Sandra G. McDonald v. George King, Mark Toler, Frasure Creek Mining, LLC and Guardco Security, LLC

Plain-English summary

Sandra McDonald alleged that she was fired from a mine-site security job after protected safety complaints. After the Commission allowed her to amend the case, she added mine operator Frasure Creek and security company Guardco to the individual respondents. Judge Jerold Feldman questioned whether Frasure Creek could be added when MSHA had not investigated a discrimination claim against it and whether Guardco met the Commission's successor-in-interest factors. He ordered McDonald to explain why both companies were proper parties and allowed them time to oppose her response.

Decision snapshot

• Governing authority: 30 U.S.C. § 815(c)
• Outcome: McDonald was ordered to show cause why Frasure Creek and Guardco were proper respondents.
• Key point: Adding a new mine operator may depend on prior MSHA investigation, while successor liability turns primarily on continuity of business operations and related factors.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH
REVIEW COMMISSION

OFFICE OF
ADMINISTRATIVE LAW JUDGES

1331 Pennsylvania
Avenue NW, Suite 520N

Washington, D.C. 20004

February 26,
2016

SANDRA G. MCDONALD,

Complainant,

v.

GEORGE KING, MARK TOLER,

FRASURE CREEK MINING, LLC,

and GUARDCO SECURITY, LLC,

Respondents,

DISCRIMINATION PROCEEDING

Docket No. WEVA 2014-387-D

HOPE-CD 2013-10

Frasure Creek Mining, LLC

Mine ID 46-07014 5G1

ORDER TO SHOW
CAUSE

Before:            Judge Feldman

This case is before me based on a discrimination
complaint filed on January 7, 2014, pursuant to section 105(c)(3) of the
Federal Mine Safety and Health Act of 1977, as amended,  30 U.S.C. § 815(c)(3)
(2006) (Mine Act). Sandra G. McDonald seeks to recover appropriate relief under
Section 105(c) of the Mine Act,[1]
from TMK Enterprise Security Services, Inc. (“TMK”), a business entity that had
been incorporated in West Virginia.

I.                  
Background

McDonald was a contractor employee working as a
security guard during the period May 2011 through September 3, 2013, at a mine
site operated by Frasure Creek Mining, LLC (“Frasure Creek”). However, the
evidence of record reflects that TMK’s corporate status was terminated by the
state of West Virginia on June 12, 2009. Consequently, McDonald was never
employed by TMK prior to its termination as a corporate entity. Rather,
McDonald was employed by George King and Mark Toler, the former principles of
TMK, who continued to operate their security services business as a
non-corporate entity.

Consequently, on February 3, 2015, I
issued a stay order to provide counsel with an opportunity to amend the
pleading by adding King and Toler as the proper respondents. However, rather
than amending the complaint to include King and Toler—who during several
telephone conferences had asserted a financial inability to pay any relief
claimed by McDonald—McDonald’s counsel sought to substitute Frasure Creek as an
entirely new respondent, under a new theory of the case. Specifically,
McDonald’s counsel alleged:

Frasure Creek was intimately involved in
and had direct knowledge of all of the hazard complaints at issue in this
discrimination case, and had a direct role in effectuating an illegal and
discriminatory course of conduct, by communicating and consummating an adverse
employment action against the Complainant in retaliation for protected
activity.

Mot. to Lift Temp. Stay and to Amend
Compl., at 2 (Feb. 18, 2015).

On March 12, 2015, I issued an Order
Denying McDonald’s Motion to Amend Complaint, which sought to substitute
Frasure Creek for TMK, rather than add King and Toler as respondents as
directed by the February 3, 2015, Order. McDonald’s motion was denied based on
apparent Commission precedent that McDonald was precluded from bringing a
discrimination action against Frasure Creek in a 105(c)(3) proceeding as the
allegations of discrimination against Frasure Creek had not been investigated
by the Secretary under section 105(c)(2).     37 FMSHRC 683, 685 (Mar. 2015)
(ALJ); Hatfield v. Colquest Energy, Inc., 13 FMSHRC 544, 546 (Apr. 1991)
(citations omitted). The case was dismissed because McDonald’s counsel elected
not to amend the complaint to include King and Toler as respondents. 37 FMSHRC
at 685. However, the March 12, 2015, Order noted that the dismissal was without
prejudice to any subsequent reopening of McDonald’s 105(c)(3)
discrimination complaint against King and/or Toler, as individuals. Id.

On March 23, 2015, McDonald filed a Petition for
Reconsideration with the undersigned that sought to set aside the March 12,
2015, dismissal order by allowing McDonald to add King and Toler as
respondents. Shortly thereafter, on March 31, 2015, the Commission exercised
review sua sponte of the March 12, 2015, Order. On October 23, 2015, the
Commission remanded this matter granting leave to McDonald to “amend the
complaint to add other relevant parties, including King and Toler,” an opportunity
that was essentially previously extended     by the undersigned and initially
rejected by McDonald. 37 FMSHRC 2239, 2243 (Oct. 2015).

Consistent with the Commission’s October 23,
2015, remand, an order was issued on November 3, 2015, granting leave for McDonald
to amend her complaint to include King and Toler, as well as any other relevant
parties. 37 FMSHRC 2651 (Nov. 2015) (ALJ).          On December 31, 2015,
McDonald filed an amended complaint. In addition to adding King and Toler,
McDonald now seeks to add Frasure Creek and Guardco Security, LLC (“Guardco”),
as a successor-in-interest to TMK. On February 5, 2016, Guardco answered McDonald’s
amended complaint, through counsel, by denying any liability in this matter.

