et al.,

Authorized Employee

OSHRC Docket
Nos. 88-0227, 88-0731, and


BEFORE: FOULKE, Chairman; MONTOYA and WISEMAN, Commissioners.


These cases arose from three inspections conducted at a worksite of Respondent, National Steel and Shipbuilding Company ("NASSCO"), in San Diego, California, between July 1987 and June 1988. The Secretary's Occupational Safety and Health Administration ("OSHA") issued a total of eight citations, setting forth 20 separate allegations that NASSCO willfully violated the Occupational Safety and Health Act of 1970, 29 U.S.C. 651-78 ("the Act"), over 300 allegations that NASSCO committed serious violations of the Act, and approximately 160 allegations of nonserious violations. OSHA proposed penalties totaling $165,100. NASSCO contested all of the willful allegations as well as many of the serious and nonserious charges. The unions representing NASSCO's employees then elected party status pursuant to Commission Rule 20(a), 29 C.F.R. 2200.20(a), which provides that affected employees and their authorized representatives may make such an election at least 10 days prior to the hearing.[[1/]]

Thereafter, the cases were assigned to two Administrative Law Judges for disposition. Docket number 88-0227 was assigned to Judge James A. Cronin, Jr., and the remaining two cases were assigned to Judge Benjamin R. Loye. The Secretary and NASSCO then entered into a single settlement agreement disposing of all three cases, and Judges Cronin and Loye issued orders approving the settlement agreement as it pertained to their respective cases. Two of the unions which had elected party status, Shopmen's Local 627 of the International Association of Bridge, Structural, and Ornamental Iron Workers ("Ironworkers") and Local 389 of the International Association of Machinists and Aerospace Workers ("Machinists") then filed petitions for discretionary review objecting to the approval of the settlement agreement. Former Commissioner Linda L. Arey directed review on the issue of whether the judges' orders should be set aside in light of the unions' objections.

Since these cases raise a common legal issue and involve identical parties, we formally consolidate them pursuant to Commission Rule 9, 29 C.F.R. 2200.9. For the reasons that follow, we conclude that the judges erred in approving the settlement agreement.

The Machinists union objects that it was not served with a copy of the settlement agreement. It points out that it was not listed on the certificate of service despite the representation in the agreement that "Complainant has served a copy of this Settlement Agreement upon the authorized representatives of employees that have elected party status...." Commission Rule 100(c), 29 C.F.R. 2200.100(c), imposes a mandatory requirement that a settlement agreement be served "upon all parties and authorized employee representatives" and that proof of service to that effect "shall be filed with the settlement agreement." We recently reaffirmed the importance of the service requirement in General Electric Co., 14 BNA OSHC 1763, 1990 CCH OSHD 29,072 (No. 88-2265, 1990), where we emphasized that Rule 100(c) is intended to allow employees or their representatives who have elected, or who still have the opportunity to elect, party status an opportunity to make known their objections to the reasonableness of any abatement time provided for in the settlement agreement before the agreement is approved. We further pointed out that Rule 100(c) also is intended to ensure that all employee representatives have notice of the terms of a settlement agreement whether or not they have elected party status. Id., 14 BNA OSHC at 1764-65 & n.2, 1990 CCH OSHD at p. 38,849 & n.2. Accordingly, the settlement agreement is deficient for failure to certify service on the Machinists, and the judges erred in approving the agreement without assurance that the Machinists had been served as required by Rule 100(c). [[2/]]

In addition to the procedural question of service on the Machinists, both the Machinists and the Ironworkers raise essentially the same substantive objections to the settlement agreement. Both unions assert that the agreement contains a material misstatement of fact regarding the cause of an accident that resulted in the inspection at issue in docket number 88-1647. According to the unions, the representation in the agreement that NASSCO's rigging practices were not responsible for this accident is contrary to an investigative report prepared for the Secretary by an outside expert. Both unions also object to provisions of the agreement that allow NASSCO to offset a portion of the penalties originally proposed by making certain expenditures for improving safety at the worksite. They contend that some of the expenditures approved by the agreement as a credit against the penalties are for employee safety instruction and training already required either by union contracts with NASSCO or by other OSHA standards. In the unions, view, funds to be expended under the settlement agreement should be used for new or additional safety measures "beyond the minimum requirements of law" and not merely for "normal operating costs like the training of newly-hired employees." The Ironworkers union also opposes a provision of the agreement giving NASSCO credit for expenditures made before the settlement agreement was signed, contending that this provision defeats the deterrent value of penalties. Finally, the Ironworkers union objects that it and the other authorized employee representatives were "excluded from the settlement process" and that the settlement agreement was negotiated without their "participation or knowledge."

The objections raised by the Machinists and the Ironworkers to the statements in the settlement agreement regarding the cause of the accident in docket number 88-1647 and to the provisions of the agreement regarding offset of penalties do not relate to the reasonableness of the time prescribed for abatement and therefore are beyond the purview of the Commission or Commission judge. [[3/]]

However, the unions may make these concerns known to the Secretary and NASSCO in the manner indicated by our recent decision in General Electric.

