Petition for Review Occupational Safety and Health Review Commission (OSHRC No. 76-3749)
Before Aldisert and Gibbons, Circuit Judges, and Pollak, District Judge.*fn* Before Seitz, Chief Judge, and Aldisert, Adams, Gibbons, Rosenn, Hunter, Weis, Garth, Higginbotham and Sloviter, Circuit Judges, and Pollak, District Judge.
Two petitions have been consolidated for decision at this time. In the appeal at No. 79-1822, the Secretary of Labor has petitioned for review of a decision by an equally divided vote of the Occupational Safety and Health Review Commission, which leaves intact an administrative law judge's approval of a settlement agreement between the Secretary and Sun Petroleum Products Company. The Secretary's petition requires us to decide whether he has the authority to withdraw from the settlement without the approval of the Commission. In the appeal at No. 79-1828, the union that represents the company's employees seeks review of the Commission's decision affirming the settlement.
These two surfaces issues do not disclose the several questions lurking as threshold problems that must be answered before we can reach the merits of the petitions. We have had the advantage of briefs and oral argument from the Secretary, the company, the union, and the Commission on the following issues, which we will address seriatim:
Is a decision by two members of the Occupational Safety and Health Review Commission, divided equally, an order appealable to a court of appeals?
May the Commission participate in the court of appeals as an active party on a petition for review of its decision, or is it only a nominal respondent?
Does the Commission have the authority to review, and therefore the power to reject or approve, a settlement between the Secretary and an employer once a case has been scheduled for hearing before an administrative law judge?
If the administrative law judge has authority to review a settlement, what is the extent of the right, if any, of affected employees to participate in the hearing?
If the Commission has authority to review a settlement, does the Secretary have the right to withdraw a settlement once it has been reviewed and approved by an administrative law judge?
The facts giving rise to this litigation are undisputed. On June 19, 1976, two workers were killed in a gas explosion at Sun Petroleum's refinery in Marcus Hook, Pennsylvania. Following the incident, an OSHA compliance officer inspected the site. As a result of the inspection the Secretary of Labor issued a citation on August 3, 1976, charging Sun with, inter alia, a serious violation of 29 U.S.C. § 654(a)(1), for failing to monitor for combustible gases during turn-around operations.*fn1 The company was also served with two proposed penalties of $700 each and ordered to abate the violation immediately. Sun filed a timely notice of contest, and the Secretary issued a formal complaint on September 13, 1976. On September 30, 1976, Local Union 8-901 of the Oil, Chemical and Atomic Workers International Union elected party status in accordance with Commission Rule 20, 29 C.F.R. § 2200.20. Party status was granted on October 21, 1976. Sun filed its answer to the Secretary's complaint on November 9, 1976.*fn2
Prior to a hearing before an administrative law judge, the Secretary and Sun entered into a settlement agreement on January 10, 1977. The agreement was served on all parties and provided, inter alia that "gas test(s) will be taken by persons knowledgeable in the care, use, and reading of the instrument, and familiar with locations where combustible gases or vapors may be present or have collected." Appendix at 26. Also as part of the settlement, Sun agreed to develop a gas testing manual within ninety days and to institute engineering and procedural changes to reduce the likelihood of accidents in the refinery. In addition, a reduction in the penalties was agreed to and Sun moved to withdraw its notice of contest. On January 19, 1977, the union filed objections to the settlement agreement. Its primary objection was that the agreement failed to abate the hazard because the provision relating to gas testing did not specify that only workers classified as gas testers could test for combustible gases. The union claimed that without such a specification the company might use "unqualified" employees to conduct the testing.
On February 8, 1977, the ALJ conducted a prehearing conference during which both Sun and the Secretary asserted that the union's right to object to the settlement agreement was limited by 29 U.S.C. § 659(c) to challenging the reasonableness of the time for abatement contemplated by the settlement. The union countered that the method of abatement was relevant to determine if the time for abatement was reasonable. Rejecting the union's argument, the ALJ issued an order on April 25, 1977, approving the settlement agreement. Because the record indicated that all abatement provisions, except for the preparation of the manual, were intended to be accomplished immediately, the ALJ reasoned that the union could not contend that the abatement time was unreasonable.
Pursuant to 29 U.S.C. § 661(i) and Commission Rule 91a, 29 C.F.R. § 2200.91a(d), Commissioner Cleary sua sponte directed review by the Commission. The direction for review requested briefs on two questions: whether the ALJ erred in concluding that the union did not challenge the reasonableness of the abatement period, and whether the ALJ erred in concluding that the Commission lacked jurisdiction to consider the union's objections to the settlement agreement. While the case was pending before the Commission, the Secretary re-evaluated the settlement agreement. After investigating the training program for gas testers, he determined that the agreement did not fully abate the hazard and was therefore contrary to public policy. By letter from the Solicitor of Labor on July 31, 1978, the Secretary told the company of his decision and notified Sun that he would inform the Commission of his changed position and request the Commission to remand the case for reconsideration. Accordingly, the Secretary requested that the matter be remanded to the ALJ for an opportunity to renegotiate the agreement or, alternatively, for a hearing on the merits of the citation.
