Petition — Sun Petroleum Products Co. v. Marshall

Supreme Court brief1980

Ask Donna

What actually matters in this document.

Text

8 0 = 4 4 1 Supreme Court, U.S.

r 2 ae oR

'& & kL

SEP 24 [stl

No. 80-

Se reaininenieiaeiecenetetiemmeendtieeemtaaddineetetammedammasiamaeiaa JR., CLERY

IN THE

Supreme Cot of the United States

OctToBER TERM, 1980

Sun PETROLEUM Propucts CoMPANY,

Petitioner,

Vv.

Ray MARSHALL, SECRETARY OF LABoR,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

JoHN A. McGuInN

Counsel of Record

Gary L. LIgBER

FARMER, WELLS, McGuinn,

FLoop & SIBAL

1000 Potomae Street, N.W.

Washington, D.C. 20007

Attorneys for

Sun Petroleum Products Company

Press or Byron S. ADAMS PRINTING, INC., WASHINGTON, D. C.

QUESTIONS PRESENTED

1. Whether a Federal appellate court reviewing a

decision by the Occupational Safety and Health Re-

view Commission has jurisdiction to consider an issue

neither raised before the Agency nor ruled upon by

the Agency.

2. Whether the Secretary of Labor has the authority

to unilaterally withdraw from a settlement agreement

he has executed with a company over a contested cita-

tion under the Occupational Safety and Health Act

where a) the Secretary has alleged no breach of the

agreement; b) the record contains no evidence that

the settlement agreement was contrary to the public

interest; and ¢c) where the Company has taken action

in reliance on the settlement.

iii

TABLE OF CONTENTS

Page

ei. sos bbaee tern es cb keeknnteeen® i

Ds ono cessed tobe bse db ends ceueesces iii

sods abe ebson teed che eb eeeh oka 1

RPE FEA EEO TEE EET VOTE TO Cre 2

III. Statutory Provisions INvoLveD .............-. 2

IV. Recuiatory Provisions INvoLvep .......... ee ieee

V. STATEMENT OF THE CASE .......cccccceccccccee 6

VI. Reasons ror GRANTING THE WRIT .............. 13

A. The Decision Below Is Contrary To Decisions

Of This Court And The Decisions Of United

States Courts Of Appeals And Raises Signifi-

cant And Recurring Problems Concerning The

Decision-Making Process Of The Occupational

Safety And Health Review Commission And

The United States Courts Of Appeals ....... 13

B. The Decision Below Raises Significant And

Recurring Problems Relating To The Due

Process Rights Of Private Litigants Adverse

To The Effective Enforcement Of The Occu-

pational Safety And Health Act ............ 21

ee ak cee fecaeeeeneuweeewan 26

ERNE TES Gee me ee ee a 5 la

TABLE OF CITATIONS

CasEs:

General Electric Company v. Occupational Safety and

1976)" Review Commission, 540 F.2d 67 (2d Cir.

Eri wlninlds sis.eses coke eeenrusucnedawes 20

PRECEDING PAGE WAS BLANK

}

Table of Citations Continued

Page

Gulf States Manufacturers, Inc. v. National Labor Re-

lations Board, 598 F.2d 896 (5th Cir. 1979) ...... 25

Ilennesey v. Securities and Exchange Commission, 285

Dee BEd: LOG Mey BOE Gave bre car badncece sans 18

Industrial Union Department, AFL-CIO v. American

Petroleum Institute, -— U.S. ——, 100 S.Ct. 2844

fe Phar eer ero, Premier ie 13, 22

Keystone Roofing Company, Inc. v. Veeupational Safety

and Health Review Commission, 539 F.2d 960 (3rd

Se, | rr ey nr Tat Tree me ae 19

Marshall v. Barlow’s Inc., 436 U.S. 307 (1978) ........ 22

McGouan v. Marshall, 604 F.2d 885 (5th Cir. 1979) . .20-21

NLRB vy. Arrow Specialties, Inc., 437 F.2d 522 (8th

Coes DURE bike cadets cus conegeetaaweseaeeneres

NLRB v. Bangor Plastics, Inc., 392 F.2d 772 (6th Cir.

ES ican phe eck os eee eee eee 25

NLRB vy. Southeastern Stages, Inc., 423 F.2d 878 (5th

CE. SUP Kinds bbe d hewn esuabes kanes ekewersees 25

NLRB v. Superior Tool & Dye Company, 309 F.2d 692

(GU SD. TONED iva Sh dik iN amiece cnn aconesacerysere 25

Rogers Manufacturing Company v. National Labor Re-

lations Board, 486 F.2d 644 (6th Cir. 1973) ...... 25

Securities and Exchange Commission v. Chenery Cor-

poration, 332 U.S. 194 (1947) .......cccceecceees 13

Todd Shipyards Corporation v. Secretary of Labor,

SOG TDG Ape. eee CMe, EOFO) eacicsesseviaseees 19-20

Unemployment Compensation Commission v. Aragan,

SP ay BG SUED oc va sneceennhopetdecauceyess

United States v. L.A. Tucker Truck Lines, 344 U.S. 33

PEE. Gotinsaleekivavarcakbi hele keue 13-14, 16-18

Wallace Corporation v. National Labor Relations

Board, 328 U.S. 248 (1945) ...cccccccccscvcccees 24

Table of Citations Continued

Page

STATUTES AND REGULATIONS:

United States Code, Title 29,

EE Ue alae s sl als cheese dhhieoetebones 2

ED. bok ily ols hele Obes heh ¥ elles caedece 29

te Nie ikescc i tiwnese ue ceon aotees cn’ i)

ei a Va cL ane Said ale eave Wann od). 6 006s 2-3, 20

DED bck Ca aes Phe ee eearet bad’ vis debe e 3, 14

ee ls Se el ee a ee ats 4, 14-15

A ee PEED) so ceb cnt dbacdecsesdssweceeds 5, 15-16

PT NN aa dav kab pence b é hobo the ceee. 21

No. 80-

IN THE

Supreme Court of the United States

OcToBER TERM, 1980

Sun PetroLeuM Propucts CoMPANY,

Petitioner,

vV.

Ray MarRsHALL, SECRETARY OF Labor,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

The Petitioner Sun Petroleum Products Company

respectfully prays that a writ of certiorari issue to

review the judgment and opinion of the United States

Court of Appeals for the Third Circuit entered on

May 29, 1980.

OPINIONS BELOW

The opinion of the Court of Appeals is reported at

622 F.2d 1176 (3rd Cir. 1980) and appears in the

Appendix at pp. la-36a. The Court’s denial on June

26, 1980 of the Petitioner’s Motion for Rehearing and

Suggestion for Rehearing in Bane appears in the

Appendix at p. 37a. The decision of the Occupa-

tional Safety and Review Commission is reported at

7 OSHC 1306 (1979) and appears in the Appendix

at pp. 38a-44a. The Administrative Law Judge’s Order

Granting Stipulated Settlement appears in the Appen-

dix at pp. 45a-48a.

Il.

JURISDICTION

The judgment of the Court of Appeals for the Third

Circuit was entered on May 29, 1979. A timely peti-

tion for Rehearing and Suggestion for Rehearing in

Bane was denied on June 26, 1980 and this petition

for certiorari is being filed within ninety days of this

date. The Court’s jurisdiction is being invoked under

28 U.S.C. § 1254(1).

Il.

STATUTORY PROVISIONS INVOLVED

United States Code, Title 29 states in pertinent

part:

§ 654. Duties oF EMPLOYERS AND EMPLOYEES

(a) Kach employer—

(1) shall furnish to each of his employees em-

ployment and a place of employment which are

free from recognized hazards that are causing or

are likely to cause death or serious physical harm

to his employees;

§ 660. Jupic1aL REVIEW

(a) Any person adversely affected or aggrieved

by an order of the Commission issued under sub-

section (c) of section 659 of this title may obtain

a review of such order in any United States court

of appeals for the circuit in which a violation is

alleged to have occurred or where the employer

has its principal office, or in the Court of Appeals

for the District of Columbia Circuit, by filing in

such court within sixty days following the issu-

ance of such order a written petition praying that

the order be modified or set aside. ... No objection

that has not been urged before the Commission

shall be considered by the court, unless the failure

or neglect to urge such objection shall be excused

because of extraordinary circumstances... .

(b) The Secretary may also obtain review or en-

forcement of any final order of the Commission

by filing a petition for such relief in the United

States court of appeals for the circuit in which

the alleged violation occurred or in which the em-

ployer has its principal office, and the provisions

of subsection (a) of this section shall govern such

proceedings to the extent applicable. ...

§ 661. OccUPATIONAL SAFETY AND HEALTH REVIEW

COMMISSION

(i) A hearing examiner appointed by the Com-

mission shall hear, and make a determination

upon, any proceeding instituted before the Com-

mission and any motion in connection therewith,

assigned to such hearing examiner by the Chair-

man of the Commission, and shall make a report

of any such determination which constitutes his

final disposition of the proceedings. The report of

the hearing examiner shall become the final order

of the Commission within thirty days after such

report by the hearing examiner, unless within

such period any Commission member has directed

that such report shall be reviewed by the Com-

mission.

IV.

REGULATORY PROVISIONS INVOLVED

29 C.F.R. § 2200.91 states in pertinent part:

DISCRETIONARY REVIEW; PETITIONS FOR; STATE-

MENTS IN OPPOSITION.

(a) A party aggrieved by the decision of a judge

may submit a petition for discretionary review.

An aggrieved party that fails to file a petition for

such review by the Commission may be foreclosed

from court review of any objection to the judge’s

decision. Keystone Roofing Co., Inc. v. Dunlop,

539 F.2d 960 (3rd Cir. 1976).

* ” *

(b)(3) Petitions for review of a Judge’s decision

may be filed directly with the Executive Secretary

subsequent to the filing of the Judge’s report.

Such petitions will be considered to the extent

that time and resources permit. Parties filing such

petitions should be aware that any action by a

Commission Member directing review must be

taken within thirty (30) days following the filing

of the Judge’s report.

(4) In the case of proposed settlements or other

proposed dispositions by consent of all parties,

petitions for discretionary review shall not be

allowed, except for good cause shown.

(ec) A petition should contain a concise statement

of each portion of the decision and order to which

a fp is taken and may be accompanied by a

brief of points and authorities relied upon. The

inclusion of precise citations to the record or legal

authorities, as the case may be, will facilitate

prompt review of the petition.

(d) Failure to act on such petition within the re-

view period shall be deemed a denial thereof.

. a *

29 C.F.R. § 2200.91a states in pertinent part:

REVIEW BY THE COMMISSION

(a) Review is a matter of sound discretion of a

member of the Commission.

(b) In exercising discretion, a Commission mem-

ber will consider assertions of the following:

(1) A finding of material fact is not sup-

ported by a preponderance of the evidence.

(2) The decision is contrary to law or to the

duly promulgated rules or decisions of the

Commission.

(3) A substantial question of law, abuse of

discretion, or policy is involved.

(4) A prejudicial error of procedure was

committed.

granted, review shall be limited to the issues speci-

fied in the petition, unless the order for review

expressly provides differently.

(d) At any time within thirty days after the filing

of a decision of a judge, a case may also be di-

rected for review by a member upon his own

motion upon any ground that could be raised by

a party, but the issues would normally be limited

to novel questions of law or policy or questions

involving conflict in Administrative Law Judges’

decisions. Any direction for review shall state the

issues with particularity. Except in extraordinary

circumstances, the Commission’s power to review

is limited to issues of law or fact raised by the

parties in the proceedings below.

Vv.

STATEMENT OF THE CASE

This case involves significant questions of law, policy

and procedure under the Occupational Safety and

Health Act. In its decision setting aside the decision

of the Occupational Safety and Health Review Com-

mission, and granting the petition of the Secretary of

Labor,’ the Third Circuit held that the Secretary of

Labor is completely free to withdraw from a settle-

ment agreement entered into with an employer at any

time prior to the issuance of a final order by the Re-

view Commission even though the Secretary had not

effectively raised the question of withdrawal from the

agreement before the Commission, the Commission

had not directed review on the merits of the agree-

ment and the Secretary had presented no evidence in

support of its unilateral withdrawal from the agree-

ment.

The genesis of the case goes back to a July 8, 1976

OSHA inspection of the Marcus Hook facility oper-

ated by Sun Petroleum Products Company. Following

the inspection, the Secretary of Labor issued a citation

on August 3, 1976, alleging that the Company had

committed two violations of OSHA safety standards.

The citations stated as follows:

29 CFR 1910.132(a): Protective fire resistant

clothing was not provided for operating personnel

in Plant 8C-Lub [sic] Oil unit to protect them

from the hazard of fire, as well as skin contact of

*The instant case was consolidated for argument and decision

with the Union’s Petition for Review of the Commission’s deci-

sion on a different issue.

crude oil and its distallates [sic] resulting from

splashes and leakes during turn-around opera-

tions.

General Duty Clause, Public Law 91-596, Section

5(a)(1): The employer did not furnish to each of

his employees employment and a place of employ-

ment, which were free from recognized hazards

that were causing or were likely to cause death or

serious physical harm to his employees in that:

On June 19, 1976 from 8:00 p.m. to midnight, the

area around the H-2 Heater in Plant 8-C, Lub

[sic] Oil Unit was not monitored for combustible

gases or vapors during the turn-around operation,

when two 14-inch pipe outlets were open for vent-

ing purposes. Part of this operation involved

lighting of gas burners by employees in close

proximity to the vents.

The Company was assessed $700 penalties for each

violation. An abatement date of October 3, 1976 was

proposed for the first citation and an immediate time

for abatement for the second one.

On August 24, 1976, the Company filed a notice of

contest challenging all aspects of the citations. The

notice of contest triggered the filing of an adminis-

trative complaint by the Secretary of Labor on Sep-

tember 13, 1976. On September 30, 1976, the Oil, Chem-

ical & Atomic Workers International Union and its

Local 8-901 sought party status. By Order of the Ad-

ministrative Law Judge assigned to the case, on Octo-

ber 21, 1976, party status was afforded to the local

Union. On November 9, the Company filed its answer

to the complaint and denied the substantive alle-

gations.

Prior to any hearing on the matter, the Secretary of

Labor and the Company negotiated a settlement agree-

ment that was executed on January 10, 1977. The

Union fully participated in the discussions regarding

settlement and advanced their views to the Secretary

prior to his entering into the agreement. The settle-

ment agreement [attached in its entirety at pp. 49a-54a

of the Appendix] resolved all outstanding issues and

provided for the following:

1. A requirement for fire-retardant clothing for

rsons in the immediate vicinity of a burner

in a fired heater during the time of the lighting

of such pilot or first burner during the course o

turnaround operations.

2. In such situations a requirement of a gas test

in the firebox and in areas in the immediate

vicinity of the fired heater or burner where

gases may be present.

3. Such gas tests ‘‘will be taken by persons knowl-

edgeable in the care, use, and reading of the

instrument, and familiar with locations where

combustible or vapors may be present or

have collected.”

4. A requirement of recording such gas tests.

5. Development and distribution of a comprehen-

sive gas testing manual,

6. Certain engineering and procedural changes as

outlined in the two appendices to the settlement

agreement.

7. serene to continuing compliance with the

ct.

8. A statement that the settlement agreement had

been served on the Union “‘in accordance with

Commission Rule 7, and the Order dated Octo-

ber 21, 1976’’.

