USDOL/OALJ Law Library: Nuclear and Environmental Whistleblower Digest, DIVISION XVII -- SETTLEMENTS

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.

[Nuclear & Environmental Digest XVII A]
SETTLEMENT; PART 24 AMENDMENTS IN 2007; WHETHER TO APPLY TO SETTLEMENTS REACHED IN PENDING CASES

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.

XVII A Term of settlement

McCoy v. Utah Power/Pacific Power, 94-CAA-1, 94-CAA-6 (ALJ Feb. 7, 1994)

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. See Beliveau 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 Biddle based 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. MR/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- yers 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. See Debose 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."

EEOC v. Cosmair, Inc., 821 F.2d 1085, 1090 (5th Cir. 1987).

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

XVII. B. 1. a. Confidentiality provision/limitation on complainant's ability to provide information to DOL or other authorities

"[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."

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

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 ar. 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.

XVII B 1 b Settlement provisions not relating to CAA complaint not reviewed

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 ar. 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. See Aurich 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 ar. 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).

VIII.C.1. Accord Poulos

Accord Poulos : Buzard v. Seafood Producers Cold Storage, Inc., 93-WPC-4 (Sec'y Sept. 29, 1993); Hammer v. Brush Wellman, Inc., 93-SDW-2 (Sec'y Sept. 29, 1993).

XVII.B.1.b. Matters not relating to the ERA

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).

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 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

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

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." See Tinsley 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).

XVII B 1 d Additional cases; provision for interpretation under state law

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).

XVII B 1 e Prior notice of future claims

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).

XVII B 1 f Provision disclaiming any admission of wrongdoing

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).

XVII B 1 g Modification provision

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).

XVII B 1 h Contingency provisions

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.

XVII B 1 i Provision limiting Secretary's authority to enforce settlement agreement

In Guity v. Tennessee Valley Authority , 86-ERA-16 (Sec'y ay 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 ay 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 2 a Unenforceable clause does not automatically vitiate entire agreement

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

[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. See Polizzi 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 ay 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

XVII.B.2.a. Severance permissible where agreement contains savings clause

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.)

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

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).

XVII B 2 b Approval by Secretary

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).

XVII C 1 Settlement must be part of record for review, though it need not be part of the order

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 anagement 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).

XVII C 2 Agreement to submit settlement

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.

XVII C 3 Documents referenced in agreement

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

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]

In Klock v. Tennessee Valley Authority , 95-ERA-20 (ARB May 1, 1996), Biddy v. Alyeska Pipeline Service Co. , 95-TSC-7 (ARB May 31, 1996), and Ezell v. Tennessee Valley Authority, 95-ERA-39 (ARB June 26, 1996), the parties submitted settlement agreements for approval by the Secretary. Those agreements, however, gave no indication as to the actual amount of money to be paid to the Complainant pursuant to the proposed settlement.

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. See generally San 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 D 1 Appropriate regulation to cite when dismissing based on a settlement

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).

[Nuclear and Environmental Digest XVII D 2]
SETTLEMENTS; WPCA CASE MAY BE SETTLED WITHOUT DOL APPROVAL OF SETTLEMENT AGREEMENT

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

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

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

XVII D 2 Motion to withdraw based on settlement does not void need for Secretarial review

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.

XVII.E.1. Amount paid cannot be redacted/consequences of failure to submit

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 emorandum 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]

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

The parties designated certain terms in the settlement and an attachment as confidential commercial information pursuant to 29 C.F.R. § 70.26(b).

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.

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.

[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 ay 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 -- see Biddy 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

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 ay 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 utual 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. See Corder , 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:
1. there must be a controlling question of law at issue;
2. there must be a substantial ground for difference of opinion;
3. 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.

To the same effect: Tan v. Deborah Research Institute, 94-ERA-31 (Sec'y Nov. 28, 1994); Hasan v. Bechtel Power Corp. , 93-ERA-22 (Sec'y Feb. 13, 1995); Hasan v. Bechtel Corp. , 93-ERA-40 (Sec'y Feb. 13, 1995).

XVII E 2 Sealing of settlement; 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).

The Secretary issued an order to submit settlement agreement, and invited the parties to state whether the confidentiality provision could be severed.

XVII F Renunciation of settlement agreements

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 cDermott & 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

[N/E Digest XVII F]
SETTLEMENT; DISAPPROVAL WHERE MATERIAL BREACH OCCURRED PRIOR TO CONSIDERATION BY ARB; DISAPPROVAL WHERE LACK OF ASSENT TO ATERIAL 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, issouri, 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 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. See generally San 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 ishawaka, 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.

XVII G Attorney's fees

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 emorandum: 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).

VII G 2 Contingent agreement

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 anagement 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.]

XVII G 3 District Director's finding that the Act was violated despite settlement's stipulation of no violation admitted

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."

XVII G 4 Premature assertion of breach of contract

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

[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

XVII G 5 Effect of payment of lump sum prior to Secretary's 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. ishawaka 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.

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).

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.

Slip op. at 3.

SETTLEMENT; SIDE AGREEMENTS
[N/E Digest XVII G 6]

In Biddy v. Alyeska Pipeline Service Co. , 95-TSC-7 (ARB May 31, 1996) and Biddy v. Alyeska Pipeline Service Co. , 95-TSC-7 (ARB June 19, 1996), the Board had ordered the parties to disclose the actual amount the Complainant will ultimately receive in settlement of his complaint before DOL.

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

XVII G 7 NO TIME RESTRICTIONS ON SECRETARY'S REVIEW OF SETTLEMENT

In Drew 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.

XVII G 8 Order approving settlement should not contain "findings of fact and conclusion of law"

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).

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.

[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 AINTENANCE 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. ishawaka 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

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

XVII. G. 9. Other issues

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."