Farmers Export Company

Plain-English summary

The Secretary and Farmers Export Company settled citations issued after a 1977 grain-elevator explosion, reducing proposed penalties from $126,000 to $8,000. Farmers Export had sold the reconstructed facility and said it could neither abate the cited conditions nor serve current affected employees. The Commission waived the normal abatement statement because the company no longer controlled the site. It conditionally approved the settlement only if Farmers Export mailed the decision and agreement to the new owner and the successor employee representative, followed by a 10-day period for employee objections.

Decision snapshot

• Cited standard(s): Not specified in this settlement-review decision.
• Outcome: Settlement conditionally approved with $8,000 in penalties, subject to service on the new owner and employee representative.
• Key point: When a cited employer has sold the facility, the Commission may waive an abatement statement but still require notice to the new owner and affected employees before approving settlement.

Full text (OSHRC public release)

Docket No. 78-0910 78-2809

SECRETARY OF LABOR,

Complainant,

v.

FARMERS EXPORT COMPANY,

Respondent.

OSHRC Docket Nos. 78-0910 & 78-2809

DECISION

Before:  ROWLAND, Chairman; CLEARY and
COTTINE, Commissioners.

BY THE COMMISSION:

A decision of Administrative Law Judge Stanley
M. Schwartz is before the Commission for review pursuant to sections 12(j), 29 U.S.C. ��
661(i), of the Occupational Safety and Health Act of 1970, 29 U.S.C. �� 651-678
("the Act").  Judge Schwartz approved a settlement agreement between the
Secretary of Labor and Farmer's Export Company in which Farmers Export stated that,
because it no longer owned, controlled, or operated the grain export facility involved in
the citations in these cases, the company could not abate the cited conditions and could
not serve a copy of the settlement upon the affected employees.  For the following
reasons, we modify the judge's decision.

I

The Secretary issued the citations in these
cases following a December 1977 explosion at Farmers Export's export grain elevator in
Galveston, Texas.  The citations alleged a considerable number of serious and willful
violations.  Immediate abatement was required and penalties totaling $126,000 in the
two cases were proposed.  Farmers Export contested the citations and the Farmers
Export Grain Handlers Union elected party status.

According to statements made by the Secretary
and Farmers Export during the proceedings in these cases the Galveston grain elevator was
not in operation and was under reconstruction for a time following the explosion.  
Reconstruction was expected to be completed by mid-1980.  Then, in June 1981, the
reconstructed grain elevator was sold.

Sometime prior to the sale, the Farmers Export
Grain Handlers Union merged with the Carpenter's District Council in Houston, Texas, and
became an affiliate of the carpenter's union.  Also, by the time of the sale, the
president of the Farmers Export Grain Handlers Union who had elected party status on
behalf of this union in these cases was no longer employed by Farmers Export.  Also,
after the sale, Farmers Export did not know who was the president of the carpenter's
union.  Although the judge served a notice of the pre-hearing conference held in
these cases on the former president of the Farmers Export Grain Handlers Union, no
representative of affected employees appeared at the hearing.

In the settlement agreement which was submitted
by the Secretary and Farmers Export after the pre-hearing conference, the Secretary agreed
to withdraw certain citation items, amend or recharacterize other items, and reduce the
proposed penalties to a total of $8,000.  Farmers Export agreed to withdraw its
notice of contest to the amended or recharacterized citation items and to pay the reduced
proposed penalties.  With respect to abatement of the violations and service of the
settlement agreement upon affected employees, the settlement agreement stated:

Respondent states that Respondent does not now
own, control or operated the Galveston, Texas export grain elevator which was the subject
of [the citations]. . . .Therefore, the parties agree as follows: (a) Respondent is unable
to abate any condition or practice which was the subject of [the citations]. . . . ., as
amended by this Settlement Agreement; (b) Respondent is unable to serve a copy of this
Settlement Agreement upon any employee.

II

Judge Schwart approved the settlement agreement.
  However, noting that the Commission has required abatement and service upon
affected employees for approval of a settlement agreement, the judge made the following
"advisory comments to the Secretary concerning future precautionary actions
subsequent to approval of this agreement":

The Secretary should provide a copy of my
decision and the settlement agreement to the new management and the employee
representatives at the reconstructed grain elevator.  The purpose of this is to
provide information on the conditions and practices spelled out in the agreement.
 These can be reviewed on a self-inspection basis.  In addition the Secretary
should arrange a speedy monitoring of this new facility.  The exact nature of the
inspection program is within the discretion of OSHA.  However its technical personnel
should use the knowledge gleaned from this case to assure the safety of those employees
working at the reconstructed elevator.  The sale of the elevator should not mark the
cessation of a joint effort by management, employees, and the government to achieve a safe
environment at the Galveston, Texas, grain elevator.

Judge Schwart also indicated that the Secretary
should distribute a portion of the settlement agreement--the paragraph concerning the use
of spark arrestors on locomotives operated in the grain export facility--as a memo to his
own personnel for their use in compliance efforts.

Upon his own motion, Commissioner Cottine
directed review on the following issues:

1.  Whether the judge erred in approving
the settlement agreement in the absence of service on affected employees or their
authorized representative.  See Commission Rule 100(c), 29 C.F.R. � 2200.100(c).

