Caterpillar, Inc. (Commission decision, January 26, 1996)

Plain-English summary

After a 1993 inspection of Caterpillar's Peoria, Illinois plant, OSHA cited the company for several serious violations, mostly of the confined space and lockout-tagout standards, plus two nonserious hazard communication items, with $19,500 in proposed penalties. The parties settled and told Administrative Law Judge James H. Barkley in November 1994, and he gave them twenty days to file the agreement. They did not file it, and did not ask for more time. Nearly two months later the judge issued a show cause order. Caterpillar blamed the holidays and vacation schedules. The judge found that was not good cause, found the late filing fit a pattern across several Caterpillar cases, and noted that the delay kept the cited hazards unabated, since abatement is not required until a final order is entered. As a sanction he struck the reduced penalties from the settlement and substituted the penalties OSHA had originally proposed. The Commission agreed the excuse was inadequate; it said a sanction could be imposed if the conduct was part of a pattern and was contumacious. It held, however, that the Commission and its judges cannot approve a settlement only in part, because changing the penalty terms changes the deal the parties made to avoid litigating. Altering the penalties was an abuse of discretion, so the order approving the modified settlement was vacated. The Commission pointed to the sanctions that were available instead, including exclusion of a party or representative under Commission Rule 104(b) and, in some circumstances, dismissal of the citation or the notice of contest. It sent the case back to Judge Barkley, who knew the conduct best, to decide whether Caterpillar or its attorney should be sanctioned, what the sanction should be, and whether to approve the settlement as the parties signed it.

Decision snapshot

• Cited standard(s): 29 C.F.R. § 1910.146 and 29 C.F.R. § 1910.147 (serious items); 29 C.F.R. § 1910.1200 (nonserious items)
• Outcome: The order approving the modified settlement was vacated and the case remanded for the judge to consider an appropriate sanction.
• Key point: The judge could consider an appropriate sanction for the filing delay, but could not rewrite the settlement's penalty terms.

Full text (OSHRC public release)

United’ States of America
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION 1120 20th Street, N.W., Ninth Floor
Washington, DC 20036-34 19

PHONE: (202) 606-5 100
FAX: (202) 606-5050

SECRETARY OF LABOR,
Complainant,

CATERPILLAR, INC.,
Respondent. t: OSHRC Docket No. 94-347
:
:
INTERNATIONAL UNION, UNITED
;:
AUTOMOBILE, AEROSPACE &
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AGRICULTURAL IMPLEMENT
::
WORKERS OF AMERICA,
::
.:
. ;

Authorized Employee i
::
Representative. ::
:
:
,
DECISIONAND ORDER
BEFORE: WEISBERG, Chairman; and MONTOYA, Commissioner.
BY THE COMMISSION:
At issue in this case is the appropriate sanction the Commission or its judges may impose against a party or its attorney for failure to comply with the Commission’s orders and rules when the case results in a settlement agreement. For the reasons that follow, we find that the sanction the judge imposed here was not an appropriate one. Accordingly, we vacate his order approving the modified settlement agreement and remand the case to him so that he may consider whether to assess an appropriate sanction.

1996 OSHRC No. 4
 Following an October 1993 inspection of its facility at Peoria, Illinois, Caterpillar, Inc., was cited for several serious violations, primarily of the confined space and lockout-tagout standards,’ and two nonserious violations of the hazard communication standard.2 Penalties totaling $19,500 were proposed for the alleged serious violations.
On November 1,1994, the parties notified Administrative Law Judge James H. Barkley that they had settled the matter. The next day, the judge cancelled the scheduled hearing and directed the parties to file the settlement agreement with the Commission within twenty days. The parties did not comply with the judge’s order. On December 29,1994, because the parties still had neither filed the settlement agreement nor filed a motion seeking an extension of time, the judge issued a show cause order directing each party to explain its part, if any, in the failure to file ,.the agreement. Both parties responded to the show cause order.
The judge found that Caterpillar was responsible for the delay and that its response, which blamed the delay on the intervening holiday season and personal vacation schedules, failed to establish good cause. He additionally found that Caterpillar’s failure to timely file the settlement agreement was part of a pattern of conduct involving several cases, and concluded that the company had shown a lack of respect for the Commission, its rules, and its orders. The judge also observed that Caterpillar’s failure to timely file the settlement agreement prolonged employee exposure to the cited hazards, which are not required to be abated until the entry of a final order. He concluded that sanctions were in order under Commission Rule of Procedure 41,29 C.F.R. 5 2200.41,3 struck those parts of the settlement agreement that reduced the penalties, and

‘29 C.F.R. $9 1910.146 and 1910.147, respectively.