II.               
Frasure Creek

In her amended complaint, McDonald alleges that she
was terminated by TMK, at the insistence of Frasure Creek, shortly after MSHA
received anonymous complaints regarding Frasure Creek’s alleged failure to
provide periodic refresher and hazard training, as required by 30 C.F.R. §§
48.28(a) and 48.31, respectively. Amended Compl., at 4-7 (Dec. 31, 2015). However,
the evidence of record in this matter reflects that McDonald’s discrimination
complaint under section 105(c)(2) was never previously construed by MSHA, or
McDonald’s counsel, as a complaint against Frasure Creek. Consequently, MSHA
never conducted an investigation under section 105(c)(2) to determine whether
Frasure Creek discriminated against McDonald.  See Hatfield, 13 FMSHRC at
546 (holding that an MSHA investigation of a claim of alleged discrimination under
section 105(c)(2) is a statutory prerequisite for a complaint under section
105(c)(3)). Significantly, McDonald’s counsel has, to date, never served Frasure
Creek as a party, such as during discovery in this proceeding, serving only TMK
(Toler and King).

Consequently, McDonald IS ORDERED TO SHOW
CAUSE why her amended complaint should not be dismissed with respect to
Frasure Creek. Specifically, McDonald should address whether MSHA’s failure to
investigate Frasure Creek’s alleged discrimination against McDonald under
section 105(c)(2) precludes McDonald’s attempt to add Frasure Creek as a
respondent in this 105(c)(3) proceeding.[2]

III.            
Guardco as a successor-in-interest

McDonald’s amended complaint also seeks to add
Guardco as a successor-in-interest to her former employer, TMK (Toler and King).
The Commission has recognized that a successor-in-interest may be found liable for
its predecessor’s discriminatory conduct. See Meek v. Essroc Corp., 15
FMSHRC 606, 609-10 (Apr. 1993). To determine whether an entity is a proper
party in a discrimination proceeding as a successor-in-interest, the Commission
has traditionally considered nine factors:

(1) whether the successor company had
notice of the charge, (2) the ability of the predecessor to provide relief, (3)
whether there has been a substantial continuity of business operation, (4)
whether the new employer uses the same plant, (5) whether he uses the same or
substantially the same work force, (6) whether he uses the same or
substantially the same supervisory personnel, (7) whether the same jobs exist
under substantially the same working conditions, (8) whether he uses the same
machinery, equipment and methods of production and (9) whether he produces the
same products.

Sec’y of Labor o/b/o Keene v. S&M Coal Co., 10
FMSHRC 1145, 1153 (Sep. 1988) (citing Munsey v. Smitty Baker Coal Co., 2
FMSHRC 3463 (Dec. 1980), aff’d sub nom. Munsey

v. FMSHRC, 701 F.2d 976 (D.C. Cir 1983), cert.
denied, 464 U.S. 851 (1983)). The key factor in this successorship analysis
is whether there is substantial continuity of business operations. Id.

Accordingly, McDonald IS ORDERED TO SHOW
CAUSE, by specifically addressing any of the relevant indicia of
successorship noted above, whether Guardco is a proper successor-in-interest to
TMK (Toler and King) in this proceeding.

ORDER

Consistent with the above, McDonald IS
ORDERED TO SHOW CAUSE on or before March 30, 2016, why Frasure Creek
and Guardco are proper parties in this matter. Any oppositions or replies filed
by Frasure Creek[3]
and/or Guardco should be filed on or before April 20, 2016.

/s/ Jerold
Feldman

Jerold Feldman

Administrative
Law Judge

Distribution: (by regular and certified mail)

Samuel B. Petsonk, Esq., Mountain State Justice, Inc., 1031
Quarrier Street, Suite 200, Charleston, WV 25301(counsel for Sandra G.
McDonald)

David C. Stratton, Esq., Stratton Law Firm, PSC, P.O. Box
1530, Pikeville, KY 41502  (counsel for Guardco Security, LLC)

Mark Toler, P.O. Box 88, Delbarton, WV 25670

George King, 1704 Jackson Avenue, St. Albans, WV 25177

Frasure Creek Mining, LLC, 137 East Main Street, Oak Hill,
WV 25901

/acp

[1] Section 105(c)(1) provides, in pertinent part:

No person shall discharge or in any
manner discriminate against … any miner … because such miner … has filed or
made a complaint under or related to this Act, including a complaint notifying
the operator or the operator’s agent … of an alleged danger or safety or health
violation in a coal or other mine … or because such miner … instituted any
proceeding under or related to this Act ….

30 U.S.C. § 815(c)(1).

[2] In view of the Commission’s holding in Hatfield,
in a March 12, 2015, Order, I denied McDonald’s motion to amend her complaint
to include Frasure Creek. The Commission remanded this matter granting leave
“for McDonald to amend the complaint to add other relevant parties, including
King and Toler.” 37 FMSHRC at 2243. Consequently,
I do not consider the previous denial of McDonald’s request to include Frasure
Creek as a respondent to be the law of the case.

[3]
To date, Frasure Creek has not answered, or otherwise acknowledged, McDonald’s
amended complaint identifying it as an alleged party in this matter. Frasure
Creek is cautioned that a failure to oppose or reply to McDonald’s response to
this Order to Show Cause, may result in the issuance of a default judgment
against it with respect to any reasonable remedy that may be awarded in this
matter.