ML20115B464

Responds to Rd Walker of TU Re Author to I Selin on New Evidence of Illegal Settlements at Comanche Peak Steam Electric Station Units 1 & 2

ML20115B464
Person / Time
Site:	Comanche Peak
Issue date:	10/06/1992
From:	Kohn S NATIONAL WHISTLEBLOWER CENTER
To:	Murley T Office of Nuclear Reactor Regulation
References
CON-#492-13277 CPA, TAC-M84073, NUDOCS 9210160086
Download: ML20115B464 (9)

Text

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. NviiosAt WillSTI.Eltl.OWElt CINiEll 517 Florida Avenue NW hhington. DC 20001-I850 (202) 66l-7515. Fax (202) 462-4145 October 6, 1992 Dr. Thomas E. Murley, Director Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Ret Comanche Peak Steam Electric Station Docket Nos. 50-445 ani 50-446, concerning the June 11, 1992 letter from the Nation-al Whistleblower Center to Chairman Ivan Selin, subject "New Evidence of Illegal Settlements at Comanche Peak," (TAC No.

M84073)

Dear Dr. Murley:

I am writing in response to the letter from Roger D. Walker, the Manager of Regulatory Affairs for TU Electric dated August 6, 1992 regarding the above-referenced matter. Mr. Walker's letter was in direct response to the National Whistleblower Center's (NWC) letter of June 11, 1992 regarding improper restrictive settlements at Comanche Peak. As a matter of-law, and on the basis of public policy and nuclear safety, .the arguments raised by TU Electric must be dismissed. Additionally, the arguments raised by TU Electric are contrary to the written decisions of the U.S. Secretary of Labor concerning the nature and scope of protected activities under Section 210 of the Energy Reorganization Act, 42 U.S.C. 5 5851.

At the time the NWC wrote its June lith letter to the NRC Chairman, the Center did not possess a copy of the controverted Tex-La settlement. The Center recently obtained a copy of that agreement from the NRC's Public Document Room. Unfortunately, the NWC still does not have a copy of the other-settlement agreements entered into between TU Electric and the other former minority owners. Once those agreements have been obtained and reviewed we will file additional comments, if necessary.

On the basis of the actual language of the Tex-Law settlement, its inappropriate restr.ictions are obvious:

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• Page 2 Dr. Thomas E. Hurley October 6, 1992 I. THE CONTRACTUAL RESTRICTIONS IMPOSED BY THE TEX-LAW SETTLEMENT INHIBIT THE FREE FLOW OF INFORMATION.

On March 23, 1989 Tex-La and TU Electric executed a settlement agreement concerning Tex-La's status as a minority owner of the Comanche Peak nuclear facility. Prior to the settlement, Tex-La (along with the other minority owners of Comanche Peak) had been in litigation with TU Electric. During the course of that litigation, Tex-La (and the other minority owners) had amassed a wealth of information directly related to the safety of Comanche Peak, the improper actions of TU Electric in constructing Comanche Peak and to outstanding issues being litigated before the NRC Atomic Safety and Licensing Board (ASLB) in the Operating License (OL) and Construction Permit Amendment (CPA) dockets.

For example, one former minority owner was asked, in formal interrogatory questions submitted to the NRC, what information it had concerning Contention 2 in the ASLB CPA proceeding.1/ In response to that question, the minority owner stated that it had information that TU Electric engaged in " misrepresentations, non-disclosures, and threats" and interfered with the " minority owners' obligations to the ASLB, to the parties to these proceedings [i.e.

the ASLB proceedings), and to the NRC." The minority owner stated

that these improper corporate policies had "not been discarded or repudiated by TU Electric." See, Objections and Responses of Brazos Electric Power Cooperative, Inc. to Consolidated Interven-ors' Interrogatories and Request for Production of Documents, dated August 14, 1987. Additionally, the minority owner listed scores of l' Contention 2 in the CPA hearing was

The delay in construction of Unit 1 was caused by Applicants'-

intentional conduct, which had no valid purpose and was the result of corporate policies which have not been discarded or repudiated by Applicants.

