Text

Motion for Reconsideration of NRC Memorandum & Order CLI-89-14.* NRC Should Excuse Itself from Consideration on Matters Re Jj Macktal & Should Refer All Issues on NRC Requested Subpoena to Independent Adjudicatory Body
	ML20246B867
Person / Time
Site:	Comanche Peak
Issue date:	08/17/1989
From:	Kohn S; KOHN, KOHN & COLAPINTO, P.C. (FORMERLY KOHN & ASSOCIA
To:	; NRC COMMISSION (OCM)
Shared Package
ML20246B872	List: ML20246B867; ML20246B891;
References
	CON-#389-9067 CLI-89-14, NUDOCS 8908240046
	Download: ML20246B867 (74)
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l UNITED STATES OF AMERICA

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-l In Re Joseph J.

Macktal, Jr.

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MOTION FOR RECONSIDERATION OF

. NRC MEMORANDUM AND ORDER CLI-89-14 1

Mr. Joseph J. Macktal hereby moves the Nuclear Regulatory. Commission (NRC) to reconsider'its Memorandum and' Order CLI-89-14 ("M&O"). 'This request is based on'the following considerations:

1)

On pages 2-3 of the M&O' the'NRC states:

Beginning sometime before the.-hearing and continuing thereafter, both the office'of Investigations and the NRC technical' staff repeatedly attempted to schedule an interview with Mr. Macktal to review his concerns.

After all these~ attempts failed, on June 5, 1989, OI issued a subpoena.

This statement is wholly inaccurate.

First, the M&O fails to consider that the NRC Staff (including OI which reports to the Staff director), ignored all'.of the allegations placed on the record by " John Doe" during the July 5-13, 1988 period.- The NRC was alerted to the' fact that " hush" money had been offered at CPSES but failed to initiate any form of investigation or. inquiry.

The John Doe allegations were completely ignored by the NRC -- and'even today the. John Doe. allegations are still ignored.

See Ex.

1, affidavit of Stephen M. Kohn; Ex. 2; John Doe pleadings.

l There was n_o good faith effort by the NRC to review any of l

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<1 the.CPSES " hush-noney" allegations (including.Mr. Macktal's) between July, 1988 and the early Spring,.1989.: It was not-until after the U.S.

Senate Subcommittee on Nuclear Regulation initiated its investigation that the NRC became interested in Mr. Macktal's concerns.

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Secon'd, " attempts"-to voluntarily arrange the interview of Mr. Macktal did not " fail."

On May 22, 1989, as a result-of-some preliminary discussions between NRC Staff and

' representatives of Mr. Macktal, the NRC Staff agreed to j

conduct the Macktal interview at a " time and place mutually agreeable."

Ex.

3.

Instead of continuing to negotiate mutually agreeable terms for the interview, just 11 days after that letter was sent, NRC issued a-subpoena for Mr.

Macktal.

Even facing hostility'from the NRC, Mr. Macktal still agreed to voluntarily appear pursuant to the letter to Mr. Zech from Mr. Kohn.

See Affidavit of Stephen M.

Kohn, Par. 20.

2)

On page 3 of CLI-89-14, the NRC notes that Mr.

Macktal has "since refused to honor the subpoena..." :The NRC failed to take cognizance of the attempts made by Mr.

Macktal to voluntarily provide testimony to the NRC on reasonable terms and conditions.

See e.g.,

Affidavit of Stephen M. Kohn, Para. 13, 19-20.

Mr. Macktal has always been interested ir. voluntarily cooperating with the.NRC.

The NRC has misusec its subpoena powers to coerce Mr.

Macktal to provide testimony.without confidentiality, l

without consideration as to'how the NRC's action may impact i

on Mr. Macktal's DOL case and without c' consideration of Mr.

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Macktal's poverty.

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3)

The NRC states that a " pervasive bias or prejudice" is grounds for disqualification.

Mr. Macktal has produced ample evidence that the NRC is biased against his interests.

See e.g.,

Affidavit of Stephen M. Kohn.

4)

The NRC maintains that Mr. Macktal's compliance with the subpoena "will have no effect on his litigation before the Department of Labor." MO at 11.

This argument is simply false.

First, the NRC Staff's and Commission's actions regarding Mr. Macktal have already been used to prejudice Mr. Macktal before the U.S.

Department of Labor.

For example, Brown and Root, Inc.

(B & R), the respondent in Mr. Macktal's labor case (pursuant to 42 U.S.C.

Sec. 5851), used the original NRC Staff position that Mr.

Mackta'ls settlement was legal in an attempt to pursuade the DOL to rule against Macktal.

Ex.

4.

B & R used the NRC's December 22, 1988 Order to argue that the DOL was precluded from voiding Macktal's settlement on public policy grounds.

Ex.

5.

The NRC knew fully well that their interpretation of the settlement would have great weight with the DOL --

especially in light of the Memorandum and Understanding between the NRC and DOL.

47 Fed. Reg. 54585 (1982).

(Also the fact that the Austin allegations have been forwarded to

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the Department of Justice forcloses the NRC to improperly subpoena the same information.

See Pillsbury Co.

V.

FTC, 354 F.2d 952 (5th Cir. 1966) and its progeny.)

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Mr. Macktal's employment claim pending before the DOL i

1 was twice prejudiced by NRC actions.

It is simply l

1 unreasonable to allow the NRC to prejudice his claim for a j

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third time.

5)

The NRC incorrectly stated what is at issue in Mr.

Macktal's DOL claim.

The NRC stated:

"his DOL claim rests on the argument that he suffered discrimination because he voiced safety concerns, not because he voiced technically l

correct safety concerns."

M&O p.

12.

The issue presently pending before the DOL is not the discrimination claim -- the main issue is whether paragragh 3 of Macktal's settlement can be severed from the contract.

B & R is now arguing that paragraph 3 of Macktal's settlement should be severed and the remainder of the settlement should be upheld.

Mr. Macktal is arguing the opposite -- that the entire settlement should be stricken. See Ex. 6 and 7.

The intent of the parties who negotiated the settlement is at issue before the DOL.

This intent necessarily I

l encompasses the allegations concerning M.

L. Austin l

(President of B & R).

The NRC subpoena is seeking information concerning the intent of the parties for the Macktal settlement.

Consequently, the NRC is seeking to take actions on the major controverted issue pending before the DOL.

Attached to this motion are excerpts from the briefs before the DOL which highlight exactly how th

" intent" issue is pending before the DOL.

Ex.

6-7.

6) The NRC's position on the subpoena and disqualification issue fails to address the crux of Mr.

Macktal's concerns.

Simply put, why did the NRC Staff and l

l Commission uphold the legality of Paragraph 3 of Macktal's settlement?

It was clear to any independent observer that the Macktal settlement was highly illegal.

The U.

S.

Senate 4

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U subcommittee hearing. transcript is critical on this issue.

See Ex.

8.

The illegal terms of Macktal's settlement were obvious -- why would the NRC, at the highest levels, attempt to ignore this fact?

What was the NRC's motive?

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_1 NRC Region IV has been highly criticized for collusion I

with the industry.

See Ex.

9.-

For. example, in

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v.