9. A reduction in the total penatlies assessed from

$1,400 to $1,000.

10. A withdrawal by the Company of its notice of

contest.

On January 19, 1977, the Union filed objections to

the settlement agreement. The Company contested the

Union’s right to make objections to the substance of

the agreement and a pre-hearing conference was held

on February 8, 1977, to consider the Company’s posi-

tion. The ALJ sustained the Company’s position on

the basis that the Union’s objections dealt with the

substantive terms of the settlement and not the period

of time for abatement as set forth in 29 U.S.C. § 659

(c). Thereafter, on April 25, 1977, the ALJ issued a

formal order approving the settlement.

On May 24, 1977, pursuant to Section 12(i) of the

Act [29 U.S.C. § 661(i)], Commissioner Cleary of the

Occupational Safety and Health Review Commission

directed review on the following two issues:

(1) Whether the Administrative Law Judge

erred in concluding that the authorized employee

representative did not challenge the reasonable-

ness of the abatement period embodied in the

proposed settlement agreement ?

(2) Whether the Administrative Law Judge

erred in concluding that the Commission lacks

jurisdiction to entertain the authorized employee

representatives objection to the proposed settle-

ment agreement?

The Secretary of Labor then filed a series of motions

for extensions of time to file its brief. The Secretary

received an additional ninety days to file its brief.

The Company opposed the Secretary’s third request

and the Commission denied that request on October

5, 1977. The Company and Union filed timely briefs

on the issues on which review was directed. The Secre-

tary never filed a brief.

On September 18, 1978, some eleven months after

the Commission denied the Secretary’s third request

for an extension of time within which to file its brief,

the Secretary filed a self-styled ‘‘ Response to Direction

for Review”’ in which he stated that he had reconsid-

ered the settlement agreement with respect to the

clause pertaining to gas testing and had concluded that

the settlement should be set aside. That portion of

the settlement agreement stated in pertinent part that

gas tests ‘‘will be taken by persons knowledgeable in

the care, use, and reading of the instruments, and

familiar with locations where combustible gas or vapors

may be present.’’ During this period of time the Inter-

national Union lobbied ex parte the Washington

OSHA office to adopt the Union’s view that only per-

sons classified for wage purposes as laboratory gas

testers should be permitted to take gas tests irrespec-

tive of any other person’s qualifications, This had been

a longstanding labor relations issue between the par-

ties. The local Union in contract negotiations in 1977

and 1979 agreed that operating personnel and not nec-

essarily laboratory gas testers could take gas tests.

This reply was not responsive to the Commission’s

Direction for Review.

Furthermore, the Secretary did not explain how he

had arrived at this reversal in position. Nor did he

contend that the Company was not fully abiding by the

agreement. He also failed to even allude to the fact

that this response was untimely by almost a year.

On April 27, 1979, by a one-to-one vote, the Com-

mission affirmed the ALJ’s decision and order. The

Commission relegated the Secretary’s position to a

footnote in which it held that the Secretary’s ‘‘Re-

sponse’’ was not properly before it:

The Secretary’s position is set forth in his ‘‘Re-

sponse to Direction for Review’’, which was filed

more than eleven 1 vnths after the parties were

notified that the Secretary’s third request for an

extension of briefing time was denied. Sun Pe-

troleum has moved to strike the Secretary’s re-

sponse as untimely. Chairman Cleary’s disposi-

tion is based solely on the Union’s right to raise

objections to a settlement agreement in an action

instituted by an employer’s notice of contest, and

is arrived at independent of the Secretary’s re-

sponse. He thus considers the motion to strike to

be moot. Commissioner Barnako would grant the

motion to strike, and has not considered the Sec-

retary’s response.

The Secretary filed a petition for review in the

instant case with United States Court of Appeals for

the Third Cireuit. The Union filed a separate petition

on the questions raised by the Commission’s Direction

for Review. These cases were consolidated for argu-

ment and decision.

In its decision which issued on May 29, 1980, the

Court held that the Secretary of Labor has the abso-

lute authority to withdraw from a settlement agree-

ment for any or even no reason as long as the with-

drawal preceded the issuance of a final order by the

Commission. The Court’s reasoning for this holding

was that as the person most responsible for the en-

forcement of the Act, the Secretary was acting within

his authority in withdrawing from any settlement

agreement regardless of the nature of the agreement

or the grounds given for his ex parte action. The Court

referred to the following statement by Senator Wil-

liams, the chief sponsor of the Act in the Senate, as the

basis for their unbridled authority:

[T]he majority of our Committee wisely concluded

that the Secretary of Labor ought to be assigned

the responsibility for promulgating and enforcing

the standards under this Act, subject to those pro-

visions of the Administrative Procedure Act

which insure that considerations of due process

are fully satisfied.

The Court, however, never indicated what due proc-

ess considerations the Secretary was required to fol-

low prior to his withdrawal from the agreement.

Moreover, the Court did not consider the Company’s

threshhold contention that the Court lacked jurisdic-

tion to consider the Secretary’s petition because its

withdrawal was not effectively urged before the Re-

view Commission. The Court failed to address this

issue, which the Company initially raised in its Mo-

tion to Dismiss Secretary’s Petition and to Strike

Brief, not withstanding the established body of law,

including decisions of this Court, that stand for the

proposition that only issues effectively urged before

the administrative agency having jurisdiction over a

particular proceeding are subject to appellate review.

For this reason, the Company filed a Petition for Re-

hearing and Suggestion for Rehearing in Bane on

June 12, 1980. That Petition was denied on June 26,

1980.

VI.

REASONS FOR GRANTING THE WRIT

A. The Decision Below Is Contrary To Decisions Of This Court

And The Decisions Of United States Courts Of Appeals And

Raises Significant And Recurring Problems Concerning The

Decision-Making Process Of The Occupational Safety And

Health Review Commission And The United States Courts Of

Appeal.

In granting the Secretary’s Petition for Review and

thereby agreeing to set aside the settlement agree-

ment, the Court ignored important and well-established

principles of administrative law enunciated by this

Court and other Circuit Courts of Appeal. The deci-

sions threatens the very fabric of administrative

agency decision-making by signalling to all litigants

that limitations relating to the exercise of agency ju-

risdiction can be sidestepped, if not totally ignored.

In a series of cases, this Court has fashioned the

well-established principle that issues not properly

raised before and ruled upon by an administrative

agency are not subject to judicial review. United

States v. L. A. Tucker Truck Innes, 344 U.S. 33, 37

(1952) ; Securities and Exchange Commission v. Chen-

ery Corporation, 332 U.S. 194 (1947) ; Unemployment

Compensation Commission v. Aragan, 329 U.S. 143,

154 (1946). Significantly, within the past few months,

this principle has been applied by the Court to the

Occupational Safety and Health Act. Industrial Union

Department, AFL-CIO v. American Petroleum Insti-

tute, —— U.S. ——, 100 S.Ct. 2844, 2858 at n.31 (1980).

The purpose of this principle is clear and was suc-

einctly spelled out by this Court in U.S. v. L. A.

Tucker Truck Lanes:

Simple fairness to those who are engaged in the

tasks of administration, and to litigants requires

as a general rule that courts should not topple over

administrative decisions unless the administra-

tive body not only has erred but has erred against

objection made at the time appropriate under its

practice. 344 U.S. at 37.

The Occupational Safety and Health Act delineates

specific procedures for the review of contested citations

by the Occupational Safety and Health Review Com-

mission. The Act also contains clear and specific means

by which an adverse Commission ruling can be judi-

cially reviewed. Section 29 U.S.C. § 661(i) states in

pertinent part that ‘‘[T]he report of the hearing ex-

aminer shall become the final order of the Commission

within thirty days after such report by the hearing

examiner, unless within such period any Commission

member has directed that such report shall be reviewed

by the Commission.’’ The Commission’s own regula-

tions set forth one such method for a party to file a

Petition for Discretionary Review in which the Com-

mission is free to accept or reject a case for review.

That method is codified by Commission regulations

which state in pertinent part:

DISCRETIONARY REVIEW; Petitions For; State-

MENTS IN OPPOSITION.

(a) A party aggrieved by the decision of a

judge may submit a petition for discretionary

review. An aggrieved party that fails to file a

etition for such review by the Commission may

foreclosed from court review of any objection

to the judge’s decision. Keystone Roofing Co., Inc.

v. Dunlop, 539 F.2d 960 (3rd Cir. 1976).

(b)

(3) Petitions for review of a Judge’s deci-

sion may be filed directly with the Executive Sec-

retary subsequent to the filing of the Judge’s re-

port. Such petitions will be considered to the

extent that time and resources permit. Parties

filing such petitions should be aware that any

action by a Commission Member directing review

must be taken within thirty (30) days following

the time of the Judge’s report.

(4) In the case of proposed settlements or

other proposed dispositions by consent of all par-

ties, petitions for discretionary review shall not

be allowed, except for good cause shown.

ment of each portion of the decision and order to

which exception is taken and may be accompanied

by a brief of points and authorities relied upon.

The inclusion of precise citations to the record or

legal authorities, as the case may be, will facili-

tate prompt review of the petition.

(d) Failure to act on such a petition within the

review period shall be deemed a denial thereof.

29 C.F.R. § 2200.91

The second method is by sua sponte review by the

Commission at the direction of one or more of its

members. That method is also delineated in the Com-

mission’s regulations.

Review By THE COMMISSION

(a) Review is a matter of sound discretion of a

member of the Commission.

(b) In exercising discretion, a Commission mem-

ber will consider assertions of the following:

(1) A finding of material fact is not sup-

vorted by a preponderance of the evi-

dence,

(2) The decision is contrary to law or the

duly promulgated rules or decisions of

the Commission.

(3) A substantial question of law, abuse of

discretion, or policy is involved.

(4) A prejudicial error of procedure was

committed.

granted, review shall be limited to the issues

specified in the petition, unless the order for

review expressly provides differently.

(d) At any time within 30 days after the filing

of a decision of a judge, a case may also be

directed for review by a member upon his

own motion upon any ground that could be

raised by a party, but the issues would nor-

mally be limited to novel questions of law or

policy or of questions involving conflict in

Administrative Law Judges’ decisions. An

direction for review shall state the issues wit

particularity. Except in extraordinary cir-

cumstances, the Commission’s power to re-

view is limited to issues of law or fact raised

by the parties in the proceedings below.

29 C.F.R. § 2200.91a

These regulations implement the principles enunci-

ated in U.S. v. L. A. Tucker Truck Lines and the cases

cited above. The regulations provide that in the ab-

sence of the granting of a party’s petition for review,

the issue before the Commission will be limited to

that directed for review by the Commission should

that method of review be invoked.

The facts in this case contain a stream of undis-

puted facts which clearly reveal that the Secretary

did not effectively object to the settlement agreement

in the manner prescribed ‘‘appropriate under its [the

Commission’s] practice’ as required by this Court in

U.S. v. L. A. Tucker Truck Lines. Those facts, in brief,

are:

1. The Secretary did not file a Petition for Dis-

eretionary Review.

2. The issues directed for review were specifically

described in the Direction for Review as re-

quired under the 29 C.F.R. § 2200.91a(d) which

states ‘‘Any direction for review shall state the

issues with particularity.”’

3. The issues directed for review were totally

alien to the matter raised by the Secretary

sixteen months later.

In its decision affirming the ALJ, the Commission

properly did not consider the Secretary’s self-styled

Response to the Commission’s Direction for Review.

Had the Commission so responded it would have effec-

tively created a gaping loophole in the discretionary

nature of Commission review by allowing a party to

avoid filing for discretionary review on an arguably

unappealing issue and then upon the Commission’s

own direction for review, raising through the back

door that same unappealing issue. This analysis is

particularly relevant in this case in view of the Com-

mission’s own regulation that sets an even higher

standard for acceptance of a petition for discretion-

ary review in cases relating to settlements, 29 C.F.R.

§ 2200.91(b) (4). Stated conversely, if the Secretary

had ‘‘effectively’’ raised the issue of his withdrawal

from the settlement agreement with the Commission

and if Sun had been able to rebut the Secretary’s

position on the merits, we have no doubt that the

Commission would not have permitted the Secretary

to withdraw from a settlement guaranteeing gas test-

ing by qualified persons in favor of gas testing by

individuals in a particular job classification. But the

point of the fact is that the Commission did not rule

on this issue because the Secretary did not effectively

raise it. And for that reason the Court should not have

decided it. Instead the Court’s failure to decline juris-

diction served to evade the Commission’s own rules

implementing the doctrine of Tucker Truck Lines.

The Third Circuit’s total refusal to even speak to

this threshhold issue is alarming in view of not only

the Supreme Court rulings, but also in view of deci-

sions of the same Court applying Tucker Truck Lines

and that of other Circuit Courts which have applied

the doctrine to cases arising under the Occupational

Safety and Health Act.

Thus, the Third Circuit Court’s decision is in direct

conflict with its own holding in Hennesey v. Securities

& Exchange Commission, 285 F.2d 511 (3rd Cir. 1961),

in which it stated:

It is well-established that issues not effectively

presented to an administrative agency, where am-

ple opportunity to do so has been afforded, cannot

be raised on appeal of that agency’s decision. This

principle may be viewed as one facet of judicially

developed doctrine of ‘‘exhaustion of administra-

tive remedies’’. 285 F.2d at 514 (emphasis added).

Even more to the point, the Court’s refusal to decline

jurisdiction is in conflict with its vigorous approval

of the statutory scheme of review described above. In

Keystone Roofing Company, Inc. v. Occupational

Safety and Health Review Commission, 539 F.2d 960

(3rd Cir. 1976), the Court dismissed a petition by an

employer because he had not sought review with the

Commission. The Court’s recognition of the statutory

scheme is particularly relevant to the instant case:

29 U.S.C. §660(a) does not require that the

Commission decide every issue tendered to it in

petitions for discretionary review. All that is nec-

essary as a condition precedent to judicial review

is that the objection be ‘‘urged before the Com-

mission’’, The language and method are deliberate.

The Commission must have the opportunity to

correct decisions of the hearing examiners, At the

same time, the statute does not have the capacity

to force a backlog of cases on the Commission. In

short, this statutory framework furthers two laud-

able goals of administrative law: it encourages the

Commission to achieve uniformly applied occu-

pational safety and health standards in further-

ance of the Act’s overall objectives, while guar-

anteeing as far as practicable that the administra-

tive process will be efficient rather than protracted.

[Footnote omitted] 539 F.2d at 964.

Notwithstanding the Court’s total avoidance of the

question presented, the Secretary’s objection was not

‘‘urged before the Commission”’.

Other Courts have similarly refused to entertain

issues that were not effectively urged before the Com-

mission. In Todd Shipyards Corp. v. Secretary of

Labor, 566 F.2d 1327, 1331 (9th Cir. 1978), the Court

refused to consider a due process contention by the

employer since that issue had not been specifically

raised before the Commission, The Second Circuit in

General Electric Company v. Occupational Safety and

Health Review Commission, 540 F.2d 67 (2d Cir.

1976), similarly indicated the limit of its review au-

thority :

We confine our review of the Commission’s order

to the validity of the ground upon which the

agency rested its decision. Securities and Ex-

change Commission v. Chenery, 318 U.S. 80

(1943), 540 F.2d at 68, n.1.

In McGowan v, Marshall, 604 F.2d 885 (5th Cir.