229 C.F.R. 5 1910.1200.

3 The rule states in pertinent part:

5 2200.41 Failure to obey rules

(a) Sanctions. When any party has failed to plead or otherwise proceed as provided by these rules or as required by the Commission or Judge, he may be declared to be in default either:
(continued...)
 3

substituted the penalties originally proposed by the Secretary.
We agree with Judge Barkley that Caterpillar failed to establish good cause for not complying with his original order to file the settlement agreement. We are unable to see how personal vacation schedules and easily anticipated national holidays justify a delay in the filing of a settlement agreement for over two months after the judge was notified that it had been reached. We can only wonder how much longer the filing would have been delayed if Judge Barkley had not issued his order to show cause on December 29, 1994. No justification was ever offered either for the failure to inform Judge Barkley of the delay or for the failure to request an extension of time to file the settlement agreement. Indeed, over a month after the agreement was due to be filed, Judge Barkley initiated the action to determine the status of the settlement. Assuming that this conduct is part of a pattern involving several cases in which Caterpillar has failed to timely file settlement agreements and warrants a finding that it is contumacious, an appropriate sanction may be imposed by the judge.
However, it is well-settled that the Commission does not have the authority to approve a settlement agreement only in part because to do so would substantively alter the terms under which the parties decided to forgo litigating the issues in the case. Phillips 66 Co., 16 BNA OSHC 1332, 1335, 1993 CCH OSHD T[30,191, pp. 41539-40 (NO. 90-1549,1993); Snider Indus., Inc., 8 BNA OSHC 2046, 2047, 1980 CCH OSHD 7 24,749, p. 30,478 (No. 78-452, 1980); Independence Foundy & Mfg.Co., Inc.,8 BNA OSHC 2020,2022,1980 CCH OSHD 7 24,747, p. 30,475 (No. 79-5772-P, 1980). By altering the penalty provisions of this settlement agreement, the judge has in effect altered the terms of the settlement and thus abused his discretion. We therefore vacate

3(...continued)
(1) On the initiative of the Commission or Judge, after having been afforded an opportunity to show cause why he should not be declared to be in default; or (2) On the motion of a party. Thereafter, the Commission or Judge, in their discretion, may enter a decision against the defaulting party or strike any pleading or document not filed in accordance with these rules.
 4

his order modifying and approving the settlement agreement.4 Nevertheless, while the judge did not have the authority to alter the terms of the settlement agreement, he was not without available sanctions. For example, under Commission Rule 104(b), 29 C.F.R. 8 2200. 104(b),5the judge has the authority to exclude any party or its representative who refuses to comply with his orders or the Commission’s rules of procedure, continuously uses dilatory tactics, or fails to act in good faith.
In other instances, where a party fails to timely file a settlement agreement, and neither seeks an extension of time nor establishes good cause for its failure to timely file, dismissal of either the citation or notice of contest has been found to be appropriate. Chartwell Corp., 15 BNA OSHC 188 1, 1883, 1992 CCH OSHD 129,8 17, pp. 40,626-27 (No. 91-2097, 1992)! Whether dismissal is appropriate in any situation depends on whether a party’s behavior demonstrates

4We note that it could be argued that approving the settlement agreement with a penalty higher than that agreed to by the parties has the same effect as approving the settlement agreement as signed and assessing a separate penalty for noncompliance with the judge’s order. We find nothing in the law that would authorize an administrative law judge to assess a monetary penalty under these circumstances.

SThe rule states in pertinent part:

6 2200.104 Standal’ds of Conduct. l a l l

(b) Misbehavior before a Judge-(l) ExcZusion@om a proceeding. A Judge may exclude from participation in a proceeding any person, <including a party or its representative, who engages in disruptive behavior, refuses to comply with orders or rules of procedure, continuously uses dilatory tactics, refuses to adhere to standards of orderly or ethical conduct, or fails to act in good faith. The cause for the exclusion shall be stated in writing, or may be stated in thenrecord if the exclusion occurs during the course of the hearing. Where the person removed is a party’s attorney or other representative, the Judge shall suspend the proceeding for a reasonable time for the purpose of enabling the party to obtain another attorney or other representative.