Garde, 673 F.Supp. 604,-605, the person who l-l successfully rejected.an NRC subpoena criticized'NRC. Region I

i IV in the strongest possible terms:

"we would be i

irresponsible if we led more whistleblowers blindly to the-slaughterhouse of your Arlington office.".Id. NRC Staff's actions regarding Macktal are a' repeat of the apparent misconduct other whistleblowers have been subjected to at

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Region IV.

Ex.

9.

I Unfortunately, the Staff and Commission have shown such radical insensitivity to whistleblowers.that.it'has become J

apparent, in this case and others,'that an illegal animus exists between NRC Staff and CPSES whistleblowers.

This animus fully explains why the NRC Staff and Commission ignored the illegality of Macktal's settlement I

agreement until the U.S.

Senate intervened.

It also explains why the negotiations over Macktal's voluntary.

testimony collapsed and why the NRC seeks to enforce the subpoena in Federal court -- versus attempting to negotiate a rational deposition of Mr. Macktal.

Finally, the animus explains why the NRC commission should be disqualified from further involvement in Mr.'Macktal's case.

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7)

The Commissioners failed to individually decide whether to recuse themselves.

In CLI-89-14, the Commissioners adopted 10 C.F.R. 2.704(c) to analogously apply to Mr. Macktal's motion for the Commissioners to recuse themselves form adjudicating any case involving him.

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That being the case, the Commissioners have not followed their own procedure previously established in Hg.'.ston, 54 AdL 2d at 971.

The Commission, in Houston, held that "a motion seeking the recusal of a member of the Commission or of an appeal board from further participation in an adjudicatory proceeding is to be determined by that individual rather than the full Commission or board."

Housten, 54 AdL 2d at 971.

See also, Pacific Gas & Electric Co. (Diablo Canyon Nuclear Power Plant, Units 1 & 2).

11 NRC 436.

The Commissioner's have not made an individual determination.

Only the Commission as a whole has acted upon this motion.

8.

The NRC neglected to apply the " appearance of bias" test to Macktal's Motion.

The NRC Commissioners, in their August 16, 1989 M&O CLI-89-14, improperly state their own requirement for disqualification.

The Commissioners refer to Houston Lighting and Power Company, 15 NRC 1363 (1982) for the proposition that " disqualification may be appropriate if judicial conduct demonstrates a pervasive bias or prejudice."

M&O p.

7.

However, the Commission neglected to mention that an appearance of impropriety can justify disqualification.

See Houston Lighting & Power Co.,

54 AdL2d 965, 968 (1982) quoting Amos Treat & Co.

v.

SEC, 306 F.2d 260, 267.

Dear Mr. Chairman:

We are writing to request leave to brief the Commission We on issues related to the abcs,-referenced subpoena.

either URC S*t.f f or the Of fice of _

understand that Investigations (GI) will be requesting the Commission to l

Mr. Macktal hereby prays that the l

enforce this subpoena.

working days to respond to any

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Commission grant him five (5) request filed for enforcement of said subpoena.

For your information, as of today we have been negotiating with the Office of General Counsel a mutuallyMachtal to be inter f or ?ar.

agreeable arrangementaction taken by the Commission would be 01.

Any enforcementis nothing on the public record which j

indicates that Mr. "acktal would not or will not fully

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premature as there cooperate with OI.

In fact, Mr. Macktal has agreed to make in the District of Columbia to himself voluntarily availableMotion for Protective Order, June be questioned by OI.

See, 13, 1989.

Moreover, Mr. Macktal has never opposed fully cooperating with the NRC.

The public record in this case, Macktal's prior specifically the transcribed pages of Mr. interview with NRC Staff in 1986, demonstrates confidential that it was Mr. Macktal's former counsel (with the full i'

consent of NRC Staff) who instructed Mr.

knowledge and tacitto answer certain areas of inquiry by the NRC.

Macktal not at the risk of great personal as you are aware, Machtal courageous 3y exposed a practice Furthermore, sacrifice Mr.

suppressing testimony about safety concerns in exchange for Macktal's exemplary conduct this money.

But for Mr.

practice would remain hidden f rom.public view.

Y' tn8

Lando Zech, Jr.

June 16, 1989 Page Two

-Mr. Macktal is unemployed and indigent.

He has a family to support and as you know he has been forced to incur considerable legal expenses over the last several months just to have the Secretary of Labor and the illegal settlement Commission review the repugnant andhe was coerced into signing by h agreementattorneys and Texas Utilities / Brown and Root.however, he has afford to send his counsel to Texas;D.C.

to be cannot agreed to drive from Texas to Washington, represented by counsel of his choice during.the OI L.ikewise, Mr. Macktal has agreed to be in Texas if the NRC would pay the airf are of one proceeding.

interviewed of his attorneys to travel to the Lone Star state.

but Apparently this latter arrangement was acceptable to OI, for bureaucratic reasons was unworkable.

that the Commission order the interview to or in the We suggestin the District of Columbia, for be' conducted that the NRC pay the transportation costs The alternative,Macktal's attorneys to fly to Texas.

Commission need not vote to enforce the subpoena since Mr.

crea of Mr.

is willing to provide the NRC with voluntary The only issue before this Commission is the Macktal interview.

testimony.

logistical problem of the time and place for the the parties had agreed to deal Please be advised that with any issues of confidentiality, privilege, and other We do not the time of the interview.

anticipate that such potential objections would interfere objections at Macktal's ability to fully explicate his safety we expressed a concern to 01

.eith Mr.

concerns.

Moreover, investigators regarding the production of documentscertain documents in the subpoena.

For example, but are in storage.

We requested in Mr. Macktal's possession,non-privileged documents which are not and agreed that the time of testimony, obtained would be produced atMacktal would expeditiously produce any cthe that Mr.

privileged documents in his possession.

We understand that certain employees of the Commission At the Senate Hearings some may be hostile to Mr. Macktal.to strong criticism and the NRC actions were subjectCommissioners themselves reveeled their pe some of the issues involved in the Macktal case.Macktal's counsel has Mr.

without naming names, learned of negative opinions some Commission employeesIf the purpose Furthermore, is i

harbor about Mr. Macktal.

to harass Mr. Macktal then issue an enforcement order and ignore his desire to fully cooperate in a good faith effort by the Commission to learn his safety concerns.

(

l Lando Zech, Jr.

June 16, 1989 Page Three We would also like to call the Commission's attention j

to the fact that, according to the public record, Mr.

Macktal's former counsel, Billie p.

Garde, has reportedly represer.ted NRC employees.

For example Judge Thomas F.

Hogan noted on page eight of the slip opinion of U.S.is said to be an NRC v.

Garde, that "one of Ms. Garde's clients employee..."

In order to ensure that the Commission's investigation into Mr. Macktal's allegations is unbiased we I

hereby request that the NRC take reasonable steps to avoid any s.,ch potential conflicts of interest.

We are more than for the NRC; willing to negotiate this concern with counsel r

i we only bring it to the Commission's attention now in order to forestall potential problemr which may arise in

however, Macktal's y

negotiating the terms of confidentiality for Mr.

l testimony.

i But we sincerely nope that the Commission will not Macktal.

