AMERICAN AIRLINES, INC.

OSHRC Docket No. 7021

Occupational Safety and Health Review Commission

May 30, 1975

[*1]

Before MORAN, Chairman; and CLEARY, Commissioner

OPINION:

BY THE COMMISSION: A decision of Judge L. Stuller is before the Commission for review pursuant to 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"].

On August 23, 1974, Judge Stuller issued his order affirming a portion of a settlement agreement on grounds that the Commission is required by the holding in Dale M. Madden Constr. Co., Inc. v. Hodgson 502 F.2d 278 (9th Cir. 1974) to honor such agreements.

On September 23, 1974, pursuant to section 12(j) of the Act the Judge's decision was directed for review before the full Commission. Review was directed on the issue of whether the Judge erred in concluding that the Commission is required to honor settlement agreements between parties as to appropriate penalties for admitted violations of the Act.

The Commission has reviewed the briefs of the parties and has considered the entire record. We adopt Judge Stuller's order only to the extent that it is consistent with the following.

Respondent is engaged in maintenance and engineering of aircraft in Tulsa, Oklahoma. As a result of an [*2] inspection conducted on February 4, 1974, the respondent was issued a citation for a repeated violation with a notification of proposed penalty and a notification of failure to correct the violation and a proposed additional penalty for the failure to correct.

The respondent filed a timely notice of contest. n1 Before the hearing, the parties stipulated that potential foot hazards existed and appropriate action would be taken by respondent to abate the hazards. The respondent represented that the conditions giving rise to the citation and notification of failure to correct had been abated and, finally, the parties agreed to delete the proposed penalty of $100 for the repeated violation and agreed to reduce the proposed penalty for the notification of failure to correct violation from $400 to $200.

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n1 The notice of contest was apparently intended to contest both proposed penalties, the citation for repeated violation, and the notification of failure to correct.

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At the hearing Judge Stuller agreed to accept [*3] that portion of the settlement agreement relating to the notification of failure to correct violation and the proposed penalty therefor. The Judge held that the court's decision in Dale M. Madden Constr. Co., Inc. v. Hodgson, supra, requires the Commission to honor such settlements. The Judge refused to accept that portion of the settlement agreement regarding the repeated violation and penalty on the grounds that the citation for repeated violation was not before him and he had no authority to recognize that portion of the agreement.

Respondent has filed no brief with the Commission. In his brief on review, the Secretary submits that the Commission is required to honor the settlement agreement between the Secretary and respondent where the agreement works to the advantage of the parties and affected employees, and to hold otherwise is to place the Commission in the role of an "associate prosecutor."

The Secretary argues that the notice of contest included the citation for a repeated violation and its proposed penalty, and therefore the Judge erred when he held that that portion of the settlement agreement was not before him. Careful review of the file shows that the [*4] first mention of the citation for the repeated violation and penalty proposed therefor occurs in the complaint, paragraph VII, in which it is averred that a notification of failure to correct violation and of proposed additional penalty were issued on February 13, 1974. Paragraph IX of the complaint states:

IX

Complaint duly certified to the Commission the above mentioned Notification of Failure to Correct violation and of proposed additional penalty, and the above mentioned Notice of Contest.

It is inferred from paragraph IX that the citation for a repeated violation and its accompanying notification of proposed penalty were not forwarded to the Commission and therefore were not made a part of this record.

The Judge's conclusion that the citation for a repeated violation and its accompanying notification of proposed penalty were not before him apparently is based upon the fact that the citation and notification of proposed penalty were not forwarded by the Secretary for inclusion in the record. The complaint, however, alleges all facts surrounding this citation and its proposed penalty and, as the Secretary argues, the intent of the parties to settle both matters [*5] also must be considered. We read the complaint to be merely a restatement of the citation and hold that both the notification of failure to correct and the citation for a repeated violation are before us.

In Commissioner Cleary's view, the Madden case, supra, does not require that the Commission accept all settlements. In that case a hearing was held; the case was reviewed by the full Commission; and the employer filed a petition for review in the Ninth Circuit Court of Appeals as permitted by section 11 of the Act. Only then did the Secretary and respondent enter into a settlement agreement. In this case the proposed settlement agreement was entered into before the matter was heard by the Administrative Law Judge. Under the Administrative Procedure Act the Commission may apply "public interest" considerations in passing upon settlements. See 5 U.S.C. section 554(c). See also American Airlines, No. 6087 (December 4, 1974). The Commission has consistently approved, however, settlements that include: (1) an agreement to pay the proposed penalty; (2) a motion to withdraw the notice of contest; (3) and an assertion that the violation has been abated. Additionally, [*6] it must be shown that the settlement agreement has been properly served on the authorized employee representative or posted to inform unrepresented employees and that there is no employee objection. American Airlines, supra. The settlement here meets these requirements.

Moreover, the Commission will accept penalties agreed upon by the parties in the absence of objection and where the penalties are not clearly repugnant to the purposes of the Act. Thorleif Larsen & Son of Indiana, Inc., No. 370 (October 11, 1974); Shaffer Const. & Eng. Co., No. 675 (December 24, 1974). These conditions are also met in this case.

Chairman Moran agrees that all matters in the settlement agreement are before the Commission. He does not, however, agree with the views of Commissioner Cleary on the power of the Commission to require contingencies before approving a settlement agreement. He believes, as did Judge Stuller, that the decision of the Ninth Circuit in Dale M. Madden Co., supra, requires approving the settlement agreement.

As the Commissioners are in agreement as to the result in this case, the Judge's decision insofar as it approves the settlement agreement as [*7] to the failure to abate is affirmed; that portion of the settlement agreement concerning the citation for repeated violation is also approved.

Acccordingly, it is ORDERED that the notification of failure to correct is affirmed and a penalty of $200 is assessed; the citation for repeated violation is affirmed and no penalty is assessed for this violation; and respondent's motion to withdraw its notice of contest is granted.

[The Judge's decision referred to herein follows]

STULLER, JUDGE: The parties hereto have entered into a settlement agreement disposing of all the issues in this case. The affected employees have been duly notified of this agreement and have failed to file an objection. Therefore, pursuant to Dale M. Madden Construction Company, Inc., v. Secretary of Labor, 502 F.2d 278 (9th Cir., 1974) requiring the Commission to honor such settlements, it is ORDERED that the respondent's notice of contest is withdrawn, that the notification of failure to correct violation is AFFIRMED and that the proposed additional penalty for failure to abate is MODIFIED to $200.

The parties in their settlement agreement have agreed that a penalty of $100 proposed for [*8] a repeated violation alleged in a citation on February 13, 1974, be deleted. As that citation and proposed penalty are not before the undersigned Judge, that portion of the agreement can not be honored herein.