61nfinding that under certain circumstances dismissal of either the citation or notice of contest may be appropriate sanctions, Chairman Weisberg does not endorse the Commission’s holding in ChartweZZCorp., based on the facts in that case. 5

contumacy, whether the other party suffered prejudice, and whether other aggravating circumstances were present. Morrison-Knudsen Co./Yonkers Contrac. Co., 16 BNA OSHC 1105, 1117, 1991-93 CCH OSHD 7 30,048, p. 41,274 (NO. 88-572, 1993); FordDev. Corp., 15 BNA

OSHC 2003,2005, 1991-93 CCH OSHD 7 29,900, p. 40,797 (No. 90-1505, 1992), ard
16 F.3d 1219 (6th Cir. 1993)(unpublished). Thus, the Commission has held that where a party displays a pattern of disregard for Commission procedures, dismissal may be an appropriate sanction. Philadelphia Constr. Equip., Inc., 16 BNA OSHC 1128, 1131, 1993 CCH OEID y 30,051, p. 4 1,295 (No. 92-899, 1993).
We recognize that, generally, the Secretary has the discretion to withdraw or settle citations.

Nonetheless, the Commission retains the authority to ensure that various legal and procedural requirements are met. Asbestos Abatement Consultation and Engg., 15 BNA OSHC 1252, 1256, 199 1-93 CCH OSHD 7 29,464, p. 39,733 (No. 87-1522, 1991). For example, before approving a settlement agreement, the Commission requires that employees be given an “opportunity” for “input” in the settlement process. Boise Cascade Corp., 14 BNA OSHC 1993, 1991-93 CCH

OSHD 7 29,222 (No. 89-3087, 1991) (consolidated).
The Commission also has the authority to take such procedural actions as may be necessary to maintain the integrity of its adjudicatory proceedings.
We think the broad congressional power to authorize agencies to adjudicate ‘public rights’ necessarily carries with it power to authorize an agency to take such procedural actions as may be necessary to maintain the integrity of the agency’s adjudicatory proceedings.
Atlantic Richfield Co. v. United States Dept. of Energy, 769 F.2d 771, 794 (DC. Cir. 1984)?
When parties fail to respect the authority of the Commission and its judges, the entire

statutory scheme created by Congress, to assure the fair and impartial adjudication of cases brought

under the Act, is put at risk. To put it directly, any party who fails to comply with a Commission

order does so at its peril. Trinity Indus., Inc., 15 BNA OSHC 1579, 1583, n.6, 1991-93 CCH

71ndeed, Congress has explicitly granted the CommissionI authority to “make such rules as are necessary for the orderly transaction of its proceedings.” Section 12(g) of the Occupational Safety and Health Act of 1970,29 U.S.C. 5 661(g), (“the Act”). 6

OSHD 129,662, p. 40,185, n.6 (No. 88-1545, 1992) (consolidated), rev’d on other grounds, 16 F.3d 1149 (1 lth Cir. 1994).
While dismissal of Caterpillar’s notice of contest or another sanction under Rule 104(b) and (c), including suspension from practice before the Commission, may in certain circumstances be appropriate sanctions, we are reluctant to make such a determination here. The judge is most familiar with the conduct in question and whether it is part of a pattern and, therefore, is in the best position to determine what sanction, if any, is appropriate. Accordingly, we remand this case to the judge to determine whether, in the instant circumstances, the behavior of Caterpillar or its attorney warrants a sanction. If so, the judge should further determine what the appropriate sanction should be, and, consistent with that, determine whether the settlement agreement, as signed by the parties, should be approved.
Accordingly, this case is remanded to the judge for consideration consistent with this decision.

Chairman

Velma Montoya
u
Commissioner

Dated: January 26, 1996
 NOTICE OF DECISION AND ORDER

The attached Decision and Order by the Occupational Safety and Health Review Commission was issued and served on the following on January 26,1996.

Daniel J. Mick, Esq.
Counsel for Regional Trial Litigation
Office of the Solicitor, USDOL
200 Constitution Ave., N.W. Room S4004
Washington, D.C. 20210

John H. Secaras, Esq.
Regional Solicitor
Office of the Solicitor, U.S. DOL
Room 844
230 South Dearborn St.
Chicago, IL 60604

Robert E. Mann, Esquire
Franczek, Sullivan, Mann, Crement,
Hem & Relias
300 South Wacker Drive, Suite 3400
Chicago, IL 60606-6785

Jerome Schur, Esquire
Katz, Friedman, Schur & Eagle
77 West Washington Street, 20th Floor
Chicago, IL 60602-2801

Larry Wm. Semonski,
Area Plantwide Safety Chairman
UAW, Local 974
3025 Springfield Road
East Peoria, IL 6161 l-4880
James Barkley
Administrative Law Judge
Occupational Safety and Health
Review Commission
Room 250
1244 North Speer Boulevard
Denver, CO 80204.3582

FOR THE COMMISSION

Ray H. Darling, Jr.
Executive Secretary
 UNITED STATES OF AMERICA
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION One Lafayette Centre
1120 20th Street, N.W. - 9th Floor
Washington, DC 200364419

SECRETARY OF LABOR
Complainant,
V. OSHRC DOCKET
NO. 94-0347
CA~FU?IILAR INC.
Respondent.