OI's resort to punitive actions against Mr.

request that the subpoena be enforced should be denied and Macktal's the Commission should order OI to conduct Mr.

interview in Washington, D.C.,

or in the alternative, the should pay the requested transportation costs.

NRC f

We hereby request to present oral argument to the I

Commission on the issues raised herein and in the Motion for me "

Protective Order, dated June 13, 1989.

Respectfully

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Stephen M.

Kohn i

Michael D.

Kohn David K.

Colapinto Attorneys for Mr. Mac):tal cc:

Secretary of the Commission Charles E. Mullins, Esq.

Sen. John Breaux e

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EXHIBIT 2 t

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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION f

BEFORE THE ATOMIC SAFETY AND LICENSING BOARD

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In the Matter of,

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Docket Nos. 50-445-OL TEXAS UTILITIES ELECTRIC

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50-446-OL l

COMPANY, et al.,

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(Application for an I

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Operating License) 1

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(Comanche Peak Steam Electric

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Docket No. 50-445 CPA Station, Units 1 and 2)

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(Construction Permit

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Amendment) l

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l MCTION TO MAKE PUBLIC ALL SETTLEMENT AGREEMENTS ENACTED BY THE PARTIES I

l Comes now petitioner John Doe, through counsel, who hereby 1

moves this Honorable Court to make public all settlement agreements enacted by the parties in the above-captioned proceeding.

In support of his motion, petitioner sets forth the l.

following reasons:

1.

Upon information and belief, the proposed settlement agreement or " Joint Stipulation," filed by the parties on or about J:lly 1, 1988, was never reviewed, approved or authorized by the Government Accountability Project (hereinafter,

" GAP") despite the signature of Ms. Billie Pirner Garde, an attorney compensated by GAP, and despite references to GAP within the document.

See, Joint Stipulation, at 9.

2.

Upon information and belief, there exists

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additional secret settlement agreements or other' agreements between the parties in the above-captioned proceeding _which have not been filed with the Court and, upon information and belief, will not be filed with the Court. 'Th'ese-secret agreements apparently have resulted in.'the transfer of,large sums.of money',

l possibly amounting in the millions of dollars, from'the utility, Texas Utilities Electric Company (hereinafter, "TUEC"),.and/or-its representatives to the intervenor, Citizens Association'for 1

Sound Energy (hereinafter, " CASE"), and individuals associated with CASE.

Upon information and belief, representatives.of CASE-have boasted that there are." pots of money" available,'and nave also stated that "there are not enough banks in Dallas" in which.

to deposit the money tendered by TUEC in settlement of these licensing proceedings.

3.

Upon information and belief, a' secret settlement agreement was entered into affecting the rights and status of current and former whistleblowers at.the Comanche Peak Steam Electric Station (hereinafter, "CPSES"), including petitioner.

4.

Upon information and belief, a. secret _ agreement was entered into which directly concerns petitioner's' allegations of safety problems at CPSES, petitioner's ongoing case before the U.S. Department'of Labor,.and which concerns, directly or indirectly, petitioner's allegations of perjury against the.

i present management team at CPSES.

5.

Upon information and belief, a secret agreement concerning petitioner was reached without the knowledge or j

l consent of petitioner between the parties to the " Joint I -l

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e Stipulation" in which petitioner would be offered a substantial sum of money in order to forego his rights to raise his contentions and/or appear as a witness before this tribunal.

Prior to the entering of the " Joint Stipulation" petitioner was listed as a witness for CASE and had raised substantial allegations to the NRC staff about the safety of CPSES.

WHEREFORE, petitioner hereby requests:

(1)

That the pending public settlement agreement or

" Joint Stipulation," submitted on or about July 1, 1988, not be approved; (2)

That all other agreements or collateral agreements between CASE and the utility TUEC -- or between other parties to the settlement -- be ade public and that copies be provided to petitioner; and (3)

That petiticner be granted thirty days to review all settlement agreements -- Secret or otherwise -- and that petitioner then be permitted to be heard in opposition thereto.

Respectfully submitted, A'

W MICHAEL D.

KOHN STEPHEN M. KOHN DAVID K. COLAPINTO 526 U Street, N.W.

Washington, D.C.

20001 (202) 234-4663 1

Attorneys for Petitioner l

July 6, 1988

0-EXHIDIT 3 s

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pn Mcoq'o UNITED STATES

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k NUCLEAR REGULATORY COMMISSION 5

E W ASHINGT ON, D. C. 20555 May 22, 1989

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Mr. Michael D. Kohn 526 U Street, N. W.

Washington, D. C. 20001

Dear Mr. Kohn:

On May 1, 1989, I spoke with you on the telephone in an effort to arrange meeting with your client, Mr. Joseph Macktal, to discuss safety concerns he says he has about Comanche Peak. During our call, you indicated that there wasn't sufficient time to schedule a meeting prior to the Senate subcommittee hearing which was held on May 4, 1989.

During testimony at the subcommittee hearing, Mr. Macktal repeated his assertions that he has safety concerns about Comanche Peak that have not been provided to the NRC. Mr. Macktal also stated at the hearing that he would be willing to discuss his concerns with NRC j

headquarters staff.

As we discussed, we request your assistance in scheduling a reeeting between Mr. Macktal and the NRC staff to discuss his safety concerns. To ensure that we clearly understand Mr. Macktal's concerns, we propose to conduct a transcribed interview at a time and place mutually agreeable, preferably as soon as possible, j

J During our May 1,1989 conversation', you indicated that Mr. Macktal requested a confidentiality agreement with the NRC.

Standards for granting a confidentiality i

agreement are set out in NRC Manual Chapter 0517. One objective of an NRC

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confidentiality agreement is to' protect the identity of an individual from public disclosure where such disclosure could cause hann.

In view of the broad public i

exposure that Mr. Macktal has sought out over his concerns, we do not see the purpose in providing a confidentiality agreement to him.

Enclosed is a copy uf this letter for Mr. Macktal.

Please advise Mr. Macktal that we wish to interview him as soon as possible. Please respond within five j

working days of your receipt of this letter with a time and a place convenient l

for you to cor. duct the interview.

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Sincerely, (3riginal signed by P. F. Mckee for)

Christopher I. Grimes,. Director Comanche Peak Project Division Office of Nuclear Reactor. Regulation j

l Reissuance of

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letter sent May 12, 1989

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EXHIBIT 4 i

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l UNITED STATES OF AMERICA BEFORE THE SECRETARY OF LABOR d

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JOSEPH MACKTAL,

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l Complainant,

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. Case No. 86-ERA-23 v.

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BROWN & ROOT-INC.,

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Respondent.

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f RESPONDENT BROWN & ROOT, INC.'S OPPOSITION TO MOTION FOR j

EMERGENCY PARTIAL ORDER d

l 'd In papers filed between August 26,and October 6,

1988, J

complainant has moved the Secretary to nullify

!se agreement by 4

which complainant settled his suit against Brown.& Root, Inc.

(" Brown & Root"), arising under Section 210Hof the~ Energy j

i Reorganization Act of 1974, 42 U.S.C.

5 5851 ("Section 210").

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Brown & Root here shows that. complainant's motion lacks' legal foundation and that complainant's suit against Brown & Root must.

be dismissed with prejudice'in accordance with.the1 parties' mutual commitments.

