ML23153A087

PR-002 - 59FR60697 - Policy and Procedure for Enforcement Actions; Policy Statement, Discrimination

ML23153A087
Person / Time
Issue date:	11/28/1994
From:	NRC/SECY
To:
References
59FR60697, PR-002
Download: ML23153A087 (1)

Text

ADAMS Template: SECY-067 DOCUMENT DATE: 11/28/1994 TITLE: PR-002 - 59FR60697 - POLICY AND PROCEDURE FOR ENFORCEMENT ACTIONS; POLICY STATEMENT, DISCRIMINATION CASE

REFERENCE:

PR-002 59FR60697 KEYWORD: RULEMAKING COMMENTS Document Sensitivity: Non-sensitive - SUNSI Review Complete

DOCKET NO. PR-OO2 (59FR60697)

In the Matter of POLICY AND PROCEDURE FOR ENFORCEMENT ACTIONS; POLICY STATEMENT, DISCRIMINATION DATE DATE OF TITLE OR DOCKETED DOCUMENT DESCRIPTION OF DOCUMENT

11/21/94 11/21/94 FEDERAL REGISTER NOTICE - PROPOSED RULE 12/28/94 12/27/94 COMMENT OF IES, FPlL, TUEC, HL&P, l S. CAL. EDISON _,--

(GEORGE L. EDGAR) ( 1) 12/28/94 12/28/94 COMMENT OF NUCLEAR ENERGY INSTITUTE /

(WILLIAM H. RASIN) ( 2) 12/29/94 12/22/94 COMMENT OF FLORIDA POWER l LIGHT COMPANY /

(W.H. BOHLKE) ( 3) 12/30/94 12/29/94 COMMENT OF DPC, ENTGERY OPS, NMPC, RG&EC, WPPSS /

(NICHOLAS S. REYNOLDS) ( 4) 01/09/95 10/02/94 COMMENT OF MARVIN I. LEWIS ( 5) 01/31/95 01/26/95 COMMENT OF BALTIMORE GAS AND ELECTRIC COMPANY /

(ROBERT E. DENTON) ( 6)

OOCt~f TFD ROBERT E. DENTON Vice President LI<'... .

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Baltimore Gas and Electric Company Calvert Cliffs Nuclear Power Plant 1650 Calvert Cliffs Parkway Nuclear Energy Lusby, Maryland 20657

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(5~rR.Coclo9'lJ January 26, 1995 Secretary of the Commission U.S. Nuclear Regulatory Commission

- Washington, DC 20555 ATTENTION: Docketing and Services Branch

SUBJECT:

Calvert Cliffs Nuclear Power Plant Unit Nos. 1 & 2; Docket Nos. 50-317 & 50-318 Comments on Revision to 10 CFR Part 2, Policy Statement for Enforcement Actions on Discrimination (59FR60697)

The Baltimore Gas and Electric Company is pleased to provide the following comments on the revision to the Nuclear Regulatory Commission (NRC) General Statement of Policy and Procedure for Enforcement Actions (Enforcement Policy) to address issues associated with discrimination. We support the comments submitted by the Nuclear Energy Institute. We have the following comments that emphasize our concerns regarding the issue of civil penalty adjustment for corrective action.

In the revised policy statement, the NRC states their belief that a proposed penalty should be mitigated only if a personal remedy is provided. While there are cases where settlements are an effective and efficient way to resolve allegations, forcing a licensee to provide a personal remedy through a rapid settlement may not be the best resolution in a particular case. However, with this policy statement, the NRC has so heavily weighted the enforcement policy in favor of settlement that licensees will now be at an extreme disadvantage in their efforts to resolve allegations of discrimination. The result may be that licensees will have little choice but to provide a personal remedy, even for claims of questionable merit.

The following two examples illustrate concerns with the NRC's timing and escalation of enforcement action:

The NRC has not provided any evidence to show how a chilling effect is placed on the work force simply because the licensee chooses to make no changes to its policies and procedures until after the Department of Labor has decided the case. Therefore, there is no basis to penalize the licensee for awaiting the outcome of a proceeding, regardless of its final outcome.

FEB 2 4 1995 Acknowledged by card ...............................

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Docketing and Services Branch January 26, 1995 Page2 Similarly, there is no basis to escalate enforcement when "broad" corrective action is not taken until after a Secretary of Labor's decision upholds an Administrative Law Judge's finding of discrimination. To conclude that a licensee's corrective action may be untimely simply because they chose to await the outcome of the proceeding before taking corrective action is unreasonable.

It should be reasonable and appropriate for the licensee to take broad corrective action after the Secretary's decision.

Should you have questions regarding this matter, we will be pleased to discuss them with you.

Very truly yours, RED/JMO/dlm cc: D. A. Brune, Esquire J.E. Silberg, Esquire L. B. Marsh, NRC D. G. McDonald, Jr., NRC T. T . Martin, NRC P. R. Wilson, NRC R. I. McLean, DNR J. H. Walter, PSC

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SE Enf orcement P olicy; Proposed Ru l e; Request f o r Pub lic Co mment.

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FOI, NRC, Washington, D. C. 20555. KETN PO D  :.

Chief Myers and Commissioners; This rulemaking should really be called examination of th e (SC\fR-bD(c9 'D NRC's non-enforcement policy. The NRC enforces its rules very e , arshly against the smal 1 bLtsinessperse,n and leaves the misadventures of the large licensee go unpunished. The NRC endangers and discourages *whistleblowers' who would tell the NRC of misdeeds and dangers perpetuated by certain licensees.

1 . The NRC enforces its rules very harshly against the small busi nessperse,n.

Ruth Miner and Manny Mendelsohn have attended enforcement hearings in King of Prussia Region headquarters. From their reports, I have ascertained a pattern of unnecessary harshness against small businesspeople who have made honest paperwork mistakes which did not endanger employees or the general public.

2 . The NRC leaves the misadventures of the large licensee go unpunished.

"The NRC staff did ne,t pre,pe,se a fine fe,r this alleged vie,latie,n

, al'~c ause it inveilved a pre,blem that e,riginated more than seven

~ ;21rs ago . " NUREG/BR 0032 V14 Ne, 33 Item Ne, .94-129 NRC Staff proposes to Northeast Nuclear Energy Company $87,500 for alleged violations of NRC requirements at Millstone Unit 2.

This quote seems to be saying that if you hide a violation long enough, you will not get fined for endangering the employees and public for those many years. I sent a request for an explanation of this statement and have received no reply . I must consider my interpretation correct for large companies : hide a violation long enough and you will not get fined .

3. The NRC endangers and discourages "whistleblowers' who would tell the NRC of misdeeds and dangers perpetrated by certain licensees.

The Christian Science Monitor of 7-29-94 has an excellent article, NRC Discourages Whistle Blowing at Nuke Plants. This article specifies names, circumstances and verification by the NRC Inspector General of endangerment and misdeeds.

Finally, all these ne,n-enforcement policies pa l e_ intc, insignificance beside the NRC own admission that the NRC is the licensee advocate instead of its regulator in SECY 92-043, EXERCISE OF DISCRETION NOT TO ENFORCE COMPLIANCE WITH LICENSE CONDITIONS. I have heard many jokes about regulat ors being in bed with the regulated, but this is not a joke. FEB 2 4 1995 Acknowledged by card .......................... ......

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Senator Joseph Lieberman has requested the text of SECY 92-043 with limited results. He has alsc, suggested that "Nc,tices c,f Enfc,rcement Discretic,n" require public cc,mment. I hope that the NRC decides to answer the Senator instead of ignoring him as I have been ignored with my letter regarding my interpretation of the NRC policy not to fine violations which have endangered the public for a long time.

How about enforcing your rules against large, powerful licensees, and don't give the identity of informants to the e ,iolatc,rs.

I wish that I could say, Respectfully submitted, 10-2-94.