This contention, which directly relates to the safety of Comanche Peak and the character and competence of TU' Electric-to operate said facility, is identical to a new contention filed by clients of the NWC on October 5, 1992 concerning a new CPA hearing for Unit 2 of Comanche Peak. See Supplement to Petition to Intervene and Reauest for Hearina of B. Irene Orr. D.I. Orr Joseoll J. Macktal. Jr. and S.M.A. Hasan,-Docket No. 50-446-CPA and ASLBP No. 92-668-01-CPA. Significantly, the intervenors in this new CPA proceeding are being denied access to the information amassed by the former-minority owners due to the restrictive settlement.

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" misrepresentations and- failures to disclose material information" L

i concerning the " licensing" of Comanche Peak, including:

l * " Misrepresentations and failures to .discloso material

! information as to the construction of.CPSES and-the adequacy thereof;"  ;

t * " Misrepresentations and failures to disclose material information1as to TUEC's compliance with applicable regula-tions;"

• " Misrepresentations and failures ' to disclose -material' i

'information as to TUEC's' adherence' to commitments made to the-

! NRC;"

• " Misrepresentations and failurss to - disclose material

! information as to the competence of: TU Electric .to perform the duties of project manager;"

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• " Misrepresentations- and failures to disclose material >

j information as to the competence of contractors and subcon-tractors;"

l * " Misrepresentations and failures to disclose material

, information as to the competence' of' the archi- ,

j tact / engineers;"

• " Misrepresentations and failures to disclose : material j information as to the viabilityjof CPSES QA/QCfprograms;"

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• " Misrepresentations and failures to -disclose : material i information as to the competence of --TU i Electric and-other i

Texas Utilities personnel;"~

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• - " Misrepresentations and L failures _ to disclose material

, information' as to the accuracy of statements . made - -'by J TU Electric to the NRC." l JJia. , pp. 3-4.

t As can be- seen - from this one document alone, the minority P

owners of . Comanche Peak - had assembled . a wealth ' of ~ information' l relevant.to.the licensing ;of CPSES-. Units ^ 1~ & 2. - Also gat,_CPA Docket created before ' the ASLB, ' 50-445-CPA.. Consequently, the

[ suppression of: evidence' caused by the TU Electric - minority owner settlements was significant. Moreovnr, the prejudice caused by the inability of 'present intervenors before the 'NRC to -obtain informa-4 o ,

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i Page 4 Dr. Thomas E. Murley October 6, 1992 tion from the minority owners in order to use the data in NRC proceedings is likewise apparent.

This prejudice is obvious from even a cursory review of the Tex-La agreement. First, the Tex-La agreement is not limited to restricting the speech of one single employee (such as the now highly discredited Macktal and Polizzi agreements). The Tex-La agreement encompassed the activities of literally hundreds and thousands of " employees," " officers," " directors," " consultants,"

" attorneys," " agents," " servants" and " representatives. " Agreement-pp. 42; 45 and Settlement Agreement Exhibit M.

Second, the agreement prohibits these above-referenced persons

from engaging in a wide variety of actions which "will directly or indirectiv, oppose, challenge, contest or assert any complaint in any court or administrative agency or body in any forum whatsoever with respect to, or in any manner involving, concerning, arising out of, or relating to, Comanche Peak and the incidents and attributes thereof including, without limitation, the planning, i design, construction or licensing or any other aspect of such planning, design, construction or 12 censing . . . and the manage-ment of such planning, design,. construction or licensing .. . .

i Agreement pp. 42-43. Accord, Agreement Appendix M.

i This blanket prohibition includes Tex-La employees, attorneys and agents from assisting in any manner whatsoever in activities

, related to the NRC's licensing of CPSES and prohibits any Tex-La employee, attorney and agent from assisting the current intervenors

- at CPSES. Thus, it comes as no surprise that Mr. William H.

. Burchette, the lead attorney for Tex-La in its former dispute with TU Electric, -informed an intervenor at CPSES that " Tex-La, as well as its employees, attorneys and other consultants, are precluded from assisting or cooperating in any way with your organization, or with any other third party, in opposing TU Electric in connection with the licensing of Coman;he Peak " Burchette to Dow, May 20, 1992.

