential commercial information pursuant to 29 C.F.R. §
70.26(b).
XVII B 1 a Conditioning settlement on gag provision
In Delcore v. W.J. Barney Corp., 89-ERA-38 (Sec'y
Apr. 19, 1995), the Secretary found
the Respondents in violation the whistleblower provision of the
ERA while negotiating settlement of a
court action filed against them by the Complainant.
Specifically, the Respondents offered the
Complainant a monetary settlement in exchange for his agreement
to restrict his participation in future
regulatory proceedings, and broke off negotiations when the
Complainant refused to agree to the
restriction. The Secretary pointed out that the circumstances
giving rise to this complaint were no longer
prevalent in the light of intervening regulation by the NRC.
See 10 C.F.R. §
50.7(f)(1994).
XVII B 1 a Additional case citations; accord
Polizzi
Confidentiality provision found void as against public policy
(accord Polizzi): Williams v. Indiana Vocational
Technical College, 89-SWD-1 (Sec'y Apr. 23, 1990)
(settlement had a savings clause); Cassinelli v. The City
of Duvall, 90-SWD-2 (Sec'y June 6, 1990) (Secretary first
issued an order to show cause why the provision should not be
severed; no response); Fitzgerald v. The Adamson Company,
Inc., 90-SWD-3 (Sec'y Sept. 27, 1990) (Secretary first
issued an order to show cause why the provision should not be
severed; parties' joint response indicated provision could be
severed); Hammer v. Brush Wellman, Inc., 93-SDW-2
(Sec'y Sept. 29, 1993).
XVII B 1 a Confidentiality provision does not restrict
disclosure where required by law
A provision of a settlement agreement restricting parties and
their counsel from disclosing the terms of the agreement will be
interpreted by the Secretary as not restricting disclosure of the
terms of the agreement where required by law. Rondinelli
v. Consoldiated Edison Co. of New York, Inc., 91-CAA-3
(Sec'y Apr. 10, 1992).
XVII B 1 a Provision limiting ability to communicate
with authorities
In Rogers v. Front Range Environmental Services,
90-ERA-20 (Sec'y Aug. 21, 1990), the Secretary severed from a
settlement agreement a paragraph as void because it was against
public policy to the extent that it would prohibit the
complainant and the respondent from communicating information to
federal or state enforcement authorities concerning alleged
violations of the WPCA or other laws. The parties had failed to
respond to the Secretary's order to show cause why the provision
should not be so severed.
XVII B 1 a Interpretation of confidentiality
provision not to violate public
policy
In Thornton v. Burlington Environmental & Phillip
Environmental, 94-TSC-2 (Sec'y
Mar. 17, 1995), the Secretary interpreted a provision that
required the Complainant to keep the terms of
the settlement confidential as not preventing the Complainant,
either voluntarily or pursuant to order or
subpoena, from communication with, providing information to,
state or federal agencies about suspected
violations of law involving the Respondents.
The Secretary's authority to approve settlements under the Clean
Air Act is limited to terms and conditions which resolve issues
which arose out the employment relationship in the context of
alleged violations of that Act. Thus, the Secretary limited
review of a agreement settling a CAA complaint to issues arising
out of the CAA complaint; approval or disapproval of other
provisions is beyond the scope of the Secretary's authority.
Aurich v. Consolidated Edison Co. of New York,
Inc., 86-CAA-2 (Sec'y July 29, 1987).
Accord: Crider v. Holston Defense Corp., 88-CAA-1 (Sec'y
Mar. 1, 1989); Moran v. Consolidated Edison Co. of New York,
Inc., 88-CAA-2 (Sec'y June 20, 1988); Papa v. Consolidated
Edison Co. of New York, Inc., 88-CAA-6 (Sec'y Aug. 3, 1989);
Duffy v. Consolidated Edison Co. of New York, Inc., 88-
CAA-8 (Sec'y Mar. 22, 1989); Tinsley v. 179 South Street
Venture, 89-CAA-3 (Sec'y Mar. 14, 1990); Rondinelli v.
Consolidated Edison Co. of New York, Inc., 91-CAA-3 (Sec'y
Apr. 10, 1992) (citing Poulos v. Ambassador Fuel Oil Co.,
86-CAA-1 (Sec'y Nov. 2, 1987)); Heffley v. NGK Metals
Corp., 89-SDW-2 (Sec'y Apr. 20, 1990); Dubois v. Village
of Cobden, 90-SDW-1 (Sec'y Apr. 24, 1991); Scott v.
Yeargin, Inc., 91-SDW-1 and 2 (Sec'y May 6, 1992).
XVII B 1 b Non-CAA laws
Where a settlement agreement encompasses the settlement of
matters arising under various laws, only one of which is the
employee protection provision of the Act under the jurisdiction
of the Department of Labor, the Secretary's review of the
agreement is limited to determining whether its terms are a fair,
adequate and reasonable settlement of the complainant's
allegations that the respondent violated the DOL-enforced Act.
Pace v. Kirshenbaum Investments, 92-CAA-8 (Sec'y
Dec. 2, 1992).
XVII B 1 b Settlements
Mills v. Arizona Public Service Co., 92-ERA-13
(Sec'y Jan. 23, 1992).
An ALJ's approval of parties' settlement agreement must be
limited to the settlement of matters under laws within the
jurisdiction of the Secretary. Therefore, the Secretary limited
her acceptance of the ALJ's approval of the agreement to whether
the terms thereof were a fair, adequate, and reasonable
settlement of the Complainant's allegations concerning
Respondent's violation of the Energy Reorganization Act
(ERA).
XVII B 1 b Matters not relating to ERA
In reviewing a settlement agreement, the Secretary limits her
review to determining whether the terms thereof are a fair,
adequate and reasonable settlement of the complainant's
allegation that the respondent violated the ERA.
Williamson v. Tennessee Valley Authority, 91-ERA-16
(Sec'y Mar. 4, 1992) (agreement contained settlement of matters
under laws other than the ERA).
In Poulos v. Ambassador Fuel Oil Co., Inc., 86-CAA-1
(Sec'y Nov. 2, 1987), slip op. at 2, the Secretary stated:
[The Secretary's] authority over settlement
agreements is limited to such statutes as are within
[the Secretary's] jurisdiction and is defined by the
applicable statute. SeeAurich v.
Consolidated Edison Company of New York, Inc., Case
No. [86-]CAA-2, Secretary's Order Approving Settlement,
issued July 29, 1987; Chase v. Buncombe County,
N.C., Case No. 85-SWD-4, Secretary's Decision and
Order on Remand, issued November 3, 1986.
Therefore, where a settlement agreement appears to encompass the
settlement of matters arising under various law, only one of
which is the ERA, she limits her review to determining whether
the terms of the agreement are a fair, adequate and reasonable
settlement of the complainant's allegation that the respondent
violated the ERA. Kim v. University City Science
Center, 90-ERA-7 (Sec'y July 26, 1990).
To the same effect: Reid v. Tennessee Valley
Authority, 91-ERA-17 (Sec'y Aug. 31, 1992);
Mullenix v. Tennessee Valley Authority, 91-ERA-18
(Sec'y Apr. 19, 1991); Harris v. Tennessee Valley
Authority, 90-ERA-9 (Sec'y Dec. 6, 1990); Ruggles
v. Lumbermans Mutual Casualty Co., 90-ERA-13 (Sec'y Mar.
14, 1990); Henderson, et al. v. Tennessee Valley
Authority, 90-ERA-25, 50, 51 and 91-ERA-5, 6, 26, 43, 44
(Sec'y Aug. 5, 1992); Manning v. Detroit Edison
Corp., 90-ERA-28 (Sec'y May 29, 1991); Neely v.
Tennessee Valley Authority, 90-ERA-41 and 42 (Sec'y Oct.
24, 1990); McCuistion v. Tennessee Valley
Authority, 90-ERA-44 (Sec'y Aug. 31, 1992);
Burchfield v. Tennessee Valley Authority, 90-ERA-45
and 92-ERA-11 (Sec'y Mar. 13, 1992); Vogel v. Florida Power
Corp., 90-ERA-49 (Sec'y Mar. 12, 1991); Goklaney v.
Tennessee Valley Authority, 90-ERA-54 (Sec'y Nov. 30,
1990); Evans v. Tennessee Valley, 90-ERA-55 (Sec'y
Mar. 9, 1992); Bunn v. MMR/Foley, 89-ERA-5 (Sec'y
Sept. 29, 1989); Samodurov v. Niagara Mohawk Power
Corp., 89-ERA-20 (Sec'y Mar. 28, 1990); Bivens v.
Louisiana Power & Light, 89-ERA-30 (Sec'y July 8,
1992); Roberts v. Morrison Construction Co., 89-
ERA-46 (Sec'y Feb. 12, 1990); Harris v. Tennessee Valley
Authority, 89-ERA-47 (Sec'y Jan. 25, 1991); Lau v.
Tennessee Valley Authority, 88-ERA-12, 13 and 20 (Sec'y
Feb. 6, 1991); Bittner v. Fuel Economy Contracting
Co., 88-ERA-22 (Sec'y June 28, 1990); Radelich v.
Ebasco Services, Inc., 88-ERA-24 (Sec'y Aug. 3, 1989);
Goese v. Ebasco Services, Inc., 88-ERA-25 (Sec'y
Dec. 8, 1988); Hamka v. The Detroit Edison Co., 88-
ERA-26 (Sec'y Jan. 31, 1992); O'Sullivan v. Northeast
Nuclear Energy Co., 88-ERA-37 and 38, 89-ERA-34, 90-ERA-
5, 34, 35, 51, 92-ERA-3 (Sec'y July 10, 1992); Wallace v.
Tennessee Valley Authority, 88-ERA-41 (Sec'y Feb. 15,
1991); Young v. Philadelphia Electric Co., 87-ERA-
11, 36, 88-ERA-1 (Sec'y Dec. 18, 1992) (settlement with respect
to co-respondent E.H. Hinds Co. in 88-ERA-1; other matters
decided on the merits); Bohan v. Tennessee Valley
Authority, 87-ERA-28 (Sec'y Aug. 3, 1989); Polizzi
v. Gibbs & Hill, Inc., 87-ERA-38 (Sec'y July 18,
1989).
Settlement of "matters in addition to those arising under
the ERA: Roos v. Commonwealth Edison Co., 91-ERA-
52 (Sec'y June 24, 1992); Ryan v. Niagara Mohawk Power
Corp., 88-ERA-7 (Sec'y Jan. 25, 1990); Labatut v.
Anco Insulations, Inc., 88-ERA-10 (Sec'y Feb. 27, 1990);
Blake v. Hatfield Electric Co., 87-ERA-4 (Sec'y May
28, 1992); Ryan v. Niagara Mohawk Power Corp., 87-
ERA-47 (Sec'y Jan. 25, 1990).
XVII B 1 b Non-ERA laws
Where a settlement agreement appears to encompass the settlement
of matters arising under various laws, only one of which is the
ERA, the Secretary limits review of the agreement to determining
whether its terms are a fair, adequate and reasonable settlement
of the alleged violation of the ERA. 42 U.S.C. §
5851(b)(2)(A); Poulos v. Ambassador Fuel Oil Co., 86-CAA-1
(Sec'y Nov. 2, 1987), slip op. at 2.
DeFord v. Tennessee Valley Authority, 90-ERA-60
(Sec'y Jan. 13, 1993) (case was remanded for determination as to
attorney fees and expenses).
XVII B 1 b Settlements
The Secretary's authority over settlement agreements is limited
to such statutes as are within the Secretary's jurisdiction and
as defined by applicable statute. Thus, where a settlement
agreement appeared to encompass the settlement of matters under
various laws, only one of which was ERA, the Secretary limited
her review to determine whether the terms of the agreement were a
fair, adequate and reasonable settlement of the complainant's
allegation that the employer violated the ERA.
Priest v. Baldwin Assocs., 84-ERA-30 (Sec'y Dec.
19, 1991).
XVII B 1 b Settlement; matters concerning
other laws not considered
In Brodeur v. Westinghouse Hanford Co., 92-SWD-3
(Sec'y Oct. 16, 1992), the Secretary found that the terms of a
settlement were fair, adequate and reasonable. She declined to
review the agreement in regard to matters arising under laws
other than federal employee protection provisions under her
jurisdiction.
XVII B 1 b Additional case citations; accord
Aurich
Accord Aurich/Poulos: Williams v. Indiana
Vocational Technical College, 89-SWD-1 (Sec'y Apr. 23,
1990); Rhode v. City of West Lafayette, Indiana,
91-SWD-3 (Sec'y July 3, 1991); Brodeur v. Westinghouse
Hanford Co., 92-SWD-3 (Sec'y Oct. 16, 1992); Rivera
v. Bristol-Myers Barceloneta, Inc., 93-CAA-3 (Sec'y June
28, 1993); McGlynn v. Pulsair Inc., 93-CAA-2 (Sec'y
June 28, 1993); Anderson v. Wackenhut Corp., 92-
ERA-54 (Sec'y June 28, 1993); Elliot v. Enercon, Services,
Inc., 92-ERA-47 (Sec'y June 28, 1993); Ratliff v.
Airco Gases, 93-STA-5 (Sec'y June 25, 1993); Iverson
v. Town of Keystone, South Dakota, 93-WPC-3 (Sec'y June 28,
1993); Bender v. Professional Service Industries, Inc.,
93-WPC-2 (Sec'y June 28, 1993); Davis v. Valley View Ferry
Authority, 93-WPC-1 (Sec'y June 28, 1993); Eisner v.
United States Environmental Protection Agency, 90-SDW-2
(Sec'y Aug. 16, 1993).
XVII B 1 b Settlement; scope
In reviewing a settlement agreement in a case arising under ERA,
42 U.S.C. § 5851, the Secretary reviews the agreement only
to determine whether it represents an acceptable settlement of
Complainant's claims that the employer violated the ERA, and does
not review matters encompassed in a settlements not relating to
the ERA complaint. Simmons v. Fluor Constructors,
Inc., 88-ERA-28, 30, and 89-ERA-28, 29 (Sec'y June 28,
1991).
Anderson v. Kaiser Engineers Hanford Co., 94-ERA-14
(Sec'y Oct. 21, 1994). Accord Poulos v. Ambassador Fuel Oil
Co., Inc., 86-CAA-1 (Sec'y Nov. 2, 1987). The Secretary's
authority over settlement agreements is limited to such statutes
as are within the Secretary's jurisdiction and is defined by the
applicable statute. Thus, the Secretary's review of the
settlement in this case extended only to the complaint as it
related to the ERA.
XVII B 1 b Matters encompassing various laws
Accord Poulos: Pace v. Kirshenbaum
Investments, 92-CAA-8 (Sec'y Dec. 2, 1992); Roos v.
Commonwealth Edison Co., 91-ERA-52 (Sec'y June 24, 1992);
Poulos v. Ambassador Fuel Oil Co., Inc., 86-CAA-1
(Sec'y Nov. 2, 1987); Sauer v. Tennessee Valley
Authority, 86-ERA-21 (Sec'y May 4, 1990); Smith v.
Tennessee Valley Authority, 86-ERA-22 (Sec'y May 2,
1990).
In McCoy v. Utah Power, 94-CAA-1 and 6 (Sec'y Aug.
1, 1994), the Secretary found that certain paragraphs of a
settlement agreement could be construed as a waiver by the
Complainant of any causes of action he may have which arise in
the future. Rather than disapproving the agreement, the
Secretary interpreted the provision as limited to the right to
sue in the future on claims or causes of action arising out of
facts or any set of facts occurring before the date of the
agreement.
To the same effect: Armijo v Wackenhut Services,
Inc., 94-ERA-7 (Sec'y Aug. 22, 1994).
XVII B 1 c General release
In Saporito v. Arizona Public Service Co., 92-ERA-
30, 93-ERA-26 and 93-ERA-43 (Sec'y Mar. 21, 1994), the Secretary
approved a settlement agreement, but limited his approval to an
interpretation that only Complainant's claims arising under the
ERA before the settlement date would be dismissed. The General
Release contained a provision that could be interpreted to
release the Respondent from any claims accrued to the complainant
after the date of execution of the release.
XVII B 1 c Waiver of future causes of action
Accord Polizzi: Pace v. Kirshenbaum
Investments, 92-CAA-8 (Sec'y Dec. 2, 1992)
XVII. B. 1. c. Waiver of future claims
In McCoy v. Utah Power, 94-CAA-1 and 6 (Sec'y Aug.
1, 1994), the Secretary found that certain paragraphs of a
settlement agreement could be construed as a waiver by the
Complainant of any causes of action he may have which arise in
the future. Rather than disapproving the agreement, the
Secretary interpreted the provision as limited to the right to
sue in the future on claims or causes of action arising out of
facts or any set of facts occurring before the date of the
agreement.
To the same effect: Armijo v Wackenhut Services,
Inc., 94-ERA-7 (Sec'y Aug. 22, 1994).
XVII B 1 c Terms relating to waiver of future
claims
The Secretary will not approve terms of a settlement agreement
that include a waiver of the complainant's right with respect to
claims that might arise in the future. See Polizzi v. Gibbs
& Hill, Inc., 87-ERA-38 (Sec'y July 18, 1989). In
Ryan v. Niagara Mohawk Power Corp., 88-ERA-7 (Sec'y
Jan. 25, 1990), the Secretary disapproved such a waiver of future
claims, but still approved the agreement because another
provision provided that the agreement would remain in full force
and effect even if any part of a provision is deleted.
To the same effect: Bittner v. Fuel Economy Contracting
Co., 88-ERA-22 (Sec'y June 28, 1990) (interpreting the
provision as limiting only the right to sue in the future on
claims or causes of action arising out of facts or any set of
facts occurring before the date of the agreement); Polizzi
v. Gibbs & Hill, Inc., 87-ERA-38 (Sec'y July 18,
1989); Ryan v. Niagara Mohawk Power Corp., 87-ERA-
47 (Sec'y Jan. 25, 1990).
XVII B 1 c Waiver of future claims
Where certain paragraphs of a settlement agreement could be
interpreted as a waiver of the Complainant's rights with respect
to claims that might arise in the future, the Secretary
interpreted those paragraphs to be limited to a waiver of the
Complainant's right to sue in the future on claims or causes of
action arising out of facts occurring before the date of the
settlement.
Crider v. Holston Defense Corp., 88-CAA-1 (Sec'y Mar.
1, 1989).
XVII B 1 c Settlement; provision regarding waiver of
future causes of action
In French v. Texas Utilities, 92-ERA-36 (Sec'y Aug.
31, 1992), the Secretary approved a settlement agreement, but,
noting that one provision could be construed as a waiver by the
complainant of causes of action he may have which arise in the
future, conditioned her approval on a construction of that
provision as limited to a waiver of the right to seek damages in
the future based on claims or causes of action arising out of the
facts or any set of facts occurring before the date of the
agreements.
XVII B 1 c Future claims
Because a waiver of the complainant's rights based on future
employer actions would be contrary to public policy, language in
a settlement agreement that could be construed as a waiver by the
complainant of causes of action that may arise in the future are
interpreted by the Secretary as limited to a waiver of the right
to seek damages in the future based on claims or causes of action
arising out of facts or any set of facts occurring before the
date of the agreement. See Polizzi v. Gibbs and Hill, 87-
ERA-38 (Sec'y July 18, 1992), slip op. at 9, and cases cited
therein.
Pace v. Kirshenbaum Investments, 92-CAA-8 (Sec'y
Dec. 2, 1992).
XVII B 1 c Additional cases; Future actions
Waiver of causes of action arise in future. Anderson v.
Wackenhut Corp., 92-ERA-54 (Sec'y June 28, 1993);
Mitchell v. Arizona Public Service Co., 91-ERA-9
(Sec'y June 28, 1993); Mitchell v. Arizona Public Service
Co., 92-ERA-28, 29, 35, 55 (Sec'y June 28, 1993); Eisner
v. United States Environmental Protection Agency, 90-SDW-2
(Sec'y Aug. 16, 1993).
XVII B 1 c Settlement
In her review of a general release and settlement the Secretary
interpreted language in the agreement that could be construed as
a waiver by Complainant of any cause of action he may have which
arise in the future as limited to a waiver of the right to sue in
the future on claims or cause of action arising out of facts or
any set of facts occurring before the date of the agreement. The
Secretary made this interpretation because a waiver of
Complainant's rights based on future employer actions would be
contrary to public policy. Phillips v. Citizens Ass'n for
Sound Energy, 91-ERA-25 (Sec'y Nov. 4, 1991).
XVII B 1 c Future claims
Because a waiver of the complainant's rights based on future
employer actions would be contrary to public policy, language in
a settlement agreement that could be construed as a waiver by the
complainant of causes of action that may arise in the future are
interpreted by the Secretary as limited to a waiver of the right
to seek damages in the future based on claims or causes of action
arising out of facts or any set of facts occurring before the
date of the agreement. See Polizzi v. Gibbs and Hill, 87-
ERA-38 (Sec'y July 18, 1992), slip op. at 9, and cases cited
therein.
Pace v. Kirshenbaum Investments, 92-CAA-8 (Sec'y
Dec. 2, 1992).
XVII B 1 c Waiver of future actions
Where a settlement agreement includes a provision that could be
construed as waiving the complainant's right to file
whistleblower claims under the CAA based on future actions, such
a waiver is contrary to public policy, and the Secretary will
interpret the release provision as releasing the respondent from
liability under the Act only with respect to the instant
complaint. The first paragraph of the release stated that it was
limited in effect to "claim resulting from anything which
has happened up to now" whille another provision released
the respondent from liability for "any and all further
claims or other causes of action arising out of the provisions of
the Federal Clean Air Act." SeeTinsley v.
179 South Street Venture, 89-CAA-3 (Sec'y Mar. 15, 1990).
XVII B 1 c Settlement; waiver of actions that may arise in
the future
Where a whistleblower settlement agreement contains language that
could be construed as a waiver by
the parties of any causes of action they may have which arise in
the future, the Secretary will interpret
such provisions in limiting the right to sue in the future on
claims or causes of action arising out of facts
or any set of facts occurring before the date of the agreement.
Tan v. Deborah Research
Institute, 94-ERA-31 (Sec'y Nov. 28, 1994).
Provision for interpretation under state law does not limit
authority of Secretary or United States district court.
Rivera v. Bristol-Myers Barceloneta, Inc., 93-CAA-3
(Sec'y June 28, 1993); McGlynn v. Pulsair Inc., 93-CAA-2 (Sec'y June 28,
1993); Elliot v. Enercon, Services, Inc., 92-ERA-47
(Sec'y June 28, 1993); Ratliff v. Airco Gases, 93-
STA-5 (Sec'y June 25, 1993).
XVII B 1 d Governing state law interpreted not to
limit enforcement action
In Stites v. Houston Lighting & Power, 89-ERA-1
and 89-ERA-41 (Sec'y May 31, 1990), the Secretary interpreted a
provision of a settlement agreement providing in part " that
any civil action or other litigation arising out of or resulting
from a breach or violation or alleged breach or violation of this
[Settlement] Agreement, shall be controlled by the laws of the
State of Texas" as not restricting in any way the authority
of the Secretary to bring an enforcement action under 42 U.S.C.
§ 5851(d), nor as limiting in such action the jurisdiction
of the district court to grant all appropriate relief as
identified in the statute.
To the same effect: Bivens v. Louisiana Power &
Light, 89-ERA-30 (Sec'y July 8, 1992).
XVII B 1 d State law
Where a settlement agreement states that it "is being made
and entered into in the State of Texas, and the parties agree and
stipulate that Texas law, and applicable federal law, shall
govern its enforceability and construction," the Secretary
will interpret this statement as not limiting the authority of
the Secretary or the United States District Court under the
statute and the regulations. 42 U.S.C. § 7622(d); see
also 29 C.F.R. § 24.8(a); Phillips v. Citizens Assoc.
for Sound Energy, 91-ERA-25 (Sec'y Nov. 4, 1991), slip op. at
2.
Pace v. Kirshenbaum Investments, 92-CAA-8 (Sec'y
Dec. 2, 1992).
XVII B 1 d Settlement
In her review of a general release and settlement the Secretary
interpreted language in the agreement stating that any dispute
arising under the agreement "will be construed and
resolved" pursuant to the laws of Texas as not limiting the
authority of the Secretary or the United States District Court
under the statute and the regulations. 42 U.S.C. § 5851(d);
see also 29 C.F.R. § 24.8(A). Phillips v.
Citizens Ass'n for Sound Energy, 91-ERA-25 (Sec'y Nov. 4,
1991).
XVII B 1 d Settlement governed by state law
Where provision of a settlement agreement stated that it is to be
interpreted, enforced and governed by the law of a particular
state, the Secretary interprets the provision as not limiting the
authority of the Secretary or the United States District Court
under the statute and the regulations. 42 U.S.C. § 7622(d);
see also 29 C.F.R. § 24.8(a) (1991); Phillips v. Citizens
Assoc. for Sound Energy, 91-ERA-25 (Sec'y Nov. 4, 1991).
Rondinelli v. Consolidated Edison Co. of New York,
Inc., 91-CAA-3 (Sec'y Apr. 10, 1992).
Where a settlement agreement contained a provision requiring that
if the complainant is rehired and again believes that he is
discriminated or retaliated against, the complainant will notify
the respondents of the alleged retaliation and give them an
opportunity to address the problem before taking legal or
administrative action, the Secretary held that considering the
thirty limitations period, the provision would be interpreted as
not restricting the complainant from filing a complaint under the
ERA to protect his rights and to notify the Department of Labor
of such violations of the Act while the respondents take steps
they consider appropriate to resolve the matter. Bittner
v. Fuel Economy Contracting Co., 88-ERA-22 (Sec'y June
28, 1990).
Where the settlement agreement included a provision stating that
the agreement "shall not be construed as an admission of any
wrongdoing by any of the parties, nor shall it be construed as an
adjudication on the merits or claims for or against either
party" the Secretary indicated that his approval of the
agreement was not to be construed as indicating any view on the
merits of the various issues raised by the case. Plumley
v. Federal Bureau of Prisons, 86-CAA-6 (Sec'y July 20,
1987) (order of dismissal).
In Elliot v. Enercon, Services, Inc., 92-ERA-47
(Sec'y June 28, 1993), the parties submitted a settlement
agreement that contained a provision stating that the
"Agreement can be modified only after obtaining the written
consent of all parties thereto." The Secretary interpreted
this provision to include the requisite approval of the
Secretary. See 42 U.S.C. § 5851(b)(2).
In Fitzgerald v. The Adamson Co., Inc., 90-SWD-3
(Sec'y Aug. 21, 1990) (order to show cause), the parties had
included in a cover letter a representation that their settlement
agreement was contingent on approval by the Secretary within 45
days from the ALJ's decision. The Secretary ordered the parties,
in view of her simultaneous order regarding another matter, to
show cause why the Secretary should not proceed to review this
case without regard to the 45 day period imposed by the parties
for review of the case.
The Secretary noted that the existence of a contingency in some
cases will preclude any review of the settlement agreement,
Polydorou v. A.J. Clarke Management Corp., 88-CAA-7 (Sec'y
Aug. 3, 1989), but that the circumstances of this case would be
to permit the parties to address this issue at the same time as
the other issue.
In Guity v. Tennessee Valley Authority, 86-ERA-16 (Sec'y
May 2, 1990), the Secretary reviewed the Settlement Agreement
and, with the following qualification, found it fair, adequate,
and reasonable. One of the provisions stated that the agreement
will be enforceable by either party in accordance with its terms
in the federal district court in Knoxville. The Secretary
interpreted that provision as not restricting in any way the
authority of the Secretary to bring an enforcement action under
the ERA.
XVII B 1 i Settlement term regarding positive employment
reference not
objectionable
In Rhyne v. Brand Utilities Services, Inc.,
94-ERA-33 and 45 (Sec'y June 20, 1995),
the ALJ had recommended that the Secretary not
"endorse" certain language in the parties'
settlement agreement pertaining to the Respondents' positive
employment references for the
Complainant. The Secretary declined to follow adopt this
recommendation, citing Macktal v.
Secretary of Labor, 923 F.2d 1150, 1155 (5th Cir. 1991), and
approved the settlement as written.
XVII B 1 i Provision limiting Secretary's authority
to enforce settlement agreement
In Smith v. Tennessee Valley Authority, 86-ERA-22, (Sec'y
May 2, 1990), the Secretary reviewed the Settlement Agreement
and, with the following qualification, found it fair, adequate,
and reasonable. One of the provisions stated that the agreement
will be enforceable by either party in accordance with its terms
in the federal district court in Knoxville. The Secretary
interpreted that provision as not restricting in any way the
authority of the Secretary to bring an enforcement action under
the ERA.
The presence in a settlement agreement of a section 5851
complaint of an unenforceable clause does not automatically
vitiate the entire agreement. Wampler v. Pullman-Higgins
Co., 84-ERA-13 (Sec'y Jan. 23, 1992) (order to submit
settlement agreement).
[Editor's note: On March 26, 1984, The ALJ dismissed the
complaint based on withdrawal of the complaint. On April 12,
1990, Complainant requested that the ALJ's decision be vacated
because the settlement on which it was based was void as a matter
of public policy (the unenforceable clause). On January 23, 1992
did OAA issue an order directing the parties to submit the
settlement (which had not been disclosed prior to the April 12,
1990 letter).]
[Nuclear & Environmental Digest XVII B 2 a]
SETTLEMENT; COMPLAINANT IS NOT NECESSARILY ENTITLED TO WITHDRAW
PRIOR TO SECRETARIAL APPROVAL; MAY NOT BE VOIDED BASED ON ALLEGED
FRAUD OR DURESS OF COMPLAINANT'S OWN ATTORNEY'S, BUT MAY BE VOIDED BASED
ON MISCONDUCT OF OPPOSING PARTY (SUCH AS COLLUSION WITH
COMPLAINANT'S ATTORNEY); DOL MAY STRIKE PROVISION AS AGAINST PUBLIC
POLICY WHERE SETTLEMENT CONTAINS SAVINGS CLAUSE
In Beliveau v. Naval Undersea Warfare
Center, ARB No. 98-032, ALJ No. 1997-SDW-6 (ARB June 26, 1998), the ARB had
ruled that a whistleblower complaint could be terminated based on a settlement without the Secretary's
entering into the settlement, if the settlement occurred prior to a request for a hearing before an ALJ.
The U.S. Court of Appeals for the First Circuit, however, reversed this decision and remanded the
case. Beliveau v. USDOL, No. 98-1786 (1st
Cir. Mar. 10, 1999).
Complainant had filed a motion to reopen his complaint, despite
a settlement reached prior to completion of the Wage and Hour Division's investigation, on the theory
that he could withdraw from the settlement any time prior to the Secretary's approval of the settlement.
The ARB, however, observed in Beliveau v. Naval
Undersea Warfare Center, ARB No. 99-070, ALJ No. 1997-SDW-6 (ARB June 30, 1999), an order remanding the case to the ALJ for further proceedings, that "assuming that
Beliveau participated in and consented to the settlement at the time it was negotiated, he is bound by his
initial negotiated consent to settle the complaint until such time as the Secretary approves or rejects the
settlement." Slip op. at 2 (citation omitted). The ARB found a remand to the ALJ necessary to
consider Complainant's allegation that Respondent colluded with Complainant's attorney, or otherwise
engaged in improper conduct in negotiating the settlement agreement. The ARB observed that
"A complainant may not repudiate a settlement because of alleged fraud or duress by his own
attorneys. .... However, an opposing party's improper conduct may render a settlement agreement
voidable." Slip op. at 2 (citations omitted). The ARB directed the ALJ to conduct a hearing on
the merits if he found that improper conduct did occur, and that if he found lack of evidence of
improper conduct, he should consider Complainant's alternative argument that certain settlement terms
constituted "gag" provisions in violation of public policy. The ARB noted that, unlike
Macktal v. Secretary of Labor, 923 F.2d 1150, 1153-1156 (5th Cir. 1991), in which it was
held that in the absence of a severability provision in the settlement, the Secretary could not sever terms
that violate public policy and otherwise enforce the remainder of the agreement, the instant settlement
did contain a savings provision, and therefore the ALJ could strike provisions that violate public policy
and uphold the remainder of the settlement.