FREDERICK H. WINSTON (1853-1888) 1400 L STREET, N.W. CHICAGO OFFICE SILAS H. STRAWN (1891-1946) WASHINGTON, D.C. 20005-3502 , 'i!j.-.,W E511ffC~Rf RIVE 94 [ r ._Oi_tjc:AGl).!IIJ.INQISi 60601 (312) 558-5600 (202) 371-5700 NEW.'fl)RK OFFICE FACSIMILE (202) 371-5950 115 wkrER.*STRJ:EJ" NEW '/ORK. NY 1clo38-4981 (212) 269-2500 GENEVA, SWITZERLAND OFFICE 43 RUE DU RHONE 1204 GENEVA, SWITZERLAND (4122) 7810508 December 29, 1994 RIYADH, SAUDI ARABIA OFFICE THE INTERNATIONAL LAW FIRM SULAYMANIYAH CENTER TAHLIA STREET RIYADH 11495, SAUDI ARABIA (9661) 4629866 John C. Hoyle, Acting Secretary United States Nuclear Regulatory Commission Washington, D.C. 20555 Attn: Docketing and Service Branch Re: Revisions to Enforcement Policy (59 Fed. Rei, ©697)

Dear Mr. Hoyle:

These comments address the recently announced revisions to the NRC's Enforcement Policy. See 59 Fed. Reg. (J.)697 (Nov. 28, 1994). The revisions apply to violations of the NRC's employee protection regulations, such as 10 C.F.R. § 50.7.

These comments are being filed on behalf of: Duke Power Company; Entergy Operations, Incorporated; Niagara Mohawk Power Corporation; Rochester Gas & Electric Corporation; and Washington Public Power Supply System. However, the comments have been prepared in coordination with the Nuclear Energy Institute (NEI). While offering a slightly different perspective, these comments are intended to be consistent and compatible with the separate comments being submitted by NEI.

As an initial matter, we appreciate that the NRC has recogniz.ed, through the revisions concerning enforcement discretion, that not all instances of discrimination, or allegations of discrimination, warrant exercise of the NRC's enforcement powers. As has often been noted, the Department of Labor (DOL) has been entrusted by Congress to resolve individual complaints of discrimination under Section 211 of the Energy Reorganization Act and to provide personal remedies. The exercise of enforcement discretion is, we believe, particularly appropriate where, as here, Congress has authorized a sister agency to address the very issue that may lead to enforcement action. Further, even though DOL has the responsibility over individual complaints of discrimination, the NRC already has done far more than any other federal agency to protect employees through measures that are independent of the DOL process.

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WINSTON & STRAWN John C. Hoyle, Acting Secretary December 29, 1994 Page 2 Nevertheless, the preamble to the Policy revisions indicates that the NRC continues to hold an interest in minimizing "chilling effects" at licensee sites. While in theory this might seem to be a valid regulatory concern, the NRC has never established when or how "chilling effects" occur. Even assuming a basis for the concern, in our view any effort to monitor and minimire the likelihood of hypothetical chilling effects should focus on the broad-scale measures licensees have implemented to address this matter, prior to, as well as after, an allegation of discrimination has been raised. The NRC has instead, in large part, keyed its regulation of chilling effects to assessments of the resolution of individual discrimination cases.

By threatening to withhold enforcement discretion or mitigation, or to impose escalation of civil penalties, based on a licensee's failure t o ~ individual complaints and to provide a "personal remedy" to each complainant, the Enforcement Policy revisions propel the NRC down a misguided path. Settlements can have significant downsides, and should not be generically approved and encouraged as the NRC proposes in the Policy revision.

In short, we urge the NRC to abandon its enforcement focus on whether and when licensees settle individual claims and whether complainants obtain a personal remedy for a complaint of discrimination. While we believe that the prompt settlement of complaints could be considered as one basis for discretion or mitigation, the revised Enforcement Policy may unnecessarily coerce licensees into settling cases by making resolution of individual complaints an absolute precondition to discretion and mitigation.

1. Ensuring a personal remedy is not the province of the NRC. As a threshold matter, it is not the NRC's statutory mission to ensure that employees who complain of discrimination receive a personal remedy. The NRC has consistently recogniz.ed, as even the preamble to the Policy revisions does (59 Fed. Reg. at 60698), that the NRC "does not have the authority to provide a personal remedy when discrimination occurs. That is the responsibility of the Department of Labor under Section 211." Transcript, "Briefing on NRC Actions Vis-a-Vis Allegers," at 11 (Jan. 31, 1994) (statement of J. Lieberman) (hereafter "Briefing Transcript"). The revised Enforcement Policy indirectly attempts to encourage, and indeed implicitly coerce, licensees to do what the NRC has no authority to require directly - provide an employee with a personal remedy. By factoring the provision of a personal remedy into the enforcement equation, the NRC needlessly intrudes on DOL's authority.

2. The NRC's approach is unduly coercive. The outlined enforcement approach is also inappropriately coercive because it penalizes the licensee who decides, given all the facts, circumstances, and legal issues present in a particular case, to pursue a final DOL ruling on a discrimination complaint. Penalizing licensees through the Enforcement Policy is precisely the outcome against which former Commissioner Remick warned in response to the Review Team's recommendation that mitigation for corrective action be conditioned on providing a personal remedy to complainants: The Commissioner noted that the Review Team's

WINSTON & STRAWN John C. Hoyle, Acting Secretary December 29, 1994 Page 3 recommendations regarding enforcement actions appeared "to be an attempt to threaten or punish licensees [by withholding mitigation] if they pursue their legal rights, particularly if in pursuing legal rights [the licensee] delays a decision and causes a chilling effect." Briefing Transcript, at 75. Indeed, the Commission rejected another Review Team recommendation - that mitigation be used to encourage licensees "voluntarily" to implement a "holding period" when a complaint of discrimination is filed -- due to strong concerns that this form of mitigation would coerce licensees into adopting a certain approach to a discrimination complaint. See Briefing Transcript, at 55-60. As Chairman Selin noted during the Commission briefing by the Allegations Review Team, the "question of coercion is an important question." Id. at 59. The current revisions are equally problematic for these same reasons.

3. There is a "disconnect" between the purported malady (chilling effect) and the proposed cure. The NRC has not ever identified the nature or scope of "chilling effects,"

and the fact that the magnitude of possible chilling effects is unknown and perhaps unquantifiable calls into question the presumption of the Policy revisions that routine settlement of discrimination complaints provides an effective remedy. There has never been a finding that chilling effects are a common industry phenomenon, and the site-specific surveys of which we are aware indicate that the vast majority of industry employees do feel free to raise safety concerns with their supervisors or through other internal mechanisms. Indeed, the Allegations Review Team, whose recommendations provide the impetus for the Enforcement Policy revisions, conceded that it was not able to answer the ultimate questions of whether, and if so, to what degree, industry employees are chilled from reporting safety issues. Briefing Transcript, at 4 (remarks of Chairman Selin), 15-16 (remarks of J. Lieberman). The Commission is thus adopting a cure without first defining the nature or scope of the problem. We are not aware of any data or finding that litigation causes chilling effects or that the settlement of individual complaints provides a cure for "chilling effects."

In short, the Enforcement Policy revisions assume that the workforce will view the prompt settlement of a complaint as an admirable effort to encourage employees to raise safety issues. Contrary to the assertion in the preamble, !I we are aware of no support for the premise that the existence or degree of a chilling effect is any way dependent on whether an individual claimant receives a "personal remedy." Indeed, as is discussed further below, settlement of frivolous cases may actually erode employee moral. And there is no evidence that litigation of complaints causes other employees to abrogate their own responsibility to raise issues to management or the NRC.

1' See 59 Fed. Reg. at 60698 (" A violation involving discrimination is not completely corrected without the personal remedy, and the chilling effect may well continue if a personal remedy is not provided.").

WINSTON & STRAWN John C. Hoyle, Acting Secretary December 29, 1994 Page4

4. The Enforcerrumt Policy revisions invite abuse of the system. By encouraging management to "knuckle under" prior to even a prima fade finding of discrimination, the revised Enforcement Policy invites abuse of the system -- a concern compounded by the fact that there are no existing disincentives to the filing of frivolous discrimination complaints. Armed with the knowledge that an employer may forfeit mitigation and the opportunity to benefit from enforcement discretion if it defends itself to any advanced stage of the DOL process, employees now have the incentive to file meritless complaints in the hope of a "quick fix," such as a settlement for nuisance value. In a similar vein, employees may view management willingness to enter into settlements quickly -- regardless of the genuineness of the underlying complaint -- as evidence that management "caves in" even to frivolous claims - a perception that will erode management's control of its workforce.