1979), the Fifth Circuit held that a party’s failure to

properly respond to the Commission’s Direction for

Review or file a Petition for Review prohibited judi-

cial review by that party. The Court stated:

Accordingly, we hold that absent extraordinary

circumstances, a party is precluded from obtain-

ing judicial review of a final order of the Com-

mission if he has failed to pursue his administra-

tive remedies either by neglecting to file a petition

for discretionary review under 29 C.F.R. § 2200.91

(a), or, in a case which has been directed for re-

view, by failing to respond to the Commission’s

invitation to file briefs. 604 F.2d at 890.

The section of the Act permitting judicial review is

entirely consistent with the above analysis. In perti-

nent part 29 U.S.C. § 660(a) states ‘‘No objection that

has not been urged before the Commission shall be

considered by the Court unless the failure or neglect

to urge such objection shall be excused because of ex-

traordinary circumstances.’’ It is thus evident that in

devising the Act, Congress intended to adhere to the

traditional limitations of review common to other

administrative agencies. While it permitted a limited

exception based upon ‘‘extraordinary circumstances’,

the Court below made no inquiry of the Secretary of

such ‘‘extraordinary circumstances’? and indeed the

Secretary did not and could not volunteer any such

evidence. See McGowan v. Marshall, supra at 891,

n.19 and accompanying text.

The failure of the Court to dismiss the instant peti-

tion for want of jurisdiction places in great jeopardy

the exhaustion doctrine framed by this Court and

carried forward by the courts of appeals in the exer-

cise of their judicial review. The decision, therefore,

threatens to erode the unique and time tested proce-

dures utilized by the Review Commission as well as

other administrative agencies that act in an adjudi-

eating capacity.

B. The Decision Below Raises Significant And Recurring Prob-

lems Relating To The Due Process Righis Of Private Litigants

Adverse To The Effective Enforcement Of The Occupational

Safety And Health Act.

The Court’s decision granting the Secretary the

absolute authority to withdraw from a_ settlement

agreement at any time for any reason or no reason

was based upon the Secretary’s overall responsibility

for the enforcement of the Act. While the Secretary’s

powers are broad in this regard, Petitioners submit

that these powers are to be tempered by traditional

notions of fairness and due process, Although the Act

does not contain any specific provision relating to

settlement,* the Secretary’s powers with respect to

* Consistent with the purposes and policies of the Act, the Com-

mission has implemented a rule encouraging the settlement of all

contested cases. 29 C.F.R. § 2200.100. See opinion of Judge Pollack,

concurring in part and dissenting in part at n.6 [App. at 34a].

standard-setting inspections, investigations citations

are carefully balanced to afford private parties re-

course to traditional due process safeguards. 29 U.S.C.

§§ 657, 658, and 659. See Marshall v. Barlow’s Inc.,

436 U.S. 307 (1978) ; Industr’ wu Union Department v.

American Petroleum Institute, supra, —— U.S. ——,

100 S.Ct. 2844 (1980).

Moreover, the Court’s conclusion that the Secre-

tary’s power to withdraw from settlement agreements

can be wielded in such a coercive fashion [without any

reference to the facts since the agreement was consum-

mated or the detrimental effect which the withdrawal

would have on the other party] is inconsistent with the

same legislative history cited by the Court for approv-

ing this extraordinary grant of authority to the Secre-

tary. Thus, the Court heavily relied on the statement

by the Senate Subcommittee on Labor that ‘‘the ma-

jority of our committee wisely concluded that the

Secretary of Labor ought to be assigned the responsi-

bility for promulgating and enforcing the standards

under this act, subject to those provisions of the Ad-

ministrative Procedure Act which insure that consid-

eration of due process are fully satisfied.’’ Nowhere in

the Court’s decision did it even allude to the nature

of those due process guarantees.’

*The Court’s order requiring that the parties be placed in a

status quo ante position is not pertinent to the issue of due process.

First, it does not speak to the authority of the Secretary to with-

draw from the agreement but only to the effects upon the Em-

ployer after he withdraws. Second, it is obvious that if the current

whim of the Secretary remains a constant, a new inspection will

undoubtedly result in a citation. The result will then be the same—-

the employer will have undertaken and complied with al] the obli-

gations of the settlement and then be required to take on a new

onerous obligation in addition to what had already been agreed to.

The Court further refused to discuss those undis-

puted facts that should preclude the Secretary from

unilaterally withdrawing from the agreement. Those

facts are as follows:

First, at no time has the Secretary advanced any

newly discovered evidence obtained after the initial

agreement to support its new position that the settle-

ment agreement is not in the public interest. In fact,

the Secretary presented no specifics explaining the

basis for his change of opinion, but relied on ez parte

claims of the Union to the effect that only employees

classified as ‘‘gas testers’’ can safely take gas tests—a

position which the Union itself abandoned in collective

bargaining when it agreed in 1977 and again in 1979

that gas testing is generally to be performed by operat-

ing personnel.

Second, there is no evidence and no contention that

the procedures implemented by the Company in reli-

ance upon the settlement agreement have been ineffec-

tive. At the same time, there is also no contention that

the Company has breached the settlement or has com-

mitted new violations which could vitiate the terms of

the settlement agreement, even though the Secretary

has made inspections of the Marcus Hook facility

since the agreement was executed.

Third, neither the Secretary nor the Court below has

made any mention of the significant investment which

the Company has made in implementing the agree-

ment. This includes (a) a formal gas testing program

conducted by an outside consultant; (b) preparation

of a gas testing manual; and (c) an extensive in-house

gas testing training program to train operating person-

nel.

The Court cited no authority for the proposition

that in the absence of newly discovered evidence, a

subsequent violation of a breach of the agreement, the

Secretary retained the unilateral authority to with-

draw from the agreement. In this regard, it ignored the

standards for withdrawal from a settlement agreement

enunciated by this Court under the National Labor

Relations Act—an Act with equally significant public

policy objectives that has been the subject of extensive

judicial interpretation in its forty-five year history.

The leading case under the NLRA is Wallace Corpora-

tion v. National Labor Relations Board, 323 U.S. 248

(1945), where the Court approved the Labor Board’s

policy with respect to settlements:

To prevent disputes like the one here involved,

the Board has from the very beginning encour-

aged compromises and settlements. The purpose of

such attempted settlements has been to end labor

disputes, and so far as possible to extinguish all

the elements giving rise to them. The attempted

settlement here wholly failed to prevent the whole-

sale discard of employees as a result of their

union affiliations. The purpose of the settlement

was thereby defeated. Upon this failure, when the

Beard’s further action was properly invoked, it

became its duty to take fresh steps to prevent

frustration of the Act. To meet such situations the

Board has established as a working rule the prin-

ciple that it ordinarily will respect the terms of a

settlement agreement cueorel tr it. It has con-

sistently gone behind such agreements, however,

where subsequent events have demonstrated that

efforts at adjustment have failed to accomplish

their purpose, or where there has been a subse-

quent unfair labor practice. We think this rule

adopted by the Board is appropriate to accomplish

the Act’s purpose with fairness to all concerned.

323 U.S. at 254-255.

The vitality of this principle is exemplified by the

strict adherence to it in more recent cases dealing with

similar issues. In referring to the Wallace decision,

the Fifth Circuit stated:

This holding of the Supreme Court has been in-

terpreted to mean that a settlement agreement can

be set aside and presettlement violations found,

when there has been a breach of the agreement, or

where there has been a subsequent independent

violation of the Act by © party to the agreement.

NLRB vy. Southeastern Stages, Inc., 423 F.2d 878,

880 (5th Cir. 1970).

The Sixth Circuit came to the same conclusion in

Rogers Manufacturing Company v. NLRB, 486 F.2d

644 (6th Cir. 1973):

It is of course recognized that the Board may not

consider matters properly disposed by a settlement

agreement ‘‘unless there is a breach of the agree-

ment or a subsequent independent violation of the

Act by the parties to the agreement’’. Lincoln

Bearing Co. v. NLRB, 311 F.2d 48, 50 (6th Cir.

1962). 486 F.2d at 648.

Accord: Gulf States Manufacturers Inc. v. NLRB, 598

F.2d 896 (5th Cir. 1979); NLRB v. Arrow Specialties

Inc., 4387 F.2d 522 (8th Cir. 1971); NLRB v. Bangor

Plastics, Inc., 392 F.2d 772, 775 (6th Cir. 1967) ; NLRB

v. Superior Tool & Dye Company, 309 F.2d 692 (6th

Cir. 1962).

It is evident that the reasoning behind this judicially

accepted rule is to protect the integrity of settlements

without unjustly penalizing a party who has acted in

good faith reliance on the agreement and who has not

engaged in any substantive unlawful conduct which, in

effect, flaunts the agreed-upon terms of the settlement.

At the same time, the standards imposed under the

rule, prohibit ex parte, ex post facto review of the

settlement and thereby serve to guarantee due process

to the party adversely affected by the attempted with-

drawal. The Court’s decision here allows for a com-

pletely contrary result.

The Court’s decision will have a devastating impact

upon the enforcement of the Occupational Safety and

Health Act. Most citations are now settled informally

and any kind of change away from resolution through

settlement will cause a complete breakdown in the en-

forcement of the Act. Yet, the Court’s decision sends

a loud and clear signal to industry that battle by cita-

tions, notices of contests, hearings and appeals are

preferable to achieving the Act’s purposes of industrial

safety and health by voluntary cooperation through

settlement.

vil

CONCLUSION

For the above reasons, a writ of certiorari should

issue to review the judgment and opinion of the Third

Circuit.

Respectfully submitted,

Joun A. McGuinn

Counsel of Record

Gary L. LIEBER

FARMER, WELLS, McGuinn,

FLoop & SrBaL

1000 Potomac Street, N.W.

Washington, D.C. 20007

Attorneys for

Sun Petroleum Products Company

APPENDIX

UNITED STATES COURT OF APPEALS,

THIRD CIRCUIT,

Nos. 78-1822, 79-1828.

Ray Marsa, Secretary of Labor,

United States Department of Labor,

Petitioner, No. 79-1822,

Vv.

Sun Petroteum Propvucts Co, and

Occupational Safety and Health Review

Commission, Respondents.

LocaL 8-901 or Om, CHEMiIcAL AND ATOMIC

Workers INTERNATIONAL UNION,

Petitioner, No. 79-1828,

Vv.

OccuPaTIONAL Sarety AND Heattn Review Commission,

Sun Petroleum Products and Secretary of Labor,

Respondents.

Argued March 20, 1980.

Decided May 29, 1980.

As Amended June 4, 1980.

Carin A. Clauss, Sol. of Labor, Baruch A. Fellner

(argued), Benjamin W. Mintz, Associate Sol. for Occu-

pational Safety and Health, Marleigh Dover Lang (ar-

gued), Allen H. Feldman, Counsel for Appellate Litiga-

tion, Dennis K. Wade, Asst. Counsel for Appellate Liti-

gation, Lorelei J. Borland, Atty., Marshall H. Harris, Re-

gional Sol., U.S. Dept. of Labor, Philadelphia, Pa., for

Secretary of Labor.

John A. McGuinn (argued), Gary L. Lieber, Farmer,

Shibley, McGuinn & Flood, Washington, D. C., for Sun

Petroleum Products Co.

George H. Cohen (argued), David M. Silberman, Bred-

hoff, Gottesman, Cohen & Weinberg, Washington, D. C.,

(Robert E. Wages, Asst. General Counsel, Oil, Chemical

& Atomic Workers Union, Denver, Colo. of Counsel), for

Local 8-901 of Oil, Chemical and Atomic Workers Inter-

national Union.

Before AvpiserT and Gissons, Circuit Judges, and Pot-

LAK, District Judge.*

OPINION OF THE COURT

Avorsert, Circuit Judge.

Two petitions have been consolidated for decision at this

time. In the appeal at No. 79-1822, the Secretary of Labor

has petitioned for review of a decision by an equally di-

vided vote of the Occupational Safety and Health Review

Commission, which leaves intact an administrative law

judge’s approval of a settlement agreement between the

Secretary and Sun Petroleum Products Company. The Sec-

retary’s petition requires us to decide whether he has the

authority to withdraw from the settlement without the

approval of the Commission. In the appeal at No. 79-1828,

the union that represents the company’s employees seeks

review of the Commission’s decision affirming the settle-

ment.

These two surfaces issues do not disclose the several

questions lurking as threshold problems that must be

* Honorable Louis H. Pollak, of the United States District

Court for the Eastern District of Pennsylvania, sitting by designa-

tion.

answered before we can reach the merits of the petitions.

‘We have had the advantage of briefs and oral argument

from the Secretary, the company, the union, and the Com-

mission on the following issues, which we will address

seriatim:

Is a decision by two members of the Occupational

Safety and Health Review Commission, divided equal-

ly, an order appealable to a court of appeals?

May the Commission participate in the court of ap-

peals as an active party on a petition for review of

its decision, or is it only a nominal respondent?

Does the Commission have the authority to review,

and therefore the power to reject or approve, a settle-

ment between the Secretary and an employer once a

case has been scheduled for hearing before an admin-

istrative law judge?

If the administrative law judge has authority to

review a settlement, what is the extent of the right,

if any, of affected employees to participate in the

hearing?

If the Commission has authority to review a settle-

ment, does the Secretary have the right to withdraw a

settlement once it has been reviewed and approved by

an administrative law judge?

The facts giving rise to this litigation are undisputed.

On June 19, 1976, two workers were killed in a gas ex-

plosion at Sun Petroleum’s refinery in Marcus Hook, Penn-

sylvania. Following the incident, an OSHA compliance

officer inspected the site. As a result of the inspection the

Secretary of Labor issued a citation on August 3, 1976,

charging Sun with, inter alia, a serious violation of 29

U.S.C. § 654(a)(1), for failing to monitor for combustible

gases during turn-around operations.’ The company was

also served with two proposed penalties of $700 each and

ordered to abate the violation immediately. Sun filed a

timely notice of contest, and the Secretary issued a formal

complaint on September 13, 1976. On September 30, 1976,

Local Union 8-901 of the Oil, Chemical and Atomic Work-

ers International Union elected party status in accordance

with Commission Rule 20, 29 C.F.R. § 2200.20. Party status

was granted on October 21, 1976. Sun filed its answer to

the Secretary’s complaint on November 9, 1976.?

Prior to a hearing before an administrative law judge,

the Secretary and Sun entered into a settlement agreement

on January 10, 1977. The agreement was served on all

parties and provided, inter alia that “gas test[{s] will be

taken by persons knowledgeable in the care, use, and read-

ing of the instrument, and familiar with locations where

combustible gases or vapors may be present or have col-

lected.” Appendix at 26. Also as part of the settlement,

Sun agreed to develop a gas testing manual within ninety

days and tu institute engineering and procedural changes

to reduce the likelihood of accidents in the refinery. In

addition, a reduction in the penalties was agreed to and

Sun moved to withdraw its notice of contest. On January

19, 1977, the union filed objections to the settlement agree-

1 Section 654(a)(1) requires every employer, as defined by 29

U.S.C. § 652(5), to ‘‘furnish to each of his employees employ-

ment and a place of employment which are free from recognized

hazards that are causing or are likely to cause death or serious

physical harm to his employees.’’ A serious violation is defined by

29 U.S.C. § 666(j) as one that creates ‘‘a substantial probability

that death or serious physical harm could result from a condition

which exists . . . in such place of employment unless the employer

did not, and could not with the exercise of reasonable diligence,

know of the presence of the violation.’’

