KAISER ALUMINUM & CHEMICAL CORP.
OSHRC Docket No. 76-2293
Occupational Safety and Health Review Commission
December 4, 1978
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Before CLEARY, Chairman; BARNAKO and COTTINE, Commissioners.
COUNSEL:
Baruch A. Fellner, Office of the Solicitor, USDOL
Marshall H. Harris, Reg. Sol., USDOL
S. Booth, Corporate Labor Counsel, for the employer
A Lawson, Asst. Gen. Counsel, United States Workers of America, for the employees
Harold E. Rose & Van O'Lynn, Safety & Health Committee, Local Union 5668-USWA, for the employees
OPINIONBY: CLEARY
OPINION:
DECISION
CLEARY, Chairman:
A decision of Review Commission Judge James D. Burroughs is before the Commission pursuant to a direction for review issued by me under section 12(j) of the Occupational Safety and Health Act of 1970, 29 U.S.C. § 651 et. seq. Judge Burroughs approved a settlement agreement arrived at between the complainant and respondent.
Respondent Kaiser Aluminum & Chemical Corp. was issued a citation alleging noncompliance with 29 CFR § 1910.179(f)(2)(vi) n1 in that ten overhead traveling bridge cranes, which were used to handle molten metal, were not provided with at least two holding brakes on their hoisting units. Respondent contested the citation. Local Union 5668 of the United Steelworkers of America, the authorized representative of affected employees, elected party [*2] status, and the case went to a hearing before Judge Burroughs.
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n1 The standard provides that "[e]ach independent hoisting unit of a crane handling hot metal and having power control braking means shall be equipped with at least two holding brakes." The standard at 29 CFR § 1910.179(f)(2)(i)(2) requires each holding brake to have a full load hoisting torque rating of 100%.
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At the outset of the hearing, the Secretary stated that a settlement had been reached with respondent under which the Secretary agreed to withdraw the citation, proposed penalty, and abatement requirement, and change the characterization of the violation from serious to de minimis. n2 Respondent agreed to withdraw its notice of contest. The Judge asked the employee representative if he objected to the settlement and he answered that "[u]nder the circumstances" he did not, whereupon Judge Burroughs approved the settlement.
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n2 A de minimis violation is one that has ". . . no direct or immediate relationship to safety or health." Section 9(a) of the Act. No citation is issued, penalty proposed, or abatement required for such violations.
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Subsequently, this Commission received a timely petition for discretionary review from Local 5668 of the Steelworkers indicating that the Local Union representative at the hearing had not been apprised of the proposed settlement in advance, nor of the terms of the proposal, and that the basis for the settlement is invalid because a change in certain American National Standards Institute (ANSI) standards should not have been construed by the Secretary as amending the Secretary's standards promulgated under the Occupational Safety and Health Act.
The Secretary has endorsed the petition for discretionary review, saying he too wishes the settlement to be abrogated, and the case remanded for hearing on the merits. He denies, however, that the employee representative was not advised of the proposed settlement by the Secretary's representative, and indicates the basis for the settlement was not because of a change in an ANSI standard.
After a notice of contest has been filed, a settlement proposal offered to the Commission is not final until the Commission approves the proposal as consistent with the intent [*4] of the Act and the public interest. See Davies Can Co., 76 OSAHRC 56/D8, 4 BNA OSHC 1237, 1976-77 CCH OSHD para. 20,704 (No. 8182, 1976); Seaboard Coast Line RR. Co., 76 OSAHRC 125/G4, 3 BNA OSHC 1761, 1975-76 CCH OSHD para. 20,184 (No. 10541, 1975). We have recently held that employee representatives that have elected party status have the right to meaningful participation in Commission proceedings. IMC Chemical Group, Inc., (No. 76-4761, 1978); ITT Thompson Industries, Inc., 78 OSAHRC 70/D10, 6 BNA OSHC 1944, 1978 CCH OSHD para. 22,944 (Nos. 77-4174 & 77-4175, 1978). This right includes a reasonable opportunity to review and comment upon settlements proposed by the other parties before they reach fruition, a right which may not have been accorded in this case. In this instance, there is considerable doubt whether the employee representatives were aware of the terms of the proposed settlement sufficiently in advance of the hearing to enable them to render a considered opinion. The length of time necessary for affected employees to adequately evaluate the merits of a settlement proposal will, of course, vary according to the complexity of the case. In [*5] no event, however, should affected employees be afforded less than 10 days in which to analyze a settlement proposal.