[Nuclear & Environmental Digest XVII B 2 a]
SETTLEMENT; COMPLAINT ABOUT TAX TREATMENT
In Trice v. Bartlett Nuclear,
Inc., 1997-ERA-40 (ARB Aug. 28, 1998), the ARB while considering an ALJ's
recommendation of approval of a settlement agreement executed by Complainant and
Respondent, received a letter from Complainant alleging that Respondents incorrectly designated
the settlement payment on Complainant's IRS 1099-MISC form as income generated through
self-employment. Complainant believed that this will affect his tax liability, and that the ARB
should therefore "consider [his] total expenses" in its determination. The ARB ruled
that it would not amend the settlement amount or disapprove the agreement based on this
collateral issue, citing authority to the effect that where a settlement is knowing and voluntary,
the settlement is binding, final and conclusive even though a party may later believe that the
agreement is disadvantageous or otherwise changes his or her mind.
[N/E DIGEST XVII B 2 a]
SETTLEMENT; PROVISION FOR PROTECTIVE ORDER; SEVERANCE NOT
PERMITTED
In Paine v. Saybolt, Inc., 97-CAA-4 (ARB July 22, 1997), the
parties
submitted a settlement agreement seeking approval of the settlement and
dismissal of the
complaint. The agreement contained a provision indicating that the record
shall be covered by a
protective order. This, together with a designation of the record as
confidential commercial
information, was intended as an attempt to shield the entire record from
disclosure under FOIA.
The ALJ recommended severing the provision from the agreement. The Board,
however, held
that "[w]e expressly reject this recommendation because the Board cannot
sever or modify
material terms of a negotiated settlement. See, e.g., Macktal v. Secretary
of Labor, 923
F.2d 1150, 1154-56 (5th Cir. 1991)...."
[Editor's note: This decision appears to conflict with Brown v. Holmes &
Narver,
Inc., 90-ERA-26 (Sec'y May 11, 1994), in which the Secretary found that a
offensive
provision could be severed without violating Macktal, where the
agreement also
contained a savings provision.]
XVII B 2 a Settlement, existence of
"The United States Court of Appeals for the Fifth Circuit
recently described the Secretary's authority under the ERA as
either to consent or not to consent to a settlement as written by
the parties. The court there found no authority 'to strike
certain terms, and enforce the remainder, of a settlement without
the consent of both [parties].'" Hasan v. Nuclear
Power Servs, Inc., 86-ERA-24 (Sec'y June 26, 1991),
citing Macktal v. Secretary of Labor, 923 F.2d 1150, 1154
(5th Cir. 1991). Thus, in Hasan, in the absence of
a formal settlement document and where there is disagreement as
to material terms of settlement the Secretary concluded that no
settlement had been reached. (Complainant was seeking to enforce
a settlement offer of $200,000; ALJ had recommended dismissal of
the complaint and the Secretary adopted that recommendation).
XVII. B. 2. a. Severance of unacceptable term or condition
In Wampler v. Pullam-Higgins Co., 84-ERA-13 (Sec'y
June 13, 1994), the Respondent filed a motion for reconsideration
of the Secretary's Final Order Disapproving Settlement and
Remanding Case, see Wampler v. Pullam-Higgins Co., 84-ERA-
13 (Sec'y June 13, 1994), holding that the settlement agreement
presented for approval contained a provision which was contrary
to public policy and unenforceable in that it could restrict
Complainant's communication of safety concerns to state and
federal government agencies, and that, in accordance with
Macktal v. Secretary of Labor, 923 F.2d 1150 (5th Cir.
1991), he could not sever that provision and enforce the
remainder of the agreement.
The Respondent requested that the Secretary approve the original
settlement agreement with an attached formal release which
discharges Complainant from any duties under the challenged
provision, arguing that by attaching this formal release to the
settlement agreement it has unilaterally released Complainant
from any duties and obligations of the offending provision.
Complainant objected.
The Secretary found that the arguments advanced by Respondent,
that application of traditional contract law allows for a
unilateral release from the offending provision, and that
Complainant has been allowed to communicate safety concerns
without enforcement of the provision, were addressed in
Macktal v. Brown & Root, Inc., 86-ERA-23 (Sec'y Oct.
13, 1993), slip op. at 3-6. The Secretary's conclusion in
Macktal, 86-ERA-23, and in his Final Order in the present
case, was that he cannot modify the terms of the agreement
without the consent of Complainant.
XVII B 2 a Severance of unacceptable terms or
conditions
In Stites v. Houston Lighting & Power, 89-ERA-1
and 89-ERA-41 (Sec'y May 31, 1990), the Secretary severed a
confidentiality provision of a settlement agreement upon the
failure of any party to respond to her order to show cause why
the provision should not be severed. In her March 16, 1990 order
to show cause she had explained that the provision "would
appear to restrict Complainants from providing information or
documents obtained in the course of this case to the Nuclear
Regulatory Commission [NRC] or any other agency. . . . So
construed, its effect would be to 'dry up' channels of
communication which are essential for government agencies to
carry out their responsibilities. SeePolizzi v. Gibbs
& Hill, Inc., Case No. 87-ERA-38, Sec. Order, July 18,
1989, slip op. at 3-6."
To the same effect: Lull v. Duke Power Co., 88-
ERA-16 (Sec'y May 31, 1990) (Feb. 27, 1990 order to show cause
why this provision should not be severed contains legal
analysis); Thompson v. The Detroit Edison Co., 87-
ERA-2 (Sec'y July 9, 1990) (one provision requiring complainant
not to "participate in, aid, encourage, support or assist in
any other claims which may be brought against" the
respondent and one provision requiring complainant not to
"disclose, except as required by law, any complaints or
claims ever made about his employment" with the respondent;
both severed as void against public policy); Hoffman v.
Fuel Economy Contracting, 87-ERA-33 (Sec'y Apr. 20,
1990).
XVII B 2 a Procedure for severing objectionable
conditions
In McQuay v. The Waldinger Corp., 85-ERA-33 (Sec'y
May 31, 1990), the Secretary found a provision of a settlement
agreement void as against public policy, and gave the parties 30
days to show cause why the objectionable provisions should not be
severed and the remainder of the agreement approved and the case
dismissed with prejudice. The parties did not file a response
and the Secretary severed the provisions, approved the remainder
of the agreement, and dismissed the case with prejudice.
XVII B 2 a Offending provisions may not simply be
severed; Secretary may only approve or reject
as written
In Macktal v. Brown & Root, Inc., 86-ERA-23
(Sec'y Oct. 13, 1993), the Secretary disapproved a settlement
agreement that had a provision in it that restricted
Complainant's right to provide information to government agencies
-- a provision that was void as against public policy.
When originally presented with the settlement, the Secretary
ordered the offending paragraph severed and found the remainder
of the agreement valid and enforceable (despite Complainant's
attempt to repudiate the agreement). Macktal v. Brown &
Root, Inc., 86-ERA-23 (Sec'y Nov 14, 1989). On appeal to the
Fifth Circuit, however, the Secretary was found to have only the
authority to consent or not consent to a settlement as written.
Macktal v. Secretary of Labor, 923 F.2d 1150 (5th Cir.
1991). The Fifth Circuit remanded the case directing the
Secretary either to enter into the settlement or refuse to enter
into it by rejecting it. The Fifth Circuit affirmed the
Secretary's ruling that Complainant could not repudiate the
agreement he had entered into.
On remand, the Secretary affirmed that the provision was against
public policy. The Secretary noted Respondent's contention that
the provision was moot (because Complainant had already all
information he possessed to government agencies) and
unenforceable (because of an NRC directive dated April 27, 1989
that such provisions would not be enforced; see also 55
Fed. Reg. 10, 397 (1990) and 10 C.F.R. §§ 30.7(g),
40.7(g), 50.7(f), 60.9(f), 61.9(f), 70.7(g), 72.10(f) (1991)).
He rejected that contention as "no more than a prediction of
the action a court might take in a suit to enforce the
settlement" and found, more fundamentally, that approval of
a settlement with this term could cast doubt on a whistleblower's
right to contact government agencies without any restriction.
The Secretary concluded that "a prophylactic approach to
settlements which include questionable language will more
faithfully carry out Congressional intent on the role of the
Secretary under the ERA."
The Secretary also rejected Respondent's contention that under
contract law the settlement could be approved because (1)
Complainant accepted Respondent's payment of $35,000 which
"worked an accord and satisfaction of his ERA claim, (2)
Complainant ratified the settlement without the offending
paragraph by retaining the money after both the NRC and the
Secretary had declared the provision unenforceable and after
Respondent waived any right to enforce it, and (3) Complainant
executed release separate and distinct from the settlement
releasing Respondent of any claims arising out of his employment.
The Secretary concluded that the Fifth Circuit's remand order
limited him to considering the agreement as written. In
addition, he concluded that the general release was clearly
related to the settlement agreement.
XVII.B.2.a. Severance permissible where agreement
contains savings clause
In Brown v. Holmes & Narver, Inc., 90-ERA-26
(Sec'y May 11, 1994), a settlement agreement contained a
provision that appeared to prohibit the parties from voluntarily
discussing the facts surrounding the complaint with government
agencies. It provides in relevant part:
Except to carry out the specific covenants of this
Agreement or unless specifically required by court order or
government agency order, none of the parties shall
directly or indirectly, or by any means or manner whatsoever
disclose, urge, encourage, cooperate in, cause or
permit the disclosure of dissemination to any person or
entity the contents or substances of this
Agreement, any consideration given or received hereto,
the claims or demands released herein, and all matters
arising therefrom or relating thereto. * * * PROVIDED
further that H&N, Inc. may discuss the terms of the
settlement with the United States Department of Energy.
(Emphasis added.)
The Secretary found that this was void as contrary to public
policy and unenforceable to the extent that they could be
construed as restricting Complainant from communicating
voluntarily with, and providing information to, any Federal or
state government agencies. Because the agreement also contained
a savings provision, however, the Secretary was able to approve
the remainder of the Agreement without the offending language
prohibiting the parties from discussing the facts surrounding the
complaint with government agencies without violating Macktal
v. Secretary of Labor, 923 F.2d 1150, 1155-1156 (5th Cir.
1991).
XVII B 2 a Severance of unacceptable terms or
conditions
In Rogers v. Front Range Environmental Services,
90-ERA-20 (Sec'y Aug. 21, 1990), the Secretary severed from a
settlement agreement a paragraph as void because it was against
public policy to the extent that it would prohibit the
complainant and the respondent from communicating information to
federal or state enforcement authorities concerning alleged
violations of the WPCA or other laws. The parties had failed to
respond to the Secretary's order to show cause why the provision
should not be so severed.
XVII B 2 a Severance of unacceptable terms or
conditions
In Thompson v. The Detroit Edison Co., 87-ERA-2
(Sec'y Apr. 26, 1990) (order to show cause) the Secretary ordered
the parties to show cause why several provisions should not be
severed as void against public policy, and the remainder of the
agreements approved. She wrote:
The remainder of the Settlement may be enforceable if
"performance as to which the agreement is unenforceable is
not an essential part of the agreed exchange." EEOC v.
Cosmair, Inc., 821 F.2d 1085, 1091 (5th Cir. 1987) (quoting
the Restatement (Second) of Contracts § 184(1)). See
also Nichols v. Anderson, 837 F.2d 1372, 1375 (5th Cir. 1988)
("[I]f less than all of a contract violates public policy,
the rest of the contract may be enforced unless the unenforceable
term is an essential part of the contract.") Thus, in
McCall v. United States Postal Service, 839 F.2d 664 (Fed.
Cir. 1988), an employee had settled an action challenging his
removal by agreeing that, upon reinstatement for a one year
probationary period, he would not appeal any disciplinary action
taken against him and also waived his right to file a charge with
EEOC. The court held that "even if [the employee's]
attempted waiver of his right to file EEOC charges is void, that
would not affect the validity of other portions of the
agreement." 839 F.2d 664, 666 at *.
Since it was not clear from the record whether the parties
intended the remainder of the agreement to remain in effect if
certain provisions were not approved by the Secretary, she
afforded them an opportunity to state their positions.
[Editor's note: Neither party responded, and the Secretary
approved the remainder of the agreement in Thompson v. The
Detroit Edison Co., 87-ERA-2 (Sec'y July 9, 1990).]
XVII. B. 2. a. Severance of unacceptable term or
condition
In Wampler v. Pullam-Higgins Co., 84-ERA-13 (Sec'y
June 13, 1994), the Respondent filed a motion for reconsideration
of the Secretary's Final Order Disapproving Settlement and
Remanding Case, see Wampler v. Pullam-Higgins Co., 84-ERA-
13 (Sec'y June 13, 1994), holding that the settlement agreement
presented for approval contained a provision which was contrary
to public policy and unenforceable in that it could restrict
Complainant's communication of safety concerns to state and
federal government agencies, and that, in accordance with
Macktal v. Secretary of Labor, 923 F.2d 1150 (5th Cir.
1991), he could not sever that provision and enforce the
remainder of the agreement.
The Respondent requested that the Secretary approve the original
settlement agreement with an attached formal release which
discharges Complainant from any duties under the challenged
provision, arguing that by attaching this formal release to the
settlement agreement it has unilaterally released Complainant
from any duties and obligations of the offending provision.
Complainant objected.
The Secretary found that the arguments advanced by Respondent,
that application of traditional contract law allows for a
unilateral release from the offending provision, and that
Complainant has been allowed to communicate safety concerns
without enforcement of the provision, were addressed in
Macktal v. Brown & Root, Inc., 86-ERA-23 (Sec'y Oct.
13, 1993), slip op. at 3-6. The Secretary's conclusion in
Macktal, 86-ERA-23, and in his Final Order in the present
case, was that he cannot modify the terms of the agreement
without the consent of Complainant.
XVII B 2 a Need for order to show cause before provisions
are severed
In Fitzgerald v. The Adamson Co., Inc., 90-SWD-3
(Sec'y Aug. 21, 1990) (order to show cause), the Secretary
indicated that she would void several provisions of a settlement
agreement before approving it. Since the parties had not
including a savings clause, it was necessary for her to issue an
order to show cause why the disapproved restrictions should not
be severed and the remainder of the agreement approved and the
case dismissed.
XVII B 2 a Severance of unacceptable term; order
to show cause where no savings
clause
In Nolder v. Raymond Kaiser Engineers, Inc., 84-
ERA-5 (Sec'y Feb. 27, 1990) (order to show cause), the Secretary
declared a provision in a Release -- that "except as
required by law, [Complainant] will not participate in, aid,
abet, support, encourage, or assist any other claims that may be
brought against Kaiser or Raymond and/or the officers, directors,
employees, attorneys, agents, successors, assigns, or insurers of
any of them" -- to be void and unenforceable because it has
the effect of restricting the administration and enforcement of
law and is against public policy.
Because nothing in the Release or elsewhere in the record
indicated whether Respondent intended to agree to the other
provisions of the settlement if this provision is severed, the
Secretary ordered Respondent to show cause why the voided
provision should not be severed and the remainder of the
agreement approved.
In its response to the Order to Show Cause, Respondent agreed to
be bound by the remainder of the agreement, and the Secretary
dismissed the complaint with prejudice. Nolder v. Raymond
Kaiser Engineers, Inc., 84-ERA-5 (Sec'y Apr. 20, 1990)
(order approving settlement).
Under section 5851(b)(2)(A), the Secretary may not enter into a
settlement terminating a whistleblower proceeding under the
Energy Reorganization Act "without the participation and
consent of the complainant." 42 U.S.C. §
5851(b)(2)(A). Thus, where a settlement agreement was silent as
to the dismissal of the claims as being with or without
prejudice, but extrinsic evidence indicated that the parties had
agreed that the order would not be construed as an adjudication
on the merits, the Secretary's dismissal of the complaint with
prejudice improperly added a material condition to the parties'
agreement since an administrative dismissal with prejudice could
provide a res judicata bar on a subsequent claim not brought
under section 210. In addition, the Secretary failed to advance a
reason for refusing to follow numerous previous cases where
settlement agreements were simply approved with no mention of
dismissal with prejudice. Thompson v. United States Dept.
of Labor, 885 F2d 551 (9th Cir. 1989) (the case was
remanded, however, because the Secretary must be given the
opportunity to decide not to approve the settlement agreement
because it is not fair and reasonable without dismissal with
prejudice; the Secretary was instructed to take into
consideration on remand that the complainant had filed a lawsuit
in state court to which the employer had asserted a defense of
res judicata).
XVII B 2 b Settlement; dismissal with
prejudice
Employee filed a complaint with the NRC, after which Employer
allegedly demoted, transferred and discriminated against him in
his employment. Parties entered into a settlement agreement,
purposely remaining silent as to any dismissal of the claims,
either with or without prejudice. The Secretary must approve all
settlement agreements, however, "[t]he Secretary may not
enter into a settlement terminating a proceeding on a complaint
without the participation and consent of the complainant."
42 U.S.C. § 5851(b)(2)(A). The court held that although the
Secretary could decide not to approve the settlement agreement
because it is not fair and reasonable without the dismissal with
prejudice, by adding that term, the Secretary made a significant
enough change in the agreement that it must be remanded to the
Secretary for further proceedings. Thompson v. United
States, 885 F.2d 551, 558 (9th Cir. 1989).
Although it is not necessary that a settlement agreement be made
part of the Secretary's final order, the agreement should be part
of the record for the Secretary's review so a determination can
be made whether the terms of the settlement should be approved.
See James v. Dresser-Atlas Division, 84-ERA-28
(Sec'y Oct. 28, 1987) (order to submit settlement agreement).
[Nuclear and Environmental Digest XVII.C.1.]
SETTLEMENT; DEFICIENCIES
In Amato v. Assured Transportation and Delivery,
Inc., 1998-TSC-6 (ALJ Oct. 31, 2000), the ALJ rejected a settlement agreement
submitted by the parties because (1) it did not specify the net amount that Complainant would
receive after payment of attorney fees; (2) it failed to specifically and explicitly state whether there
are any other claims being settled and if so under what terms; (3) it provided for construction or
interpretation of the agreement by California law rather than the statutes and regulations of the
United States; and (4) it included a confidentiality provision that did not take into account the
FOIA or the Privacy Act. The ALJ ordered the parties to submit a new settlement agreement or
be prepared to proceed to a hearing on the merits.
[Nuclear and Environmental Digest XVII.C.1.]
SETTLEMENTS; ALL SETTLEMENT DOCUMENTS MUST BE PROVIDED TO ARB
In cases where the ARB reviews and approves whistleblower settlements, the ARB requires
that settlement documentation for any other claims arising from the same factual
circumstances forming the basis of the federal claim be provided, or a certification that the parties entered into no
other such settlement agreements. Beliveau v.
Naval Undersea Warfare Center, ARB Nos. 00-073, 01-017, 01-019, ALJ Nos.
1997-SDW-1, 4 and 6 (ARB Nov. 30, 2000), citing Biddy v. Alyeska Pipeline Service Co., ARB Nos.
96-109, 97-015, ALJ No. 1995-TSC-7 (ARB Dec. 3, 1996), slip op. at 3.
SETTLEMENT; FAILURE TO SHOW TOTAL AMOUNT TO BE PAID TO
COMPLAINANT
[N/E Digest XVII C 1]
Where the settlement agreement presented for the Secretary's
review indicated only the total amount of the settlement
including attorney's fees, and there was no indication of the
actual amount of money to be paid to the Complainant, the Office
of Administrative Appeals ordered the parties to respond to an
order pointing out that the Secretary needs to know the amount
paid to the Complainant to determine whether the settlement is
fair, adequate and reasonable. Carter v. Electrical District
No. 2 of Pinal County, 92-TSC-11 (OAA Apr. 24, 1996).
XVII C 1 Record for review
In considering a settlement of a CAA employee protection
complaint, the ALJ improperly limited the contents of the record
pursuant to 29 C.F.R. § 18.9(b)(2) (1988). Under 29 C.F.R.
§ 24.6(b), the Secretary is required to base a final order
on the entire record; therefore her review is not limited to the
complaint, the agreement and notice of administrative
determination, but also includes the hearing transcript, the
exhibits submitted, all pleadings and motions and other contents
of the record of the proceeding. Polydorou v. A.J. Clarke
Management Corp., 88-CAA-7 (Sec'y Aug. 3, 1989) (order
regarding settlement agreement).
XVII C 1 Handling of files
The "whole" administrative record consists of all
documents and materials directly or indirectly considered by
agency decision makers and includes evidence contrary to the
agency's position. See 29 C.F.R. § 24.5(e)(2).
Thus, where the administrative law judge evidently considered
correspondence relating to settlement negotiations, at least
indirectly, when he approved a recommended order that was silent
as to the mode of dismissal, the administrative law judge should
have included all relevant correspondence concerning settlement
negotiations as part of the record forwarded to the Secretary.
Thompson v. United States Dept. of Labor, 885 F2d
551 (9th Cir. 1989) (the Secretary had subsequently dismissed the
complaint with prejudice, contrary to the intent of the
settlement agreement).
XVII C 1 Administrative file in settlement
Employee filed a complaint with the NRC, after which Employer
allegedly demoted, transferred and discriminated against him in
his employment. Parties entered into a settlement agreement,
purposely remaining silent as to any dismissal of the claims,
either with or without prejudice. The court held that judicial
review is to be based on the full administrative record before
the agency when it made its decision. Citizens to Preserve
Overton Park v. Volpe, 401 U.S. at 420, 91 S.Ct. at 825.
Consequently, the court determined that certain letters were
before the Secretary at the time of the Secretary's decision, and
thus, they could consider those letters on appeal.
Thompson v. United States, 885 F.2d 551, 556 (9th
Cir. 1989).
In Tinsley v. 179 South Street Venture, 89-CAA-3
(Sec'y Aug. 3, 1989) (order of remand), the ALJ had recommended
approval of a settlement based on representations made at the
hearing that a settlement had been reached. The Secretary
rejected the recommendation, primarily on two grounds: (1) the
transcript indicated that the parties had only agreed to submit a
settlement agreement, and (2) it was not clear that the building
manager, who was at the hearing and agreed to the settlement, had
the authority to settle the case.
XVII C 2 Oral settlement based on ALJ's recommended
decision
In Mackowiak v. University Nuclear Systems, Inc.,
82-ERA-8 (Sec'y Apr. 18, 1989), the Secretary ordered the parties
to submit their settlement agreement, to which Complainant's
counsel replied that there was no written agreement, but rather
an oral agreement with the exchange of checks substantially in
compliance with the Administrative Law Judge's Recommended
Decision and Order. The Secretary accepted a letter from
Respondent transmitting the checks to Complainant (which also
served as a release and an acknowledgment), together with the
letter from Complainant's counsel responding to the order to
submit the settlement as a settlement, and found that it was
fair, adequate and reasonable.
XVII C 2 Memorandum of agreement not sufficient
submission for Secretarial review
McCoy v. Utah Power/Pacific Power, 94-CAA-1,
94-CAA-6 (Sec'y Mar. 22, 1994)
The Secretary held that he cannot enter into a settlement
with the alleged violator or dismiss the case after it has been
settled unless the settlement agreement is reviewed to determine
that it is fair, adequate, and reasonable, especially where the
agreement has legal precedence over the Memorandum of Settlement
Agreement. The Secretary stated that "the Department does
not simply provide a forum for private parties to litigate their
private employment discrimination suits." Slip Op. at 2.
"Protected whistleblowing may expose not just private harms,
but health and safety hazards to the public, and the Secretary
represents the public interest in keeping channels of information
open by assuring that settlements adequately protect
whistleblowers. The parties were thus ordered to submit a copy
of the settlement agreement to the Secretary. In the interest of
administrative economy, the Secretary chose to review the
agreement himself instead of remanding the case to the ALJ.
Where a settlement agreement contained a provision stating that
the respondent would pay attorney's fees in accordance with a
letter not contained in the record, the parties were ordered by
the Secretary to submit the referenced letter for review.
Any attachments containing terms upon which a settlement
agreement of an ERA whistleblower complaint is based must be
submitted to the Secretary for review.
O'Sullivan v. Northeast Nuclear Energy Co., 88-ERA-
37, 38, 89-ERA-34, 90-ERA-4, 33, 34, 91-ERA-51, 92-ERA-3 (Sec'y
June 17, 1992).
[N/E Digest XVII C 3]
SUBMISSION OF SETTLEMENT AGREEMENT IN FWPCA CASES
In James v. Ketchikan Pulp Co., 94-WPC-4 (ARB Mar. 11, 1997),
the
ARB ordered the parties to submit a copy of a settlement agreement to the ARB,
so that it could
determine whether the settlement agreement is fair, adequate and reasonable.
The ARB also
ordered the parties to "provide the settlement documentation for any
other alleged claims
arising from the same factual circumstances forming the basis of the federal
claim, or to certify
that no other such agreements were entered into between the parties,"
citing Biddy v.
Alyeska Pipeline Service Co., 95-TSC-7 (ARB Dec. 3, 1996).
The ALJ's recommended decision indicates that the settlement agreement relates
only to the
amount of Complainant's attorneys' fee application. James v. Ketchikan
Pulp Co.,
94-WPC-4 (ALJ Dec. 13, 1996).
The ARB's order is a departure from the approach in Biddle v. United States
Dept. of
the Army, 93-WPC-15 (Sec'y Mar. 29, 1995), adopting (ALJ May 6,
1994), a
FWPCA case in which the parties settled, but the matter was dismissed pursuant
to Fed. R. Civ.
P. 41(a)(1)(ii) based on a stipulated withdrawal without a review of the
settlement by the ALJ or
the Secretary. Rule 41(a)(1)(ii) was used in Biddlebased on the
reasoning that the
statutory language of the FWPCA, unlike the CAA or the ERA, does not make the
Secretary a
signatory to the settlement.
SETTLEMENT; DOLLAR AMOUNT MUST BE DISCLOSED TO DEPARTMENT;
AMOUNT OF ATTORNEY FEES AGREED TO NEED NOT BE REVIEWED UNLESS A
DISPUTE ARISES ABOUT THE APPROPRIATENESS OF THE AMOUNT
[N/E Digest XVII C 3]
The Board, ordering a joint response from the parties in the
cases, stated that it must know the amount Complainant will
receive in order to determine if the settlement agreement is
fair, adequate and reasonable. The Board stated in each order
that: "This amount affects not only the Complainant's
individual interest, but impacts on the public interest as well,
because if the amount is not fair, adequate and reasonable, other
employees may be discouraged from reporting safety
violations." Citing Plumlee v. Alyeska Pipeline Service
Co., 92-TSC-7 (Sec'y Aug. 6, 1993).
In Klock and Biddy, the record
also failed to specify the amount of attorney's fees to be paid.
The Board stated in those orders that "[a]s long as the
parties are in agreement as to the amount of the attorney's fees
to be paid, it is not necessary for the Secretary to review the
amount with the specificity usually required by the lodestar
method. Hensley v. Eckerhart, 461 U.S. 424 (1983). If a
dispute arises between the parties with regard to the
appropriateness of the amount of attorney's fees, a subsequent
order requiring an itemization of such fees may be
necessary."
SETTLEMENT MUST BE PRESENTED TO DEPARTMENT FOR APPROVAL
[N/E Digest XVII C 3]
[STAA Digest X A 3]
In Faust v. Chemical
Leaman Tank Lines, Inc., 92-SWD-2 and 93-STA-15 (ARB
June 13, 1996), the Secretary issued a remand order to the ALJ
for a recommended order on damages. Respondent filed a request
that the remand order be vacated because the parties had settled
a couple months prior to issuance of the remand order. This was
the first notice DOL had of the settlement. The Board declined
to vacate the remand order, noting that until the settlement was
approved it was not valid. The Board directed the ALJ to
consider the proposed settlement, "or if either party so
desires, for issuance of a recommended order on damages
consistent with the [remand order]".
SETTLEMENT; CAA MAY BE VOLUNTARILY DISMISSED WITHOUT REVIEW
OF UNDERLYING SETTLEMENT
[N/E Digest XVII C 3]
In Spears v. Envirite Corp., 95-CAA-17 (Sec'y
Apr. 15, 1996), the Complainant notified the ALJ prior to the
hearing that the matter had been settled and should be removed
from the docket. The ALJ properly construed the notification as
a notice of voluntary dismissal and issued a order recommending
dismissal without prejudice.
XVII C 3 Document referenced in agreement must be submitted
to Secretary for review
In Elliot v. Enercon, Services, Inc., 92-ERA-47
(Sec'y June 28, 1993), the parties submitted a settlement
agreement that referred to a memorandum that was not contained in
the administrative record. The Secretary ordered that the
memorandum be submitted, and the parties complied. Complainant
expressed concern over the memorandum during settlement
negotiations, i.e., Respondent "refused to incorporate the
terms of the memorandum within the agreement text or make the
memo more binding." Complainant also expressed concern that
he cannot now work at a particular nuclear power plant due to the
terms of the settlement.
The Secretary found that Complainant's concerns over the effect
of the memorandum incorporated into the settlement were not
persuasive because the memorandum was expressly referenced and
accordingly was a binding term of the agreement, and because the
record contained no showing of coercion or other impropriety that
would justify renunciation of the settlement agreement.
In a footnote, the Secretary stated:
I note that the Secretary has considered the issue of
whether one party may disavow a settlement before the
Secretary has reviewed it, specifically addressing the claim
of lack of consent and attorney coercion. Macktal v.
Brown & Root, Case No. 86-ERA-23, Sec. Order
Rejecting in Part and Approving in Part Settlement Between
the parties and Dismissing Case, Nov. 14, 1989, slip op. at
4-10. The Secretary's disposition on that issue was
expressly upheld. Macktal v. Secretary of Labor, 923
F.2d 1150, 1157 (5th Cir. 1991). The record here similarly
contains no showing of coercion or other impropriety that
would justify renunciation of the settlement agreement.
SeegenerallySan Joo Kim v. The Trustees
of the University of Pennsylvania, Case Nos. 91-ERA-45
and 92-ERA-8, Final Ord. Approving Settlement Agreement and
Dismissing Cases, June 17, 1992, slip op. at 3-4.
Where a party settles prior to hearing, 29 C.F.R. § 18.39(b)
only operates to permit dismissal of the request for a hearing.
Thus, the settlement should be handled under 29 C.F.R. §
18.9, which provides for the dismissal of the complaint based
upon a consent order or settlement. Poulos v. Ambassador
Fuel Oil Co., Inc., 86-CAA-1 (Sec'y Nov. 2, 1987), slip
op. at n.1.
[Nuclear & Environmental Digest XVII D 1]
SETTLEMENT; LACK OF ORDER TO SHOW CAUSE PRIOR TO DISMISSAL
In Balog v. Med-Safe Systems,
Inc., ARB No. 99-034, ALJ No. 1995-TSC-9 (ARB Sept. 13, 2000), Complainant
urged the ARB to find that the ALJ's approval of a settlement agreement was procedurally flawed
because he did not issue an order to show cause as required by the regulation at 29 C.F.R.
§ 24.6(e)(4)(ii) (1996), prior to dismissing the complaint. The ARB found that
Complainant's argument elevated form over substance, holding that "[w]hen both parties
are before the ALJ and jointly request dismissal an order to show cause is superfluous."