But the agreement goes even further then these -blanket prohibitions. It was widely known that the attorneys and. consul-tants hired by Tex-La (and the other minority owners) has assembled a wealth of information extremely critical of TU Electric's construction and operation of CPSES. The agreement suppressed this extremely important information:

. . . it being. understood and agreed that Tex-La's consultants and attorneys may have obtained or developed information regarding Comanche Peak in the course of the t

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Page-5 Dr. Thomas E.-Murley October 6, 1992 Pending Litigation that arguably could be inequitable for them to otherwise utilize in view of the consideration being rendered by TU Electric . . . Tex-La covenants and agrees that it will take all- such action as may be necessary or appropriate in order to prevent the consul-tants and attorneys . . . from participating or assisting in any manner adverse to Tex-La's duty of cooperation  ;

herein or-to TU Electric in connection with . . . any current or future proceeding or matter before the PUC or the NRC involving or-relating to Comanche Peak, or any current or future proceedings before any court or before any administrative agency or body or in any other-forum whatsoever with respect to, or in any manner involving, concerning, arising out of, ore relating to . . . the acts or omissions of TU Electric . .. .the acts or omissions of TU Electric or the Project Manager with respect to Comanche Peak . . . .

Agreement pp. 45-46.

Incredibly, TU Electric contracted for the suppression of Tex-La assembled information before all "NRC" proceedings " involving or relating to Comanche Peak." This suppression of evidence is not only prejudicing intervenors at CPSES, it has already jeopardized the public health and safety. For example, the information ,

outlined in the above-referenced interrogatory answers was suppressed by this agreement.

Even more incredibly, TU Electric has asserted in its August 6, 1992 letter to Dr. Murley, that these types of restrictions serve the "public interest." What public interest could possibly be served by forcing Tex-La's consultants to suppress information amassed ov,er a long investigation regarding significant safety related matters? l TU Electric alleges that the restrictive elements of its agreement with Tex-La " pertain entirely to the covenants not to sue." Walker to Murley, p. 6. This is not correct. The Tex-La employees, consultants and agents, etc. are expresslyLprohibited not merely from-filing new litigation against TU Electric, but from

" assisting in any manner any person _ opposing the licensing of Comanche Peak. The agreement was explicitly designed to suppress the information gathered by Tex-La's consultants and attorneys.

Agreement pp. 45-4 6. Additionally, TU Electric does not understand that it is a violation of law and public policy for any person to enter into an agreement restricting their right to file a safety

4 Page 6 Dr. Thomas E. Murley October 6, 1992 complaint with the NRC and/or to assist in the investiga-tion / adjudication of such a safety complaint. No person can legally waive the right'to file a complaint against TU Electric with the NRC. 29 C.F.R. 5 24.2 (b) (1) ; 42 U.S.C. 6 5851(a) (1) .

. For example, in EEOC v. Cosmair, Inc. , 821 F.2d 1085 (5th Cir, 1987), the court held that a waiver of the right to file a charge with the EEOC was void as against public policy. The Cosmair decision was cited to and reaffirmed by the Secretary of Labor in her decision in Polizzi v. Gibbs & Hill. Inc., 87-ERA-38, D&O of SOL, p. 5-7 (July 18, 1989). Thus, under both Polizzi and Cosmair the type of prohibition contained in the Tex-La settlement against

filing a charge with the NRC concerning safety related matters at Comanche Peak is patently illegal.

In any event, the prohibitions outlined above violate public policy and the Congressionally mandated rights of employees under the Energy Reorganization Act.

II. THE TEX-LA AGREEMENT VIOLATES THE ENERGY REORGANIZATION ACT AND IMPORTANT PUBLIC POLICIES.

l TU Electric asserts that the Tex-La agreement does not violate 10 C.F.R. 6 50.7 (f) . These assertions demonstrate that TU Electric still does not understand the importance of preserving the free flow of information from informants to the NRC and/or the relation-ship of Section 210 to nuclear safety.

TU Electric alleges that its agreement with Tex-La does not  ;

violate $ 50.7(f) because it does not affect :the " terms" or  !

" conditions" of employment, does not prohibit persons from

" participating in protected activity" and that restrictions on l

" communicating with third persons" does not violate the regulation.

Walker to Murley, pp. 3-5. These assertions are without merit.

First, Section 210 and its implementing regulations (29 C.F.R.

Part 24 and 10 C.F.R. Part 50) explicitly protect the right of i persons to " communicate" potential safety concerns with " third _

persons." For example, in the . legislative history for Section 210, I the right of employees to contact non-NRC sources with information (i.e. such as a labor union) was explicitly recognized:- "Under this section, employees and union officials could help assure that employers do not violate requirements of the Atomic Energy Act. S.