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.- etc. (undated)

Complainant's Motion for Expedited Consideration, at 1 (emphasis original).

Not true.

Under the literal terms of the agreement' Mr. Macktal is perfectly free to report whatever he-wants to whomever he wants.

Equally incorrect is complainant's statement that "[ilf, by some chancei a person discovered that Mr. Macktal had testimony about. safety _ problems of Comanche Peak,

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Mr. Macktal could not cooperate with that person

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Complainant's-Opposition to Brown & Root's October 5,'1988 Request, etc. (Oct.'6, 1988) at 6.

Nothing in paragraph 3 inhibits complainant's cooperation with anyone, and complainant's

" testimony" about Comanche Peak is a matter of public record, well-known to the NRC, to CASE, to GAP and to TLPJ.

Nor does anything in paragraph 3 inhibit complainant's further dissemination of his " testimony" -- except by_ stipulating that should someone want complainant formally to appear as a witness or as a party hostile to Brown & Root he must.do so pursuant to an unobjectionable subpoena.

The NRC Staff itself, which plays the primary role in receiving and investigating safety-related information such as that complainant claims to possess,17 has examined paragraph 3 of the settlement and has approved its limited scope.

CFUR alleges that Mr. Macktal's " secret" settlement agreement with Brown & Root of his DOL complaint (was}-designed to preclude'the raising of safety concerns A reading of

-~17/ Cincinnati Gas & Elec.

Co.,

et al. (Wm.

H. Zimmer Nuclear Power Station, Unit No. 1), CLI+82-20, 19 NRC 109, 114 (1982)'

(Ahearne and Roberts, Comm'rs, concurring),-as clarified, CLI-83-4, 17 NRC 75 (1983).

the agreement does not support CFUR's allegations.

The agreement does not, as discussed above, preclude Mr. Macktal from bringing safety concerns to the NRC Staff, or from raising his concerns publicly.

It does o

restrict Mr. Macktal's ability to appear voluntarily as a witness or a party in NRC proceedings related to Comanche Peak.

While it does require him to take. reasonable steps.

to resist compulsory process, it does not i

require him to disobey a subpoena.were such a subpoena to be issued.

The Staff does not believe the agreement would have precluded Mr.

Macktal_from providing information to the NRC in the form of letters to the Staff or meetings with Commission employees or in any other manner than appearing as a voluntary l

witness.

The Staff does not condone the use of settlement agreements to preclude the bringing of safety concerns to the NRC.

The Staff does not believe this agreement achieves the results alleged by CFUR.

Exhibit 1 at 8 and n.

5.

2.

The NRC Staff's conclusion that nothing in paragraph-3 of the agreement contravenes public policy is consistent with applicable caselaw.

The lawfulness of the agreement in this case is confirmed by l

the decision in Hoffman v.

United Telecommunications, Inc., 687 l

l F.Supp. 1512 (D.Kan. 1988).

In Hoffman, as in this case, the j

plaintiff had been involved in two related proceedings against her employer:

an individual discrimination suit, and a-class action subsequently taken over, and prosecuted in the public

-Also interest, by the Equal Employment Opportunity Commission.

i in this case, plaintiff in Hoffman had participated at some as i

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to settle his case and Complainant admittedly' authorized GAP complainant himself ratified, in both word and deed, every term of the settlement created pursuant to that authority.

If in retaining complainant's authorization and consent obtaining or that:is entirely satisfy' complainant's expectations, GAP did not It cannot entitle complainant to complainant's and GAP's affair.-

of its rights.on grounds of actions.in which strip Brown & Root Brown & Root in no-way. participated.

CONCLUSION For the foregoing reasons-Brown & Root respectfully requests that the Secretary issue an order denying-complainant's motions and dismissing this-case with prejudice.

Respectfully submitted, I

,f

~ by

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Richafv m '"atkvT, Esquire.

Peter Kryn Dykema, Esquire BISHOP, COOK, PURCELL & REYNOLDS 1400 L Street,-N.W.

Washington, D.C.

20005-3502 Telephone:

(202) 371-5776 Dated:

october 28, 1988 l

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EXHIBIT 5 1

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3 UNITED STATES OF AMERICA

~~a pp BEFORE THE SECRETARY-OF LABOR 1 = =*J

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.gg JOSEPH MACKTAL,

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Complainant,

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Case No. 86-ERA-23 v.

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BROWN & ROOT, INC.,

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Respondent.

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l RESPONDENT BROWN & ROOT, INC.'S REPLY TO.

l "BRIEF OF COMPLAINANT JOSEPH J.

MACKTAL"

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By memorandum dated December 20, 1988, complainant presented the Secretary with a variety of arguments -- several theretofore unseen -- in support of his request that he be permitted.to Root, while pocketing its e

nullify his settlement with Brown &

proceeds.

Brown & Root here replies to a few of the more contentions.

misleading of complainant's new l

The Nuclear Regulatory Commission Has A.

Is Determined That-The Settlement Agreement Fully Consistent With Nuclear Law And Policy l

Complainant has argued at length.that his promise not to Root in the absence a witness or party adverse.to Brown &

become of a valid subpoena is violative of public policy, and that any to the contrary is " frivolous."

Complainant's Brief at argument e

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After' receiving briefs on all 8,

11, 14.

The NRC. disagrees.

issue,1 the Commission stated:

sides of the tes allow the read the agreement Weindividual involved to bring any safety.. and concerns he'has directly to the NRC respond to an administrative subpoena if i

to subpoena is not quashed by the issuing that The agreement..

only officer restricts-the individual's right to appear voluntarily as a witness or a party.in certain (and then only on behalf of j

NRC proceedings organizations and individuals listed in the agreement) and obligates the individual.to the take " reasonable" steps to resist a subpoena Ac long as the

~

in such proceedings.

individual's right to-bring matters to the NRC I

reasonably convenient manner is not in a curtailed, we do not see'a violation of federal law or NRC regulation.

i In The Matter of Texas Utilities Electric Memorandum and Order, Units 1 Company, et al.,

(Comanche Peak Steam Electric. Station, and 2), CLI-88-12, NRC (1988) at p.

10 (emphasis In light of the NRC's primary responsibility and original).

in the area of federal nuclear policy and procedure, 1

expertise resolution of complainant's contention that his settlement its contravenes federal nuclear law is entitled'to substantial deference.

The Department of Labor and the NRC have specifically to the fullest extent committed "to cooperate with each other in every1 case of alleged discrimination, n.volving possible Memorandum of employees of Commission licensees

Root, Exhibits 1 and 13 to Respondent Brown &

Inc.'s Opposition to Motion For Emergency Partial Order (Oc',

1/

See, e.g.,

j 28, 1988).

5 Understanding Between NRC and Department of Labor;-Employee Protection, 47 Fed. Reg. 54585 (Dec.

3, 1982).- In this case, of deferring to the NRC's opinion, as expressed in its

course, but of December 21' Order, is not simply a. matter of cooperation, proper respect-for the agency created by Congress to administer the specific policies implicated, as the courts have held.

In safir v. Gibson, 432 F.2d 137 (2d Cir. 1970), for example, Judge Friendly strongly disapproved one agency's failure to accord to the determinations of another agency, where preclusive effect agency to address ~the matter in issue was acting within the first thus held-that the Maritime its special expertise.

