NASHUA CORPORATION

OSHRC Docket No. 78-2146

Occupational Safety and Health Review Commission

December 12, 1980

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Before: CLEARY, Chairman; BARNAKO and COTTINE, Commissioners.  

COUNSEL:

Baruch A. Fellner, Office of the Solicitor, USDOL

Herman Grant, Regional Solicitor, USDOL

Charles M. Chadd, for the employer

OPINION:

DECISION

BY THE COMMISSION:

On January 29, 1979, pursuant to section 12(j), 29 U.S.C. §   661(i), of the Occupational Safety and Health Act of 1970, 29 U.S.C. § §   651-678 ("the Act"), Commissioner Cottine directed review of an order by Administrative Law Judge Ben D. Worcester approving a settlement agreement filed by the Secretary of Labor ("the Secretary") and the Respondent, Nashua Corporation.   Commissioner Cottine's sua sponte direction for review was limited to the following issues:

1) Whether the abatement provisions contained in paragraph III of the settlement agreement are consistent with the provisions and objectives of the [Act].

2) Whether the judge erred in approving a settlement agreement that contains the following exculpatory language:

In withdrawing its Notice of Contest herein and paying a $100 penalty, respondent does not waive its contentions in any future proceeding that it has utilized all feasible engineering or administrative controls to reduce employee noise exposure [*2]   to Table G-16 levels of 29 C.F.R. §   1910.95 or that the enclosure described in Exhibit "A" is not a feasible engineering control.

We conclude that the settlement agreement under review cannot be approved.   Accordingly, we remand the case to the judge for further proceedings consistent with this opinion.

I

An Occupational Safety and Health Administration compliance officer inspected Respondent's tape manufacturing plant from February 8 to March 3, 1978.   As a result of that inspection, the Secretary issued two citations alleging that Respondent committed a number of serious and other than serious violations of the Act.   Respondent contested only the first two items of citation 1, which alleged serious violations for noncompliance with the noise standards at 29 C.F.R. §   1910.95(b)(1) n1 and §   1910.95(b)(3). n2 After the complaint and answer were filed, but before a hearing on the merits, the parties entered into a settlement agreement that was approved by Judge Worcester.

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n1 The standard provides that whenever employees are subjected to noise levels in excess of those listed in the standard, employers must implement feasible administrative or engineering controls.   If those controls do not reduce noise levels to within the prescribed limits, employees must use personal protective equipment.

n2 The standard provides that when noise levels exceed those listed in the standard, a "continuing, effective hearing conservation program shall be administered."

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The third paragraph of the settlement agreement (paragraph "III"), in pertinent part, provides:

Respondent, without admitting or denying the allegations of the complaint, hereby withdraws its answer to the complaint, and its Notice of Contest to the Citations and Notification of Penalty, as amended.   Respondent makes the following representations and assurances to complainant:

(a) On a test basis, Respondent will install a noise enclosure on the Dusenberrey Slitter as described in Exhibit "A" which is attached hereto and made a part hereof.   Respondent will test the enclosure under normal production conditions to determine if it: (i) materially reduces sound levels, and (ii) does not significantly interfere with production and/or lowers productivity on the tape slitter.

(b) If the aforesaid enclosure materially reduces sound levels and does not significantly interfere with production or lower productivity, then respondent will continue to utilize it and will install similar enclosures on slitters running "357" tape in excess of 15% of the time.   If the enclosure does not materially lower sound levels [*4]   and/or significantly interferes with production or lowers productivity, then respondent will discontinue its use and will not install similar enclosures on other slitters.

The settlement agreement (paragraph "V") further provides:

In withdrawing its Notice of Contest herein and paying a $100 penalty, respondent does not waive its contentions in any future proceeding that it has utilized all feasible engineering or administrative controls to reduce employee noise exposure to Table G-16 levels of 29 C.F.R. §   1910.95 or that the enclosure [tested] is not a feasible engineering control.

