USDOL/OALJ Law Library: STAA Whistleblower Digest, DIVISION X -- SETTLEMENTS

USDOL/OALJ STAA Whistleblower Digest
DIVISION X -- SETTLEMENTS

[Last updated Dec. 11, 2013]

X. Settlements

A. Review of settlement agreement

1. Standard for review

2. Requirement of written agreement

3. ALJ's review of the terms of settlement agreement

B. Renunciation of settlement agreement/reopening

C. Dismissal with prejudice

D. Confidentiality provisions

E. Assent of Assistant Secretary

F. Enforcement

[STAA Digest X]
SETTLEMENT; CONTINUED EFFECTIVENESS OF ALJ'S RECOMMENDED DECISION

In Bettner v. Daymark Foods, Inc. ,1997-STA-23 (ARB Aug. 10, 1998), the parties reached a settlement agreement after the ALJ had issued a recommended decision and forwarded the case to the ARB. The ARB, in reviewing the settlement agreement noted an apparent conflict or ambiguity between two paragraphs of the Agreement: one paragraph provided that the ALJ's Recommended Decision and Supplemental Recommended Decision shall become final; another paragraph provided that the parties have settled the damage and attorney fee portion of the Complainant's claims "notwithstanding the Recommended Decisions and Orders."

The ARB found that the "notwithstanding" Paragraph is controlling. In a footnote, the ARB held that its instant "Final Order Approving Settlement and Dismissing Complaint" superseded the Recommended Decision and Supplemental Recommended Decision in any event.

[STAA Digest X A]
SETTLEMENT; PARTIES CANNOT AVOID DOL REVIEW OF ADJUDICATORY SETTLEMENT BY AGREEING TO WITHDRAWAL OF OBJECTIONS TO OSHA FINDINGS

In Nichols v. Roma of Dallas , ARB No. 06-113, ALJ No. 2006-STA-9 (ARB Oct, 21, 2007), the ALJ recommended approval of the parties' Joint Motion to Dismiss with Prejudice. Upon automatic review, the ARB issued an order informing the parties that the STAA regulations provide only two options for ending litigation short of a merits decision after a party has filed objections to OSHA findings or preliminary order: First, the party who requested an ALJ hearing may file with the ALJ (or the ARB if on appeal) a written withdrawal of �objections to the OSHA findings or order. In the instant case, although the parties requested that the case be dismissed with prejudice, the ALJ instead treated the motion as it if were a request to withdraw objections. �Second, the parties may settle the case. However, if the parties settle the case, they must file a copy with the ALJ or the ARB, and the ARB must approve the settlement. In the instant case, although the Complainant filed a Notice to Withdraw Objections with the Board, the parties, in their joint motion to dismiss, noted that they had resolved their differences, suggesting the possibility that the parties had entered into a settlement.� The ARB, therefore, notified the parties that it would not dismiss the complaint based on a settlement unless the settlement was provided to the Board for its review and approval. The ARB notified the parties that they must inform it of the method they intended to pursue and submit any settlement.

At first, the parties did not respond to the ARB's order. The ARB, however, had omitted a page from its earlier order, and it issued a corrected order. In the corrected order, it required the parties to show cause why the matter should not be remanded to the ALJ to be adjudicated on the merits. In response, the Respondent submitted a copy of a settlement agreement. The ARB noted that the materials submitted suggested that that parties "believed that they could circumvent the regulation's requirement that parties submit any settlement to the Board for approval by simply withdrawing objection to the Secretary's findings." Slip op. at 2-3 (footnote omitted). The ARB observed that the STAA and applicable regulations mandate that settlements be submitted for approval. The Board wrote that "had the parties attempted to consummate a settlement without the Department of Labor's approval, the settlement would not have been effective." Slip op. at 3. The Board then reviewed and approved the settlement.

[STAA Digest X A]
SETTLEMENT UNDER BOTH STAA AND ENVIRONMENTAL STATUTES WHERE NO PARTY APPEALS; ARB REVIEW OF SETTLEMENT IS LIMITED TO THE STAA CLAIM

In Andrews v. Max Trans, LLC , ARB No. 07-065, ALJ No. 2006-STA-45 (ARB May 30, 2007), the parties settled a whistleblower case involving both the Surface Transportation Assistance Act, and the TSCA, SDWA, SWDA, WPCA, and CERCLA. The ARB reviewed and approved the settlement in regard to the STAA because it issues the final order in such cases. The ARB, however, did not review the settlement under the environmental laws because no party had filed an appeal.

[STAA Digest X A]
SETTLEMENTS BEFORE THE ALJ IN STAA CASES; BOARD REVIEW PROCEDURE

In Ass't Sec'y & Hisert v. Longhorn Trucking Co., Inc. , ARB No. 05-056, ALJ No. 2004-STA-49 (ARB Apr. 28, 2005), the parties settled before the ALJ. The ALJ approved the settlement and forwarded it to the ARB for entry of a final order. The ARB reviewed the settlement, found it to be fair, adequate and reasonable, and dismissed the complaint. No mention is made of whether a briefing schedule was issued.

Under similar circumstances in Samsel v. Roadway Express, Inc. , ARB No. 05-033, ALJ No. 2002-STA-46 (ARB Apr. 29, 2005), the ARB issued a briefing schedule, to which no party responded. The Board thereupon reviewed the agreement and approved it with a few clarifications. To the same effect Gomaz v. Roadway Express, Inc. , ARB No. 05-021, ALJ No. 2004-STA-15 (ARB Apr. 29, 2005).

[STAA Digest X a]
SETTLEMENT JUDGE PROCEEDINGS; APPLICABILITY OF FOIA

A matter that was unclear under the settlement judge regulation at 29 C.F.R. § 18.9(e) , was whether papers created by, or received by and retained by, an OALJ settlement judge are subject to the Freedom of Information Act. The answer appears to lie in the Administrative Dispute Resolution Act , 5 U.S.C. §§ 571-584. In 1996, Congress reenacted the Administrative Dispute Resolution Act of 1990 (the original act had a 1995 sunset date). The 1996 reenactment deals directly with the issue of the application of FOIA to a federal government neutral, to wit: "A dispute resolution communication which is between a neutral and a party and which may not be disclosed under this section shall also be exempt from disclosure under section 552(b)(3)." 5 U.S.C. § 574(j). Section 552(b)(3) is FOIA exemption 3, which exempts matters "specifically exempted from disclosure by statute."

X A 1 [STAA Whistleblower Digest X A 1]
SETTLEMENTS; CIRCUMSTANCE THAT COMPLAINANT WAS REPRESENTED BY ABLE COUNSEL AS SUPPORTING FINDING THAT THE AGREEMENT IS "FAIR, ADEQUATE AND REASONABLE"

In Edmisten v. Ray Thomas Petroleum , 2009-STA-36 (ALJ Oct. 30, 2009), the case settled prior to an evidentiary hearing and the parties submitted the settlement agreement to the presiding ALJ for approval. In approving the settlement, the ALJ observed that because he had not heard the case, he had no basis to determine whether the agreement was fair or adequate. The ALJ, however, noting that the agreement did not contain any provisions which are contrary to law or against public policy, and that the Complainant had been represented by very able counsel, found that it was reasonable to presume that the agreement was in the complainant's best interests. The case was transferred to the ARB for issuance of a final order. In Edmisten v. Ray Thomas Petroleum , ARB No. 10-020, ALJ No. 2009-STA-36 (ARB Dec. 16, 2009), the ARB found that the settlement was unopposed under its terms because neither party submitted a brief in response to the ARB 's notice of review. The ARB stated that because the ALJ had not made a finding regarding whether the parties' settlement agreement constitutes a fair, adequate, and reasonable settlement, it would do so. In finding that the settlement was fair, adequate, and reasonable, the ARB wrote:

The parties acknowledged and agreed that they consulted with attorneys of their own choosing before entering into the Agreement and were given a reasonable period of time within which to consider the Agreement. Additionally, Edmisten's counsel, an experienced litigator under the STAA, represented that the settlement was fair, adequate, and reasonable.

USDOL/OALJ Reporter at 3 (footnote omitted).

STAA cases settled before ALJ with Assistant Secretary for OSHA or his designee as a signatory

In Kidd v. Sharron Motor Lines, Inc., 87-STA-2 (Sec'y July 30, 1987), the Secretary determined that "henceforth ... whenever a case under the STAA which is before the ALJ is settled, and the Assistant Secretary for OSHA or his designee is a signatory of the settlement, the ALJ may issue a final order dismissing the case pursuant to the settlement , and does not need to forward the record of the case and his decision to [the Secretary of Labor]." If the Assistant Secretary of OSHA has not indicated approval of the settlement, the ALJ shall direct the Assistant Secretary to review the settlement and to determine whether in the Assistant Secretary's view,the settlement is fair, adequate and reasonable. The Secretary's determination shall become part of the record of the case.

[STAA Digest X A 1]
SETTLEMENT; CLAUSE FORBIDDING RE-EMPLOYMENT IS NOT INHERENTLY VOID AS AGAINST PUBLIC POLICY

In Taylor v. Greyhound Lines , ARB No. 06-137, ALJ No. 2006-STA-19 (ARB Apr. 30, 2007), the Complainant argued for repudiation of a settlement agreement based, inter alia , on the contention that a clause forbidding re-employment was too restrictive. The Complainant argued that given the Respondent's market share, the clause essentially precluded him from seeking employment with any motor carrier and would be a violation of his Civil Rights. The ARB rejected the contention, noting that the Complainant had freely agreed to the waiver, and not provided any evidence, legal authority or analysis in support of his position. The ARB also stated that it was "not aware of any case precedent holding such reemployment waivers void as against the public interest," whereas a recent Tenth Circuit decision upheld such a provision in a Title VII case. Jencks v. Modern Woodmen of America , 479 F.3d 1261, 1266-67 (10th Cir. 2007).

[STAA Digest X A 1]
SETTLEMENT; FAIRNESS, ADEQUACY AND REASONABLENESS WHERE COMPLAINANT ACCEPTS SMALLER AMOUNT THAN AMOUNT AWARDED IN ARB DECISION

In Cook v. Guardian Lubricants, Inc. , 95-STA-43 (ALJ Sept. 11, 1997), the ALJ found a settlement agreement to be fair and adequate even though Complainant would receive an amount substantially smaller than was awarded to him in an earlier ARB remand decision. The ALJ found Complainant's decision to accept this amount was reasonable given the risks involved in continuing the litigation, the ALJ noting that there were several grounds on which an appellate court could potentially reverse the ARB's decision.