Accordingly, the Judge's decision must be reversed, the settlement proposed by respondent and the Secretary is rejected, and this case is remanded for further proceedings consistent with this opinion.
DISSENTBY: BARNAKO
DISSENT:
BARNAKO, Commissioner, Dissenting:
I dissent from the majority opinion remanding this case because of "doubt" whether the Union, representing the affected employees as a party, was aware of the proposed settlement sufficiently in advance of the Secretary's and Kaiser's agreement to it to have been able to render a considered opinion on the proposed terms.
As my colleagues note, Local Union 5668 of the United Steelworkers of America, the authorized employee representative, elected party status in this case, entering the appearance of one of the co-chairmen of the safety committee and a committeeman. Thereafter, Kaiser filed a motion to dismiss the citation arguing that the alleged serious violation of 29 C.F.R. 1910.179(f)(2)(vi) n1 was de minimis. n2 A copy of the motion was mailed by Kaiser to the Union.
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n1 The requirements of 29 C.F.R. 1910.179(f)(2)(vi) are set forth in footnote 1 of the majority opinion.
n2 Kaiser contended that the alleged violation should be considered de minimis because, although Kaiser's working condition violated the safety standard presently in effect, it conformed to a change in the American National Standards Institute (ANSI) source document from which the safety standard was adopted. In support of its argument Kaiser referenced a 1975 program directive of the Secretary, which stated that when a 1975 program directive of the Secretary, which stated that when the Secretary officially indicates a change in a standard will be made, thereafter any alleged violation of its terms will be characterized as de minimis where the deviation from the terms of the standard has no direct relationship to safety and health. Kaiser noted that in a letter to The Aluminum Association concerning the cited standard, the Secretary proposed as an alternative to the cited standard the change adopted by ANSI, i.e. a requirement for only one holding brake having a full load hoisting torque (broadly, a twisting or turning force) rating of 150 percent.
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At the hearing on October 27, 1976, the Union was represented by the committeeman. At the outset of the hearing, with Kaiser's motion still pending without a ruling, the Secretary notified the judge that the parties had reached settlement by which the Secretary had agreed to recharacterize the alleged violation as de minimis and Kaiser had agreed to withdraw its notice of contest. The Secretary described his rationale for the recharacterization as follows. The source of the cited standard is a provision in the American National Standards Institute (ANSI) B-30.2.0-1967, Safety Code for Overhead & Gantry Cranes. Although the source document originally required two brakes under the same circumstances as the cited OSHA standard, the ANSI standard was subsequently amended to permit the utilization of a single brake provided the brake has a torque capacity of 150 percent. The Secretary recognized an ANSI change does not automatically amend the safety standard cited here, and therefore Kaiser's failure to provide two holding brakes is a violation of the technical requirements of the presently effective [*8] standard. Nevertheless, in the Secretary's view, the ANSI change does show that a single brake having a 150 percent capacity provides protection substantially equivalent to that required by the presently effective OSHA standard. Since Kaiser represented to the Secretary that its single brakes were rated at 163.5 percent, the Secretary did not believe the cited conditions were directly related to safety and health, and agreed to recharacterize the violation as de minimis.
