KAISER ALUMINUM & CHEMICAL CORPORATION

OSHRC Docket No. 76-1468

Occupational Safety and Health Review Commission

June 29, 1979

[*1]

Before CLEARY, Chairman; BARNAKO and COTTINE, Commissioners.

COUNSEL:

Baruch A. Fellner, Office of the Solicitor, USDOL

Bobbye D. Spears, Regional Solicitor, USDOL

Stephen H. Booth, Labor Counsel, KAISER ALUMINUM & CHEMICAL CORP., for the employer

OPINION:

DECISION

BY THE COMMISSION:

A decision of Judge John S. Patton, dismissing a citation and complaint issued under the Occupational Safety and Health Act of 1970, 29 U.S.C. 651-678 ["the Act"], alleging a failure to comply with the occupational noise standard published at 29 CFR 1910.95(b)(1), is before the Commission pursuant to section 12(j) of the Act, 29 U.S.C. 661(i).

In the course of pre-trial discovery, the Secretary of Labor ["Secretary"] filed a request pursuant to Fed. R. Civ. P. 34, for entry into Kaiser's plant. Kaiser objected on the grounds, inter alia, that entry by a non-federal employee would endanger the confidentiality of respondent's trade secrets. In a subsequent "Motion for Order Compelling Discovery" filed pursuant to Fed. R. Civ. P. 37(a)(2), the Secretary asserted that respondent had not established the existence of trade secrets, and that even if the Commission found the existence of trade secrets, [*2] respondent must show good cause why it is entitled to a protective order under Fed. R. Civ. P. 26(c). On July 21, 1976, Judge Patton granted the Secretary's discovery motion but restricted entry to a federal employee. Following the filing by the Secretary of a motion for reconsideration, the Judge held a hearing with respect to two issues: first, whether trade secrets exist at Kaiser's plant that are likely to be revealed during such an inspection; and second, whether there are qualified experts employed by the federal government who could inspect respondent's premises for the purpose of determining whether feasible engineering or administrative controls exist to reduce the noise in respondent's plant. Finding that respondent had proven the existence of trade secrets that would be disclosed during a discovery inspection, and finding that the Secretary had not established the impossibility of securing a qualified federal employee expert, Judge Patton authorized the Secretary to conduct a discovery inspection but limited entry to federal employees.

Thereafter, the Secretary filed a "Statement of Position," indicating that, because of the Judge's refusal to allow entry by a non-federal [*3] expert, the Secretary was unable to proceed to hearing at that time but was not abandoning the case. Judge Patton dismissed the citation and complaint based on the Secretary's indication that he could not go forward. The Secretary filed a petition for discretionary review, and Chairman Cleary directed review.

The issues before us on review are whether the Judge erred in (1) finding the existence of trade secrets that would be revealed in the course of a discovery inspection, (2) limiting entry to federal employees, and (3) dismissing the citation and complaint. We reverse Judge Patton with respect to his order restricting entry to federal employees and his dismissal of the citation and complaint. For the reasons that follow, we find it unnecessary to decide the remaining issue at this time.

Subsequent to the issuance of the Judge's dismissal in this case, the Commission issued its decision in Owens-Illinois, Inc., 78 OSAHRC 105/C8, 6 BNA OSHC 2162, 1978 CCH OSHD para. 23,218 (No. 77-648, 1978), ["Owens"]. In Owens, the Commission held that the possibility of disclosure of trade secrets to an expert who is not a federal employee does not preclude entry upon the respondent's [*4] land for discovery purposes so long as the respondent's trade secrets are adequately protected. We concluded in Owens that trade secrets could be adequately protected by an appropriate protective order and a provision in the Secretary's contract with the outside expert that would allow the employer an enforceable third-party beneficiary interest. The decision in Owens also described the minimum requirements of an acceptable protective order and indicated the procedure to be followed when a trade secret claim is made by an employer. To the extent that they are inconsistent with the Owens decision, the Commission decisions in Reynolds Metals Co., 78 OSAHRC 51/F1, 3 BNA OSHC 1749, 1975-76 CCH OSHD para. 20,214 (No. 4385, 1975), and Reynolds Metals Co., 78 OSAHRC 51/D4, 6 BNA OSHC 1667, 1978 CCH OSHD para. 22,806 (No. 4385, 1978), were overruled. Thus, the Secretary is no longer required to show good cause in order to gain entry by a non-federal expert to an employer's premises for discovery purposes even when the existence of trade secrets has been established as long as an appropriate protective order is issued.