X A 1 1988 regulations governing STAA settlements

In response to comments on the Interim Final rules and important a Supreme Court ruling in STAA matters, OSHA published new STAA regulations in November 1988. The pertinent regulatory history provides that:

Attorney Pasek also was concerned that § 1978.111(c) unduly restricted settlement attempts since the subsection requires the ALJ or the Secretary to affirm any portion of the findings or order with respect to which objection is withdrawn. OSHA's purpose in promulgating this rule was to cover unilateral withdrawals of objections to findings and an order where a party has determined on his or her own that he or she no longer wishes to pursue an objection and it is not intended to cover a settlement agreement. The Secretary, in Underwood v. Blue Springs Hatchery, 87-STA-21, Order to Show Cause, issued September 23, 1987, has also ruled that § 1978.111(c) covers the withdrawal of complaint after the filing of objections. If the parties, including the Assistant Secretary, agree, a settlement which includes a withdrawal of objections without admitting liability may be reached without engaging the provisions in § 1978.111(c). Such a settlement falls not under § 1978.111(c) but rather § 1978.111(d), where settlements are to be tri-partite as required by the statute.
In § 1978.111(d), OSHA intended to require that all parties who have chosen to participate in the hearing agree to the settlement and that the Secretary of Labor approve such agreement. In § 1978.111(d) settlements, if the Assistant Secretary has chosen not to participate in the hearing, it was OSHA's intent that it should be unnecessary to seek his approval of the agreement. Instead, the settlement section requires that the agreement be submitted for approval by the Secretary or his ALJ. In that regard, the settlement would conform with the statutory mandate that proceedings under 405 may be terminated by a settlement agreement entered into by the Secretary of Labor, the complainant and the named person.
To the extent that § 1978.111(d) does not make this intention clear, OSHA has changed the rule to provide for a distinction between settlements at the investigative phase and those at the adjudicatory phase. New § 1978.111(d)(1) provides for investigative settlements where tri-partite agreement is reached with the Assistant Secretary's approval of a settlement between complainant and the named person. New § 1978.111(d)(2) provides for the procedure in adjudicatory settlements where the parties, including the Assistant Secretary if he or she has elected to participate, must submit the agreement for approval to the ALJ or the Secretary. New § 1978.111(d)(3) incorporates the language of old § 1978.111(d) which covered the Assistant Secretary's declination to prosecute a case if the complainant refused to accept a fair and equitable settlement. OSHA believes that the new language will clarify its intent in the previously drafted section on settlements.

53 Fed. Reg. 47676, 47680 (Nov. 25, 1988).

The revision to section 1978.111(d), in pertinent part, is as follows:
(d)(1) Investigative Settlements. At anytime after the filing of a section 405 complaint by an employee and before the finding and/or order are objected to, or become a final order by operation of law, the case may be settled if the Assistant Secretary, the complainant and the named person agree to a settlement.
(2) Adjudicatory settlement. At any time after the filing of objections to the Assistant Secretary's findings and/or order, the case may be settled if the participating parties agree to a settlement and such settlement is approved by the Secretary of Labor or the ALJ. A copy of the settlement shall be filed with the ALJ or the Secretary as the case may be.
(3) If, under paragraph (d) (1) or (2) of this section the named person makes an offer to settle the case which the Assistant Secretary, when acting as the prosecuting party, deems to be a fair and equitable settlement of all matters at issue and the complainant refuses to accept the offer, the Assistant Secretary may decline to assume the role of prosecuting party as set forth in § 1978.107(a). In such circumstances, the Assistant Secretary shall immediately notify the complainant that his review of the settlement offer may cause the Assistant Secretary to decline the role of prosecuting party. After the Assistant Secretary has reviewed the offer and when he or she has decided to decline the role of prosecuting party, the Assistant Secretary shall immediately notify all parties of his decision in writing and, if the case is before the administrative law judge, or the Secretary on review, a copy of the notice shall be sent to the appropriate official. Upon receipt of the Assistant Secretary's notice, the parties shall assume the roles set forth in § 1978.107(b).

53 Fed. Reg. at 47684.

X A 1 Concept of "deferral" in the settling of STAA cases

In Leidigh v. Freightway Corporation, 87-STA-12 (Sec'y July 9, 1990), the parties reached a settlement in which they agreed to accept the final decision of their case before the NLRB as determining the outcome of their case before the Department of Labor. They characterized this agreement as a "deferral" to the NLRB decision. The Secretary noted that the STAA employs the concept of deferral somewhat differently under regulatory section 1978.122(c), which provides that the Secretary or Assistant Secretary may defer to the results of other proceedings in special circumstances. Specifically, that section states:

A determination to defer to the outcome of other proceedings initiated by a complainant must necessarily be made on a case-by-case basis, after careful scrutiny of all available information. Before the ... Secretary defers to the results of other proceedings, it must be clear that those proceedings dealt adequately with all factual issues, that the proceedings were fair, regular, and free of procedural infirmities, and that the outcome of the proceedings was not repugnant to the purpose and policy of the Act.

Therefore, deferral under the STAA would require that any other proceeding first be completed and a final order be entered.

X A 1 Settlement; withdrawal of Assistant Secretary's findings with prejudice

In Moravec v. HC & M Transportation, Inc., 90- STA-44 (Sec'y Oct. 26, 1992), the Secretary approved a settlement agreement that she found to be fair, adequate and reasonable. She directed the Assistant Secretary for Occupational Safety and Health "to withdraw, with prejudice, her Findings and Preliminary Order in the case, as requested by the parties."

X A 1 Restriction on complainant's provision of testimony

In Stack v. Preston Trucking Company, Inc., 92-STA- 21 (Sec'y Nov. 25, 1991) (order to show cause), a settlement agreement included the following provision:

Complainant agrees not to testify or serve as a consultant in any proceeding held under the auspices of any city, county, state or federal agency or court relating to any allegation of discrimination involving Preston [Trucking Company, Inc.], its parent or affiliates, or their directors, officers, employees or agents, except as required by law.

The Secretary concluded that this provision would apparently preclude the complainant from being "consulted" in regulatory proceedings -- a bar to providing testimony before agencies without subpoena authority, and a restriction on the channels of communication essential to government regulation. All other provisions appeared to be fair, adequate and reasonable. Accordingly, the parties were directed to show cause why the quoted provision should not be found void as against public policy and severed from the settlement agreement.

X A 1 Standard of review depends upon date entered into

If a settlement agreement is entered into on a date subsequent to expiration of the time for appeal of the Secretary's final decision and order, then a stricter standard for approval of the settlement applies than if the agreement were reached on a date within the statutory appeal period. Any settlement after final adjudication and expiration of the appeal period must not only be fair and equitable to the complainant, but must be carefully scrutinized to determine that there exists some compelling reason why the final order should not be enforced. See McGavock v. Elbar, Inc. , 86-STA-5 (Sec'y Nov. 25, 1986). McGavock v. Elbar, Inc. , 86-STA-5 (Sec'y Jan. 25, 1988).

X A 1 1986 regulations governing STAA settlements

The STAA regulations were published as Interim Final Rules in 1986. The 1986 version of the regulations stated that

(d) At any time after the filing of a section 405 complaint by an employee and before the findings and/or order become final, the case may be settled if the Assistant Secretary, the complainant, and the named person agree to a settlement. If such settlement is reached after objections have been filed pursuant to § 1978.104, notice of settlement shall be filed with the administrative law judge or the Secretary, as the case may be. [Remainder of section indicates that if the Assistant Secretary finds a settlement offer to be fair and equitable, but the complaint refuses to accept the offer, the Assistant Secretary may decline the role of prosecuting party.]

29 C.F.R. § 1978.111(d) (1986).

The Secretary interpreted this provision in Kidd v. Sharron Motor Lines, Inc., 87-STA-2 (Sec'y July 30, 1987). He stated that:

    The procedures established for agreements entered into prior to December 22, 1986, required that I review all settlement agreements and determine whether the terms of each agreement were fair, adequate and reasonable. See McGavock v. Elbar, Inc., Case No. 86-STA-5, Secretary's Order, issued November 25, 1986. Thus, when a case before the ALJ was settled, the ALJ's order of dismissal pursuant to the settlement constituted merely a recommendation for a dismissal, and a final order of dismissal by me was required in order to dispose of the case.

    By virtue of section 1978.111(d) of the STAA regulations, however, neither my review of a settlement agreement nor a decision by me is required for final disposition of cases settled at the ALJ level. Section 1978.111(d) provides that, before the findings or preliminary order of the Assistant Secretary for Occupational Safety and Health (OSHA) have become final, "the cases may be settled if the Assistant Secretary, the complainant and the named person [respondent] agree to the settlement." Thus, where the Assistant Secretary is a signatory to the settlement agreement or has indicated his specific approval of the terms of the agreement, section 1978.111(d) does not require further evaluation of such terms by either the ALJ or by me. See Conrad v. Johns, Case No. 86-STA-17, Secretary's Order issued June 8, 1987. Section 1978.111(d) simply requires that "notice of the settlement shall be filed with the administrative law judge or the Secretary, as the case may be." The purpose of the notice requirement is so that disposition of the case may be accomplished.

   Henceforth, therefore, whenever a case under the STAA which is before the ALJ is settled, and the Assistant Secretary for OSHA or his designee is a signatory to the agreement or has indicated in writing that he approves of the settlement, the ALJ may issue a final order dismissing the case pursuant to the settlement, and does not need to forward the record of the case and his decision to me. If the settlement agreement presented to the ALJ does not indicate the Assistant Secretary's approval of the settlement, the ALJ shall prior to dismissal of the case, direct the Assistant Secretary to review the settlement and to determine whether, in the Assistant Secretary's view, the settlement is fair, adequate and reasonable. See Secretary's Order in Conrad v. Johns, Case No. 86-STA-17, issued June 8, 1987, directing the Assistant Secretary to review the agreement of settlement. The Assistant Secretary's determination shall become part of the record of the case.

[Editor's note: The regulation underlying Kidd was changed in 1988.]

[STAA Digest X A 2]
STAA HEARING MAY NOT BE DISMISSED BASED ON A SETTLEMENT UNLESS AND UNTIL THE SETTLEMENT AGREEMENT IS SUBMITTED TO THE ALJ OR ARB FOR REVIEW

In Karoly v. Brink's Inc. , ARB No. 07-019, ALJ No. 2005-STA-10 (ARB Sept. 29, 2008), the ARB remanded the case to the ALJ for a hearing or submission of a settlement agreement, where the Complainant had requested dismissal of the STAA action based on a settlement, but failed to provide a copy of a signed, executed settlement agreement to either the ALJ or the ARB.