?On December 7, 1976, the Secretary was granted leave to file

an amended citation and complaint, which Sun answered on De-

cember 16, 1976.

ment. Its primary objection was that the agreement failed

to abate the hazard because the provision relating to gas

testing did not specify that only workers classified as gas

testers could test for combustible gases. The union claimed

that without such a specification the company might use

“unqualified” employees to conduct the testing.

On February 8, 1977, the ALJ conducted a prehearing

conference during which both Sun and the Secretary as-

serted that the union’s right to object to the settlement

agreement was limited by 29 U.S.C. § 659(c) to challenging

the reasonableness of the time for abatement contemplated

by the settlement. The union countered that the method of

abatement was relevant to determine if the time for abate-

ment was reasonable. Rejecting the union’s argument, the

ALJ issued an order on April 25, 1977, approving the

settlement agreement. Because the record indicated that

all abatement provisions, except for the preparation of the

manual, were intended to be accomplished immediately, the

ALJ reasoned that the union could not contend that the

abatement time was unreasonable.

Pursuant to 29 U.S.C. §661(i) and Commission Rule

9la, 29 C.F.R. § 2200.91a(d), Commissioner Cleary sua

sponte directed review by the Commission. The direction

for review requested briefs on two questions: whether the

ALJ erred in concluding that the union did not challenge

the reasonableness of the abatement period, and whether

the ALJ erred in concluding that the Commission lacked

jurisdiction to consider the union’s objections to the settle-

ment agreement. While the case was pending before the

Commission, the Secretary re-evaluated the settlement

agreement. After investigating the training program for

gas testers, he determined that the agreement did not fully

abate the hazard and was therefore contrary to public

policy. By letter from the Solicitor of Labor on July 31,

1978, the Secretary told the company of his decision and

notified Sun that he would inform the Commission of his

changed position and request the Commission to remand

the case for reconsideration. Accordingly, the Secretary

requested that the matter be remanded to the ALJ for an

opportunity to renegotiate the agreement or, alternatively,

for a hearing on the merits of the citation.

Only two of the three Commission members reviewed the

judge’s decision.’ Neither addressed the validity of the

settlement agreement. Rather, they were divided on the

disposition of the issues that had been directed for review.

Chairman Cleary took the position that the ALJ’s order

should be vacated and the case remanded for consideration

of the union’s objections to the settlement agreement, while

Commissioner Barnako would have affirmed because he

agreed with the ALJ that the union’s objections were be-

yond the scope of issues that the union could legitimately

present for adjudication. The Commission resolved the

impasse on April 27, 1979, by affirming the ALJ’s order

but accorded it only the precedential value of an unre-

viewed ALJ decision. These separate petitions for review

by the Secretary and the union followed.

Il.

As an initial matter, Sun challenges the jurisdiction of

this court, arguing that the split vote by which the Com-

mission affirmed the order of the ALJ did not constitute

official action by a quorum of the Commission and is, there-

fore, not a final, reviewable order. Our jurisdictional basis

for reviewing any Commission proceeding is 29 U.S.C. § 660,

which provides that the courts of appeals shall have juris-

diction to review “an order of the Commission” issued

pursuant to 29 U.S.C. § 659(c¢).

*The third commissioner, Commissioner Cottine, disqualified

himself from participation in the case because, prior to his ap-

pointment as a member of the Commission, he had represented

the union at the hearing before the ALJ.

The method by which the Commission may take official

action is prescribed by 29 U.S.C. § 661(e). Section 661(e)

provides that “two members of the Commission shall con-

stitute a quorum and official action can be taken only on

the affirmative vote of at least two members.” The Court

of Appeals for the Ninth Circuit has interpreted this sec-

tion to mean that an affirmance of an ALJ’s order by an

equally divided Commission is not reviewable by a court of

appeals because it is supported by the affirmative vote of

only one member, and is therefore not official action under

section 661(e). Williamette Iron & Steel Co. v. Secretary

of Labor, 604 F.2d 1177 (9th Cir. 1979), cert. denied, ——

US. , 100 S.Ct. 1337, 63 L.Ed.2d 776 (1979); Cox

Brothers, Inc. v. Secretary of Labor, 574 F.2d 465 (9th

Cir. 1978). See also Shaw Construction, Inc. v. OSHRC,

534 F.2d 1188, 1185-86 (5th Cir. 1976). We disagree with

this analysis and prefer the reasoning of the Court of

Appeals for the Fourth Circuit set forth in George Hyman

Construction Co. v. OSHRC, 582 F.2d 834 (4th Cir. 1978).

Speaking through Judge (now Chief Judge) Lay of the

Eighth (Circuit, the court reasoned that inasmuch as an

ALJ’s decision becomes the final reviewable order of the

Commission if no member directs review, see 29 U.S.C.

§ 661(i),* then a divided Commission vote, a fortiori, would

permit review. Responding to the quorum requirement

argument relied on in Willamette, Judge Lay noted:

A review of the legislative history of § 12 of the Act

[29 U.S.C. § 661] reveals no intent to limit judicial

review of the Commission’s decisions. The evident in-

tent in enacting §12 was to speed review of adminis-

‘This section provides that the ‘‘report of the [ALJ] shall be-

come the final order of the Commission within thirty days after

such report . . . unless within such period any Commission member

has directed that such report shall be reviewed by the Commis-

sion.’’ 29 U.S.C. § 661(i). Thus, if Commissioner Cleary had not

directed review in this case, the ALJ’s decision would have be-

come a final order of the Commission reviewable by this court.

trative citations and to ensure independent review of

those citations. . .

Allowing the ALJ’s decision to stand is analogous

to the case of split decision affirmances by a court of

appeals or the Supreme Court under which the lower

court decision is allowed to stand.

582 F.2d at 837 n.5 (citation to legislative history omitted).

In Bethlehem Steel Corp. v. OSHRC, 573 F.2d 157 (3d Cir.

1978), without having this issue directly raised, we con-

sidered the merits of a petition emanating from an equally

divided Commission. We now hold that such Commission

action constitutes a final order for purposes of review in

this court. Like the decision of an equally divided court,

the action of an equally divided Commission may be exam-

ined by the next link in the hierarchal chain of review.

As it relates to the matter before us we interpret the

quorum requirement of 29 U.S.C. §661(e) to mean that,

in the context of Commission review of an ALJ’s decision,

that decision will stand unless two Commission members

vote to the contrary.

Il.

We must next decide if the Commission, one of the named

respondents in these proceedings, has the authority to

participate as an active party in this court on petitions

for review of its decisions. The Department of Justice,

which represented the Commission by brief and at oral

argument, contends that the Commission does have the

authority and argues that this conclusion is supported by

the language of the statute as well as by the legislative

history and purposes underlying the Occupational Safety

and Health Act. This view has been endorsed by the Courts

of Appeals for the Fourth and Fifth Circuits. See Diamond

Roofing Co. v. OSHRC, 528 F.2d 645, 648 n.8 (Sth Cir.

1976); Brennan v. Gilles & Cottiag, Inc., 504 F.2d 1255,

1266-67 (4th Cir. 1974).

The Secretary advances a contrary view. He argues that

the Commission is only a nominal party before this court

because Congress did not contemplate that the Commission

would function as a litigator. Indeed, according to the

Secretary, the role of the Commission was envisioned as

exactly the opposite. The Court of Appeals for the Ninth

Cireuit supports his view. Dale M. Madden Construction,

Inc. v. Hodgson, 502 F.2d 278, 280-81 (9th Cir. 1974).

In the context of the Longshoremen’s and Harbor Work-

ers’ Compensation Act, 33 U.S.C. §§ 901-950, we faced a

similar issue concerning the status of the Benefits Review

Board. In determining that the Board was only a nominal

respondent, we said:

[T |he Benefits Review Board performs a review func-

tion which prior to the 1972 amendments was per-

formed by the district courts. Certainly those courts

had no duty or interest in defending their actions on

appeal. There appears to be no reason why the Benefits

Review Board should be thought to have such a duty

or interest. At best, it is a nominal respondent, and

we have no concern that it will disregard a mandate

in a case in which it is not so named. The motion of

the Benefits Review Board to be dismissed as a re-

spondent will be granted.

Nacirema Operating Co., Inc. v. Benefits Review Board,

538 F.2d 73, 75 (3d Cir. 1976).

In addition to relying on the Diamond Roofing and

Brennan cases, the Commission isolates two statements

from the legislative history of the Act made by Senator

Javits, who sponsored the amendment creating the Com-

mission, in which he compared the Review Commission to

the Federal Trade Commission, a body that does have the

10a

authority to defend its orders in the courts of appeals.

See FTC v, Dean Foods Co., 384 U.S. 597, 607, 86 S.Ct.

1738, 1744, 16 L.Ed.2d 802 (1966).° Senator Javits stated:

{The Review Commission] will have the same type of

authority that the Federal Trade Commission exercises

.... It is the traditional Federal Trade Commission

type of procedure.

... The analogies between the qualifications of mem-

bers and the authority of the Commission, and so forth,

would be with the Federal Trade Commission.°

The Secretary contends that Senator Javits’ analogy

between the Review Commission and the FTC refers only

to the FTC’s role as an adjudicator, and that a reading of

the surrounding text shows that the sponsor of the amend-

ment clearly intended that the Review Commission function

only as an adjudicative body and not as an administrative

agency charged with the role of defending its decisions in

the courts:

It [the amendment] creates a review commission

which will deal with the complaints referred to it by

the Secretary and which will have the same type of

authority that the Federal Trade Commission exer-

cises: The power to issue a cease and desist order

°In Dean Foods the Supreme Court remarked: ‘‘There is no

explicit statutory authority for the {Federal Trade] Commission

to appear in judicial review proceedings, but no one has contended

it cannot appear in the courts of appeals to defend its orders. .. .

Such “ancillary powers have always been treated as essential to

the effective discharge of the Commission’s responsibilities.’’ 384

U.S. at 607, 86 S.Ct. at 1744.

* Subcomm. on Labor of the Senate Comm. on Labor and Public

Welfare, 92d Cong., Ist Sess., Legislative History of the Occupa-

tional Safety and Health Act of 1970 at 462, 465 (Comm. Print

1971) [hereinafter cited as Legislative History].

lla

which, if challenged within a given period of time,

can be reviewed by the Circuit Court of Appeals. Its

operation is stayed if the Cireuit Court of Appeals so

orders. If the Secretary desires to enforce the order

through the contempt power, similarly, he can go into

court in order to get the Circuit Court of Appea!s to

enter an order for the specific purpose, and then that

order can be enforced through the contempt powers

of the Circuit Court of Appeals. It is the traditional

Federal Trade Commission type of procedure.

The panel would be three members appointed by the

President for a specific term—2, 4, or 6 years. A term

would normally be for 6 years. The analogies between

the qualifications of members and the authority of the

Commission, and so forth, would be with the Federal

Trade Commission.’

We are satisfied that the Secretary’s position is the

correct interpretation of the legislative intent. For example,

Senator Javits argued during the floor debate:

One other point which is critically important: What

is the difference between a board to establish the

standards and a commission to enforce them, and why,

in my judgment, is it more important to have an

autonomous and independent commission even than to

have some form of board to promulgate certain

standards?

The reason is this: The enforcement of orders is an

adjudicatory act, whereas the establishment of stand-

ards is a deliberative act. There are serious penalties

involved for the individual enterprise. It is a case by

case proposition. It does not apply across the board

to every member of industry. One particular rubber

" Legislative History, supra, note 6, at 462, 465.

12a

company, for example, can be materially disadvantaged

by a finding against it in a given case, whereas estab-

lished standards are an across-the-board proposition.

It is entirely practical to be rather deliberate about

that in hearings before the Secretary of Labor or

officials of that Department. They can go into the thing

deeply and if they want to contest it there is plenty of

opportunity to go into court and contest the rule. But

enforcement of an order or the making of an order is

an adjudicatory action.*

For several additional reasons, we are persuaded that a

detailed analysis of the legislative history further sustains

the Secretary’s position.

First, we are impressed that the very interpretation

urged upon this court by the Commission was contained

in two earlier OSHA bills that were not enacted by Con-

gress. The Javits bill, S. 2788, ard the Ayres bill, H.R.

13373, sought to establish a separate national board with

both rule making and adjudicatory authority.’ Both bills

expressly provided that when the Secretary appealed from

a board order, the board was entitled to be represented on

appeal by the Department of Justice:

Kixeept as provided in section 518(a) of title 28, United

States Code, relating to litigation before the Supreme

Court and the Court of Claims, the Solicitor of Labor

may appear for and represent the Secretary and the

Board in any civil litigation brought under this Act

but all such litigation shall be subject to the direction

and control of the Attorney General: Provided, That

in any appeal of any action of the Board brought by

® Legislative History, supra, note 6, at 464.

® Legislative History, supra, note 6, at 36-49, 684-97.

l3a

the Secretary ... , the Solicitor shall represent the

Secretary; the Attorney General shall represent the

Board in such proceedings.

Legislative History, supra note 6, at 51, 699. Both bills

died in their respective committee chambers. The present

Act can be traced to 8. 2193, the Williams bill, reported

by the Senate Committee on Labor and Public Welfare

(now the Human Resources Committee) and to H.R. 16785,

the Daniels bill, reported by the House Committee on Edu-

cation and Labor. These bills vested in the Secretary of

Labor the authority to investigate, prosecute, and adjudi-

cate employer violations, as well as the power to promul-

gate standards.” The Williams bill was amended on the

Senate floor on the motion of Senator Javits to provide

for the existence of an independent adjudicatory tribunal,

the Review Commission, to hear disputes with respect to

citations issued by the Secretary of Labor. The Williams

bill, including the Javits amendment, was _ ultimately

enacted. Pub.L.No. 91-596, 84 Stat. 1590 (1970).

Certain important conclusions concerning the nature of

the Review Commission can be drawn by comparing the

Javits amendment to the Williams bill with S. 2788, the

earlier Javits-sponsored bill. Unlike the board proposed

in S. 2788, the Review Commission that was established by

the Javits amendment to the Williams bill was assigned no

rulemaking authority. As Senator Javits stressed, the

Review Commission was designed to perform a single

function:

[It is to be a]jutonomous and independent. ... [I]t

is expressly set forth to be an independent commission,

established for the purpose of dealing with these com-

plaints and passing on them.

l4a

... [WJe have an established practice of quasi-judicial

character and a separation, a degree of autonomy in

the commission which distinguishes it from authorities

who have done [the] investigating, the [reporting],

and so forth, in respect of the original complaint of

the violation.”

The Review Commission’s mandate, as Senator Javits pro-

posed it, was therefore strictly limited to adjudication.

Moreover, neither Senator Javits’ original bill nor his

amendment to the Williams bill ever contemplated Com-

mission representation in judicial proceedings when the

Secretary of Labor was not the appealing party. The clear

implication to be drawn is that only the Secretary would

have authority to defend agency decisions. Significantly,

the Javits amendment to the Williams bill did not authorize

the Department of Justice to represent the Commission in

judicial proceedings, even when the Secretary was the party

appealing from a Commission decision. This omission is

critical since, as already noted, Senator Javits specifically

provided in his earlier bill that the board be afforded such

representation.

Second, an examination of the floor debates and the

conference committee comments also supports the Secre-

tary’s position. In reporting the conference committee ac-

tion to the Senate, Senator Prouty observed:

The original bills introduced in both bodies provided

that the Secretary of Labor would promulgate all

health and safety standards and would also be respon-

sible for deciding appeals from employers who con-

tested violations found or penalties assessed by in-

spectors employed by the Department of Labor.

