Administrative Review Board Decisions Concerning Whistleblower Settlements, Disclosure of Dollar Amount of Payments, and Possible Side Agreements
September 9, 1996 [Updated December 6, 1996]
DOLLAR AMOUNT MUST BE DISCLOSED
For those whistleblower case types that must be reviewed by the Department of Labor before the matter may be dismissed, an ALJ is not permitted merely to accept the parties' contention that the dollar amount received by the Complainant is fair, adequate and reasonable. Rather, the dollar amount must be disclosed . This is not a new rule, see Plumlee v. Alyeska Pipeline Service Co. , 92-TSC-7 (Sec'y Aug. 6, 1993), but it is one that the new Board has been pressing in the last several months. See Faust v. Chemical Leaman Tank Lines, Inc., 92-SWD-2 and 93-STA-15 (ARB June 13, 1996); 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); Ezell v. Tennessee Valley Authority , 95-ERA-39 (ARB June 26, 1996).
DISCLOSURE MUST REVEAL AMOUNT OF TOTAL DESIGNATED FOR ATTORNEY'S FEES, EXPENSES AND COSTS
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 settlment 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.
DEGREE OF REVIEW OF ATTORNEY'S FEES
In Guity v. Tennessee Valley Authority , 90-ERA-10 (ARB Aug. 28, 1996), Klock v. Tennessee Valley Authority , 95-ERA-20 (ARB May 1, 1996); and Biddy v. Alyeska Pipeline Service Co ., 95-TSC-7 (ARB May 31, 1996), the record did not specify the amount of attorney's fees to be paid in a settlement agreement, but the Board stated 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."
In Blackburn v. Metric Constructors, Inc. , 86-ERA-4 (ARB July 22, 1996), however, 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.
In Ezell v. Tennessee Valley Authority, 95-ERA-39 (ARB Aug. 21, 1996), the amount of the settlement was slightly less than Complainant's total attorney's fees and costs. The Board, however, 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."
It is also not a new rule that the parties are not permitted to hide additional settlement terms from the Department in an effort to avoid DOL review, see Bixby v. State of New exico , 94-TSC-1 (Sec'y Aug. 16, 1994), but the Board's belief that this is a serious problem is squarely presented in the recent decision in Biddy v. Alyeska Pipeline Service Co. , 95-TSC-7 (ARB Aug. 1, 1996).
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.
In its Final Order Approving Settlement and Dismissing Complaint, the Board indicated that the parties had 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. Biddy v. Alyeska Pipeline Service Co. , 95-TSC-7 (ARB Dec. 3, 1996). 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 (bold emphasis added).