X.A.2. Requirement of written agreement; binding on parties

In Tankersley v. Triple Crown Services, Inc., 92- STA-8 (Sec'y Oct. 17, 1994), the Secretary approved a settlement based on the Complainant's attorney's oral acceptance of a settlement offer.

In Tankersley, the ALJ had recommended approval of a settlement in an earlier recommended order, but the Secretary had disagreed, explaining:

Because this record contains no written settlement signed by all parties, or other memorialization of an entire agreement to which each party has consented, Respondents' motion for Approval of Adjudicatory Settlement must be denied. (Citation omitted)

On remand, the ALJ received additional evidence and concluded that the parties reached a fully consummated agreement, which is binding and should be enforced. The Secretary agreed that the Complainant expressly authorized his attorney to settle the case, and when his attorney accepted Respondent's offer by telephone, a binding agreement existed. Complainant admitted that he instructed his attorney to "settle the claim for what you can get." The Secretary concluded that "[a]t most, Complainant appears to have had second thoughts about the level of his recovery, which does not justify setting aside an otherwise valid agreement." [citations ommitted]

In a footnote, the Secretary explained that although the regulations ordinarily provide that the ALJ may issue a final order of dismissal where the parties agree to an adjudicatory settlement, in view of the circumstances and disagreement, he accepted jurisdiction to review the ALJ's rulings.

[STAA Digest X A 2]
SETTLEMENT; PRINCIPLES GOVERNING STAA SETTLEMENTS; ORAL SETTLEMENTS

In Eash v. Roadway Express, Inc. , ARB No. 99-037, ALJ No. 1998-STA-28 (ARB Oct. 29, 1999), the ARB explained that STAA settlements, unlike most other settlements, are subject to the Secretary of Labor's "participation and consent." See 49 U.S.C. § 31105(b)(2)(C). Thus, once a complainant and respondent have reached agreement, the Secretary (via the ARB) also "may consent to the agreement if it protects the interests of the public and the complainant." Macktal v. Sec'y of Labor , 923 F.2d 1150, 1156 (5th Cir. 1991) (analogous provision of the ERA).

Where an oral agreement is presented for approval, the record clearly must reflect all material terms of the settlement and evidence an unequivocal declaration by the parties that they have agreed to those terms, such as a evidence of documentation of an agreement signed by the complainant, or by reaffirmance of an agreement by the complainant in open court.

Federal contract law governs the validity of any settlement of an STAA whistleblower complaint. Thus, the ARB concluded it is appropriate to refer to the Restatement (Second) of Contracts and the Restatement (Second) of Agency to discern the applicable federal common law rules, and as well as to federal case law.

In Eash , the central issue was whether a settlement agreement negotiated by Complainant's first attorney had been accepted by Complainant, or was enforceable based on an authorization by Complainant of the attorney to settle absent prior approval. The ALJ concluded that there had been an enforceable oral agreement. The ARB, however, in a detailed opinion, concluded that the settlement agreement was not enforceable, finding that Complainant neither accepted nor authorized acceptance of Respondent's settlement offer. The ARB's opinion thoroughly analyzed whether Complainant authorized acceptance, based on a close analysis of the precise wording of Complainant's settlement instructions. The Board found neither actual, either express or implied, or apparent authority. The ARB also found no evidence suggesting that Complainant ratified the settlement, such as by failing promptly to repudiate the agreement. The ARB also considered whether, assuming arguendo that Complainant made an oral acceptance of the offer of settlement, there was an intent with the eventually produced written document to memorialize an already enforceable oral agreement, or to require a written agreement as a condition precedent to a binding contract. The Board, following the criteria listed in Ciaramella v. Reader's Digest Ass'n, Inc. , 131 F.3d 320, 323 (2d Cir. 1997), closely considered testimony relating to intent, and referred to language from the agreement itself, to conclude that the parties intended to reserve the right not to be bound to any oral agreement in principle, that there was no partial performance of the contract, and that the written agreement exposed matters still to be worked out. The ARB also took into consideration caselaw indicating that settlements of litigation normally should be documented either in writing or on the record in open court.

Finally, the ARB concluded that the agreement would be void for nonperformance, as Complainant had not acted to dismiss his complaint or withdraw his request for a hearing, which were conditions precedent to the written agreement.

One member of the Board concurred with the finding that a settlement had not been agreed to, but disagreed with the majority that the ALJ erred in finding that Complainant's attorney had the authority to do so. That member did not find that the ALJ's finding in this respect was not supported by substantial evidence, and noted that a high degree of proof is normally required of a party asserting that his or her attorney acted without the client's authority.

[STAA Digest X A 2]
ORAL SETTLEMENT; BINDING EFFECT

In Eash v. Roadway Express, Inc. , 1998-STA-28 (ALJ Feb. 3, 1999), the ALJ recommended enforcement of a settlement agreement to which Complainant had orally agreed, but declined to sign when presented with the written agreement. The ALJ relied in great part on the credible testimony of Complainant's former counsel.

X A 2 Notice of Settlement is sufficient

Where the Assistant Secretary for Occupational Safety and Health (OSHA) has agreed to a settlement entered into by the parties, the Secretary's approval of the settlement terms is not required. Notice of the settlement is sufficient. Blair v. Lanman Corp., 86-STA-17, (Sec'y Sep. 27, 1988).

[Editor's note: The Secretary has noted that the ALJ had the wrong case number and that this is the correct number. There is, however, another case with the 86-STA-17 number.]

X A 2 Notice of Settlement is sufficient

Where the Assistant Secretary for Occupational Safety and Health (OSHA) has agreed to a settlement entered into by the parties, the Secretary's approval of the settlement terms is not required. Notice of the settlement is sufficient. Stone v. Nu-Car Carriers, Inc. , 86-STA-16, (Sec'y Feb. 14, 1989).

X A 2 Requirement that written settlement agreement be submitted to ALJ or Secretary

In Tankersly v. Triple Crown Services, Inc., 92-STA-8 (ALJ Oct. 20, 1992), the ALJ granted the Respondent's motion for approval of an adjudicatory settlement that it had earlier reached orally with the Complainant's counsel. The Complainant attempted to renounce the agreement, but the ALJ found that the agreement was binding even though not reduced to writing.

The Secretary declined to adopt the ALJ's granting of the motion for approval of the settlement because the record did not contain a written settlement signed by all parties, or other memorialization of an entire agreement to which each party has consented. Tankersly v. Triple Crown Services, Inc., 92-STA-8 (Sec'y Feb. 18, 1993).

The Secretary stated that a settlement under the STAA cannot become effective until its terms have been reviewed and determined to be fair, adequate, and reasonable, and in the public interest. Consistent with that required review, the regulations specifically provide that "[a] copy of the settlement shall be filed with the ALJ or the Secretary as the case may be." 29 C.F.R. § 1978.111(d)(2). As explained in a case arising under an analogous statutory employee protection provision, a settlement will not be approved unless it is submitted in writing and signed by all parties, or the record contains an unequivocal declaration by the parties that they have agreed to all the terms of a settlement and stating those terms clearly. Hasan v. Nuclear Power Services, Inc., 86-ERA-24 (Sec'y Mar. 21, 1991), slip op. at 2 (order to show cause; Final Decision & Order June 26, 1991, petition denied, No. 91-4642 (5th Cir. May 7, 1992)).

[Editor's note: The thrust of the Secretary's decision is that a settlement agreement must be in writing and submitted to the reviewing official. The ruling in Tankersley that a copy of the settlement shall be filed with the ALJ or the Secretary conflicts with Urie v. Car-Dar Enterprises, Inc., 88-STA- 16, 18, 26, 28 (Sec'y Sept. 12, 1989). Under Erie , the proper approach would have been to have the Assistant Secretary state OSHA's position on the agreement, and NOT to require the submission of the settlement agreement with the ALJ. The decision in Tankersley conforms with the 1988 version of the STAA regulations in regard to settlements, and is probably correct for that reason. Urie cited Kidd v. Sharron otor Lines, Inc., 87-STA-2 (Sec'y July 30, 1987), which was decided under the pre-1988 version of the regulations.

One more point about Tankersley . The ruling is in direct conflict with O'Sullivan v. Northeast Nuclear Energy Co., 90-ERA-35 and 36 (Sec'y Dec. 10, 1990), in which the Secretary held that an oral ERA settlement is enforceable. The difference probably is that the STAA regs specifically state that a settlement must be submitted in writing -- but O'Sullivan was not addressed in Tankersley .]

[STAA Digest X A 3]
STAA SETTLEMENT; REVIEW AND APPROVAL BY THE ARB

In Uhley v. William F. Braun Milk Hauling, Inc. , ARB No. 12-082, ALJ No. 2011-STA-33 (ARB Nov. 22, 2013), the parties cross-appealed the ALJ's decision to the ARB. The Complainant's appeal was dismissed upon notice to the ARB withdrawing the appeal. Later, the ARB issued an order directing the Respondents to show cause why their appeal should not be dismissed for failure to file an opening brief. The Respondents replied that they had previously requested withdrawal of their petition for review and dismissal of their appeal based on settlement of the underlying claim. The ARB granted the motion to dismiss, writing:

Based on the parties� respective and undisputed representations that this case has been settled, and because no party objects to dismissal and neither party contests the settlement, we will grant Respondents� motion requesting dismissal. We do so noting, however, that dismissal of this appeal is not to be interpreted as approval of the settlement reached by the parties nor do we otherwise condone the failure by both parties to submit the settlement to the Administrative Review Board for review and approval prior to respectively seeking dismissal.

USDOL/OALJ Reporter at 2 (footnote omitted). In a footnote, the ARB observed that adjudicatory settlements may be settled "if the participating parties agree to a settlement and such settlement is approved by the Administrative Review Board . . . or the ALJ." 29 C.F.R. § 1978.111(d)(2). The ARB stated that "Because the parties have not provided the Board with a copy of the settlement, the Board did not have the opportunity to determine whether the parties� settlement agreement constituted a fair, adequate, and reasonable settlement of Uhley's STAA complaint." USDOL/OALJ Reporter at n.2.