Rep 95-848, reprinted in 1978 U.S. Code Cong. & Admin. News 7303-04 (emphasis added).

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, October 6, 1992 1-1-

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This recognition that persons covered under Section 210 may want to utilize third parties-to engage in protected-activity =was-codified by Congress in the statute itself. Section 210(a) -

recognizes that employees may engage in' protected ' activity directly-

" . . .- the employee - (or any - person

or through third - parties

acting pursuant to a request of.the employee) . . . . " 42 U.S.C.

[

$ 5851(a).

I If there was any doubt about an:employce's right to work with third . parties in making .-disclosures about potential _-safety problems,- the statutory definition of protected activity explicitly protects this form of conduct. Protected; activity _ includes :

" assisting" persons (such as-intervenors or persons _who have filed

2.206 petitions) who are participating in NRC proceedings

I- gypsisted or participated or-is about to assist or participate in any manner in such a proceeding:or an any other manner in  ;

such_a proceeding or in any other action'to carry out the

[ purposes of this Act or the Atomic Energy Act of 1954 i

42 U.S.C. 5 5851(a)(3) (emphasis added).

This statutory right to " assist" third parties in-engaging _in

, protected activity is consistent with the overall- definition of =

protected activity. -For example, no employer can_.bar an employee from " testify (ing)" in an NRC proceeding. . 42 U.S.C. 5 5851(a) (2) .

Consequently, if an employee wanted to provide testimony in support-of a citizen intervenor or a complainant in-a 2.206: proceeding, such. conduct is statutorily . protected. . _ It. lis illegal for :: a '

l corporation, such as TU Electric 'or Tex-Lu, to create any contrac-

tual impediments to the right-of persons to " testify" or'" assist" F participants-in NRC proceedings'.-

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These protections _are reflected in both the regulations of.the I

U.S. Department cf , Labor. [29 C.F.R. ' 6- 24. 2 (b) ] and'the NRC (10 -

! C.F.R. 6 50.7 (a) (1) (iii) ) . -

If there was any_ doubt whatsoever - about Section--210's protection of persons who assist. third' parties,!this ambiguity was fully _ resolved.by the U.S. Secretary of: Labor-(SOL).- In-the case of -Nunn v. Duke ' Power Company, .No. 84-ERA-27,- D&O of Deputy Secretary of Labor, p.13 (July' 30,1987) , the SOL explicitly ruled 1

that employee contact with citizen intervenors!was protected.as._a-matter of law. In that.' case,Jthe-SOL-ruled that:Mr Howard Samuel' .j

{ Nunn's. contacts with the Palmetto: Alliance'-(a citizen intervenorf group) and the Government Accountability'ProjectL(a whistleblower- '!

protection group similar to= the National Whistleblower Center) were 1-l E a

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! Dr. Thomas n. Murley.

October 6, 1992-j protected under Section 210. .Nunn, D&O p. 13. This ruling-under l the Energy Reorganization Act was in accordance - with the - SOL's - ,

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rulings in other cases under identical employee protection laws-l also administered by the SOL. Sag, e,ct . Weddersocon v. Milliaan, e No. 80-WPCA-1, D&O of AL7 at pp. 10-11 (July s 11, 1980),-adopted by.

i. the SOL (July 28, 1980)., In Weddersooon, an employee's contact t with an environmental organization and the news media was found_to j be protected.

4 Consequently, the Tex-La agreement's provisions which prohibit f

i Tex-La employees, attorneys, consultants and others from " assist- -

! ing" citizen intervenors (such as ._ the ' Disposable ' Workers ' of-l Comanche Peak,- the National Whistleblower Center and various whistleblower-intervenor clients of the NWC)l1s illegal and must be 1 l

l voided.

l Second, TU Electric's - attempt to mitigate the restrictive i nature _ of . the settlement' alleging . that the -agreement merely

! requires - Tex-La ' to " encourage and solicit" its attorneys and -

! consultants from refrainingito take "certain' actions"jagainst TU '

Electric. Walker to Murley, p. - 4. - This' assertion is-misleading at

! best. Obviously, attorneys and consultants to Tex-La are under l various contractual and ethical obligations to actLin a manner in l'

which the client directs. For' example, it would . be. an' ethical violation of the basic rules governing attorney conduct for Tex-La

to cooperate with Ethe NWC or' the Disposable--Workers 1 on -matters -

! related to their representation of Tex-La without Tex-La's consent.

l- Under the settlement that consent can never be'given. -In1 fact, L Tex-La is presently _ obligated to ' enforce these illegal re'strictions-l on their " consultants and attorneys" unless these_ agreements are

!- voidod. The Agreement states, s in parti - that Tex-La will: take all such action as- may - be necessary . . . ~-in = order l to preventL the

! consultants and-attorneys . , . from-participating or assisting ..

