REYNOLDS METALS COMPANY, INC. �

OSHRC Docket No. 77-69

Occupational Safety and Health Review Commission

May 30, 1980

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

COUNSEL:

Baruch A. Fellner, Office of the Solicitor, USDOL

Bobbye D. Spears, Regional Solicitor, U.S. Department of Labor

John R. Amos, Reynolds Aluminum, Reynolds Metals Company, for the employer

Manuel Arduengo, United Steelworkers of America, AFL-CIO, Local 6813, for the employees

OPINION:

DECISION

BY THE COMMISSION:

A decision of Judge John L. Larkin, dismissing a citation and complaint issued under the Occupational Safety and Health Act of 1970, 29 U.S.C. � � � 651-678 ("the Act") is before this Commission for review pursuant to section 12(j) of the Act, 29 U.S.C. � � 661(i). n1

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Respondent, Reynolds Metals Company, Inc., one of the nation's largest aluminum can manufacturers, operates a production plant in Tampa, Florida. � Following a two week inspection in November of 1976, the Secretary of Labor ("Secretary") issued a citation to Respondent alleging a violation of section 5(a)(2) of the Act, 29 U.S.C. � � 654(a)(2), for failure to comply with the noise standard at 29 C.F.R. � � 1910.95(b)(1). � The citation charged that several employees were exposed to noise levels exceeding the limits established by the standard and that feasible administrative or engineering controls were not utilized to reduce the noise. Respondent timely contested the citation, and the case was assigned to Judge Larkin for hearing.

In preparation for the hearing, the Secretary sought to reenter the plant area to "inspect, measure, survey and photograph" the areas in question. � The Secretary requested permission for "authorized agents" of OSHA as well as "potential witnesses" to enter the premises. � The Secretary conceded that such persons would include private consultants who are not federal employees. Respondent moved for [*3] � a protective order, contending that the proposed discovery would endanger the confidentiality of its trade secrets, and the Secretary simultaneously sought an order to compel discovery.

Judge Larkin denied the motion to compel discovery, basing his decision on Reynolds Metals Co., 78 OSAHRC 51/F1, 3 BNA OSHC 1749, 1975-76 CCH OSHD P20,214 (No. 4385, 1975) that restricted the Secretary to the use of federal employees for discovery inspections that would endanger an employer's trade secrets unless good cause was shown for the use of individuals who were not federal employees. The Secretary argued that Judge Larkin's ruling was improper since Respondent had not proved the existence of trade secrets and moved for a hearing on the issue of trade secrets. Judge Larkin assented and convened a hearing at which Respondent presented evidence relevant to its trade secrets claim. � Subsequently, Judge Larkin ruled that trade secrets did exist in Respondent's Tampa plant. The judge based his ruling on the testimony of the witnesses, exhibits introduced into evidence, and the credibility of the witnesses. � He also stated that the Secretary failed to show why the inspection could not be conducted [*4] � by a federal employee. Because there was no showing of good cause, the judge relied on Reynolds, supra, to deny the Secretary's discovery request. The Secretary then filed a "Statement of Position" advising the judge that the order denying the Secretary's discovery request "prejudices complainant and prohibits him from proceeding further in this matter." The Secretary also stated that by filing the Statement of Position he was not "dismissing the action." Judge Larkin offered the Secretary a final opportunity to present his case. � According to the judge's order, "complainant advised he was unable to proceed." The judge then granted Respondent's motion to dismiss the citation with prejudice. � The Secretary filed a Petition for Discretionary Review that was granted by Chairman Cleary.

The issues raised by the petition and specified in the direction for review are: (1) whether the judge erred in finding the existence of trade secrets that would be revealed in the course of a discovery inspection; (2) whether the judge erred in requiring the Secretary to show good cause for the use of non-government experts to conduct the discovery inspection; (3) whether the Commission decision [*5] � in Reynolds Metals Co., supra, should be overruled; and (4) whether the judge erred in dismissing the citation and complaint. � We reverse Judge Larkin with respect to his order denying the Secretary's motion to compel discovery with the use of non-government experts and granting Respondent's motion to dismiss the citation and complaint. � For the reasons that follow, we find it unnecessary to decide the remaining issues at this time.

The facts of this case are, in all significant respects, identical with Kaiser Aluminum and Chemical Corp., 79 OSAHRC 49/C10, 7 BNA OSHC 1486, 1979 CCH OSHD P23,662 (No. 76-1468, 1979). � In Kaiser, the Commission affirmed its holding in Owens-Illinois, Inc., 78 OSAHRC 105/C8, 6 BNA 2162, 1978 CCH OSHD P23,218 (No. 77-648, 1978), that where an employer's trade secrets are otherwise adequately protected, the possibility that these trade secrets may be disclosed to a non-federal expert does not preclude entry onto the employer's premises for discovery purposes. � In Owens-Illinois, we overruled Reynolds Metals, supra, the case upon which Judge Larkin relied here to require the Secretary to show good cause for the use of experts [*6] � who are not federal employees. n2 Thus, even if the existence of trade secrets is shown, if an appropriate protective order is issued we no longer require the Secretary to show good cause in order for a non-federal expert to enter an employer's premises for discovery purposes.

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n2 To the extent that it is inconsistent with Owens-Illinois, Reynolds Metals Co., 78 OSAHRC 51/D4, 6 BNA OSHC 1667, 1978 CCH OSHD P22,806 (No. 4385, 1978) was also overruled.

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In Kaiser, supra, we said:

[T]rade secrets [can] be adequately protected by an appropriate protective order and a provision in the Secretary's contract with the outside expert that [will] allow the employer an enforceable third-party beneficiary interest.

We then went on to note the "minimum requirements of an acceptable protective order and . . . the procedure to be followed when a trade secret claim is made by an employer."

In this case, as in Kaiser, a hearing was held on the question of trade secrets. Following the hearing, the judge found the existence [*7] � of trade secrets and granted the Respondent's motion to dismiss because the Secretary had failed to show why a federal employee could not conduct the discovery inspection. As a result of the intervening change of law, the Secretary is no longer limited to federal experts. � Further, under our decision in Owens-Illinois an employer need not establish the existence of trade secrets if the Secretary does not object to the entry of a protective order. Thus, the question of whether the judge erred in finding the existence of trade secrets need not be reached at this time if an appropriate protective order that meets the requirements set out in Owens-Illinois motion entered. � Thus, the case will be remanded.

Because the law has changed since the last briefs were filed, and the record does not disclose the position of the parties respecting a protective order, we will allow the parties an opportunity to reconsider their positions in light of the decision in Owens-Illinois. As we said in Kaiser, however,

[f]ailure to pursue the merits of the trade secrets issue at this stage of the proceedings . . . will not preclude later Commission review of that issue, should later review [*8] � become necessary for reasons not apparent now.

Accordingly, the decision of the judge will be reversed and the case remanded for proceedings consistent with this decision and our decision in Owens-Illinois unless within 10 days from the date of this order either party indicates that 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 Larkin held a hearing on the trade secrets issue raised in this case and found that Reynolds 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 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 [*9] � 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 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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