Only two of the three Commission members reviewed the judge's decision.*fn3 Neither addressed the validity of the settlement agreement. Rather, they were divided on the disposition of the issues that had been directed for review. Chairman Cleary took the position that the ALJ's order should be vacated and the case remanded for consideration of the union's objections to the settlement agreement, while Commissioner Barnako would have affirmed because he agreed with the ALJ that the union's objections were beyond the scope of issues that the union could legitimately present for adjudication. The Commission resolved the impasse on April 27, 1979, by affirming the ALJ's order but accorded it only the precedential value of an unreviewed ALJ decision. These separate petitions for review by the Secretary and the union followed.
As an initial matter, Sun challenges the jurisdiction of this court, arguing that the split vote by which the Commission affirmed the order of the ALJ did not constitute official action by a quorum of the Commission and is, therefore, not a final, reviewable order. Our jurisdictional basis for reviewing any Commission proceeding is 29 U.S.C. § 660, which provides that the courts of appeals shall have jurisdiction to review "an order of the Commission" issued pursuant to 29 U.S.C. § 659(c).
The method by which the Commission may take official action is prescribed by 29 U.S.C. § 661(e). Section 661(e) provides that "two members of the Commission shall constitute a quorum and official action can be taken only on the affirmative vote of at least two members." The Court of Appeals for the Ninth Circuit has interpreted this section to mean that an affirmance of an ALJ's order by an equally divided Commission is not reviewable by a court of appeals because it is supported by the affirmative vote of only one member, and is therefore not official action under section 661(e). Willamette Iron & Steel Co. v. Secretary of Labor, 604 F.2d 1177 (9th Cir. 1979), cert. denied, 445 U.S. 942, 100 S. Ct. 1337, 63 L. Ed. 2d 776 (1979); Cox Brothers, Inc. v. Secretary of Labor, 574 F.2d 465 (9th Cir. 1978). See also Shaw Construction, Inc. v. OSHRC, 534 F.2d 1183, 1185-86 (5th Cir. 1976). We disagree with this analysis and prefer the reasoning of the Court of Appeals for the Fourth Circuit set forth in George Hyman Construction Co. v. OSHRC, 582 F.2d 834 (4th Cir. 1978). Speaking through Judge (now Chief Judge) Lay of the Eighth Circuit, the court reasoned that inasmuch as an ALJ's decision becomes the final reviewable order of the Commission if no member directs review, see 29 U.S.C. § 661(i),*fn4 then a divided Commission vote, a fortiori, would permit review. Responding to the quorum requirement argument relied on in Willamette, Judge Lay noted:
A review of the legislative history of § 12 of the Act (29 U.S.C. § 661) reveals no intent to limit judicial review of the Commission's decisions. The evident intent in enacting § 12 was to speed review of administrative citations and to ensure independent review of those citations. . . .
Allowing the ALJ's decision to stand is analogous to the case of split decision affirmances by a court of appeals or the Supreme Court under which the lower court decision is allowed to stand.
582 F.2d at 837 n.5 (citation to legislative history omitted). In Bethlehem Steel Corp. v. OSHRC, 573 F.2d 157 (3d Cir. 1978), without having this issue directly raised, we considered the merits of a petition emanating from an equally divided Commission. We now hold that such Commission action constitutes a final order for purposes of review in this court. Like the decision of an equally divided court, the action of an equally divided Commission may be examined by the next link in the hierarchal chain of review. As it relates to the matter before us we interpret the quorum requirement of 29 U.S.C. § 661(e) to mean that, in the context of Commission review of an ALJ's decision, that decision will stand unless two Commission members vote to the contrary.
We must next decide if the Commission, one of the named respondents in these proceedings, has the authority to participate as an active party in this court on petitions for review of its decisions. The Department of Justice, which represented the Commission by brief and at oral argument, contends that the Commission does have the authority and argues that this conclusion is supported by the language of the statute as well as by the legislative history and purposes underlying the Occupational Safety and Health Act. This view has been endorsed by the Courts of Appeals for the Fourth and Fifth Circuits. See Diamond Roofing Co. v. OSHRC, 528 F.2d 645, 648 n.8 (5th Cir. 1976); Brennan v. Gilles & Cotting, Inc., 504 F.2d 1255, 1266-67 (4th Cir. 1974).
The Secretary advances a contrary view. He argues that the Commission is only a nominal party before this court because Congress did not contemplate that the Commission would function as a litigator. Indeed, according to the Secretary, the role of the Commission was envisioned as exactly the opposite. The Court of Appeals for the Ninth Circuit supports his view. Dale M. Madden Construction, Inc. v. Hodgson, 502 F.2d 278, 280-81 (9th Cir. 1974).
In the context of the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. §§ 901-950, we faced a similar issue concerning the status of the Benefits Review Board. In determining that the Board was only a nominal respondent, we said:
(T)he Benefits Review Board performs a review function which prior to the 1972 amendments was performed by the district courts. Certainly those courts had no duty or interest in defending their actions on appeal. There appears to be no reason why the Benefits Review Board should be thought to have such a duty or interest. At best, it is a nominal respondent, and we have no concern that it will disregard a mandate in a case in ...