This concern is not hypothetical. A federal judge recently overturned a jury verdict in a case arising under the Rehabilitation Act, concluding that the plaintiff, a security guard at Brookhaven National Laboratory, was attempting to escape responsibility for his own misconduct by falsely asserting that he was terminated because of his disability. 'II NRC licensees currently face a similar problem: a perception among the workforce that employees can insulate themselves from proper discipline by portraying themselves as the victims of retaliation.~ By encouraging early settlements, the revisions to the Enforcement Policy serve to invite frivolous Section 211 complaints.

5. The Enforcement Policy revisions confront licensees with a *eatch-22*

dilemma. Given the emphasis in the revised Enforcement Policy on the settlement of Section 211 complaints, the provision in the Policy that a "history of ... settlements" will disqualify a licensee from enforcement discretion consideration seems illogical. Apart from maintaining an environment in which complaints of discrimination are unlikely to arise in the first instance (which, again, is where we think the Enforcement Policy ought to focus), the only way a y

Jones v. Associated Universities. Inc., Case No. 92-CV-2681 (DC ENY), 1994 U.S.

Dist. LEXIS 17920 (Dec. 12, 1994) ("the jury's verdict, if not overturned, sends the message that an employee can blame his employer for his own affirmative acts of misconduct and plead his disability as an excuse. Such [a verdict] would undermine the remedial scheme that Congress sought to implement through the Rehabilitation Act").

As Commissioner Remick noted at the Review Team briefing: "[l]t doesn't take a Rhodes scholar to reali7.e that a below average performer, if he thinks his job is at risk, the easiest thing to do is on a periodic basis put a safety concern before the NRC and then, if any action is taken, say, 'Well, that's the basis of it' .... " Briefing Transcript, at 78.

WINSTON & STRAWN John C. Hoyle, Acting Secretary December 29, 1994 Page 5 licensee can avoid creating a history of settlements is to litigate discrimination complaints -- a result the revised Enforcement Policy otherwise plainly discourages. This provision also assumes that the fact of settlement may suggest a "programmatic ... discrimination problem" -- i.e., that a settlement is evidence of discrimination. Given that licensees would have a strong incentive by virtue of the Enforcement Policy revisions to settle even the most superficial discrimination complaints, this assumption simply cannot stand. We urge the Commission to remove this reference to settlement agreements from the Enforcement Policy (as well as from the Enforcement Manual) as a factor to be considered in the enforcement discretion analysis.

At bottom, we believe that the revised Enforcement Policy is unsoundly keyed to the outcome of individual complaints of discrimination, and fails to recogniu that such complaints may arise even where the licensee has taken extraordinary steps to foster a workplace conducive to the raising and resolution of safety issues. While we recogniu that a widely visible and unambiguous act of discrimination, if not promptly addressed, could create a chilling effect on other workers, most discrimination complaints do not arise from such unambiguous circumstances. We therefore disagree with the assumption of the Policy revisions that resolution of an individual allegation of discrimination -- or more specifically, the stage of the DOL process in which the allegation is resolved -- significantly affects the quality-consciousness of a nuclear workplace. §I The perceived problem of chilling effects should not be addressed by encouraging licensees to settle indiscriminately any and all cases, including those which should be litigated. Rather, the NRC should exercise enforcement discretion and should mitigate penalties where licensee management has implemented appropriate measures (such as training, an employee concerns program, firm commitments from contractors to avoid retaliation, and the like) to create a workplace environment in which employees feel free to raise safety issues. The maintenance of such environments -- not the filing or resolution of individual complaints of discrimination -- is the correct regulatory focus and should be the focus of the Enforcement Policy.

~/ To the extent that the Policy revisions assume that mere delay in the resolution of complaints contributes to a chilling effect, the Policy arbitrarily ties enforcement penalties to the stage that has been reached in the DOL process, rather than the actual length of time that a complaint has remained unresolved. For example, in one case an ALI hearing might be held expeditiously, within two or three months of the filing of a complaint. In another case, the AU hearing may be delayed for two or three years. In many cases, the delay is not attributable to the employer, but may be caused by the complainant's failure promptly to obtain counsel, by excessive discovery by complainant's counsel, by unfruitful settlement negotiations, or by the vagaries of the DOL process.

WINSTON & STRAWN John C. Hoyle, Acting Secretary December 29, 1994 Page 6 Although the Policy revisions have already been implemented, and indeed some of the concepts incorporated in the revisions have been applied in recent enforcement actions,~

we trust that all comments received on the revisions will be carefully considered. If you have any questions about the foregoing comments, please contact the undersigned. Thank you for your attention to these important matters.