The conference report, Mr. President, adopts pro-

visions contained in both the House- and Senate-passed

" Legislative History, supra note 6, at 462, 464.

15a

bills establishing an independent Commission to review

all contested cases involving violations found or penal-

ties assessed by the Secretary of Labor. The Commis-

sion’s order in turn is subject to judicial review in an

appropriate U. 8S. court of appeals.”

Although the Review Commission vigorously asserted at

oral argument that it is a major policy-making body under

OSHA, the fact is that the Act confers all rulemaking and

policymaking responsibilities on the Secretary and not

the Commission."* The Secretary possesses authority to

promulgate occupational safety and health standards, 29

U.S.C. § 655, to conduct inspections and investigations, id.

§ 657, to issue citations, id. § 658, to propose penalties, td.

§ 659(a), to prescribe abatement periods, id. § 658(a), to

promulgate regulations, id. §657(g)(2), and to perform

the day-to-day functions important to the administration

of the Act, its programs, and policies. By contrast, the

Commission's jurisdiction is triggered only when a cited

employer files a notice of contest to a citation issued by the

Secretary or when an employee challenges an abatement

2 Legislative History, supra note 6, at 1149. See also id. at 1147

(remarks of Senator Williams) (‘‘This provision was designed to

separate the adjudication of violations from the other functions

performed by the Secretary of Labor’’) ; id, at 1151 (remarks of

Senator Javits) (‘‘the bill provides for an independent three-man

commission to adjudicate enforcement cases’’) ; id. at 1212 (‘‘the

establishment of an independent occupational safety and health

appeals commission to handle administrative adjudications’’) (re-

marks of Rep. Steiger).

By rulemaking authority, we refer only to the power to

promulgate standards imposing substantive occupational safety

and health obligations on employers, and not to the power to de-

vise procedural rules for administrative hearings under the Act.

The Commision is given authority to promulgate procedural rules

for hearings. See 29 U.S.C. § 661(f).

léa

date as unreasonable. Its sole function is then to issue

orders, based on findings of fact, that affirm, modify, or

vacate the Secretary’s citations and proposed penalties, to

assess penalties, or to direct other appropriate relief. See

29 U.S.C. §§ 659(c), 666(i)."

Moreover, the Act grants the Secretary exclusive author-

ity to enforce Commission decisions in the courts of ap-

peals. 29 U.S.C. § 660(b). Section 14 of the Act authorizes

only the Secretary to conduct OSHA civil litigation, subject

to the direction and control of the Attorney General. 29

U.S.C. § 663. The Commission is not so entitled. Nor can

it claim to participate as a party in appellate proceedings

by virtue of being “adversely affected or aggrieved” by its

own decision. See 29 U.S.C. § 660(a). At every turn, then,

the statute denies the Commission the authority to appear

in the courts of appeals.

We therefore conclude that the Review Commission was

designed strictly as an independent adjudicator, with no

rulemaking authority other than for procedural rules for

hearings, no direct policy role in administering the Act,

and accordingly, no right to independent representation in

judicial review procedures before this court.

IV.

Having determined that the Review Commission is an

adjudicatory tribunal, we must now meet the Secretary’s

contention that the Commission has no jurisdiction to re-

*For purposes of proceedings before it, the Commission is au-

thorized, upon application of any party to the proceeding, to

subpoena witnesses or testimony and, if necessary, to apply to

the appropriate United States district court for a directing order.

See 29 U.S.C. §§ 661(g), (h) (incorporating by reference 29 U.S.C.

§ 161).

17a

view or modify settlement agreements. The Secretary

argues that OSHA delegates to the Commission no specific

authority to review settlements, as has been delegated to

agencies by other statutes. For example, under the Federal

Mine Safety and Health Amendments Act of 1977, “[nJo

proposed penalty, which has been contested before the

[Federal Mine Safety and Health Review] Commission

... Shall be compromised, mitigated, or settled except with

the approval of the Commission.” 30 U.S.C. § 820(k). The

Longshoremen’s and Harbor Workers’ Compensation Act

specifically provides when settlements may be approved by

the Secretary. 33 U.S.C. § 908(i)(B). Under the Antitrust

Procedures and Penalties Act, Congress described in detail

the procedures district courts should follow in determining

whether a settlement comports with the public interest.

See 15 U.S.C. §§ 16(a)-16(i).

But the Secretary’s most forceful argument is based on

the legislative schema of OSHA under which a self-

executing order of the Secretary automatically becomes

final unless the employer or the employees’ representative

contests it. Section 10(c) of the Act, 29 U.S.C. § 659(c),

provides that if either the employer or the employees’

representative files a notice of contest to a citation or

proposed penalty, the notice of contest shall be forwarded

to the Commission, which shall afford an opportunity for a

hearing and thereafter “issue an order, based on findings

of fact, affirming, modifying or vacating the Secretary’s

citation or proposed penalty, or directing other appro-

priate relief.” The Act explicitly provides, however, that

citations and abatement dates proposed by the Secretary

shall become enforceable final orders without Commission

action if neither the cited employer nor the employees’

representative files a notice of contest. Section 10(a) of the

Act, 29 U.S.C. § 659(a), provides that if an employer fails

to file a notice of contest within fifteen working days of

receipt of a citation or notice of penalty from the Secretary,

the citation or penalty “as proposed, shall be deemed a

18a

final order of the Commission and not subject to review

by any court or agency.” Section 10(b), 29 U.S.C. § 659(b),

outlines an identical finality provision for notices issued

by the Secretary alleging that an employer has failed to

correct a violation within the abatement period. The Sec-

retary thus argues that these sections, 29 U.S.C. §§ 659(a),

(b), and (c), establish two basic points: that the Review

Commission has jurisdiction only over cases in which a

notice of contest is filed, and that the Commission’s only

statutory function is to adjudicate issues raised by a notice

of contest.

We are prepared to accept most of the Secretary’s argu-

ments because we agree that in the absence of a contest,

neither the Review Commission nor the ALJ has juris-

diction to review a settlement agreement entered into be-

tween the Secretary and an employer. Moreover, we agree

that even after the employer files a notice of contest, if no

employee files a notice or has not acquired party status

under 29 C.F.R. § 2200.20, then the Commission would lack

jurisdiction to review any settlement entered into between

the Secretary and the employer. If an employee formally

expresses an interest in the proceedings, however, we

believe that the Commission would have jurisdiction to

review the settlement in order to protect that interest.

The Act provides that the Commission is required to

afford an opportunity for a hearing upon the happening

of either of two events: (1) if the employer notifies the

Secretary that he intends to contest a citation, or (2) if

“any employee or representative of employees files a notice

with the Secretary alleging that the period of time fixed

in the citation for the abatement of the violation is un-

reasonable.” 29 U.S.C. §659(c). If settlement is reached

after either of these events occurs, but prior to the sched-

uled hearing, the ALJ would have jurisdiction to review

the settlement, but only for the limited purpose of enter-

taining objections from the employee or employees’ repre-

19a

sentative that the abatement period proposed by the settle-

ment is unreasonable.

It follows, then, that if the ALJ had jurisdiction in this

case, the Review Commission would have jurisdiction for

this same limited purpose—to review the settlement as

provided in 29 C.F.R. §§ 2200.91 and 2200.91a. Accordingly,

we hold that if no employer notice of contest has been

filed, or if an employee or bis representative has not filed

a notice to challenge the abatement period prior to the

time when a settlement is entered into between the Secre-

tary and the cited employer, then the Commission has no

jurisdiction to review the settlement; but once either notice

has been properly filed, the ALJ and, later, the Review

Commission would have jurisdiction to review the settle-

ment to a limited extent, to-wit, to determine whether the

time fixed in the citation for the abatement of the violation

is unreasonbale.

Our view, of necessity, rejects the argument advanced

by Sun that the union in this case was not a proper party

in the Commission proceedings because it failed to file a

notice with the Secretary within fifteen days of the citation

as required by section 10(c) of the Act, 29 U.S.C. § 659(c).**

If an employer notifies the Secretary that he intends to con-

test a citation issued under section 658(a) of this title or notifica-

tion issued under subsection (a) or (b) of this section, or if, within

fifteen working days of the issuance of a citation under section

658(a) of this title, any employee or representative of employees

files a notice with the Secretary alleging that the period of time

fixed in the citation for the abatement of the violation is unreason-

able, the Secretary shall immediately advise the Commission of

such notification, and the Commission shall afford an opportunity

for a hearing (in accordance with section 554 of Title 5 but with-

out regard to subsection (a) (3) of such section), The Commission

shall thereafter issue an order, based on findings of fact, affirming,

(continued on next page)

20a

We do not read section 10(¢) so grudgingly. If the employer

files a notice of contest, as happened in this case, then the

union is not required to file its notice within fifteen days

of the citation because the employer’s notice of contest has

effectively triggered a hearing. Once the hearing mechanism

is instituted, affected employees may elect to participate

as parties at any time prior to the commencement of the

hearing before the ALJ as provided by 29 C.F.R. § 2200.-

20." This rule of procedure was duly promulgated by the

Commission under authority granted by 29 U.S.C. § 659(c¢).

The fifteen-day time limit for employee filing under section

10(c) is operative only when the employer has not contested

the citation and a hearing is desired by the employee or his

modifying, or vacating the Secretary’s citation or proposed pen-

alty, or directing other appropriate relief, and such order shall

become final thirty days after its issuance. Upon a showing by an

employer of a good faith effort to comply with the abatement re-

quirements of a citation, and that abatement has not been com-

pleted because of factors beyond his reasonable control, the Sec-

retary, after an opportunity for a hearing as provided in this

subsection, shall issue an order affirming or modifying the abate-

ment requirements in such citation. The rules of procedure pre-

scribed by the Commission shall provide affected employees or

representatives of affected employees an opportunity to participate

as parties to hearings under this subsection.

29 U.S.C. § 659(¢) (emphasis added).

16 The regulation provides:

§ 2200.20 Party status.

(a) Affected employees may elect to participate as parties

at any time before the commencement of the hearing before

the judge, unless, for good cause shown, the Commission or

the judge allows such election at a later time. See also

§ 2200.21.

(b) Where a notice of contest is filed by an employee or

by an authorized employee representative with respect to

the reasonableness of the period for abatement of a violation,

the employer charged with the responsibility of abating the

violation may elect party status at any time before the com-

mencement of the hearing before the judge. See also § 2200.21.

2la

representative. Under these circumstances, the time limit

operates as a fail-safe mechanism to insure employees the

opportunity for a hearing.

Under our interpretation we also reject the union’s con-

tention that affected employees have a right to be heard

on matters other than the reasonableness of the abatement

period. The Senate Committee Report makes clear that

section 10(c) “gives an employee or representative of em-

ployees a right, whenever he believes that the period of

time provided in a citation for abatement of a violation is

unreasonably long, to challenge the citation on that

ground.” ** Moreover, the legislative history discloses no

support for the union’s position. Indeed, any evidence of

congressional intent on this point contradicts the union’s

assertion that it is entitled to be heard on matters other

than the abatement period.** We therefore conclude that

any cliallenge advanced by an employee is limited to an

attack on the reasonableness of the abatement period.

We now turn to the final question for decision which,

because of the particular facts in this case, controls the

disposition of these appeals. We must determine the extent

of the Secretary’s ex parte authority to withdraw from a

settlement agreement he has entered into with a cited em-

ployer. Sun argues that there is no justification to permit

the Secretary this authority. It argues that the Secretary

has disclosed no newly discovered evidence obtained after

the bargain was struck to support its present position that

17 Legislative History, supra note 6; at 155 (emphasis added).

1’ For example, Senator Williams succinctly defined the right of

employees to appeal from the issuances of a citation and proposed

penalty: ‘‘Employees are also given appeal rights when they be-

lieve that an unreasonably long period of time has been allowed

for abatement of a violation.’’ Legislative History, supra note 6,

at 414 (emphasis added).

22a

the agreement does not protect the public interest; nor is

there evidence, or even an assertion, that the procedures

implemented by Sun in reliance on the agreement have been

ineffective. The company contends further that this court

should not disregard the substantial investment Sun has

made to implement the agreement.

The Secretary responds that it is his duty to withdraw

from this settlement because he has re-evaluated the infor-

mation supporting the settlement and has considered re-

ports from a subsequent inspection of Sun’s refinery and

other information,’® and has determined that the settlement

does not adequately protect the public interest. The Secre-

tary’s justification for his withdrawal from the settlement

was expressed in a letter to Sun from the Solicitor of Labor

on July 31, 1978, when the proceedings were still active

before the Commission: “In sum, the Department of Labor

has concluded that both the settlement entered into by the

Philadelphia Regional Solicitor and Sun Oil and Sun Oil’s

implementation of that settlement provide for less than

adequate gas testing at the worksite and therefore fail to

abate the hazard cited.” *°

The chronology of events is important. The settlement

agreement was reached on January 10, 1977, three months

before the ALJ’s decision approving the settlement on

April 25, 1977. The direction for review by the Commission

was ordered on May 24, 1977. On July 31, 1978, the Secre-

tary attempted to withdraw from the agreement; and the

The Secretary also considered a labor arbitration decision in

which a provision contained in Sun’s collective bargaining agree-

ment with Local 8-901 was interpreted to preclude dock personnel

from acting as gas testers for safety reasons. The arbitrator’s

award in favor of the union was ordered enforced by the district

eourt. See Sun Ou Co. v. Local 8-901, Oil, Chemical, and Atomic

Workers’ International Union, 421 F Supp. 1376 (E.D.Pa. 1976).

2° Brief for Secretary of Labor in No. 79-1822. Addendum A

at 4.

23a

Commission’s divided-vote affirmance followed on April 27,

1979. Thus, the withdrawal was attempted prior to the

decision of the Review Commission.

We are persuaded that, because of the Secretary’s unique

role in effectuating the purposes of OSHA, he has the power

to withdraw from any settlement agreement prior to the

entry of a final decision by the Commission. As the Supreme

Court has noted, the Act creates public rights that are to

be protected by the Secretary through goveri.ment enforce-

ment in the context of a complex administrative schema.

Atlas Roofing Co. v. OSHRC, 430 U.S. 442, 444-47, 97 S.Ct.

1261, 1263-65, 51 L.Ed.2d 464 (1977). “Enforcement of the

Act is the Secretary’s responsibility.” Dale M. Madden

Construction, Inc. v. Hodgson, 502 F.2d 278, 280 (9th Cir.

1974). He is the Act’s prosecutor. Atlas Roofing, 430 U.S.

at 445-47, 97 S.Ct. at 1264-65. Necessarily included within

these prosecutorial powers is the discretion to settle cita-

tions issued against employers and to compromise, mitigate

or settle any penalty assessed under the Act. 29 U.S.C.

§ 655(e). When entering into settlement agreements, the

Secretary seeks to implement the public policy of the Act

which is to “assure so far as possible every working man

and woman in the Nation safe and healthful working con-

ditions.” 29 U.S.C. §651(b). Similarly, re-evaluation of a

settlement may indicate to the Secretary that the agree-

ment does not effectuate that purpose.