XVII D 1 Rule 41(a)(1) not applicable if withdrawal is based
on settlement
In Milewski v. Kansas Gas and Electric Co., 85-ERA-
21 (Sec'y Jan. 15, 1988) (order), the Secretary noted that a
joint motion for dismissal with prejudice was premised on 29
C.F.R. § 18.39(b) which permits dismissal upon abandonment
or settlement, and that it view of the fact that the preliminary
findings were in favor of Complainant and Respondent requested
the hearing, it appeared that a settlement underlaid the joint
motion. If a settlement was involved, the Secretary stated that
it must be submitted for review, and ordered the parties to
explain the basis for the joint motion and if a settlement was
involved, submit a copy.
Respondent moved for reconsideration of this order and for
dismissal under Rule 41(a)(1), which Respondent viewed as an
unconditional right to a final order of dismissal.
Milewski v. Kansas Gas & Electric Co., 85-ERA-
21 (Sec'y Apr. 23, 1990) (order). Respondent also contended that
a section 29 C.F.R. § 24.6(a) review is only required
following an evidentiary hearing.
The Secretary held that although Rule 41(a) is generally
applicable to the voluntary withdrawal of ERA complaints, it is
not applicable where the parties request dismissal on the basis
of a settlement. In cases where the employer has filed a request
for hearing, as this Respondent did, Rule 41(a)(1)(ii) would be
the applicable rule. But where a settlement is involved, Rule
41(a)(1) is not applicable.
The Secretary also found that the ALJ's order of dismissal was
subject to review and issuance of a final order by the Secretary.
XVII D 1 Settlement of CERCLA complaint; Secretarial review
not required
In Lepore v. East Bay Municipal Utility District,
94-CER-3
(Sec'y Feb. 15, 1995), the Office of
Administrative Appeals issued a Notice of Case Closing, stating
that "[b]ecause CERCLA does not
contain language making the Secretary a party to settlements in
CERCLA cases, this action may be
dismissed by the filing of a stipulation of dismissal signed by
all parties who have appeared in the
action." Fed. R. Civ. P. 41(a)(1)(ii).
[Editor's note 1: The CAA, ERA, SDWA and TSCA
contain the "settlement
entered into by the Secretary" language. The CERCLA, SWDA
and FWPCA do not. See also
Biddle v. United States Dept. of the Army, 93-WPC-15 (ALJ May
6, 1994) in which the ALJ issued a
recommended order of dismissal based on Rule 41, even though she
had knowledge of settlement
negotiations, in a FWPCA case.]
[Editor's note 2: In other Part 24 dismissals based
on Rule 41, the Secretary issues a
final order. In Lepore, the notice of case closing
is similar to what OAA does with STAA
settlements. CERCLA is not presently listed as a Part 24 case,
which may explain the different
treatment. CERCLA is included in Part 24, however, under
proposed amendments to Part 24. See 59
Fed. Reg. 12506 (1994).]
XVII D 1 Rule 41(a)(1)(ii) not applicable if motion is
based on a settlement
Where the parties agreed to a voluntary dismissal pursuant to
Rule 41(a)(1)(ii) of the Federal Rules of Civil Procedure, and
the dismissal is based on a settlement, the ALJ should review the
terms of the settlement. The case should not be dismissed unless
the terms of the settlement are fair, adequate and reasonable.
In addition, where a dismissal is based on a fully executed
settlement agreement between the parties, it is not necessary to
employ Rule 41(a)(1)(ii) as the applicable statutes and case law
provide for the dismissal of a case by the Secretary upon
approval of the terms of such an agreement.
McGlynn v. Pulsair Inc., 93-CAA-2 (Sec'y June 28,
1993).
In Hager v. Noveon Hilton-Davis, Inc., ARB No. 05-145, ALJ No. 2004-WPC-4 (ARB Dec. 31, 2007), the parties notified the ARB that they had reached a private settlement and jointly sought dismissal of the complaint and the appeal. The ARB dismissed the complaint and appeal with prejudice under FRCP 41(a)(1)(ii), noting that unlike the whistleblower provisions of the CAA, SDWA, and TSCA, Secretarial approval of a settlement is not required under the the WPCA.
XVII. D. 2. Motion to withdraw based on
settlement does not void need for Secretary's review
In Bixby v. State of New Mexico, Office of the Commissioner
of Public Lands, 94-TSC-1 (Sec'y Aug. 16, 1994) (order to
submit settlement), the parties submitted a document entitled
"Stipulated Order of Dismissal," and the ALJ
recommended dismissal. The stipulated order, however, stated
that the parties "wish to settle their differences,"
and that Respondent is "willing to compensate"
Complainant.
The Secretary noted that the case may not be settled unless the
terms of the settlement have been reviewed and found to be fair,
adequate and reasonable by the Secretary. Thus, the Secretary
ordered the parties to submit a copy of the additional terms of
the settlement. The Secretary required the signature of all the
parties, including the Complainant individually, demonstrating
their informed consent to the agreement. If there are no
additional settlement terms, the parties could submit a
declaration to that effect pursuant to 28 U.S.C. § 1746.
[Nuclear and Environmental Digest XVII D 2] SETTLEMENT WHILE CASE ON APPEAL BEFORE THE ARB; IN WPCA CASES, DOL APPROVAL OF THE SETTLEMENT IS NOT REQUIRED
In Bertacchi v. City of Columbus - Div. of Sewerage & Drainage, ARB No. 05-155, ALJ No. 2003-WPC-11 (ARB Apr. 13, 2006), PDF while the appeal was pending before the ARB the parties reached a settlement. The ARB dismissed the appeal, noting that under the WPCA, there is no requirement that the Secretary of Labor approve a settlement. Thus, the appeal was dismissed pursuant to FRCP 41(a)(1)(ii).
[N/E Digest XVII D 2]
SUBMISSION OF SETTLEMENT AGREEMENT IN FWPCA CASES
In Dorsey v. Greenbriar County Public
Service
District #2, 96-WPC-3 (ARB Sept. 29, 1997), the ARB indicated that
where the
parties submit a letter to the ALJ stipulating resolution of their dispute and
requesting dismissal
of the complaint, Fed. R. Civ. P. 41(a)(1)(ii) is applied, and the complaint
is dismissed.
Although the ALJ required submission of the settlement, and reviewed it to
determine whether it
was fair, adequate and reasonable, Dorsey v.
Greenbriar County Public Service District #2, 96-WPC-3 (ALJ July
25, 1997),
there is no indication that the ARB did anything more than accept the
stipulation of dismissal.
In the April newsletter, a casenote reported that
in
James v. Ketchikan Pulp Co., 94-WPC-4 (ARB Mar. 11, 1997), the ARB
ordered the
parties to submit a copy of a settlement agreement to the ARB, so that it
could determine
whether the settlement agreement is fair, adequate and reasonable, in an
apparent departure from
the approach in Biddle v. United States
Dept. of the
Army, 93-WPC-15 (Sec'y Mar. 24, 1995), adopting, Biddle v. United States Dept. of the
Army,
93-WPC-15 (ALJ May 6, 1994), a FWPCA case in which the parties settled, but
the matter was
dismissed pursuant to Fed. R. Civ. P. 41(a)(1)(ii) based on a stipulated
withdrawal without a
review of the settlement by the ALJ or the Secretary. In the final order,
however, the ARB in
James v. Ketchikan Pulp Co., 94-WPC-4 (ARB July 23, 1997),
applied Fed.
R. Civ. P. 41(a)(1)(ii), apparently without review of the underlying
settlement.
Thus, based on Dorsey, and the final order in James, it appears
that the ALJ's
approach in Biddle is still correct.
[N/E Digest XVII D 2]
SUBMISSION OF SETTLEMENT AGREEMENT IN FWPCA CASES
In James v. Ketchikan Pulp Co., 94-WPC-4 (ARB Mar. 11, 1997),
the
ARB ordered the parties to submit a copy of a settlement agreement to the ARB,
so that it could
determine whether the settlement agreement is fair, adequate and reasonable.
The ARB also
ordered the parties to "provide the settlement documentation for any
other alleged claims
arising from the same factual circumstances forming the basis of the federal
claim, or to certify
that no other such agreements were entered into between the parties,"
citing Biddy v.
Alyeska Pipeline Service Co., 95-TSC-7 (ARB Dec. 3, 1996).
The ALJ's recommended decision indicates that the settlement agreement relates
only to the
amount of Complainant's attorneys' fee application. James v. Ketchikan
Pulp Co.,
94-WPC-4 (ALJ Dec. 13, 1996).
The ARB's order is a departure from the approach in Biddle v. United States
Dept. of
the Army, 93-WPC-15 (Sec'y Mar. 29, 1995), adopting (ALJ May 6,
1994), a
FWPCA case in which the parties settled, but the matter was dismissed pursuant
to Fed. R. Civ.
P. 41(a)(1)(ii) based on a stipulated withdrawal without a review of the
settlement by the ALJ or
the Secretary. Rule 41(a)(1)(ii) was used in Biddlebased on the
reasoning that the
statutory language of the FWPCA, unlike the CAA or the ERA, does not make the
Secretary a
signatory to the settlement.
XVII D 2 Rule 41 dismissal appropriate if Complainant
certifies that there was
no underlying settlement
In Maternowski v. I.E.S. Industries, Inc.,
95-ERA-22 (Sec'y May 31, 1995), dismissal
under Fed. R. Civ. P. 41 was appropriate where, prior to the
hearing, the Complainant moved to
dismiss with prejudice, stating that the motion was not made
pursuant to a settlement, and that there
was not and would not be a settlement of the complaint.
XVII D 2 Underlying settlement of CAA case must be
reviewed
It is error to dismiss a CAA case without reviewing an underlying
settlement agreement to determine
whether it is fair adequate and reasonable. Darr v.
Precise Hard Chrome, 95-CAA-6
(Sec'y May 9, 1995).
XVII D 2 Stipulated dismissal
In Bradish v. The Detroit Edison Co., 94-ERA-20
(Sec'y Aug. 8, 1994), the ALJ recommended that the complaint be
withdrawn and that the initial determination of the Wage and Hour
Administration become final based on Complainant's request for
withdrawal and Respondent's statement of no opposition. The
Secretary found it well established that in cases arising under
the ERA, requests for withdrawal of the complaint are treated as
requests for voluntary dismissal under Rule 41 of the Federal
Rules of Civil Procedure, and here, where the Respondent concurs
in the Complainant's request, the Secretary has applied Rule
41(a)(1)(ii).
XVII D 2 Order to submit settlement agreement
In McQuay v. The Waldinger Corp., 85-ERA-33 (Sec'y
Sept. 29, 1989), the parties submitted a stipulated withdrawal
and asked for a Fed. R. Civ. P. 41(a)(1)(ii) dismissal.
The Secretary stated that "in these circumstances, where a
case has proceeded to a hearing and a decision has been rendered
by the ALJ, the facts indicate that the matter has been settled,
rather than simply withdrawn." Thus, the Secretary refused
to dismiss the case if the withdrawal was based on a settlement
until after the agreement was submitted for review and approval,
and ordered the parties either to submit the signed agreement or,
if the withdrawal was not a result of a settlement, a
declaration to that effect pursuant to 29 U.S.C. § 1746.
XVII D 2 Order to submit settlement agreement
In Ryan v. Niagara Mohawk Power Corp., 85-ERA-24
(Sec'y Aug. 9, 1989) (order), the Secretary found that it
appeared that Complainant's withdrawal may have been based on a
settlement agreement, because in two other cases involving the
same parties, Respondent informed the ALJ that a settlement had
been reached in that "and the other actions pending before
the Secretary of Labor." Thus, the parties were ordered to
explain the basis for Complainant's withdrawal and if the
withdrawal was based on agreement, a copy of that agreement
should be submitted.
XVII D 2 Settlement agreement must be reviewed
In Gillilan v. Tennessee Valley Authority, 89-ERA-
40 (Sec'y Apr. 12, 1994), the ALJ had recommended dismissal under
Fed. R. Civ. P. 41(a)(1)(ii), pursuant to the parties' request.
The Secretary, however, found indications that the request for
dismissal may have been based on a settlement agreement, and
ordered the parties to submit the settlement agreement for the
Secretary's approval, if there was an underlying settlement. The
parties filed a conciliation agreement.
XVII. D. 2. Motion to withdraw based on settlement does not
void need for Secretary's review
In Bixby v. State of New Mexico, Office of the Commissioner
of Public Lands, 94-TSC-1 (Sec'y Aug. 16, 1994) (order to
submit settlement), the parties submitted a document entitled
"Stipulated Order of Dismissal," and the ALJ
recommended dismissal. The stipulated order, however, stated
that the parties "wish to settle their differences,"
and that Respondent is "willing to compensate"
Complainant.
The Secretary noted that the case may not be settled unless the
terms of the settlement have been reviewed and found to be fair,
adequate and reasonable by the Secretary. Thus, the Secretary
ordered the parties to submit a copy of the additional terms of
the settlement. The Secretary required the signature of all the
parties, including the Complainant individually, demonstrating
their informed consent to the agreement. If there are no
additional settlement terms, the parties could submit a
declaration to that effect pursuant to 28 U.S.C. § 1746.
XVII D 2 Motion to withdraw based on settlement does not void
need for Secretarial review
Where the parties agreed to a voluntary dismissal pursuant to
Rule 41(a)(1)(ii) of the Federal Rules of Civil Procedure, and
the dismissal is based on a settlement, the ALJ should review the
terms of the settlement. The case should not be dismissed unless
the terms of the settlement are fair, adequate and reasonable.
In addition, where a dismissal is based on a fully executed
settlement agreement between the parties, it is not necessary to
employ Rule 41(a)(1)(ii) as the applicable statutes and case law
provide for the dismissal of a case by the Secretary upon
approval of the terms of such an agreement.
McGlynn v. Pulsair Inc., 93-CAA-2 (Sec'y June 28,
1993).
XVII D 2 Stipulated withdrawal of FWPCA complaints
based on settlement
may be dismissed under Rule 41(a)(1)(ii)
In Biddle v. United States Dept. of the Army,
93-WPC-15 (ALJ May 6, 1994), the ALJ
recommended entry of an order of dismissal pursuant to Rule
41(a)(1)(ii), even though a settlement
almost certainly prompted the parties' stipulation of dismissal.
The ALJ distinguished decisions of the
Secretary indicating that a Rule 41 dismissal is not applicable
where a settlement underlies a stipulation
of dismissal in ERA and CAA cases. Hoffman v. Fuel Economy
Contracting, 87-ERA-33 (Sec'y
Aug. 4, 1989); McGlynn v. Pulsair Inc., 93-CAA-2 (Sec'y
June 28, 1993). The ALJ's distinction
was that the ERA and CAA included language that whistleblower
settlements are "entered
into" by the Secretary; such cases cannot be dismissed
unless the Secretary finds that the
settlement is fair, adequate and reasonable. The FWPCA, however,
which was the underlying statute in
Biddle, does not contain the "entered
into" language. Thus, the ALJ
reasoned that Rule 41(a)(1)(ii) applied, and the matter should be
dismissed without leave of the court.
In his Final Order of Dismissal, the Secretary approved the use
of Rule 41(a)(1)(ii) to dismiss the
complaint, stating the Rule was applicable in these
circumstances. Biddle v. United States Dept.
of the Army, 93-WPC-15 (Sec'y Mar. 29, 1995).
[Editor's note: The ALJ was quite explicit that she knew
that settlement negotiations had
immediately preceded the entry of a stipulated dismissal -- in
fact, the ALJ had commenced the
hearing, and permitted a continuance for the purpose of allowing
the parties to discuss settlement. The
Secretary cited in support of his finding that Rule 41(a)(1)(ii)
may be used to approve a stipulated
dismissal several ERA, CAA and TSC decisions. In those
decisions, however, either a settlement did
not underlie the request to withdraw, or the existence of an
underlying settlement is not addressed in
the ALJ or Secretary's decisions.
Rossel v. Kings Mountain Hospital, Inc., 94-CAA-14
(Sec'y Jan. 9, 1995) (no discussion
of reason for stipulated dismissal)
Bauer v. Power Resources, Inc., 94-ERA-10 (Se'cy June
24, 1994) (Complainant
decided to pursue actions in other forums)
Everhart v. Tecumseh Products Co., 91-TSC-4 (Sec'y
Aug. 30, 1991) (affirmative finding
that settlement did not underlie stipulated dismissal)
Keelan v. Consolidated Edison Com. of New York, Inc.,
88-CAA-3 (Sec'y Sept. 29, 1989)
(Complainant recognized "procedural infirmities with
his case)
Nolder v. Raymond Kaiser Engineers, Inc., 84-ERA-5
(Sec'y June 28, 1985)
(Complainant wanted relief from pursuing both federal and
state claims).
The Secretary ignored the decisions cited and distinguished by
the ALJ indicating that if a settlement
motivates the request for dismissal of an ERA or CAA complaint,
Rule 41 is not applicable.
It seems unlikely that the Secretary would change his position
about the inapplicability of Rule 41 to
ERA and CAA cases in which a settlement underlies a stipulated
dismissal without a fuller exposition. It
also seems unusual that such a significant distinction in the
treatment of a FWPCA settlement would
pass the Secretary's office in such a offhand way -- the bottom
line in Biddle is that
FWPCA settlements do not have to be approved by the Department of
Labor, while ERA and CAA
settlements do. Rather than to attempt to read too much into the
choice of cases cited by the Secretary
in Biddle, it may simply be that the Office of
Administrative Appeals did not fully
appreciate the importance of the issue raised by the ALJ.
In the earlier treatment of the ALJ's decision in this Digest, an
Editor's note pointed out that the CAA,
ERA, SDWA and TSCA contain the "entered into" language,
while CERCLA, SWDA and
FWPCA do not. Since the Secretary approved the stipulated
dismissal in Biddle, it appears that
CERCLA, SWDA and FWPCA settlements may now be disposed of based
on stipulated dismissal, and
the parties are not required to submit settlements of these case
types to the Department for approval.]
XVII.D.2. Consequences of refusal to submit agreement
In Ruud v. Westinghouse Hanford Co., 88-ERA-33
(Sec'y June 7, 1994), the ALJ issued an Order of Dismissal with
Prejudice. The terms of the settlment were not included in the
record, and the Secretary ordered the parties to submit the terms
of settlement for review. Thereafter, Respondent expressly
declined to disclose the settlement terms, and no response
whatever was received from Complainant. The Secretary held that
because he cannot approve the settlement without reviewing its
terms, he rejected the ALJ's recommended order of dismissal and
remanded the case for a hearing.
In Fuchko v. Georgia Power Co., 89-ERA-9 and 10
(June 13, 1994), the Secretary noted that he had issued an order
on February 22, 1994 in this case denying the parties' motion for
remand to the Administrative Law Judge (ALJ) for the purpose of
reviewing in camera a settlement entered by the parties,
returning the settlement to the parties and submitting a
recommended decision to the Secretary. Since it appeared the
parties would not comply with the Secretary's Order to Submit
Settlement issued on March 23, 1989, the February 22 order
remanded this case to the ALJ for further proceedings.
Subsequently, however, the parties submitted to the Secretary a
redacted copy of their settlement.
Both the amount of money paid to Complainants and the amount paid
to Complainants' attorneys for attorneys fees were redacted from
the copy of the settlement submitted with the joint motion. The
Secretary disagreed with the parties that the exact amount of
money paid is not a matter of public concern, noting that he had
held that unredacted copies of settlement agreements must be
reviewed because:
[t]he particular terms of the agreement[], such as
the amount of money to be received by the Complainant,
affect not only the individual whistleblower but impact
the public interest as well. Where such terms are not
fair, adequate and reasonable, other employees may be
discouraged from reporting safety
violations."
Plumlee v. Alyeska Pipeline Service Co., 92-TSC-7 (Sec'y
Aug. 6, 1993), slip op. at 5. Moreover, a party cannot enter
into an agreement all the terms of which he is not aware. Thus,
the Secretary concluded that the amount of attorneys' fees may
not be redacted from the settlement. The Secretary decided to
retain jurisdiction of this matter for thirty days to give the
parties an opportunity to submit an unredacted copy of the
settlement.
In Fuchko v. Georgia Power Co., 89-ERA-9 and 10
(Sec'y Sept. 19, 1994), the Secretary remanded the matter for a
hearing after the parties failed to provide him with an
unredacted copy of their settlement agreement. The Secretary
added, however, that "[t]he parties may at any time submit
an unredacted copy of their agreement to me for review."
Later it was determined that the June 13, 1994 order was served
using out-of-date addresses; the parties submitted an unredacted
copy for review, and the Secretary approved it. Fuchko v.
Georgia Power Co., 89-ERA-9 and 10 (Sec'y Oct. 12, 1994).
[N/E Digest XVII E 1]
SETTLEMENTS; NO ALJ OR ARB REVIEW OF AGREEMENTS REACHED PRIOR
TO COMPLETION OF INVESTIGATORY STAGE
In discussing whether to grant an interlocutory appeal relating to the alleged
breach of a
settlement agreement that had been reached prior to completion of a Wage and
Hour
investigation, the ARB in Beliveau v. Naval Undersea Warfare
Center,
97-SDW-1 and 4 (ARB Aug. 14, 1997) wrote:
Complainant also argues that the Board should now assume
jurisdiction
over this matter because the Board, acting for the Secretary of Labor,
"is
specifically required under several of the environmental statutes
referenced in
[Complainant's] 1995 complaint to be a party to any settlement resulting
in the dismissal
of a complainant." ... It is true that the Secretary and the Board
are specifically
charged with being a party to settlement agreements under certain of the
Acts. However,
this authority is exercised only under the circumstances where a
settlement is reached
between the parties after an appeal of a Department of Labor
investigative agency (Wage
and Hour or OSHA) finding to the Office of Administrative Law Judges, or
where a
settlement is entered after issuance of an ALJ's recommended order and
such matter is
before the Board for review. Complainant has cited no authority to
support the
proposition that either an ALJ or this Board may reopen and void a
settlement agreement
reached during the administrative investigation stage of a whistleblower
complaint.
Slip op. at 3.
[N/E Digest XVII E 1]
SETTLEMENT; REQUIREMENT OF SUBMISSION TO DOL
In McDowell v. Doyon Drilling Services,
Ltd., 96-TSC-8 (ARB May 19, 1997), a case arising under the
employee
protection provisions of the CAA, SWDA, TSCA and FWPCA, the parties submitted
a
Memorandum of Settlement seeking approval of the settlement and dismissal of
the complaint.
The settlement had not been submitted to the ALJ, and the ARB issued an order
instructing the
parties to submit their settlement for review. The parties declined, claiming
that submission of
the settlement agreement would constitute a de facto waiver of the
confidentiality
provision of the agreement.
The Board held that it must review the settlement to determine whether the
terms
are a fair, adequate and reasonable settlement of the complaint -- that
"[a]pproval by
the Secretary, or her designee, the Board, is a necessary component of an
enforceable
settlement. We simply cannot approve a settlement that we have never
seen." The
ARB therefore remanded the matter to the ALJ to provide the parties an
opportunity to
submit its settlement for approval.
[Editor's note: The parties had originally submitted to the ALJ an
"Unopposed Motion, Memorandum and Order for Dismissal of Complaint for
Cause," arguing that submission of the settlement was not necessary as
there was no
question of Complainant being "gagged" or in any way prevented from
furnishing information to government agencies or authorities regarding
environmental
concerns raised in the complaint. The parties argued that "[t]he private
settlement
agreement between [Complainant] and [Respondent] requires confidentiality as
to the terms
and conditions of the settlement only, not as to any other matters such as the
specifics of
the environmental concerns which precipitated [Complainant's] Whistleblower
complaint." In his Recommended Order recommending dismissal, the ALJ
implied
that a complainant could just not show up for the hearing, and that the matter
would then
be dismissed following issuance of an order to show cause under 29 C.F.R.
§
24.5(e)(4). See McDowell v. Doyon Drilling
Services, Ltd., 96-TSC-8 (ALJ Jan. 13, 1997).
On remand, the parties submitted a settlement and asked for treatment of the
settlement as confidential commercial information pursuant to 29 C.F.R. §
70.26(b).
See McDowell v. Doyon Drilling Services, Ltd., 96-TSC-8 (ALJ June 18,
1997)]
SETTLEMENT; WITHDRAWAL IN APPARENT ATTEMPT TO AVOID DOL
REVIEW OF SETTLEMENT
[N/E Digest XVII E 1]
In Wampler v. Pullman-Higgins
Co., 84-ERA-13 (ARB Aug. 16, 1996)(Notice), the Secretary had
disapproved a
settlement and remanded the case. On remand, just prior to hearing,
Complainant withdrew his
complaint and the ALJ recommended approval of the withdrawal. The Board,
stating that the
outcome of any particular ERA case affects not only the parties, but the
public as well, requested
the Associate Solicitor for the Division of Fair Labor Standards to review the
matter. Although it
is not explicitly stated, Board is apparently concerned that the parties
settled and are trying to
avoid DOL review.
SETTLEMENT AGREEMENT; EFFECT OF NONDISCLOSURE PROVISION ON
ENFORCEABILITY
[N/E Digest XVII E 1]
In Ruud v. Westinghouse Hanford Co., 88-ERA-33
(ALJ Mar. 15, 1996), the Complainant took the position that the
settlement agreement was void because it contained a provision
that the terms of the settlement should remain "strictly
confidential and shall not be disclosed to any other
person." The Complainant's theory was that this provision
precluded submission of the settlement to the Secretary of Labor,
and that because submission to the Secretary is a precondition to
the validity of the agreement, the settlement self destructed.
The ALJ, however, concluded that "because disclosure to and
approval by the Secretary are necessary elements of the
settlement process, the agreement should not be read to prohibit
disclosure to the Secretary. To do otherwise would be to
attribute to the parties ignorance of the law or an intent to
destroy the settlement, an absurd result." Slip op. at 78
(footnote omitted).
XVII E 1 Secretary must review settlement; will not permit
ALJ to view it in camera and then return it to the
parties; since no fact finding, ALJ's recommendation
not necessary
Fuchko v. Georgia Power Co., 89-ERA-9 and 10 (Sec'y
Feb. 22, 1994).
The ALJ recommended dismissal based on a settlement. The
Secretary ordered submission of the settlement agreement. The
parties moved for a remand to the ALJ and for a protective order,
proposing that on remand the ALJ would review the settlement
in camera, submit a recommended decision to the Secretary,
and return the agreement to the parties. Under the proposal,
under documents in the record relating to the settlement would be
covered by the requested protective order and access to them
would be restricted.
The Secretary denied the motion, holding that since no fact
finding was necessary, a remand to the ALJ was not necessary, and
that it would be improper for the ALJ to review the settlement
and return it to the parties. See 29 C.F.R. §§
24.5(e)(2) and 24.6(a).
The Secretary also stated that "it is well settled that all
documents in the record in an ERA case are government records
subject to disclosure under the Freedom of Information Act, 5
U.S.C. § 552(b)(1988), and that motions to seal the record
or restrict access to any part of it will be denied. Corder
v. Bechtel Energy Corp. Case No. 88-ERA-9, Secy. Order Feb.
9, 1994, slip op. at 4-5; DeBose v. Carolina Power and Light
Co., Case No. 92-ERA-14, Sec'y. Ord. Feb. 7, 1994, slip op.
at 2-3 and cases discussed therein."
Finally, the Secretary held that he could not "accept the
ALJ's recommendation without reviewing a copy of the settlement
on which it was based. . . ."
XVII. E. 1. Secretarial review required
In McCoy v. Utah Power, 94-CAA-1 and 6 (Sec'y Aug.
1, 1994), the parties submitted a joint memorandum of settlement,
and the ALJ issued a recommended order of dismissal without
reviewing the settlement agreement or including it in the record.
The Secretary ordered the parties to submit the settlement for
review. Once the parties submitted the agreement, it became
subject to FOIA. One paragraph of the agreement provided that
the parties shall keep the terms of the settlement confidential,
with certain specified exceptions.
The parties designated certain terms in the settlement and an
attachment as confidential commercial information pursuant to 29
C.F.R. § 70.26(b).
The Secretary noted that a FOIA request for the settlement had
been received before the settlement agreement was received from
the parties. That request was denied. The Secretary stated that
if a subsequent FOIA request is received for the settlement or
attachments, the procedure in 29 C.F.R. § 70.26 will be
followed.
XVII. E. 1. Secretarial review required
In McCoy v. Utah Power, 94-CAA-1 and 6 (Sec'y Aug.
1, 1994), the parties submitted a joint memorandum of settlement,
and the ALJ issued a recommended order of dismissal without
reviewing the settlement agreement or including it in the record.
The Secretary ordered the parties to submit the settlement for
review. Once the parties submitted the agreement, it became
subject to FOIA. One paragraph of the agreement provided that
the parties shall keep the terms of the settlement confidential,
with certain specified exceptions.
The parties designated certain terms in the settlement and an
attachment as confidential commercial information pursuant to 29
C.F.R. § 70.26(b).
The Secretary noted that a FOIA request for the settlement had
been received before the settlement agreement was received from
the parties. That request was denied. The Secretary stated that
if a subsequent FOIA request is received for the settlement or
attachments, the procedure in 29 C.F.R. § 70.26 will be
followed.
XVII E 1 Settlement may not be viewed in camera and then
withdrawn
Corder v. Bechtel Energy Corp., 88-ERA-9 (Sec'y
Feb. 9, 1994).
The ALJ reviewed a settlement and then permitted it to be
"withdrawn" and retained by counsel for Respondent. A
copy of the settlement was not made a part of the record before
the ALJ, and the ALJ issued an order sealing the transcript
"[i]n order to honor the request of the parties that the
terms of the settlement remain confidential."
The Secretary ordered the parties to submit the settlement,
noting that "a case under the ERA cannot be dismissed on the
basis of a settlement unless the settlement has been reviewed to
determine whether it is fair, adequate and reasonable, and that
there was a serious question whether an ALJ or the Secretary has
the authority under the ERA to seal the transcript of a
hearing."
Complainant wrote the Secretary stating that he was forced to
sign the agreement due to pressure from his attorney, and
requesting that the transcript and the settlement be made public.
He did not renounce the settlement. Respondent filed a brief and
a "sealed" copy of the release and settlement and the
transcript.
The Secretary stated that he had held in a number of cases with
respect to confidentiality provisions in settlement agreements
that the FOIA request disclosure unless the requested documents
are exempt. He then held that "[t]he hearing record in this
case, including the transcript and settlement agreement,
therefore, are agency records which must be made available for
public inspection and copying under the FOIA."
The Secretary noted that if a FOIA request was filed, the agency
would have to determine if an exemption is applicable, but
declined to examine whether any exemption are applicable since no
FOIA request had been made.
The Secretary, therefore, reversed the ALJ's order sealing the
transcript.
Because the confidentiality provisions of the agreement
restricted Complainant's ability to provide information to the
DOL and the NRC, the agreement was rejected and the matter
remanded to the ALJ for further proceedings.
[Editor's note: The Secretary did not directly address
Respondent's arguments that the ALJ has the authority to seal
under 29 C.F.R. § 18.56; that disclosure would violate 18
U.S.C. § 1905, which prohibits disclosure by government
employees of trade secrets and confidential statistical
information]
XVII E 1 Authority review FWPCA settlement
The Secretary has held in ERA and CAA cases that Fed. R. Civ. P.
41 is not to be applied when a settlement agreement underlies a
request for a voluntary or stipulated dismissal. Hoffman v.
Fuel Economy Contracting, 87-ERA-33 (Sec'y Aug. 4, 1989);
McGlynn v. Pulsair Inc., 93-CAA-2 (Sec'y June 28, 1993).
These decisions, however, are grounded in statutory language that
requires the Secretary to enter into any settlement agreement
before a proceeding may be terminated because of that agreement.
See 42 U.S.C. §§ 5851, 7622.
In Biddle v. United States Dept. of the Army, 93-
WPC-15 (ALJ May 6, 1994), the ALJ issued a Recommended Order of
Dismissal based on Rule 41 in a Federal Water Pollution Control
Act case, even though she had knowledge that settlement
negotiations were ongoing shortly before the request for a
stipulated dismissal. Her decision is based on the fact that the
FWPCA does not contain the language "settlement entered into
by the Secretary" that is found in the ERA and the CAA.