II

In response to Commissioner Cottine's direction for review both the Secretary and Respondent filed briefs in which they argue in support of the judge's decision.   Relying on Dale M. Madden Construction, Inc. v. Hodgson, 502 F.2d 278 (9th Cir. 1974) ("Dale Madden"), both parties contend that the Commission lacks jurisdiction to substantively review the settlement agreement. The Secretary asserts that Commission review is unauthorized because the Commission's jurisdiction is limited to cases or controversies and the settlement evinces the parties' agreement.   Further, anticipating our reliance [*5]   on Thorlief Larson & Son, Inc., 74 OSAHRC 74/C8, 2 BNA OSHC 1256, 1974-75 CCH OSHD P18,826 (No. 370, 1974), for the proposition that we have jurisdiction to review this settlement agreement, the Secretary asserts that this case is distinguishable.   The Secretary notes that Thorleif Larson involved Commission review of a stipulated penalty and that this case involves Commission review of an abatement plan.   The Secretary contends that Commission jurisdiction asserted in Thorlief Larson - based on the provision in section 17(j) of the Act that the Secretary "propose" and the Commission "assess" penalties - is not similarly "reserved for the Commission by the Act over the abatement provisions of settlement agreements." The Secretary also asserts that the agreement satisfies the Commission's guidelines for settlement agreements delineated in Dawson Brothers-Mechanical Contractors, 72 OSAHRC 5/B8, 1 BNA OSHC 1024, 1971-73 CCH OSHD P15,039 (No. 12, 1972) ("Dawson Brothers"). n3

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n3 Dawson Brothers specifies that an approvable settlement agreement must contain the date on which abatement of the violation has been or will be accomplished, a statement that the penalty proposed by the Secretary has been paid, and evidence that affected employees or their authorized representatives have been afforded the opportunity to participate in the proceedings.   The essential elements of a settlement set forth in Dawson Brothers were codified by the Commission at Rule 100, 29 C.F.R. §   2200.100, which became effective January 1, 1980.

Commission Rule 100, in pertinent part, provides:

(a) Policy. . . .   A settlement proposal shall be approved when it is consistent with the provisions and objectives of the Act.

(b) Requirements. Every settlement proposal submitted to the Judge or Commission shall include, when applicable, the following:

(1) A motion to amend or withdraw a citation, notification of proposed penalty, notice of contest, or petition for modification of abatement;

(2) A statement that payment of the penalty has been tendered or a statement of a promise to pay; and

(3) A statement that the cited condition has been abated or a statement of the date by which abatement will be accomplished.

(c) Filling; service and notice. When a settlement proposal is filed with the Judge or Commission, it shall also be served upon represented and unrepresented affected employees in the manner prescribed for notices of contest in §   2200.7.   Proof of service shall accompany the settlement proposal. A settlement proposal shall not be approved until at least 10 days following service of the settlement proposal on affected employees.

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Respondent contends that the agreement complies with the Dawson Brothers requirements and therefore, without an employee objection to the agreement, the Commission is precluded from reviewing it.   Respondent also contends that it is inappropriate for the Commission to review the agreement on its merits because without a hearing the Commission lacks an evidentiary record for evaluating the settlement. Further, Respondent contends that the judge did not err in approving the settlement including the language found in paragraph V because (1) it is distinguishable from language previously found inconsistent with the purposes of the Act, see, e.g., Matt J. Zaich Construction Co., 73 OSAHRC 55/D5, 1 BNA OSHC 1225, 1971-73 CCH OSHD P15,683 (No. 756, 1973) and Blaisdell Manufacturing, Inc., 73 OSAHRC 53/B8, 1 BNA OSHC 1406, 1971-73 CCH OSHD P15,514 (No. 1566, 1973); and (2) it does not preclude the Secretary from bringing future proceedings based on the citation.   The settlement provides only that Respondent experiment with a particular device to determine whether it can protect employees [*7]   without unduly affecting productivity. Respondent contends that the language termed "exculpatory" in the direction for review - the language preserving for Respondent its right to argue that it has used all feasible controls - is necessary to insure that Respondent may argue in "future proceedings" that attempts at implementation indicate that the enclosure is not feasible. In essence, Respondent asserts that the language in question is not exculpatory nor is it inconsistent with the purposes of the Act.

III

The Commission recently reaffirmed its position that it has jurisdiction to review settlement agreements. GAF Corp., 80 OSAHRC    , 8 BNA OSHC 2006, 1980 CCH OSHD P23,511 (Nos. 78-867 and 78-1399, 1980); Farmers Export Co., 80 OSAHRC    , 8 BNA OSHC 1655, 1980 CCH OSHD P24,569 (No. 78-1708, 1980).   But see Marshall v. Sun Petroleum Products Co., 622 F.2d 1176 (3rd Cir. 1980). Further, the parties' reliance on the Ninth Circuit's ruling in Dale Madden is misplaced.   In Dale Madden, the parties agreed to a settlement during the course of an appeal to the circuit court of the Commission's order affirming the citation.   The court held that the Commission [*8]   was not authorized to contest an appellate settlement. The question of whether the Commission has authority to review settlement agreements proposed during the course of Commission proceedings was not before the court.   In this case, Commissioner Cottine's direction for review was issued before the judge's order approving the settlement became a final order.   Thus, the Dale Madden ruling is inapposite.   As with any case timely directed for review, a final order in this case awaits our resolution of the issues directed for review.   See section 12(j) of the Act, 29 U.S.C. §   661(i).   Accordingly, we have jurisdiction to evaluate the submitted settlement agreement for its consistency with the provisions and objectives of the Act.   See Dawson Brothers, supra; sections 10(c) and 12(j) of the Act, 29 U.S.C. § §   659(c) and 661(i); and Commission Rule 100, 29 C.F.R. §   2200.100.

