U.S. Department of Labor Administrative Review Board
200 Constitution Avenue, N.W.
Washington, D.C. 20210
ARB CASE NO. 96-087
ALJ CASE NO. 88-ERA-33
DATE: November 10, 1997
In the Matter of:
CASEY RUUD,
COMPLAINANT,
v.
WESTINGHOUSE HANFORD COMPANY,
RESPONDENT.
BEFORE: THE ADMINISTRATIVE REVIEW BOARD
DECISION AND ORDER OF REMAND
This complaint was brought by Casey Ruud against Respondent
Westinghouse Hanford Company (WHC or Westinghouse) under the employee protection
(whistleblower) provisions of the Energy Reorganization Act of 1974 (ERA), as amended, 42
U.S.C. §5851 (1994), the Toxic Substances Control Act (TSCA), 15 U.S.C. §2622
(1994), the Clean Air Act (CAA), 42 U.S.C. §7622 (1994), the Solid Waste Disposal Act
(SWDA), 42 U.S.C. §6971 (1994), the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA), 42 U.S.C. §9610 (1994), the Safe Drinking
[Page 2]
Water Act (SDWA), 42 U.S.C. §300j-9(i) (1994) and the Federal Water Pollution Control
Act or Clean Water Act (CWA), 33 U.S.C. §1367 (1994). Before the Board for review is
the Recommended Decision and Order (R. D. and O.) issued on March 15, 1996, by the
Administrative Law Judge (ALJ). In disposition, we decline to approve the parties' proposed
settlement, we adopt many of the ALJ's findings and we remand the case to the ALJ for further
proceedings regarding a specific portion of the complaint and appropriate relief.
involved, and the [contractor's] general manager later acknowledged that he had been told of the
episode shortly after it occurred but failed to follow up, the DOE characterized the episode as an
"aberration." One must inquire how much the Governor of the State of Washington
was radiated through the kindness and hospitality of the Federal Government and its contractors.
CX 10 at 2-3. See R. D. and O. at 6. The ALJ found that WHC retaliated against
Ruud by assigning him to provide extensive information within an unrealistically abbreviated time
frame, failing to select him for the position of temporary auditor at the N-Reactor and failing to
select him for a permanent senior quality assurance engineer position. The parties agreed to settle
this portion of the complaint in mid-1988. See discussion infra. A term
of the settlement prohibited interference with Ruud's prospective employment.
1 The Secretary has
delegated approval authority for settlements under these statutes to this Board.
2 WHC's
senior labor counsel advised the Secretary: "The specific Settlement Agreement between Mr.
Ruud and WHC which you are requesting does not allow disclosure of terms and conditions; thus,
we are unable to provide it to you." Despite the specific wording of the settlement
provisions of some of the statutes involved, WHC's counsel asked the Secretary to dismiss the case
"without further delay."
3 The ALJ
found that Robert Gelman, WHC's quality assurance manager, retaliated against Ruud because of
Ruud's testimony before a United States Congressional subcommittee addressing Gelman's lack
of qualifications. The ALJ stated: "Any person who was not affected by a criticism like that
leveled by Ruud in his Congressional testimony would be a candidate for sainthood. My
observation of Gelman and my review of the record lead me to conclude that he is not such a
candidate." R. D. and O. at 89 (footnotes omitted). As an example, the ALJ cited Gelman's
"resistance to a stop-work order after presentation of an alarming audit . . . ."
Id. at n.10. The ALJ found Gelman's denial of animus to be "an exercise in self
delusion." Id.
4 WHC
contracted with the DOE to perform operations and engineering services at that facility. The DOE
remained responsible for overseeing the activities of contractors to ensure adequate public safety
and health. Ruud was employed as a nuclear quality assurance auditor and senior engineer.
Simpkin was employed as a quality assurance inspector and examiner.
5 Simpkin,
who was not laid off, complained of harassment. Prior to the 1987 congressional hearings,
Simpkin consistently had received outstanding performance ratings. Following the hearings, he
received a written reprimand which subsequently was found by the DOE to have been unjustified.
In meeting with Simpkin, a WHC executive characterized the congressional subcommittee as
"adversarial" and interested only in "shutting Hanford down." Simpkin
was told that he "had gone outside the system" and that he could cease cooperating
with the subcommittee "at any time." Simpkin's mail and telephone calls were
screened by WHC. The subcommittee chairman requested that Simpkin provide answers to
written questions, some of which required consultation with a co-worker. WHC's general counsel
admonished Simpkin that "it would not be appropriate to divert the time and attention of
other employees from their assigned responsibilities to work on this matter." A supervisor
directed Simpkin that the questions should be answered on his own time. Simpkin was removed
from a panel established to review a testing program because his persistence in raising safety,
health and environmental concerns was "a source of irritation" to WHC. WHC
removed Simpkin from the job of correcting problems and did not assign him any replacement
duties. CX 10 at 500, 559-560, 586-588.