[STAA Digest X A 3, X B AND X E]
INVESTIGATORY SETTLEMENTS BEFORE OSHA; ALJ'S ONLY ROLE IS TO DETERMINE WHETHER PARTIES HAD AGREED AND SIGNED THE SETTLEMENT AND WHETHER OSHA APPROVED THE SETTLEMENT; ALJ DOES NOT HAVE THE AUTHORITY TO CONSIDER REPUDIATION CLAIM OR TO DETERMINE WHETHER THERE WAS COMPLIANCE

INVESTIGATORY SETTLEMENT; ALJ DOES NOT HAVE THE AUTHORITY TO ADJUDICATE WHETHER PARTY WHO WAS NOT EXPRESSLY DISCUSSED IN THE SETTLEMENT WAS COVERED BY A RELEASE OF THE EMPLOYER'S "AGENTS"

In Carter v. Marten Transport, Ltd. , ARB No. 09-117, ALJ No. 2009-STA-31 (ARB July 21, 2011), the Complainant was successful in establishing that his employer (Marten) had violated the STAA whistleblower provision; Marten was ordered to reinstate the Complainant, give him back pay and compensation for emotional distress, and amend his DAC report by deleting unfavorable information and showing only continuous employment. In 2008, the Complainant filed a second STAA complaint alleging that Marten and a commercial service that maintains DAC reports (USIS) blacklisted him by retaining negative information about him in his DAC report. While the matter was before OSHA, Marten and the Complainant entered into a settlement agreement. The agreement did not mention USIS. OSHA approved the settlement, dismissed the complaint against Marten based on the settlement, and dismissed the complaint against USIS based on a finding that it had not been proved that USIS engaged in adverse employment action.

The Complainant objected to the OSHA findings, asserting that Marten had breached the settlement agreement by not paying the monies owed and not correcting his DAC report. The Complainant specified two instances after the settlement was signed in which he lost employment opportunities because of information received about him.

The ALJ found that the settlement before OSHA resolved both the first and second complaints in regard to Marten, and that the settlement included USIS because the settlement expressly dismissed claims against Marten's agents. On appeal, the ARB affirmed in part, but remanded for further proceedings.

Investigatory Settlements

First, the ARB found that, in regard to the "investigatory settlement," the "ALJ's only option was to ascertain whether there had been a settlement approved and signed under § 1978.111(d)(1) and, if so, dismiss such claims [as included in the settlement]." USDOL/OALJ Reporter at 4. The ARB wrote:

With respect to Investigative Agreements, there is no regulatory requirement or authority for the ALJ or the ARB to delve into the validity or reasonableness of a settlement agreement. The ALJ has no legal authority to entertain a repudiation claim as was done in this case. The ALJ has no legal authority to determine whether the parties complied with the terms of a settlement agreement. Once the ALJ was satisfied that the Settlement was approved and signed by the parties, he was required to end the litigation as to the claims resolved by the Agreement. The ALJ should then have moved forward in the administrative process as to the claims against any parties that did not sign the settlement agreement.

USDOL/OALJ Reporter at 5 (footnote omitted).

Finding That USIS Was Marten's Agent

The ARB vacated and remanded the ALJ's dismissal of the complaint against USIS for three reasons. First, the ALJ had not provided a sufficient explanation for the legal and factual basis for the conclusion that USIS was acting as an "agent" within the meaning of the settlement. Second, the issue of agency is of mixed fact and law, and the facts on agency needed to be undisputed to render a summary decision. Third, the ARB found that an ALJ does not have the authority to adjudicate a pure contract dispute - in this case, whether the settlement's inclusion of "agent" applied to USIS. The ARB stated that "because USIS failed to sign the Settlement and because the settlement did not mention USIS, the ALJ must proceed to address Carter's claim against USIS, absent intervention by a court of law." USDOL/OALJ Reporter at 6. On remand, the ALJ was directed to determine whether USIS is a covered respondent under the STAA.

ALJ's Jurisdiction to Consider Potential New Claims Arising After Date of Investigatory Settlement

The ARB also found that the ALJ must determine on remand whether the Complainant's objections to the Secretary's Findings of March 10, 2009 asserted new claims. The Complainant had alluded in his objections to new information provided on March 27, 2009, that Marten was still providing deceptive employment history to prospective motor carrier employers. The ARB noted that the settlement only released Marten from liability for any conduct that occurred prior to the effective date of the settlement, and that new acts occurring after the effective date of the settlement could form the basis for a new complaint. The ARB found that OSHA's had implicitly - if not explicitly - rejected the Complainant's claims of continued false reporting by Marten and USIS when it dismissed the complaints. The ARB found, therefore, that the ALJ had the jurisdiction to decide whether the Complainant had asserted new claims of discrimination that arose subsequent to the settlement.

[STAA Digest X A 3]
NOTICE OF WITHDRAWAL OF APPEAL MUST SPECIFY WHETHER IT IS GROUNDED IN WITHDRAWAL OF OBJECTIONS OR IN AN ADJUDICATORY SETTLEMENT

Where the Complainant filed a notice of withdrawal of appeal with the ARB, the ARB ordered the Complainant to state whether he was withdrawing his objections to the OSHA findings and order, or whether the parties had entered into an adjudicatory settlement, in which case the parties are required to file a copy of the settlement for review. In response, the Complainant filed a copy of a settlement agreement, which the ARB then approved. Goulet v. Tri-Tech , ARB No. 10-067, ALJ No. 2009-STA-56 (ARB Feb. 28, 2011).

[STAA Digest X A 3]
STAA SETTLEMENT AGREEMENT MUST BE SUBMITTED AND REVIEWED

In Hamilton v. Tri-National, Inc. , ARB No. 10-100, ALJ Nos. 2009-STA-12 and 13 (ARB July 22, 2010), the parties submitted a joint stipulation of dismissal based on settlement the ALJ, who recommended dismissal of the complaint. On review, the ARB found that the ALJ had neither requested nor reviewed the settlement agreement. The ARB therefore ordered submission of the settlement agreement. Upon review the agreement, the ARB approved it.

[STAA Digest X A 3]
STAA SETTLEMENT AGREEMENT MUST BE SUBMITTED AND REVIEWED

In Coogler v. Schneider National Carriers, Inc. , ARB No. 09-133, ALJ No. 2009-STA-23 (ARB July 30, 2010), the Complainant submitted a voluntary withdrawal based on an amicable resolution of the case, and the the ALJ recommended dismissal of the complaint. On review, the ARB found that the ALJ had neither requested nor reviewed the settlement agreement. The ARB therefore ordered submission of the settlement agreement. Upon review the agreement, the ARB approved it.

[STAA Digest X A 3]
SETTLEMENT AGREEMENT MUST BE SUBMITTED FOR ALJ REVIEW AND APPROVAL

In Bradbury v. Schwan's Food Co. , ARB No. 08-120, ALJ No. 2008-STA-7 (ARB Jan. 29, 2009), the ALJ received a letter informing that the parties had settled the case, and noting that under the agreement the Complainant must have the ALJ's dismissal order before the terms favorable to the Complainant could be applied. The ALJ also received a request from the Complainant for issuance of an Order of Dismissal With Prejudice. The ALJ dismissed under 29 C.F.R. § 1978.111(c), which permits a party to withdraw objections to the OSHA findings. The ALJ's recommended order did not acknowledge that a settlement had been entered into, and did not approve the settlement as required by 29 C.F.R. § 1978.111(c). Thus, on review, the ARB ordered the parties to either submit the settlement for review or show cause why the case should not be remanded for a hearing on the merits. The settlement was thereafter submitted and approved by the ARB.

[STAA Digest X A 3]
IF STAA COMPLAINT IS RESOLVED BY ADJUDICATORY SETTLEMENT, IT MUST BE REVIEWED AND APPROVED BY THE ALJ AND THE ARB

In Mann v. Schwan's Food Co. , ARB No. 09-017, ALJ No. 2008-STA-27 (ARB Dec. 31, 2008), the parties informed the ALJ in a letter that they had reached a resolution of the case and would be filing a Withdrawal of Objections and Notice of Dismissal. An attached letter indicated that the resolution was based on a settlement. Thereafter, the ALJ dismissed the case without acknowledging or approving the settlement. On review, the ARB wrote:

Perhaps hoping to keep the settlement confidential, the parties (and the ALJ) concluded that the regulations' requirement of settlement approval were inapplicable if Mann withdrew his objections to the Secretary's findings. However, "[i]n keeping with the statute, a settlement under the STAA cannot become effective until its terms have been reviewed and determined to be fair, adequate, and reasonable, and in the public interest. . . . Consistent with that required review, the applicable regulations specifically provide that �[a] copy of the settlement shall be filed with the ALJ or the Secretary as the case may be.' 29 C.F.R. § 1978.111(d)(2)."

USDOL/OALJ Reporter at 2-3 (footnotes omitted). Because the settlement was in the record, the ARB reviewed it and found that it was fair, adequate, and reasonable, and in the public interest. The Board thus approved the agreement and dismissed the complaint with prejudice.

[STAA Digest X A 3]
SETTLEMENT; ERROR TO APPROVE SETTLEMENT PRIOR TO COMPLETION OF ALL CONDITIONS PRECEDENT

In Craig v. City of Torrington, Wyoming , ARB No. 06-152, ALJ No. 2006-SDW-1 (ARB Apr. 30, 2008), the parties reached a settlement, a condition of which was that the parties would file a joint motion for dismissal with the ALJ after the Respondent took certain corrective actions. The Respondent never took some of the corrective actions, and the parties never submitted the joint motion for dismissal. The ALJ, however, issued a Decision and Order Approving Settlement Agreement, ordering the parties to carry out the terms of the agreement and dismissing the complaint. On review, the ARB found that the ALJ erred by entering an order of dismissal before he conditions precedent were fulfilled. The ARB vacated the ALJ's order and remanded the case for a hearing, completion by the parties of their settlement agreement, or other action consistent with the ARB's order.

[STAA Digest X A 3]
SETTLEMENT; FAILURE OF ALJ TO REVIEW SETTLEMENT HARMLESS ERROR IN STAA CASES BECAUSE OF DE NOVO REVIEW AND ISSUANCE OF FINAL ORDER BY THE ARB

In Sellers v. Source Interlink Companies , ARB No. 07-075, ALJ No. 2006-STA-44 (ARB July 31, 2007), the ARB did not find a copy of the settlement approved by the ALJ in the record, and requested that the ALJ forward it. In response, the ALJ's office provided the settlement agreement, but explained that the ALJ who had originally presided over the matter had died, and a different ALJ had issued the recommended order, apparently without actually reviewing the agreement. The ARB found that this was harmless error because it reviews an ALJ's legal conclusions de novo, because no party objected to the ALJ's failure to review the settlement, and because the ARB is required to issue the final decision in STAA cases.