IV

The terms of the settlement agreement provide for the Secretary's withdrawal of item 2 of the citation alleging a serious violation of the noise standard at section 1910.95(b)(3).   The agreement also provides that the Secretary will amend to November 17, 1979 the abatement date for item   [*9]   1 of the citation alleging a serious violation of section 1910.95(b)(1).   Paragraph III of the agreement describes the terms under which abatement will be implemented.   Specifically, Nashua has conditionally agreed to install a noise enclosure ("prototype") on one of its slitter machines.   Installation of that enclosure is on a test basis only.   If the enclosure is successful in "materially reducing noise" and does not "significantly interfere with production or lower productivity," then Nashua will install similar enclosures on other slitters in the plant.   However, the agreement allows Nashua to discontinue use of the enclosure if it does not "materially lower sound levels and/or significantly interferes with production or lowers productivity." Therefore, even though November 17, 1979, was designated as the date by which an enclosure will be installed, the agreement does not articulate final abatement measures.   Accordingly, the issue to be addressed is whether implementation of noise attenuation measures on an open-ended trial basis satisfies the requirement in Dawson Brothers and Commission Rule 100 that a date be specified on which abatement has been or will be accomplished.   [*10]   n4

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n4 See note 3 supra.

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The agreement before us requires only that "experimentation" begin on a specified date.   Experimentation prior to the date set for final abatement is a reasonable way to develop and implement the most suitable means of abatement. This agreement, however, offers experimentation as a substitute for abatement and does not assure that any abatement will occur should Respondent abandon the proposed controls.   Although we encourage the research and development of new and improved methods for protecting employee safety and health, we cannot sanction indeterminate periods of experimentation that might foster unwarranted delay in the implementation of feasible abatement measures.

To remedy this deficiency the parties should have specified two dates: one by which the feasibility of the prototype will be evaluated, and one by which actual abatement will be accomplished if the prototype device is deemed feasible. n5 The submitted agreement arguably provides for Respondent's unilateral determination [*11]   of the prototype's feasibility. To the extent that a settlement agreement provides for an employer's unilateral determination of feasibility it is unacceptable.   The Secretary must retain the authority to evaluate a proposed abatement program.   Although the Secretary may choose not to exercise that authority, it remains an integral part of his statutory enforcement responsibility that cannot be delegated to an employer.

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n5 See generally Samson Paper Bag Co., 80 OSAHRC    , 8 BNA OSHC 1515, 1980 CCH OSHD P24,555 (No. 76-222, 1980).

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Even under a plan providing for an evaluation date and an abatement date, we cannot predict the outcome of Respondent's experiment with the prototype. If Respondent finds the prototype to be infeasible but the Secretary disagrees and concludes that feasible controls are available to protect Respondent's employees from excessive noise levels, the Secretary, in his discretion, may commence an enforcement proceeding.   Inasmuch as Respondent will have determined that it will not [*12]   install enclosures, the Secretary need not wait until the second or abatement date to take action. n6

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n6 If Respondent concludes that abatement measures are infeasible and the Secretary disagrees, feasibility will be the crucial issue in the subsequent enforcement proceeding.   Therefore, the language highlighted by the direction for review is not "exculpatory", but rather, preserves an issue essential to Respondent in light of the parties' agreement on experimentation which leaves feasibility unresolved.

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Based upon this analysis we conclude that the agreement is inconsistent with the requirement for specification of the date on which abatement has been or will be accomplished. n7 Accordingly, the case is remanded for further proceedings consistent with this decision. n8 SO ORDERED.

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n7 Chairman Cleary concludes that Commission Rule 108, 29 C.F.R. §   2200.108, justifies waiver of Commission Rule 100 concerning the specification of an abatement date.   However, Chairman Cleary gives no reason for application of Rule 108 except for the apparent good faith of the Respondent in entering into and abiding by the settlement. This alone is insufficient to constitute "special circumstances" within Rule 108.   We assume that all parties enter into settlement agreements in good faith.   Accordingly, by applying Commission Rule 108 here, Chairman Cleary effectively nullifies consistent application of Rule 100 to settlements.

n8 In light of our disposition, it is unnecessary to pass upon any other portion of the settlement agreement.