6 The
Governor's party included representatives of the National media -- in particular Connie Chung.
Hearing Transcript (T.) 71-73.
7 The ALJ
found that "[t]he corporate connection between WHC and WSRC is close enough to attribute
the actions of one corporation to the other for purposes of whistleblower protection." R.
D. and O. at 91. We agree as discussed infra.
8 Larry
McCormack, a WHC attorney who had participated in Ruud and Simpkin's settlement negotiations
with WHC, also was employed by WSRC. Former WHC president William Jacobi managed the
Gold Coast School for Environmental Excellence (GOCO) in South Carolina. Operated by
Westinghouse Electric Corporation, the school was created to train Westinghouse government
operations employees in environmental matters. CX 135 at 45. Ruud was engaged in producing
technical training modules for the school. R. D. and O. at 22. Beginning in 1989, Jacobi was
employed by Westinghouse Electric Corporation as vice president of the government operations
business unit and served on WSRC's board of directors. CX 135 at 31, 42-45.
[Ruud] was physically escorted off site, which is extraordinarily unusual.
. . . [T]here are a lot of people who have badges past their contract term
and are not escorted off site and continue to go on and off site as long as
their badge is active. . . . I know of badges for a fact that were handed in
and were not terminated for a year and a half, so it was somewhat bizarre
. . . the way he was escorted off site.
CX 148 at 86.
10 Not all
WSRC managers shared Wise's and Samuels's animus. Thomas Anderson, WSRC vice president
and a general manager, was emphatic in his commitment not to discriminate. CX 150A at 59-60.
11 Since the
1990-1991 retaliation at the Savannah River facility had not yet occurred, that portion of the
complaint was not settled as the result of the 1988 negotiations.
12 The
exception permitting Ruud to respond to a lawful subpoena does not save the restriction. Not all
regulatory agencies possess the authority to issue subpoenas.
13 The
Nuclear Waste Policy Act required the Department of Energy (DOE) to provide a repository for
high level nuclear waste. The BWIP was implemented "to determine the properties and
extent of the basalt [on the Hanford reservation], its permeability, the ground water flows . . . and
to evaluate whether it was a suitable site" for a repository. R. D. and O. at 38.
14 Fed. R.
Civ. P. 23(e) is analogous. A court is not authorized to require the parties to accept a settlement
to which they have not agreed. Rather, the court may (1) accept the proposed settlement, (2)
reject the proposed settlement and postpone the trial in order to determine whether a different
settlement can be achieved or (3) decide to try the case. Evans v. Jeff D., 475 U.S.
at 726-727.
15 Even if
improper, a threat does not constitute duress if the victim possesses a reasonable alternative to the
threatened action and fails to avail himself of the alternative. For example, a party to a claim
against it may threaten to file a court action unless the claimant discharges the claim. Because
defense to the threatened action is a reasonable alternative to agreeing to discharge the claim, the
threat does not constitute duress and the agreement is not voidable. In contrast, if the threatened
court action would cause severe financial loss or irreparable injury, the threat may constitute
duress and any agreement to discharge the claim may be voidable.
16 The ALJ
found that because of the agreement's integration clause, McCormack's implied "oral
commitment not to affect Complainant's employability adversely" was not binding and that
Ruud did not in fact rely upon it. R. D. and O. at 76. To the contrary, we find that
McCormack's oral commitment constituted a statement of intent at the time of settlement and that
Ruud actually and reasonably relied on the statement. Oral assertions are relevant regardless of
whether they are legally binding. Restatement §159. A misrepresentation,
i.e., a false assertion, may consist of spoken or written words. The falseness of a
statement depends on the meaning of the words in all of the circumstances, including what may
be inferred from the words. An assertion may be inferred from conduct. Concealment or non-disclosure may constitute misrepresentation. The "Personnel File" provision of the
agreement tracks McCormack's commitment. The agreement obligated WHC to expunge negative
comments from employment files and to provide prospective employers with recommendations
"of at least a neutral tone and quality." CX 60 at 2, par. 6. Continued employment
with RI-TECH required a neutral employment recommendation, and the act of "forc[ing]
Ruud out of his job with ... RI-TECH," R. D. and O. at 93, because of whistleblowing
activities was not grounded on such a recommendation. On the subject of reliance, the ALJ stated:
"Indeed, Complainant acknowledged that he did not rely on any promises made by WHC
outside the settlement agreement because, in light of what he believed to be false statements to the
press and to Congress, he did not trust WHC management." Id. at 76. Ruud
trusted WHC sufficiently to enter into the settlement, however. Indeed, the finding of absence of
reasonable or actual reliance contradicts another ALJ finding that "[a]t the time of the
agreement, Ruud did not have any indication that WHC was not going to follow the terms of the
settlement." Id. at 20.