Sincerely,

~~~ Nicholas S. Reynolds David A. Repka cc: James Lieberman See Letter from Joseph R. Gray, Acting Director, NRC Office of Enforcement, to Public Service Co. of Colorado (May 18, 1994) (allowing full mitigation of civil penalty for Section 50. 7 violation based on fact that licensee had settled Section 210 complaint prior to evidentiary hearing and licensee's good past performance).

Florida Power & Light Company, P.O. Box 14000, Juno Beach, FL 33408-0420 D0Ct'ETf- D USNRL

• 94 O[C 29 PS DEC 2 2 1994 OFF lrL or *:~_C ,. I I~ PY L-94-329 DOC' l: i ~, * ~ .__ r "' ., ~

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DOC,<E: T NUMBER PR Mr. John C. Hoyle, Acting Secretary PROPOSED RULE 2 U.S. Nuclear Regulatory Commission (~ q FY< 60_G_CJ_?)_ _

Washington, D.C. 20555-0001 Attn: Docketing and Service Branch Re: Policy and Procedure for Enforcement Actions; Policy Statement, Discrimination 59 Fed. Reg. 60697, November 28, 1994 Request for Comments On November 28, 1994 (59 FR 60697) , the Nuclear Regulatory Commission (NRC ) published for public comment a policy statement revision, "Policy and Procedure for Enforcement Actions; Pol i cy Statement, Discrimination." The following comments are submitted on behalf of Florida Power and Light Company (FPL ) , a licensed operator of two nuclear power plant units in Dade County, Florida and two units in St. Lucie County, Florida.

The Nuclear Energy Institute (NEI) is offering comments on this revision. Additionally, FPL' s legal counsel (Morgan, Lewis &

Beckius), has issued comments on behalf of FPL and several other utilities. FPL endorses these comment s and recommendations.

FPL appreciates the opportunity to comment on these topics.

Very truly yours,

~

W. H. Bohl ke Vice President Nuclear Engineering and Licensing WHB / spt FEB 2 4 1995 Acknowledged by card.......................... *... ,

an FPL Group company

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NUCLEAR ENERGY INSTITUTE

• 94 O[C 28 p 4 :22 William H. Rasin December 28, 1994 Mr. John C. Hoyle Acting Secretary Office of the Secretary U.S. Nuclear Regulatory Commission Washington, D.C. 20555-0001

SUBJECT:

Policy and Procedure for Enforcement Actions; Policy Statement, Discrimination (59 Fed. Reg. 60697, November 28, 1994)

Dear Mr. Hoyle:

The Nuclear Energy Institute (NEI) 1 on behalf of the nuclear industry, is pleased to submit the following comments on the NRC's amendments to its General Statement of Policy and Procedure for Enforcement Actions (10 CFR Part 2, Appendix C).

The amendments to the Enforcement Policy are the outgrowth of recommendations made in the NRC's "Report of the Review Team for Assessment of the NRC's Program for Protecting Allegers Against Retaliation" (dated January 7, 1994). As was stated in the industry's comments on that report (dated March 4, 1994), we believe that the Review Team's analysis was fundamentally flawed because the Review Team concluded that comprehensive reform was needed even though the NRC provided no evidence that there are pervasive problems in the current system. Now, on the basis of limited anecdotal evidence and the unverified assumption that pervasive problems exist with the NRC's and licensee's handling of allegers, the NRC has made immediately effective certain of the Review Team's recommended changes to the Enforcement Policy.

Although the NRC emphasized in the Federal Register notice (59 Fed. Reg. 60697-60698) that the Enforcement Policy provides guidance and is not a regulation, the Enforcement Policy has a wide-ranging regulatory effect. In practice, the Enforcement Policy is implemented as though it is a regulation. As such, the industry believes that the NRC should reconsider its recently published amendments to the Enforcement Policy on violations involving discrimination.

1 NEI is the organization responsible for establishing unified nuclear industry policy on matters affecting the nuclear energy industry, including the regulatory aspects of generic operational and technical issues. NEI's members include all utilities licensed to operate commercial nuclear power plants in the United States, nuclear plant designers, major architect/engineering firms, fuel fabrication facilities, nuclear materials licensees, and other organizations and individuals involved in the nuclear energy industry.

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Mr. John C. Hoyle December 28, 1994 Page 2 The industry is extremely concerned that certain aspects of these amendments do not comport with current law, may encourage inappropriate or inequitable settlements, and will significantly affect the ability of licensees to effectively manage their work force. In light of the fact that the NRC has undertaken a full scale reexamination of its Enforcement Policy, the industry recommends that the NRC withhold implementing changes on a piecemeal basis. Instead, the NRC should integrate its consideration of all changes to the Enforcement Policy to ensure that any resulting modifications are appropriate when viewed in the context of the entire Enforcement Policy.

Further, the NRC's decision to make this rule immediately effective is contrary to the agency's stated position regarding the value of public participation and its goal of fostering opportunities for public participation to the greatest extent possible. The NRC has made these amendments immediately effective without identifying any justification for doing so.

In fact, there is no pending emergency requiring that these amendments be made immediately effective. And, after-the-fact comment does not allow the public to provide its views so that they can be meaningfully considered in the NRC's decision about whether the action should be taken.

We describe below our specific concerns with the NRC's amendments to the Enforcement Policy.

A. Civil Penalty Adjustment for Corrective Action The NRC has amended the Enforcement Policy to allow for mitigation of a civil penalty "only if the licensee takes prompt, comprehensive corrective action which (1) addresses the broader environment for raising concerns in the workplace; and (2) provides a remedy for the particular discrimination at issue." 59 Fed. Reg. 60698. While the NRC's objective is to ensure a workplace environment free from discrimination, all parties concerned would be better served by a more positive approach. Rather than proposing a civil penalty and then mitigating it, the NRC's Enforcement Policy should include a presumption that no penalty will be imposed for violations that are promptly corrected by the licensee. A civil penalty would be imposed only in circumstances where the licensee does not institute proper corrective measures.

The NRC has made providing a personal remedy a condition for mitigation. Because there are significantly varying circumstances in discrimination cases, forcing a licensee to provide a personal remedy through a rapid settlement may not be the best resolution in a particular case. While the industry believes that encouraging settlements comports with existing Commission policy, and that settlements may be an effective and efficient way to resolve allegations of discrimination, the NRC has so heavily weighted the enforcement policy in favor of settlement that licensees will now be at an extreme disadvantage in their efforts to resolve allegations of discrimination. Licensees will have little choice but to settle a matter, even if the claim essentially is meritless. Also, by requiring a personal remedy to be part of any corrective action for which mitigation is sought, the NRC may

Mr. John C. Hoyle December 28, 1994 Page 3 inadvertently encourage those who wish to use the system to their advantage to do so.

Such individuals may file claims knowing that, regardless of the merits of the claim, the licensee will be put in an unfavorable position with the NRC if it does not settle. This will exacerbate the current difficulty a licensee faces in making a choice between settling, even though the claim is, in its view, of questionable merit, or incurring the significant intangible costs of litigating the matter before the Department of Labor, e.g., unfavorable publicity, the NRC conducting a separate investigation, etc.

The NRC's consideration of the promptness of the corrective action also creates problems.

By concluding, without a factual basis, that there is a nexus between a rapid settlement and avoiding a chilling effect, the NRC will de facto impede licensees from merely exercising their statutory right to defend themselves against discrimination claims.

Moreover, as a basis for encouraging settlement prior to the time the Department of Labor Administrative Law Judge closes the administrative record, the NRC relies on the complainant's potential expenditure of "substantial resources to present his or her case."

That any complainant must at the outset bear the cost of his or her legal challenge is a fundamental part of this country's legal system. For that reason, and because there are many reasons to explain why and when parties settle, it is an unwarranted departure from and distortion of our current legal system to base mitigation of a civil penalty on the timing of the settlement.

Although the Secretary of Labor's decision in favor of a licensee is a reasonable basis for the NRC to decline to take enforcement action or withdraw previously initiated enforcement action, the NRC has not justified the basis for penalizing a licensee who awaits the outcome of a proceeding at the Department of Labor before making changes to its processes or procedures in response to an allegation of discrimination. In this circumstance, as in the others described above, the NRC has, without supporting evidence, determined that a licensee's decision to hold its response in abeyance while litigating its case will have a chilling effect on its work force. We disagree with the NRC's suggestion in the preamble to these Enforcement Policy amendments that an escalated penalty is necessarily appropriate in these cases.

B. Enforcement Discretion The NRC should also reconsider its changes to the Enforcement Policy addressing the NRC's enforcement discretion. For example, the NRC has concluded that it may decline to take enforcement action if a licensee identifies an issue of discrimination and takes corrective action to address the situation at hand and the overall work environment. The NRC also would view favorably a licensee's aggressive follow-up actions which communicate that retaliation is unacceptable in the workplace. However, as a condition of the NRC's declining to take enforcement action the licensee's actions must be "reasonable and effective." 59 Fed. Reg. 60698.