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DISSENTBY: CLEARY

DISSENT:

CLEARY, Chairman, dissenting:

The Occupational Safety and Health Review Commission is approaching its tenth anniversary.   I am disappointed that after almost ten years we have not learned to be more flexible in the application of our rules - that we have not learned to "read between the lines" of the record before us in order to be more understanding of and responsive to an unusual set of circumstances.   I, for one, am willing to trust the parties appearing before us, and thus, I must dissent from the decision of my colleagues.

I agreed to the adoption of the Review Commission's new rule on settlements, Rule 100. n8 The rule generally informs those appearing before us of the basic policy guidelines for the approval of settlements by the Review Commission.   In a recent case, Farmers Export Co., 80 OSAHRC    , 8 BNA OSHC 1655, 1980 CCH OSHD P24,569 (No. 78-1708, 1980), I stated as a general proposition that settlements submitted to the Review Commission should be approved as long as they meet the basic criteria set out in Rule 100. n9 8 BNA OSHC at 1657, 1980 CCH OSHD at p. 30,081. Mindful [*14]   that a case-by-case process such as ours always presents at least the possibility of an unusual set of circumstances, I did not state, nor did I intend to imply, that settlements not fitting neatly into our policy guidelines would be rejected automatically.

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n8 29 C.F.R. §   2200.100.   See 44 Fed. Reg. 70106, 70112 (1979).

n9 The application of this general proposition assumes, of course, that the respondent's employees or their authorized representatives have had an opportunity for meaningful participation in the settlement process and that they have no objection to the agreement as submitted to the Review Commission.

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One of my colleagues took a similar position in his separate opinion in Farmers Export Co. concerning the application of Rule 100, but his approach was somewhat different.   He stated, "I would not approve any settlement that does not comply with the requirements of Commission Rule 100." (Emphasis added.) 8 BNA OSHC at 1661, 1980 CCH OSHD at p. 30,085. My colleague remains true to   [*15]   that position in this case, a case involving a settlement that clearly does not comply with the letter of Rule 100.   I respect him and the position he has taken, but nonetheless regret that his approach does not permit him to join me in a more selective and flexible application of the rule.

We have before us in this case a very clear indication by the parties that the settlement agreement submitted for approval represents something of an experiment in lieu of trying the case on the evidence.   I believe that this "experiment" holds forth the promise of good faith efforts at abatement under circumstances where neither party can be certain that abatement is possible.   We must be careful, therefore, not to interpret our own rules so strictly, or limit our view of the Act's purpose so severely, that we inhibit our ability to handle diverse and unusual situations.   On the other hand, Commission Rule 100 generally provides a sound basis for analyzing most settlements presented to the Commission.   Attempting to artificially bend or qualify the rule to fit special circumstances will commence a process of deterioration that, in the long run, will produce a far less effective rule.   I am not [*16]   ready to scrap, or even significantly alter, Rule 100 - at least not yet.   There is another solution to the problem presented by this case.

Commission Rule 108, 29 C.F.R. §   2200.108, provides that "[i]n special circumstances not contemplated by the provisions of these rules, or for good cause shown, the Commission may, upon application by any party or intervenor, or on its own motion, after 3 days notice to all parties and intervenors, waive any rule or make such orders as justice or the administration of the Act requires." Certainly the settlement agreement before us in this case provides the type of special circumstances where justice requires that the Commission permit the parties to attempt a novel resolution to a difficult problem.   This is particularly so since there is nothing on the record to suggest that the respondent has agreed to this settlement in bad faith or that it will refuse to recognize the efficacy of the prototype noise enclosure, if such turns out to be the case.   Accordingly, I would invoke Commission Rule 108 to waive the provisions of Commission Rule 100(b) n10 in order to approve this settlement agreement. I believe that this result, approval of the agreement,   [*17]   is consistent with the provisions and objectives of the Act because it is only by fostering an atmosphere of cooperation and voluntary compliance that the Act will have any hope of succeeding.   Because no party would be aggrieved by the application of Commission Rule 108, I believe that it would be unnecessary to offer three days notice to the parties in this case as the rule normally would require.   This reference to parties being "aggrieved" brings me to my final point, which is, in fact, a single point with two aspects - one concerning prosecutorial discretion and the other concerning adjudications in the absence of a dispute.

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n10 See note 3 supra.