X A 3 STAA settlements; consideration of adequacy of consideration; STAA settlements may be approved by ALJ

Under the STAA and implementing regulations, a proceeding may be terminated on the basis of a settlement, provided either the Secretary or the ALJ approves the settlement. 49 U.S.C. app. § 2305(c)(2)(A); 29 C.F.R. § 1978.111(d)(2). Consistently, the Secretary has held that the terms of the proposed settlement must be fair, adequate, and reasonable. An ALJ does not err in inquiring into the propriety of the settlement before deciding whether to approve its terms. In Champlin v. Florilli Corp., 91-STA-7 (Sec'y May 20, 1992), however, the Secretary rejected the ALJ's refusal to accept a settlement because of a disparity between the consideration for the settlement and the amount of damages assessed in the Preliminary Findings and Order of the Assistant Secretary. The Secretary found:

By law, "[a]dequacy of consideration turns not on whether a party received as much as he might had he litigated the dispute and won, "but, rather, whether he received something of value to which he was not already unquestionably entitled. [citations omitted]" Quoting DiMartino v. City of Hartford, 636 F. Supp. 1241, 1250 (D. Conn. 1986) (age discrimination case).
Since a hearing had been requested, the Assistant Secretary's preliminary findings are not accorded weight in any decision in the case, and the complainant had no guarantee of winning any amount of damages.
The complainant knowingly and voluntarily consented to the settlement at the time it was executed and did not show any legitimate basis to nullify the settlement. [Complainant had later testified that he signed under duress].
Complainant accepted the settlement money, never relinquished or repaid the consideration, and remained silent regarding the fairness of the settlement despite orders from the ALJ inviting a statement until a telephone conversation several months later.
That complainant was not represented by his own independent counsel does not persuade that the agreement was unknowing or involuntary where complainant was neither barred from retaining private counsel nor denied access to counsel.
Complainant could not avoid the settlement merely because upon further reflection he believe the terms were insufficient. Glass v. Rock Island Refining Corp., 788 F.2d 450, 454-55 (7th Cir. 1986).

The Secretary dismissed the complaint based on the settlement agreement.

[Editor's Note: Upon refusing the approve the settlement agreement, the ALJ proceeded with the evidentiary hearing. The ALJ did not believe the complainant's testimony, recommended dismissal of the complaint, and ordered complainant to repay the settlement monies.]

[STAA Digest X A 3]
SETTLEMENT; PARTIES' STIPULATED DISMISSAL ASSUMED NOT TO INCLUDE A SETTLEMENT

In Green v. Deffenbaugh Disposal Services , ARB No. 05-034, ALJ No. 2004-STA-50 (ARB Feb. 28, 2005), the ARB assumed that no settlement underlied a joint stipulation of dismissal with prejudice which did not refer to a settlement, even though the Complainant had indicated a desire to settle in a telephone conference call the prior week, "since [a settlement] would have to be submitted to the ALJ for approval and then approved by the Administrative Review Board. See 29 C.F.R. § 1978.111(d)(2)."

[STAA Whistleblower Digest X A 3]
SETTLEMENT BEFORE THE ALJ; ALJ SHOULD REVIEW, BUT THE ARB ISSUES THE FINAL DECISION AND ORDER

Where the parties in a STAA whistleblower case settle while the matter is pending before the ALJ, the ALJ appropriately reviews the agreement; however, the ARB "must, nevertheless, issue a final decision and order .... Monore v. Cumberland Transp. Corp. , ARB No. 01 101, ALJ No. 00 STA 50 (ARB Sept. 26, 2001); Cook v. Shaffer Trucking Inc. , ARB No. 01 051, ALJ No. 00 STA 17 (ARB May 30, 2001)." Rhoades v. First Student, Inc. , ARB No. 04 038, ALJ No. 2003 STA 41 (ARB Mar. 18, 2004). To the same effect Radle v. Panther Bus Service , ARB No. 04 018, ALJ Nos. 2003 STA 19 and 20 (ARB Mar. 22, 2004); Ass't Sec'y & Bielicki v. Lu Transport, Inc. , ARB No. 04 053, ALJ No. 2004 STA 11 (ARB Mar. 30, 2004).

[STAA Whistleblower Digest X A 3]
SETTLEMENT BEFORE ALJ; ARB ISSUES FINAL ORDER

In Howick v. Experience Hendrix, LLC , ARB No. 02 049, ALJ No. 2000 STA 32 (ARB Sept. 26, 2002), the parties reached a settlement during a recess at the hearing, and read the terms of the agreement into the record when the hearing re convened. Thereafter, the parties failed to submit a written, signed agreement to the ALJ. Complainant argued that the settlement should not be approved, maintaining that he had agreed to it under duress. The ALJ found that Complainant failed to prove duress, and, finding that the settlement as reached at the hearing was fair, adequate and reasonable, approved the settlement and dismissed the case with prejudice.

The ARB, apparently sua sponte , issued a Notice of Review and Briefing Schedule, pursuant to 29 C.F.R. § 1978.109(c)(2). Subsequently, Complainant field a Notice of Appeal. Ultimately, Respondent filed a brief, but Complainant filed instead a withdrawal of all objections to the ALJ's order approving settlement and dismissal of the case.

The ARB found that the ALJ had properly reviewed and approved the settlement under 29 C.F.R. § 1978.111(d)(2). The Board held, however, that "the ARB must, nevertheless, issue a final decision in order in the case. Monroe v. Cumberland Transportation Corp. , ARB No. 01 101, ALJ No. [20]00 STA 50 (ARB Sept. 26, 2001); Cook v. Shaffer Trucking Inc. , ARB No. 01 051, ALJ No. [20]00 STA 17 (ARB May 30, 2001)."

[ Editor's note: The Howick , Monroe and Cook rulings on the requirement that the ARB issue the final order, even though the ALJ has approved a settlement reached before the ALJ, is a reversal of course for the ARB. In a "Notice of Case Closing" in Fisher v. ABC Trailer Sales & Rental, Inc. , 1997 STA 20 (ARB ay 29, 1998), for example, the ARB wrote: "Pursuant to 29 C.F.R. §§1978.111(d)(2) (1997), the ALJ has the authority to approve a settlement under the STAA at this stage in the proceeding. Accordingly, the ALJ's order is the final departmental action and this case is CLOSED ." To the same effect: Ass't Sec'y & Ely v. Air Ride, Inc. , 1997 STA 24 (ARB Jan. 14, 1998); Hahn v. New Directions Tours , 1997 STA 26 (ARB Jan. 14, 1998); Dinkins v. Bull Market, Inc. , 1997 STA 34 (ARB Jan. 14, 1998); Thompson v. G & W Transportation, Co., Inc. , 1990 STA 25 (Sec'y Oct. 24, 1990).

OALJ had been interpreting the Notices of Case Closing as meaning that ALJs issue the final order in STAA cases.]

[STAA Digest X A 3]
SETTLEMENT; ARB REVIEW

Once the ALJ has issued a recommended decision and forwarded the case to the ARB for review, the ARB is the appropriate body to review a subsequent settlement agreement. Ass't Sec'y & Zurenda v. Corporate Express Delivery Systems, Inc. , ARB No. 00-041, ALJ No. 1999-STA-30 (ARB Mar. 31, 2000).

[STAA Digest X A 3]
SETTLEMENT REACHED AFTER ALJ ISSUES RECOMMENDED DECISION; ARB PROPER BODY TO REVIEW

Where the parties reached a settlement of an STAA whistleblower complaint after the ALJ issued his recommended decision and order, and forwarded the case to the ARB for consideration, the ARB was the appropriate body to review the settlement agreement. See 29 C.F.R. § 1978.111(d)(2). Ass't Sec'y & Swank v. Four Winds Inc. , 1998-STA-4 (ARB Jan. 29, 1999).

[STAA Digest X A 3]
SETTLEMENT; APPROPRIATE BODY TO REVIEW

Where the parties reached a settlement agreement after the ALJ had issued a recommended decision and forwarded the case to the ARB, the ARB is the appropriate body to review the agreement. See 29 C.F.R. § 1978.111(2). Bettner v. Daymark Foods, Inc. ,1997-STA-23 (ARB Aug. 10, 1998).

[STAA Digest X A 3]
SETTLEMENTS; IN STAA ADJUDICATORY SETTLEMENTS, ALJ'S ORDER APPROVING IS FINAL

Pursuant to 29 C.F.R. § 1978.111(d)(2), an ALJ has the authority to approve an adjudicatory settlement. If approved, the ALJ's order is the final departmental action. Fisher v. ABC Trailer Sales & Rental, Inc. , 97-STA-20 (ARB May 29, 1998).

[STAA Digest X A 3]
SETTLEMENTS IN STAA PROCEEDINGS; ALJ'S ORDER IS FINAL IF SETTLEMENT REACHED IN ADJUDICATORY STAGE

Pursuant to 29 C.F.R. § 1978.111(d)(2), an ALJ has the authority to approve a settlement under the STAA at the adjudicatory stage of the proceeding. Accordingly, an ALJ's order approving such a settlement is the final departmental action on the case. Ass't Sec'y & Ely v. Air Ride, Inc. , 97-STA-24 (ARB Jan. 14, 1998); Hahn v. New Directions Tours , 97-STA-26 (ARB Jan. 14, 1998); Dinkins v. Bull arket, Inc. , 97-STA-34 (ARB Jan. 14, 1998).

[STAA Digest X A 3]
SETTLEMENT FOLLOWING FINAL BOARD ORDER

In Caimano v. Brink's, Inc ., 95-STA-4 (ARB Jan. 22, 1997), Respondent filed a motion seeking the Board's withdrawal of the Secretary's Decision and Order of Remand in which Respondent was found to have violated the STAA and the Board's Final Decision and Order in which Respondent was ordered to pay damages, interest, attorney's fees and costs. The motion was based on the need to effect a prompt resolution of the matter, and a suggestion that a settlement had been effected contingent on the vacating of the aforesaid decisions.

The Board indicated that Respondent's motion was essentially a FRCP 60(b) motion, and that it had no authority to entertain such a motion while jurisdiction rested with an appellate tribunal. Moreover, the Board held that consideration of such motion required submission of a settlement agreement that meets the criteria for approval of a STAA settlement as required by 29 C.F.R. § 1978.111(d)(2).