Permitting the Secretary to withdraw from a settlement

agreement prior to final Commission action, we think, com-

ports with the congressional mandate that the Secretary be

entrusted with the basic responsibilities for administering

the Act. As Senator Williams stated in the floor debate,

there was a conscious decision to rest this responsibility in

the Secretary and not in a separate board: “(T]he majority

of our committee wisely concluded that the Secretary of

Labor ought to be assigned the responsibility for promul-

gating and enforcing the standards under this act, subject

24a

to those provisions of the Administrative Procedure Act

which insure that considerations of due process are fully

satisfied.” ** In interpreting the Act, courts must always

heed the legislative purpose to insure that there will be

coherent administration of the Act. We must heed Senator

Williams’ admonition to avoid a “diffusion of responsibility

and accountability as to seriously undermine the effective-

ness of this program.” ”

Although we conclude that the Secretary does have the

power to withdraw from a settlement prior to final Com-

mission action, dictates of fairness and justice require that

all parties be placed in the position of status quo ante the

issuance of the citation. A new inspection must be conducted

pursuant to 29 U.S.C. §657(a), and if circumstances war-

rant, the Secretary must issue a new citation pursuant to

29 U.S.C. § 658. Thus, neither the employer nor any affected

employees will be prejudiced by the unilateral action of the

Secretary. Any expenditures or implementation by the

employer of the aborted agreement will be reflected in its

worksite and therefore capable of being considered ab initio

by the compliance inspector. Moreover, by returning the

parties to their original position, the employer will not be

required to defend stale citations under conditions in which

circumstances may have changed between the time of the

issuance of the citation and the withdrawal from the set-

tlement.

Accordingly, we conclude that based on the important

role placed on the Secretary by congressional mandate to

protect the public interest in the safety of the work-place,

the Secretary may withdraw from a settlement agreement

prior to the entry of a final order by the Commission.

21 Legislative History, supra note 6, at 417.

22 Td.

25a

Vil.

The Secretary’s petition for review in No. 79-1822 will

be granted and the cause remanded to the Commission

with a direction that the Secretary be given sixty days to

notify the Commission whether he elects to withdraw from

the settlement or to proceed in some other manner in ac-

cordance with this opinion.** The appearance of the Depart-

ment of Justice as counsel for the Commission will be

stricken and the Commission will be removed as a party

from these proceedings. The union’s petition for review

at No. 79-1828 will be denied.

Lovis H. Potxak, District Judge, concurring in part and

dissenting in part.

With the bulk of the court’s exposition of the Occupa-

tional Safety and Health Act, as it applies to the facts of

this tortuous administrative proceeding, I am in accord:

I agree that the objections filed by Oil Workers Local 8-901

to the settlement agreement entered into by the Secretary

of Labor and Sun Oil vested in the administrative law

judge, and thereafter in the Occupational Safety and Health

Review Commission, jurisdiction to review the settlement

agreement. And I agree that the Commission’s affirmance

—by the divided vote of the two participating Commission-

ers—of the administrative law judge’s rejection of the Oil

Workers’ challenge to the settlement agreement, was a

Commission decision appealable to this court. I also agree

that the Commission is only a nominal party to this appeal,

having no standing to appear here to defend its decision.

Moreover, I agree that prior to final Commission action the

Secretary had authority to withdraw from a settlement

agreement which he had found, on reconsideration, would

not sufficiently promote the purposes of the underlying

legislation.

*°In view of our analysis, we perforce deny Sun’s motion to

strike the Secretary’s brief.

26a

But I disagree with the court's rejection of “the union’s

contention that affected employees have a right to be heard

[in employer-initiated proceedings before an administrative

law judge and the Commission] on matters other than the

reasonableness of the abatement period.” P. 1186. Since the

court’s position on this issue can be expected to have sig-

nificant impact on the scope, and hence the content, of

Commission adjudication, I think it appropriate to explain

my views on this issue and on certain closely related issues.

Section 10(c) of the Act is the key to the entitlement of

employees, or of a union representing employees, to par-

ticipate in hearings before the Commission. Section 10(c)

provides in its entirety as follows:

If an employer notifies the Secretary that he intends

to contest a citation issued under section 658(a) of this

title or notification issued under subsection (a) or (b)

of this section, or if, within fifteen working days of

the issuance of a citation under section 658(a) of this

title, any employee or representative of employees files

a notice with the Secretary alleging that the period

of time fixed in the citation for the abatement of the

violation is unreasonable, the Secretary shall imme-

diately advise the Commission of such notification, and

the Commission shall afford an opportunity for a

hearing (in accordance with Section 554 of Title 5 but

without regard to subsection (a)(3) of such section).

The Commission shall thereafter issue an order, based

on findings of fact, affirming, modifying, or vacating

the Secretary’s citation or proposed penalty, or direct-

ing other appropriate relief, and such order shall be-

come final thirty days after its issuance. Upon a show-

ing by an employer of a good faith effort to comply

with the abatement requirements of a citation, and

that abatement has not been completed because of

27a

factors beyond his reasonable control, the Secretary,

after an opportunity for a hearing as provided in this

subsection, shall issue an order affirming or modifying

the abatement requirements in such citation. The rules

of procedure prescribed by the Commission shall pro-

vide affected employees or representatives of affected

employees an opportunity to participate as parties to

hearings under this subsection.

29 U.S.C. § 659(¢)

It is apparent that the first sentence of Section 10(c)

contemplates two types of hearings. The first type of hear-

ing contemplated by Section 10(c)’s first sentence is one

triggered by an employer who notifies the Secretary of an

intention to contest a citation; in that hearing, employees

(or a union thereof) are authorized “to participate as

parties” by virtue of the last sentence of Section 10(c). The

second type of hearing contemplated by Section 10(c)’s

first sentence is one triggered by employees (or a union

thereof) who notify the Secretary of their contention “that

the period of time fixed in the citation for the abatement

of the violation is unreasonable.”

Manifestly, the second type of hearing—that initiated

by employees (or a union)—is tied firmly to the limited

agenda set by the statute: the reasonableness of the abate-

ment period.’ International Union, United Auto, etc., v.

United States Occupational Safety & Health Review Comm.,

557 F.2d 607 (7th Cir. 1977). But nothing in the text of

the statute confines employee/union participation “as

parties” in the first type of hearing—that initiated by an

employer contesting a citation—to questions relating to

‘Indeed, even if the employer elects, pursuant to Commission

Rule 20, 29 C.F.R. § 2200.20(b), to participate in this form of

employee-initiated contest, this intervention cannot broaden the

relatively narrow inquiry which is the focus of this species of

Commission hearing.

28a

the reasonableness of the abatement period.’ And, indeed,

such a limitation would seem anomalous: Typically, an

employer contests the Secretary’s citation because the em-

ployer disputes the Secretary’s finding of a violation—a

finding which in many cases flows from an employee or

union complaint which the Secretary is by statute required

to inquire into, And it would, indeed, be odd if the words

of Section 10(¢c) precluded employees from pursuing at the

adjudicative phase of OSHA enforcement the interests the

Act encourages them to monitor at the investigative phase.*

*The fact that the Act specifically provides for employee con-

tests on the reasonableness of the abatement period, does not, in

itself, suggest any constraint on the interest of employees in re-

gard to the existence of a violation. The Act contemplates that

the Secretary’s citation be in two parts: The citation must (1)

describe with particularity the nature of the violation and, (2)

fix a reasonable period of abatement. 29 U.S.C. § 658(a), Em-

ployees cannot themselves be cited as violators of the Act, Atlantic

& Gulf Stevedores v. OSHRC, 534 F.2d 541 (3d Cir. 1976), and

it is hardeto imagine a situation where employees would wish to

object to \. Secretary's finding of a violation. (It is of course

clear that employees may not invoke the Commission's jurisdic-

tion over the Secretary’s finding of a violation.) Thus, it is only

in regard to the length of the abatement period that the Secre-

tary’s views, as formally announced in his citation, might, in

some instances, be perceived as adverse to the interest of em-

ployees. But this does not mean that employees would not have a

significant interest in intervening in an employer initiated con-

test in order (1) to support the Secretary’s finding of a violation,

and (2) to encourage the adoption of an effective remedial plan.

* The provisions for employee input into the enforcement process

which are contained in the Act, apparently comprise a cohesively

structured and comprehensive legislative plan for employee par-

ticipation, and are not the product of haphazard drafting. As re-

ferred to the Subcommittee on Labor, S. 2193 made no allowance

for employee input. That Subcommittee added provisions for the

full measure of employee participation ultimately incorporated in

the final bill :

Employees who believe tha* a violation exists may request an

inspection by giving notice to the Secretary. If the Secretary de-

(continued on next page)

29a

The anomalous limitation not expressed in the text of

Section 10(¢) is supplied, so the court insists, by the report

of the Senate Committee on Labor and Public Welfare.

It is of course true, as the court notes, that the Commit-

tee’s report recites that Section 10(¢) “gives an employee

or representative of employees a right, whenever he believes

that the period of time provided in a citation for abatement

of a violation is unreasonably long, to challenge the citation

on that ground.” But the report says more. The entire

termines that there are reasonable grounds to believe a violation

exists, he must conduct such inspection as soon as practicable. 29

U.S.C, § 657(f) (1). If he finds no reasonable grounds for an in-

spection, he must notify the employees in writing. Jd. Provision

is made to allow a representative of the employees to accompany

the Secretary or his authorized representative during the physical

inspection of the workplace. 29 U.S.C. § 657(e). If, upon inspec-

tion, the Secretary believes that an employer has violated the Act,

‘the shall with reasonable promptness issue a citation to the em-

ployer.” 29 U.S.C. § 658(a). In those instances in which the See-

retary finds no violation, the Act provides that the Secretary shall,

by regulation, establish procedures for the informal review of his

decision, and he must furnish to the employees requesting review

a written statement of his reason for the final disposition of the

ease. 29 U.S.C. § 657(f) (2).

Thus, ‘‘while guarding against frivolous complaints,’’ Legisla-

tive History, infra note 4, at 432 (Remarks of Senator Williams),

by channeling employee grievances through the impartial office of

the Secretary, the Act allows employees to translate their meri-

torious concerns for safety into employer citations. Indeed, in

cases in which the employer does not contest the citation, the em-

ployees will thus have brought their grievance to the only fruition

which the Act contemplates—the final determination of a viola-

tion, a schedule for abatement, and,the assessment of a penalty.

29 U.S.C. § 659(a). The court holds, however, that the employees’

interest in and contributions to the enforcement process, so elab-

orately protected through the initial stages, abruptly ceases at the

moment the employer opposes their efforts by filing a notice of

contest. It is my view that by providing employees the right to

elect party status, Congress intended to ensure that the employees’

central role in the enforcement of the Act would continue in the

adjudicative arena.

30a

relevant passage, including the language relied on by the

court, shows the Committee’s understanding that an em-

ployee/union challenge to the length of the proposed abate-

ment period is but one of two modes of employee/union

participation in Commission proceedings—two distinct

modes linked by the conjunctive “also.”

If the employer decides to contest a citation or noti-

fication, or proposed assessment of penalty, the Sec-

retary must afford an opportunity for a formal hearing

under the Administrative Procedure Act. Based upon

the hearing record the Secretary shall issue an order

confirming, denying, or modifying the citation, notifi-

cation, or proposed penalty assessment. The procedural

rules prescribed by the Secretary for the conduct of

such hearing must make provision for affected em-

ployees or other representatives to participate as

parties.

Section 10(¢) also gives an employee or representa-

tive of employees a right, whenever he believes that

the period of time provided in a citation for abatement

of a violation is unreasonably long, to challenge the

citation on that ground. Such challenges must be filed

within 15 days of the issuance of the citation, and an

opportunity for a hearing must be provided in similar

fashion to hearings when an employer contests. The

employer is to be given an opportunity to participate

as a party.’ (Hmphasis added.)

*Subcomm. on Labor of the Senate Comm. on Labor and Public

Welfare, 92d Cong., Ist Sess., Legislative History of the Oceupa-

tional Safety and Health Act of 1970 at 154-155 (Comm. Print

1971) [herein cited as Legislative History|. The bill referred from

committee, which is addressed in the above passage, contemplated

hearings within the Department of Labor; hence, the allusion in

the excerpt to hearings before the Secretary. As detailed in the

opinion of the court, however, the enforcement scheme was modi-

fied on the Senate floor to provide for review before an independ-

ent administrative body in the form of the Review Commission.

(continued on next page)

3la

This very litigation illustrates the anomaly generated

by confining the employee/union role in employer-initiated

proceedings to a challenge to the reasonableness of the

abatement period. Local 8-901’s difficulty with the remedy

incorporated in the settlement agreement was not that its

effective date was remote. 'l'o the contrary, the settlement

agreement contemplated that the remedy would go into

effect at once. The problem, as Local 8-901 saw it, was

that the remedy agreed upon by Sun and the Secretary

would be totally inefficacious—in that monitoring potenfial

fire hazards at the refinery would be placed in the han@s of

employees whom the union deemed to be inadequately

trained to fulfill their critically important tasks. By not

permitting the union to pursue these issues, the adminis-

trative law judge seems to have guaranteed that the hear-

ing on the settlement agreement would be an antiseptic

ritual leading to perfunctory approval. At all events, the

very shortcomings in the agreed remedy which the admin-

istrative law judge would not let the union probe were those

which led the Secretary, more than a year later, to with-

draw his assent from the settlement agreement.

The court appears to acknowledge that Local 8-901's

timely request for party status conferred on the adminis-

trative law judge, and ultimately on the Commission itself,

jurisdiction to entertain the union’s objections on all mat-

ters with respect to which it had on interest under the Act.

My difference with the courts is that I take a more spacious

view of the interest assertable by the union in an employer-

initiated proceeding. Before the administrative law judge,

the union objected that the settlement proposed by Sun

and the Secretary was inconsistent with the purposes of

the Act in that it would fail to abate the cited condition.

Apart from the substitution of the Review Commission for the

Secretary, procedures set forth in the final Act are, in all rele-

vant respects, identical to those which are the subject of this

Committee Report.

32a

Since I find that this was a subject well within the scope

of the union’s permissible concerns, I would hold that the

union was entitled not only to have its objections considered,

but also to support those objections through the presenta-

tion of evidence in a hearing before the administrative law

judge.°

* This approach comports with procedures applied to the settle-

ment of cases before the National Labor Relations Board. See

Marine Engineers Beneficial Assn. v. NLRB, 202 F.2d 546, 549

(3d Cir. 1953), cert. denied, 346 U.S. 819, 74 S.Ct. 32, 98 L.Ed.

345; Terminal Freight Cooperative Ass’n v. NLRB, 447 F.2d 1099,

1011 (3d Cir. 1971), cert. denied, 409 U.S. 1063, 93 S.Ct. 553, 34

L.Ed.2d 516 (1972); Leeds & Northrup Company v. NLRB, 357

F.2d 527 (3d Cir. 1966). In Marine Engineers, this court grappled

with the then unfamiliar role of the charging party in Labor

Board proceedings:

The difficulty in this case comes because in changing ti:.es

and the evolution of administrative procedure our old anal-

ogies are not in point. The charging party in a labor case is

something like a complaining witness in a criminal case. But

he is certainly more than that for a complaining witness is

certainly not entitled to appeal even when an appeal is allowed

for the prosecution in a criminal case. On the other hand,

the charging party is not like the ordinary plaintiff in a law-

suit, who does not have to have anybody’s permission to go

ahead with his action if he can pay the required fees. This is

something in between.