The court Administration should have held itself precluded from redetermining an issue that had been settled earlier by the l

rederal aaritime Commission.

It is the FMC, not the Maritime Administra-tion, that has the' expertise to pass on whether, rates are unfair or unduly l

and it would be quite l

discriminatory, i

unseemly for the Maritime Administration to i

conclude that its sister' agency had been wrong l

l on a fully litigated issue.

l i

_Id.

at 143.

The NRC does not of course have jurisdiction to' adjudicate o

complainant's claims against Brown & Root.

The_ contention,

l' however, that complainant's settlement violates NRC regulations

.l c

integrity of NRC procedures is clearly j

and compromises the contrary to the NRC's view of the matter.

Since the NRC has in j

L fact considered and rejected this contention, it would at a l

i 1

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l l

l i

s

1P' l

I minimum be "quite unseemly", as Judge Friendly put i t, for the Secretary to adopt a contrary conclusion.

Basis For The NRC's Ruling Demonstrates J

B.

The The Inapplicability Of EEOC v.

Cosmair

~

that basis for'the NRC's conclusion'is the fact One to contact'the NRC or its Staff with hir;J complainant remains free Thus complainant's reliance upon EEOC v.

Cosmair,.821 concerns.

F.2d 1085 (5th Cir. 1987).is. misplaced.

The settlement in j

~

extent that it found objectionable only to the Cosmair was foreclosed the employee's access'to thelEEOC's principal

]

a " charge" of discrimination.

information-gathering mechanism, to both of-Here, by contrast,- complainant has uninhibited access NRC's principal information-gathering mechanisms -- the NRC the In addition, as the Staff and the Applicant's management.

complainant is free, if he.l Commission's December 21 Order notes, l

The Cosmair to communicate directly with the NRC.

wishes, l

facts of this case.

decision thus has no bearing on the does complainant's misquotation-of 10 CFR S 2.206 help Nor him.

That section'does not, as complainant states, " entitle 'an, the NRC.

Macktal institute a proceeding'" beforce person' to section'only permits a person to " file a

l Brief at 17.

That or for such other actior; request to institute a-proceeding 1

Root, Inc.

v. Donovan, 747 F.2d 1029, 1035 (5th (describing'the central and statutorily-mandated

-2/

See Brown &

corporate officers play in the reporting.of Cir. 1984) j critical saf ety conditions at a nuclear power plant. )

role that

~

L

_m__

y as may be proper."

10 CFR S 2.206(a).

If appropriate, upon shall request,."the Director of the NRC receipt of such a or shall advise either institute the requested proceeding that no proceeding will be the person who made the request instituted 10 CFR S 2.206(b) (emphasis added).

Thus an individual who files a section 2.206 request does not institute a.

proceeding, not,.if a proceeding.is instituted, is the. person whc Commonwealth Edison Company filed the petition a party thereto.

(Shipments of Irradiated Fuel from West Valley), DD-83-14, 18. NRC 726, 728 n. 1 (1983) (" Consideration of a request for action

' proceeding' or give rise to any under 2.206 does not initiate a intervention rights under~the Atomic Energy Act");

hearing or 1979).3

-Illinois v. NRC, 591 r.2d 12 (7th Cir.

Complainant Misstates The. Burden Of Proof On.

C.

Issues Of Illegality, Duress And Voluntariness.

64 Mr. Macktal asserts that, despite his oral agreement to and his accepting settle, his twice signing the General Release, and keeping the settlement proceeds, his. naked claim that he did the -

" constitutes an irrebuttable presumption that not consent 3/

Complainant's argument that the settlement has the potential interfere with Department of Labor proceedings rests on the assumption that the Department lacks the authority to to

. This assumption seer issue subpoenae in a Section 210 case. regulations detailing the dubious in lignt of Departmentalsubpoenae-(29 CFR S 18.24).and procedure for issuance of Philadelphia Electric l l

contrary decisional law.

See Young v.

Company, Case No. 87-ERA-0D376 (Memorandum and Order Ruling, I

11 on Department of Labor's Motion to Quash Subpoenas, Sept.

Tennessee Valley Authority, Case No 1987); but see Bohan v.

(Footnote 3 continued on next page) ia C______._____._______

..a

O I 'l CONCLUSION For the foregoing reasons Respondent Brown & Root respectfully requests that the Secretary enter an Order of dismissal with prejudice in accordance with the parties' mutual commitments.

Respectfully submitted fn. kk Richard K.

Walker, Esquire Peter Kryn Dykema, Esquire l

BISHOF, COOK, PURCELL & REYNOLDS 1400 L Street, N.W.

Washington, D.C.

20005-3502 Telephone:

(202) 371-5776 Dated:

January 17, 1989 l

1

i l

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1 1

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l EXHIBIT 6 1

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A

UNITED STATES OF AMERICA BEFORE THE SECRETARY OF LABOR

'l

)

J

)

JOSEPH MACKTAL, l

)

j Complainant,

)

Case No. 86-ERA-23 v.

BROWN & ROOT, INC.,

)

j

)

I Respondent.

)

i i

. l NOTICE OF EXPRESS WAIVER AND RESPONSE TO COMPLAINANT'S NOTIFICATION OF SUPPLEMENTAL AUTHORITY y

l 4

l l

Brown & Root Has Expressly Waived Any I,

Right To Restrict Complainant's Access To The NRC, Thus Removing Any-Perceived Impediment To Severability.

~.

In a variety of pleadings filed since August, 1988,

]

.x complainant has been urging the secretary to annul a settlement-l i

agreement signed in January, 1987, resolving a Section 210 claim l

filed by complainant again'st his~former. employer, Brown & Root, Inc.

Complainant.has asserted that his consent to-the agreement

!'i was somehow coerced,-and that the agreement unlawfully' prevents.

him from communicating safety concerns-to the staff of the.

Nuclear Regulatory Commission. _He argues that the entire j

agreement, including the' bulk of the provisions ~ (whose legality _

j i

i l

~1/.

See, e.g., " Motion for Expedited Consideration ~or.-for.

' Emergency Order," undated,.before the Secretary:of Labor, at p.

1.

I i

m____._i____._____________________

-__- 1' he does not question), is void.

Neither Brown

&' Root,.the NRC l

Staff, nor the NRC itself, however,

.has given.the agreement the restrictive reading that complainant would have the Secretary l

give it.2-OnfApril-128,'.1989,' Victor Stello, Jr., Executive Director'for j

Operations at the NRC,-sent all' licensees a memorandum regarding i

/

agreements in Section 210 cases that could in.any way-I settlement restrict an. employee's access to'the NRC.

Complainant submitted copy of the. memorandum, appended to a " Notification of a

Supplemental Activity,"Ehis latest filing in this case addressed to the Secretary on May 3, 1989.

i there could be no doubt whatsoever of the terms and effect So of its agreement with complainant, Brown & Root took.the step of expressly waiving any ri'ght to enforce the' disputed provision of the agreement "to the extent that lit] might even arguably be a

construed to limit or restrict in any way Mr. Macktal, or his legal representative, from communicating with'any representative j

of the NRC about potential safety issues."

