Secretary of Labor v. J.L. Sherman Excavation Co.

Plain-English summary

The Secretary alleged that J.L. Sherman Excavation fired Kelly Rawley after he reported unsafe loader brakes to MSHA. At the same time, the Secretary was seeking individual civil penalties against Rawley for earlier alleged safety violations. Judge David F. Barbour identified a potential conflict because the Solicitor's Office was advocating for Rawley in one proceeding while prosecuting him in another. The Judge directed the parties to address whether the dual roles were permissible, whether both proceedings could continue, and how the professional-conduct rules applied. He did not decide the discrimination claim or the conflict issue in this order and required position statements by September 23, 2016.

Decision snapshot

• Governing provisions: 30 U.S.C. §§ 815(c)(1)-(2) and 820(c)
• Outcome: The parties were ordered to submit position statements on the potential conflict by September 23, 2016.
• Key point: Simultaneously advocating for a miner and prosecuting that miner can require judicial scrutiny of conflicts, screening, and the effect on both proceedings.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH
REVIEW COMMISSION

OFFICE OF
ADMINISTRATIVE LAW JUDGES

1331 PENNSYLVANIA
AVE., N.W., SUITE 520N

WASHINGTON, DC
20004-1710

TELEPHONE:
202-434-9958 / FAX: 202-434-9949

SECRETARY
OF LABOR

MINE
SAFETY AND HEALTH    

ADMINISTRATION
(MSHA),

on
behalf of KELLY RAWLEY,

Complainant,

v.

J.L.
SHERMAN EXCAVATION CO.,

Respondent.

DISCRIMINATION
PROCEEDING:

Docket
No. WEST 2016-545-DM

MSHA
Case No. WE-MD 16-07

Mine:
J.L. Sherman Excavation Co.

Mine
ID: 43-03100

REQUEST
FOR STATEMENTS OF POSITION

ON
CONFLICT ISSUE

The court has
before it a complaint of discrimination filed by the Secretary of Labor
pursuant to section 105(c)(2) of the Mine Act on behalf of Kelly Rawley against
J.L. Sherman Excavation Co. In the case, the Secretary alleges that Mr. Rawley
engaged in protected activity on October 7, 2015, when he called the
Secretary’s Mine Safety and Health Administration (“MSHA”) to complain of unsafe
brakes on a front end loader and again in November 12, 2015, when he called
MSHA to report he had been terminated following his report about the unsafe
brakes. According to the Secretary, Mr. Rawley was later told he had been laid
off for winter rather than terminated and that he would return to work in the
spring. However, on or about April 12, 2016, Mr. Rawley was fired, and the
Secretary asserts the April termination discriminated against Rawley in
violation of section 105(c)(1) the Act. The Secretary requests a finding that
Mr. Rawley’s rights were unlawfully interfered with by the company in violation
of the Act. The Secretary also requests an order requiring the company to fully
compensate Mr. Rawley for lost wages and pay-related benefits plus interest, an
order requiring the company to compensate Mr. Rawley for consequential damages,
expenses and the costs that he incurred as a result of his alleged illegal
termination, an order directing Mr. Rawley’s personnel file be expunged of any
disciplinary action taken against him as the result of his termination, an
order awarding damages for emotional distress and loss of reputation, and the
Secretary asks the court to assess a civil penalty of $25,000 against the
company for its alleged violation of section 105(c).[1] Secretary’s First Amended
Complaint 3-4. The discrimination case is presently scheduled to go to hearing
on October 4, 2015.[2]

Subsequent to
scheduling the case for hearing, the court and counsels agreed to have
settlement attorneys work with counsels to determine if the matter could be
settled in a mutually agreeable way. Order of Assignment to Settlement
Attorneys (August 22, 2016). The court has been advised by the settlement
attorneys that a settlement does not appear possible and if this remains the
case the authority of the settlement counsels will end no later than September
23, 2016. Id.

In
the meantime, and unbeknownst to the court at the time, in addition to
proceeding on Mr. Rawley’s behalf in the temporary reinstatement case (Docket
No. WEST 2016-467) and in the discrimination case (Docket No. WEST
2016-545-DM), the Secretary filed with the Commission a petition for assessment
of civil penalty AGAINST Mr. Rawley. The case is Secretary of Labor
v. Kelly S. Rawley, Docket No. WEST 2016-605-M. The Secretary’s case
against Mr. Rawley is brought pursuant to Section 110(c) of the Act and
requests the Commission to assess Mr. Rawley with total civil penalties of
$4,700 for violations of the Secretary’s safety standards for surface metal and
nonmetal mines (30 C.F.R. Part 56) as set forth in a section 104(d)(1) citation
and in a section 104(d)(1) order issued on October 15, 2014. The case is
presently assigned to Commission Administrative Law Judge Richard Manning and
the Secretary is represented in the case by Winfield J. Wilson of the
Arlington, Virginia Solicitor’s Office, Department of Labor.