202 F.2d at 549. The court went on to hold that the charging party

in a Labor Board case had a right to be heard on settlement objec-

tions to present evidence on that issue, and to appeal an adverse

ruling. 7d. Other circuits are generally in accord. See George Ryan

Co. v. NLRB, 609 F.2d 1249 (7th Cir. 1979) ; ILGWU v. NLRB,

501 F.2d 823 (D.C.Cir. 1974) ; NLRB v. ODCAW, 476 F.2d 1031

(1st Cir. 1973) ; Concrete Materials of Georgia v. NLRB, 440 F.2d

61 (5th Cir. 1971); NLRB v. Electrical Workers Local 357, 445

F.2d 1015 (9th Cir. 1971).

OSHA procedures and those under the National Labor Rela-

tions Act are, of course, not strictly analogous. The NLRA does

not, in terms, provide that the charging party can participate as

a party to Board proceedings. Nor does the NLRA provide the

charging party with the elaborate protections afforded employees

(continued on next page)

33a

Although the court imposes limits I do not subscribe to

on the scope of employee/union party status in a proceed-

ing initiated by the employer’s contest of a citation issued

by the Secretary, the court acknowledges that employee/

union assertion of party status gives the administrative

law judge and the Commission a revisory jurisdiction—at

least to the extent of passing on properly raised union

challenges—which cannot be ousted by a subsequent settle-

ment agreement between the Secretary and the employer.

At the same time, the court announces that in the absence

of employee/union assertion of party status the commission

jurisdiction which attaches when an employer files a notice

of contest evaporates at such time as the Secretary and the

employer enter into a settlement agreement.

Much ean be said for the position announced by the court

—a position which assumes that in the absence of objection

from an interested party there is no reason for ti: Com-

mission to second-guess the judgment of the Secretary that

a particular settlement agreement will promote the pur-

poses of the Act. On the other hand, there are counter-

under OSHA. Seemingly of even greater significance, in contrast

with the position of the Secretary under the OSHA scheme, the

General Counsel of the National Labor Relations Board enjoys the

statutory discretion not to issue a complaint even if there exists

a violation of the Act. Each of these distinctions would appear

to suggest broader rights for employees under OSHA, than under

the NLRA. But under Labor Board rules, once the General Coun-

sel issues a complaint, ‘‘the charging party is accorded formal

recognition: he participates in the hearings as a ‘party,’ ... he

may call witnesses and cross-examine others, may file exceptions

to any order of the trial examiner . . .’’ International Union, etc.

v. Scofield, 382 U.S. 205, 219, 86 S.Ct. 373, 382, 15 L.Ed.2d 272

(1965). It is improbable that Congress, writing against this back-

drop of the National Labor Relations Act practice, could have

intended any lesser role for the complaining employees under

OSHA by explicitly providing them the right ‘‘to participate as

a party.’’

34a

arguments which suggest the utility of an independent

check on the Secretary’s discretion. Such counter-arguments

seem to be reflected in the Commission’s rule in force when

this settlement agreement was entered into, which contem-

plated that all settlement agreements arrived at after the

Commission’s jurisdiction attached would be submitted to

the Commission for approval." And the revised rule now

in force, endorsed by the Secretary prior to its adoption

by the Commission on December 5, 1979, recites that, “A

settlement proposal shall be approved [by the administra-

tive law judge or the Commission] when it is consistent

with the provisions and objectives of the Act.”’

®* Commission Rule 100, 29 C.F.R. § 2200.100, in effect at the

time of the proposed settlement in this case, provided in full:

Settlement

(a) Settlement is encouraged at any state of the proceed-

ings where such settlement is consistent with the provisions

and objectives of the Act.

(b) Settlement agreements submitted by the parties shall

be accompanied by an appropriate proposed order.

(ce) Where parties to settlement agree upon a proposal, it

shall be served upon represented and unrepresented affected

employees in the manner set forth in § 2200.7. Proof of such

service shall accompany the proposed settlement when sub-

mitted to the Commission or the Judge.

*The revised rule, 29 C.F.R. § 2200.100, which became effective

on January 1, 1980, 44 Fed. Reg. 70,106 (1979), provides in full:

Settlement

(a) Policy. Settlement is permitted at any stage of the

proceedings. Settlements submitted for consideration after the

Judge’s decision has been directed for review shall be filed

with the Executive Secretary. A settlement proposal shall be

approved when it is consistent with the provisions and objec-

tives of the Act.

(b) Requirements. Every settlement proposal submitted to

the Judge or Commission shall include, where applicable, the

following:

(1) A motion to amend or withdraw a citation, notification

(continued on next page)

35a

Where the balance of wisdom—and, to the extent detect-

able, of statutory instruction—lies on this issue, I have no

settled view. More to the point, I do not regard it as neces-

sary to resolve the issue in the context of this case, since

in this instance I would hold that, because Local 8-901 had

elected party status and had raised a cognizable objection

to the settlement proposal, the Commission remained seized

of the jurisdiction it had acquired before the settlement

agreement was entered into—at least until the Secretary

undertook to withdraw from the settlement agreement.

Cc.

I concur in the court’s holding that the Secretary, in the

exercise of his duty to enforce the Act, is entitled to with-

draw from a settlement agreement with an employer which

he concludes does not protect the safety and health of

employees with the efficacy called for by the Act. I also

concur in the court’s view that the Secretary’s occasional

exercise of the authority to withdraw from an agreement

solemnly entered into should be tempered by the need to

protect the employer from loss occasioned by the employer’s

detrimental reliance on the agreement the Secretary pro-

poses to jettison. Accordingly, inasmuch as prior to the

_of proposed penalty, notice of contest, or petition for modifica-

tion 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 will be accomplished.

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 settle-

ment proposal shall not be approved until at least 10 days

following service of the settlement proposal on affected em-

ployees.

36a

unfolding of this very litigation Sun would presumably

have no ground for anticipating that the Secretary would

turn out to have not only the disposition but also the

authority to change his official mind. I concur in holding

that the Secretary must go back to the status quo ante if

he persists in his announced withdrawal from the Sun

settlement. But the result dictated by the equities here may

not necessarily apply in future instances of withdrawal,

should there be any: for today’s holding now makes it

patent that OSHA settlement agreements are not proof

against Secretarial second thoughts. Wherefore, I would

reserve to another day, when an answer is insistently called

for, the question whether a return to the status quo ante

is required of, or even open to, the Secretary in all situa-

tions in which he concludes that an OSHA settlement agree-

ment was improvidently entered into.

37a

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 79-1822

Ray MarsuHati, Secretary of Labor, United States

Department of Labor,

Petitioner,

vs.

Sun Petroteum Propucts Co.

(OSHRC No. 76-3749)

‘SUR PETITION FOR REHEARING

Present: Seitz, Chief Judge, and Awpisert, Apams, Gis-

pons, Rosenn, Hunter, Weis, Gartu, Hiaarn-

BOTHAM and Stoviter, Circuit Judges, and Pot-

LAK, District Judge.*

The petition for rehearing filed by Respondent in the

above entitled case having been submitted to the judges

who participated in the decision of this court and to all the

other available circuit judges of the circuit in regular

active service, and no judge who concurred in the decision

having asked for rehearing, and a majority of the circuit

judges of the circuit in regular active service not having

voted for rehearing by the court in banc, the petition for

rehearing is denied,

By the Court,

/s/ ALDISERT

Judge

Dated: June 26, 1980

* Honorable Louis H. Pollak, of the United States District Court

for the Eastern District of Pennsylvania, sitting by designation.

38a

Sun Perroteum Propucts Company

REVIEW COMMISSION DECISION

Secretary or Lasor, Complainant v. Sun PerrroLeum

Propucts Company, Respondent, Loca 8-901 or Or, Cuem-

1cAL AND Atomic Workers InrernationaL Union, Author-

ized Employee Representative, OSAHRC Docket No, 76-

3749, April 27, 1979.

Marshall H. Harris, Philadelphia, Pa., for complainant.

John A. McGuinn, Washington, D.C., for respondent,

Sun Petroleum Products Company.

Steven Wodka, Washington, D.C., for employees.

Review Commission Judge William E, Brennan.

Before Cleary, Chairman, and Barnako, Commissioner.*

By ture Commission:

The Secretary of Labor cited Respondent (Sun Petro-

leum) for allegedly committing a serious violation of Sec-

tion 5(a)(1) of the Occupational Safety and Health Act

of 1970' by failing to adequately monitor a particular area

at its Mareus Hook, Pennsylvania, refinery for the pres-

ence of combustible gases. Sun Petroleum contested the

* Prior to his appointment as a Member of the Commission,

Commissioner Cottine appeared as counsel at the hearing before

the administrative law judge in this case, Accordingly, he has dis-

qualified himself from participating in this case. ABA, Code of

Judicial Conduct, Canon 3C(1)(b) (1972); See 28 U.S.C. § 455

(b) (2),

29 U.S.C. 651 et seq., hereinafter, ‘‘the Act.’’ Section 5(a) (1)

provides that

Each employer shall furnish to each of his employees employ-

ment and a place of employment which are free from recog-

nized hazards that are causing or are likely to cause death

or serious physical harm to his employees.

39a

citation and Local 8-901 of the Oil, Chemical and Atomic

Workers International Union (the Union) adopted party

status in the resulting proceedings, before the Commission.

Thereafter, prior to a hearing, the Secretary and Sun Pe-

troleum entered into a settlement agreement resolving the

issues in dispute between them. The Union objected to the

proposed settlement but, following a hearing on the Union’s

objections, Judge William EK. Brennan entered an order

approving the settlement. Chairman Cleary directed that

the order be reviewed by the Commission pursuant to

Section 12(j) of the Act.’

Having reviewed the entire record, the Commission mem-

bers are divided on the appropriate disposition for the

reasons set forth below. In view of the statutory purpose

of expeditious adjudication, the members agree to resolve

their impasse by affirming the Judge’s order but according

it the precedential value of an unreviewed judge’s decision.

Life Science Products Co., 77 OSAHRC 200/A2, 6 BNA

OSHC 1053, 1977-78 CCH OSHD { 22,313 (No. 14910, 1977),

aff'd, No. 78-1014 [7 OSHC 1031] (4th Cir. Feb, 1, 1979).

The settlement agreement ontered into by the Secretary

and Sun Petroleum provided that Sun Petroleum would

withdraw its notice of contest thereby admitting, for pur-

poses of this proceeding, that it violated Section 5(a)(1) as

alleged, The agreement specified that Sun Petroleum would

abate the violation by monitoring for combustible gases in

the cited location, and that

said gas test will be taken by persons knowledgeable

in the case, use and reading of the instrument, and

familiar with locations where combustible gases or

vapors may be present or have collected.

* The settlement agreement also resolved a citation alleging Sun

Petroleum’s violation of the safety standard at 29 C.F.R, 1910.132

(a). The Union does not take exception to that aspect of the settle-

ment agreement,

40a

The agreement did not explicitly mention an abatement

date. The citation, however, specified an immediate abate-

ment requirement, and Sun Petroleum’s agreement to with-

draw its notice of contest left this unchanged. Accordingly,

the settlement provides for immediate abatement, and the

parties understand that to be the case.

In arguing to the Judge that the agreement should not

be approved, the Union primarily contended that the above-

quoted language did not adequately provide for abatement

of the violation. It argued that the settlement should ex-

plicitly state that full time gas testers must perform the

tests. The Union asserted that, without such a provision,

the company may use production employees, who are not as

well qualified as gas testers, to conduct the tests, and that

the agreement will therefore fail to achieve abatement of

the cited hazard. The Union contended that the Commis-

sion’s authority under Section 10(¢) of the Act to grant

“other appropriate relief” permits the Commission to spe-

cify the means an employer must use to correct a violation.

The Secretary and Sun Petroleum, on the other hand,

argued that the agreement adequately provided for abate-

ment of the violation, and that it was beyond the Commis-

sion’s authority to require more specific abatement meas-

ures.

The parties also argued the effect of the Commission's

decision in Local 588, United Auto Workers (Ford Motor

Co.), 76 OSAHRC 58/B8, 4 BNA OSHC 1243, 1976-77 CCH

OSHD {| 20,737 (No, 2786, 1976), aff'd, 557 F.2d 607 [5

OSHC 1525] (7th Cir. 1977). In that case, the Secretary

and an employer agreed to an abatement plan to which

the affected employees objected by filing a notice of con-

test pursuant to section 10(¢) of the Act requesting the

Commission to modify the plan to which the other parties

had agreed. The Commission held that it lacked authority

to modify the plan, and that the Act did not grant the em-

4la

ployees the right to contest an abatement plan except as to

the time allotted for abatement. The employees could, how-

ever, dispute the time period allotted for abatement, and

to that end could present evidence as to alternative abate-

ment means for the purpose of showing that abatement

could be accomplished in a shorter time than that specified

in the plan. The Union attempted to bring this case within

the confines of Local 588, United Auto Workers, arguing

that if a settlement agreement did not adequately provide

for abatement, then abatement would not be accomplished

within the period permitted by the plan and that its objec-

tion therefore did concern the time allotted in the agree-

ment for abatement.

Finally, the Union contended that the settlement agree-

ment should contain an admission by Sun Petroleum that

the violation was willful, despite the fact that the citation

and complaint contained no such allegation.

Judge Brennan rejected the Union’s objection to the

abatement requirement contained in the settlement agree-

ment. He noted that, since the agreement provided for im-

mediate abatement, the Union’s objection could hardly be

construed as going to the time allowed for abatement.

Thus, relying on Local 588, United Auto Workers, he con-

cluded that, by objecting to the abatement method specified

in the agreement, the Union had not raised a justiciable

issue. The Judge did not explicitly deal with the Union’s

contention that the violation should be classified as willful.

On review, the Union and Sun Petroleum make the same

arguments they made before the Judge. Sun Petroleum

further contends that the Commission lacks any authority

to interfere with a settlement agreement between the Sec-

retary and an employer. The Secretary now agrees with the

Union that the abatement order contained in the settlement

agreement is inadequate, and requests that we remand

42a

for the purpose of allowing the agreement to be renego-

tiated.’

As a threshold matter, both Commission members reject

Sun Petroleum’s contention that the Commission lacks au-

thority to rule on the propriety of a settlement agreement

reached between the Secretary and a cited employer. Al-

though the Commission’s rules encourage parties to settle

their disputes, 29 C.F.R. 2200.100, such settlements must be

consistent with the objectives of the Act, and the Commis-

sion retains the authority to make that determination when

a proposed settlement is submitted. Blaisdell Manufactur-

ing, Inc., 73 OSAHRC 53/B8, 1 BNA OSHC 1406, 1973-74

CCH OSHD {16,915 (No. 1566, 1973).

Chairman Cleary would vacate the judge’s order and

hold that the Commission has jurisdiction to consider the

Union’s objection to the settlement proposed by the other

parties. He notes that the Local 588, United Auto Workers

ease is not pertinent to this proceeding. The primary issue

addressed in that case concerned the scope of the right of

employees under section 10(c) of the Act to file a notice

* The Secretary’s position is set forth in his ‘‘ Response to Diree-

tion for Review,’’ which was filed more than eleven months after

the parties were notified that the Secretary’s third request for an

extension of briefing time was denied. Sun Petroleum has moved

to strike the Secretary’s response as untimely. Chairman Cleary’s

disposition is based solely on the Union’s right to raise objections

to a settlement agreement in an action instituted by an employer’s

notice of contest, and is arrived at independent of the Secretary’s

response. He thus considers the motion to strike to be moot, Com-

missioner Barnako would grant the motion to strike and has not

considered the Secretary ’s response.