17 A
nonfraudulent misrepresentation does not render an agreement voidable unless it is material. In
contrast, materiality is not essential if the misrepresentation is fraudulent. A party who
nonfraudulently misrepresents an apparently unimportant fact would not reasonably expect the
assertion to induce assent, while "a fraudulent misrepresentation is directed to attaining that
very end . . . ." Restatement (Second) of Contracts §164(b). The materiality criterion
may be met either if the provision likely would induce a reasonable person to manifest assent or
if the maker knows that for a special reason the provision likely would induce a particular recipient
to manifest assent.
[C]ourts naturally are concerned lest every breach of contract be levered
into fraud by the too-facile expedient of asking the jury to infer from the
fact that the defendant did not perform his promise that he never intended
to perform it. So the rule has grown up that nonperformance is not enough
to ground such an inference; there must be additional evidence of the
defendant's intentions at the time he made the promise.
13 F.3d at 1109.
19 The
Secretary of Labor addressed this issue in Chase v. Buncombe County, N.C., Dep't of
Community Improvement, Case No. 85-SWD-4, Sec. Rem. Dec., Nov. 3, 1986. There, a
term of settlement "require[d] that Complainant's personnel file be purged of all mention
of the alleged cause of his termination and the events leading up to said termination' and also
require[d] that the County give, if requested, a neutral reference as to [Complainant's]
performance as a County employee.'" Slip op. at 6. The employer subsequently refused
to rehire the complainant for a job opening despite his superior qualifications. The city director
of community improvement, who declined the complainant reemployment, had discharged him in
the first instance, stating before witnesses that complainant never again would work for the county.
The Secretary stated:
The purpose of requirements for the purging of records and the providing
of "neutral" references is to ensure that information in the hands
of the employer does not adversely affect the employee in seeking future
employment. Thus, where such information is the basis for the refusal to
hire the employee, it cannot be said that the employer has purged its records
and has given a "neutral" reference. The fact that the
information is used to reject the employee in seeking reemployment by his
former employer, rather than in applying for a position with a different
employer, does not alter this conclusion.
Id. at 6-7.
20 As in
Chase, use of such information about previous employment to separate Ruud from
prospective employment is not consistent with an agreement to purge employment records and
provide neutral recommendations. Rather, information "in the hands of the employer"
curtailed Ruud's employment.
21 Because
we are obligated under the whistleblower statutes to examine the terms of settlement before
granting approval and because we "cannot approve a settlement that we have never
seen," a refusal to disclose the settlement terms results in a remand for hearing.
McDowell v. Doyon Drilling Services, Ltd., Case No. 96-TSC-8, Rem. Ord., May
19, 1997, slip op. at 2; Backen v. Entergy Operations, Inc., Case No. 96-ERA-18,
Ord., Dec. 12, 1996; Biddy v. Alyeska Pipeline Service Co., Case No. 95-TSC-7,
Rem. Ord., Aug. 1, 1996. The possibility that, at hearing, a complainant may not prevail or a
respondent may incur increased liability is the price the parties pay for disregarding the statutory
provisions requiring submission of settlements for approval.
22 Ruud
testified that after publication of a newspaper article detailing whistleblowing activities at WHC,
he was removed as instructor and denied access at WSRC. The ALJ overruled a relevancy
objection and denied a motion to strike, ruling that the testimony tended to show animus. T. 298-299. The animus allegedly fueled the retaliation at the Savannah River facility and
foreclosed any intention of abiding by the "Personnel File" term of the settlement
agreement from its inception. Later, WHC objected to introduction of deposition testimony of
certain WSRC witnesses. Ruud's counsel countered that WHC had refused to produce the
witnesses at hearing and that he should be permitted to use the depositions if they contained
relevant testimony. The ALJ ruled: "I think it's a distinction without a difference between
the two corporations. I think the representation, for all practical purposes, involved in this case
[is] the same." T. 677-678. These exchanges represent the only challenges to the testimony
about retaliation at the Savannah River facility.