[Editor's note: The CAA, ERA, SDWA, and TSCA contain the
"settlement entered into by the Secretary" language.
The CERCLA, SWDA and FWPCA do not.]
XVII E 1 Settlement agreement must be submitted for review;
once submitted it is part of the public record
Richter v. Baldwin Associates, 84-ERA-9 to 12
(Sec'y Feb. 22, 1994).
The ALJ granted dismissal with prejudice based on his review and
approval of a settlement stipulation. The settlement stipulation
was not made a part of the record because "the parties in
good faith have agreed that such documents remain
confidential."
The Secretary issued an Order to Submit Settlement Agreement, to
which the parties complied. Respondent, however, requested that
the settlement stipulation not be made a part of the record since
a term of the agreement was that it be kept confidential.
Alternatively, Respondent requested that the settlement
stipulation be placed under seal.
The Secretary held that the Secretary has the authority and
responsibility to review any ERA settlement. He also held that
once the settlement agreement is submitted for review, it becomes
part of the record in the case.
The Secretary pointed out that he has concluded that settlement
agreements, being a part of the record, are subject to FOIA,
which requires agencies to disclose requested documents unless
they are exempt from disclosure. Accordingly, he rejected
Respondent's request that the settlement be placed under
seal.
XVII E 1 Interlocutory appeal on sealing fact of
settlement
In Porter v. Brown & Root, Inc., 91-ERA-4
(Sec'y Sept. 29, 1993), the Secretary issued an order to show
cause why the ALJ's order should not be reviewed as the
Recommended Decision and Order in this case. The parties had
settled the case, but conditioned the settlement on sealing
portions of the record.
According to the Secretary, the ALJ had issued an order in which
he sealed the terms of a settlement agreement, declined to seal
portions of the record which indicated the existence of a
settlement agreement, and granted the parties's request that the
issue of sealing portions of the record be certified for
interlocutory appeal to the Secretary. The Secretary noted that
the ALJ issued a separate Order Granting an Interlocutory Appeal,
and forwarded under seal all documents indicating the existence
of a settlement including the aforementioned order even though he
recommending sealing only the agreement itself and denying the
request to seal any documents mentioning the settlement.
The Secretary noted the absence of regulatory provisions under
either 29 C.F.R. Parts 18 or 24 governing interlocutory appeals
to the Secretary, but stated that an ALJ may certify a
controlling question of law may to the Secretary pursuant to 28
U.S.C. § 1292(b). Nevertheless, the Secretary declined to
exercise any discretion he had to entertain such an appeal, not
wishing to set a new precedent. The Complainant had filed a
motion to remand because the ALJ had not yet provided a
recommended decision. The Secretary proposed, in the interest of
administrative efficiency, to treat the ALJ's first order as the
Recommended Decision and Order in this case unless the parties
show cause why he should not.
Wampler v. Pullman-Higgins Co., 84-ERA-13 (Sec'y
Feb. 14, 1994).
Before the Secretary, Complainant contended that his withdrawal
of the complaint was based on a settlement agreement that should
be declared null and void because of an unenforceable provision
restricting Complainant's communication with the NRC. The ALJ
had dismissed with prejudice under 29 C.F.R. § 24.5(e)(4)
(dismissal for cause).
The Secretary issued an order to submit settlement agreement, and
invited the parties to state whether the confidentiality
provision could be severed.
In regard to a confidentiality provision the Secretary noted that
the parties' submission become part of the record, and therefore
subject to FOIA, which requires disclosure unless the records are
exempt under the Act.
The challenged provision provided: "Neither party will
discuss or disclose the facts of this case except if ordered to
do so by court, tribunal or agency of competent
jurisdiction." The Secretary held that the provision was
void to the extent that it could be construed as restricting
Complainant from voluntarily communicating to federal and state
agencies.
Respondent requested that the provision be stricken to the extent
that it could be construed as limiting Complainant's ability to
provide information to government agencies, but urged that the
remainder of the agreement be upheld. Complainant did not
consent.
The Secretary cited Macktal v. Secretary of Labor,
923 F.2d 1150 (5th Cir. 1991), in which the court held that the
Secretary must consent or not consent to the terms of a proposed
settlement as written, and cannot sever a term and enforce the
remainder of the agreement, without the consent of both parties.
Thus, he rejected the settlement agreement and remanded to the
ALJ.
[Nuclear and Environmental Whistleblower Digest XVII E 2]
SETTLEMENT AGREEMENT; POTENTIAL FOR DISCLOSURE PURSUANT TO FOIA
In Doherty v. Hayward Tyler, Inc., ARB No. 04-001, ALJ No. 2001-ERA-43 (ARB May 28, 2004), the case settled while pending before the ARB. The parties requested by joint motion that the Board order that the terms of the agreement not be disclosed except as provided for in the agreement. The ARB, however, stated that parties' submissions, including a settlement agreement, "may become part of the record of the case and may be subject to the Freedom of Information Act... which requires federal agencies to make certain disclosures unless they are exempt from disclosure under the Act." Slip op. at 2 (citations omitted). Thus, the Board denied the joint motion.
[N/E Digest XVII E 2]
EXEMPTIONS FOUR AND SIX; DISCLOSURE OF TERMS OF SETTLEMENT
UNDER FOIA
In Frey v. U.S. Coast Guard Academy, 98-CER-1, 2 and 3, the parties reached a
settlement that was approved by the presiding ALJ. A local newspaper filed a FOIA request for
a copy of the settlement. Because the parties had designated the settlement as confidential
commercial information, predisclosure notification was provided. Respondent's response to the
notice implied that it was not was claiming disclosure of the settlement would cause substantial
competitive harm in any subsequent settlement negotiations, and did not identify what other
substantial competitive harm might result if the settlement was released. The Chief ALJ,
considering the absence of a statement of what interests were at stake under Exemption 4, and
noting authority disfavoring "sealing" of settlements, concluded that Exemption 4
was not shown to be applicable. The agreement, however, was not disclosed, at least on a
delayed basis, based on a balancing of the privacy and public interests at stake under Exemption
6. The Chief ALJ found that public employees have a privacy interest in settlements reached
with their employers. The FOIA requester has appealed this decision to the Office of the
Solicitor.
In a FOIA request relating to the settlement agreement in Harris v. Tennessee Valley
Authority, 97-ERA-26 and 50, the Chief ALJ found that Exemption 4 did apply, even
though TVA is a government instrumentality. Applying the three part test stated in Federal court
decisions, the Chief ALJ found that the information was "obtained from a person"
because the settlement came from both TVA and an employee seeking to protect her private
employment rights, that the settlement amount and terms were financial or commercial
information, and that -- applying the competitive harm analysis -- the information was
confidential in the sense that disclosure would place Respondent at a competitive disadvantage in
future settlement negotiations. Although the FOIA requester, a news organization, wrote a story
about this ruling, OALJ has not been informed of any formal appeal.
[N/E Digest XVII E 2]
SETTLEMENT JUDGE PROCEEDINGS; APPLICABILITY OF FOIA
A matter that was unclear under the settlement judge regulation at 29 C.F.R. § 18.9(e), was
whether
papers created by, or received by and retained by, an OALJ settlement judge are subject to the
Freedom of Information Act. The answer appears to lie in the Administrative Dispute Resolution
Act, 5 U.S.C. §§ 571-584. In 1996, Congress reenacted the
Administrative
Dispute Resolution Act of 1990 (the original act had a 1995 sunset date). The 1996
reenactment
deals directly with the issue of the application of FOIA to a federal government neutral, to wit:
"A dispute resolution communication which is between a neutral and a party and which
may not be disclosed under this section shall also be exempt from disclosure under section
552(b)(3)." 5 U.S.C. §
574(j). Section 552(b)(3) is FOIA exemption 3, which
exempts matters "specifically exempted from disclosure by statute."
[N/E Digest XVII E 2]
SETTLEMENT; REQUEST THAT SETTLEMENT BE SUBMITTED UNDER
SEAL
In McDowell v. Doyon Drilling Services, Ltd., 96-TSC-8 (ARB
May 19, 1997), the parties requested that it be allowed to submit its
settlement agreement
"under seal." The ARB denied this request, noting that the parties'
submissions in whistleblower cases under 29 C.F.R. Part 24 become part of the
record in
the case and that the Freedom of Information Act, 5 U.S.C. § 552 (1988),
requires
federal agencies to disclose requested records unless they are exempt from
disclosure under
that Act. The ARB noted the existence of DOL regulations that provide
specific
procedures for responding to FOIA requests, for appeals by requestors from
denials of
such requests, and for protecting the interests of submitters of confidential
commercial
information. See 29 C.F.R. Part 70.
[N/E Digest XVII E 2]
SETTLEMENT; ADEQUACY OF AFFIDAVIT OF RESPONDENT'S GENERAL
COUNSEL TO INVOKE RIGHT TO PREDISCLOSURE NOTIFICATION UNDER DOL
FOIA REGULATIONS
In Rigby v. Washington Public Power Supply System, 97-ERA-12
(ALJ Aug. 22, 1997), the ALJ found that the affidavit of Respondent's general
counsel that the
settlement agreement and its terms include nonpublic commercially sensitive
information that
would cause substantial competitive harm to Respondent if disclosed,
substantially complied
with the USDOL regulatory procedures for predisclosure notification at 29
C.F.R. §
70.26(b).
[N/E DIGEST XVII E 2]
SETTLEMENT; PREDISCLOSURE NOTIFICATION; DOL WILL NOT ACCEPT
BLANKET DESIGNATIONS OF ENTIRE RECORD AS CONFIDENTIAL COMMERCIAL
INFORMATION; PUBLICATION POLICY FAVORING NONDISCLOSURE OF
FINANCIAL TERMS
In Paine v. Saybolt, Inc., 97-CAA-4 (ARB July 22, 1997), the
parties
submitted a settlement agreement seeking approval of the settlement and
dismissal of the
complaint. The agreement contained a provision indicating that the record
shall be covered by a
protective order, and designating the contents of the record
"confidential commercial
information." The purpose of this provision was an attempt to shield the
entire record from
disclosure pursuant to the Freedom of Information Act. The Board rejected the
blanket
designation and refused to approve the settlement, finding that the intent of
the predisclosure
notification provision of DOL's FOIA regulations "is to protect specific
information which
the submitter in good faith claims could reasonably be expected to cause
[substantial
competitive] harm." The Board wrote: "Designating the entire
contents of the
record, some portions of which would not qualify for FOIA exemption under any
circumstances
(e.g., the hearing transcript and exhibits which are already public
records) does not
constitute a good faith designation."
The Board distinguished its approval of the settlement agreement in Seater
v. Southern
California Edison Co., 95-ERA-13 (ARB Mar. 27, 1997), on the ground that
the parties only
designated certain financial information regarding the settlement and not the
entire record. The
Board noted that the ALJ in Seater, had suggested that financial terms
of a settlement
should be set forth in the ALJ's recommended decision. The Board, however,
stated:
We recognize that publishing the financial terms of a settlement
may serve
the purpose of encouraging employees to engage in whistleblower
activities. However,
we also recognize that publishing the financial terms of settlements
would likely lead to
fewer settlements, perhaps more contentious litigation and potentially
have a chilling
effect on whistleblowing activities. Therefore, we decline to adopt the
ALJ's suggestion
in Seater.
[N/E Digest XVII E 2]
SETTLEMENT; CONFIDENTIALITY V. PUBLIC INTEREST
In Seater v. Southern California Edison Co., 95-ERA-13 (ALJ Mar.
11,
1997), the ALJ pointed out a conflict between the public policy that
whistleblower settlements
should be subject to public scrutiny -- seeBiddy v. Alyeska
Pipeline Service Co.,
95-TSC-7 (ARB Dec. 3, 1996) (importance of publication of the true dollar
amount of
whistleblower settlements for the benefit of the public and potential future
whistleblowers -- and
the parties' ability, by self-designation of settlement terms as confidential
commercial
information, to invoke FOIA procedures obligating the Department to provide
predisclosure
notification to the parties in the event of a FOIA request for the settlement
agreement. See
29 C.F.R. § 70.26(b). The ALJ suggested that the ARB address this
conflict,
suggesting that the dollar amount of a settlement should be published, or at
the very least the
submitter should be required to establish before the ALJ that the information
designated as
confidential commercial information is truly material that could cause
substantial competitive
harm if disclosed pursuant to FOIA.
In Seater v. Southern California Edison Co., 95-ERA-13 (ARB Mar.
27, 1997), however, the ARB declined the ALJ's suggestion sub silentio.
Rather, the
ARB employed the following standard boilerplate language in approving the
settlement:
The records in this case are agency records
which must be
made available
for public inspection and copying under the FOIA. In the event a request
for inspection
and copying of the record of this case is made by a member of the public,
that request
must be responded to as provided in the FOIA, If an exemption is
applicable to the
record in this case or any specific document in it, the Department of
Labor would
determine at the time a request is made whether to exercise its
discretion to claim the
exemption and withhold the document. If no exemption were applicable,
the document
would have to be disclosed. Since no FOIA request has been made, it
would be
premature to determine whether any of the exemptions in the FOIA would be
applicable
and whether the Department of Labor would exercise its authority to claim
such an
exemption and withhold the requested information. It would also be
inappropriate to
decide such questions in this proceeding.
Slip op. at 2.
SETTLEMENT; CONFIDENTIALITY; CHIEF ALJ'S OBLIGATION AS FOIA
DISCLOSURE OFFICER
[N/E Digest XVII E 2]
In Cianfrani v. Public Service Electric
&
Gas Co., 95-ERA-33, slip op. at 2 n.3 (ARB Sept. 19, 1996), the
parties requested
that certain information in their settlement agreement be treated as
confidential commercial
information pursuant to the DOL's FOIA regulation at 29 C.F.R. §
70.26(e)(predisclosure
notification procedure). After the ALJ denied a request by the parties to
issue a redacted
decision, the parties petitioned the Chief ALJ for intervention; the Chief ALJ
denied the request,
stating that he did not have the authority to intervene in a matter disposed
of by another ALJ.
Id., slip op. at 2 n.2; see also Cianfrani v.
Public Service Electric & Gas Co., 95-ERA-33 (ALJ Sept. 4,
1996)(memorandum)
The Board held that the ALJ compromised the parties' request pursuant to
section 70.26(e)
by his incorporation of the terms of the settlement in his recommended
decision and order. The
Board held that the Chief ALJ was correct that he could not intervene in a
matter disposed of by
another ALJ, but that the Chief ALJ "as the designated Disclosure Officer
pursuant to 29
C.F.R. § 70.2(c) and Appendix A to Part 70(b)(1), is to determine whether
such
information under his custody is exempt from disclosure under the provisions
of FOIA, pursuant
to § 552(b). Therefore, the Chief Administrative Law Judge should make
such provisions
as he deems appropriate to protect the confidentiality of the materials so
requested, until a
request is made pursuant to the pertinent regulations. The Federal recipients
indicated on the
ALJ's Recommended Decision Service Sheet are likewise requested to observe
restricted
handling in compliance with FOIA."
XVII E 2 FOIA; Predisclosure notification; adequacy of
notarized signature of
corporate officer in claiming exemption; rejection
of bright line rule
In Stephenson v. National Aeronautics & Space
Administration, 94-TSC-5
(Sec'y June 19, 1995), the Secretary approved a settlement in
which a corporate Respondent stated
that it considered information contained in the settlement
agreement to be "trade secrets and
commercial or financial information of a privileged or
confidential nature" under FOIA. 5 U.S.C.
§ 552(b)(4), and requested predisclosure notification under
the Department's regulations. 29
C.F.R. § 70.26.
The Secretary accepted the notarized signature of the corporate
Respondent's President claiming the
exemption as meeting the regulatory requirement that the
predisclosure notification request shall be
supported by a statement or certification by an officer or
authorized representative of the submitter that
the identified information in question is, in fact, confidential
commercial or financial information and has
not been disclosed to the public.
XVII E 2 Designation of settlement as confidential
commercial information will
not prevent disclosure if required under FOIA
In Saporito v. Houston Lighting & Power,
92-ERA-38 and 45 and 93-ERA-28
(Sec'y May 23, 1995), the Secretary noted in approving a
settlement agreement that
Although the parties have designated the documents in
this case as confidential
commercial information, the Freedom of Information Act
(FOIA), 5 U.S.C. § 552 (1988),
requires Federal agencies to disclose requested records
unless they are exempt from
disclosure under the Act.
Slip op. at 2-3 (footnote and citations omitted).
XVII E 2 Rejection of bright line rule that settlements
are never exempt under
FOIA
In Stephenson v. National Aeronautics & Space
Administration, 94-TSC-5
(Sec'y June 19, 1995), the Secretary approved a settlement in
which a corporate Respondent stated
that it considered information contained in the settlement
agreement to be "trade secrets and
commercial or financial information of a privileged or
confidential nature" under FOIA. 5 U.S.C.
§ 552(b)(4), and requested predisclosure notification under
the Department's regulations. 29
C.F.R. § 70.26.
The Wage and Hour Administrator proposed that the Secretary
establish a "bright line" rule
that settlement agreements in whistleblower cases are
never subject to exemption under the
FOIA and that "all terms of all settlement agreements
must be disclosed . . . ." Slip
op. at 3, quoting Administrator's brief at 2-6 (emphasis added by
Secretary).
The Secretary rejected a bright line rule, noting that, although
settlements are part of the case record
and subject to FOIA, they are not routinely issued as part of the
final agency decision. Further, he
noted that the statutory "enter into" requires the
Secretary to approve or disapprove the
settlement based on public policy, but it does not mean that the
Secretary participated in the
settlement negotiations or benefits from or is obligated by the
settlement terms. The Secretary wrote:
"[W]here public policy does not preclude approval, the
Secretary's 'consent' to the parties'
settlement adds nothing whatever to its terms: it merely permits
the parties to end the case. . . . To
the extent that government accountability is a concern,
settlement agreements, as part of the
administrative record, are publicly available under the
FOIA." Slip op. at 5.
XVII E Confidentiality provision may be approved, but
FOIA may limit its
effectiveness
In Darr v. Precise Hard Chrome, 95-CAA-6 (Sec'y May
9, 1995), the Secretary
approved a settlement agreement in which the Complainant agreed
to keep the terms of the settlement
confidential, with certain specified exceptions. In his order,
the Secretary noted that FOIA requires
agencies to disclose requested documents unless they are exempt
from disclosure, and that the
settlement, having been submitted for review, was an agency
record covered by FOIA. If a FOIA
request is made for this settlement agreement, the agency would
have to respond and decide whether
to exercise its discretion to claim any applicable exemption.
The Secretary also pointed out the DOL
regulations covering the submission of confidential commercial
information.
To the same effect: Drouillard v. Detroit Edison,
94-ERA-1 (Sec'y May 1, 1995); Ing v. Jerry
L. Pettis Veterans Affairs Medical Center, 95-ERA-6 (Sec'y
May 9, 1995); England v. Raytheon
(Ebasco Contractors, Inc.), 95-ERA-21 (Sec'y May 1, 1995).
XVI E 2 Settlement agreement as a public
document
The ALJ recommended approval of a settlement agreement. For
reasons of confidentiality, the actual agreement was not
submitted to the ALJ or the Secretary. The Secretary ordered the
parties to submit a copy of the settlement agreement so he could
determine whether it was fair, adequate and reasonable. The
Secretary has previously held that a settlement agreement cannot
be approved unless such a determination has been made, especially
when the agreement has legal precedence over the memorandum of
settlement.
Once submitted for review, all submissions including settlement
agreements and all related documents become part of the public
record in the case, and are subject to the Freedom of Information
Act. The parties, however, may designate specific information as
confidential commercial information to be handled as provided in
29 C.F.R. Part 70.
McCoy v. Utah Power/Pacific Power, 94-CAA-1 and 6
(Sec'y Mar. 22, 1994).
XVII E 2 Sealing of settlement
In Mitchell v. Arizona Public Service Co., 92-ERA-
28, 29, 35, 55 (Sec'y June 28, 1993), the parties jointly
requested that the Settlement Agreement be maintained
confidential and under seal. The Settlement, however, stated
that "[n]othing in this Agreement shall be construed to
restrict the disclosure of the terms of this Agreement where
required by law." The Secretary noted that FOIA requires
federal agencies to disclose requested records unless the records
are exempt from disclosure under that Act, and therefore denied
the request that the Settlement remain under seal and
confidential.
VII E 2 Settlement agreement part of record
subject to FOIA
Disclosure of agency records pursuant to a request from the
public is governed by the Freedom of Information Act (FOIA). 5
U.S.C. § 552 (1988). As the Secretary has held numerous
times, the settlement agreement and stipulation here are part of
the record in this case and as such are "agency
records" and must be made available for public inspection
and copying as provided in the Freedom of Information Act unless
they are exempt from disclosure.
Blanch v. Northeast Nuclear Energy Co., 90-ERA-11
(Sec'y May 11, 1994) (denying request to put settlement agreement
under seal).
XVII.E.2. Placing settlement under seal not permitted
In Bausemer v. Flour Daniel, 90-ERA-16 and 17
(Sec'y June 14, 1994), the parties submitted a settlement and a
Mutual Release to the ALJ "under seal," and the parties
requested, and the ALJ recommended, that the record in this case
be kept under seal.
The Secretary noted that he had held in a number of cases with
respect to confidentiality provisions in settlement agreements
that the FOIA "requires agencies to disclose requested
documents unless they are exempt from disclosure . . . ."
[citations omitted] He found that the hearing record in this
case, including the Settlement Agreement, was an agency record
which must be made available for public inspection and copying
under the FOIA.
XVII.E.2. In camera review not permitted
In Jones v. Tennessee Valley Authority, 89-ERA-27
(Sec'y June 3, 1994), the ALJ reviewed the parties' Conciliation
Agreement and Joint Motion for Order of Dismissal, found the
terms of the agreement to be "fair to all parties and
consistent with provisions of the law," and ordered the case
dismissed with prejudice. Pursuant to the parties' request, the
ALJ also ordered:
[T]hat the terms of the conciliation agreement
entered into between the parties shall be kept
confidential by the parties and their attorneys in
accordance with that agreement, that after review and
approval by the Secretary of Labor, the copy of such
agreement submitted for inspection in camera shall be
resealed and returned to the attorneys for the
Tennessee Valley Authority, and that the Department of
Labor's file . . . concerning the inspection and
approval of the agreement shall be sealed and the
contents thereof not subject to disclosure other than
by order of the Secretary of Labor after notice to
counsel for the parties and an opportunity to be
heard.
The Secretary noted that Section 210(b)(2)(A) of the ERA, 42
U.S.C. § 5851(b)(2)(A), provides that, "the Secretary
shall, unless the proceeding on the complaint is terminated by
the Secretary on the basis of a settlement entered into by the
Secretary and the person alleged to have committed such
violation, issue an order either providing the relief prescribed
by subparagraph (B) or denying the complaint." The
Secretary's role is to review the terms of the settlement agreed
upon by the private parties to ensure that they are fair,
adequate and reasonable to settle Complainant's allegations that
Respondent violated the ERA. Macktal v. Secretary of
Labor, 923 F.2d 1150, 1153-1154 (5th Cir. 1991); Thompson
v. U.S. Department of Labor, 885 F.2d 551, 556 (9th Cir.
1989); Fuchko and Yunker v. Georgia Power Co., 89-ERA-9,
10 (Sec'y Mar. 23, 1989), slip op. at 1-2.
The Secretary noted that he had consistently held that once
submitted for review, the parties' submissions including
Settlement Agreements and all related documents become a part of
the public record in the case and are subject to the provisions
of the Freedom of Information Act (FOIA), 5 U.S.C. § 552
(1988), requiring Federal agencies to disclose requested records
unless they are exempt from disclosure under the Act.
The Secretary also noted that he had addressed the issue of
sealing settlement agreements and placing related documents in a
restricted access portion of the record pursuant to 29 C.F.R.
§ 18.56 (1992), and have rejected such requests. SeeCorder, slip op. at 1-5; DeBose, slip op. at 2-4;
Mitchell v. Arizona Public Service Co., Case Nos. 92-ERA-
28, 29, 35 and 55, Sec. Ord. Approving Settlement Agreement and
Dismissing Cases, June 28, 1993, slip op. at 2.
Thus, the Secretary rejected the parties' request that the case
files be sealed, and rejected the confidentiality provisions of
the conciliation agreement and joint motion. He remanded the
case for hearing.
XVII.E.2. Settlement as public document
In Brock v. Tennessee Valley Authority, 89-ERA-13
(Sec'y June 7, 1994), the Secretary approved a settlement.
Noting that the agreement was entitled "Administratively
Confidential" and that Paragraph 2 of the Agreement
provides that "the amount set forth in item 1 hereof shall
not be revealed to any person not legally entitled to knowledge
thereof," the Secretary stated that
It should be noted that the parties submissions,
including settlement agreements, become part of the record
in the case and are subject to the provisions of the Freedom
of Information Act (FOIA), 5 U.S.C. § 552 (1988), which
requires federal agencies to disclose requested records
unless they are exempt from disclosure under the Act.
Debose v. Carolina Power & Light Co., Case No.
92-ERA-14, Ord. Disapproving Settlement and Remanding Case,
Feb. 7, 1994, slip op. at 2-3 and cases cited
therein.
XVII E 2 Rejection of settlement that seeks DOL
seal
Gillilan v. Tennessee Valley Authority, 89-
ERA-40 (Sec'y Apr. 12, 1994)
The Secretary rejected the settlement agreement because it
contained confidentiality provisions which seals the agreement
and any files related to the agreement. The Freedom of
Information Act provides that unless a special exemption applies,
the case record must be available for public inspection and
copying.
XVII E 2 Designation as confidential
commercial information
McCoy v. Utah Power/Pacific Power, 94-CAA-1,
94-CAA-6 (Sec'y Mar. 22, 1994)
The Secretary reaffirmed its holding that once settlement
agreements and all related documents of a case are submitted for
review, they become part of the public record of the case and are
subject to the provisions of the Freedom of Information Act
(FOIA), which requires Federal agencies to disclose requested
documents unless they are exempt from disclosure. However, the
parties may designate specific information as confidential
commercial information upon submission of that information. When
FOIA requests are received for such information, the Department
of Labor will promptly notify the submitter to allow a reasonable
period of time to state any objections to disclosure. The
submitter will be notified if a decision is made to disclose the
information or if the requester files a suit to compel disclosure
after a decision is made to withhold the information.
XVII E 2 Sealing of record
Where a settlement agreement included a provision in which the
parties agreed to maintain the strictest confidentiality of the
terms of the agreement, and the parties at the hearing asked the
ALJ to keep the agreement under seal if possible, but that if it
were not possible that it would not cause the agreement to fail,
the Secretary accepted the agreement but left the unsealed the
agreement and incorporated it into the administrative record of
the case. She noted that the parties had not presented any
reason for sealing record in regard to the settlement agreement.
Vogel v. Florida Power Corp., 90-ERA-49 (Sec'y Mar.
12, 1991).
XVII E 2 Sealing of settlement
In Plumless v. Aleyska Pipeline Service Co., 92-
TSC-7, 10 and 92-WPC-6, 7, 8 and 93-WPC-10 (ALJ July 15, 1993),
the monetary amounts of a settlement were reviewed and submitted
to the Secretary by the ALJ under seal for in camera review. The
reported decision contained redacted copies of the settlements
"pursuant to the parties' joint request "designed to
preserve confidentiality.'" See 29 C.F.R. §
18.46.
Before the Secretary, the parties filed a substitute Joint Motion
to Approve Settlement Agreements in which the parties stated that
they had no objection to unsealing the unredacted versions of the
settlement agreements and placing them in the public record if
deemed necessary by the Secretary. Plumless v. Aleyska
Pipeline Service Co., 92-TSC-7, 10 and 92-WPC-6, 7, 8 and
93-WPC-10 (Sec'y Aug. 6, 1993), The Secretary did so deem. The
following is an excerpt from his decision:
The Secretary has the authority and responsibility to
review the terms of these settlement agreements and
determine whether they are fair, adequate and reasonable to
settle Complainants' allegations that Respondent violated
the Acts. [citations and footnote omitted] The particular
terms of the agreements, such as the amount of money to be
received by the Complainant, affect not only the individual
whistleblower but impact the public interest as well. Where
such terms are not fair, adequate and reasonable, other
employees may be discouraged from reporting safety
violations. [citation omitted]
Accordingly, I must review the unredacted copies of the
settlement agreements submitted by the parties as the basis
for dismissing these cases against Respondent. Contrary to
the request of the parties in their original joint motion
for dismissal, the complete unredacted settlement agreements
submitted for my review become a part of the public record
in these cases. [citations omitted] With respect to the
provisions in the settlement agreements dealing with
confidentiality, I further note that the Freedom of
Information Act, 5 U.S.C. § 552, requires federal
agencies to disclose requested records unless they are
exempt from disclosure under the Act. [citations
omitted]
XVII E 2 Settlement may not be placed in restricted access
portion of the file
Porter v. Brown & Root, Inc., 91-ERA-4 (Sec'y
Feb. 25, 1994).
The ALJ reviewed a Settlement Agreement, and except for certain
confidentiality provisions conditioning the settlement on the
issuance of an order placing portions of the record under seal,
found the terms acceptable.
The ALJ issued an order wherein he sealed the terms of the
settlement agreement; declined to seal portions of the record
which indicated the existence of a settlement agreement; and
granted the parties' request that the issue of sealing portions
of the record be certified for interlocutory appeal to the
Secretary.
The Secretary issued an order denying the interlocutory appeal,
and ordered the parties to show cause why the ALJ's order should
not be treated as a recommended decision.
[Editor's note: Although the ALJ denied the request to seal the
record in regard any document that revealed the existence of the
settlement, in conformance with the request for an interlocutory
appeal on that issue, he sent the entire file to OAA under seal,
and under an order that did not mention the fact that a
settlement had been reached. OAA apparently misconstrued the
ALJ's intent not to reveal the fact of a settlement before the
Secretary ruled on the interlocutory appeal, because the
Secretary's order denying the interlocutory appeal revealed the
fact of settlement.]
In this case, the parties clearly articulated that the
confidentiality provisions were essential and nonseverable terms
of the agreement. In a subsequent Joint Notice, the parties
stipulated to modify their request for confidentiality so as to
conform to the ALJ's order--that is restricted access for only
the settlement agreement and any documents disclosing or
describing the terms of the agreement, rather than for any
document indicating negotiation of a settlement or the existence
of an agreement.
The Secretary continued:
The Secretary has consistently held that once submitted
for review, the parties' submissions including Settlement
Agreements and all related documents become a part of the
public record in the case and are subject to the provisions
of the Freedom of Information Act (FOIA), 5 U.S.C. §
552 (1988), requiring federal agencies to disclose requested
records unless they are exempt from disclosure under the
Act. [citations omitted; footnote omitted (describing the
provisions of 29 C.F.R. § 70.26 that provide for
predisclosure notification of confidential commercial
information).
Subsequent to issuance of the ALJ's Order in this case,
I have also addressed the issue of sealing settlement
agreements and placing related documents in a restricted
access portion of the record pursuant to 29 C.F.R. §
18.56 (1992), and have rejected such requests. [citations
omitted] Similarly, in the instant case, I must reject the
parties' request that the Settlement Agreement and other
documents indicating the terms of the agreement be
maintained under seal and placed in a restricted access
portion of the record. In support of my conclusion, I adopt
the ALJ's discussion on the applicability of the regulations
at 29 C.F.R. Part 18, finding that the regulations do not
provide authority for placing this settlement agreement and
related documents in a restricted access portion of the
record in this case. ALJ's order at 3-4.
