Matt J. Zaich Construction Co.

Plain-English summary

Matt J. Zaich Construction and the Secretary submitted a settlement that would affirm a citation and $125 penalty while stating that the employer did not admit a violation or liability. The judge approved the agreement. The Commission set that approval aside because the agreement's ambiguous language could cast doubt on whether the citation could be used in later proceedings involving repeated violations, failure to abate, or violation history. It remanded with ten days for the parties to remove the objectionable provisions or proceed to a hearing, with the citation and penalties to be affirmed if they did neither. The official release also includes a later order approving a revised settlement that affirmed the citation and assessed the $125 penalty. The release does not identify the cited safety standards.

Decision snapshot

• Cited standard(s): Not identified in the release
• Outcome: The original settlement approval was set aside and remanded for revision or a hearing; the appended later order approved a revised settlement for $125.
• Key point: A settlement could not include ambiguous language that might prevent the citation from being used in future OSHA proceedings.

Full text (OSHRC public release)

Matt J. Zaich Construction Co., Docket No. 756

UNITED STATES OF AMERICA

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

SECRETARY OF LABOR,

Complainant,

v.

OSHRC DOCKET NO. 756

MATT J. ZAICH CONSTRUCTION CO.

Respondent.

ORDER OF REMAND

April 27, 1973

Before VAN NAMEE and BURCH, Commissioners

VAN NAMEE, COMMISSIONER:

On October 5, 1972, Judge James A. Cronin, Jr., issued an Order affirming the
Complainant’s citation and proposed penalties in accordance with the terms of a settlement
agreement executed between the parties on September 18, 1972.

On November 9, 1972, I directed that the Judge’s order be reviewed by the Commission
pursuant to Section 12(j) of the Occupational Safety and Health Act of 1970 (29 U.S.C.A. 651
et. seq., 84 Stat. 1590, hereinafter referred to as ‘the Act’).

We have reviewed the record, the Judge’s order and the briefs filed by the parties. For the
reasons given hereinafter we reverse and remand.

The settlement agreement, in pertinent part, provides as follows:

3. The parties in entering into this Settlement Agreement have done so with the
   intent and on the basis that it is determinative of and related solely to the
   disposition of this case. The parties further agree that as to subsequent acts or
   events this settlement and disposition in no way affects any rights or remedies
   which may be exercised in the future by either party pursuant to the Occupational
   Safety and Health Act. It is further agreed that neither Respondent’s action in
   entering into this Settlement, its abatement of the alleged violations, its
   withdrawal of its Notice of Contest, or its payment of $125.00 shall be construed
   as an admission of fault or liability as to any claim or proceeding which exists or
   may exist or may arise, and be pursued by any person, agency, or entity; further
   by entering into this stipulation and Settlement Agreement and by performing in
   accordance with its terms, Respondent does not admit to any violation of the
   Occupational Safety and Health Act of 1970.

4(e). Extent to which provisions were violated. Respondent does not admit that it
violated the provisions for which it was cited and disputes said violations in the
contest proceeding that is settled pursuant to this agreement.’ (Emphasis added.)

In his decision Judge Cronin said that this agreement ‘. . . is consistent with the provisions of the
Occupational Safety and Health Act of 1970.’ We cannot agree with the Judge’s conclusion.

We do not agree for the reason that the above-quoted language of the agreement creates
doubt as to whether the violations in this case may be used against Respondent in a possible
future proceeding before this Commission. This conclusion is fully supported by the
Complainant’s brief on review.

He therein points to the following language in paragraph 3:

‘as to any subsequent acts or events this settlement and disposition in no way
affects any rights or remedies which may be exercised in the future by either
party pursuant to the . . . Act.’

And, he argues that the agreement should not be construed as barring him from using the citation
and penalty notice of this case in a future proceeding, such as: a proceeding to prove a willful or
repeated violation (section 17(a)), a proceeding to prove a failure to abate (section 17(d)), or as
evidence in a proceeding to establish a history of previous violations (section 17(j)).

However, by arguing that the agreement should be construed in his favor Complainant
admits that it is ambiguous and might be construed against him. In this regard the following
words (which also appear in paragraph 3):

It is further agreed that neither Respondent’s action in entering into this
Settlement, its abatement of the alleged violations, its withdrawal of its Notice of
Contest, or its payment of $125.00 shall be construed as an admission of fault or
liability as to any claim or proceeding which exists or may exist or may arise and
be pursued by any person, agency, or entity . . .

contradict the language relied upon. Certainly, Respondent can argue that ‘agency’ means the
Complainant and a ‘proceeding which .. . may exist or may arise’ means a proceeding for willful
or repeated violation, a proceeding for failure to abate, or a proceeding where the present
violation is evidentiary of prior history. This language alone creates doubt.

In addition, by paragraph 4(e) Respondent goes beyond a simple failure to admit
violations.

Respondent disputes the violations. This factor when added to the contradictory
language of paragraph 3 gives support to the conclusion that the agreement should be interpreted
as not permitting use of the citation in a future proceeding.

A settlement agreement which contains language which casts doubt concerning the future
usability of a citation should not be approved in that it is incompatible with the avowed
legislative purpose of the Act and therefore is not in the public interest (5 U.S.C. 554(c)). We
have said that ‘the principal purpose of this Act is to obtain compliance with its requirements in
order to ensure a safe and healthful workplace.’ Secretary of Labor v. J. E. Chilton Millwork &
Lumber Company, Inc ., OSHRC Docket No. 123 (1972).