After Kaiser stated it agreed to the settlement terms, the judge asked the Union representative if he objected; he replied that "[u]nder the circumstances," he did not. No disagreement was expressed by the Union representative at this time with the fact of settlement, terms of settlement, or manner in which it had been negotiated and presented. The Union representative did not ask for any further explanation or time to allow the Union to consider the settlement terms and prepare objections. Nor did the Union object to the settlement during the one month period between the date of the hearing and the time the judge entered his order in this case. Rather, the Union waited approximately two months after [*9] the parties had submitted the settlement agreement to the judge, before it objected. At that time, in a petition for review to the Commission, the Union contended that the settlement must be set aside and the case remanded for proceedings concerning the alleged violation. Arguing that Kaiser's single brakes present hazards, the Union asserted the Secretary improperly refused to enforce his own effective standard. The Union argued that the Secretary and Kaiser were mutually mistaken in believing a change in the ANSI provision changes the cited standard, and that this mistake formed the basis of the settlement. The Union also stated it had first learned of the settlement at the hearing, and lacked knowledge of the standard other than from the citation. The Secretary thereafter joined with the Union in its request for abrogation of the settlement, emphasizing as his own reasons (1) that the Union now expressed reservations and (2) that noncompliance would present hazards to employees. n3 Kaiser opposed the requests, asserting parties are bound by settlement terms after giving their assent, and arguing that abrogation here will substantially weaken stipulation and settlement as an [*10] option for resolving a contest.
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n3 Despite making these arguments, the Secretary particularly noted the following: that the Union did not object at the hearing; that the Union was twice informed of the settlement terms before the hearing; that the Secretary retains full discretion as to when he will prosecute; and that, in entering the settlement, he fully understood an ANSI change does not change the cited standard.
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For the following reasons, I disagree with my colleagues' action in setting aside the settlement. To the extent the majority states that affected employees or their authorized representative who have elected party status have the right to participate in the negotiations for the formulation of a settlement agreement, I agree. ITT Thompson Industries, Inc., 78 OSAHRC 70/D10, 6 BNA OSHC 1944, 1978 CCH OSHD para. 22,944 (Nos. 77-4174 & 77-4175, 1978) (concurring opinion). Indeed, the Secretary should inform the employees or their representative who have elected party status of any settement negotiations [*11] prior to formulation of the final ettlement so that the employees may make their views known and raise any objections concerning the proposed settlement to the Secretary. The Secretary should then consider their views in determining whether to proceed with settlement. See IMC Chemical Group, Inc., No. 76-4761 ( Nov. 17, 1978) (slip opinion at p. 16, n.12).
Here, as my colleagues note, it is disputed whether the Secretary informed the Union of the settlement negotiations prior to presenting the final settlement to the judge at the hearing. Nevertheless, the Commission need not resolve this dispute, and a remand is not warranted. Even assuming the Union was not informed of the settlement until the hearing, it was not prejudiced by this delay.
Because the Union may first have learned of the terms of the proposed settlement at the hearing, the majority concludes the Union lacked an adequate opportunity to make an informed judgment of the settlement terms and to voice any comments or objections. I disagree. Approximately four months before the hearing, the Union was informed of the de minimis issue through receipt of Kaiser's motion to dismiss, wherein Kaiser [*12] asserted that the violation should be reclassified as de minimis. The Union thereafter appeared at the hearing through its safety committeeman, one of the two persons whose appearance the Union entered the electing party status. At the hearing, the committeeman heard the Secretary's discussion of the settlement terms and rationale in some depth. The Secretary particularly explained why he thought the hazard de minmis despite the terms of the cited standard. After full explanation of the settlement, the judge gave the Union a chance to voice any objections, and the committeeman stated there were none. If the committeeman was learning of the settlement for the first time or did not understand its terms, his failure to seek additional time to consider the terms cured any problem otherwise presented by any failure of the Secretary to afford opportunity in advance for the employees' consideration of the settlement. Indeed, the Union failed to raise any objections during the month before the judge approved the settlement. Accordingly, I would conclude that the Union rendered an informed judgment concerning the settlement agreement.