Since the Sixth Circuit had evidently not remanded the matter to the Board, and since it was not established that Complainant had agreed to the settlement suggested by the motion, the Board ordered the parties to show cause why Respondent's motion should not be denied.

SETTLEMENT MUST BE PRESENTED TO DEPARTMENT FOR APPROVAL
[N/E Digest XVII C 3]
[STAA Digest X A 3]

In Faust v. Chemical Leaman Tank Lines, Inc. , 92-SWD-2 and 93-STA-15 (ARB June 13, 1996), the Secretary issued a remand order to the ALJ for a recommended order on damages. Respondent filed a request that the remand order be vacated because the parties had settled a couple months prior to issuance of the remand order. This was the first notice DOL had of the settlement. The Board declined to vacate the remand order, noting that until the settlement was approved it was not valid. The Board directed the ALJ to consider the proposed settlement, "or if either party so desires, for issuance of a recommended order on damages consistent with the [remand order]".

X A 3 ALJ's order to clarify reasonableness and fairness

In McKinley v. Coosada Trucking Co., 91-STA-6 (ALJ Apr. 25, 1991), the ALJ issued an order concerning the reasonableness and fairness of the parties' settlement agreement. The ALJ ordered

the parties to provide information regarding the wages the Complainant could reasonably have expected had he been employed in his regular job as a truck driver (to compare against the proposed settlement payment)
suggested that the release be limited to the STAA
suggested that a term requiring the Complainant to keep the matter confidential for ten years, or be held in contempt was not enforceable
questioned whether an ALJ could find reasonable an agreement for the Complainant to make a liquidated damages payment of $4,000 in the event he violated the confidentiality agreement
clarify whether the Complainant's temporary reinstatement would become permanent
required argument on why the Complainant should bear his own attorneys' fees and costs, and an estimate of their amount.

In the final order, the ALJ approved the money damages payment, noted that the Complainant's reinstatement was permanent, that the confidentiality agreement was a private agreement and the parties' recourse was to the state or local courts and not the U.S. Dept. of Labor, that the Complainant would permit an amount of the damages payment to be withheld by his attorney for fees and expenses. McKinley v. Coosada Truck Co., 91- STA-6 (Sec'y May 22, 1991).

X A 3 Finality of ALJ order

In Byron v. Dale Haugen Trucking, 93-STA-20 (Sec'y ay 10, 1993), the Office of Administrative Appeals issued a Notice of Case Closing, noting that under the regulations implementing the STAA, either an ALJ or the Secretary of Labor may approve a settlement agreement and dismiss a case. The ALJ had issued a "Final Order Approving Settlement and Dismissing Complaint". Byron v. Dale Haugen Trucking, 93-STA-20 (ALJ Apr. 23, 1993).

X A 3 Whether ALJ should review a settlement agreement and whether the ALJ's order is final

In Binder v. Truck Transport, Inc., 88-STA-23 (Sec'y Sept. 27, 1988), the Secretary found that the ALJ erred in reviewing a settlement agreement entered into by the Assistant Secretary and forwarding a recommended decision to the Secretary.

[Editor's note: This decision was based on Kidd v. Sharron otor Lines, Inc., 87-STA-2 (Sec'y July 30, 1987), which in turn was based on a version of the regulations which has since been changed. Kidd may have lost relevancy under the new regulation.]

X A 3 ALJ's approval of STAA settlement is final

Accord Swisher/Ratliff : Kopacz v. Scammon Trucking, Inc., 93-STA-33 (Sec'y Sept. 23, 1993) (Notice of Case Closing by OAA); Agoitia v. Melvin Minor Trucking, 93-STA-37 (Sec'y Sept. 23, 1993).

X A 3 Treatment of STAA settlements by OAA

The OAA has treated STAA settlements in different ways for the past several years. For example, in various cases OAA:

issued a Final Order of Dismissal in which the ALJ was instructed to follow the procedures set out in Kidd which would have required the ALJ to submit the settlement to OSHA for approval even though this case was adjudicated under regulations revised after Kidd was decided Urie v. Car-Dar Enterprises, Inc., 88-STA-16, 18, 26 and 28 (Sec'y Sept. 12, 1989) (Asst. Sec'y not on caption, but entered agreement)
issued an Approval of Settlement and Dismissal of Complaint, in which the ALJ was said to have erred in issuing a recommended order of dismissal because the case was settled during adjudication of the complaint, but should have reviewed the agreement and if appropriate approved the agreement and issued a "final" order of dismissal under new regulation 1978.111(d)(2). Thompson v. G & W Transportation Co., Inc., 90-STA-25 (Sec'y Oct. 24, 1990) (Asst. Sec'y should have been on caption; settlement was not signed by OSHA representative)
simply returned the file to OALJ. Ducote v. L & B Metals, Inc., 92-STA-3 (letter of Feb. 26, 1992 from Ms. Culbreth to Judge Litt) (Asst. Sec'y not on caption and did not sign agreement)
reviewed the settlement and issued a Final Order without commenting on whether the ALJ could approve the settlement and issue a final order. Roos v. Commonwealth Edison Co., 91-ERA-52 (Sec'y June 24, 1992) (Asst. Sec'y was not on caption and did not sign the settlement)
issued a Final Order Approving Settlement Agreement noting that since the Assistant Secretary approved the settlement, the ALJ had the authority to issue a final order, and that the order was to "clarify" that the case was dismissed. Dacus v. Boston-Buffalo Express, Inc., 92-STA-42 (Sec'y Nov. 24, 1992) (Asst. Sec'y on caption and reviewed and approved agreement)
issued an Order to Show Cause why an unacceptable provision of the settlement should not be severed. Stack v. Preston Trucking Co., Inc., 92- STA-21 (Sec'y Nov. 25, 1992) (Asst. Sec'y was not on caption and did not sign the settlement)
issued a Final Order Approving a Settlement Agreement, stating that either the ALJ or the Secretary can approve STAA settlements, but then going ahead and reviewing the settlement anyway. Swisher v. Gerber Childrenswear, Inc., 93-STA-1 (Sec'y Jan. 4, 1993) (Asst. Sec'y not on caption; unknown whether OSHA was involved in settlement)
issued a Notice of Case Closing, stating that the case was closed pursuant to the ALJ's Order of Dismissal. Knight v. Bud Morgan Towing & Wrecker Serv., 93-STA-3 (Sec'y Feb. 17, 1993) (Asst. Sec'y was on caption)
remanded a case in which the ALJ issued a "Decision and Order Approving Proposed Adjudicatory Settlement and Dismissing Complaint." Tankersley v. Triple Crown Services, Inc., 92-STA-8 (Sec'y Feb. 18, 1993) (Asst. Sec'y did not participate)

X A 3 ALJ may approve settlement

After reviewing the settlement agreement, the ALJ found that the public interest would be well served by the terms and conditions of the agreement. The ALJ concluded that the parties were bound to comply with the terms and conditions of the agreement without further order of the Secretary. See Kidd v. Sharron Motor Lines, Inc. , 87-STA-2 (Sec'y July 30, 1987). The case was dismissed with prejudice. Pease v. Transcon Lines , 89- STA-6 (ALJ July 7, 1989).

X A 3 Finality of ALJ order

In an STAA case, where the Assistant Secretary for Occupational Safety and Health and the respondent jointly moved for approval of the settlement agreement between the parties, the ALJ had the authority to issue a final order dismissing the case because the Assistant Secretary's designee reviewed and approved the settlement agreement. Kidd v. Sharron Motor Lines, Inc., 87-STA-2 (Sec'y July 20, 1987), slip op. at 2; 29 C.F.R. § 1978.111(d)(2).

Dacus v. Boston-Buffalo Express, Inc., 92-STA-42 (Sec'y Nov. 24, 1992).

X A 3 ALJ may approve STAA settlement

Swisher v. Gerber Childrenswear, Inc., 93-STA-1 (Sec'y Jan. 4, 1993) (ALJ issued Recommended Decision and Order Approving Settlement; Secretary stated that either ALJ or Secretary has the authority to approve settlement of a STAA complaint BUT went ahead and reviewed it anyway).

X A 3 Finality of ALJ order

In STAA proceedings, either an ALJ or the Secretary of Labor may approve a settlement agreement and dismiss a case. 29 C.F.R. § 1978.111(d)(2); see Swischer v. Gerber Childrenswear, Inc., 93-STA-1 (Sec'y Jan. 4, 1993).

In Knight v. Bud Morgan Towing & Wrecker Service, 93-STA-3 (Sec'y Feb. 17, 1993) (Notice of Case Closing), the Secretary merely noted that the ALJ had dismissed the case with prejudice based upon a settlement agreement. He did not review the ALJ's decision.

[Editor's note: Knight was signed by the Acting Director of OAA and not by the Secretary of Labor. Swischer was captioned "Final Order Approving Settlement, and though it stated what Knight says it did, the Secretary in Swischer also went ahead and reviewed the settlement agreement. In Tankersly , issued the day after Knight , the Secretary treated an ALJ's acceptance of an oral settlement agreement as a decision and order (as it was also characterized by the ALJ), declined to accept the recommendation to accept the agreement, and remanded to the ALJ. The ALJ's decision to accept the oral agreement was controversial because the complainant thereafter renounced his attorney's acceptance of the agreement.

A review of OAA's treatment of settlements in STAA cases for the past several years reveals that it has varied considerably. Part of the variation may be explained by the change in regulations in 1988 and the ambiguity over whether to apply Kidd (see separate case notes). Part of the variation is simply inconsistency by OAA, sometimes returning the file to OALJ without formal review, sometimes issuing a notice of case closing, and sometimes noting the ALJ's authority to issue a final order, but reviewing the settlement agreement anyway.

Despite the inconsistency, the most recent case law and the current regulations provide the ALJ with the authority to issue a final order approving a settlement in any STAA complaint in which all parties joined the agreement.]

X A 3 Finality of ALJ order

Accord Kidd v. Sharron Motor Lines, Inc., 87-STA-2 (Sec'y July 30, 1987):

Binder v. Truck Transport, Inc., 88-STA-23 (Sec'y Sept. 27, 1988).

X A 3 Changing terms of settlement

In Sandness v. Beyer's Cement, Inc., 85-STA-2 (Sec'y Apr. 30, 1985), the ALJ recommended approval of a settlement agreement, but also adopted as part of his recommended order the findings made by the Regional Administrator in the Preliminary Order. The Secretary stated that inasmuch as the initial findings by the Regional Administrator were not incorporated by the settlement agreement, it was improper for the ALJ to include those findings as part of his recommendation.