NOTICE OF DOCKETING
OF ADMINISTRATIVE LAW JUDGE’S DECISION
The Administrative Law Judge’s Report in the above referenced case was docketed with the Commission on February 17,199s. The decision of the Judge will become a final order of the Commission on March 20, 1995 unless a Commission member directs review of the decision on or before that date. ANY PARTY DESIRING REVIEW OF THE JUDGE’S DECISION BY THE COMMISSION MUST FILE A PETITION FOR DISCRETIONARY REVIEW. Any such etition should be received by the Executive Secretary on or before March 9, P995 in order to ermit sufficlent time for its review. See Commission Rule 91,29 cp.F.R. 2200.91. All fixther pleadings or communications regarding this case shall be addressed to:
Executive Secretary
Occupational Safety and Health
Revlew Commission
1120 20th St. N.W., Suite 980
Washington, D.C. 20036-3419
Petitioning parties shall also mail a copy to:
Daniel J. Mick, Esq.
Counsel for Regional Trial IJti ation
Office of&e Solicitor, U.S. DOg_
Room S4004
200 Constitution Avenue, N.W.
Washington, D.C. 20210
If a Direction for Review is issued by the Commission, then the Counsel for Regional Trial Litigation will represent the Department of Labor. Any party havrng questions about review rights may contact the Commission’s Executive Secretary or call (202) 606~5400.
FOR THE COMMISSION

Date: February 17, 1995
DOCKET NO. 94-0347
NOTICE IS GIVEN TO THE FOLLOWING:

Daniel J. Mick, Esq.
Counsel for Regional Trial Liti ation
Office of the Solicitor, U.S. DOH.
Room S4004
200 Constitution Ave., N.W.
Washington, D.C. 20210

John H. Secaras, Esq.
Re lonal Solicitor
O&e of the Solicitor U.S. DOL
230 South Dearborn St.
Chicago, IL 60604

Robert E. Mann, Es .
Franczek, Sullivan, la arm, Crement,
Hein & Relias
300 South Wacker Drive
Suite 3400
Chicago, IL 60606 6785

Jerry Schur
Katz, Friedman, Schur & Eagle
77 West Washin on Street
Chicago, IL 606iii 2803

James H. Barkley
Administrative Law Jud e
Occupational Safety an cf Health
Review Commission
Room 250
1244 North S eer Boulevard
Denver, CO 80204 3582

00103494126:05
 UNITED STATES OF AMERICA
OCCUPATIONAL
SAFETY AND HEALTH REVIEW COMMISSION
1244 N. Speer Boulevard
Room 250
Denver, Colorado 80204-3582

PHONE: FAX:
COM (303) 8444409
COM (303) 8444759
~(303)-
FTS (303) 844-3759

SECRETARY OF LABOR,

Complainant,

OSHRC DOCKET
NO. 94-0347
CATERPILUUX, INC.,
’

Respondent.
- II - m - B

UAW - LOCAL 974,

Authorized Employee
Representative.

FINAL ORDER
On October 31, 1994, Respondent
notified the Secretary that the case was settled,
and on November 1, 1994, the Secretary so notified the undersigned.
On November 2,1994,
the hearing was cancelled and the parties directed to file the Settlement Agreement within twenty (20) days. By December 29, 1994, the Settlement Agreement had not been filed, nor
had a motion seeking an extension.
A Show Cause Order was entered directing each party
to explain its part, if any, in the untimely filing. The Secretary’s response established diligent
efforts to secure the timely filing of the Settlement Agreement. Respondent pointed to
inconvenience caused by holidays, but failed to show good cause. By its failure to file the
Settlement Agreement as directed, by failing to request an extension, and by its lack of
justification for the untimely filing, Respondent has shown a lack of respect for the w
2 -

Commission, its rules, and its orders.’
More importantly, Respondent’s actions have adversely affected the safety of
employees. By operation of law, Respondent is not required to abate workplace hazards until the Settlement Agreement is filed and a Final Order is entered. Delaying filing the Settlement Agreement prolongs employee exposures to the cited hazards.
Respondent’s disregard of Commission rules and orders and the re&ting
prolonged
employee exposure to the cited hazards require sanctions.
In accordance with Commission Rule 41, 29 C.F.R. 52200.41, those parts of the Settlement Agreement proposing reduced penalties are stricken. In lieu thereof, the original penalties are substituted.

Dated: February 10, 1995

1 This case is not an isolated instance, but rather one in a pattern of filing Settlement Agreements in an untimely fashion by this Respondent. (See Caterpillar cases Docket Numbers 94-0153; 94-0580; 94.0682).