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One of my colleagues has long been a strong supporter of the Secretary's prosecutorial discretion. See, e.g., IMC Chemical Groups, Inc., 78 OSAHRC 95/C14, 6 BNA OSHC 2075, 1978 CCH OSHD P23,149 (No. 76-4761, 1978) (dissenting opinion), pet. for review filed, No. 79-3041 (6th Cir., January 16, 1979).   That same colleague also has generally [*18]   avoided going forward with an adjudication in the absence of a dispute among the parties.   See, e.g., PPG Industries, 80 OSAHRC    , 8 BNA OSHC 2003, 1980 CCH OSHD P23,402 (No. 77-2235, 1980); Keco Industries, Inc., 79 OSAHRC    , 7 BNA OSHC 2048, 1979 CCH OSHD P24,117 (No. 78-661, 1979).   Indeed, in his separate opinion in Farmers Export Co., my colleague essentially summarized his position when he stated:

I have often recognized the discretion of the Secretary as prosecutor to settle a case by withdrawal of a citation.   In my opinion, as the enforcing authority under the Act, the Secretary has the right to decide how the Act may best be enforced in a particular instance including withdrawal if in the Secretary's judgment such action is appropriate.   For the same reason, the Commission ordinarily should not second-guess decisions of the Secretary which relate to settlement. Similarly, in the usual case the Commission should defer to the judgment of an employer who wishes to terminate the litigation through withdrawal of his notice of contest. As the Commission stated in Gilbert Manufacturing, supra, "the goal of expeditious adjudication suggests that [*19]   proceedings before the Commission should not be required in the absence of a dispute requiring adjudication." 79 OSAHRC 68/A2, p. 9, 7 BNA OSHC at 1614, 1979 CCH OSHD P23,782 at 28,847. (Footnote omitted.)

8 BNA OSHC at 1660, 1980 CCH OSHD at p. 30,084.

It is no secret that in the past I have been a less than enthusiastic supporter of the Secretary's prosecutorial discretion. See, e.g., IMC Chemical Group, Inc., supra, (majority opinion).   Yet, realizing the reality represented by settlements, I noted in Farmers Export Co. that, "The Solicitor of Labor appears in our proceedings as the representative of the Occupational Safety and Health Administration of the Department of Labor (OSHA), and I must assume that OSHA, as represented by the Solicitor, enters into settlement agreements freely and with 'its eyes open.'" 8 BNA OSHC at 1657, 1980 CCH OSHD at p. 30,081. Like my colleague quoted above, I have not been one to create a dispute where none exists.   See, e.g., PPG Industries, supra; Keco Industries, Inc., supra; Francisco Tower Service, Inc., 76 OSAHRC 11/A2, 3 BNA OSHC 1952, 1975-76 CCH OSHD P20,401 (No. 4845, 1976).   In general,   [*20]   therefore, I am of the opinion that where the Secretary and the employer have reached agreement on a basis to settle their dispute and the affected employees or their authorized representative have had an opportunity for meaningful participation in the settlement process, in particular adequate notice of the agreement, and they raise no objection to the settlement, the Review Commission should approve the agreement reached by the parties. n11

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n11 I still believe that, "Inherent in the Commission's adjudicatory role is a policy-making function to protect the public interest and to act in a supervisory capacity over the Act's enforcement." Farmers Export Co., 8 BNA OSHC at 1656, 1980 CCH OSHD at p. 30,080. As stated above, however, I also believe that settlement agreements such as the one in this case are consistent with the overall provisions and objectives of the Act.   If it is an exercise of our policy-making function to force compliance with the letter of our procedural rules, it is also an exercise of that policy-making function to waive our rules when an unusual set of circumstances makes waiver appropriate.

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The settlement agreement before us in this case is novel, true; but it represents both an honest attempt by the parties to cooperate in the name of safety and health as well as a true exercise of the Secretary's prosecutorial discretion. n12 The Secretary is satisfied with the settlement. The Respondent is satisfied with the settlement. The authorized representative for the affected employees was served with a copy of the agreement, and no objection has been raised.   In short, there is no dispute before us.   Under these circumstances, as stated above, I would waive the letter of Rule 100(b) and approve the settlement agreement.

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n12 Interestingly, based on the positions he has taken in various cases such as IMC Chemical Group, Inc. and Farmers Export Co., it would seem that one of my colleagues would have less of a problem granting an unopposed motion by the Secretary to withdraw completely than he does approving the type of "experiment" embodied in the settlement in this case.

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To summarize, what we have in this case is an honest, good faith effort by the parties to make the best of a difficult situation.   I am unwilling to stand in their way.