On March 14, 1979, Sun Petroleum moved to supplement the

record with a collective bargaining agreement between the Com-

pany and the Union dated March 1, 1979. Sun contends that this

agreement demonstrates that the Secretary’s position regarding

the inadequacy of the abatement order lacks merit. As we do not

rely on the Secretary’s argument in disposing of the case, we deny

Sun Petroleum’s motion.

43a

contesting a citation and thereby invoke the Commission’s

jurisdiction. As noted above, the Commission obtained

jurisdiction in this proceeding when respondent filed a

notice of contest. A recently decided case does, however,

address the issue presented here. In Kaiser Aluminum &

Chemical Corporation, 73 OSAHRC 103/A2, 6 BNA OSHC

2172, 1978 CCH OSHD f 23,200 (No. 76-2293, 1978), the

Commission held that the Act requires that affected em-

ployees with party status be afforded the opportunity to

review and raise objections to settlements proposed by the

other parties, including objections to matters other than

the abatement period specified in a settlement proposal.

Accordingly, the Chairman would remand this case for

further proceedings consistent with Commission precedent.

Commissioner Barnako would affirm the Judge’s order

approving the settlement agreement. In his view, the Com-

mission’s authority to direct “other appropriate relief,”

29 U.S.C. 659(¢e), does not include specifying the precise

means that an employer must follow to abate a violation.

Local 588, United Auto Workers, supra. The agreement

requires Sun Petroleum to immediately abate the violation.

If Sun Petroleum does not take the steps necessary to

eliminate the hazard for which it was cited, then the

Union’s proper recourse is to so inform the Secretary,

who is authorized to enforce the abatement order, either

through a petition for enforcement to a court of appeals,

29 U.S.C. 660(b), or the issuance of a notification of failure

to correct and proposed additional penalties. 29 U.S.C. 659

(b) and 666(d).

Commissioner Barnako would also reject the Union’s

attempt to have the Commission find the violation to be

willful. The Commission has held, in recognition of the

Secretary’s exclusive prosecutorial authority under the

Act, that it cannot find a violation of a higher degree than

alleged by the Secretary without the Secretary’s consent.

Wetmore & Parman, Inc., 73 OSAHRC 2/C5, 1 BNA

44a

OSHC 1099, 1971-73 CCH OSHD { 15,400 (No. 221, 1973).

The Secretary knows of the Union's position that the viola-

tion should be alleged to be willful and of the reasons un-

derlying the Union’s position, yet has not sought to amend

his pleadings to contain such an allegation. Accordingly,

the issue is not properly before the Commission.

Since the Union’s objections to the settlement agreement

are beyond the scope of the issues the Union can legiti-

mately present for adjudication, Commissioner Barnako

would approve the agreement. See IMC Chemical Group,

Inc., 783 OSAHRC 95/C14, 6 BNA OSHC 2075, 1978 CCH

OSHD { 23,149 (No. 76-4751, 1978) (dissenting opinion).

Accordingly, the Judge’s decision is affirmed.

45a

UNITED STATES OF AMERICA

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

OSHRC Docket No, 76-3749

SECRETARY OF LABOR

Complainant

Sun Perroteum Propucts Company anv Locat 8-901 oF THE

Or, CHemicaL AND Atomic Workers INTERNATIONAL UNION

Respondents

ORDER GRANTING STIPULATED SETTLEMENT

Brennan, William E.; A.L.J.

This matter comes on for determination pursuant to 29

U.S.C. 659(¢c) and 661(i) and Commission Rules 50 and

100, 29 C.F.R. 2200.50 and 2200.100, upon a Settlement

Agreement originally received by the Commission on Jan-

uary 13, 1977, involving one Serious Citation (two num-

bered Items) and Notification of Proposed Penalties in the

total amount of $1400 issued to Respondent by the Com-

plainant on August 3, 1976.

On January 2! 1977, Local 8-901 of the Oil, Chemical

and Atomie Workers Union (having previously been ac-

corded party status (see Order dated October 21, 1976, R.p.

J-7)), through its representative, filed objections to this

Settlement and requested a hearing thereon (R.p. J-29).

These objections, inter alia, set forth the following:

“1) The key, provision [of the Settlement Agreement]

is Section 1(A)(B) which states:

‘said gas test will be taken by persons knowl-

edgeable in the care, use, and reading of the

instrument, and familiar witit locations where

combustable gases or vapors may be present or

have collected.’

46a

It is our position that the only persons that meet

this criteria in the refinery are the workers in the

gas tester classification.

It was the company’s use of regular operating per-

sonel to perform gas tests that caused the fire which

resulted in the death of two workers and the issu-

ance of the citation.

2) The position of the Union as to the proper classifica-

tion to perform the gas testing was upheld by the

arbitrator in Sun Oil Company of Pennsylvania and

Oil, Chemical and Atomic Workers Local 8-901,

AAA#M30 1021 73J No. 20. This arbitrator’s award

was further upheld by the U.S. District Court in

Sun Oil Company of Pennsylvania vy. Local 8-901,

Oil, Chemical and Atomic Workers International

Union.

* * *

In summary, based on the fact that the settlement

agreement would fail to abate the hazard and fails

to acknowledge a willful violation, we hereby re-

quest its rejection by the Commission.” (R.p. J-29).

Settlements are ruled upon by the Review Commission

pursuant to the provisions of its Rule of Procedure 100(a),

which provides:

“Settlement is encouraged at any stage of the pro-

ceedings where such settlement is consistent with the

provisions and objectives of the Act.” (29 C.F.R. 2200.

100(a)).

Thus, a hearing on the Union’s objections as requested

was noticed by Order dated January 21, 1977 (R.p. J-30),

which was rescheduled upon the Union’s request for Feb-

ruary 8, 1977 (R.p. J-31, J-32).

47a

On February 4, 1977, there was received a Motion from

Respondent Company requesting a pretrial conference on

the morning of the scheduled hearing, on the grounds that

Review Commission precedent in Sec. of Labor v. Ford

Motor Co., Metal Stamping Division, Docket No. 2786

(5/25/76) prohibited the relief sought by the Union’s

objections as it was held therein that a union may only

contest and object to the period of abatement (R.p. J-33).

This request was granted by Order dated February 4,

1977 (R.p. J-34).

On February 8, 1977, a recorded pretrial conference was

held, all three parties appearing through counsel.

The Union maintained its two basic objections, arguing

essentially that in order to determine if the time within

which to abate is reasonable, the method of abatement

necessarily must be considered. In a case involving future

abatement, this principal is sound.

However, in this case, counsel for the Company, con-

curred in by Complainant’s counsel, represented on the

record that all abatement provisions set forth in the Set-

tlement Agreement (except for the preparation of a manual

within 90 days), were intended to be accomplished imme-

diately upon the entrance of an Order approving the Set-

tlement Agreement. Consequently, the Union could not

object to the “immediate” time period for abatement as

unreasonable.

It persisted in its argument however, that adherence to

the Stipulated abatement terms would not effect complete

abatement of the type of condition causing the fatalities

herein, because gas or vapor testing could be done by

operating personnel who were not “gas testers.’’ The

response to this argument was that if the union believes

any gas testing is carried on by personnel not identified in

the Settlement Agreement abatement provisions, the Com-

plainant would, upon notice thereof, issue a Failure to

Abate Citation to the Respondent Company.

48a

Consequently, based upon the Commission precedent an-

nounced in Sec. of Labor v, Ford Motor Co., supra, and

Sec of Labor v. United States Steel Corp., Docket No, 2975,.

et al. (1/17/77),' it was concluded that because the Union

herein did not challenge the “immediate” time period for

abatement intended by the Settlement Agreement, there

was a lack of jurisdiction to entertain evidence on the

question of the means or manner of effecting abatement.

Thus, the Stipulated Settlement Agreement was found

to comply with the Commission’s requirements for “hos-

pitable consideration,” (See, Sec. of Labor v. Dawson

Brothers Mechanical Contractors, 1 OSAHRC 386 (2/22/

72)), and based upon the representations set forth in this

Agreement, and the representations of counsel during the

pretrial conference, it was approved. Further, the Serious

Citation and the proposed penalties based thereon, which

had been reduced to $1000 in the Settlement Agreement,

and had been paid (TR 88), were affirmed. The Respondent

Company's Motion to Withdraw its Notice of Contest was

Granted (TR 69-70).

Lastly, to carry out abatement at the earliest possible

moment, consistent with the intention of Complainant and

Respondent Company, as voiced by counsel, the approval

date of the Settlement Agreement was entered as of the

date of the Pretrial Conference, February 8, 1977 (TR

88).

It is so Ordered.

/s/ Wiuiam E. Brennan

William E. Brennan

Judge, OSHRC

Dated: April 25, 1977

Hyattsville, Maryland

* Which precedent binds the undersigned, See, Sec. of Labor v.

Gindy Manufacturing Co., 10 OSAHRC 367 (1974) ; Sec. of Labor

v. Grossman Steel & Aluminum Corp., Docket No. 12775 (5/12/76).

49a

UNITED STATES OF AMERICA

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

OSHRC Docket No. 76-3749

Reoron III

W. J. Usery, Jr., Secretary or Lasor,

Unitep States Department or Lasor,

Complainant,

Sun Perroteum Propucts Company, a Division of

Sun Om Company oF PENNSYLVANIA,

Respondent.

SETTLEMENT AGREEMENT

I. The parties agree to the following settlement of the

Citation issued to Respondent relative to turn-around op-

erations at Plant 8-C of Respondent’s Marcus Hook Re-

finery :

A. In the course of a turnaround operation at the 8-C

Plant, during the time of the lighting of a pilot or first

burner in a fired heater:

the person or persons lighting off said pilot or burner

and anyone in the immediate vicinity of said pilot

or burner who may be directly exposed of flashback

during lighting, shall wear fire retardant clothing.

prior to the lighting of pilot or first burner in a fired

heater, a gas test shall be taken in the firebox and in

areas in the immediate vicinity of the fired heater or

burner where combustible gases or vapors might be

present.

said gas test will be taken by persons knowledgeable

in the care, use, and reading of the instrument, and

familiar with locations where combustible gases or

vapors may be present or have collected.

50a

4. all such gas tests shall be recorded as to the time,

place, date, name or initials of the persons taking

the test and the results of these tests.

B. A gas testing manual is to be developed by the Com-

pany within three months. This manual is to include areas

where combustible gases or vapors might be present due to

leaks from flanges, valves or other openings in the system

. or where they might have collected due to open vents,

sewers or other enclosed spaces, and indicate that the test

results will be brought to the attention of the person re-

questing the test. The manual will be made available to

operating personnel, included in the initial refresher train-

ing, and be made part of standard practice for taking gas

tests.

C. Engineering and Procedural changes shall be imple-

mented to prevent recurrence of the recent accident in

Plant 8-C, as set forth in Appendix I, “Equipment Revi-

sions Intended to Ensure Safe Operation of H-2 Heater at

Plant 8-C”, and Appendix II, “Procedural Revisions to

Ensure the Safe Coking of H-2 Heater in future shut-

downs”.

II. Respondent agrees to continuing compliance with the

applicable provisions of the Occupational Safety and

Health Act of 1970 and regulations duly promulgated pur-

suant thereto.

III. Copies of the Citation and this Settlement Agreement

have been served upon the authorized employee repre-

sentative, Local 8-901, Oil, Chemical and Atomic Workers’

International Union, AFL-CIO and its representative here-

in, in accordance with Commission Rule 7, and Order dated

October 21, 1976.

IV. Based upon the foregoing Complainant and Respon-

dent agree that the proposed penalties imposed be reduced

from $700 each for the cited violation of 29 C.F.R. § 1910.

5la

132(a) and 29 U.S.C. §654(a) to $500 each. The Com-

plainant and Respondent agree that the reduced penalty of

$1000 is appropriate under the circumstances.

V. In view of the foregoing, Respondent hereby moves to

Withdraw its Notice of Contest in the above-captioned

case.

This Settlement Agreement entered into by and between

the parties this —— day of January, 1977.

Sun Perroteum Propucts Company,

a division of

Sun Om Company oF PENNSYLVANIA

/s/ JonatHan C. WALLER

/s/ Joserx D. Zui

Attorneys for Respondent

Unitep States DEPARTMENT OF LABOR

/s/ MarsHauyu H. Harris

Marshall H. Harris

Regional Solicitor

/s/ Howarp K. AGran

Howard K. Agran

Attorney

Attorneys for Complainant

52a

APPENDIX 1

Equipment Revisions

Intended To Ensure The Safe Operation

Of H-2 Heater At Plant 8-C

. A 3” connection with a valve has been installed at the

main reduced crude regulator of H-2 heater. This will

permit injection of steam to the coils of H-2 heater in

such a way that the steam flow to each coil can be con-

trolled and measured. The coils can be steamed indi-

vidually or simultaneously.

. 135# steam will be permanently piped to the new 3”

connection. This installation will be designed in such a

way that the valves will be easily accessible and can be

operated safely, particularly during emergencies.

. The original 1” steam lines to the four individual coils

will be retained as a back-up system for the new 3”

steam system described above. Each of the 1” steam

lines has now been equipped with its own separate con-

trol valve.

. A quench pot will be installed at the outlet of the heater

coils as so that the effluent will be discharged under

control into a safe area, i.e., away from any possible

ignition source; away from any possible human con-

tact.

. Two 3” stainless steel valves with blanks will be in-

stalled in both of the 14” crab outlets of H-2 heater.

This will allow a visual check to assure the satisfactory

completion of the steaming procedure, i.e., no oil emitted

with the steam exhausting from the heater outlets, (The

3” stainless steel connections for these valves have al-

ready been installed. )

53a

APPENDIX 2

Procedural Revisions

To Ensure The Safe Coking Of H-2 Heater

In Future Shutdowns

. Blanks to prevent oil from entering the furnace will be

installed as soon as possible after oil has been diverted

away from the furnace.

. After all of the blanks are installed to isolate the oil

to the furnace, the coils will be steamed for 4 hours

directly into the Vacuum Tower to fully evacuate each

coil.

. At the beginning of the steaming procedure, all four

individual coils will be steamed separately to assure

sufficient steam flow in each coil. Once this has been

established, then all four coils will be steamed simul-

taneously for four hours.

. During the steaming procedure, the steam flow through

each of the coils will be monitored continuously to make

certain that each coil is being steamed properly. This

will be done by way of continuous flow and tempera-

ture recorders that are located in each of the individual

coils.

. At the end of the steaming procedure, a visual check will

be made at two newly installed 3” connections at the

heater outlet to assure that the procedure has been car-

ried out successfully, and that the equipment is safe

to opén to the atmosphere to proceed to the “coking”

step.

. Once the steaming procedure is complete, the 14” out-

let lines of the heater will be isolated from the Vaewum

Tower. Both of these lines will be vented by way of a

3” valve through a quench pot to the atmosphere, to be

installed prior to the next scheduled shutdown of the

heater.

54a

7. Once the heater outlets have been vented to the atmos-

phere, each of the four coils of the heater will again be

steamed individually to determine that they have been

properly safed. This will be done by checking the efflu-

ent from each coil at the quench pot.

8. The “coking” procedure will not be started until the

safing procedure has been carried out to complete

satisfaction.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.