Moreover, since the Union failed [*13] to voice any objection to the settlement, it appears the Union would not have given any information to the Secretary, had he provided opportunity to participate in the negotiations, that would have changed his course in settling. Accordingly, the settlement would have remained the same as that submitted to the judge, even had the Union received advance notice of its terms.
Since the Union consented to the settlement, the Secretary reasonably could have considered the settlement adequately reflected the interests of the employees. The judge was then justified in approving the settlement once presented to him by the Secretary and Kaiser. n4
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n4 Commission Rule 100(a), 29 C.F.R. 2200.100(a), states, Settlement is encouraged at any stage of the proceedings where such settlement is consistent with the provisions and objectives of the Act.
Since the settlement agreement entered into by the Secretary and Kaiser appeared consistent with the objectives of the Act, the judge properly approved it.
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The Union also asserts, [*14] as reason to abrogate the settlement on review, that the Secretary improperly failed to prosecute an alleged violation of an effective safety standard, and that both the Secretary and Kaiser were mutually mistaken in believing the cited safety standard no longer in effect. n5 In making these arguments, the Union challenges the legitimacy of the Secretary's prosecutorial discretion in enforcing the standards. In my view, employees lack standing to challenge the Secretary's exercise of prosecutorial discretion in proceedings before the judge or Commission. See IMC Chemical, supra; see also ITT Thompson, supra and cases cited therein. Indeed, because the settlement did not involve any question of the reasonableness of the time for abatement, the Union had no standing to object to the judge on any ground, and accordingly, the judge could properly approve the settlement even if the Union had made these objections to him.
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n5 As the Secretary notes in his letter dated April 7, 1977, to the Commission, he was never under the impression that the cited standard was no longer in effect. Moreover, it is clear that Kaiser was not under a mistaken belief concerning the cited standard.
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The remaining question for consideration is whether the Secretary has argued by sufficient basis for rescinding his consent to the settlement agreement. The Secretary asserted in his Position Paper one ground for abrogation of the settlement agreement: that the Union had expressed reservations about the settlement. Subsequently, as if in afterthought, in a letter filed in response to the employee representative's Brief, the Secretary noted that "noncompliance would present hazards to employees and thus Complainant has asked the Commission to remand this matter. . . ."
Ordinarily, a party to a settlement agreement should not be permitted to abrograte his consent on review where both parties entered into a settlement which at the time appeared consistent with the provisions and objectives of the Act. n6 See Commission Rule 100(a), 29 C.F.R. 2200.100(a). The Commission has stated that prompt settlement in cases where it is possible is favored because issues can promptly be resolved to the benefit of all parties. See Thorlief Larsen & Son of Indiana, Inc., 74 OSAHRC 74/C8, 2 BNA OSHC 1256, 1974-75 [*16] CCH OSHD para. 18,826 (No. 370, 1974). As Kaiser points out here, if a party who has consented to a settlement can freely withdraw its agreement on review and thereby abrogate the settlement, then settlement as a means of effectively resolving disputes at the stage where the case is assigned to the judge is undermined. Moreover, where a party is able to rescind his agreement on review, the time and resources spent in negotiating the settlement before the judge are wasted.
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n6 The case law cited by the majority at page 3 of its opinion does not support a contrary result. In both Davies Can Co., 76 OSAHRC 56/D8, 4 BNA OSHC 1237, 197677 CCH OSHD para. 20,704 (No. 8182, 1976) and in Seaboard Coast Line RR. Co., 76 OSAHRC 125/G4, 3 BNA OSHC 1761, 197576 CCH OSHD para. 20,184 (No. 10541, 1975), the question before the Commission was whether the judge erred in failing to give effect to particular terms of settlements to which all parties agreed after due notice. In Davies, supra, the Commission held that the judge erred in failing to give effect to that portion of a settlement agreement which involved a plant which had not been cited. It reasoned that its authority to ratify that portion of the settlement agreement was analogous to the exercise of a court's ancillary jurisdiction. In Seabord, supra, the Commission abrogated the settlement, but it did so on the limited basis that the judge could not properly abrogate one term of an agreement without giving the parties an opportunity to withdraw the entire agreement. Hence, in these cases the Commission was primarily concerned with the settlement terms the parties had agreed upon to determine whether the judges' actions were justified.