[Editor's note: The ALJ noted that 29 C.F.R. §
18.56 is limited to situations when the access is restricted
by law or the ALJ issues a protective order. The Part 18
regulations only provide for protective orders in discovery
(18.15) or in the context of the assertion of a privilege or
the existence of classified or sensitive information.
Unlike the Secretary, however, the ALJ went on to find that
federal common law permitted the sealing of a settlement
agreement.]
The Secretary rejected the settlement agreement and remanded the
case to the ALJ. Macktal v. Secretary of Labor,
923 F.2d 1150 (5th Cir. 1991).
XVII.E.2. Confidential commercial or financial
information
In Brown v. Holmes & Narver, Inc., 90-ERA-26
(Sec'y May 11, 1994), the ALJ noted that "the terms of the
settlement have been separately filed in a sealed envelope and
are considered to be confidential commercial or financial
information which have not been disclosed to the public."
The Secretary noted that he had concluded that settlement
agreements, which are part of the record in a case, are subject
to the provisions of the Freedom of Information Act (FOIA), 5
U.S.C. § 552 (1988). The FOIA requires agencies to disclose
requested documents unless they are exempt from disclosure. In
accord with earlier decisions, he declined to place the Agreement
under seal. Since no one had requested a copy of the Agreement
pursuant to the FOIA, and it was premature to determine if it
contains commercial or financial information that comes within
the "trade secrets" exemption to the FOIA, 5 U.S.C.
§ 552(b)(4), or any other exemption. Since the Respondent
had requested predisclosure notification pursuant to 29 C.F.R.
§ 70.26, however, the Secretary directed OALJ, as custodian
of the documents, to place a notice prominently displayed in the
record of this case referring to Respondent's request and
directing that the procedures in 29 C.F.R. § 70.26 be
followed if an FOIA request is received that encompasses the
settlement agreement.
XVII E 2 Confidential commercial information
Emory v. United States Environmental Protection
Agency, 93-SDW-4 (Sec'y Feb. 22, 1994) (indicates that a
confidentiality provision must be construed with a view to FOIA,
and that if no exemption is applicable, the document will be
disclosed; also notes that 29 C.F.R. Part 70 provides procedures
"for protecting the interests of submitters of confidential
commercial information.")
XVII E 2 Attempt to keep monetary amount
confidential
In Nolder v. Raymond Kaiser Engineers, Inc.,
84-ERA-5 (Sec'y Aug. 2, 1989) (order for further submission),
Complainant had submitted a copy of a Release, signed by
Complainant individually, acknowledging Complainant's receipt of
a sum of money from Respondent in full satisfaction of all claims
against Respondent, including the case before the Secretary. The
Release did not set forth the amount of money received by
Complainant, and Complainant's counsel advised that because of a
specific confidentiality provision, Respondent's permission must
be obtained to furnish the Secretary with that amount. Counsel
noted, however, that Complainant felt the settlement was fair,
adequate and reasonable.
The Secretary stated that although the terms of a settlement
agreement need not be set out in an order approving a settlement,
the Secretary must examine the specific terms of the settlement
to determine whether it is fair, adequate and reasonable. To
make this determination, it is necessary to balance the strength
of the complainant's case on the merits against the settlement
terms. [citations omitted] The amount of money offered to
Complainant is a settlement term which is integral to this
process -- in fact, it is the most important factor. [citations
omitted]
The Secretary ordered the parties to furnish the specific amount
of money received by Complainant and, since the Release was
signed only by Complainant, directed Respondent to submit a
certification demonstrating its informed consent to the
agreement.
[Editor's note: The parties complied with the Secretary's order.
In several subsequent orders, the Secretary did not reveal the
specific amount paid to Complainant.]
XVII E 2 Settlement may not be placed in restricted
access portion of file pursuant to 29 CFR 18.56;
possibility that information may be protected as
confidential commercial information under 29 CFR
Part 70
DeBose v. Carolina Power & Light Co., 92-ERA-14
(Sec'y Feb. 7, 1994).
The ALJ recommended disapproval of the settlement agreement
because of several confidentiality provisions, including a
provision that the agreement itself be placed in a
"restricted access" portion of the record under 29
C.F.R. § 18.56, that would violate several policies
underlying the ERA and the Secretary's functions under the Act.
Before the Secretary, the parties argued that the settlement
balanced their interests in confidentiality against the public
interest in access to the record by providing that the agreement
may be disclosed upon a showing of a "compelling need to
review the document." The parties also asserted that
disclosure of the agreement would reveal confidential information
and constitute an unwarranted invasion of privacy, while
maintaining confidentiality would be consistent with certain FOIA
exemptions, and may be required by the Privacy Act.
The Secretary noted that the FOIA requires disclosure of
requested documents unless they are exempt. In the absence of a
FOIA request, the Secretary considered it inappropriate to
determine whether an exemption is applicable.
Since the confidentiality provision was not severable, the
Secretary rejected the agreement under Macktal v. Secretary
of Labor, 923 F.2d 1150 (5th Cir. 1991).
Finally the Secretary stated:
The parties should be aware, however, that Department
of Labor regulations implementing the FOIA provide that
submitters of information may designate specific information
as confidential commercial information to be handled as
provided in those regulations. 29 C.F.R. § 70.26(b)
(1991). When an FOIA request for such information is
received, the Department of Labor will notify the submitter
promptly, 29 C.F.R. § 70.26(c), the submitter will be
given a reasonable period of time to state its objections to
disclosure, 29 C.F.R. § 70.26(e), and the submitter
will be notified if a decision is made to disclose the
information. 29 C.F.R. § 7026(f). If the information
is withheld and suit is filed by the requester to compel
disclosure, the submitter will be notified. 29 C.F.R.
§ 70.26(h).
These regulations provide substantial protection for
the interests of the parties in the confidentiality of the
settlement. I encourage the parties to reconsider the
confidentiality provisions of the settlement in light of
these regulations and to submit an amended settlement to the
ALJ.
[Editor's note: Although the Secretary has suggested 29 C.F.R.
§ 70.26 as a means by which a party could protect a
settlement from disclosure under FOIA, a preliminary matter
whether a settlement agreement qualifies as "confidential
commercial information" under FOIA.]
XVII E 2 Sealing of record; settlement
In xxx v. xxx, xx-ERA-xx (ALJ xxx) (names and dates
redacted), the parties presented a settlement agreement to the
ALJ. Therein they requested that both the terms of the agreement
and the fact that a settlement had been reached be kept
confidential. Without the ALJ's issuance of an order sealing
these parts of the record, the parties indicated that the
settlement would fail. The parties, therefore, requested that if
the ALJ denied the sealing of the record, the issue be certified
for interlocutory appeal to the Secretary.
The ALJ
found the settlement agreement to be acceptable
concluded that he could not ensure that a sealing
of the record would withstand a FOIA request, but
that the request for a seal was not mooted by that
possibility
concluded that 29 C.F.R. § 18.56 could not be used
to place the relevant documents in a restricted access
portion of the record because public access to the
material was not subject to restriction by law or a
protective order entered in the proceedings (a
protective order was not authorized by § 18.15
(discovery matters) or § 18.46 (privileges and
classified or sensitive materials))
referred to the federal rules pursuant to §
18.1(a), and not finding an applicable rule, further
referred to federal common law based on cases
indicating that it is appropriate for federal courts to
fill in gaps with common law or "judicial
legislation"
concluded that the parties have the burden of
demonstrating facts compelling the sealing of a record
concluded that the parties' interest in keeping
the terms of the agreement confidential outweighed
the public's interest in access
concluded that the fact that a settlement had been
reached could not be put under seal
concluded that Plumley v. Federal Bureau of
Prison, 86-CAA-6 (Sec'y Apr. 29, 1987), indicated
that an ALJ could certify a question for interlocutory
appeal in the same manner as a district court pursuant
to 29 U.S.C. § 1292(b)
found that § 1292(b) has a three prong test for
certification, which the instant case satisfied:
there must be a controlling question of law
at issue;
there must be a substantial ground for
difference of opinion;
an immediate appeal must materially advance
the ultimate termination of the litigation.
certified the case for interlocutory appeal to the
Secretary.
VII E 2 Procedure for predisclosure
notification
The following is an excerpt from the Secretary's decision in
Brown v. Holmes & Narver, 90-ERA-26 (Sec'y May
11, 1994), regarding the procedure for handling the file when a
party requests predisclosure notification of a FOIA request for a
whistleblower settlement agreement:
The ALJ noted that "the terms of the
settlement have been separately filed in a sealed envelope
and are considered to be confidential commercial or
financial information which have not been disclosed to the
public." The Secretary has concluded that settlement
agreements, which are part of the record in a case, are
subject to the provisions of the Freedom of Information Act
(FOIA), 5 U.S.C. § 552 (1988). The FOIA requires
agencies to disclose requested documents unless they are
exempt from disclosure. Richter, et al. v. Baldwin
Assoc., et al., Case Nos. 84-ERA-9 through 84-ERA-12,
Final Order Approving Settlement and Dismissing Complaints,
Feb. 22, 1994, slip op. at 4 and cases there cited. In
accord with earlier decisions, I decline to place the
Agreement under seal. [citations omitted]
...[T]he Respondent has requested predisclosure
notification pursuant to 29 C.F.R. § 70.26 should
anyone file a FOIA request that encompasses the Agreement.1/
As custodian of the documents, the Office of Administrative
Law Judges is directed to place a notice prominently
displayed in the record of this case referring to
Respondent's request and directing that the procedures in 29
C.F.R. § 70.26 be followed if an FOIA request is
received that encompasses the settlement agreement.
_____________
1/ Under the Department's regulation implementing the FOIA,
submitters of information may designate specific information
as confidential commercial information, 29 C.F.R. §
70.26(b)(1993), as Respondent has done here. When an FOIA
request for such information is received, the Department of
Labor will notify the submitter promptly, 29 C.F.R. §
70/26(c), the submitter will be given a reasonable period of
time to state its objections to disclosure, 29 C.F.R. §
70.26(e), and the submitter will be notified if a decision
is made to disclose the information. 29 C.F.R. §
70.26(f). If the information is withheld and suit is filed
by the requester to compel disclosure, the submitter will be
notified. 20 C.F.R. § 70.26(h).
[Editor's note: Neither the Secretary nor this Office has yet
determined whether a whistleblower settlement agreement qualifies
for a FOIA exemption for confidential commercial or financial
information pursuant to 5 U.S.C. § 552(b)(4). Thus, simply
because a party requests predisclosure notification does not
guarantee that the settlement agreement is protected from a FOIA
requester.
Note Biddle v. United States Dept. of the Army, 93-WPC-15
(ALJ May 6, 1994), in which the ALJ dismissed under Fed. R. Civ.
P. 41, even though she knew settlement negotiations were ongoing
shortly before the request for a stipulated dismissal. The
CERLCA, SWDA and FWPCA do not contain the statutory language
indicating that the Secretary must enter into a settlement.
Thus, arguably, those varieties of complaints may be dismissed
pursuant to Rule 41 without Department of Labor review of an
underlying settlement agreement.]
XVII E 2 Sealing of record
In DeBose v. Carolina Power & Light Co., 92-
ERA-14 (ALJ Feb. 27, 1992), the ALJ recommended disapproval of a
settlement agreement where the parties' request that the
settlement be placed in restricted access pursuant to 29 C.F.R.
§ 18.56 was not severable from the rest of the agreement.
The ALJ noted that whistleblower proceedings before the
Department of Labor are not purely private, but involve a public
interest. The ALJ found that the desire to preclude other
employees from filing similar claims was an insufficient reason
for sealing the settlement, and stated that absent overriding
considerations, administrative records of this kind should not be
sealed. The ALJ did, however, seal the agreement to protect the
parties' position until such time as the Secretary has had a
chance to review the matter, recommending that the Secretary then
take the agreement out of restricted access.
XVII E 2 Predisclosure notification
In Saporito v. Arizona Public Service Co., 92-ERA-
30, 93-ERA-26 and 93-ERA-43 (Sec'y Mar. 21, 1994), the Secretary
approved a settlement and directed the OALJ to display
prominently in the record a notice of the Respondent's request to
be notified of any FOIA requests for the agreement.
XVII E 2 Secretary's position on confidentiality
In Jones v. Tennessee Valley Authority, 89-ERA-27
(Sec'y Jan. 26, 1995), the Secretary
approved a conciliation agreement, which, following remand, the
parties had modified by removing a
provision in which the parties agreed to keep the terms of the
conciliation agreement confidential. In a
footnote, the Secretary wrote:
The Secretary has consistently held that: a) the public
interest is best served and
whistleblowers are best protected by assuring an open flow
of information, and b) parties'
submissions, including Settlement Agreements and all related
documents become a part of the
public record in the case and are subject to the provisions
of the Freedom of Information Act
(FOIA), 5 U.S.C. § 552 (1988).
XVII E 2 Placement of settlement materials in restricted
access portion of the
file
In Babel v. Federal Way Water and Sewer District,
94-CAA-11 (Sec'y Dec. 21, 1994),
the Secretary noted that the parties had included a
confidentiality provision, and pointed out that the
settlement agreement is subject to FOIA. The Secretary noted
that the ALJ had "acceded to
Complainant's Counsel's request that the document setting forth
his attorney fee be placed in a
separate clearly marked 'restricted access' file." In a
footnote to this observation, the Secretary
noted the Department's FOIA regulations on designation of certain
information as confidential
commercial information. See 29 C.F.R. § 70.26.
[Editor's note: Apparently, the Secretary is
approving the use of 29 C.F.R. §
18.56, to implement 29 C.F.R. § 70.26. Thus, section 18.56
is not necessarily equated with a
sealing of the record. Compare
Gillilan v. Tennessee Valley Authority, 89-ERA-40
(Sec'y Nov. 29, 1994) (order denying motion to reconsider).]
XVII E 2 Confidentiality provisions; relation to
FOIA
In Smith v. Bell Power Corp., 94-ERA-17 (Sec'y Dec.
22, 1994), the Secretary approved
a settlement agreement that contained language that the parties
and their attorneys shall keep the
terms of the agreement confidential except to the extent
necessary to file tax returns, or as otherwise
required by law. The Secretary noted, however, that the parties'
submissions, including the settlement
agreement become part of the record and are subject to FOIA.
In Gillilan v. Tennessee Valley Authority,
89-ERA-40 (Sec'y Nov. 29, 1994) (order denying motion to reconsider), the Respondent filed a motion
seeking reconsideration of the Secretary's
Order Disapproving Settlement & Remanding Case. See Gillilan v. Tennessee Valley
Authority, 89-ERA-40 (Sec'y Apr. 12, 1994). In the
remand
order, the Secretary had concluded that
a settlement could not be approved because the parties had made
the sealing of the record an
essential term of the settlement. The Secretary had determined
in a series of decisions that he could
not seal a settlement agreement, largely on the basis of FOIA.
In the motion seeking reconsideration, the Respondent maintained
that because the settlement
agreement contained language permitting disclosures "as
required by law," it did not prohibit
disclosures required under FOIA. The Secretary, however, found
that although the agreement as
written permitted the parties to disclose the terms of the
agreement under various circumstances,
including where required by law, it separately, and improperly,
bound the Secretary to "seal"
the files. Thus, he affirmed his earlier decision to disapprove
the settlement agreement.
[Editor's notes: (1) This is an alternative
ruling; the Secretary also ruled that he does
not have the authority to reconsider in cases arising in the 6th
Circuit. (2) The Office of Administrative
Law Judges has recently determined in another case that the terms
of ERA whistleblower settlements
may be protected in certain instances from disclosure under FOIA
pursuant to exemption four.
See casenote on Irick v. Arizona Public Service
Co., 95-ERA-2.]
XVII E 2 Exemption Four determined to prohibit
disclosure of terms of settlement
under FOIA
[Editor's note: The following is not a "casenote." It
is based on the transcript and the
Deputy Chief Judge's FOIA determination letter]
In Irick v. Arizona Public Service Co., 95-ERA-2 (ALJ Nov. 30, 1994), final order
issued by the Secretary (Sec'y Jan. 26, 1995), the
parties
advised the ALJ that they had settled on
the eve of the hearing, and were in the process of drafting a
settlement agreement. A recess was
granted. Upon resumption of the hearing, the parties advised
that the agreement was not completed as
they wanted the ALJ's views on a confidentiality provision. The
ALJ was also advised of the basic
terms of the agreement, including the monetary consideration to
be paid to Complainant. The
agreement was eventually submitted after the hearing, and the ALJ
recommended approval of it. In a
separate order, however, the ALJ denied a motion to seal the
record.
After the hearing, a reporter filed a FOIA request with the
Office of Administrative Law Judges (OALJ)
for the transcript of the hearing. OALJ provided predisclosure
notification pursuant to 29 C.F.R. §
70.26 as requested by the parties. In a
letter dated January 18,
1995, the Deputy Chief Administrative
Law Judge concluded that Exemption Four of the FOIA prohibits the
Department from disclosing the
terms of the settlement. Specifically, the Deputy Chief Judge
concluded that the terms of the
agreement were commercial or financial information, and that
because the terms of the agreement are
not provided to the Department voluntarily, the test for whether
the information is confidential is found in
National Parks & Conservation Association v. Morton,
498 F.2d 765 (D.C. Cir. 1974).
Under that test, commercial or financial information is
confidential if the information is likely to cause
substantial harm to the competitive position of the submitter.
The Deputy Chief Judge accepted the
Respondent's contention that it would be placed at a competitive
disadvantage in future settlement
negotiations if the terms of the agreement were disclosed. The
Deputy Chief Judge concluded that the
National Parks analysis did not permit consideration of other
policy factors such as the public interest in
whether the Secretary is adequately reviewing ERA settlements or
the Department's policy of supporting
alternative dispute resolution. Thus, the Department redacted
the discussion of the terms of the
settlement from the transcript prior to its release to the
reporter.
[Editor's notes: (1) This FOIA determination was a
matter of first impression. OALJ's
position has not been tested on appeal to the Office of the
Solicitor. (2) While on review before the
Secretary, the Office of Administrative Appeals has custody over
the administrative file. That Office
makes its own, independent FOIA determinations. The FOIA request
in Irick was directed at
OALJ and not OAA. (3) FOIA determinations are made on a
case-by-case basis. Thus, different facts
may influence whether a disclosure is made. For example, if the
respondent had been another federal
agency, the exemption may not have been applicable. See
United States Department of Justice,
Office of Information and Privacy, Freedom of Information Act
Guide and Privacy Act Overview 97
(Sept. 1993 ed.) (federal agency not a person for purposes of
Exemption Four; suggesting, however,
that Exemption Five might be applicable).]
XVII E 2 Refusal of parties to submit
"confidential" settlement
In Swindler v. Wallace-Superior, 81-ERA-2 (ALJ
Sept. 22, 1981), the parties refused to provide a copy of a
stipulation of settlement despite repeated request from the ALJ.
Counsel for Respondent maintained that the settlement was
confidential, had been fully performed, and there were not issues
to try. The ALJ treated the matter as though the complaint had
been withdrawn.
[Editor's note: This is an early ERA case that probably should
not be relied on: it has since become clear that an ALJ cannot
dismiss an ERA case on this ground and that the ERA complaints
based on settlement must be reviewed by the Secretary.]
XVII E 2 Sealing of settlement agreement
In Webb v. Quantum Resources, Inc., 93-ERA-42A (ALJ
Oct. 20, 1993), the ALJ found that a proffered settlement
agreement was fair, adequate and reasonable, but for the fact
that the parties agreed to keep the terms of the settlement, and
the settlement agreement itself, confidential. The ALJ
recommended against approval of the confidentiality agreement
primarily because the parties had not presented any reason for
denying the public access to the agreement. The ALJ also
recommended that the Secretary follow Macktal v. Secretary of
Labor, 923 F.2d 1150, 1154 (5th Cir. 1991) and Thompson v.
United States Dept. of Labor, 883 F.2d 551, 557 (9th Cir.
1989), and reject the settlement agreement, rather than severing
the offensive provision and approving the remainder, unless the
parties indicate to the Secretary their consent to making their
agreement part of the public record in the case.
XVII E 2 Clause seeking in camera review and sealing of
record
A settlement agreement cannot be approved when it contains a
clause that invalidates the agreement "[s]hould the
Administrative Law Judge and/or the Secretary of Labor determine
that this agreement cannot be reviewed in camera, that the files
related hereto cannot be sealed and/or that any term of this
agreement cannot remain confidential in accordance with this
agreement."
The case record, including the settlement agreement, are agency
records which are subject to the Freedom of Information Act, 5
U.S.C. § 552 (1988), and the procedures in 29 C.F.R. part 70
(1993). Unless exempt, such records must be made available for
public inspection and copying.
Gillilan v. Tennessee Valley Authority, 89-ERA-40
(Sec'y Apr. 12, 1994).
XVII E 2 Upon submission, settlement becomes part of public
record subject to FOIA; Secretary cannot sever
portions of agreement without consent of all
parties
Wampler v. Pullman-Higgins Co., 84-ERA-13 (Sec'y
Feb. 14, 1994).
Before the Secretary, Complainant contended that his withdrawal
of the complaint was based on a settlement agreement that should
be declared null and void because of an unenforceable provision
restricting Complainant's communication with the NRC. The ALJ
had dismissed with prejudice under 29 C.F.R. § 24.5(e)(4)
(dismissal for cause).
The Secretary issued an order to submit settlement agreement, and
invited the parties to state whether the confidentiality
provision could be severed.
In regard to a confidentiality provision the Secretary noted that
the parties' submission become part of the record, and therefore
subject to FOIA, which requires disclosure unless the records are
exempt under the Act.
The challenged provision provided: "Neither party will
discuss or disclose the facts of this case except if ordered to
do so by court, tribunal or agency of competent
jurisdiction." The Secretary held that the provision was
void to the extent that it could be construed as restricting
Complainant from voluntarily communicating to federal and state
agencies.
Respondent requested that the provision be stricken to the extent
that it could be construed as limiting Complainant's ability to
provide information to government agencies, but urged that the
remainder of the agreement be upheld. Complainant did not
consent.
The Secretary cited Macktal v. Secretary of Labor,
923 F.2d 1150 (5th Cir. 1991), in which the court held that the
Secretary must consent or not consent to the terms of a proposed
settlement as written, and cannot sever a term and enforce the
remainder of the agreement, without the consent of both parties.
Thus, he rejected the settlement agreement and remanded to the
ALJ.
In O'Sullivan v. Northeast Nuclear Energy Co., 90-
ERA-35 and 36 (Sec'y Dec. 10, 1990), at the hearing before the
administrative law judge both parties represented that a
settlement had been reached and would be filed shortly with the
ALJ. The complainant told the ALJ unequivocally "I can
state, Your Honor, that I absolutely agree with the settlement as
proposed." Several weeks later, however, the complainant
wrote to the ALJ that "[d]ue to . . . harassment,
intimidation and ridicule . . . I am unable to sign the agreement
as promised . . . ." The ALJ found that the complainant was
bound by the settlement because he "knowingly, voluntarily
and purposely orally consented to [it]." The ALJ cited
Macktal v. Brown & Root, Inc., 86-ERA-23 (Sec'y Nov.
14, 1990) (when consent to a settlement is "'voluntary and
knowing' . . . [a] settlement [is] binding, final and conclusive
. . . and a party is bound by [it] even though he later realizes
the agreement is disadvantageous . . . or he changes his
mind."
The Secretary agreed, stating that "[s]ettlements need not
be reduced to writing to be enforceable, and if a party "who
has previously authorized a settlement changes his mind when
presented with the settlement documents, that party remains bound
by the terms of the agreement." Fulgence v. J. Ray
McDermott & Co., 662 F.2d 1207, 1209 (5th Cir. 1981);
accord Brock v. The Scheuner Corp., 841 F.2d 151, 154 (6th
Cir. 1988).
The Secretary indicated that the complainant's argument that the
respondent violated the terms of the settlement and/or has
committed violations of the ERA may be the basis a new complaint,
but are not grounds for declaring the settlement void.
[Nuclear & Environmental Digest XVII F]
SETTLEMENT; BINDING EFFECT UNTIL FORMALLY APPROVED; MATERIAL
CHANGE IN CIRCUMSTANCES
In Balog v. Med-Safe Systems,
Inc., ARB No. 99-034, ALJ No. 1995-TSC-9 (ARB Sept. 13, 2000), the parties,
with the assistance of a DOL settlement judge, had negotiated a settlement of both
Complainant's TSCA complaint before DOL and a parallel state action. The presiding ALJ
approved the settlement and dismissed the TSCA proceeding, but failed to forward the matter to
the ARB for final action as required by the regulations then in effect until several years had
passed. On review before the ARB, Complainant sought to have the settlement agreement
repudiated. The ARB denied this request:
Settlements are favored as a matter of policy since
they resolve matters amicably without the expenditure of scarce resources. ... Holding
parties to their settlement agreement until formally approved both promotes the economy
of the process and enhances its credibility. "Employers would be less likely to enter
into settlements if they thought a complainant could withdraw from it if he changed his
mind or believed . . . he could obtain a greater relief by going to a hearing."
Macktal v. Brown & Root, Inc., Case No. 86-ERA-23, Order Rejecting in Part
and Approving in Part Settlement between the Parties, slip op. at 16 (Nov. 14, 1989),
rev'd in part and aff'd in relevant part sub nom. Macktal v. Sec'y of Labor, 923
F.2d 1150, 1157 (5th Cir. 1991) (Secretary may hold complainant and company to their
initial consent until she has had time to review the settlement).
There is some tension between the stability offered
by holding the parties to their agreement until it is reviewed and the inequity which can
occur when circumstances change before the agreement is reviewed. However, where the
circumstances have not changed materially, we ordinarily hold the parties to the terms of
their settlement agreement. ...
Moreover, [Complainant] has already elected to
treat the ALJ's approval of the Settlement of his TSCA complaint as final, e.g., he
apparently considered the ALJ's Decision and Order as satisfying his obligation to seek
dismissal of his TSCA complaint; he accepted the money Med-Safe paid under the terms
of the Settlement Agreement; and, he filed suit in state court claiming that Med-Safe had
breached the Settlement Agreement. "Normally if a party enters into a settlement
agreement knowingly and voluntarily, the agreement is treated as a binding contract and
the party is precluded from raising the underlying claims." Arnold v. U.S.,
816 F.2d 1306, 1309 (9th Cir. 1986) (citing Alexander v. Gardner-Denver Co.,
414 U.S. 36, 52 n.15 (1974)).
In this case, we do not perceive any material change
in circumstances that would justify rejecting the Settlement Agreement entered into
voluntarily by [Complainant] and [Respondent]. To the extent that [Complainant]
believes that [Respondent] has breached the Agreement, he has adequate legal remedies
available to him.
Slip op. at 6-7 (footnotes and some citations omitted). The ARB noted that, ironically,
Complainant asserted that he need not return the money he received under the settlement
agreement even while attempting to repudiate it and proceed to litigate the original TSCA claim.
[Nuclear & Environmental Digest XVII F]
SETTLEMENT; REPUDIATION BASED ON FRAUD; EFFECT OF HAVING BEEN
REPRESENTED BY COUNSEL
In Balog v. Med-Safe Systems,
Inc., ARB No. 99-034, ALJ No. 1995-TSC-9 (ARB Sept. 13, 2000), Complainant
argued that a settlement agreement could not be approved because Respondent's sole customer
did not sign the settlement agreement. The ARB rejected this argument because the customer
had not been named in Complainant's TSCA suit before DOL (the customer had been named in a
parallel state suit also subject to the settlement agreement).
Complainant's argument was that the settlement agreement was unfair because the
customer had "obtained all the benefits of being a 'released party' yet suffered no
liability." Complainant argued that the customer "deliberately avoided signing the
Settlement Agreement and thereby committed a fraud on the ARB and Complainant, and the U.S.
Department of Labor." The ARB held that "[f]raud upon the court must involve an
unconscionable plan or scheme designed to improperly influence the court in its decision. ... To
show fraud upon the court, the complaining party must establish that the alleged misconduct
affected the integrity of the judicial process, either because the court itself was defrauded or
because the misconduct was perpetrated by officers of the court." Slip op. at 8 n.8
(citations omitted). The ARB held that Complainant had not established these elements, and that
"[h]aving fully participated through counsel in the negotiations leading up to the drafting of
the Settlement Agreement and its execution, ... cannot now complain that the Agreement was
imperfectly drafted or executed." Id.
[Nuclear & Environmental Digest XVII F]
SETTLEMENT; "INADEQUACY" OF PROCEEDS
In Balog v. Med-Safe Systems,
Inc., ARB No. 99-034, ALJ No. 1995-TSC-9 (ARB Sept. 13, 2000), Complainant
sought repudiation of a settlement agreement based on the argument that, although he received a
substantial sum of money for lost wages, other damages and attorney's fees, he essentially
received nothing after expenses for an unsuccessful subsequent defamation suit based in part on
alleged breach of the settlement agreement. The ARB rejected this argument, citing Worthy
v. McKesson Corp., 756 F.2d 1370, 1373 (8th Cir. 1985), for the proposition that a party to a
voluntary settlement agreement cannot avoid the agreement simply because it ultimately proves
inadequate.
[Nuclear & Environmental Digest XVII F]
SETTLEMENT; RENUNCIATION
In a recommended decision on remand, the ALJ in Espinosa v. Alliedsignal,
Inc., 1996-WPC-2 (ALJ Oct. 14, 1999), applied a three part test from Ruud v.
Westinghouse Hanford Co., 1988-ERA-33, slip op. at 75-6 (ALJ Mar. 15, 1996), in
considering whether a fraud was committed upon either the OALJ or the ARB in the presentation of a
settlement agreement: clear and convincing evidence of (1) knowingly false material representations;
(2) an intent to deceive; and (3) the alleging party's reliance thereon. The facts in Espinosa
were complex, and to fully understand the circumstances and rulings, the full decision should be
consulted. Briefly, Complainant and her former counsel each made allegations that led the ARB, while
reviewing the ALJ's original recommendation of approval of a settlement agreement, to conclude that
"at least one of the litigants in this case (or their counsel) have made material misrepresentations
to the Department with regard to [Complainant's] whistleblower claims under the environmental
statutes." Espinosa v. Allied Signal, Inc., 1996-WPC-2 (ARB Aug. 18, 1998). The
ARB felt that it could not approve the settlement under such a cloud, and remanded the case to the ALJ
to reconsider, and take additional evidence if necessary. Id.
On remand, the ALJ found that the third element of the Ruud test was not met because
there was no evidence of detrimental reliance by the OALJ or the ARB on the document that contained
the allegedly material misrepresentation the misleading nature of the exhibit having already been
disclosed by Complainant's new counsel to the settlement judge who assisted the parties in negotiating
the settlement that was ultimately presented to the presiding ALJ (there had been an earlier settlement
negotiated by Complainant's former counsel that was repudiated by Complainant) and Respondent's
counsel. Thus, finding that the settlement was fair, adequate and reasonable, the ALJ reinstated his
earlier recommendation that the settlement be approved.
[Nuclear & Environmental Digest XVII F]
SETTLEMENT; COMPLAINANT IS NOT NECESSARILY ENTITLED TO WITHDRAW
PRIOR TO SECRETARIAL APPROVAL; MAY NOT BE VOIDED BASED ON ALLEGED
FRAUD OR DURESS OF COMPLAINANT'S OWN ATTORNEY'S, BUT MAY BE VOIDED BASED
ON MISCONDUCT OF OPPOSING PARTY (SUCH AS COLLUSION WITH
COMPLAINANT'S ATTORNEY); DOL MAY STRIKE PROVISION AS AGAINST PUBLIC
POLICY WHERE SETTLEMENT CONTAINS SAVINGS CLAUSE
In Beliveau v. Naval Undersea Warfare
Center, ARB No. 98-032, ALJ No. 1997-SDW-6 (ARB June 26, 1998), the ARB had
ruled that a whistleblower complaint could be terminated based on a settlement without the Secretary's
entering into the settlement, if the settlement occurred prior to a request for a hearing before an ALJ.
