Reading Anthracite Company

Plain-English summary

The Commission had previously found that Reading Anthracite Company violated section 105(c) of the Mine Act when it transferred William Kaczmarczyk from light duty to workers’ compensation status. The parties agreed that Kaczmarczyk was owed $5,098.42 in economic loss and travel expenses, but Reading withheld taxes from the payment and paid $3,945.06. The Commission held that the Internal Revenue Code, rather than the Mine Act, governed the tax issue and that the damages needed to be categorized in detail. It remanded the matter for further proceedings to clarify the allocation of the award.

Decision snapshot

• Governing provisions: 30 U.S.C. § 815(c); 29 C.F.R. § 2700.69(b)
• Outcome: The matter was remanded for clarification and further proceedings concerning the allocation of the damages award.
• Key point: A damages award must be categorized in enough detail for the parties to treat it properly for income tax purposes.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
1730 K STREET N.W., 6TH FLOOR

                                  WASHINGTON, D.C. 20006

                                    March 15, 1996

SECRETARY OF LABOR, :
MINE SAFETY AND HEALTH :
ADMINISTRATION (MSHA), :
on behalf of :
WILLIAM KACZMARCZYK :
:
v. : Docket No. PENN 95-1-D
:
READING ANTHRACITE COMPANY :

BEFORE: Jordan, Chairman; Doyle, Holen, Marks and Riley, Commissioners

                                     DECISION

BY THE COMMISSION:

    This discrimination proceeding arises under the Federal Mine Safety and Health Act of

1977, 30 U.S.C. § 801 et seq. (1994) (“Mine Act”). On May 24, 1995, Administrative Law
Judge Arthur J. Amchan determined that the Reading Anthracite Company (“Reading”) had
violated section 105(c) of the Mine Act, 30 U.S.C. § 815(c), when it transferred William
Kaczmarczyk from a light duty position to workers’compensation status. 17 FMSHRC 784
(May 1995) (ALJ). On September 28, 1995, a hearing was held on the issues of civil penalty and
damages. 17 FMSHRC 2065, 2066 (November 1995) (ALJ). The parties stipulated that
Kaczmarczyk was entitled to receive $4,942.42 “to compensate for economic loss” as a result of
the discrimination. Id. at 2066. The judge awarded an additional $156 to compensate
Kaczmarczyk for travel expenses that he incurred in seeking another job, for total “damages” of
$5,098.42. Id. at 2066-67, 2069.

    In December 1995, Reading paid Kaczmarczyk $3,945.06. Reading apparently treated all

or most of the monetary award as wages subject to income tax withholding. On December 22,
1995, the Secretary filed a petition for discretionary review with the Commission. The Secretary
stated that an attempt was made to resolve the dispute with Reading’s counsel but that Reading
was unwilling to retreat from the position that the monetary award was subject to withholding
allowances and taxes. PDR at 3. The Secretary sought review from the Commission, rather than
reconsideration from the judge, because the judge no longer had jurisdiction under Commission
Rule 69(b), 29 C.F.R. § 2700.69(b) (1995), once his decision issued. Id. at 1-2. The Secretary

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concluded that, “since the record is unclear as to the intention of the parties and the judge’s
order is not clear on the issue of allocation of the monetary award,” the matter should be
remanded to the judge for clarification. PDR at 3-4. Reading did not respond.

    On December 29, 1995, the Commission granted the petition and stayed briefing pending

further order of the Commission.

    Apparently Reading does not dispute that, under the terms of the stipulation approved by

the judge and his further order regarding travel expenses in the amount of $156, Kaczmarczyk is
entitled to a gross amount of $5,098.42. There is, however, disagreement between the parties as
to whether that amount is subject to income tax withholding in its entirety. That issue is
governed by the terms of the Internal Revenue Code, not the Mine Act. In order for both
Reading and Kaczmarczyk to treat the damage award properly for income tax purposes, the basis
for the stipulated damages must be categorized in appropriate detail.

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Accordingly, we remand the matter for further appropriate proceedings.

                                Mary Lu Jordan, Chairman


                                Joyce A. Doyle, Commissioner


                                Arlene Holen, Commissioner


                                Marc Lincoln Marks, Commissioner


                                James C. Riley, Commissioner


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