The industry objects to the stated conditions on the grounds that there is no proven objective means to measure the effectiveness of licensee actions in discrimination cases.

Mr. John C. Hoyle December 28, 1994 Page 4 Not only are the "reasonable and effective" vague and unacceptably broad, but also, as we noted in our previous comments in response to the Review Team's report, a quantitative analysis of the number or nature of concerns could be misleading. Numbers and types of allegations are affected by many factors, including layoffs, labor disputes, media attention and various forms of promotion by interest groups. Thus, the numbers and types of allegations bear little relationship to the willingness of employees to raise safety concerns or the nature of management's response to employee safety concerns. Even the Review Team recognized in its report that "[c]are sh01,tl.d be exercised in drawing conclusions from

[such] data" as fewer allegations could either mean that internal resolution processes are improving or that employees feel less free to bring concerns to the NRC. Similarly, an increase in the number of allegations does not necessarily mean that a licensee has an unhealthy work environment or that its previous actions were unreasonable or ineffective.

A large number of the allegations may be frivolous, restatements of previously identified issues, or claims made by a single disgruntled individmµ. Without a way to accurately measure "reasonableness and effectiveness," the NRC's determination on these bases cannot be meaningful.

We also question the NRC's approach of declining to take enforcement action based upon the licensee's willingness to convey to its work force certain information about the settlement of a discrimination claim. The industry has previously made clear that a posting/communication requirement will send precisely the wrong message to the individuals it is intended to address. While the industry does not advocate a secretive process for resolving discrimination claims, the advertisement of a settlement where an employee's concerns have been satisfied is likely to create problems for that employee and, as was described above, may encourage those who wish to "game" the system to make meritless allegations in order to obtain a settlement .

• Also, the Federal Register notice indicates that even if a licensee obtains an early settlement of a discrimination claim, the NRC will not decline to take enforcement action if the alleged discrimination involves allegations provided directly to the NRC. That allows an alleger to ensure that the licensee will incur some enforcement action simply by bringing his or her safety concern directly to the NRC. That is, it allows an alleger to predetermine the agency's response despite other circumstances that might be present.

Perhaps most importantly, this amendment to the Enforcement Policy's approach will severely undermine the fundamental premise of nuclear power plant regulation -- that licensees, and not the NRC, bear the ultimate responsibility for the safe operation of their nuclear facilities. Because a licensee is in the best position to assess and respond to potential safety issues, the health and safety of the public is best protected if the licensee is made aware of a potential safety issue at the earliest possible time. Despite the employee's statutory right to report safety issues to the NRC, the NRC's amendment may encourage employees to identify potential safety concerns to the NRC instead of to the licensee as a way to ensure that the licensee is punished. That will lead to an unacceptable result because licensees must necessarily depend on individual employees to identify, process, evaluate, and resolve potential safety issues.

Mr. John C. Hoyle December 28, 1994 Page 5 The NRC also has now announced that enforcement discretion will be unavailable to a licensee even if an early settlement is reached if the alleged discrimination involves acts of a manager above the first-line supervisor. We are aware that at least some members of NRC staff have taken the position that a work-crew foreman (a bargaining unit member) is a first-line supervisor. Because any exempt employee with supervisory responsibility (in reality, the lowest level of management) would be considered above first-line supervisor, there would be few, if any, circumstances in which the NRC would decline enforcement action on the basis of management level. While it is not unreasonable for the NRC to have heightened concern if a policy to discriminate against individuals who raise safety concerns appears to be endemic within an organization, where the NRC now draws the line is unreasonable.

C. Severity Levels The NRC has added examples to the Enforcement Policy which make certain actions subject to a Severity Level ill penalty. The stated regulatory basis for adding these examples is that "Supplement VII does not currently address threats of discrimination or restrictive agreements, both of which are violations under NRC regulations such as 10 CFR 50. 7(f)." While 10 CFR 50. 7 prohibits restrictive agreements, neither subsection (f) nor any other provision of the regulation identifies as a violation a threat of discrimination.

By adding the a threat of discrimination as a violation of 10 CFR 50. 7, the NRC has impermissibly expanded the reach of its regulations (implementing section 211 of the Energy Reorganization Act) beyond actions to which Courts have held section 211 applies.

Clearly, the NRC may not legally broaden the reach of a regulation, particularly where criminal sanctions can pertain, simply by modifying its enforcement policy. The NRC must submit any substantive change to its regulations to the notice and comment procedures mandated by the Administrative Procedure Act. Since the requisite notice and comment procedures were not followed in this de facto rulemaking, the NRC's action with respect to this amendment is fatally flawed and the amendment should be rescinded immediately.

Our view that the NRC has improperly expanded the reach of its regulations is supported by the language of the statute itself. Moreover, if the NRC has added the threat of discrimination as an example of a hostile work environment, a review of case law interpreting the statute in the context of a hostile work environment claim indicates otherwise. To prevail on a hostile work environment claim under section 211, a complainant must demonstrate, inter alia, that he or she has been discriminated against with respect to his or her "compensation, terms, conditions or privileges of employment." 42 U.S.C.A § 5851(a)(l). The seminal hostile work environment case, Meritor Saving Bank v.

Vinson. 477 U.S. 57 (1986), requires that the complainant establish that he or she was subjected to "severe or pervasive" harassment sufficient to create a hostile work environment. And, the Court required a nexus between the severity or pervasiveness of the harassment and the alteration of the conditions of employment. Id. at 67. Later decisions have elaborated on this point. See e.g. Carrero y. NYC Housing Authority, 890 F.2d 569, 577 (2nd Cir. 1989) ("The incidents must be more than episodic; they must be

Mr. John C. Hoyle December 28, 1994 Page 6 sufficiently concerted in order to be deemed pervasive.") Significantly, the Supreme Court made the following additional statement in Ha.rri.B v. Forklift Sys. Inc., 114 S.Ct. 267, 371 (1993):

[W]hether an environment is "hostile" or "abusive" can be determined only by looking at all the circumstances. These may include the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with an employee's work performance.

Thus, including a mere threat of discrimination as a Level III violation of 10 CFR 50. 7, without any actual adverse effect in the terms and conditions of employment, is contrary to the statute and the Supreme Court's statutory interpretation. By retaining this example in the Enforcement Policy, the NRC has made actions or statements which are admittedly inadvisable -- and rise to the level of poor management -- into a potentially criminal act, since the NRC automatically refers 10 CFR 50. 7 violations to the Department of Justice for prosecution. Therefore, we strongly encourage the NRC immediately to delete this example from its Enforcement Policy.

We turn finally to the Federal Register's republication of examples of Severity Levels II, III and IV violations of fitness-for-duty requirements. The industry believes that these are more punitive in nature than is warranted and that the severity levels bear no relationship to the safety significance of the infractions. For example, a failure to assure that a contractor or vendor has an effective fitness-for-duty program may or may not have an effect on safety and that effect can vary widely depending upon the circumstances involved.

Where no safety impact results from an imperfection in a program or only a single discrepancy occurs, licensees should not be subjected to such severe penalties.

We appreciate the opportunity to comment on your amendments to the General Statement of Policy and Procedure for Enforcement Actions. If you have any questions on the views expressed in these comments, please do not hesitate to contact me or Ellen Ginsberg, NEfs Assistant General Counsel, at (202) 739-8140.

Sincerely, William H. Rasin WHRJECG/ec c: Mr. James Lieberman (Office of Enforcement)

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PHILADELPHIA CouNSELORS AT LAW WASHINGTON NEW YORK 1615 L STREET, N . W . Los ANGEL ES MIAMI wAsHINGToN, o.c. 2003s-ss1 d 94 O[C 28 p 5 :u3 HARRISBURG PRINC E T O N TELEPHONE: 12021 9!5!5*6600 LONDON BRUSSELS l'AX: 12021 872-0!581 F°RANKF"URT uI, TOKYO L,

December 27, 1994 Mr. John C. Hoyle Acting Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Attention: Docketing and Service Branch

Dear Sir:

On November 28, 1994, the Nuclear Regulatory Commission (NRC) published revisions to its enforcement policy and invited public comment on those revisions. ~ 59 ~ . Reg. 60697 (1994). Most of the revisions concern NRC treatment of violations of 10 C.F.R. § 50.7, the NRC's "whistleblower protection" regulation. These comments are being submitted on behalf of IES Utilities, Florida Power & Light Company, TU Electric Company, Houston Lighting & Power Company, Illinois Power Company, and Southern California Edison Company .