The U.S. Court of Appeals for the First Circuit, however, reversed this decision and remanded the
case. Beliveau v. USDOL, No. 98-1786 (1st
Cir. Mar. 10, 1999).
Complainant had filed a motion to reopen his complaint, despite
a settlement reached prior to completion of the Wage and Hour Division's investigation, on the theory
that he could withdraw from the settlement any time prior to the Secretary's approval of the settlement.
The ARB, however, observed in Beliveau v. Naval
Undersea Warfare Center, ARB No. 99-070, ALJ No. 1997-SDW-6 (ARB June
30, 1999), an order remanding the case to the ALJ for further proceedings, that "assuming that
Beliveau participated in and consented to the settlement at the time it was negotiated, he is bound by his
initial negotiated consent to settle the complaint until such time as the Secretary approves or rejects the
settlement." Slip op. at 2 (citation omitted). The ARB found a remand to the ALJ necessary to
consider Complainant's allegation that Respondent colluded with Complainant's attorney, or otherwise
engaged in improper conduct in negotiating the settlement agreement. The ARB observed that
"A complainant may not repudiate a settlement because of alleged fraud or duress by his own
attorneys. .... However, an opposing party's improper conduct may render a settlement agreement
voidable." Slip op. at 2 (citations omitted). The ARB directed the ALJ to conduct a hearing on
the merits if he found that improper conduct did occur, and that if he found lack of evidence of
improper conduct, he should consider Complainant's alternative argument that certain settlement terms
constituted "gag" provisions in violation of public policy. The ARB noted that, unlike
Macktal v. Secretary of Labor, 923 F.2d 1150, 1153-1156 (5th Cir. 1991), in which it was
held that in the absence of a severability provision in the settlement, the Secretary could not sever terms
that violate public policy and otherwise enforce the remainder of the agreement, the instant settlement
did contain a savings provision, and therefore the ALJ could strike provisions that violate public policy
and uphold the remainder of the settlement.
[N/E Digest XVII F]
SETTLEMENT; DISAPPROVAL WHERE MATERIAL BREACH OCCURRED
PRIOR TO CONSIDERATION BY ARB; DISAPPROVAL WHERE LACK OF ASSENT TO
MATERIAL TERM
In Ruud v. Westinghouse Hanford
Co., 88-ERA-33 (ARB Nov. 10, 1997), the ARB reiterated the law
concerning
settlements of whistleblower complaints where the underlying statute contains language
indicating that the Secretary must consent to any settlement negotiated by the other parties the
Secretary's role being to protect the public interest as well as that of complainant employees.
The Secretary's approval (i.e., the ARB's approval) of the settlement demonstrates
consent to the settlement agreement. The ARB noted that the consent of the other parties is
determined at the time of the initial negotiated consent rather than at the time of the Secretary's
approval.
Complainant contended that Respondent's "duress or coercion" -- essentially
that he settled because of Respondent's threat to fight him to the end, and that Respondent
misrepresented its intent not to interfere with Complainant's prospective employment --
rendered
the agreement voidable. The ARB considered and rejected these contentions. The ARB found
that Complainant, who was represented by counsel, had alternatives to settling the case, and
that
at the time of settlement, there was no evidence that there was a misrepresentation
as to
the non-interference provision or that managers intended to renege on the deal.
The ARB, however, found that evidence showing that Respondent in fact breached the
agreement by interfering with Complainant's prospective employment provided independent
grounds for rejecting the settlement. The ARB stated that "[w]e decline to 'enter into' a
settlement when evidence shows that a material term has been breached. We are charged with
"protect[ing] the interests of the public and the complainant." Macktal v.
Secretary of Labor, 923 F.2d at 1156 and n.30 (Congress sought to 'guarantee by statute
that
the employee's interests not be compromised [by settlement]'). Approval of a breached
agreement
would not ensure this protection. ... The settlement, as effectuated, thus was not fair, adequate
and reasonable because it did not afford Ruud the benefit of a material term. We consequently
decline to approve it." Ruud, 88-ERA-33 @ 14-15.
Alternatively, the ARB found that the parties did not agree on a material term of the
settlement and therefore did not reach agreement, because Respondent possibly read the
provision solely to refer to the content of personnel documents and references, whereas
Complainant read it -- reasonably according to the ARB -- to prohibit Respondent from
interfering in any manner with prospective employment. The ARB found that such a lack of
necessary assent is grounds for disapproval.
[N/E Digest XVII F]
RELEASE SIGNED PRIOR TO FILING OF COMPLAINT; KNOWING AND
VOLUNTARY; DURESS OR FRAUD
In Verdone v. Northeast Utilities, 97-ERA-27, 28 and 30 (ALJ
June 9, 1997),
three Complainants had signed documents entitled "General Release and
Convenant Not to
Sue" which had been presented to them on the basis of assertions of lack
of work,
reductions in force, or to reduce costs. Each of the Complainants later
become convinced that
the real reasons they were asked to sign the releases was their protected
activity. Complainants
filed ERA whistleblower complaints, and the ALJ considered on a motion for
summary decision
whether the releases prevented recovery for activities of the Complainants
predating the
execution of the releases.
The ALJ held that a complainant may settle a case at any time, but that such a
settlement must
nevertheless be approved by the Secretary of Labor. The ALJ focused on
whether an inherent
requirement of a release to be fair, adequate and reasonable is that it was
entered into knowingly
and voluntarily. The ALJ concluded that a waiver of ERA claims must be
closely scrutinized
and that in considering a motion for summary decision, the complete
circumstances in which the
release was executed must be carefully evaluated. Upon review of the filings
of the parties, the
ALJ concluded that, as a matter of law, the releases were entered into
knowingly and voluntarily,
considering Complainants' college level education and work experience, the
45-days for
acceptance and 7-day revocation period afforded the signatories, the clarity
and lack of
ambiguity of the terms of the release, the clear advice at the top of the
release
"NORTHEAST ADVISES YOU TO CONSULT WITH AN ATTORNEY BEFORE YOU
SIGN THIS RELEASE", and finally the fact that each Complainant received
an amount to
which he was not otherwise entitled as consideration for signing the release.
The ALJ rejected Complainants' argument that the signing was not voluntary
because any
attempt to negotiate would have been futile. The ALJ observed that there was
no evidence that
any of the Complainants had attempted to negotiate, and found other indicia
that Complainants
had knowingly and voluntarily executed the releases.
The ALJ found that the Hobson's choice of being terminated from employment or
being
terminated and executing a waiver of rights in return for money is, without
more, insufficient to
support a claim of duress. (the ALJ reserved the issue of threat of
blacklisting for a later
hearing).
Finally, the ALJ addressed Complainants' position that Respondent falsified
the reason for the
lay-offs precipitating the releases. The ALJ found that each Complainant
suspected prior to
signing the releases that Respondent was engaging in retaliatory conduct, but
that their alleged
subsequent confirmation of that conduct did not negate their waiver of their
rights.
SETTLEMENT AGREEMENT; ESTABLISHING FRAUD
[N/E Digest XVII F]
In Ruud v. Westinghouse Hanford Co., 88-ERA-33
(ALJ Mar. 15, 1996), the parties agreed that in order to show
that a settlement agreement was invalid because of fraud, a
complainant must establish all elements of a fraud. The ALJ
found that the Complainant must demonstrate the existence of
knowingly false material misrepresentations;
with intent to deceive, and
complainant's reliance thereon.
Slip op. at 75-76, citing Beckendorf v. Beckendorf,
457 P.2d 603, 606 (Wash. 1969). The ALJ found that the
Complainant had the burden of establishing all elements by
"clear, cogent and convincing evidence."
Beckendorf, supra.
XVII F Motion to disapprove based on changed
circumstances
In Gillilan v. Tennessee Valley Authority, 89-ERA-
40 (Sec'y Apr. 12, 1994), the Secretary ordered the parties' to
submit their settlement agreement for review by the Secretary.
While pending review by the Secretary, Complainant moved for
disapproval.
The Secretary noted 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.
Complainant contended that he was not repudiating the settlement,
but only requesting that the Secretary review the agreement under
current conditions because of Respondent's actions to disable
itself from performing the obligations it voluntarily undertook
in the settlement agreement. The Secretary viewed this as a
premature assertion of breach of the agreement, which is an
insufficient reason to disapprove the settlement. In this regard
the Secretary stated:
A settlement under the ERA is an executory contract,
which is binding on the parties until the Secretary acts on
it. But until the Secretary approves the settlement, the
parties are not obligated to fulfill its terms for purposes
of the ERA.
Slip op. at 3 (citations omitted).
[Editor's note: The parties settled the case on January 31,
1990, and the ALJ's recommended order of dismissal was issued on
February 26, 1990. The Secretary's order to submit settlement
was issued on January 2, 1991. Complainant contended, inter
alia, that Respondent had discontinued certain training courses
that had been promised to Complainant as part of the settlement
agreement.]
XVII F Renunciation of settlement agreement
In Kim v. Trustees of the University of
Pennsylvania, 91-ERA-45 and 92-ERA-8 (Sec'y June 17,
1992) (record certified to the Third Circuit on Aug. 24, 1992),
the Secretary found that the terms of a settlement agreement were
fair, adequate and reasonable. The complainant had alleged that
he was coerced into signing the agreement, that he did not fully
understand it, that he was not executing the agreement
voluntarily and with full knowledge of its contents, and that he
signed the agreement without reading it. The Secretary found
that the record did not support those allegations. She noted
that the question of whether a party may disavow a settlement
before the Secretary has reviewed it, and specifically the
question of lack of consent and attorney coercion in Macktal
v. Brown & Root, 86-ERA-23 (Sec'y Nov. 14, 1992), and
that the disposition was expressly upheld in Macktal v.
Secretary of Labor, 923 F.2d 1150, 1157 (5th Cir. 1991). She
found that the record in the instant matter contained no showing
of coercion or other impropriety that would justify renunciation
of the settlement agreement. See Petty v. Timken Corp.,
849 F.2d 130 (4th Cir. 1988); Riley v. American Family Mutual
Insurance Co., 881 F.2d 368, 373-74 (7th Cir. 1989).
XVII F Renunciation of settlement agreement
The Secretary established the principles for evaluating whether
settlements had been reached in whistleblower cases in Macktal
v. Brown & Root, Inc., 86-ERA-23 (Sec'y Nov. 14, 1989),
rev'd on other grounds, Macktal v. Secretary of Labor, 923
F.2d 1150 (5th Cir. 1991) (5th Circuit held that Secretary did
not have authority to sever a material provision of a settlement
agreement and impose a new redacted version on the parties
without their consent). 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, 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.
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.
Based on these principles, the Secretary reviewed the
circumstances in McFarland v. City of New Franklin,
Missouri, 86-SDW-1 (Sec'y Aug. 17, 1993), and concluded
that the parties reached a settlement agreement that Complainants
attempted to repudiate because it did not provide all the relief
they might have been entitled to under the SWDA. In
McFarland, Complainants' counsel at the time of the
settlement negotiations had written to Respondent's counsel
stating that "the proposal for settlement . . . . is
acceptable." One key term of that settlement proposal was
that Complainants tender their written resignations, which they
never did even though they received a payment from Respondent.
There was no suggestion that at the time, Complainants' counsel
did not have full authority to enter into the settlement on their
behalf at the time.
[Editor's note: as a follow up to Macktal. Complainant
in that case filed a legal malpractice action against his counsel
in Federal District Court asserting, inter alia, that he entered
into the settlement only as a result of fraud and duress by his
counsel. The District Court stayed the action pending resolution
of the matter at the administrative level. Macktal v.
Garde, No. 89-2533 JGP (D.C. D.C. May 11, 1992) (unpublished
memorandum opinion) (available at 1992 U.S. Dist. LEXIS 6330).]
XVII F Renunciation
In Elliot v. Enercon, Services, Inc., 92-ERA-47
(Sec'y June 28, 1993), the parties submitted a settlement
agreement that referred to a memorandum that was not contained in
the administrative record. The Secretary ordered that the
memorandum be submitted, and the parties complied. Complainant
expressed concern over the memorandum during settlement
negotiations, i.e., Respondent "refused to incorporate the
terms of the memorandum within the agreement text or make the
memo more binding." Complainant also expressed concern that
he cannot now work at a particular nuclear power plant due to the
terms of the settlement.
The Secretary found that Complainant's concerns over the effect
of the memorandum incorporated into the settlement were not
persuasive because the memorandum was expressly referenced and
accordingly was a binding term of the agreement, and because the
record contained no showing of coercion or other impropriety that
would justify renunciation of the settlement agreement.
In a footnote, the Secretary stated:
I note that the Secretary has considered the issue of
whether one party may disavow a settlement before the
Secretary has reviewed it, specifically addressing the claim
of lack of consent and attorney coercion. Macktal v.
Brown & Root, Case No. 86-ERA-23, Sec. Order
Rejecting in Part and Approving in Part Settlement Between
the parties and Dismissing Case, Nov. 14, 1989, slip op. at
4-10. The Secretary's disposition on that issue was
expressly upheld. Macktal v. Secretary of Labor, 923
F.2d 1150, 1157 (5th Cir. 1991). The record here similarly
contains no showing of coercion or other impropriety that
would justify renunciation of the settlement agreement.
SeegenerallySan Joo Kim v. The Trustees
of the University of Pennsylvania, Case Nos. 91-ERA-45
and 92-ERA-8, Final Ord. Approving Settlement Agreement and
Dismissing Cases, June 17, 1992, slip op. at 3-4.
XVII F Settlements - Procedural Rules and
Regulations
In Wampler v. Pullman-Higgins Co., 84-ERA-13 (Sec'y
Jan. 23, 1992) (order to submit settlement agreement), the
Complainant requested that the Secretary vacate an Order of the
ALJ which dismissed the Complainant's claim with prejudice
pursuant to 29 C.F.R. § 25(e)(4), and that the hearing on
the claim be reopened. The Complainant was attempting to nullify
an agreement made six years prior on the basis that it contained
a provision which prevented him from communicating any of his
safety concerns to the Nuclear Regulatory Commission. Before the
Secretary will reopen a hearing on a claim settled by the parties
without the assistance of an ALJ, a copy of the settlement
agreement signed by both parties must accompany a party's request
to nullify settlement. If an agreement contains any
unenforceable clause, the entire agreement is not automatically
vitiated. The unenforceable segment can be severed and the rest
of the agreement can be approved.
XVII F Violation of spirit and intent of
agreement
In Blanch v. Northeast Nuclear Energy Co., 90-ERA-
11 (Sec'y May 11, 1994), Complainant requested that the
settlement be rejected by the Secretary because he believed
Respondent had violated "the spirit and the intent" of
the agreement.
Citing Macktal v. Secretary of Labor, 923 F.2d 1150, 1156
(5th Cir. 1991), for the proposition that when the parties in an
ERA case reach a settlement, the Secretary may either approve it
or disapprove it as written, the Secretary stated:
Violation of a settlement may constitute a separate,
independent violation of the ERA, but the Secretary must
address a settlement recommended for approval by the ALJ on
the record presented to the ALJ.
Slip op. at 4 (footnote omitted). The Secretary referred
Complainant's request to the Wage and Hour Division for
investigation of whether the settlement had been violated,
directing that Complainant's attorney's letter to the Secretary
be considered a complaint for purposes of time limits in the ERA.
XVII F Parol evidence; admissibility of
In Merritt v. Mishawaka Municipal Utilities, the City of
Mishawaka, 93-SDW-3 (ALJ Mar.
24, 1995), the Respondent submitted a motion to approve a
settlement agreement in which the
Complainant agreed to release and discharge the Respondent from
any an all claims relating to his
employment with the Respondent, with the sole exception of a
potential worker's compensation claim.
The Complainant's counsel contended that the Complainant did not
participate and consent to the
settlement, that nothing in the record suggested that the SDWA
case was involved in the settlement,
and that the matter should proceed to hearing.
The ALJ concluded that the case law indicated that principles of
contract law must be applied to
interpret a settlement agreement in a DOL whistleblower
proceeding. The ALJ noted the law of the
state in which the settlement was executed that where the
language of an instrument is unambiguous,
the intent of the parties may be determined from its four
corners, and parol evidence is inadmissible to
expand, vary, or explain the instruction unless there has been a
showing of fraud, mistake, ambiguity,
illegality, duress or undue influence.
The ALJ determined that the circumstances did not support the
Complainant's contention that he was
not a participant and did not consent to the settlement
agreement, and that the four corners of the
agreement included the instant whistleblower proceeding, which
was pending at the time the settlement
was executed. Finding that the agreement was fair, adequate and
reasonable, the ALJ recommended
that the Secretary approve the settlement and dismiss the
complaint.
Where attorney fees are incorporated into a settlement agreement,
the ALJ does not approve the fee amount. If, however, the
parties submit an agreement providing for the complainant to pay
his attorney, the ALJ must take into consideration whether the
net amount to be received by the complainant is fair, adequate
and reasonable.
Tinsley v. 179 South Street Venture, 89-CAA-3
(Sec'y Aug. 3, 1989) (order of remand).
[Nuclear & Environmental Digest XVII G 1]
MOTION TO INTERVENE IN SETTLEMENT BY FORMER ATTORNEY
In Gaballa v. Carolina Power & Light
Co., 1996-ERA-43 and 1998-ERA-24 (ALJ May 27, 1999), Complainant's former
counsel filed a motion to intervene to protect his interest in receiving attorney's fees for his prior
representation of Complainant, who had subsequently entered into a settlement with Respondent
represented by new counsel. The former counsel cited Pogue v. U.S. Department of the Navy,
1987-ERA-21 (Sec'y April 14, 1994), in which the Secretary of Labor permitted intervention by a
former attorney to preserve his rights to collect supplemental attorney's fees. The ALJ distinguished
Pogue on a number of grounds, but primarily because the instant case was not litigated to any
administrative decision on the merits whereas in Pogue, the attorney merely sought to
supplement a prior award of fees after a full litigation of the case. The ALJ found applicable the
decision in "Tinsley v. 179 South Street
Venture, 1989-CAA-3 (Sec'y Aug. 3, 1989), where the Secretary held that, in a case where
parties negotiate a private resolution of a complaint brought under an environmental whistleblower
protection statute and incorporate a provision for payment of attorney's fees in the settlement
agreement, the administrative law judge does not have authority to approve the fee amount, only
whether the net amount to be received by the complainant (i.e., after deduction of the
agreed-upon attorney's fees) is fair, adequate and reasonable." Slip op. at 3. On this basis, the
ALJ found that he lacked jurisdiction to adjudicate the former attorney's alleged entitlement to
attorney's fees, and therefore denied the motion to intervene.
[Nuclear & Environmental Digest XVII G 1]
SETTLEMENT; EFFECT OF PRESENCE OF ATTORNEY'S LIEN
In Gaballa v. Carolina Power & Light
Co., 1996-ERA-43 and 1998-ERA-24 (ALJ May 27, 1999), Complainant's former
counsel had filed a notice of lien for attorney's fees. Neither the settlement agreement nor the parties'joint
motion for approval of the settlement agreement, however, contained any reference to the lien. The ALJ recommended approval of the agreement,
but vacated the order of approval after Respondent pointed out the issue of the lien.
After giving all interested parties an opportunity to respond to several orders on the matter, and
concluding that the former attorney did not have a right to intervene, the ALJ applied a totality of the
circumstances test to determine if the agreement was knowing and voluntary,. The ALJ concluded that
Complainant entered into the settlement agreement with full understanding of the potential consequences
of his actions. Thus, the ALJ reaffirmed his prior finding that the parties' agreement constituted a fair,
adequate and reasonable settlement of the complaints.
[N/E Digest XVII G 1]
ATTORNEY FEES FOR SUCCESS ON ILLEGAL SETTLEMENT TERMS
In Macktal v. Brown & Root,
Inc., 86-ERA-23 (ARB Jan. 6, 1998), the
matter had been settled at a much earlier stage in the litigation. Certain
terms of the settlement
were found illegal by the Secretary. The matter eventually reached the ARB on
the merits,
which found that the complaint must be dismissed because Complainant only
stated internal
complaints for his pre-1992 ERA amendment complaint in the Fifth Circuit.
Complainant,
however, now requested attorney's fees for his successful litigation of the
illegal settlement
terms. Noting the similarity of the settlement terms ruling in the instant
case with
Connecticut Light& Power Co. v. Secretary of Labor, 85-F.3d 89 (2d Cir.
1996), the
ARB concluded that such fees should be awarded.
[N/E Digest XVII G 1]
POLICY SUPPORTING REQUIREMENT THAT PARTIES DISCLOSE WHETHER
PREVIOUS BACK PAY ORDER HAD BEEN COMPLIED WITH PRIOR TO APPROVAL
OF SETTLEMENT ON ATTORNEY'S FEES, COSTS AND EXPENSES
The amount of a back pay award affects not only a complainant's individual
interest, but also the
public interest because if the amount is not fair, adequate and reasonable,
other employees may
be discouraged from reporting safety violations. Keene v. Ebasco
Constructors,
Inc., 95-ERA-4 (ARB June 27, 1997) (Board explaining why it needed
information
about whether its previous order on back pay had been complied with before it
could consider a
settlement on attorney's fees, costs and expenses).
[N/E Digest XVII G 1]
REQUIREMENT THAT PARTIES DISCLOSE WHETHER PREVIOUS BACK PAY
AND EXPUNGEMENT ORDERS HAD BEEN COMPLIED WITH PRIOR TO APPROVAL
OF SETTLEMENT ON ATTORNEY'S FEES, COSTS AND EXPENSES; COINCIDENTAL
REQUIREMENT OF DISCLOSURE OF ANY SIDE AGREEMENTS
In Keene v. Ebasco Constructors, Inc., 95-ERA-4 (ARB June 27,
1997), the
matter had been remanded for a recommended decision on costs and expenses.
Earlier, the
Board had ordered an award of back pay and an expungement of Complainant's
"fair" performance appraisal. Following the ALJ's recommended
decision, the
parties submitted a letter of agreement to the Board stating that the parties
had agreed to a
settlement of attorney's fees, costs and expenses. The Board noted that the
letter of agreement
did not specify whether Respondent had complied with the orders on back pay
and expungement,
and indicated that it must know this information so that it could determine if
the settlement
agreement is fair, adequate and reasonable.
The Board also ordered submission of any settlement documentation for any
other alleged claims
arising from the same factual circumstances forming the basis of the federal
claim, or to certify
that no other such settlement agreements were entered into between the
parties.
SETTLEMENTS; ACTUAL AMOUNT COMPLAINANT WILL
RECEIVE MUST BE SPECIFIED
[N/E Digest XVII G 1]
In a series of decisions, the Board has held that the actual amount the
complainant will receive in settlement of a complaint must be specified in
order for the Board to determine whether the settlement agreement is fair,
adequate and reasonable. See OALJ
Memorandum: Disclosure of Dollar Amount of Payments and Attorneys' Fees;
Possible Side Agreements. Thus, if a settlement agreement reveals a
total payment to Complainant, but does not specify the amount of attorney's
fees to be paid out of that amount, the Board will order provision of this
information by either a joint response, or from Complainant's counsel, prior
to
acting on approval of the settlement. See, e.g.,Backen v.
Entergy Operations, Inc., 96-ERA-18 (ARB Dec. 12, 1996)(order).
[Editor's note: ALJs probably should order the parties to provide the
required information before transmitting a recommended decision to the
Board. See, e.g.,DeBose v. North Carolina Power
& Light Co., 92-ERA-14 (ALJ Jan. 10, 1997) (order of Chief
ALJ).]
SETTLEMENT; AMOUNT RECEIVED BY COMPLAINANT; RELATION TO
ATTORNEY'S FEE PAID BY COMPLAINANT
[N/E Digest XVIII G 1]
In Ezell v. Tennessee Valley
Authority, 95-ERA-39 (ARB Aug. 21, 1996), the Board had ordered
the parties to
advise it as to the actual amount of the settlement dollar amount that
Complainant was to receive.
Complainant's counsel advised that Complainant was to receive the entire
amount of the
settlement
since she had paid her attorney under a separate agreement. Although the
amount of the
settlement
was slightly less than Complainant's total attorney's fees and costs, the
Board nonetheless
approved
the settlement, noting that "the Wage and Hour investigation found that
the adverse actions
taken against Complainant were not motivated by her protected activities and
that she remains
employed by Respondent at her regular employment."
SETTLEMENT; ATTORNEY'S FEES
[N/E Digest XVII G 1]
In Blackburn v. Metric Constructors,
Inc., 86-ERA-4 (ARB July 22, 1996), the parties reached a
settlement on attorneys
fees and costs relating to appellate work before the Fourth Circuit. The Board
ordered the parties
to
submit a copy of this settlement for approval by the
Board as the Secretary's designee.
SETTLEMENT; INSUFFICIENT TO DISCLOSE TOTAL AMOUNT PAID TO
COMPLAINANT; DISCLOSURE MUST REVEAL AMOUNT OF TOTAL DESIGNATED
FOR
ATTORNEY'S FEES, EXPENSES AND COSTS
[N/E Digest XVII G 1]
In Guity v. Tennessee Valley
Authority, 90-ERA-10 (ALJ Aug. 15, 1996), the ALJ recommended
approval of a
settlement of an ERA whistleblower complaint. The ALJ noted that she was
required to
determine
the dollar amount received by Complainant to determine whether a settlement
was fair, adequate
and
reasonable. The Memorandum of Understanding and Agreement submitted by the
parties, in
fact,
did disclose the total dollar amount to be paid to Complainant.
The Board, however, noting that another provision of the settlement released
Respondent
from
claims for attorney's fees, expenses and/or costs, and that the agreement did
not specify the
amount
of attorney's fees to be paid, ordered the parties to file a joint response
indicating the
"actual
amount of money to be to the Complainant...." Guity v. Tennessee Valley
Authority, 90-ERA-10 (ARB Aug. 28, 1996). If the parties could not agree upon a joint
response,
Complainant's
counsel was ordered to submit the required information.
SETTLEMENT; ATTORNEY'S FEES; IF PARTIES AGREE, SECRETARY DOES
NOT NEED TO REVIEW THE AMOUNT UNDER LODESTAR METHOD
[N/E Digest XVI E 3 and XVII G 1]
If the parties are in agreement as to the amount of
attorney s fees to be paid, the Secretary does not need to review
the amount with the specificity usually required by the lodestar
method. Carter v.
Electrical District No. 2 of Pinal County, 92-TSC-11 (OAA Apr. 24, 1996), citing Hensley v. Eckerhart, 461 U.S.
424 (1983).
Where a paragraph of a settlement of a CAA whistleblower
complaint stated that "the terms and conditions of this
Agreement are subject to the ratification and approval of the
Board of Directors of [one of the Respondents]", and the
President of the Board, the managing agent, and the Board's
attorney "warrant[ed]" that they will recommend
ratification, the Secretary found that the terms of the
settlement remained contingent and declined to approve the
settlement. She ordered that the parties submit a final, non-
contingent agreement for review within 30 days or to inform that
they do not wish to resolve the case by settlement.
Polydorou v. A.J. Clarke Management Corp., 88-CAA-7
(Sec'y Aug. 3, 1989) (order regarding settlement agreement).
After the parties notified that the Board of Directors had
ratified the settlement agreement, the Secretary reviewed and
approved the settlement. Polydorou v. A.J. Clarke
Management Corp., 88-CAA-7 (Sec'y July 9, 1990) (order
approving settlement).
[Nuclear and Environmental Digest XVII.G.2.]
NO-FAULT SETTLEMENT; ATTORNEY'S FEES; PARTIES CANNOT LEAVE IT TO
ALJ TO MAKE AN AWARD OF FEES AND COSTS
In Harris v. Tennessee Valley
Authority, ARB No. 99-004, ALJ Nos. 1997-ERA-26 and 50 (ARB Nov. 29,
2000), the ARB held that a DOL administrative law judge does not have the jurisdiction to award
costs, including attorneys' fees, where the parties have entered into a no-fault settlement
agreement. In Harris, the parties entered into a settlement agreement which
provided, inter alia, that Respondent would be responsible for attorneys' fees and
expenses in an amount to be determined by the presiding ALJ. Respondent filed a petition for
review of the ALJ's attorneys' fees and costs decision.
The ARB found that the settlement was void, holding that the ERA provision covering fees and
expenses, 42 U.S.C. § 5851(b)(2)(A) and (B), precludes an attorneys' fees award where
there has been no determination of a violation and where the parties by settlement agreement
have not expressly provided for payment of fees and costs. The ARB held that the ERA fees and
expenses provision provides for an award of such costs to the complainant only where there has
been a determination that the respondent violated the ERA anti-retaliation provision, and where
there has been an order that respondent provide relief. Moreover, the ARB held that it is black
letter law that an administrative body may only exercise authority over matters in its jurisdiction,
and that parties cannot vest the agency with that jurisdiction by agreement.
The ARB observed that "a complainant who brings an action and then enters into
no-fault settlement agreement is free to negotiate a settlement that includes her attorneys' fees as well."
Such settlements are routinely reviewed and approved. The ARB ruled, however, that "where
a complainant enters into a no-fault settlement of his or her case without at the same time
settling the attorneys' fees issue would he or she be precluded from an award of attorneys'
fees."
XVII.G.2. Settlement of remedies issue/Respondent's
intent to appeal findings on the merits
In Pillow v. Bechtel Construction, Inc., 87-ERA-35
(Sec'y Aug. 16, 1994), the Secretary approved a settlement
limited to the amount of back pay and interest, compensatory
damages, and costs and attorney's fees. The agreement did not
settle the underlying issue of liability, on which the Respondent
intended to seek judicial review. The Secretary found nothing in
the statute or regulations that prohibits such an agreement. The
Secretary noted that the agreement was binding if the Respondent
fails to seek judicial review on the issue of liability, or if it
seeks such review and the court affirms the Secretary's finding
that the Respondent, violated the ERA.
[Editor's note: After finding in an earlier decision that the
Respondent had violated the ERA, the Secretary had remanded the
case to the ALJ for findings on damages and costs.]
In McClure v. Interstate Facilities, Inc., 92-WPC-2
(ALJ Apr. 17, 1992), the Complainant filed a Federal Water
Pollution Control Act whistleblower complaint with the Wage and
Hour Division. Before the issuance of preliminary findings, the
parties executed a written settlement agreement in which the
Complainant was reinstated but in which the Respondent
specifically admitted no violation of law. The District Director
thereafter issued a Notice of Determination that included an
order of abatement and which contained a finding that the
Respondent had violated the whistleblower provision. The
Respondent requested a hearing on the inclusion of the finding of
a violation of law.
Citing Nolder v. Raymond Kaiser Engineers, Inc., 84-ERA-5
(Sec'y June 28, 1985), the ALJ concluded that the voluntary
settlement resolved the complaint in all respects to the complete
satisfaction of both parties, and therefore the District
Director's determination of a violation of law was inappropriate
and should be vacated, leaving the settlement agreement as the
"sole and proper disposition of the complaint."
Gillilan v. Tennessee Valley Authority, 89-
ERA-40 (Sec'y Apr. 12, 1994)
The Secretary found indications that the parties' request
for a voluntary dismissal of the case was based on a settlement
agreement, and ordered the parties to submit the settlement
agreement for review. While the agreement was pending review by
the Secretary, the Complainant moved to disapprove the proposed
settlement and to remand the action to the ALJ due to changed
circumstances that would render the terms of the agreement
inequitable.
The Secretary held that the Complainant's claim was merely a
premature assertion that Respondent has breached the agreement
and was an insufficient reason to disapprove the settlement. A
settlement under the ERA is an executory contract and is binding
on the parties until the Secretary acts on it. But until the
Secretary approves the settlement, the parties are not obligated
to fulfill its terms for purposes of the ERA.