Exhibit A.

This-i l

express waiver was hand-delivered toccomplainant's attorney,

-)

i Stephen M. Kohn, on-May-3, 1989,.with'the suggestion that its l

message be passed on to complainant "as soon as possible to

~

ensure that he is disabused of any understanding that he may have j i

i l

~2/

See, e. g.,- " Respondent Brown & Root, Inc.'s. Opposition to Motion for Emergency Partial Order," Oct. 28,.1988, at '26-27;,!

NRC'" Memorandum and Order," CLI-88-12, Dec. 21, 1988, at 10.

i l

p b

' that he is.in any way constrained by the settlement agreement with' respect to communications with the N R C.. "

This express. waiver removes any impediment the Secretary may,

.t even arguably, have had to expeditious approval of the settlement agreement.

Whatever may have been the effect of the language of the~Macktal; agreement on which complainant has pinned his hopes of escaping the obligations undertaken by him thereunder, the l

waiver removes lany' question as to whethe r complainant 'is f ree 1to Root has already b'riefed communicate with the NRC.

As Brown &

more fully elsewhere,3 lawful promises, conjoined with one i

contended to be unlawful, remain fully enforceable if they are

~

severable from the disputed promise.

See. Restatement (2d) of' Contracts S 184(1) (1981).

While severability is generally a question of intent, intent need not be examined when, as here, the party "for whose benefit [the disputed provisions].must be assumed to have been' inserted.

is willing'to continue under l

the contract without them."

Mayflower Hotel Stockholders Protective Committee

v. Mayflower Hotel Corp., 193 r.2d 666, 673 (D.C. Cir. 1951).

Under such circumstances there is no: equitable justification not to sever the disputed-from the undisputed terms of the contract and to enforce the. provisions'that are indisputably legal.

Because the disputed provision can be severed, Complainant's specific contentions as to the agreement's alleged illegality ares l

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See " Respondent Brown & Root, Inc.'s Opposition," supra, at

'I IT233.

1 l

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_4_

moot.

If the issue presented is no longer " live," and the parties have no " legally cognizable interest in the outcome," a case is moot.

Lee v. Schmidt-Wenzel, 766 F.2d 1387, 1389 (9th Cir. 1985).

A decision by the Secretary on the legality of the disputed provision would haie no effect one way or.the other on-the parties, as.its enforceability-will never come up between-them.

See id. at 1390 ("the possibility of a future controversy between a complaining party and some other person, not a party to the current lawsuit, does not fulfill the case or-controversy requirement of article III").

Moreover, given the NRC's April.

- i 27, 1989 policy directive to all of its licensees, this issue 1has i been addressed on an industry-wide basis.

Consequently, it is safe to say that the issue will not recur between other parties either.

illustrating how'the mootness doctrine affects this A case case i s Operating Engineers Local Union No. 3 v.

Bohn, 737 F.2d-l 1

860 (10 cir. 1984), in which a union sued for injunctive relief-l requiring state and federal authorities to incorporate the i

l appropriate wage schedule in a solicitation of bids for a highway-l

\\

construction project.

Defendants agreed before trial to comply l

with the union's demand.

The Court held that " defendants' j

concession to modify the contract to include theLcorrect wage afforded plaintiff all of the substantive' relief rate Thus, by the time defendants-moved for summary i

sought judgment, plaintiff's substantive claims were moot."

Id. at 863.,

i See also Northern Alaska Environmental Center v.

Hodel, 803 F.2d l

_n

-.s

-__.--.---._..___.__-..--___.-_.a__-a

_ 466, 469 (9th Cir. 1986) (government agencies' agreement to l

require more stringent environmental restrictions on mining activities, as demanded by plaintiff, moots that issue).

II.

Even Absent Waiver, The Disputed Provision Is Clearly Severable.

Two recent federal court decisions are directly on point and also demonstrate the agreement's severability.

In McCall v.

U. S -.

Postal Ser' ice, 839 T.2d 664 (red. Cir. 1988), the court considered the effect of a settlement agreement between the Postal Service and McCall, a postal worker who had been removed 1

from his job.

The settlement agreement reinstated McCall, in exchange for which he expressly waived, for one year, his statutory right to appeal any subsequent removal to the Merit l

System Protection Board ("MSPB") and the Equal Employment Opportunity Commission ("EEOC").

The Court held that his waiver of a right of appeal to the MSPB was not illegal.

Id. at 667-68.

As for the right to file charges with the EEOC, however, the Court observed that waiver of such a right could be void as against public policy.

Noting that this argument had not been raised on appeal, the Court concluded: "[Elven if McCall's attempted waiver of his right to file EEOC charges is void, that would not affect the validity of tne other portions of the agreement.

"ce Restatement (Second) of Contracts 5 184(1)

(1981)."

McCall, 839 r.2d at 666 n.*.

Here, of course, while the provision at issue has not been shown to be contrary to law public policy, McCall demonstrates that where the disputed or

._ provision is severable, the ' Secretary need not ever reach that question.

l The Fifth Circuit reached the same conclusion in EEOC v.

L'Oreal Hair Care Division, 821 F.2d 1085 (5th LCosmair, Inc.,

released Cosmair, his former Cir. 1987).

The employee, Terry, from all causes of action arising from his termination,

employer, in exchange for which Cosmair agreed to continue paying Terry's Within a salary and benefits for 37 weeks following discharge.

few weeks of signing the release, Terry filed an1 age whrreupon Cosmair suspended-discrimination charge with the ESOC, e

payment of his salary and benefits.

his action prompted Terry-to file a second charge with th: EEOC for unlawful retaliation.

On appeal, the Court held that Terry's release had.not since such a restrained him from filing a charge with the EEOC, charge is not a "cause of action" in the sense the. parties had

.3 intended.

Terry.had theref. ore not breached the release, and Id. at Cosmair's suspension of payments had been retaliatory.

1089..

Alternatively, the Court held that if the release did bar the filing of a charge with the EEOC,-that specific waiver was void as against public policy.

The Court toox1 pains, however, to clarify that such a result did not void the remainder of the release:

[T]he fact that a waiver of the right to file a charge is void does not invalidate a waiver of a cause of action with which it is conjoined.

See Restatement (Second) of Contracts 5 184(1)

(court may enforce. remainder of agreement unenforceable in part as against public policy when " performance as to which the agreement is unenforceable is not an essential part of the agreed exchange").

Id. at 1091.

III.

Conclusion Like the courts in McCall and Cosmair, the Secretary is faced with a disputed settlement agreement only part of which is contended to be unlawful.

McCall and Cosmair demonstrate conclusively that the agreement is severable and therefore enforceable without the disputed provision.

Moreover, Brown &

Root's express waiver of any restriction on complainant's ability to communicate with the NRC, as well as the NRC's decision to address the issue through a policy directive to all licensees, moot the issue and thus make the Secretary's course of action all the more straightforward.

In light of these circumstances, the agreement should be approved.

Respectfully submitted,

~m Richard K.

Walker, Esquire Peter J.

Maassen, Esquire BISHOP, COOK, PURCELL & REYNOLDS 1400 L Street, N.W.

Washington, D.C.