23 In his
Opening Brief before the Board, Ruud argued that he should be awarded front pay
"calculated on the basis of his remaining expected professional life" and additional
damages for emotional distress exacerbated by "continuing retaliation by Respondent even
after Complainant's termination." Br. at 26-28. Accordingly, Ruud did not abandoned the
claim of retaliation and violation at Savannah River advanced in prehearing filings and pressed at
hearing.
24 Indeed,
even in its original form, the complaint may be read to allege continued retaliation by WHC
managers, e.g., failure to consider Ruud for recall, motivated by protected activity
during Ruud's tenure at the Hanford reservation. We note that at the time of the hearing (and
effective amendment) the portion of the complaint subject to the August 1988 settlement agreement
remained pending because the terms had not yet been approved by the Secretary or the Board and
Ruud had challenged the bargaining process as impaired.
25 Supplemental pleadings have proved so useful in facilitating efficient judicial administration that
at least one Federal circuit has recommended that they be permitted as a matter of course.
Pratt v. Rowland, 769 F. Supp. 1128, 1131 (N.D. Cal. 1991).
26 The court
in Keith explained that in the event of a supplementation, application of
the "relation back" standard of Rule 15(c)(2) (relation back of amendment
to date of original pleading) is not realistic. The standard for amendment requires that an
unpleaded claim must "ar[i]se out of the conduct, transaction, or occurrence set forth . . .
in the original pleading." Supplementation, however, permits a party to plead
"transactions . . . which have occurred since the date of the pleading sought to be
supplemented." Rule 15(d). "This textually negates the argument that a transactional
test is required. While some relationship must exist between the newly alleged matters and the
subject of the original action, they need not all arise out of the same transaction." Keith
v. Volpe, 858 F.2d at 474 (noting that Rule 15(d) "makes no reference to any
[transactional] test").
27 Our
disposition comports with Department of Labor precedent that complaints are informal filings
which need not set forth all legal causes of action or allege all elements of a discrimination case
and that the fact finder is not bound by the legal theories of any party in determining whether
discrimination has occurred but must review the record in its entirety for purposes of the
determination. Ass't Sec. and Moravec v. HC & M Transportation, Inc., Case No.
90-STA-44, Sec. Dec., Jan. 6, 1992, slip op. at 4-5; Monteer v. Casey's General Store,
Inc., Case No. 88-SWD-1, Sec. Dec., Feb. 27, 1991, slip op. at 4-5; Flener v.
Cupp, Case No. 90-STA-42, Sec. Rem. Dec., Apr. 9, 1991, slip op. at 4; Perez v.
Guthmiller Trucking Company, Inc., Case No. 87-STA-13, Sec. Dec., Dec. 7, 1998, slip
op. at 32; Nunn v. Duke Power Co., Case No. 84-ERA-27, Sec. Rem. Dec., Jul. 30,
1987, slip op. at 12 n.3; Chase v. Buncombe County, N.C., Dep't of Comm. Improv.,
Case No. 85-SWD-4, Sec. Rem. Dec., Nov. 3, 1986, slip op. at 5; Richter v. Baldwin
Associates, Case Nos. 84-ERA-9 et. seq., Sec. Rem. Ord., Mar. 12, 1986, slip
op. at 11. Our disposition also perpetuates the Department's general use of amendment and
supplementation to promote administrative economy and convenience where fairness permits.
See, e.g., McNiece v. Northeast Nuclear Energy, Case No. 95-ERA-18, Sec. Rem.
Ord., Jul. 11, 1995; Studer v. Flowers Baking Co. of Tenn., Case No. 93-CAA-11,
Sec. Rem. Dec., June 19, 1995, slip op. at 1-2, 5-7; Ass't Sec. and Wilson v. Bolin
Assoc., Case No. 91-STA-4, Sec. Dec., Dec. 30, 1991, slip op. at 4-5; Grizzard v.
Tennessee Valley Authority, Case No. 90-ERA-52, Sec. Rem. Dec., Sept. 26, 1991, slip
op. at 3; Chase v. Buncombe County, slip op. at 4-5. Contra, Gabbrielli v.
Enertech, Case No. 92-ERA-51, Sec. Dec., Jul. 13, 1993, slip op. at 9 n.3;
Gunderson v. Nuclear Energy Services, Inc., Case No. 92-ERA-48, Sec. Dec., June
19, 1993, slip op. at 7-8.