[Nuclear & Environmental Whistleblower Digest XVII G 4]
SETTLEMENT; BAD FAITH (e.g., BREACH OF AGREEMENT) OF PARTY MAY BE CONSIDERED IN DETERMINING WHETHER TO APPROVE
In Ruud v. USDOL, 80 Fed Appx 12, No. 02 71742 (9th Cir. Oct. 22, 2003) (unpublished) (case below ARB No. 99 023, ALJ No. 1988 ERA 33), the Ninth Circuit held that the ARB erred when it concluded that it did not have jurisdiction to consider subsequent bad faith behavior (breach of the agreement) in the course of reviewing a settlement agreement under the whistleblower provision of the CAA. Rather, the court held that the Secretary of Labor "is free to determine that a settlement agreement is not fair, adequate and reasonable in light of a party's subsequent bad faith behavior, and in so doing does not infringe upon the jurisdiction of the district court to enforce such an agreement." Nonetheless, the court affirmed the ARB's approval of a settlement upon reconsideration based on the ARB's finding that its prior rejection of the settlement was inconsistent with "its own case law establish[ing] that breach of a settlement agreement is not a relevant consideration in the Secretary's decision whether to enter into a settlement agreement."
[Nuclear & Environmental Digest XVII G 4]
ENFORCEMENT OF SETTLEMENT AGREEMENT; JURISDICTION OF ALJ AND ARB
In Thompson v. Houston Lighting & Power Co., ARB No. 98-101, ALJ No. 1996-ERA-34 (ARB Mar. 30, 2001), Complainant asserted before the ALJ that the Department has inherent jurisdiction to enforce settlements approved by the Secretary. The ALJ declined to adopt Complainant's assertion, finding that enforcement was beyond his jurisdiction. On review, the ARB noted that subsequent to the ALJ's ruling, the Third Circuit held in an unrelated case that the Secretary lacked authority to enforce a settlement agreement because, under the ERA, enforcement authority is vested exclusively in the U.S. district courts. Williams v. Metzler, 132 F.3d 937 (3d Cir. 1997).
Complainant argued that although Williams is binding on cases arising in the Third Circuit, it is not binding on cases arising in the Fifth Circuit, and inasmuch as his case arose in the Fifth Circuit, the ARB should follow Orr v. Brown & Root, Inc., 1985-ERA-6 (Sec'y Oct. 2, 1985), a case in which the Secretary found that the Department does have jurisdiction to enforce a settlement agreement. The Board noted that the Orr decision was based on a Sixth Circuit decision that was expressly rejected by the Fifth Circuit, and held that:
In our view, the ERA makes it unequivocally clear that a settlement agreement is enforceable only through U.S. District Court. 42 U.S.C. §5851(e). Thus, we agree with the Third Circuit that the Department has no authority, either express or implied, to enforce a settlement agreement in an ERA case.
The Board, however, left open the possibility for enforcement in whistleblower cases other than ERA, noting the decision in Chase v. Buncombe County, 1985-SWD-4 (Sec'y Nov. 3, 1986), which arose under the SWDA, and which does not contain a provision placing enforcement authority in the U.S. District Courts.
Complaint also requested that the Secretary initiate or join an enforcement action. The ARB declined to address this request as DOL regulations do not confer on the Board any role in the enforcement process.
[N/E Digest XVII G 4]
SETTLEMENT AGREEMENT; DOL'S AUTHORITY TO ENFORCE
In Williams v. Metzler, No. 97-3127, 1997 WL 793315 (3rd Cir.
Dec. 30,
1997) (case below, ARB No. 96-160, ALJ No. 94-ERA-2), the Third Circuit held
that "the
Secretary of Labor does not have the authority, even with the consent of the
parties, to enforce a
settlement agreement resolving a retaliation claim brought by an
employee/whistleblower against
his employer under the Energy Reorganization Act."
The court raised this issue sua sponte, noting that the ERA provides
only that either the
Secretary or a party may seek enforcement of a settlement in the district
court. 42 U.S.C.
§ 5851(d), (e); see also 24 C.F.R. § 24.8. The court
indicated that the
Secretary could utilize an informal fact gathering proceeding preliminary to
enforcement
(i.e., to inform the Secretary's decision on whether to pursue
enforcement on the
complainant's behalf), but does not have the authority under the ERA to make a
formal
adjudication entitled to preclusive effect in subsequent district court
actions, on whether there
was a breach of a settlement agreement. The court found that the ERA places
the enforcement
function in the district court, and that the parties cannot place consensual
jurisdiction in the
Secretary to perform that function (the settlement agreement included a
provision giving the
complainant the right to seek enforcement of the agreement through the
Department of Labor).
[N/E Digest XVII G 4]
BOARD JURISDICTION OVER PROPER INTERPRETATION OF PREVIOUSLY
APPROVED SETTLEMENT
In Pillow v. Bechtel Construction, Inc., 87-ERA-35 (ARB Sept.
11,
1997), the Secretary had earlier found in favor of Complainant and remanded
the case to the ALJ
for a determination on damages. On remand, the parties settled in regard to
the amount of
damages and attorney's fees, although the settlement contemplated that
Respondent would seek
judicial review on the issue of liability. The Eleventh Circuit affirmed the
Secretary. Upon
motion of Complainant, Respondent was ordered by the ARB to pay the amount
agreed in the
settlement. See Pillow v. Bechtel
Construction,
Inc., 87-ERA-35 (ARB Feb. 5, 1997). A dispute, however, remained
concerning the
proper interpretation of the settlement agreement as to interest. Id.
Respondent argued that 42 U.S.C. § 5851(e) gives jurisdiction over
enforcement
matters to the U.S. District Court rather than the Secretary of Labor. The
ARB stated that it
"agree[s] with the general proposition that after a final decision has
been issued, the Board
lacks jurisdiction over a dispute about the proper interpretation of a
settlement agreement."
Pillow, 87-ERA-35, slip op. at 2 (ARB Sept. 11, 1997)(citation
omitted). The ARB
distinguished Williams v. Public Serv.
Elec. & Gas Co., 94-ERA-2 (Sec'y Apr. 10, 1995), appeal filed, No. 97-3127
(3d. Cir), on
the ground that, unlike here, in Williams, the settlement included a
provision retaining
jurisdiction for the Board to enforce the agreement. Thus, the ARB concluded
that, pursuant to
42 U.S.C. § 5851(e), the interpretation issue may be addressed to the
U.S. District Court.
[N/E Digest XVII G 4]
RELEASE SIGNED PRIOR TO FILING OF COMPLAINT; KNOWING AND
VOLUNTARY; DURESS OR FRAUD
In Verdone v. Northeast Utilities, 97-ERA-27, 28 and 30 (ALJ
June 9, 1997),
three Complainants had signed documents entitled "General Release and
Convenant Not to
Sue" which had been presented to them on the basis of assertions of lack
of work,
reductions in force, or to reduce costs. Each of the Complainants later
become convinced that
the real reasons they were asked to sign the releases was their protected
activity. Complainants
filed ERA whistleblower complaints, and the ALJ considered on a motion for
summary decision
whether the releases prevented recovery for activities of the Complainants
predating the
execution of the releases.
The ALJ held that a complainant may settle a case at any time, but that such a
settlement must
nevertheless be approved by the Secretary of Labor. The ALJ focused on
whether an inherent
requirement of a release to be fair, adequate and reasonable is that it was
entered into knowingly
and voluntarily. The ALJ concluded that a waiver of ERA claims must be
closely scrutinized
and that in considering a motion for summary decision, the complete
circumstances in which the
release was executed must be carefully evaluated. Upon review of the filings
of the parties, the
ALJ concluded that, as a matter of law, the releases were entered into
knowingly and voluntarily,
considering Complainants' college level education and work experience, the
45-days for
acceptance and 7-day revocation period afforded the signatories, the clarity
and lack of
ambiguity of the terms of the release, the clear advice at the top of the
release
"NORTHEAST ADVISES YOU TO CONSULT WITH AN ATTORNEY BEFORE YOU
SIGN THIS RELEASE", and finally the fact that each Complainant received
an amount to
which he was not otherwise entitled as consideration for signing the release.
The ALJ rejected Complainants' argument that the signing was not voluntary
because any
attempt to negotiate would have been futile. The ALJ observed that there was
no evidence that
any of the Complainants had attempted to negotiate, and found other indicia
that Complainants
had knowingly and voluntarily executed the releases.
The ALJ found that the Hobson's choice of being terminated from employment or
being
terminated and executing a waiver of rights in return for money is, without
more, insufficient to
support a claim of duress. (the ALJ reserved the issue of threat of
blacklisting for a later
hearing).
Finally, the ALJ addressed Complainants' position that Respondent falsified
the reason for the
lay-offs precipitating the releases. The ALJ found that each Complainant
suspected prior to
signing the releases that Respondent was engaging in retaliatory conduct, but
that their alleged
subsequent confirmation of that conduct did not negate their waiver of their
rights.
[N/E Digest XVII G 4]
SETTLEMENT; ENFORCEMENT THROUGH BINDING ARBITRATION
In Nowak v. Environmental Department of the State of New Mexico,
96-CAA-9 (ALJ Mar. 4, 1996), the ALJ recommended approval of a settlement
agreement that
included a provision that the agreement could be enforced through binding
arbitration. The ALJ
held that "[s]uch a provision is appropriate in this case because the
Eleventh Amendment
may preclude the Complainant from seeking to enforce the agreement in a
Federal District Court
under the provisions of 42 U.S.C. § 7622(e). See Seminole Tribe of
Florida v.
Florida, __ U.S. __, 116 S. Ct. 1114 (1996); Wilson-Jones v.
Caviness, 99 F.3d 203
(6th Cir. 1996)." The ALJ, however, found that the arbitration provision
does not limit the
Secretary's authority to seek enforcement of the agreement pursuant to 42
U.S.C. §
7622(d).
SETTLEMENT PROVISION FOUND VOID BY NRC DOES NOT
GIVE DOL JURISDICTION TO CONDUCT ADDITIONAL
ADMINISTRATIVE PROCEEDINGS
[N/E Digest XVII G 4]
In Thompson v. Houston Light & Power Co., 96-ERA-34 and 38 (ALJ
Nov.
27, 1996), the parties had executed a settlement
agreement relating to Case Nos. 93-ERA-2 and 95-ERA-48 on October 25,
1995, which was ultimately approved by the Secretary of Labor as a fair,
adequate and reasonable settlement of Complainant's ERA § 211
complaints. The settlement included a provision that Respondents agreed to
warrant that Complainant's access to a certain facility had not been
suspended,
revoked or denied; the settlement also included a release for all claims or
causes of action arising out of or accruing prior to the date of the
settlement
was signed. Complainant later filed Case No. 96-ERA-34, alleging that
Respondent had discriminated and harassed him when it notified the NRC and
Respondent's Access Program Division that Complainant was a potential
threat to the safety of the subject facility, and when Respondent suspended
Complainant's security access on October 5, 1995.
On cross motions for summary decision, the ALJ held that Case No. 96-ERA-34
should be
dismissed because it was barred by the release contained in
the October 25, 1995 settlement agreement. Complainant argued that the
settlement was subject to legal challenge because the NRC had notified the
parties that the warrant about security access was void on the grounds of
public policy and federal law -- that a failure to reveal the suspension of
unescorted access would be a violation of NRC regulations. Alternatively,
Complainant argued that a settlement did not exist in regard to terms that
were
illegal. The ALJ, however, found no authority to allow Complainant's
challenge to the settlement agreement in a DOL proceeding. The ALJ, noted
that in Williams v. Public Service Elec. & Gas Co., 94-ERA-2, n.2
(Sec'y Apr. 10, 1995), the Secretary of Labor had acknowledged the U.S.
Supreme Court holding in Kokkonen v. Guardian Life Ins. Co., 128
L.Ed. 2d 391 (1994). The ALJ indicated, that consistent with
Kokkonen, without a retention of jurisdiction clause, the DOL has no
authority to conduct administrative proceedings relating to enforcement of the
settlement.
Still later, Complainant filed Case No. 96-ERA-38 alleging that
Respondents breached certain provisions of the settlement agreement
including continued payment of medical benefits and the warrant about
Complainant's security access. The ALJ noted that he viewed Complainant's
Case No. 96-ERA-38 complaint as seeking redress not for mere breach of the
settlement agreement, but for violation of the ERA by virtue of breaching the
agreement. Without this distinction, DOL would have no authority to conduct
administrative proceedings in the matter.
SETTLEMENT AGREEMENT; ENFORCEMENT; DOL JURISDICTION
[N/E Digest XVII G 4]
In Ing v. Jerry L. Pettis Veterans
Affairs Medical Center, 96-ERA-32
(ALJ Sept. 4, 1996), the proceeding involved a claim of violation of a prior
settlement agreement
in Case No. 95-ERA-6, and was viewed as an enforcement proceeding by
Complainant.
Respondent moved for dismissal based on lack of jurisdiction because the
settlement contained
no provision or clause for retention of jurisdiction by the Department of
Labor. Complainant's
counsel acknowledged that he did not oppose the motion or have any good cause
or otherwise
why the motion for dismissal should not be granted.
In his recommended dismissal, the ALJ observed that the statute and
regulations provide
that enforcement actions are appropriate in United States District Court, and
that by implication,
the Secretary's decision in Williams v. Public Service Electric & Gas
Co., 94-ERA-2
(Sec'y Apr. 10, 1995), indicates that if a settlement agreement does not
contain a retention of
jurisdiction clause, DOL does not have such jurisdiction. The Board ordered
dismissal without
comment. Ing v. Jerry L. Pettis
Veterans Affairs Medical Center, 96-ERA-32
(ARB Sept. 27, 1996).
SETTLEMENT; ENFORCEMENT; WHERE TO FILE COMPLAINT
[N/E Digest XVII G 4]
In Babel v. Federal Way Water & Sewer
District, 95-CAA-23 (ALJ Apr. 26, 1996), the ALJ held
that an appeal of the Associate Regional Solicitor's dismissal of
the Complainant's request for enforcement of the settlement
agreement should have been filed with the Secretary of Labor.
See Orr v. Brown & Root, Inc., 85-ERA-6, slip op. at 2
(Sec'y Oct. 2, 1985) (settlement specifically enforceable in
court where agreement was effected).
ENFORCEMENT OF SETTLEMENT; OBLIGATION OF EMPLOYER TO TREAT
COMPLAINANT FAIRLY IN FUTURE HIRING SITUATIONS NOT MEET MERELY BY
SUPPLYING LETTER OF RECOMMENDATION [N/E Digest XVII G 4]
In Bausemer v. TU Electric, 91-ERA-20 (Sec'y
Oct. 31, 1995), although the Secretary dismissed the
Complainant's ERA complaint, he noted that the Respondent had not
meet the responsibility imposed by an earlier settlement
agreement to treat the Complainant fairly and equitably in future
hiring decisions merely by supplying the Complainant with a
letter of recommendation.
XVII G 4 DOL jurisdiction to enforce whistleblower
settlement
In Babel v. Federal Way Water and Sewer District,
95-CAA-23 (pending), the Complainant seeks enforcement of a
settlement earlier approved by the Secretary of Labor. The
Office of the Solicitor has declined jurisdiction to enforce the
settlement based on Kokkonen v. Guardian Life Ins. Co. of
America, 114 S. Ct. 1673 (1994).
XVII G 4 Enforcement of settlement agreement
In Pillow v. Bechtel Construction, Inc., 87-
ERA-35 (Sec'y Aug. 16, 1994), the Secretary had previously found
the Respondent to have violated the ERA and remanded the case to
the ALJ for a determination of damages. Although the Respondent
subsequently filed for judicial review on the issue of liability,
the parties entered into an agreement on the contingent issue of
damages in which the Complainant received back pay plus interest,
compensatory damages, and attorney's fees. The underlying issue
of respondent's liability was not settled. The Secretary
approved the settlement and found it to be enforceable only if
the respondent's liability is affirmed or in the absence of
judicial review.
XVII G 4 Authority to enforce settlement
agreement
An agreement to settle litigation is a contract and is subject to
the rules of contract interpretation. Such an agreement is
specifically enforceable in the court where the agreement was
effected. [citations omitted]
Orr v. Brown & Root, Inc., 85-ERA-6 (Sec'y Oct.
2, 1985).
[Editor's note: In Orr, Complainant asserted that
Respondent had violated the terms of an earlier settlement
agreement, and that new, independent violations of the ERA had
been committed. She later stipulated with Respondent to
withdrawal without prejudice of the breach of the settlement
portion of the complaint. The parties filed cross-motions for
summary decision on the remainder of the complaint, and the ALJ
ruled in favor of Respondent on the ground that Complainant was
no longer an employee when the alleged violations took place.
The Secretary ruled that the withdrawal of the breach claim ended
the matter, and did not rule on the other aspects of the case.
The most interesting aspect of the Secretary's short decision,
however, is that she asserted the authority to enforce a
settlement agreement.]
XVII G 4 Enforcement of settlement agreement
In Williams v. Public Service Electric & Gas
Co., 94-ERA-2 (Sec'y Apr. 10, 1995),
the Secretary remanded a case to the ALJ for a hearing on whether
a settlement agreement had been
breached by the Respondent, declining to grant the Complainant's
motion for the Secretary to join or
initiate an enforcement action in District Court. The settlement
agreement included an agreement that
the Department of Labor retained jurisdiction over the
settlement. The Secretary held that such a
clause authorizes the Department to hold further administrative
proceedings prior to either the
Department or a party seeking enforcement in District Court.
In Williams, part of the settlement agreement had
been to provide the Complainant with
a retirement annuity payment. The Respondent, however, deducted
from the gross amount of
payments the amount allegedly required for mandatory withholding
of federal income tax, state income
tax, and FICA. The Secretary concluded from statements
accompanying the payments that most of the
net amount paid is taxable income. Thus, the Secretary
questioned whether the withholding is
necessary, and remanded the matter to the ALJ to take evidence on
the appropriate tax treatment of
the annuity and whether the Respondent breached the agreement,
and to issue a recommended
decision.
The Complainant had also sought to recover attorney fees expended
in recovering $500 in back pay
due him under the agreement. The settlement agreement, however,
only provided for attorney's fees
incurred in an action concerning breach of the agreement if
initiated "in a tribunal of competent
jurisdiction." Although an attorney was retained to assist
in recovery of the shortfall, no action
was initiated in such a tribunal, and the Secretary held that the
Complainant was not entitled to attorney
fees incurred for this breach of the agreement, pursuant to the
fees-for-breach part of the settlement
agreement.
XVII G 4 Enforcement of settlement; ALJ declines
jurisdiction
In Williams v. Public Service Electric & Gas
Co., 94-ERA-2 (ALJ Jan. 25, 1995),
the ALJ declined to assert jurisdiction to enforce a settlement
agreement, noting that such a proceeding
was properly initiated by filing the motion to enforce with the
Secretary, who then at his discretion may
initiate a proceeding in federal district court.
XVII G 4 Enforcement of settlement agreement
In Pillow v. Bechtel Construction, Inc., 87-
ERA-35 (Sec'y Aug. 16, 1994), the Secretary had previously found
the Respondent to have violated the ERA and remanded the case to
the ALJ for a determination of damages. Although the Respondent
subsequently filed for judicial review on the issue of liability,
the parties entered into an agreement on the contingent issue of
damages in which the Complainant received back pay plus interest,
compensatory damages, and attorney's fees. The underlying issue
of respondent's liability was not settled. The Secretary
approved the settlement and found it to be enforceable only if
the respondent's liability is affirmed or in the absence of
judicial review.
In Macktal v. Brown & Root, Inc., 86-ERA-23
(Sec'y Oct. 13, 1993), the Secretary noted that although
Respondent had paid Complainant a lump sum of $35,000 voluntarily
fulfilling what it believed was its duty under the settlement,
until the Secretary approved the settlement, no agreement existed
for the purposes of the ERA.
[Nuclear & Environmental Whistleblower Digest XVII G 5] SETTLEMENT; ALLEGED BREACH AS GROUNDS FOR DISAPPROVAL
In Ruud v. Westinghouse Hanford
Co., ARB Nos. 99-023, 99-028, ALJ No. 1988-ERA-33 (ARB Apr. 18, 2002), the
ARB recited the lengthy procedural history of the case. Although too complex to relate
adequately in a casenote, in essence, the ALJ who originally received a settlement agreement
in the matter in 1988 granted the parties' joint stipulation to dismiss the complaint with
prejudice, which was based on an underlying settlement agreement. Under the regulations in
force at the time, however, the ALJ should have issued a recommendation on whether to
approve the settlement and forwarded the matter to the Secretary for a final decision. The
ALJ's order was not forwarded to the Secretary until 1990. The parties resisted providing a
copy of the settlement agreement, so in 1994 the matter was remanded for a hearing on the
merits. On remand the case was assigned to a different ALJ, who conducted a hearing. In
1996, the new ALJ recommended approval of the original settlement agreement, but found in
the alternative in favor of the Complainant on the merits.
Upon review of the matter following remand, the ARB in 1997 disapproved the 1988 settlement
agreement based on a finding that Respondent had breached a material term of the settlement
agreement by interfering with the Complainant's prospective employment, and based on a
finding that there had been a mutual misunderstanding regarding a material clause of the
settlement agreement which prevented the parties from reaching an agreement. The ARB
remanded the case for additional findings on the merits.
In the meantime, several related actions in other state and federal courts were resolved, and
the parties took differing positions on the impact of those dispositions on the DOL proceeding.
In addition, rather than offering evidence on the issue for which the ARB remanded the case,
Respondent argued, inter alia, that it could not be held responsible for the Board's
conclusion that agreement had been breached. Complainant argued, inter alia, that
reconsideration of the settlement agreement was not within the ALJ's mandate on remand. The
ALJ found that he could not revisit the settlement agreement, and in a 1998 recommended
decision, made findings on reinstatement and damages.
When the ARB issued its present order in 2002, it determined that its 1997 ruling rejecting the
settlement agreement was in error. First, the ARB held that "the issue of whether or not
a settlement agreement has been breached is not a matter for the Board to determine,"
noting in this regard decisions rendered after the ARB's 1997 remand decision holding that the
Secretary does not have the authority to enforce settlement agreements. The ARB also held
that "[s]uch an approach also is more consistent with prior cases of the Secretary and the
Board which have held that breach of a settlement agreement is not a basis to disapprove or
rescind a settlement." (citations omitted). The Board also noted that "in decisions
issued subsequent to the Board's 1997 Ruud decision, we have rejected efforts to void
settlements based upon claims of breach." (citations omitted).
Second, the Board re accessed the record in regard to whether there was a misunderstanding
regarding a material term of the settlement agreement, and concluded that its 1997 remand
decision was in error on this point.
Accordingly, the ARB ruled that it would hold the parties to the terms of their 1988 settlement
agreement and approve the agreement.
XVII G 5 SETTLEMENT; EQUITABLE POWER TO COMPEL COMPLAINANT TO
RETURN MONIES PAID PRIOR TO SECRETARIAL REVIEW AND DISAPPROVAL OF
SETTLEMENT
In Corder v. Bechtel
Energy Corp., 88-ERA-9 (Sec'y Sept. 12, 1995)
(petition for review filed, 5th Cir.), the ALJ ordered the
Complainant to return monies paid to the Complainant by the
Respondent prior to the Secretary's review, and disapproval, of a
settlement. The Complainant did not comply with the order, and
the ALJ recommended dismissal. The Secretary rejected the ALJ's
recommendation on the basis of Macktal v. Brown & Root,
Inc., 86-ERA-23 (Sec'y July 11, 1995).
In Macktal, the Secretary held that in the
absence of a broad delegation of rulemaking authority, neither an
ALJ nor the Secretary has the power to enter an order directing a
complainant to return settlement monies for equitable reasons.
The Secretary held that "[a]ny rule or order issued by the
Secretary under the [ERA] . . . must be directly related to a
specific provision of the statute and clearly necessary to
implement express statutory terms." Slip op. at 5.
XVII G 5 SETTLEMENT; ALLEGATION OF WRONGFUL MODIFICATION OF
TERM
In Merritt v.
Mishawaka Municipal Utilities, 93-SDW-3 (Sec'y Sept.
11, 1995) (Secretary's order has incorrect case number of
"93-SWD-3"), the Complainant complained
that the Respondents had wrongfully modified an agreed upon
response to be used in answering inquiries from potential
employers regarding the Complainant by having the General Manager
rather than the Director of Human Resources sign the letter,
thereby "personalizing" the response letter. Since the
Complainant did not allege that the Respondents materially
changed the body of the letter, the Secretary found the
Complainant's objection to be meritless. The Secretary also
found that, assuming the change in signature was outside the
scope of the settlement, the alleged breach was not sufficient to
affect his determination of the fairness, adequacy and
reasonableness of the agreement.
Where the parties signed separate settlement agreements that are
identical in their operative terms, the separate filings will be
treated as one agreement. See Nunn v. Duke Power Co., 84-
ERA-27 (Sec'y Sept. 29, 1989), slip op. at 2. Henderson v.
Allied Radiological Control, 91-ERA-39 (Sec'y Nov. 24,
1992).
SETTLEMENTS; PARTIES MUST REVEAL SIDE AGREEMENTS
OR CERTIFY THAT SUCH AN AGREEMENT DOES NOT EXIST
[N/E Digest XVII G 6]
In Biddy v. Alyeska Pipeline Service Co., 95-TSC-7 (ARB Dec. 3,
1996), the
Board held that
In the future, the Board will require all parties
requesting approval of settlements of cases arising under the employee
protection provisions of the environmental protection statutes to
provide us with the settlement documentation for any other claims
arising from the same factual circumstances forming the basis of the
federal claim, or to certify that no other such settlement agreements
were entered into between the parties.
Slip op. at 3.
Pursuant to Biddy, both the Board will order parties
provide the required information before they will act on approval of
settlements. See, e.g.,Backen v. Entergy Operations,
Inc., 96-ERA-18 (ARB Dec. 12, 1996)(order).
[Editor's note: ALJs probably should order the parties to provide the
required information before transmitting a recommended decision to the
Board. See, e.g.,Comfort v. Raytheon Engineers and
Constructors, Inc., 95-ERA-51 (ALJ Dec. 12, 1996); DeBose v. North Carolina Power
& Light Co., 92-ERA-14 (ALJ Jan. 10, 1997) (order of Chief
ALJ).]
SETTLEMENTS; SIDE AGREEMENTS MUST BE REVEALED; FUTURE
REQUIREMENT OF CERTIFICATION THAT NO SIDE AGREEMENTS EXIST
[N/E Digest XVII G 6]
In Biddy v. Alyeska Pipeline Service
Co., 95-TSC-7 (ARB Dec. 3, 1996), the parties to a whistleblower
settlement
submitted a nominal settlement to the
Department for approval, and did not reveal the existence of a side agreement
constituting the
bulk of the total settlement amount. Indicating that it was "perturbed
at counsels'
persistence in attempting to maintain the fiction of two separate, independent
settlement
agreements, when the information contained in both agreements is directly
required by the Board
in carrying out its statutory responsibilities...", slip op. at 2
(citation omitted), the Board
held that:
In the future, the Board will require all parties requesting
approval of
settlements of cases arising under the employee protection provisions of
the
environmental protection statutes to provide us with the settlement
documentation for any
other claims arising from the same factual circumstances forming the
basis of the federal
claim, or to certify that no other such agreements were entered into
between the parties.
In Biddy v. Alyeska Pipeline Service
Co., 95-TSC-7 (ARB Aug. 1, 1996), the Board noted that the
parties ultimately filed
a joint response stating that none of the federal case settlement would be
used for attorneys' fees
or
costs, and that information regarding the details of the settlement of a
state-law based claim was
beyond the purview of the Board's authority. The Board, however, received
information
indicating
that some of the parties' representations may not have reflected the actual
total settlement
amount.
Apparently suspecting a side agreement to avoid DOL review, the Board remanded
the matter to
the
ALJ for further proceedings. In addition, the Board directed the Wage and
Hour Administrator
and
the Solicitor to review four other settlements of persons who had been joint
complainants with
Complainant, noting that those complainants had accepted nominal amounts to
settle their federal
cases and give up their employment with the respondent.
XVII G 6 Caption where party dismissed, but later signs
settlement
Where a party is dismissed as a party-respondent, but that party
later signs a stipulation of settlement, that party should be
included in the caption of the case. Polydorou v. A.J.
Clarke Management Corp., 88-CAA-7 (Sec'y Aug. 3, 1989)
(order regarding settlement agreement).
XVII G 6 Treatment of separate agreements
Where the parties signed separate settlement agreements that are
identical in their operative terms, the separate filings will be
treated as one agreement. See Nunn v. Duke Power Co., 84-
ERA-27 (Sec'y Sept. 29, 1989), slip op. at 2. Henderson v.
Allied Radiological Control, 91-ERA-39 (Sec'y Nov. 24,
1992).
InDrew v. Jersy Central Power & Light Co., 86-
ERA-10, (Sec'y June 17, 1986), the Secretary approved the ALJ's
recommended settlement and dismissal. The Secretary, however,
noted that during the hearing, the ALJ advised the parties that
their stipulation of settlement would become the final order in
the case unless, within 60 days, the Secretary objected to their
agreement. The Secretary held that neither the ERA nor its
implementing regulations at 29 C.F.R. Part 24 authorize an ALJ to
impose any such time restriction. The ALJ's statement was
erroneous.
The ALJ erred in stating that a settlement agreement constituted
his "findings of fact and conclusions of law." Where a
complaint is resolved as a result of a voluntary compromise by
the parties, it is not necessary for an ALJ to make findings of
fact and reach conclusions of law. Moreover, it is inappropriate
where the parties have agreed that the settlement "shall not
be construed as a an admission of any wrongdoing by any of the
parties, nor shall it be construed as an adjudication on the
merits for or against either party." Thomas v.
Arizona Public Service Co., 86-ERA-27 (Sec'y Sept. 14,
1990) (amended order approving settlement); Thomas v.
Arizona Public Service Co., 86-ERA-27 (Sept. 17, 1987)
(order approving settlement).
In Simmons v. Arizona Public Service Co., 90-ERA-6
(ALJ Jan. 9, 1990), the ALJ informed the parties that their joint
motion with attached settlement, requesting approval of their
proposed agreement, failed to conform with 29 C.F.R. §
18.9(b) of the rules of practice and procedure. The parties
submitted a joint stipulation meeting the requirements of section
18.9(b), and by its terms modifying the original settlement
accordingly. The ALJ then reviewed the agreement and recommended
approval by the Secretary.
On review, Simmons v. Arizona Public Service Co.,
90-ERA-6 (Sec'y Sept. 7, 1994), the Secretary found that section
18.9(b) applies on to consent findings, and not settlements.
Accordingly, the Secretary approved the agreement, but rejected
the ALJ's recommendation that the parties' settlement be modified
to comply with section 18.9(b).
According to the Secretary, section 18.9 addresses two means of
disposing of a case prior to hearing: a "settlement" or
"an agreement containing findings and an order disposing of
the whole or any part of the proceeding." 29 C.F.R. §
18.9(a). Subparagraph (b) only applies to the latter.
Subparagraph (c) also retains the distinction.
A "consent judgment is a compromise between two parties . .
. fixed by negotiation . . . and formalized by the signature of a
. . . judge." Adams v. Bell, 711 F.2d 161, 195 n.123
(D.C. Cir. 1983), cert. denied, 465 U.S. 1021 (1984).
Consent judgments may or may not admit wrongdoing or incorporate
consent findings, i.e., stipulated factual findings upon which
legal conclusions may be based.
In the instant matter, the settlement generally did not contain
stipulated factual findings to support legal conclusions, the
parties expressly provided that the settlement was not to be
construed as an admission of any wrongdoing by any of the
parties, nor as an adjudication on the merits. The only item
resembling a factual finding --that Complainant was rehired-- did
not bear on issue of liability.