20005-3502 (202) 371-5776 Dated:

May 12, 1989 e

u_________._

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EXHIBIT 7' j

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l UNITED STATES OF AMERICA BEFORE THE SECRETARY OF LABOR 1

)

{

JOSEPH MACKTAL,

)

l i

}

4 l

Complainant,

)

Case No.

86-ERA-23 v.

BROWN & ROOT, INC., and

)

TEXAS UTILITIES ELECTRIC CO.,

)

Respondents.

)

I BRIEF OF COMPLAINANT JOSEPH J.

MACKTAL i

1 STATEMENT OF FACTS 1986 complainant Joseph J. Macktal filed On February 3, Inc., and a Section 210 complaint against Brown & Root, 1

alleging wrongful termination.

Texas Utilities Electric, Co.

Mr. Macktal was represented by Billie P. Garde and Mr.

Garde also represented Mr. Macktal l

Anthony Z. Roisman.

Ms.

before the U.S. Nuclear Pegulatory Commission (NRC).

Mr.

1 Macktal voluntarily made confidential disclosures to NRC

{

staff concerning some of the problems he witnessed at the Comanche Peak nuclear power construction site.

Macktal

{

Affidavit, at para.

4.

Ms. Garde informed Mr. Macktal that NRC staff at Pegion IV could not be trusted and instructed him not to fully disclose to NRC staff all of his safety related concerns., Second Macktal Affidavit at Ms. Garde informed Mr. Macktal that the best para 3.

forum to air his grievences would be before the NRC Atomic Safety and Licensing Board (ASLB) and that only some of his allegations should be aired before the ASLB.

1

l L,

Second Macktal Affidavit at para.

3.

{

l Mr. Macktal followed these instructions and never l

raised various allegations with NRC Region IV staff.

Consequently, a number of significant. allegations were never l

Macktal Affidavit at presented to NRC staff or the ASLB.

para 5.

As for the allegations Mr. Macktal did raise with NRC 1

the staff initiated proceedings.regarding his

staff, Part 2. Attachment 2, allegations pursuant to 10 C.F.R.

Notice of Violation, at 4.

NRC Staff investigated Mr.

1 Macktal's allegations and Assued a-" Notice of Violation" und a " Notice of Deviation" as to the majority of allegations 1

disclosed by.Mr. Macktal..

The NRC cited j

Texas Utilities with six separate " Severity Level IV"

)

i violations and four " deviations from commitments" based on Mr. Macktal's allegations..

While his Department of Labor (dol) complaint was Mr. Macktal met privately (without the presence of

pending, his counsel) with the president of' Brown & Root, Inc., Mr.

i Lewis Austin, and attorneys for Brown & Root.,

Second Macktal Affidavit, at para.

4-5.

Mr. Austin and Mr. Macktal had a number of detailed discussions about the i

As a merits of his case and the settlement.of his case.

result of these conversations Mr. Austin offered Mr Macktal i

i for Mr. Macktal to agree not to provide testimony l

$15,000.00 to the citizens intervenor organization for use in the ASLB l

hearings.

Mr. Austin also stated that he would "take care l

of" Mr. Macktal's attorneys., Second Macktal

]

I 2

4

i Affidavit at para. 5.

I Macktal rejected this offer and continued to pursue-Mr.

l his case before the DOL.

Mr. Macktal's attorney, learned of

~

l these meetings prior to November 18, 1986.

All of the l

parties kept the fact that these meetings occured and the offer of Mr. Austin strictly confidential.

f On November 18, 1986 attorneys for respondents and Mr.

Macktal entered settlement negotiations.

As a result of these negotiations a variation of the original Austin f

settlement was again presented to Mr. Macktal.

Mr. Macktal-would-recieve $15,000.00 and his attorneys would recieve l

J for an agreement to withdraw his dol complaint

$20,000.00 and'not test'ify before-the ASLB. Attachment 1, Second Macktal Affidavit at para.

7-8.

At this time Mr. Macktal was improperly coerced into Macktal Affidavit approving the so-called oral settlement.

para. 14-18.

Mr. Macktal conditioned his "acceptence" of the so-called oral agreement with a request that the settlement be l

fully agreed to, executed and a check issued within 30 days.

None o'f the details of the settlement had been agreed to and L

Mr. Macktal desperately needed the money before the end of the year. Attachment 1, Second Macktal Affidavit at para.

8-9.

As a consequence of his illegal discharge from Brown &

Mr. Macktal had been unemployed throughout 1986 and

Root, needed the money to support his wife and children.

The parties agreed to the 30 day _ restriction and Mr.

Macktal was informed that the ALJ ordered settlement to be completed within 30 days.

Mr. Macktal understood that if 3-

]

the settlement was not agreed to and executed within 30 j

days,-Mr. Macktal understood that the parties were in in the case.

agreement that-there would be'no settlement Second Macktal Affidavit at para.

8-9.

After 30 days expired and no settlement was agreed to, Mr. Macktal informed his attorney that the 30 day settlement period was over and that he no longer wished to settle the.

He informed them that he wanted a trial and wanted to case.

fully disclose all of his concerns at Comanche Peak.

Moreover, Mr. Macktal' informed his attorneys that he wanted' to expose the attempts to silence witnesses in which He respondents and Mr. Austin had previously engaged.

instructed his attorneys to stop all settlement negotiations and prepare for trial.

Macktal Affidavit at para. 18-26; Second Macktal Affidavit at para. 11.

Both of his attorneys refused to. follow thesc 3

l instructions.

Instead they conveyed threats to Mr. Macktal as to the harm respondents would cause Mr. Macktal and his l

family if he went to trial or if he exposed the situation.

l to the public through the press.

Macktal Affidavit para.

i 18-26.

On January 2, 1987 the attorneys signed the ' settlement l

agreement in this case and filed for a voluntary dismissal of the action.

Under duress, without knowlege of his legal rights, after being conveyed threats as to harm respondents would cause him if he refused to sign, and,after his attorneys'had already signed the " settlement" and filed a motion for-4

_ n-_ - - - - - _

]

I i

l dismissal, Mr. Macktal signed the-general' release.

d L

L After signing the release Mr. Macktal was instructed by

)

f his attorneys never to consult with the NRC or any person as i

to any matter related to his safety allegations and his The allegations he never raised before the NRC and 4

1 case.

en to ta k w th h s f m y

bo t hi conce ns n,

Second Macktal-Affidavit at para. 11-12.

J ARGUMENT i

BROWN & ROOT'S CONTENTION THAT SECTION 210 (B) (2) (A)

I.

j APPLIES ONLY TO WAGE & HOUR DIVISION I

INVESTIGATIONS IS ERRONEOUS AND FRIVOLOUS i

Respondent Brown & Root claims that Section l

i 210 (b) (2) ( A) of the Energy Reorganization Act (ERA) " applies only during the investigation and conciliation stage" of a dol Section 210 proceeding.

Respondent's Opposition (RO) at

)

19-20.

But respondents misread the law.

Section 210 (b) (2) ( A) states:

Within ninety days of the receipt of such complaint the Secretary shall, unless the proceeding on the complaint is terminated by.the Secretary on the basis of a settlement entered into by the. Secretary and the person alleged to have committed such violation, issue an order either providina the relief prescribed by subparagraph (B) or denying the complaint.