The situation is highly
unusual. Indeed, the undersigned, who has heard Mine Act cases for over twenty
years, recalls no prior instance of assignment to a case in which the Solicitor
has brought an action on behalf of a claimant while suing the claimant in
another case. In the court’s view the situation raises possible conflict of
interest issues that should be addressed before the merits of the discrimination
complaint are heard.

It seems certain to the
court that an attorney and his or her law firm could not both represent a
client in a case and at the same time sue the claimant in another case. Basic
conflict principles would prevent it. See, e.g., Model Rules of Professional
Conduct, Rule 1. However, the court recognizes that legitimate arguments
can be made that conflict principles barring a firm from participating in such
dual actions may not be applicable to the Solicitor when she proceeds under the
Mine Act. The court is mindful that the Commission, when confronted with a
situation in which the Secretary delayed filing a temporary reinstatement
proceeding for a complainant while a section 110(c) investigation was pending
against the same complainant, acknowledged the primacy of section 105(c) and
proceedings brought under it. Disciplinary Proceeding, 24 FMSHRC 28
(January 2002). While not denying the presence of a conflict of interest, the
Commission also implied that situations can arise in which the Secretary might
properly carry out his responsibilities under both sections 105(c) and 110(c)
of the Act. 24 FMSHRC at 33. The Commission’s observations, however, are dicta
and may, or may not, be applicable to the situation before the court.

The court also
notes that when the referenced disciplinary proceeding was at issue the
Solicitor expressed her desire to “avoid a conflict of interest between the
Solicitor’s prosecutorial role as the Secretary of Labor’s counsel, and the
Solicitor’s role in representing miners under the anti-discrimination provision
of the Mine Act.” 24 FMSHRC at 31. It is not clear to the court whether the
Secretary still entertains such a desire. It may be the Solicitor believes that
in the case before the court no such conflict exists. Or, it may be she
recognizes the conflict but believes she has taken appropriate steps to
neutralize it. It will be helpful to the undersigned and to the parties if the
parties will state their positions regarding whether or not the Solicitor’s representation
of the claimant under section 105(c) of the Act and the Secretary’s
simultaneous suit of the claimant under section 110(c) is permissible and
whether the section 110(c) action against Mr. Rawley can remain extant while
the Solicitor’s section 105(c) case on his behalf goes forward. It will also be
helpful to the court if the parties will state their views as to whether and to
what extent the Model Rules of Professional Conduct are applicable to the
situation. The parties should respond on or before September 23, 2016,
and they are requested to file their responses by email and to submit hard
copies via the United States Postal Service.

/s/
David F. Barbour

David
F. Barbour

Administrative
Law Judge

Distribution: (1st Class
Mail)

Katherine M. Kasameyer, Esq., U.S.
Department of Labor, Office of the Solicitor, 300 Fifth Avenue, Suite 1120,
Seattle, Washington  98104

Stephen A. Teller, Esq., Teller &
Associates, PLLC, 1139 34th Avenue, Suite B, Seattle, Washington  98122

Robin R. McCroskey, Attorney at Law, W.
405 Walnut, Suite 4, Newport, Washington  99156

Jeffrey Sherman, J.L. Sherman Excavation
Co., P.O. Box 250, Newport, Washington  99156

Kelly Rawley, P.O. Box 0045, Laclede,
Idaho  83841

/db

[1] Prior to being
assigned the discrimination complaint, the court was assigned an application
for Mr. Rawley’s temporary reinstatement. The application was filed by the
Secretary on Mr. Rawley’s behalf pursuant to section 105(c)(2) of the Act. Secretary
of Labor Mine Safety and Health Administration (MSHA) on behalf of Kelly Rawley v. J.L. Sherman
Excavation,
Docket No. WEST 2016-467-DM. The complaint was the subject of good faith
negotiations by counsels for the Secretary and the company. The negotiations
resulted in a settlement pursuant to which the company agreed, inter alia,
to economically reinstate Mr. Rawley to his position as a crusher supervisor at
a specified rate, and to provide benefits
associated with Mr. Rawley’s employment and consistent with those provided
pre-termination. On May 26, 2016, the court approved the settlement and the
economic reinstatement of Mr. Rawley went into effect. Approval of
Settlement and Orders to Comply (May 26, 2016).

[2] After the
Secretary filed his discrimination complaint, Mr. Rawley, obtained his own
counsel who entered an appearance on Mr. Rawley’s behalf.