.. . -[in) any- current or future proceedings or-matterz before the -PUC

r. or the NRC involving:or. relating to -Comanche. Peak .; . ..

" Agreement

p. 45. Tex-La's obligations to enforce the restrictiveLsettlement provisions upon their attorneys and-consultants was not merely that -

j of " encouraging" compliance. with the ; agreement. . Tex-La ' had' a1 j positive duty' to enforce the? restrictive covenants upon . these-r persons. '

. Third,- TU Electric's attempt to= claim'tthat the Tex-La:

L agreement'somehow-did not violate 10 C.F.R. 5.50.7(f) is absurd. -

l Section 50.7(f) ' explicitly prohibits employers, such as TU Electric and Tex-La,-Lfrom prohibiting " employees", including-: attorneys;and L paid consultants, from inhibiting . an _ employee 's engagement u in

, protected _ activity. The regulation incorporates by reference all P

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r of the' substantive'protections, afforded the.public-by Section 210 l

and even goes beyond the protections' spelled out in Section 210. >

Simply stated, NRC regulation 550.7(f) explicated that restrictive settlements, such as the Tex-La agreement,- not only violute section -

l 210 but'also constitute a significant-threat to the public health.

and safety requiring a formal rule prohibiting such settlements and *

. severely sanctioning utilities- who execute 'such agreements. 10 C.F.R. 5 50.7 (c) .

i Finally, even without-the statuto'ry and regulatory precedent I outlined- above, restrictive' settlements 'such as the ' -Tex-La.

agreement have been nvoided . on public policy grounds - for years.

' Town of Newton v. Rumerv, 480 U.S. ' 386,1392. (1987) ("[a]- promisois . "

unenforceable if the interest in-its' enforcement is outweighed by l- a public policy harmed by ' enforcement ofLthe agreement"). The

] public policy. behind aggressively promoting the -filing: of safety

' complaints or concerns with the NRC is! monumental.- As the U.S.

j- Supreme Court recently r'ecognized,- the public policy behind Section i

210 of- the Energy Reorganization Act'is< not only to protect persons.

from discrimination, but ' to

'" encourage" the . filing of -- bafety

compl aints. . Enalish v. General Electric, . -U.S. -(1990).

4 The ex-La agreement thwarts these Congressional andLNRC policies.. ,t p

i CONCLUSIQ){

I . We greatly-appreciate the Commission's careful review of.the 4 Tex-La agreement. If possible, We would like to_-meet -with: the Commi.;sion's Staff ~ representative' in order - to - more fully explain the serious regulatory, adjudicatory and public policy problems caused by this agreement.

! Respectfully submitted,

Stephen'M. Kohn Chairperson, Board of Governors s

cc:

3 Martin J. Virgilio Representative John Dingell Senator Bob Graham and attached Service List 4

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CERTIFICATE OF SERVICE I HEREBY CERTIFY that a copy of the foregoing was served upon the following parties by U.S. Mail, first class, being placed in the LeDroit Park Post Office Annex this 6th day of October, 1992:

Secretary, U.S. Nucelar Regulatory Commission Washington, D.C. 20555 Hon. James H. Carpenter

! Atomic Safety and Licensing Board Nucelar Regulatory Commission Washington, D.C. 20555 j Hon. Morton B. Margulies Chairman, Atomic Safety and Licensing Board Nucelar Regulatory Commission Washington, D.C. 20555 Hon. Peter S. Lam  ;

Atomic Safety and Licensing Board '

Nucelar Regulatory Commission Washington, D.C. 20555 George Edgar, Esq.

Newman & Holtzinger, P.C.

1615 L Street, N.W.,

Suite 1000 Washington, D.C. 20036 R. Micky Dow 322 Mall Blvd., # 147 Monroeville, PA - 15 'L46 i

By: /

Stephen Mi Kohn 1

4 1

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