An order of the Secretary shall be made on the record after notice and opportunity-for public hearing.

The~ Secretary may not enter into a settlement terminating a proceeding on a complaint without the participation-and consent of the complainant.

42 U.S.C. 5851(b) (2) (A).

Unquestionably, the power of the Secretary of Labor (sol) to approve a settlement exists throughout the entire 5

4 Root does not agree.

Section 210 requires that all settlements Regardless, be approved by the sol.

Thus, any part of a contract which undermines this statutory authority is void.

l G.

The Restriction Placed On Ms. Garde, Mr. Roisman, GAP and TLPJ Are Void The Settlement Agreement not only barred Mr. Macktal from testifying or being a party in any proceedings but went l

much further and placed restrictions on the conduct of Mr.

j the Government Accountability Project Roisman, Ms. Garde, (GAP) and Trial Lawyers for Public Justice (TLPJ).

As these l

other entities were representatives or agents of Mr.

Macktal has standing to invalidate those Macktal, Mr.

restrictive covenants.

Additionally, as previcusly discussed, these parts of the contract obviously affect the rights of third parties (such as Mr. Hasan) and the sol I

should invalidate them.

+t RESPONDENT'S CONTENTION THAT CONTRACT LAW JUSTIFIES IV.

AFFIRMATION OF THE AGREEMENT IS MISPLACED Respondent contends that even if the sol should hold that some or all of paragraph 3 is void, the sol should The still uphold the remaining sections of the settlement.

sol should not engage in such a contract law analysis given the statutory authority she has to disapprove a settlement.

The sol can refuse to approve the settlement on three independent grounds: (1) when a complainant does not consent to such an approval; (2) the settlement is " unlawful, unreasonable and inequitable and against the public interest"; and (3) because of respondent *s. failure to comply 20 l

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{

l with the sol's Order of May. 11, 1987.

As cases under the even an otherwise valid and enforceable contract, NLRA. hold, the sol can still refuse to approve the settlement.

U.S. Contractors v. NLRB, 697 F.2d 692, 695 (5th Cir. 1983).

_Regardless of the inequitable and unlawful aspects of the agreement, basic principles of contract law demonstrate 3

that the contract cannot be-enforced.

l Respondent's Request That the sol Enforce I

A)

Those Parts of the Settlement Not Void Per Se Must Be Denied Respondent requests that, _in the event the sol only voids certain' parts of the agreement, that che enforce _the remainder.of the agreement.

This relief should not be

. granted because the remedy of severability in contracts is an equitable remedy.

Parties entitled to such relief must have " clean-hands".

The Restatement (Second) of Contracts, i

Sec. 184 states:

1) If less than all of an' agreement is unenforceable under the rule stated in Sec. 178, a court may nevertheless enforce the rest of.the' agreement-in favor of a party who did not engage in serious EIsconduct~if the perforEince as to whiEh the I

is unenforceableable is not aji essential l

agreement part of the agreed exchange.

only part of a term as A court may treat

2) unenforceable under the rule stated in Subsection (1) if the party who seeks'to enforce the term obtained it in_qood faith and in~accordance with reasonable standards of fair dealing.

j

~~~

(emphasis added.)

A party is entitled to severability only if th'ey "did not engage in serious misconduct" and only f the improper consideration was obtained "in good' faith."- See also, s

Zerbetz v. Alaska Energy Center.708 P.2d 1282 (Alaska 1985).

Respondent engaged in " serious misconduct" when, by l

21 1

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~

using Ltheir dominant bargaining power, extracted a contract for the suppression of. evidence.

The,Second Restatement of

~

Contracts is clear:

a court will not aid a party who has taken advantage' of his dominant bargaining power to extract from the other party a promise that'is clearly so broad as g

to offend public-policy by redrafting the agreement l

so as to make a part of the promise enforceable.

Restatement of_(second) Contracts Sec. 184 (comment)

Respondent must live with the consequences of their i

illegal bargain.

Under the basic rule of contracts, the sol i

i cannot utilize her equitable powers to reforn the contract-into a legal instrument.

Even if Respondents had " clean hands", in order to reform the contract the sol must determine whether the illegal part of the contract was "not an essential part of

'the agreed exchange". Id.

The restrictions upon testifying J

were an " essential part" of the agreed upon exchange.

The initial settlement offer by the president of Brown & Root It was well was premised upon the suppression of evidence.

known to all the parties to this case that Respondent was l

primarily concerned with the effect Mr. Macktal's The l

allegations world have on the licensing proceedings.

I president of Erown & Root himself made this point abundantly clear to Mr. Macktal.

Absent the suppression of Mr.

Macktal's testimony, respondents never would have entered into'the settlement agreement.

The fact that Mr. Macktal.was coerced into offering respondents both legal and illegal consideration.for the settlea,7nt does not render the contract severable.- Under

')

contract law one cannot simply agree not to collect on the 22 k

h 1

_ _ _ _ _ _ _ _ _ = _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _. _.. _ _ _ _

.1 illegal consideration and demand to collect on the legal consideration since "a promise made upon several

]

considerations, one of which is unlawful, no matter whether.

f 1

is void."

the illegality be at common law or by statute, Edwards County v. Jennings, 35 S.W.

1053, 1054.(Texas l

Supreme Court 1896).

Citing from older cases, the Texas Supreme Court articulated the rule as fol3cws:

It is obvious that there is ample valid consideration j

to support the promise sued on; yet, if, to the abundance of valid consideration, there has been-added a leaven of what'is-illegal, the whole contract is j

.[It) cannot be enforced, because the law

{

tainted. * **

will not compel what it prohibits, and the parts can j

not be separated.

Illegality thus vitiates the entire instrument.

The purpose of the law is to discountenance and discourage improper contracts; not.to enforce them i

is adopted as the best means'to this end, and is.

l adopted in total disregard-of the effect upon the l

I parties to the prohibited transaction..

d Patrizi v. MaAninch, 269 S.W.2d 343, 348-349 (Tex. 1954)

Respondent cannot benefit as a result of their own wrongdoing.

Respondent demanded the suppression of evidence as a condition of settlement.

Respondent had obtained such language in the past and had made quite clear both to Mr. Macktal and his representative that such a i

clause was the price for settlement.

Apparently, the language used in the Macktal case was taken from another' confidential dol settlement of a ComancheLPeak whistleblower case wherein Brown L Root was also the respondents. Respondent cannot be

. heard now in equity.

I 23 I

l 1

1 Conclusion i

The sol should not approve the settlement agreement and for a should expeditiously remand this case to the ALJ hearing on the merits.

Unresolved issues arising from the settlement (i.e., restitution and sanctions) should be remanded to the Chief ALJ.

Respectfully submitted,

)

f i

J J.

i Stephen M.

Kohn, Esq.

Michael D.

Kohn, Esq.

David K..Colapinto, Esq.

1 KOHN, KOHN & COLAPINTO, P.C.

526 U Street, N.W.,

Washington, D.C.

20001 (202) 234-4663 Attys. for Joseph Macktal I

w December 20, 1988 l

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Dear Mr. Chairman:

Dear Mr. Kohn:

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