X A 3 ALJ may approve STAA settlement

Some case files in which there was no formal participation by the Assistant Secretary were not forwarded to OAA by the ALJ, the ALJ evidently assuming (perhaps reasonably) that the Secretary did not need to review such a dismissal. See, e.g., Rehling v. Sandel Glass Co., 91-STA-33 (ALJ Feb. 28, 1992) (Decision and Order Approving Settlement).

X A 3 Finality of ALJ order

Dacus v. Boston-Buffalo Express, Inc., 92-STA-42 (Sec'y Nov. 24, 1992).

X A 3 Settlement while part of case still pending before ALJ

In Avery v. Roberts Express, 91-STA-40 (Sec'y Feb. 14, 1992), the Secretary approved a consent order and consent motion and order reached by the parties while the damages issue was still pending before the ALJ on a partial remand.

X. A. 3. ALJ's review of settlement terms

In Earwood v. Dart Container Corp., 93-STA-16 (ALJ Sept. 12, 1994), the Complainant filed a STAA complaint based on suspected negative employer references. Complainant had settled a previous STAA complaint. The ALJ found that Complainant did not relinquish all future claims against Respondent by signing the agreement which resolved the previous complaint which included a comprehensive release of past, present and future claims complainant might have against Respondent. The ALJ relied on Doyle v. Hydro Nuclear Services, 89-ERA-22 (Sec'y Mar. 30, 1994), and Alexander v. Gardner-Denver Co., 415 U.S. 36, 51 (1974) (ALJ determined that it was reasonable to follow treatment of waivers of in Title VII cases; Supreme Court had held that "[t]here can be no prospective waiver of an employee's rights under Title VII.").

X A 4 ALJ may approve STAA settlement in final order

An administrative law judge has the authority to approve an STAA settlement, and hence, his or her order becomes the final order in the case. See Arledge v. Scottserve Inc., 92- STA-25 (Sec'y June 16, 1993).

X A 4 Finality of ALJ's Order

It is error for an ALJ to issue a recommended order of dismissal where the parties settle a STAA whistleblower complaint while the complaint is being adjudicated. Pursuant to 29 C.F.R. § 1978.111(d)(2), the ALJ should have reviewed the settlement, determined if it was fair, adequate and reasonable, and, is he so concluded, issued a final order of dismissal. Thompson v. G & W Transportation Co., Inc., 90- STA-25 (Sec'y Oct. 24, 1990).

X A 4 Finality of ALJ order

Dacus v. Boston-Buffalo Express, Inc., 92-STA-42 (Sec'y Nov. 24, 1992).

[STAA Digest X B]
PRE-FILING SEVERANCE AGREEMENT; AUTHORITY OF ADJUDICATORY BODY TO ADJUDICATE DISPUTE WHETHER IT WAS SIGNED UNDER DURESS AND AUTHORITY TO DISMISS STAA COMPLAINT ON BASIS OF A PRE-FILING SEVERANCE AGREEMENT

In Gilbert v. Bauer's Worldwide Transportation , ARB No. 11-019, ALJ No. 2010-STA-22 (ARB Nov. 28, 2012), both OSHA and the ALJ dismissed the Complainant's STAA complaint on the ground that the Complainant had signed a severance agreement. The Complainant argued that the severance agreement was invalid because it was signed under duress. The ARB observed that neither the STAA nor its implementing regulations expressly empowered or required it to adjudicate pre-filing severance agreements, and that it found no prior ARB decision holding that it has the authority to dismiss a STAA claim because of pre-filing severance agreement. Because of an alternative ground for affirming the ALJ's dismissal, the ARB determined that it was not necessary to resolve the issue in the instant appeal. In a footnote, the ARB observed that adjudicatory bodies have certain inherent authority to achieve the orderly and expeditious disposition of cases, but did not reach whether adjudication of a contract dispute related to a pre-filing severance agreement is within the scope of its inherent authority. The ARB also noted that it had held in an ERA whistleblower case that an employer should not be allowed to rely on a severance agreement as a waiver of the employee's rights to recover damages. See Khandelwal v. Southern Calif. Edison, ARB No. 98-159, ALJ No. 1997-ERA-6 (ARB Nov. 30, 2000).

INVESTIGATORY SETTLEMENT; ALJ DOES NOT HAVE THE AUTHORITY TO ADJUDICATE WHETHER PARTY WHO WAS NOT EXPRESSLY DISCUSSED IN THE SETTLEMENT WAS COVERED BY A RELEASE OF THE EMPLOYER'S "AGENTS"

Investigatory Settlements

With respect to Investigative Agreements, there is no regulatory requirement or authority for the ALJ or the ARB to delve into the validity or reasonableness of a settlement agreement. The ALJ has no legal authority to entertain a repudiation claim as was done in this case. The ALJ has no legal authority to determine whether the parties complied with the terms of a settlement agreement. Once the ALJ was satisfied that the Settlement was approved and signed by the parties, he was required to end the litigation as to the claims resolved by the Agreement. The ALJ should then have moved forward in the administrative process as to the claims against any parties that did not sign the settlement agreement.

USDOL/OALJ Reporter at 5 (footnote omitted).

Finding That USIS Was Marten's Agent

ALJ's Jurisdiction to Consider Potential New Claims Arising After Date of Investigatory Settlement

X B Secretary's authority to reopen the case regarding settlement

When plausible allegations of fraud or collusion are made regarding a settlement, the Secretary has the authority to reopen the case to determine whether the allegations are true and whether approval of the settlement is proper. McGavock v. Elbar, Inc. , 86-STA-5 (Sec'y Jan. 25, 1988).

[STAA Digest X B]
Settlement reached after ARB issued its final decision; refusal of ARB to approve agreement contingent on vacating of the ARB's final decision

In Testa v. Consolidated Edison Co. of New York, Inc. , ARB No. 08-029, ALJ No. 2007-STA-27 (ARB May 12, 2010), after the ARB issued its decision on the merits, but before the 60-day period for seeking judicial review had expired, the parties informed the ARB that they had reached a settlement and requested the ARB to approve the settlement and vacate the ARB's final decision. The ARB noted that the settlement agreement was contingent upon the Board vacating the final decision. The ARB ruled that was unwilling to vacate its final decision a matter of public policy, and therefore it could not approve the settlement agreement contingent upon that event.

[STAA Whistleblower Digest X B]
ENFORCEMENT OF SETTLEMENT AGREEMENT WHERE COMPLAINANT DECLINES TO SIGN FINAL SETTLEMENT DOCUMENT, BUT WHERE HER ATTORNEY HAD AGREED TO THE SETTLEMENT AND HAD NOT CONDITIONED THAT AGREEMENT ON THE COMPLAINANT'S SIGNATURE

In Chao v. Alpine, Inc. , No. 04-102-P-H (D.Me. Sept. 20, 2004), DOL had filed a complaint seeking to enforce backpay, interest and attorney fees awarded by the ARB in Drew v. Alpine, Inc. , ARB Nos. 02-044 and 02-079, ALJ No. 2001-STA-47 (ARB June 30, 2003). While pending before the District Court, the attorneys for the employee and the Defendant entered into a settlement agreement over the telephone, the Defendant sent a check to the employee's attorney to hold, and the employee's attorney sent a settlement agreement to the Defendant for signature and return for signing by the employee. Upon return, however, the employee refused to sign. The check has not been returned to the Defendant. The Defendant then sought enforcement of the settlement by the District Court. The District Court granted enforcement weighing the factors listed in the Restatement (Second) of Contracts § 27, comment c., which provides "helpful indicia of intent when there is a question whether a written agreement is merely a memorial of an agreement already reached or itself the consummation of a negotiation...." (citation omitted). Among other factors, the court found that the employee was bound by the agreement of her counsel to the settlement, the counsel having not expressly conditioned the agreement on the employee's signature on the written agreement or even on the employee's acceptance of the terms of the agreement.

[STAA Whistleblower Digest X B]
SETTLEMENT; REPUDIATION; ALLEGATION THAT THE SETTLEMENT WAS MISLEADING AS TO THE WITHHOLDING OF TAXES; MERE REGRET DOES NOT RENDER A SETTLEMENT VOIDABLE

In Taylor v. Greyhound Lines , ARB No. 06-137, ALJ No. 2006-STA-19 (ARB Apr. 30, 2007), the ALJ had recommended approval of a settlement agreement, but on automatic review by the ARB the Complainant sought to repudiate the agreement. The ARB stated that an STAA settlement agreement is a contract which is binding and conclusive, but which may be challenged upon a showing of fraud, duress, illegality, or mutual mistake. In Taylor , the Complainant argued that the Respondent tricked him into signing the settlement agreement, but proffered no supporting evidence. The Complainant also alleged that he agreed to the settlement in a hasty manner. The ARB, however, held that "[m]ere regret will not make a settlement voidable." USDOL/OALJ Reporter at 3. The Complainant contended that the settlement erroneously listed him as an employee; that when he was remitted the settlement check, taxes had been withheld; and that he was due the full dollar amount stipulated in the agreement. The ARB rejected this contention, observing that the settlement covered incidents that occurred while the Complainant was an employee, that the settlement consistently listed him as an employee, and that the settlement explicitly stated that tax withholdings would be made. Thus, the ARB found that the settlement was not misleading or deceptive.

[STAA Whistleblower Digest X B]
SETTLEMENT; REPUDIATION; ALLEGATION OF FAILURE TO PROVIDE LETTER OF REFERENCE REQUIRED BY SETTLEMENT IS A QUESTION OF BREACH OF CONTRACT, WHICH IS WITHIN THE JURISDICTION OF THE FEDERAL DISTRICT COURTS, NOT THE ARB

In Taylor v. Greyhound Lines , ARB No. 06-137, ALJ No. 2006-STA-19 (ARB Apr. 30, 2007), the Complainant argued for repudiation of a settlement agreement based, inter alia , on the alleged failure of the Respondent to produce a letter of reference as required in the settlement. The ARB found that this contention related to whether the settlement had been breached, which is a question under the jurisdiction of the federal district courts.