[Nuclear and Environmental Whistleblower Digest XVII G 9]
SETTLEMENT JUDGE PROGRAM REQUIRES VOLUNTARY PARTICIPATION OF ALL PARTIES; ALJ CANNOT COMPEL
OALJ's settlement judge procedure requires a joint motion from the parties; an ALJ cannot compel participation in the settlement judge program. Slavin v. UCSB Donald Bren School, 2005-CAA-11 (ALJ June 8, 2005).
[Nuclear & Environmental Whistleblower Digest XVII G 9]
SETTLEMENT; ARB DECLINES TO APPROVE AMENDMENT TO SETTLEMENT
WHERE IT HAD ALREADY ENTERED A FINAL ORDER APPROVING THE SETTLEMENT
AND DISMISSING THE CASE WITH PREJUDICE
In Coffman v. Alyeska Pipeline Service Co.,
ARB No. 02-026, ALJ Nos. 1996-TSC-5 and 6 (ARB July 30, 2002), the parties filed with the
ARB a Joint Motion to Approve Settlement Agreement in which Complainant and Respondents
requested the Board to approve a modification to the settlement which the Board previously
approved. The ARB ordered the parties to show cause why the Board had authority to approve
such an amendment. Although the parties filed a statement indicating that they disagreed with
the ARB's questioning of its authority in the matter, they provided no legal analysis to support
that statement. The ARB, thus dismissed the matter, writing "[t]he parties have failed
to demonstrate a basis upon which the Board has authority to amend a settlement once the
Board has entered a final order approving the settlement and dismissing the matter with
prejudice...."
[Nuclear & Environmental Whistleblower Digest XVII G 9]
SETTLEMENT; LAW OF THE CASE DOCTRINE DOES NOT PREVENT ARB FROM RECONSIDERING A PRIOR DISAPPROVAL OF A SETTLEMENT
In Ruud v. USDOL, 80 Fed Appx 12, No. 02 71742 (9th Cir. Oct. 22, 2003) (unpublished) (case below ARB No. 99 023, ALJ No. 1988 ERA 33), the Ninth Circuit held that the law of the case doctrine did not prevent the ARB from reconsidering its prior decision to disapprove the settlement in the case because the agency's own precedents permitted such reconsideration if the previous decision was erroneous.
[Nuclear & Environmental Digest XVII G 9]
SETTLEMENT; FAILURE OF ALJ TO PROMPTLY FORWARD RECOMMENDED
APPROVAL OF SETTLEMENT TO ARB UNDER PRE-MARCH 11, 1998 LAW
In Balog v. Med-Safe Systems,
Inc., ARB No. 99-034, ALJ No. 1995-TSC-9 (ARB Sept. 13, 2000), the ALJ
approved a settlement agreement in April of 1996, but failed to forward the matter to the ARB
until January of 1999. Prior to March 11, 1998, all ALJ decisions under the Part 24 regulations
were automatically reviewed by the Secretary of Labor (or the ARB beginning in May 1996). On
or after March 11, 1998, ALJ decisions under the Part 24 regulations become final unless
affirmatively appealed by one or more of the parties. Because this was a pre-March 1998 order,
the ALJ should have forwarded the matter to the ARB for its automatic review.
When finally reviewed by the ARB, Complainant argued that the settlement was void and
unenforceable because the ALJ had no authority to issue a final order and did not forward his
recommended order for review by the Board. The ARB rejected this argument, finding that the
ALJ had forwarded his recommended decision, albeit not promptly.
[Editor's note: Under the regulations in effect as of the date of this casenote
(October 6, 2000), a party must petition for review in order to obtain ARB review in a case
arising under 29 C.F.R. Part 24. The OALJ and the ARB have worked out a procedure whereby
the presiding ALJ should not forward the file in nuclear and environmental whistleblower cases unless,
and until, the ARB makes a telephonic or written request for the file. ALL ALJ dispositive
orders in Part 24 proceedings are recommended (with the possible exception of a remand to
OSHA), and only become final if none of the parties seek ARB review.
The regulations for STAA whistleblower cases at 29 C.F.R. Part 1978, however, still
contemplate automatic review of ALJ decisions. Thus, ALJs should automatically forward the
file to the ARB in STAA whistleblower cases once the recommended decision is rendered. It
should be noted, however, that in STAA cases -- unlike Part 24 cases -- an ALJ's order approving
a settlement is the agency's final decision. See
Thompson v. G & W Transportation, Co., Inc., 1990-STA-25 (Sec'y Oct. 24,
1990). Similarly, in an STAA case, if the party requesting an ALJ hearing withdraws his or her
objections to the Secretary's preliminary findings or preliminary order, the ALJ's order reinstating
the preliminary findings is final, and no ARB review is required. See Creech v. Salem Carriers, Inc.,
1988-STA-29 (Sec'y Sept. 27, 1988).].
[Nuclear and Environmental Whistleblower Digest XVII G 9]
SETTLEMENT BEFORE ARB IN ENVIRONMENTAL WHISTLEBLOWER CASE;
SINCE ALJ DECISION IS RENDERED INOPERATIVE BY SECTION 24.8, ARB'S ORDER
APPROVING SETTLEMENT NEED NOT INCLUDE ORDER VACATING ALJ DECISION
In Pawlowski v. Hewlett-Packard
Co., ARB No. 99-089, ALJ No. 1997-TSC-3 (ARB May 5, 2000), the parties
submitted a settlement agreement to the ARB for approval while the case was pending ARB
review. The parties submission included a request that the ARB vacate the ALJ's recommended
decision. The ARB ruled that Respondent's timely appeal rendered the ALJ's Recommended
Decision and Order inoperative by law, 29 C.F.R. §24.8(a), and therefore, the parties'
request that the ARB vacate the Recommended Decision and Order was moot.
[Editor's note: section 24.8(a) only applies to render ALJ recommended decisions in
environmental whistleblower cases inoperative during ARB review. In ERA cases, an ALJ's
preliminary order of relief is still effective during the period that the ARB is conducting its
review.]
[Nuclear & Environmental Digest XVII G 9]
SETTLEMENT; ONCE CASE REFERRED TO ARB, ALJ HAS NO AUTHORITY TO
APPROVE SETTLEMENT
In Marcus v. U.S. Environmental Protection
Agency, 1996-CAA-3 and 7 (ALJ Dec. 15, 1998), the ALJ found that Respondent
had violated the employee protection provision of various environmental statutes, ordered the payment
of compensatory damages, ordered the submission of an attorney's fees petition, and ordered the
parties to attempt to reach a consent agreement providing for affirmative relief. The ALJ ordered the
parties to attempt to reach a consent agreement on affirmative relief because the parties had not been
able to successfully integrate Complainant back into the Respondent agency based on prior
whistleblower complaints, and the ALJ agreed with the Complainant that a detailed orders specifically
stating the steps that would be taken to remedy the situation would be necessary.
Respondent petitioned the ARB for review of the ALJ's recommended decision. Subsequently,
the parties requested the appointment of a settlement judge pursuant to 29 C.F.R. § 18.9(e).
Upon mediation, the parties reached a settlement on the entire case, rather than just the affirmative relief
issue. The parties submitted the settlement agreement to the ALJ for approval, but only filed
"informational copies" of the agreements with the ARB. The ALJ expressed doubt about
her authority to approve the settlement, as she only intended to retain jurisdiction over the attorney's
fees and affirmative relief issues, but reviewed and approved the settlement to the extent of her authority
to do so. The ALJ's recommended order included a standard notice of review informing the parties
that the decision would become final unless a petition for review is timely filed with the ARB. Marcus v. U.S. Environmental Protection
Agency, 1996-CAA-3 and 7 (ALJ Aug. 24, 1999). The ARB obtained complete
copies of the settlement from the parties only following repeated requests.
The ARB held that once Respondent filed a timely petition for review with the ARB pursuant to
29 C.F.R. § 24.8(a), the ALJ no longer had authority to consider the proposed settlement of the
case. Marcus v. U.S. Environmental Protection
Agency, ARB No. 99-027, ALJ Nos. 1996-CAA-3 and 7 (Oct. 29, 1999). The
ARB also held that "the ALJ's referral of the case to a settlement judge while the case was on
appeal to the ARB was improper. After an ALJ's recommended decision is appealed, it is the ARB
not the ALJ that has the authority to review or disapprove any settlement agreements subsequently
reached by the parties." Slip op. at 2 (footnote omitted).
[Nuclear & Environmental Digest XVII G 9]
SETTLEMENT; ARB WILL NOT APPROVE WHERE IT APPEARS THAT A FRAUD
ON THE TRIBUNAL MAY HAVE BEEN COMMITTED IN REGARD TO A SETTLEMENT
AGREEMENT
In Espinosa v. Allied Signal,
Inc.,1996-WPC-2 (ARB Aug. 18, 1998),
the parties entered into a settlement agreement, in which a relatively small value assigned to a
federal whistleblower complaint was presumably based on the apparent merits of Respondent's
contention that the complaint was not timely filed (the settlement also included a much larger
amount purportedly in settlement of other kinds of state and federal discrimination complaints).
The ALJ received an allegation from Respondent and Complainant's second attorney that
documents submitted to the ALJ relevant to the timeliness issue by Complainant's first attorneys
were "bogus." The ALJ issued a recommended decision and order approving the
settlement. While the recommended decision was pending approval by the ARB, the ARB
received a motion from Complainant's first attorneys opposing approval of the settlement,
asserting that they had not submitted fraudulent documents, and that Complainant had
acknowledged under oath in a collateral state proceeding regarding attorneys fees, that a disputed
signature on a document was hers.
The ARB concluded that at least one of the litigants or their counsel had made material
misrepresentations to the Department with regard to Complainants whistleblower claims under
the environmental statutes. Stressing the need for litigants to act with integrity before the
Department's adjudicators, the ARB held that it would not approve a settlement under this cloud.
Rather, it remanded the case to the ALJ for reconsideration and the taking of any additional
evidence deemed necessary to reevaluate the proposed settlement.
[N/E Digest XVII G 9]
SETTLEMENT AGREEMENT TO PROVIDE RETIREMENT ANNUITY;
INTERPRETATION OF CONTRACT WHERE TAX CONSEQUENCES NOT ADDRESSED
In Williams v. Metzler, No. 97-3127, 1997 WL 793315 (3rd Cir.
Dec. 30,
1997) (case below, ARB No. 96-160, ALJ No. 94-ERA-2), the ARB had entertained
Complainant's motion to enforce a settlement agreement because of a clause in
the agreement
purportedly giving DOL the authority to enforce the agreement, but found that
employer had not
breached the agreement. The Third Circuit held that "the Secretary of
Labor does not have
the authority, even with the consent of the parties, to enforce a settlement
agreement resolving a
retaliation claim brought by an employee/whistleblower against his employer
under the Energy
Reorganization Act." The court, however, found that the record was
ambiguous as to the
nature of the Secretary's actions (i.e., whether the administrative
proceedings before the
ALJ and the ARB had been an adjudication on the merits intended to be a
binding determination,
or whether they had been preliminary to a decision by the Secretary whether to
file a suit in
district court to enforce the settlement). Thus, in the interest of judicial
efficiency, and because
the parties had fully briefed the issues, the court determined that it would
not rest on ultra
vires agency action, but would address the merits.
As part of the settlement, the parties had agreed that Complainant would
receive a retirement
benefit based on a "single life annuity." The agreement did not
specify the manner
in which Respondent was to fulfill this commitment, nor did it address the
allocation of taxes.
Respondent was advised on the cost of an annuity policy that would provide the
agreed monthly
benefit; but concluding that the cost purchase price of the annuity would be
taxable income to
Complainant, withheld state and federal taxes due on that sum and used the
remaining amount to
purchase an annuity policy. As a result, Complainant received monthly checks
of $477.13, rather
than the expected amount of $782.35.
The court held that the parties agreement was to provide an
"annuity" not an
"annuity policy" or "annuity contract." An annuity is
defined as
"'a right to receive fixed, periodic payments, either for life or for a
term of years . . . A
fixed sum payable to a person at specified intervals for a specific period of
time or for
life.'" 1997 WL 793315 at * 10 (quoting Black's Law Dictionary, at
90 (6th ed.
1990)). The court found that the parties intentions were the same: that the
annuity payments be
equivalent to an immediately payable pension as if Complainant had been
eligible to retire
immediately and receive pension benefits as would any other company retiree.
Since the agreement had not addressed tax consequences, the court examined the
agreement's
underlying purpose and integrated provisions to "fill what appears to be
a gap."
Id. at * 12. The court observed that retirees do not pay taxes
"upfront", but
only as monthly payments are received, while Respondent's purchase of an
annuity policy
withholding the taxes resulted in Complainant's paying a much higher tax rate
than other retirees.
The court noted that there were other ways of structuring the settlement that
would have avoided
this problem. The court held that there was no doubt that Respondent had
breached the
settlement agreement, that the ALJ's conclusion that there had been no breach
was erroneous, and
that the Secretary's derivative determination not to seek enforcement was
likewise not in
accordance with law.
Thus, the court remanded the case to the Secretary for further proceedings,
noting that "the
Secretary retains the discretion whether or not to seek enforcement, but may
not consider the
company's actions as set forth in this record to be in compliance with the
settlement agreement.
In view of the Secretary's inability to enforce, [Complainant] is to have the
opportunity to
withdraw his motion if he chooses and pursue an action for enforcement in the
district
court." Id. at * 13.
[N/E Digest XVII G 9]
SETTLEMENT AFTER ENTRY OF FINAL ORDER BY SECRETARY; REQUEST OF
PARTIES THAT DOL ORDERS BE VACATED SO THAT RESPONDENT IS NOT
STIGMATIZED
In Smith v. Littenberg, 92-ERA-52 (ARB Apr. 29, 1997),
Complainant
and Respondents entered into a settlement agreement after the Secretary had
entered a final
decision and order, and while a petition for review was pending in the court
of appeals. The
settlement, obtained through mediation, prevented the parties from revealing
its terms to the
Secretary, who was not a party to the court settlement. The parties requested
that the Board
"respect the parties's wishes" and vacate the Secretary's and ALJ's
decisions.
Respondents were "particularly concerned that the Secretary's Order and
the ALJ's
Recommended Decision should be vacated because of the potential for
stigmatizing
Respondents." The Board found, however, that public interest favors
allowing those
decisions to stand as legal precedent. In addition, the Board found that the
decisions should
stand because, "[u]nlike the usual ERA case in which there is a
settlement, in this case the
Secretary did not examine or enter into the settlement agreement because it
occurred after the
issuance of a final agency decision." Slip op. at 3.
[N/E Digest XVII G 9]
SETTLEMENT; TAX WITHHOLDING
In Williams v. Public Service Electric &
Gas Co., 94-ERA-2 (ARB Jan. 15, 1997), the Board adopted the ALJ's recommended decision finding that
Respondent did not
breach a settlement agreement to provide Complainant with a retirement benefit
based on a
single
life annuity where Respondent withheld federal and state income taxes and FICA
prior to
purchasing the annuity in Complainant's name. The settlement had included a
term retaining
enforcement jurisdiction in the Department of Labor.
[N/E Digest XVII G 9]
RELEASE EXECUTED PRIOR TO FILING OF ERA COMPLAINT; BAR TO
MAINTENANCE OF ERA COMPLAINT
In Khandelwal v. Southern California Edison, 97-ERA-6 (ALJ Jan.
17,
1997), the parties, prior to the filing of the instant complaint, had executed
a severance
agreement
and a general release as part of an early retirement package. Complainant
maintained that the
agreement did not cause a waiver of his right to pursue an ERA employee
protection complaint.
Respondent, however, moved for summary judgment based on the release.
The ALJ found that the agreement was a settlement, regardless of the fact that
it was
executed prior to the filing of the instant complaint; the ALJ, however,
concluded that such a
settlement must still be approved by the Secretary of Labor. The ALJ found
that general release
provisions have been routinely upheld in whistleblower cases, and proceeded to
consider whether
the agreement adhered to principles of contract law for enforceability.
Specifically, the ALJ
considered whether the terms of the agreement violated public policy and
whether Complainant's
execution of the agreement and release was knowing and voluntary.
The ALJ concluded that the agreement did not violate public policy because it
did not
prohibit Complainant from bringing prospective claims or causes of action
against Respondent
based on facts occurring subsequent to the execution of the agreement, and did
not prohibit
Complainant from participating in or assisting with the investigation by any
appropriate agency.
The ALJ applied the test found in Stroman v. West Coast Grocery Co.,
884 F.2d
458 (9th Cir. 1989), to determine whether the "totality of the
circumstances"
indicated that the execution of the agreement by Complainant was knowing and
voluntary. The
ALJ noted, inter alia, the clarity of the agreement and release,
Complainant's education
and
business experience, the absence of evidence of coercion, the dollar amount of
the compensation
received, and the lack of persuasiveness of an economic duress argument. The
ALJ also
concluded that since Complainant retained the benefits of the settlement, he
could not benefit
from any claim of duress.
Accordingly, the ALJ recommended that the motion for summary decision be
granted.
SETTLEMENT CONTINGENT ON AFFIRMANCE OF SECRETARY'S ORDER BY
APPELLATE COURT
[N/E Digest XVII G 9]
The Secretary in Frady v. Tennessee Valley Authority,
92-ERA-19 and 34 (Sec'y Oct. 23, 1995), determined that the
Respondent had violated the ERA and remanded to the ALJ to
determine the Complainant's complete remedy. On remand, the
parties reached a settlement agreement as to damages that
indicated that the Respondent intends to seek judicial review of
the Secretary's decision, and that expressly provided that the
Respondent's obligation to provide relief to the Complainant
under the agreement was contingent on the appellate court
affirming the Secretary's order. The Administrative Review Board
approved the settlement, noting that the Respondent agreed not to
seek a stay of the Board's final decision concerning damages
pending judicial review. Frady v. Tennessee Valley
Authority, 92-ERA-19 and 34 (ARB June 7, 1996).
SETTLEMENT; MEANING OF PROVISION THAT RESPONDENT WILL TAKE
"ALL REASONABLE STEPS" TO PREVENT REPRISAL
[N/E Digest XVII G 9]
In Smith v. Tennessee Valley Authority, 96-ERA-
10 (ARB June 24, 1996), the parties' settlement agreement
included a provision that the Respondent "will take all
reasonable steps to ensure that no reprisal will be taken
against [the Complainant] as a result of this settlement or as a
result of his participation in the appeal process." Slip
op. at 2 (emphasis as supplied by ARB). The Board construed this
language "to mean that Respondent's managers, administrators
and employees will be made aware that any such reprisal is
contrary to law and the occurrence of such would be the basis for
a separate environmental whistleblower claim by
Complainant." Id.
SETTLEMENT AGREEMENT; SIGNATURE BY SPOUSE OF COMPLAINANT
[N/E Digest XVII G 9]
In Simmons v. Arizona Public Service Co., 93-
ERA-5 (ALJ Apr. 3, 1996), the ALJ noted that a person who was
apparently the Complainant's spouse signed the settlement
agreement and general release form. The ALJ noted that the
complaint was initiated solely by the Complainant, and that DOL's
jurisdiction related only to the Complainant; therefore, the
ALJ's review of settlement documents was made solely from the
standpoint that the Secretary's jurisdiction relates only to the
named complainant, and the ALJ stated that his recommended order
had no bearing on the rights of the spouse concerning any matter
addressed in the settlement documents.
SETTLEMENT JUDGE PROCEDURE
[N/E Digest XVII G 9]
In Balog v. Med-Safe Systems, Inc., 95-TSC-9
(ALJ Apr. 24, 1996), the ALJ recommended approval of a
settlement. Of interest is that the parties were assisted by the
settlement judge procedure at 29 C.F.R. § 18.9(e) in
achieving the settlement.
SETTLEMENTS ENTERED INTO BY COMPLAINANTS WITHOUT BENEFIT OF
THEIR COUNSEL
[N/E Digest XVII G 9]
In Sutherland v. Spray Systems Environmental,
95-CAA-1 (Sec'y Feb. 26, 1996), several Complainants entered
into settlements with the Respondent during the pendency of
the review of the ALJ's recommended decision by the
Secretary. These settlements had been made without the
benefit of their counsel. The Secretary observed that it
was unusual for these Complainants to have acted without
their counsel, but found that there was nothing to prevent
them from doing so. The Secretary reviewed and approved the
settlements, declining to address ethical questions raised
by the Respondent's direct contact with parties known to be
represented by opposing counsel.
XVII G 9 SETTLEMENT; BINDING EFFECT OF SETTLEMENT REACHED IN
U.S. DISTRICT COURT
In Merritt v.
Mishawaka Municipal Utilities,
93-SDW-3 (Sec'y Sept. 11, 1995) (Secretary's order has incorrect
case number of "93-SWD-3"), the Complainant signed an
agreement releasing the Respondents "of and from any an all
claims, be the same known or unknown, of whatever kind or nature,
which the [Complainant] may now have or hereafter acquire by
reason of any events occurring prior to the date of this
agreement. . . ." This agreement specifically released a
case then pending in U.S. District Court. The Secretary agreed
with the ALJ's conclusion that the agreement was intended also to
settle the Complainant's whistleblower complaint before the
Department.
XVII.G.9. Applicability of 29 C.F.R. § 18.9(b)
In Simmons v. Arizona Public Service Co., 90-ERA-6
(Sec'y Sept. 7, 1994), the Secretary approved a settlement
agreement, but rejected the ALJ's recommendation that the
parties' Settlement Agreement be modified to comply with the
requirements of 29 C.F.R. § 18.9(b).
Part 18, 29 C.F.R., sets forth the procedural rules for hearings
before Labor Department ALJs. Section 18.9 contemplates two
means of disposing of a case prior to hearing -- by (1) "a
settlement" or (2) "an agreement containing findings
and an order disposing of the whole or any part of the
proceeding." 29 C.F.R. § 18.9(a). Subsection (b) of
the regulation applies only to "[a]ny agreement containing
consent findings and an order disposing of a proceeding or any
part thereof," which presumably constitutes a variety of
agreement under the second category listed in subsection (a).
Under subsection (b), an "agreement containing consent
findings and an order disposing of a proceeding or any part
thereof" must provide:
(1) That the order shall have the same
force and effect as an order made after full
hearing; (2) That the entire record on which
any order may be based shall consist solely
of the complaint, order of reference or
notice of administrative determination (or
amended notice, if one is filed) as
appropriate, and the agreement; (3) A waiver
of any further procedural steps before the
administrative law judge; and (4) A waiver of
any right to challenge or contest the
validity of the order entered into in
accordance with the agreement.
29 C.F.R. § 18.9(b).
The distinction between "a settlement" and "an
agreement containing findings" also appears at 29 C.F.R.
§ 18.9(c), which specifies that the parties may "submit
the proposed agreement containing consent findings and an order
for consideration by the [ALJ]" or "notify the
[ALJ] that the parties have reached a full settlement and have
agreed to dismissal of the action" or "inform
the [ALJ] that agreement cannot be reached."
The Secretary noted that, as a general proposition, "[a]
consent judgment is a compromise between two parties . . . fixed
by negotiation . . . and formalized by the signature of a . . .
judge." Adams v. Bell, 711 F.2d 161, 195 n.123 (D.C.
Cir. 1983), cert. denied, 465 U.S. 1021 (1984). Consent
judgments may or may not admit wrongdoing or incorporate consent
findings, i.e., stipulated factual findings upon which
legal conclusions may be based. United States v. ITT
Continental Baking Co., 420 U.S. 223, 235-239 (1975); In
Re Halpern, 810 F.2d 1061, 1064-1065 (11th Cir. 1987).
In the instant proceeding, an examination of the parties'
Settlement Agreement revealed a general absence of stipulated
factual findings to support legal conclusions relevant to the
issues in the case. While agreeing to relinquish certain rights
in order to gain certain benefits, the parties expressly intended
that their settlement "shall not be construed as an
admission of any wrongdoing by any of the parties, nor shall it
be construed as an adjudication on the merits for or against
either party."
The Secretary concluded that since the parties' Settlement
Agreement resembles a standard "settlement" under the
first category listed in 29 C.F.R. § 18.9(a), rather than an
"agreement containing consent findings" subject to
subsection (b) of the regulation, modification of the agreement
as recommended by the ALJ appears unnecessary.
XVII. G. 9. Other issues
In Bixby v. State of New Mexico, Office of the Commissioner
of Public Lands, 94-TSC-1 (Sec'y Aug. 16, 1994) (order to
submit settlement), the parties submitted a document entitled
"Stipulated Order of Dismissal," and the ALJ
recommended dismissal. The stipulated order, however, stated
that the parties "wish to settle their differences,"
and that Respondent is "willing to compensate"
Complainant.
The Secretary noted that the case may not be settled unless the
terms of the settlement have been reviewed and found to be fair,
adequate and reasonable by the Secretary. Thus, the Secretary
ordered the parties to submit a copy of the additional terms of
the settlement. The Secretary required the signature of all the
parties, including the Complainant individually, demonstrating
their informed consent to the agreement. If there are no
additional settlement terms, the parties could submit a
declaration to that effect pursuant to 28 U.S.C. § 1746.
XVII.G.9 Satisfaction of settlement terms where
settlement is subsequently found valid
In Macktal v. Brown & Root, 86-ERA-23 (Sec'y Oct.
13, 1993), the Secretary rejected the parties' settlement
agreement pursuant to a change in policy of the Nuclear
Regulatory Commission and remanded the case for hearing on the
merits. Anticipating that the Secretary would issue a final
approval of the settlement based on the ALJ's recommended
approval, the respondent paid to the complainant $35,000 in
satisfaction of its obligation under the settlement agreement.
Upon final rejection of the agreement, however, the complainant
has an obligation to return the $35,000 plus interest to the
respondent before trial so that both parties are restored to the
status quo ante.
On remand, Macktal v. Brown & Root, 86-
ERA-23 (ALJ May 3, 1994), the ALJ held that where a fundamental
purpose of an agreement is frustrated by a mistake of the parties
or by the intervention of a judicial or administrative decision,
principles of equity and justice require the complainant to
return any benefit conferred under the agreement. The ALJ
emphasized that it would be
grossly unfair [to allow Complainant] to proceed with
this litigation while retaining the benefit which had been
conferred for the purpose of avoiding litigation. Such
prosecution would be for the primary purpose of attempting
to obtain greater benefits without risk. Further,
Respondent would have to incur additional costs and could
have difficulty collecting if it is ultimately determined
that Complainant is entitled to less.
Slip op. at 5. Consequently, the ALJ ordered the complainant to
repay the respondent $35,000 plus interest which was originally
paid to the complainant in satisfaction of a settlement agreement
which was rejected by the Secretary, denied the complainant's
motion for interlocutory review, granted the respondent's motion
to stay the proceedings, and vacated the Order Scheduling Trial.
The issue of whether the Complainant's retention of the
settlement monies constituted a ratification of the agreement was
not addressed.
In Macktal v. Brown & Root, 86-ERA-23 (ALJ
July 6, 1994), the ALJ determined that the complainant was not
entitled to further proceedings in the case since he had not made
restitution to the respondent in the amount of $35,000 plus
interest for a payment made under a settlement agreement which
the Secretary ultimately deemed to be void. The case was
dismissed with prejudice for lack of prosecution.
XVII G 9 Appealable final order
A remand order by the Secretary is not an appealable order under
section 211(c) of the Energy
Reorganization Act, nor under the collateral order doctrine of
Cohen v. Beneficial Indus. Loan
Corp., 337 U.S. 541 (1949). Carolina Power & Light
Co. v. United States Dept. of
Labor, 1995 U.S. App. LEXIS 381 (4th Cir. 1995) (case
below, Debose v. Carolina Power
& Light, 92-ERA-14).
In Carolina Power, the Secretary disapproved a
settlement, and remanded the complaint
to the ALJ. The court noted that the Respondent could preserve
any objections, and challenge the
Secretary's remand order once the issue is fully adjudicated,
even if the final action is approval of a
revised settlement agreement.
XVII G 9 Adequacy of consideration
In Pillow v. Bechtel Construction, Inc., 87-ERA-35
(ALJ Dec. 7, 1993), the parties proffered a settlement of damages
and costs on the eve of a hearing that was directed by the
Secretary on remand. The parties agreed to payments to
Complainant of a total of $50,000 for back pay and compensatory
damages, and to Complainant's attorney for fees and costs of
$250,000. The ALJ noted that there was a considerable disparity
between Complainant's personal recovery and his attorney's fee,
but concluded that the fee was not excessive in view of the time
spent on the case by the attorney and Respondent's acceptance of
the amount. The ALJ also found that the amount agreed to be paid
Complainant appeared to be "generous." Thus, he
recommended that the Secretary accept the agreement.
XVII. G. 9. Other issues; miscellaneous
In Simmons v. Arizona Public Service Co., 90-ERA-6
(ALJ Jan. 9, 1990), the ALJ informed the parties that their joint
motion with attached settlement, requesting approval of their
proposed agreement, failed to conform with 29 C.F.R. §
18.9(b) of the rules of practice and procedure. The parties
submitted a joint stipulation meeting the requirements of section
18.9(b), and by its terms modifying the original settlement
accordingly. The ALJ then reviewed the agreement and recommended
approval by the Secretary.
On review, Simmons v. Arizona Public Service Co.,
90-ERA-6 (Sec'y Sept. 7, 1994), the Secretary found that section
18.9(b) applies on to consent findings, and not settlements.
Accordingly, the Secretary approved the agreement, but rejected
the ALJ's recommendation that the parties' settlement be modified
to comply with section 18.9(b).
According to the Secretary, section 18.9 addresses two means of
disposing of a case prior to hearing: a "settlement" or
"an agreement containing findings and an order disposing of
the whole or any part of the proceeding." 29 C.F.R. §
18.9(a). Subparagraph (b) only applies to the latter.
Subparagraph (c) also retains the distinction.
A "consent judgment is a compromise between two parties . .
. fixed by negotiation . . . and formalized by the signature of a
. . . judge." Adams v. Bell, 711 F.2d 161, 195 n.123
(D.C. Cir. 1983), cert. denied, 465 U.S. 1021 (1984).
Consent judgments may or may not admit wrongdoing or incorporate
consent findings, i.e., stipulated factual findings upon which
legal conclusions may be based.
In the instant matter, the settlement generally did not contain
stipulated factual findings to support legal conclusions, the
parties expressly provided that the settlement was not to be
construed as an admission of any wrongdoing by any of the
parties, nor as an adjudication on the merits. The only item
resembling a factual finding --that Complainant was rehired-- did
not bear on issue of liability.
XVII. G. 9. Other issues
In Bixby v. State of New Mexico, Office of the Commissioner
of Public Lands, 94-TSC-1 (Sec'y Aug. 16, 1994) (order to
submit settlement), the parties submitted a document entitled
"Stipulated Order of Dismissal," and the ALJ
recommended dismissal. The stipulated order, however, stated
that the parties "wish to settle their differences,"
and that Respondent is "willing to compensate"
Complainant.
The Secretary noted that the case may not be settled unless the
terms of the settlement have been reviewed and found to be fair,
adequate and reasonable by the Secretary. Thus, the Secretary
ordered the parties to submit a copy of the additional terms of
the settlement. The Secretary required the signature of all the
parties, including the Complainant individually, demonstrating
their informed consent to the agreement. If there are no
additional settlement terms, the parties could submit a
declaration to that effect pursuant to 28 U.S.C. § 1746.
XVII G 9 Better for ALJ to issue recommended decision than to
sign prepared signature line
In Egenrieder v. Metropolitan Edison Co., 85-ERA-23
(Sec'y Apr. 11, 1988), the Secretary implied that it would have
been better for the ALJ to have issued a recommended decision on
whether to approve the settlement agreement than to place his
signature on the agreement next to the word "approved."