OSHRC Docket No. 2922

Occupational Safety and Health Review Commission

July 25, 1974


Before MORAN, Chairman; VAN NAMEE and CLEARY, Commissioners



CLEARY, COMMISSIONER: On March 20, 1974, Judge George W. Otto issued an order approving a settlement reached by respondent and the Secretary of Labor concerning item 4 of a citation issued to respondent. On April 17, 1974, the Commission directed that the Judge's order concerning the settlement be reviewed in accordance with section 12(j) of the Occupational Safety and Health Act of 1970 (29 U.S.C. 651 et seq., hereinafter referred to as "the Act").

Review was directed on the question of whether respondent had complied "with Commission rule 100(c) which requires that a settlement agreement be served upon affected employees." We have reviewed the record in this case and affirm the Judge's order as modified herein.

Respondent was cited on April 17, 1973, for four non-serious violations of the Act. Penalties of $40 each were proposed for items 1 and 2. No penalties were proposed for items 3 and 4. Respondent filed a timely notice of contest to items 1 and 4 on May 7, 1973. Items 2 and 3 were not contested.

Members of the union committee at U.S.I. Clearing expressed a desire to participate in the [*2] hearing on the case and the authorized employee representative designated two representatives to appear on behalf of the employees.

Respondent moved to withdraw its notice of contest to item 1. n1 In February 1974, respondent and the Secretary reached a settlement agreement concerning item 4 which alleged failure to provide a spray booth or room to enclose spray finishing operations as required by 29 CFR 1910.94(c)(2). The settlement agreement provided that respondent would withdraw its notice of contest to item 4 if the abatement date, initially set at June 30, 1973, was amended to August 15, 1974. On March 20, 1974, the settlement agreement was approved with one minor modification not relevant for the purposes of this decision.

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n1 The Judge's order of March 20, 1974, approving the settlement agreement, also granted respondent's motion to withdraw its notice of contest to item 1. The action of the Judge concerning item 1 is now final, and therefore, not before us.

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Rule 100(a) (29 CFR 2200.100(a)) [*3] provides that settlement is to be encouraged when it is consistent with the provisions and objectives of the Act. The provisions of rule 100(c) (29 CFR 2200.100(c)) must be satisfied before a settlement agreement can be approved. n2 This rule requires that the employer serve the authorized employee representative with a copy of any proposed settlement agreement reached by the parties. Proof of such service must accompany the settlement agreement when it is submitted to the Judge for approval.

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n2 Service of the proposed settlement agreement on the authorized employee representative is one of the elements required for approval of a settlement agreement. See Colt Indus., Crucible Magnetics Div., No. 1661 (April 30, 1973) (Administrative Law Judge); Consolidated Edison Co., No. 1139 (March 7, 1973) (Administrative Law Judge); American Home Prods. Corp., No. 3 (October 7, 1971) (Administrative Law Judge) aff'd by the Commission (February 28, 1972).

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The Judge in this case erred in approving the [*4] settlement agreement without the required proof of service. In fact, respondent had not served a copy of the proposed settlement agreement on the authorized employee representative. A copy of the settlement agreement was received by the employee representative only after it had been approved by the Judge. The affidavit of respondent's safety supervisor indicates that a copy of the approved settlement agreement was not mailed to the authorized employee representative until April 17, 1974, almost a month after the Judge's order approving the agreement.

The requirements of rule 100(c) (29 CFR 2200.100(c)) are not satisfied by service of an approved settlement agreement on the authorized employee representative. The provision for service of proposed settlement agreements on the authorized employee representative is not a mere formality. The point at which an employee objection is voiced may affect its treatment by the Judge and the other parties to the proceeding. While proper service of a proposed settlement agreement is always important, it is of greater significance in this case because the affected employees had expressed a desire to exercise their statutory right [*5] under section 10 of the Act to participate as a party in the hearing. To deprive the employees of an opportunity to participate in the settlement is to deprive them of their right to party status.

The record shows, however, that after the settlement agreement was approved, it was served on the authorized employee representative and was also posted at respondent's premises on April 17, 1974. A copy of the Judge's order, permitting employee objection, was also served on the authorized employee representative. As noted above, before the settlement agreement was reached the employees had expressed a desire to participate in the hearing of the case, but no employee or employee representative has expressed any interest in the proceedings since receiving a copy of the Judge's Order and the Settlement Agreement. We thus conclude that further proceedings would serve no useful purpose.

Accordingly, it is ORDERED that the Judge's order be affirmed.



MORAN, CHAIRMAN, concurring: I concur in the disposition but not in the other statements contained in the foregoing opinion.

Judge Otto quite properly approved a settlement which specifically reserved to the parties [*6] the right to withdraw from the terms thereof if any employee or authorized employee representative objected to the entry of the settlement order. This was a perfectly logical and acceptable method of making sure that the agreement would not become the order of this Commission if opposed.

[The Judge's decision referred to herein follows]

OTTO, JUDGE, OSAHRC: By letter dated May 3, 1973, Respondent filed a notice of contest of items 1 and 4 in a Citation issued April 17, 1973, and also contested the proposed penalty of $40 for item 1. There was no penalty proposed for item 4.

Motions to withdraw notice of contest related to item 1 were filed February 15, 1974, and March 14, 1974. Respondent states the condition has been abated and the penalty paid, that Respondent will continue to comply with the standards of the Occupational Safety and Health Administration and the authorized representatives of affected employees have been given the opportunity to participate in these proceedings.

The parties filed a Settlement Agreement on February 19, 1974, under which Respondent agreed to withdraw its notice of contest regarding item 4 if the abatement date was amended to August [*7] 15, 1974. Complainant agreed to the amendment of the Citation to conform to an abatement date of August 15, 1974. In the Settlement Agreement Respondent in paragraph III assures that it intends to apply for a variance with respect to item 4 and will abate by the amended date except as there may be further agreement by the parties or unless such abatement is excused by granting of a variance, that there is no history of a previous violation, that it had tendered payment of the penalty, that promptly upon approval of the Settlement Agreement it will serve the Agreement on affected employees and authorized representatives under Rule 7. Paragraph V provides that any party including any authorized employee representative and any unrepresented affected employee who has any objection to the entering of an order should communicate such objection within ten days of the posting of the Settlement Agreement to the undersigned Judge and the address was properly stated. The Settlement Agreement was dated February 22, 1974, and was filed February 19, 1974.

It appears the settlement and withdrawal are consistent with the provisions and objectives of the Act. It is therefore.


That [*8] Respondent's Motions to withdraw its notice of contest with regard to item 1 of the above Citation is granted, that the Agreement to amend the abatement date of item 4 to August 15, 1974, is approved, that paragraph III of the Settlement Agreement is approved except III(b) is incorrect for stating no previous history of violation since a previous violation became established under the disposition of Secretary of Labor v. U.S.I. Clearing, #2812 (the withdrawal motion having been filed approximately the same date as in the instant case). The Citation issued April 17, 1973, as amended and proposed penalty of the same date are affirmed.