SETTLEMENT; REOPENING OF CASE BASED ON FAILURE TO AGREE TO ATERIAL TERM OF SETTLEMENT
[STAA Digest X B]

In Leidigh v. Freightway Corp. , 87-STA-12 (Sec'y Jan. 22, 1996), the case had been dismissed as the result of a settlement. The Complainant had filed two STAA cases, the instant case alleging wrongful discharge, and a separate complaint alleging failure to rehire and blacklisting. In settlement of the instant illegal discharge complaint, the parties agreed at the hearing that if Complainant ultimately prevailed in a NLRB blacklisting case, Respondent would reinstate Complainant. Complainant prevailed in the NLRB case involving refusal to rehire and blacklisting; the NLRB remedy included reinstatement to the position Complainant would have filled had he been rehired. When the Respondent reinstated the Complainant, it set his seniority as if he had been first hired at the time of the denial of rehiring. The effect of this was to deny the Complainant restoration of about 10 years of prior seniority.

Referring to the hearing transcript, the Secretary concluded that the parties failed to agree on a material term of settlement, to wit, the seniority date associated with the rehiring. Thus, the Secretary vacated the order approving the settlement, and remanded the case to the ALJ for a hearing on the merits.

X B Renouncement by complainant

Where the complainant had authorized his attorney to "settle the claim for what you can get" and had initially accepted a negotiated settlement, but two days later changed his mind because he desired a greater settlement amount; counsel's representation of the complainant had been able and competent; the circumstances did not show that the complainant had been subjected to any illegality, fraud, duress, undue influence or mistake in agreeing to settle; in the ALJ's view there was not much chance for success by the complainant in that his discharge preceded any complaint to a government agency; and the ALJ found that the agreement must be respected in order to avoid an abuse of the legal process, the respondent's motion for adjudicatory settlement was granted by the ALJ. The agreement had not been reduced to writing when accepted by the complainant. Because approval of the settlement agreement required findings, conclusions and an order, the ALJ concluded that the determination was actually a decision and order, and therefore informed the parties that they could file exceptions with the Secretary of Labor. Tankersly v. Triple Crown Services, Inc., 92-STA-8 (ALJ Oct. 20, 1992).

> X B Settlement agreement not entered into under duress

A settlement agreement is voidable on grounds of economic or other duress where a defendant has acted wrongfully to create and take advantage of an untenable situation. The ALJ held that the plaintiff must show that the duress was the result of the defendant's conduct, and not solely the result of the plaintiff's own necessities. See Chouinard v. Chouinard , 568 F.2d 430 (5th Cir. 1978). McGavock v. Elbar, Inc. , 86-STA-5 (ALJ ay 5, 1988).

X B Renouncement by complainant

X C Dismissal with prejudice

Where a case is dismissed because of a settlement, dismissal "with prejudice" is inappropriate unless agreed to by the parties. See Thompson v. United States Dept. of Labor, 885 F.2d 551 (9th Cir. 1989). Thompson v. G & W Transportation Co., Inc., 90-STA-25 (Sec'y Oct. 24, 1990).

X C Dismissal must state whether it is with or without prejudice

An Order approving a settlement agreement in a STAA case should specify whether the dismissal of the complaint is with or without prejudice. See Ratliff v. Airco Gases, 93-STA-5 (Sec'y June 25, 1993).

[Editor's note: Secretary issued Final Order even though the ALJ could have done so "to clarify that the complaint is dismissed with prejudice"; Secretary not only made this clarification, but thoroughly reviewed the settlement, indicating that OAA is dissatisfied with summary orders approving settlements.]

X D Gag provision void

In Stack v. Preston Trucking Co., Inc., 92-STA-21 (Sec'y Mar. 24, 1995), the Secretary rejected a settlement agreement that included a provision that precluded the Complainant from being "consulted" in regulatory proceedings. This provision was void as contrary to public policy.

[STAA Digest X D]
SETTLEMENTS; SETTLEMENTS MAY NOT BE SUBMITTED UNDER SEAL, BUT PARTIES MAY REQUEST PREDISCLOSURE NOTIFICATION UNDER 29 C.F.R. § 70.26

In Bettner v. Crete Carrier Corp. , ARB No. 07-093, ALJ No. 2006-STA-33 (ARB Sept. 27, 2007), the ALJ stated in a recommended decision and order approving a settlement that the settlement had been filed �under seal.� The ARB noted that in Porter v. Brown & Root, Inc., 1991-ERA-004 (Sec�y Feb. 25, 1994), the Secretary of Labor refused to approve a settlement in which the parties had agreed that the settlement of the complainant's whistleblower complaint would be maintained under seal. Rather, the ARB indicated that the settlement would be subject to the 29 C.F.R. § 70.26 pre-disclosure notification procedure prior to any release under FOIA, but that the ALJ's statement that the settlement is filed �under seal� was not in accordance with law.

X D Confidentiality provision; agreement not binding on Secretary allowed; provision that restrict communications with state or federal agencies void as against public policy, but may be severed where agreement includes a savings clause

In Tankersley v. Triple Crown Services, Inc., 92- STA-8 (Sec'y Feb. 1, 1995), the Secretary approved a confidentiality provision that required the Complainant to maintain the confidentiality of facts relating to the agreement itself unless disclosure is required under compulsion of law. The Secretary noted that the provision did not bind the Secretary or otherwise conflict with FOIA.

The Secretary disapproved a confidentiality provision of the same agreement that required confidentiality of "any other matters, however described, associated with any claim relating . . . to this agreement." The provision further provided that the Complainant shall not criticize, belittle, or ridicule the Respondents or any of their affiliated companies. The Secretary held that "[t]o the extent that these two provisions would restrict Complainant from voluntarily communicating with, and providing information to, any state or federal government agencies, they are void as against public policy and unenforceable." (citations omitted)

The Secretary approved the settlement, however, because the agreement included a savings clause, that if any part of the agreement is found unenforceable, the validity of the remaining agreement shall not be affected. The Secretary, therefore, severed the offensive provision. Cf. Macktal v. Secretary of Labor, 923 F.2d 1150, 1155-56 (5th Cir. 1991) (Secretary may not eliminate "material terms" of proposed settlement without consent of other two parties).

[ Editor's note: A settlement of this complaint was previously approved by final order of the Secretary. Tankersley v. Triple Crown Services, Inc., 92-STA-8 (Sec'y Oct. 17, 1994). The previous final order was not mentioned in the Feb. 1, 1995 final order, nor is there any indication that the Oct. 17, 1994 order was vacated. OAA informs that the parties submitted a renegotiated settlement and asked for the Secretary's approval. The Complainant had attempted to renounce the first settlement, and it appears that the Respondents voluntarily agreed to a renegotiation.]

INVESTIGATORY SETTLEMENT; ALJ DOES NOT HAVE THE AUTHORITY TO ADJUDICATE WHETHER PARTY WHO WAS NOT EXPRESSLY DISCUSSED IN THE SETTLEMENT WAS COVERED BY A RELEASE OF THE EMPLOYER'S "AGENTS"

Investigatory Settlements

With respect to Investigative Agreements, there is no regulatory requirement or authority for the ALJ or the ARB to delve into the validity or reasonableness of a settlement agreement. The ALJ has no legal authority to entertain a repudiation claim as was done in this case. The ALJ has no legal authority to determine whether the parties complied with the terms of a settlement agreement. Once the ALJ was satisfied that the Settlement was approved and signed by the parties, he was required to end the litigation as to the claims resolved by the Agreement. The ALJ should then have moved forward in the administrative process as to the claims against any parties that did not sign the settlement agreement.

USDOL/OALJ Reporter at 5 (footnote omitted).

Finding That USIS Was Marten's Agent

ALJ's Jurisdiction to Consider Potential New Claims Arising After Date of Investigatory Settlement

[STAA Whistleblower Digest X E]
SETTLEMENT; ASSISTANT SECRETARY'S CONSENT MUST BE PRESENTED WHERE ASSISTANT SECRETARY IS PROSECUTING PARTY IN ORDER FOR A SETTLEMENT TO BE APPROVED

Where the Assistant Secretary is the prosecuting party in a STAA whistleblower case, any settlement agreement between Complainant and Respondent must be shown to have been consented to by the Assistant Secretary prior to approval by the ARB or the ALJ. See Ass't Sec'y & Filer v. Arch Aluminum & Glass, Inc. , ARB No. 01-053, ALJ No. 1999-STA-12 (ARB Aug. 29, 2001).

[STAA Digest X F]
JURISDICTION; RESPONDENT WHICH ALLEGEDLY COMMITTED A NEW VIOLATION AFTER ENTERING INTO SETTLEMENT AGREEMENT; NO JURISDICTION TO DETERMINE IF SETTLEMENT WAS BREACHED, BUT JURISDICTION TO DETERMINE IF NEW STAA VIOLATION OCCURRED

The ARB does not have jurisdiction to determine whether a respondent violated a settlement agreement. It does have jurisdiction, however, to determine whether a respondent committed a new STAA violation after entering into the settlement agreement. White v. J.B. Hunt Transport, Inc. , ARB No. 06-063, ALJ No. 2005-STA-65 (ARB May 30, 2008).

[STAA Digest X F]
SETTLEMENT; ARB DOES NOT HAVE THE AUTHORITY TO IMPOSE SANCTIONS FOR ALLEGED BREACH OF SETTLEMENT AGREEMENT

In Bricklen v. Great Lakes Chemical Corp. , ARB No. 05-144, ALJ No. 2005-CAA-8 (ARB Oct. 31, 2007), the ALJ recommended approval of the parties' settlement agreement. Before the ARB, the Complainant sought damages for the Respondent's alleged breach of the settlement agreement. The ARB held that the issue of whether a settlement agreement has been breached is not a matter for the Board to determine. The Board wrote: "'A settlement is a contract. Its construction and enforcement are dictated by principles of contract law.' The CAA whistleblower section provides for enforcement of settlement agreements in the appropriate United States district court. Thus, the federal district courts, not this Board, have jurisdiction to consider actions based on alleged settlement breaches." Slip op. at 2-3 (footnotes omitted). The Board therefore restricted its review to ascertaining whether the ALJ properly approved the settlement agreement.

[STAA Whistleblower Digest X F]
SETTLEMENT; PARTIES' AGREEMENT CANNOT CONCUR ENFORCEMENT JURISDICTION ON OALJ OR ARB BEYOND WHAT IS PERMITTED UNDER STATUTE OR REGULATION

In Ass't Sec'y & Bryant v. Mendenhall Acquistion Corp. , ARB No. 06-027, ALJ No. 2003-STA-36 (ARB Nov. 30, 2006), PDF | HTM the ARB approved the parties' settlement agreement. One of the terms of the settlement purported to confer on the Office of Administrative Law Judges jurisdiction to enforce the agreement. The ARB observed that "[t]he authority and jurisdiction of the ALJs and this Board are governed by statute and regulation, and can not be modified by the parties."