In General Electric we reconsidered our past precedents according employees or their representatives "meaningful participation" in the settlement process in light of the limited opportunity employees have to make objections to the Commission or judge regarding the terms of a settlement agreement. We concluded that employees or their representatives who have elected party status should be permitted to provide input regarding a settlement agreement to the other parties before the agreement is fully executed and filed with the Commission or judge. This opportunity is in addition to the right provided by Commission Rule 100(c) to have 10 days to object to the reasonableness of the abatement period(s) contained in a settlement agreement before it is approved by the judge. We further stated that when a settlement agreement is submitted for approval by the Commission or judge, it is to be examined to ensure that the employees or their representatives have had an opportunity to provide input before the other parties have finalized the agreement.

In these cases, as in General Electric, there is no evidentiary record from which we can determine whether the authorized employee representatives were "excluded from the settlement process," as the Ironworkers union alleges. Consistent with General Electric, the judges' orders approving the settlement agreement are therefore set aside. These cases are remanded to the judge for development of a factual record through a hearing, affidavits, or other appropriate means and for factual findings, based on that record, as to whether the authorized employee representatives did have the opportunity to provide input. In the event it is determined that the employee representatives were not afforded that opportunity, they shall be permitted to provide input for consideration by the other parties before any settlement agreement is executed between the Secretary and NASSCO, as required by General Electric.

Since these three cases are interrelated and the unions raise the same concerns with respect to all three, we think it appropriate for the cases to remain consolidated. We therefore direct that docket number 88-0227 be reassigned to Judge Loye and that all three docket numbers be remanded to Judge Loye for further proceedings in accordance with this opinion.

Should Judge Loye determine that the authorized employee representatives did in fact have an opportunity to provide their input in accordance with General Electric, NASSCO and the Secretary are free to refile their original settlement agreement. However, we note two apparent discrepancies in that agreement. It states that an aggregate penalty of $24,200 is due in docket number 88-0731. However, the total of the individual penalties assessed for the citation items affirmed in that docket number comes to $24,500. In addition, the agreement fails to dispose of subitem 53(i) of citation number 1 in docket number 88-0731. The Secretary and NASSCO may make appropriate corrections to the penalty amounts and disposition of the citation items in any settlement agreement executed under the terms of this decision.

Edwin G. Foulke, Jr.

Velma Montoya

Donald G. Wiseman

Dated: October 25, 1990


[[1/]] The record reflects that NASSCO's employees are represented by unions for seven trades: carpenters, painters, machinists, iron workers, teamsters, electrical workers, and operating engineers. Specific elections of party status were received from the International Association of Bridge, Structural , and Ornamental Iron Workers; The international Association of machinists and Aerospace Workers; the United Brotherhood of Carpenters and Joiners of America; and the International Union of operating Engineers. In addition, two individuals, each of whom identified himself as a "full-time union health and safety representative" for NASSCO, stated that they elected party status on behalf of "all seven unions which have members employed at [NASSCO]."

[[2/]] As we emphasized in another recent decision addressing the rights of employees, General Motors Corp., Delco Electronics Div., 14 BNA OSHC 1753, 1990 CCH OSHD 29,069 (No. 88-1112, 1990), Rule 100(c) provides that employees and their representatives who have elected party status or whose time for electing party status has not expired shall be granted a period of at least 10 days after service of a copy the executed settlement agreement to make known their objections to the reasonableness of the time for abatement provided for in the settlement agreement. The Machinists union did not receive a copy of the settlement agreement until June 7, 1989, after it had asked the OSHA area office about the status of these cases. Judge Cronin issued his order approving the agreement on June 2, and Judge Loye's order was entered on June 8. Therefore, the union was not accorded the 10-day consideration period prescribed by Rule 100(c).

[[3/]] Commission Rule 100(b), 29 C.F.R. 2200.100(b), which sets forth the provisions that must appear in a settlement agreement, requires that a settlement agreement "state whether any affected employees who have elected party status have raised an objection to the reasonableness of any abatement time." In compliance with this requirement, the agreement here contained the following declaration:
All conditions cited have been abated. There being no cited conditions which remain unabated at the time of execution of this Agreement, the matter of unreasonableness of abatement time is not at issue, and no affected employee having elected party status has raised an objection thereto.

In its petition for discretionary review, the Machinists union claims that because it was not properly served with the agreement, it was denied the opportunity to "review, determine or possibly object to the current status of those cited conditions." However, the right to make objections to the Commission concerning the reasonableness of the abatement period set forth in a settlement agreement does not entitle employees or their authorized representatives to challenge a settlement agreement on the ground that abatement has not occurred. OCAW v. OSHRC (American Cyanamid Co.), 671 F.2d 643, 649 (D.C. Cir. 1982), cert, denied, 459 U.S. 904 (1982).