DOL Home > OALJ > Whistleblower > McFarland v. City of New Franklin, Missouri, 86-SDW-1 (Sec'y Aug. 17, 1993) |
[Editor's note: The correct Case No. for this document is 86- SDW-1] DATE: August 17, 1993 CASE NO. 86-SWD-00001 IN THE MATTER OF FRED AND JOYCE McFARLAND COMPLAINANTS, v. CITY OF NEW FRANKLIN, MISSOURI, RESPONDENT. BEFORE: THE SECRETARY OF LABOR ORDER APPROVING SETTLEMENT AND DISMISSING CASE After the Administrative Law Judge (ALJ) submitted his Recommended Decision and Order (R. D. and O.) in this case arising under the employee protection provision of the Safe Drinking Water Act (SDW or the Act), 42 U.S.C. § 300j-9(i) (1988), the parties, through their counsel, exchanged correspondence concerning settlement. On October 3, 1986, counsel for Respondent wrote to counsel for Complainants indicating that Respondent would not except to the ALJ's R. D. and O. and would pay Complainants back wages, less interim earnings, attorney's fees and expenses, in exchange for Complainants' submission of their resignations. Attached to the letter was an itemization of back wages with applicable deductions, and fees and expenses. Complainants' counsel responded by letter of October 8, 1986 that "the proposal for settlement . . . is acceptable." The letter itemized some interim earnings to be deducted from back pay and adjustments to the amount of attorney's fees and costs. The letter stated that "[t]he letters of resignation will shortly be delivered to the City . . . effective October 6, 1986 . . . ." Respondent's counsel sent checks for the back wages and
[PAGE 2] attorney's fees to Complainants' counsel on November 10, 1986, with a request that the resignations be submitted. On January 26, 1987, Respondent's counsel again requested by letter to Complainants' counsel that Complainants provide their written resignations including acknowledgement that the ALJ's order had been satisfied. Complainants' counsel responded on January 28, 1987 that Complainants were not satisfied with his representation and refused to follow his advice about submission of their resignations. The letter concluded "I know, and you know, what the agreement was, and that was that [Complainants] were to resign." The Secretary issued a briefing schedule in this case on June 25, 1988, and also gave notice that Complainants had substituted counsel for the attorney who had represented them before the ALJ and engaged in the settlement correspondence described above. Complainants filed a brief pro se on August 14, 1987, in which they acknowledged receiving $14,891.57 in "partial attorney fees, backpay and insurance plus interest." Complainants asserted, however, that they were entitled to receive an additional $210 in attorney's fees and "sick leave, vacation pay, comp time, and expenses" to the date of their reinstatement, as well as compensatory and punitive damages. Complainants refused to submit their resignations because "the city did not go according to Judge Mills [sic] decision." Complainants' brief at 2. Counsel for Respondent wrote to the Secretary on August 20, 1987 that this case had been settled but that Complainants' had refused to comply with their agreement to submit their resignations and were seeking to "disregard the agreement . . . and seek . . . more money." The Secretary issued an Order to Show Cause on August 9, 1989, which reviewed the procedural history of this case and ordered the parties to show cause "why review of this case should not proceed in accordance with [29 C.F.R. § 24.6 (1991)]." Respondent replied to the order to show cause on August 22, 1989 that Respondent had complied with the recommended order of the ALJ and requested that this case be closed. Complainants replied to the order to show cause on August 28, 1989, asserting that "review should proceed because proper procedures were not followed by [Respondent] on job reinstatement [and Complainants] received nothing for sick leave, vacation pay, comp time, reasonable expenses, and $210 additional attorney fees." Complainants requested that the ALJ's decision be affirmed, but if they were not reinstated they should receive punitive damages and letters of reference in addition to the above relief. On July 17, 1990, the Secretary issued a Notice of Review and Briefing Schedule which rejected Respondent's request that this case be closed and established a new briefing schedule. The
[PAGE 3] Notice of Review stated in a footnote that "[n]either party asserted . . . that a settlement had been reached . . . ." Notice of Review and Briefing Schedule at 1 n. 1. Complainants, by their new counsel, filed a Brief in Support of Complainants on August 14, 1990, asserting that this case has not been resolved and that the Respondent has not complied with the ALJ's recommended order because Complainants have not been reinstated or received vacation pay, comp time, sick leave and legal fees. In addition, Complainants requested punitive damages. Respondent's attorney wrote to the Secretary on August 14, 1990 asserting that an agreement had been reached in this case because "[Complainants'] attorney settled this matter with the City and the City has paid money to the McFarland's [sic] in a good faith response to that settlement." On September 11, 1990, Respondent filed a Suggestion in Opposition to Complainants asserting that Respondent had reached