Obviously, this goal cannot be achieved solely through utilization of the Act’s
enforcement provisions. Practicality dictates that sufficient resources cannot be made available
to achieve total compliance by enforcement alone. Accordingly, the achievement of safe and
healthful workplaces and employments will in large measure depend on the extent to which
employers and employees will voluntarily strive to achieve the goal.

The objectionable provisions in the settlement agreement in this case do not promote
voluntary compliance. A recalcitrant employer

armed with the shield of such provisions might
well place its confidence in its defenses rather than comply with the Act’s requirements. The
result in such case would frustrate achievement of the principal goal. Accordingly, it would be
contrary to the public interest; we cannot approve an agreement containing provisions of the
kind involved in this case.

It should also be noted that Complainant’s position in this case contradicts the position
taken by him in Secretary of Labor v. California Blowpipe and Steel Co., Inc., OSHRC Docket
No. 1034. Respondent there submitted a motion to withdraw its notice of contest. The motion
contained exculpatory language in the nature of a refusal to admit liability. The motion was
opposed by the Regional Solicitor having overall responsibility for the present case for, inter
alia, the reason that an agreement containing such language was contrary to the purposes of the
Act. Respondent California Blowpipe and Steel Co., Inc. thereafter submitted a second motion to
withdraw. The second motion did not contain the language considered objectionable by the
Complainant, and it was granted.

A consistent result is required. Accordingly, the agreement presented for approval in this
case would comport with our requirements for hospitable consideration if paragraphs 3 and 4(e)
are deleted therefrom.

It is therefore ORDERED that (1) the Judge’s decision be and the same is hereby set
aside; (2) the case be remanded; (3) the parties be given 10 days from the date of receipt of this
decision to either conform the settlement agreement as indicated herein or indicate their intent to
proceed to a hearing; and (4) the notice of contest be dismissed and the citation and proposed
civil penalties be affirmed in all respects in the event the parties do not comply with requirement
(3) hereof.

[The Judge’s decision referred to herein follows]

CRONIN, JUDGE, OSAHRC:

A settlement agreement executed by the parties on September 18, 1972, was filed with
the undersigned on September 20, 1972 and it appears that said agreement complies with Section
2200.100 of the Rules of Procedure of the Occupational Safety and Health Review Commission
(29 C.F.R. 2200.100).

Essentially, the Respondent agrees to the entry of a final order affirming the citation
issued to Respondent on April 3, 1972, and assessing the proposed penalties based thereon,
while denying its liability under the Occupational Safety and Health Act of 1970 (29 U.S.C. §
651 et seq.).

Respondent has represented that it has abated the conditions set forth in the citation of
April 3, 1972; and will continue to comply with the safety standards designated therein; will pay
the proposed penalties, and that it has fully conformed with the applicable posting and service
requirements as required by the Commission rules.

On the basis of the foregoing, and no objection having been received, the undersigned
approves the said settlement agreement, finding that such settlement is consistent with the
provisions and objectives of the Occupational Safety and Health Act of 1970.

In accordance with the terms of said settlement agreement, it is ORDERED, that the
citation issued April 3, 1972 is hereby affirmed and the proposed penalties totaling $125.00 and
designated in the Notification of Proposed Penalty, dated April 3, 1972, are hereby assessed.

There being no further contest in this case, it is further ORDERED, that the proceedings are
hereby dismissed.

UNITED STATES OF AMERICA

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

SECRETARY OF LABOR,

Complainant,

v.

OSHRC DOCKET NO. 756

MATT J. ZAICH CONSTRUCTION CO.

Respondent.

December 3, 1973

CRONIN, JUDGE, OSAHRC:

A settlement agreement in this case was executed by the parties and filed by the
Complainant on October 16, 1973, and it appears that said agreement complies with Section
2200.100 of the Rules of Procedure of the Occupational Safety and Health Review Commission
(29 C.F.R. 2200.100).

Essentially, Respondent agrees to the entry of a final order affirming the Citation issued
to Respondent on April 3, 1972 and assessing the proposed penalties based thereon. The parties
agree that Respondent’s consent to the entry of a final order pursuant to the Settlement
Agreement shall not constitute an admission by Respondent of violations of the Act.

Respondent has represented that it has abated the conditions set forth in the Citation
issued to Respondent on April 3, 1972; that it will continue to comply with the safety standards
designated therein; and will pay the proposed penalties totalling $125.00.

The record reflects that the Complainant has fully conformed with the applicable service
requirements of the Commission’s Rules of Procedure.

On the basis of the foregoing, and no objection having been received, the undersigned
approves the said settlement agreement, finding that such settlement is consistent with the
provisions and objectives of the Occupational Safety and Health Act of 1970.

In accordance with the terms of said Settlement Agreement, it is ORDERED that the
Citation issued April 3, 1972 is hereby AFFIRMED, and the proposed penalties totalling
$125.00 and designated in the Notification of Proposed Penalty, dated April 3, 1972, are hereby
ASSESSED.

There being no further contest in this case, it is further ORDERED, that the proceedings
are hereby DISMISSED.