As described in more detail in the Attachment to this letter, we are concerned about the effects and legality of a number of the revisions. We believe that several of the revisions are inconsistent with the underlying statute and regulations or improperly penalize licensees for exercising their statutory rights to a hearing to respond to allegations of discrimination. In other cases, the revisions base the existence and level of violation on factors that do not appear to bear any relationship to the seriousness of the violation, its potential safety significance, or the adequacy of corrective action.

The revisions will also expand the NRC's traditional regulatory scope into areas involving employer/employee relationships and litigation tactics which have little clear relation to safety and are not an area of any special agency expertise. This initiative appears to conflict with other NRC and government-wide initiatives to streamline operations and focus on the essential regulatory mission. Also, by entering into the sphere of personal remedies -- already comprehensively addressed in regulations and proceedings of the Department of JfEB 2 4 1995 Acknowledged by card '""""'""""'""""M"

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MORGAN, LEWIS g BOCKIUS John C. Hoyle December 27, 1994 Page 2 Labor (DOL) -- the NRC exacerbates the existing regulatory duplication in enforcement of employee protection statutes and disrupts the balance between employer and employee interests that was established by Congress in the Energy Reorgani zat ion Act of 1974, as amended.

We believe that the NRC should delay implementation of these revisions until public comments are considered. We believe that this is particularly appropriate because this topic has been the subject of study and controversy for a significant period of time and no immediate safety problem dictates the need to dispense with prior public comment . We hope that these comments will provide the basis for reconsideration of a number of the specific revisions.

We also believe that the NRC should consolidate review of these amendments with its ongoing reexamination of the enforcement policy as a whole. This would assure that these matters are addressed in a fashion which considers the revisions in light of the full scope of enforcement tool s and incentives and the overall safety benefits achieved .

I would be very pleased to discuss these matters with representatives of the NRC, or to participate in any meetings or other further consideration of these matters. Please call me should you have any questions on these comments .

cc: Chairman Ivan Selin Commissioner Kenneth c. Rogers Commissioner E. Gail de Planque James M. Taylor Executive Director for Operations James Lieberman Director, Office of Enforcement

MORGAN, LEWIS & BOCKIUS ATTACHMENT COMMENTS ON REVISIONS TO NRC ENFORCEMENT POLICY REGARDING VIOLATIONS OF 10 C.F.R. § 50.7 A. The Revisions Purport to Authorize Issuance of Violations for Actions Not Prohibited in the Statute and Regulations The revisions include a provision that would cause the NRC to issue Severity Level III violations, and associated civil penalties, based not on actual discrimination, but on "threats of discrimination." Section 211 prohibits discrimination "against any employee with respect to his compensation, terms, conditions ,

or privileges of employment . . . . " 42 u.s.c.A. § 5851 (1993).

Similarly, 10 C.F.R. § 50.7 (a) prohibits discharge or other discrimination relating to "compensation, terms, conditions or privileges of employment." Enforcement action on "threats of discrimination" -- a term nowhere defined and highly subjective in nature -- is not authorized by either Section 211 of the Energy Reorgani z ation Act (ERA) of 1974, as* amended, or 10 C.F.R.

§ 50.7.

Nuclear plant l icensees obviously do not condone remarks or behavior that might be construed as "threats of discrimination." Licensees generally have policies and procedures, and conduct supervisory training, to ensure that such incidents do not occur, both in the context of the raising of safety concerns and as a general matter of behavioral expectations for personnel. Nonetheless, insofar as the Enforcement Policy revisions contemplate penalties for "threats" alone , without any actual prohibited discrimination , they go beyond the prohibitions of Section 211 and 10 CFR § 50.7. As the courts and administrative agencies have held in a variety of contexts , threats or other adverse remarks do not rise to the level of prohibited discrimination unless they are so "severe or pervasive" as to constitute a "hostile work environment" which, in effect, alters the conditions of employment of the c omplainant. See Meritor Savings Bank v. Vinson, 477 u.s. 57, 65 - 67 (1986); Harris v, Forklift Sys,, Inc,, 114 s.ct. 367, 370- 71 (1993); Cosgrove v, sears Roebuck & co., 9 F.3d 1033 , 104 2

( 2d Cir. 1993); Varnadore v, Oak Ridge Nat'l Laboratory, et, al, ,

Case No 94-CAA-3, Orde r Granting Partial Summary Judgment, Slip op. at 11 (April 6, 1994); Marien and Nericcio v. Northeast Nuclear Energy Co, , Case ~os. 93-ERA-49/50, Recommended Decision and Order, Slip op. at 11 (June 27, 1994).

The NRC is not authorized to issue violations or civil penalties except in the case of actual violations o f the specific prohibitions in the Atomic Energy Act, properly promulgated

MORGAN, LEWIS & BOCKIUS rules, or license terms conditions or limitations. 42 u.s . c.

§ 2282 (1988), 10 CFR § 2.205 . Cf. Drake Y, Honeywell, Inc ,, 797 F.2d 603 , 607 (8th Cir. 1986) (no enforceable violation of interpretive r ules beyond statutory prohibition ) . Rules affecting rights and duties may only be properly issued according to the procedures contained in Section 553 of the Administrative Procedure Act (APA), 5 u.s.c. § 553, {1988). The Commission cannot modify those rights and duties via a policy statement .

American Mininq conqress v, MSHA, 995 F.2d 1106 , 1109-11 (D . C.

Cir. 1993); Public Citize n y. NRC, 940 F.2d 679, 682-84 (D.C .

Cir. 1991); American Hospital Ass'n v, Bowen, 834 F.2d 1037, 1045-48 (D.C. Cir. 1987). Accordingly, those portions of the revisions that purport to direct the issuance of violations and civil penalties for activities not already prohibited by s tatute or properly promulgated regulation are invalid and should be withdrawn.

B. The Revisions are Designed to Chill Licensees ' Exercise of Statutory Rights to Hearings Before the Department to Labor Section 211 of the ERA and the Department of Labor regulations issued thereunder provide that parties to a proceeding under Section 211 have a right to a public hearing on the record to determine whether the complaint has merit . 42

u. s. c .A. § 5851 {1993) . The revisions to the Enforcement Policy penali ze licensees for exercising that right by providing that a full civil penalty will generally be imposed if a violation is contested before the DOL and the licensee does not prevail , but that if the licensee waives the right to hearing and settles the case , enforcement discretion or mitigation of the penalty will be available . Such a policy is not geared toward the substantive signific ance of the violation, but chills {and punishes) the exercise of the hearing rights that Congress determined should be available to parties in these proceedings .

In addition , because litigation always entails some risk , the policy set forth in the revisions pressures licensees to settle cases even when they believe that no violation has occurred . This fact will encourage "nuisance value" claims which make no contribution to safety but will foster cynicism and adverse relations among licensees and their employees . A better approach , consistent with the hearing rights provided in the law and more likely to ensure that all parties are afforded an opportunity to have these allegations reviewed in a fair and open manner , would be to eliminate those portions of the revisions hat discourage the exercise of the right to a hearing. Accordingly, enforcement discretion and penalty mitigation should be available in cases where the violation was not serious and corrective MORGAN, LEWIS & BOCKIUS action was strong without consideration of whether the employer decides to exercise its right to a hearing .

c. The Expansion of NRC's Po l icy into the Area of Personal Remedies is Inappropriate and Duplicative of DOL Processes The Enforcement Policy revisions render the nature and level of NRC enforcement highly dependent on whether the licensee personally remunerates or provides other individual benefits to persons claiming discrimination . Section 211 explicitly vests the DOL, not the NRC, with jurisdiction over providing personal relief to claimants . The processes in the statute have been carefully balanced to assure fairnes s to both licensees and complainants , and the DOL regulations contain specific procedures for government-sponsored mediation and DOL review of settlement agreements . The NRC has repeatedly stated -- in its policies , in internal and guidance documents, and to Congress -- that it has no jurisdiction over personal remedies . For example, as noted in testimony by Chairman Selin :

[T]he Commission has no authority to provide an individual remedy such as reinstatement or back pay for a n employee who has been subjected to discrimination .

The enactment of . . . s ection 211 of the Energy Reorgani zation Act . . . established a process to provide such a remedy through the Department of Labor . 1/

The revisions to the Enforcement Policy ignore these carefully s tructured statutory and jurisdictional arrangements ,

and direct the NRC Staff to base its enforcement decisions in part on its evaluation of the adequacy and timing of the personal remedy provided by the licensee to the complainant . This evaluation is already performed by the DOL , and expansion of the regulatory activities of the NRC into this area creates an unnecessary duplication of regulation .

Placing the weight of potential NRC enforcement on the s ide of a complainant if a settlement is not quickly reached al so disrupts the careful balance and structure contained in the ERA 1/ Whistleblower Issues in the Nuclear Industry : Hearing before the Subcommittee on Clean Air and Nuclear Regulation of the Committee on Environment and Public Works of the United States Senate, 103d Cong., 1s t Sess. 53 (1993).