an agreement with Complainants as evidenced by the correspondence discussed above. The Secretary established the principles for evaluating whether settlements had been reached in whistleblower cases in Macktal v. Brown & Root, Inc., Case No. 86-ERA-23, Sec. Dec. Nov. 14, 1989, rev'd on other grounds, Macktal v. Secretary of Labor, 923 F.2d 1150 (5th Cir. 1991). Among other things, Complainant in that case claimed that the Secretary should not approve a settlement he had entered into allegedly because he was under duress exerted by his own counsel who he claimed had misled him, and because, by the time of the Secretary's review, he no longer agreed to the settlement. The Secretary held that a "settlement is a contract, and its construction and enforcement are governed by principles of contract law. . . . There must be a meeting of the minds on all essential terms . . . 'and the employee's consent [must have been] voluntary and knowing.'" Macktal v. Secretary of Labor, slip op. at 4-5 (quoting Alexander v. Gardner- Denver Co., 415 U.S. 36, 52 n.15 (1974). Furthermore, the Secretary said [w]hen a litigant voluntarily accepts an offer of settlement, either directly or indirectly through the duly authorized actions of his attorney, the integrity of the settlement cannot be attacked on the basis of inadequate representation by the litigant's attorney . . . . [A]ny remaining dispute is purely between the party and his attorney . . . . Unless the resulting settlement is substantially unfair, judicial economy demands that a party be held to the terms of a voluntary settlement. * * * * A litigant who enters the judicial process through the agency of freely chosen counsel always assumes a certain risk that the result achieved will not be satisfactory.
[PAGE 4] Defeated expectations do not, therefore, entitle the litigant to repudiate commitments made to opposing parties or to the court. Id. at 7-8 (quoting Petty v. Timken Corp., 849 F.2d 130, 133 (4th Cir. 1988)). In addition, the Secretary held in Macktal that a party cannot withdraw from a settlement after agreeing to it or oppose approval of it at any time up to the time the Secretary approves it. A settlement is an executory contract which is binding on the parties until the Secretary acts on it. Id. at 14. All these findings in Macktal were affirmed by the court of appeals. Macktal v. Secretary of Labor, 923 F.2d at 1156-58. It is clear the parties reached a settlement agreement here which Complainants have attempted to repudiate because it did not provide all the relief they might have been entitled to under the Act. The parties' representatives, their counsel, exchanged correspondence in October 1986 which is sufficient evidence of a settlement. Respondent's counsel made an offer by letter of October 3, 1986 setting forth all the essential terms of a settlement and Complainants' counsel accepted that offer on October 8, 1986, saying "the proposal for settlement . . . is acceptable." Complainants apparently were dissatisfied with their counsel's representation and later discharged him. See letter of January 28, 1987 from Mr. Cullen Cline to Mr. Larry E. Tate, and June 25, 1988 Briefing Schedule and Notice of Substitution of Counsel. However, there has been no suggestion that, at the time Complainants' counsel entered into the settlement on their behalf, he did not have full authority to do so. Complainants may have believed they were entitled to more relief under the ALJ's decision, such as payment for accrued leave, compensatory (comp) time, expenses, and compensatory and punitive damages which should have been included in a settlement. But it is in the nature of a settlement that each party compromises some aspect of its position to avoid the uncertainties and expense of further litigation. As pointed out in the July 17, 1990 Notice of Review and Briefing Schedule, the ALJ's R. D. and O. is only a recommended decision; the Secretary issues the final decision in all cases arising under the SDW. 29 C.F.R. § 24.6 (1991). [1] Without intimating any conclusions about the merits of this case, I simply note that, when Complainants' attorney agreed to this settlement on their behalf, there was no judgment or order outstanding in favor of Complainants nor were they in any sense entitled to any relief. It is unfortunate that Complainants apparently misunderstood the status of their case, but that is not grounds for rejecting a settlement fairly entered into. The terms of the settlement described in the correspondence discussed above are fair, adequate and reasonable and I approve
[PAGE 5] it. Accordingly, this case is DISMISSED. SO ORDERED. ROBERT B. REICH Secretary of Labor Washington, D.C. [ENDNOTES] [1] There is no provision in the SDW or the regulations by which a recommended decision of an ALJ becomes a final agency decision after 90 days, unless modified or vacated by the Secretary. As discussed in the text, only the Secretary issues final decisions. The Secretary has held, moreover, that failure to issue a decision within the 90 day time limit in the environmental whistleblower statutes does not deprive the Secretary of jurisdiction. Poulos v. Ambassador Fuel Oil Co., Case No. 86-CAA-1, Sec. Dec. Apr. 27, 1987, slip op. at 12; Lockert v. Pullman Power Products Corp., 84-ERA-15, Sec. [Remand] Dec. Aug. 19, 1985, slip op. at 1 n.1.