2.  Whether the judge erred in approving
the settlement agreement as consistent with the provisions of Commission Rule 100(a) &
(b), 29 C.F.R. �� 2200.100(a), (b).

III

For a settlement agreement to be approved by the
Commission, it must be "consistent with the provisions and objectives of the
Act."  29 C.F.R. � 2200.100(a); see John Deere Foundry, 81 OSAHRC 14/B9, 9 BNA
OSHC 1351, 1981 CCH OSHD � 25,218 (No. 78-5498, 1981).  Every settlement agreement
must include "[a] statement that the cited condition has been abated or a statement
of the date by which abatement will be accomplished."  29 C.F.R. �
2200.100(b)(3); see Raybestos Friction Materials Co., 80 OSAHRC 111/E14, 9 BNA OSHC 1141,
1980 CCH OSHD � 24,910 (No. 80-2793, 1980); see also Nashua Corp., 80 OSAHRC 121/A2, 9
BNA OSHC 1113, 1981 CCH OSHD � 25,020 (No. 78-2146, 1980) (majority and dissenting
opinions).   Also, when a settlement agreement is filed, it must be served on the
affected employees.  29 C.F.R. � 2200.100(c).[[1]]  See General Motors Corp.,
Texas Division, 82 OSAHRC      , 10 BNA OSHC 2020, 82 CCH OSHD �
26,241 (No. 78-2792, 1982), and Whirlpool Corp., 82 OSAHRC    , 10 BNA OSHC
1992, 1982 CCH OSHD � 26,237 (No. 78-3930, 1982), appeal filed, No. 82-2665 (8th Cir.
Oct. 21, 1982).

In this case, because Farmers Export no longer
has any control over conditions at the Galveston Grain Elevator, the company cannot be
expected actually to abate any of the violations involved in these areas.
 Accordingly, we waive the requirement of Rule 100(b)(3) for a statement promising
abatement.  See 29 C.F.R. � 2200.108. [[2]]  See also Nashua Corp., supra;
Asarco, Inc., El Paso Division, 80 OSAHRC 99/A3, 8 BNA OSHC 2156, 1980 CCH OSHD � 24,838
(No. 79-6850, 1980); Maxwell Wirebound Box Co., 80 OSAHRC 84/D11, 8 BNA OSHC 1995, 1980
CCH OSHD � 24,758 (No. 15965, 1980), aff'd without opinion, No. 81-2269 (D.C. Cir. 1982).
 However, as a condition of approval of this settlement agreement, Farmers Export, as
the cited employer, must send a copy of this decision and the settlement agreement to the
new owner of the Galveston export grain facility.

Similarly, while Farmers Export cannot be
expected to post the settlement agreement at the grain elevator as required by Rules
100(c) and 7(g), the company can mail a copy of the settlement agreement and this decision
to the Carpenter's District Council in Houston.  At the time the citations were
issued and contested, the Farmers Export Grain Handlers Union represented employees at the
grain elevator and this union elected party status in this proceeding.  The record
shows that this union merged with the Carpenters District Council in Houston prior to the
time Farmers Export sold the grain elevator.  Accordingly, we condition approval of
the settlement agreement on service of the settlement agreement and our decision on the
Carpenter's District Council in Houston.

We affirm the judge's decision upon the
condition that the parties submit a certification to the Executive Secretary of the
Commission showing that Farmers Export has mailed copies of this decision and the
settlement agreement to the new owner of the Galveston Export grain elevator and to the
Carpenter's District Council in Houston, Texas.  This certification must be received
within twenty days of issuance of this order.  The affected employees will be
afforded ten days following receipt of the decision and settlement agreement to submit to
the Commission any objections they may have regarding the settlement agreement.  SO
ORDERED.

FOR THE COMMISSION

Ray H. Darling, Jr.

Executive Secretary

Dated:  MAR 31 1983

The Administrative Law Judge decision in this matter is unavailable in this format.
  To obtain a copy of this document, please request one from our Public Information
Office by e-mail ( [email protected] ),
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FOOTNOTES:

[[1]] 29 C.F.R. �� 2200.100(c) provides:

Filing; service and notice.  When a settlement proposal is filed with
the Judge or Commission, it shall also be served upon represented and unrepresented
affected employees in the manner prescribed for notices of contest in � 2200.7.  
Proof of service shall accompany the settlement proposal.  A settlement proposal
shall not be approved until at least 10 days following service of the settlement proposal
on affected employees.

[[2]]  29 C.F.R. � 2200.108 states:

In special circumstances not contemplated by the provisions of these rules,
or for good cause shown, the Commission may, upon applications by any party or intervenor,
or on its own motion, after 3 days notice to all parties and intervenors, waive any rule
or make such orders as justice or the administration of the Act requires.

In this case, it is unnecessary for the Commission to give notice to the
Secretary and Farmers Export that the abatement requirement is being waived, for both of
the parties already have agreed in their settlement agreement that abatement cannot be
performed in these cases.  The affected employees will receive notice and have an
opportunity to comment upon receipt of service of copies of this decision and the
settlement agreement, as discussed infra.