MORGAN, L EW IS & BOCKIUS and DOL regulations pertaining to mediation, settlement, and trial of complaints. By definition under the statute, a licens e e who provide s a remedy imposed or approved by the DOL has complied with the law in terms of providing a sufficient individual remedy. The revisions raise the prospect that the NRC will penalize licensees for failing to provide a remedy earlier or more generous than the law actually requires. For these reasons, those portions of the revisions that purport to base the Severity Level or amount of a civil penalty on the timing and nature of the personal remedy provided by the licensee are inappropriate and should be withdrawn.

Furthermore, the NRC policy dictating that failures to promptly settle cases involving violations of 10 C.F.R. § 50.7 should cause issuance of a civil penalty bears no rational relationship to the NRC's safety mission. Settlements are frequently e ntered into -- or not -- based on considerations unrelated to the merits of the complaint, such as litigation cost considerat ions, labor relations concerns, the forums in which litigation is pending, and the reasonableness of the parties' financial expectations in relation to the actual harm suffered.

They are normally the product of negotiations between counsel for the complainant and the licensee which occur after the fact of any alleged violation and the filing of a complaint, and are not a part of normal corrective action programs. For these reasons, in some cases, licensees settle cases that they believe have little merit; in others, complainants refuse to accept very reasonable settlement offers . Such matters bear no relationship to plant safety and are not a proper or reliable ground upon which to base enforcement penalties.

In sum, the timing and nature of personal remuneration or other remedies provided to complainants is generally unrelated to plant safety and is the proper regulatory province of the DOL, not the NRC. NRC enforcement, including the availability of mitigated penalties or enforcement discretion, should not be tied to consideration of these remedies.

MORGAN, L EW IS & BOCKIUS D. Penalties Imposed on the Basis of a "History of Settlements" Will Discourage Settlements and Will Have No Positive safety Impact The revisions to the enforcement policy make enforcement discretion normally unav ailable in cases where there is a "history of . * . settlements" of discrimination complaints.

This provision provides licensees with a disincentive to settle cases for fear that the NRC will perceive the settlement as an admission of guilt and withhold enfo rcement discretion either in that case or in the future. Also, as noted above, settlements are entered into for a variety of reasons, many of which have little to do with the question of whether a violation actually occurred. Basing the availability of enforcement discretion on whether there has been a "history of . . . settlements" will therefore both discourage settlement s and make the severity of NRC enforcement dependent upon matters bearing no relationship to plant safety. In addition, it is odd that the Enforcement Policy revisions include this provision -- which will clearly discourage settlements -- while other provisions of the revisions are obviously intended to compel them. 2/ This contradiction creates a dilemma for a licensee faced with an unsubstantiated allegation of harassment and intimidation. The licensee risks escalated civil penalties if i t chooses to assert the hearing right or risks creation of "history of settlements" by settling the matter.

E. The Revisions Contain Provisions Which Eliminate the Possibility of Non-Cited Violations Based on Considerations Unrelated to the Seriousness of the Violation or the Adequacy of corrective Action The revisions to the enforcement policy eliminate the availability of a non-cited violation in cases involving either a direct allegation to the NRC or acts of a manager above first-line supervision. The fact that the violation may involve an allegation directly to the NRC is not itself indicative of regulatory or safety significance. Licensees are required and encouraged by the NRC to inform t he ir employees of their right to directly contact the NRC regarding safety concerns. When an employee does so, it is often a reflection of the success of these efforts by the l icensee. Furthermore, employees are 2/ The requirement that settlements be publicly posted will similarly make licensees less willing to settle these matters in any cases where liability may be questionable or where there is a reasonable chance of prevailing in litigation.

MORGAN, LEWIS & BOCKIUS equally protected by the law and r egulations whether they report their concerns to the licensee or to the NRC. Basing the amount of NRC enforcement on the forum to which the alleger chooses to report a concern is irrelevant to the merits of the licensee's conduct and should not be a determining factor in deciding whether a non-cited violation should be appropriate.

Similarly, the revisions preclude the possibility of a non-cited violation if the conduct involves an individual above first-line supervision. In view of the fact that some NRC regions have taken the position that a work-crew foreman (often a bargaining-unit member) is a first-line supervisor , this provision renders the possibil i ty of a non-cited violation illusory in most cases. Rather than a blanket rule based on an arbitrarily selected management level, a better approach would be to consider not only the level within the organization but also the nature of the supervisor's responsibilities and the specific nature of the discrimination to determine whether a non-cited violation might be appropriate.

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• 94 OV 21 A10 :43 10 CFR Part 2 OF FICE (1;: SLCPF tA:-'Y Pol icy and Procedure for Enforcement Actions; DOC ETl~IG  ?'( ~ LR ;cr 1

BR, CH Policy Statement, Discrimination AGENCY: Nuclear Regulatory Co11111ission.

ACTION: Policy statement: Revision.

SUMMARY

The Nuclear Regulatory Commission (NRC} is amending its General Statement of Policy and Procedure for Enforcement Actions (Enforcement Policy}

to address issues associated with discrimination. A change is also being made to address Co11111ission review of certain cases involving reports of the Office of Investigations.

1 1 I ")_J-1 Cf L-/

DATES: This revision is effective on [Date of Publication in the Federal Register]. I J-J~rl 1 l-/

Co11111ents are due on or before (30 days after publication in the Federal Register).

ADDRESSEES: Send written co11111ents to: The Secretary of the Commission, U.S.

Nuclear Regulatory Commission, Washington, DC 20555. ATTN: Docketing and Service Branch. Deliver co11111ents to: 11555 Rockville Pike, Rockville, Maryland 20852, between 7:45 am and 4:15 pm on Federal workdays.

1

Cop;es of connents may be exam;ned at the NRC Publ;c Document Room, 2120 L Street, NW. (Lower-Level), Wash;ngton, DC.

FOR FURTHER INFORMATION CONTACT: James Lieberman, D;rector, Off;ce of Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555 (301)-504-2741.

SUPPLEMENTARY INFORMATION:

On July 6, 1993, the NRC's Execut;ve Director for Operations establ;shed a review team to reassess the NRC's program for protecting allegers against retaliation. The review team report, NUREG-1499 1 , Reassessment of the NRC's Program for Protecting Allegers Against Retaliation, was published in January 1994. The team report summarizes current processes, gives an overview of current problems, and gives recommendations for each area that is discussed.

The NRC is adding additional guidance in its Enforcement Policy to address Recommendations II D.2, D.S., and D.6 of the report relating to enforcement actions for violations involving discrimination.

The NRC Enforcement Policy is codified at 10 CFR Part 2, Appendix C to provide widespread dissemination of the Commission's Enforcement Policy.

However, this is a policy statement and not a regulation.

1 Copies of NUREG-1499 may be purchased from the Superintendent of Documents, U.S. Government Printing Office, Mail Stop SSOP, Washington, DC 20402-9328. Copies are also available from the National Technical Informat;on Service, 5285 Port Royal Road, Springfield, Virginia 22161. A copy is also available for inspection and copying for a fee in the NRC Public Document Room, 2120 L Street, NW. (Lower Level), Washington, DC 20555-0001.

2

Civil Penalty Adjustment For Corrective Action Corrective action is a significant factor in mitigation or escalation of base civil penalties for violations involving discrimination. A paragraph is being added to B2(b) of Section VI of the Enforcement Policy to provide an explanation of the corrective action adjustment factor as applied to discrimination cases. The NRC can require broad remedial action to improve the

)

workplace environment, but it cannot require a licensee to provide the

- individual with a personal remedy. The lLPJ)artment of Labor {uOL) has the authority to require that a personal remedy be provided. A violation involving discrimination is not completely corrected without the personal remedy, and the chilling effect may well continue if a personal remedy is not provided. Thus the Commission does not believe that any proposed penalty should be mitigated if a personal remedy is not provide~. A civil penalty nonnally should be mitigated for corrective action only if the licensee takes prompt, comprehensive corrective action which (1) addresses the broader

- environment for raising concerns in the workplace; and (2) provides a remedy for the particular discrimination at issue. In the determination of whether or *not a remedy has been provided, the NRC considers whether a settlement has been reached or if a remedy ordered by DOL has been implemented. Where a remedy has been accepted by DOL, NRC intends to defer to OOL on the adequacy of the remedy. Cases where a licensee offers an employee a reasonable remedy, but the employee declines, will be handled on a case by case basis.

The promptness and scope of corrective action should also be considered in applying the corrective action factor. If settlement occurs early in the 3