In the present case, the existence of trade secrets [*5] was found by the Judge following a hearing. Because the Secretary was unable to establish that no qualified federal experts were available to conduct the discovery, the Judge dismissed the citation and complaint. As discussed above, however, entry is no longer limited to federally employed experts since the decision in Owens. The dismissal, therefore, is improper. In addition, if an appropriate protective order that meets the minimum requirements enumerated in Owens can be entered in this case, the issue of whether the Judge erred in finding the existence of trade secrets need not be reached by the Commission at this time. Thus, the case is properly remanded to the Judge for proceedings consistent with this opinion and with the Commission decision in Owens. n1

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n1 See Fred's Frozen Foods, Inc., OSAHRC    /   , 7 BNA OSHC 1271, 1979 CCH OSHD para. 23,461 (No.    /7-1817, 1979).

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The record, however, does not disclose the positions of the parties with respect to a protective order because [*6] the law has changed since the last briefs were filed. Therefore, we will afford the parties an opportunity to reconsider their positions in light of Owens. Failure to pursue the merits of the trade secrets issue at this stage of the proceedings, however, will not preclude later Commission review of that issue, should later review become necessary for reasons not apparent now.

Accordingly, the Judge's decision will be reversed and the case remanded for further proceedings consistent with this decision and our decision in Owens unless, within ten days from the issuance of this order, either party indicates why the trade secrets issue should be reviewed at this time. Upon receipt of a submission, the Commission will reconsider whether a remand is appropriate. So ORDERED.

DISSENTBY: BARNAKO

DISSENT:

BARNAKO, Commissioner, dissenting:

Judge Patton held a hearing on the trade secrets issue raised in this case and found that Kaiser possessed trade secrets which would be revealed to an individual conducting the discovery inspection requested by the Secretary. My colleagues, however, decline to rule on whether the judge's finding was correct. Instead, they note that if an appropriate protective [*7] order which meets the requirements enumerated in their decision in Owens-Illinois, Inc. n1 can be entered in this case, the issue of whether the judge's finding concerning trade secrets is correct will not have to be resolved. Therefore, they conclude that the case should be remanded to the judge for further proceedings consistent with Owens-Illinois, Inc.

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n1 78 OSAHRC 105/C8, 6 BNA OSHC 2162, 1978 CCH OSHD P23,218 (No. 77-648, 1978).

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I dissented in Owens-Illinois, Inc. Following my rationale in Reynolds Metals Co., n2 I concluded that where trade secrets have been shown to exist any discovery entry shall be limited to a federal expert unless the Secretary shows good cause for use of an outside expert. On the other hand, if trade secrets are not established, there is no basis for barring the use of an outside expert. Accordingly, under my view of the law, a ruling on trade secrets is essential. Because my colleagues do not rule on whether the judge's finding of trade secrets is correct, and they [*8] permit discovery inspections by an outside expert so long as an appropriate protective order is entered, I respectfully dissent from their decision and order.

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n2 78 OSAHRC 51/F1, 3 BNA OSHC 1749, 1975-76 CCH OSHD P20,214 (No. 4385, 1975) and 78 OSAHRC 51/D4, 6 BNA OSHC 1667, 1978 CCH OSHD P22,806 (No. 4385, 1978).

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