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Neither of the two grounds advanced by the Secretary and noted above justify creating an exception to this rule. The Secretary apparently believes a request for abrogation is reasonable at this time because the Union did not make known any reservations until now. As I indicated previously, the Union rendered an informed opinion concerning the settlement agreement. Therefore even assuming the Union has the right to raise objections to the settlement on review, its reservations come too late in the proceedings. Accordingly, it is not appropriate to consider the Secretary's request for abrogation on this basis.
The Secretary buttresses his request to abrogate the settlement by asserting that "[i]nformation acquired since [settlement] . . . convinces Complainant that such noncompliance would present hazards to employees. . . ." The Secretary does not further describe the information, but it can at least be inferred from the Secretary's reference to his belief that "non-compliance would present hazards" that the information generally concerns the insufficient strength of a single brake having a torque [*18] rating of more than 150 percent in comparison with double blakes each rated at 100 percent. Clearly, the Secretary knew that the determining issue in entering the settlement was whether Kaiser's noncompliance presented a hazard, as is shown by his discussion of the settlement at the hearing. Accordingly, he knew he must consider all available information on the hazard to decide whether to enter the settlement. Absent an assertion by the Secretary that such information was not available through the exercise of reasonable diligence, I would find no merit in the Secretary's argument. n7 Although he admits he only acquired information showing a hazard since entering the settlement, the Secretary fails to argue any reason why he was unable to acquire the information initially. At the time the Secretary entered into the settlement agreement, he believed the violation was de minimis and the grounds given by the Secretary for his belief rationally supported that determination. Accordingly, I would affirm the judge's action in approving the settlement.
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n7 A party seeking to rescind its consent to a settlement on review must present a valid reason why it could not have raised its objections before the judge. For example, a party must show that it did not actually or knowingly consent; that consent was the result of misrepresentation as to the terms of settlement; or that evidence, now available, showing consent was erroneously given, could not earlier have been obtained. Cf. U.S. v. Carpet Manufactures of America, 1 F.R.D. 363 (S.D.N.Y., 1941) and cases cited therein; In re 4145 Broadway Hotel Co., 100 F.2d 7 (7th Cir. 1938).
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APPENDIX A
ORDER APPROVING SETTLEMENT OF THE PARTIES
Respondent, by letter dated May 19, 1976, timely contested a serious citation and notification of proposed penalty issued to it on May 4, 1976. The serious citation alleged a violation of section 5(a)(2) of the Occupational Safety and Health Act of 1970 for failure to comply with 29 C.F.R. 1910.179(f)(2)(vi). A penalty of $800 was proposed for the alleged violation.
This case was previously consolidated with Docket No. 76-2040 and both dockets were called for hearing on October 27, 1976. At the commencement of the hearing, the parties advised that the issues in Docket No. 76-2293 had been amicably resolved. By order dated October 28, 1976, Docket No. 76-2293 was severed from Docket No. 76-2040.
Under the terms of the settlement, complainant amended the serious citation to change it to a de minimum violation and to eliminate the proposed penalty. Respondent agreed to withdraw its notice of contest to the citation as amended.
The settlement having been considered, it is
ORDERED: (1) That the settlement is consistent with the objectives [*20] of the Act and is incorporated and made a part of this order;
(2) That the serious citation issued to respondent on May 4, 1976, is amended to reflect a de minimis violation of 29 C.F.R. 1910.179(f)(2)(vi); and
(3) That the notification of proposed penalty issued to respondent on May 4, 1976, is vacated.
Dated this 26th day of November, 1976.
JAMES D. BURROUGHS, Judge