administrative process, mitigation may be warranted based on corrective actions as the chilling effect ay have been minimized by the prOIIIJ)tness of th, reaedy and remedial action. However, if settlemen~ occurs after the evidentiary record closes before the Administrative Law Judge, then any existing chilling effect may have existed for a substantial time, and the complainant may have had to spend substantial resources to present his or her case. Under such situations mitigation normally would not be warranted. If the licensee does not take broad corrective action until after a Secretary of Labpr's deci~ion, and the Secretary's decision upholds an Administrative Law Judge's finding of discrimination, corrective action may be untimely and escalation warranted. If the licensee chooses to litigate and eventually prevails on the merits of the case, then enforcement action will not be taken and, if already initiated, will be withdrawn. Assuming that evidence of discrimination exists, enforcement action that emphasizes the value.of promptly counteracting the potential chilling effect is warranted.

Enforcement Discretion It. is recognized that there are some cases of discrimination where enforcement action may not be warranted. Paragraph 8(7) is being added to Section VII to provide an explanation of the types of cases in which the NRC may refrain from taking enforcement action and those in which the NRC normally would not exercise such discretion. A licensee who, without the need for government intervention, identifies an issue of discrimination and takes corrective action to address both the particular situation and the overall work environment is helping to establish a safety-conscious workplace.

Aggressive licensee follow-up also provides a message that retaliation is not 4

acceptable within its workplace. Assuming that these actions are reasonable and effective, NRC enforcement action 111ay not be warranted.

Another situation in which enforcement may not be warranted is where a complaint is filed with the DOL, but the licensee settles the matter before the DOL Area Office makes a finding of discrimination. :Alternatively, if a finding is made against the licensee, the licensee may choose to settle before the evidentiary hearing begins. An NRC policy of not nonnally citing violations in such cases might encourage licensee settlements, thereby reducing the potential for chilling effect. Settlements also provide a more timely remedy for the complainant and may be used to demonstrate the licensee's c011111itment to a retaliation-free environment. Therefore, the NRC may exercise its discretion not to take enforcement action when the licensee has publicized (1) that a complaint of discrimination for engaging in protected activity was made to the DOL; (2) that the matter was'settled to the satisfaction of the employee (the terms of the specific settlement agreement need not be posted); and (3) that if the OOL Area Office found discrimination, the licensee has taken action to positively reemphasize that discrimination will not be tolerated. This infonnation might be publicized by posting a notice, a newsletter, a handout, or some other means, but the infonnation should be conveyed in a manner designed to minimize the chilling effect on others. A similar approach may be taken when a person comes to the NRC without going to the DOL.

Even if no formal enforcement action is taken, the NRC would issue a letter, as is normal practice in similar cases, to emphasize the need for 5

lasting reaedial action. The licensee would also be informed that future violations may result in enforcement action. In certain cases, the NRC may also consider entering into a consent order with the licensee, as part of the settlement process, to address remedial action.

Whether the exercise of discretion is appropriate will depend on the circumstances. For example, normally enforcement discretion would not be appropriate for cases that involve: (1) allegations of discrimination as a result of providing information directly to the NRC; (2) allegations of discrimination caused by a manager above first-line supervisor {consistent with the current Enforcement Policy classification of Severity Level I or II violations); {3) allegations of discrimination where a history of findings of discrimination (by the OOL or the NRC) or settlements suggest a progranunatic rather than an isolated discrimination problem; (4) allegations of discrimination which appear particularly blatant or egregious. 2 In addition enforcement discretion normally would not be exercised for cases where the licensee does not appropriately address the overall work environment {e.g. by using training, postings, revised policies or procedures, any necessary disciplinary action, etc. to co11111unicate corporate policy against discrimination).

2 While enforcement action would normally be warranted in these four types of cases, depending on the circumstances mitigation for corrective action may be appropriate.

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Severity Levels The existing examples of harassment and intimidation in Supplement VII of the NRC Enforcement Policy focus on the level of management involved in the discrimination. Additional examples are warranted to address other considerations associated with discrimination. Example 8(9) will be added as a Severity Level II example to address violations involving a hostile work environment. Such a violation may be very significant because the failure by licensee's management to correct a hostile work environment can have a potentially significant adverse impact on employees raising issues. In such cases employees may not believe that they are free to raise concerns.

Supplement VII does not currently address threats of discrimination or restrictive agreements, both of which are violations under NRC regulations such as 10 CFR 50.7(f). Example C(IO) is being added as a Severity Level III example to address such violations. This type of violation is being categorized at a Severity Level III because the potential impact on future protected activity may be of significant regulatory concern.

Some discrimination cases may occur which, in themselves, do not warrant a Severity Level III categorization. Example D(6) is being added as a Severity Level IV example to address these situations. An example of such a case might be a single act of discrimination inv9lving a first-line supervisor, in which the licensee promptly investigates the matter on its own initiative, takes prompt, decisive corrective action to limit the potential chilling effect, and thereby provides a clear message to other supervisors and employees that such conduct will not be tolerated. Another example might 7

involve a threat of adverse actio,n against an employee for going around the supervisor to raise a concern; 1f the licensee took prOIIIJ)t, aggressive corrective action before any adverse action was taken toward the employee, such a case might be considered as having minimal potential for a widespread chilling effect. These cases would be categorized at a Severity Level IV because they are of 1ROre than minor concern and, if left uncorrected, could lead to a significant regulatory concern. Therefore, the Enforcement Policy is being changed to provide the flexibility to classify less significant discrimination violations as Severity - Level IV. Such cases would normally be

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considered for exercising enforcement discretion if warranted under section VII 8(7}. However, citations would normally be made if one of the four exceptions in that section were applicable.

Miscellaneous The Enforcement Policy is also being changed to reflect current Comission practice on consultation concerning proposed enforcement actions involving or relating to Office of Investigation {01) reports. This change is being made to Section III.

Paperwork Reduction Act Statement This final policy statement does not contain a new or amended information collection requirement subject to the Paperwork Reduction Act of 1980 {44 U.S.C. 3501 et seq.). Existing requirements were aproved by the Office of Management and Budget, approval number 3150-0136.

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List of Subjects in Part 2 Part 2 - Administrative practice and procedure, Antitrust, Byproduct material, Classified infonnation, Envirom,ental protection, Nuclear materials, Nuclear power plants and reactors, Penalty, Sex discrimination, Source 11aterial, Special nuclear material, Waste treataent and disposal.

PART 2 -- RULES OF PRACTICE FOR DOMESTIC LICENSING PROCEEDINGS AND ISSUANCE OF ORDERS I. The authority citation for Part 2 continues to read, in part, as follows:

AUTHORITY: Secs. 161, 181, 68 Stat. 948, 953, as amended (42 U.S.C.

2201, 2231); sec. 191, as amended, Pub. L.87-615, 76 Stat. 409 (42 U.S.C.

2241); sec. 201, 88 Stat. 1242, as illiended (42 U.S.C. 5841)*

2. Appendix C to Part 2 is amended by --

a. Revising Section III, paragraph (9);

b. Adding a paragraph directly after Section VI, B.2., paragraph {b};

c. Adding paragraph (7) to Section VII, B.; and

d. In Supplement VII, revising paragraphs 8(7}, 8(8}, C(S), C(9),

0(4), and 0(5) and adding paragraphs 8(9), C(lO), and D(6) to read as follows:

APPENDIX C TO PART 2 -- GENERAL STATEMENT OF POLICY AND PROCEDURE FOR NRC ENFORCEMENT ACTIONS 9

III. Responsibilities (9) Any proposed enforcement case involving an Office of Investigation (OI) report where the staff (other than the OI staff) does not arrive at the same conclusions as those 1n the OI report concerning issues of intent if the Director of 01 concludes that Co11111ission consultation is warranted; and VI. Enforcement Actions B. Civil Penalty 10

2. Civil Penalty Adjustment Factors (b) Corrective action A civil penalty for violations involving discrimination should nonnally only be itigated if the licensee takes prompt, comprehensive corrective action that (1) addresses the broader environment for raising safety concerns

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in the work place, and (2) provides a remedy for the particular discrimination at issue.

VII. Exercise of Discretion B. Mitigation of Enforcement Sanction

{7) Enforcement discretion may be exercised for discrimination cases where a licensee who, without the need for government intervention, identifies an issue of discrimination and takes prompt, comprehensive, and effective corrective action to address both the particular situation and the overall 11

work environment for raising safety concerns. Similarly, enforcement may not be warranted where a complaint is filed with the Department of Labor (DOL) under Section 211 of the Energy Reorganization Act of 1994, as amended, but the licensee settles the matter before the DOL makes an initial finding of discrimination and addresses the overall work environment. Alternatively, if a finding of discrimination is made, the licensee may choose to settle the case before the evidentiary hearing begins. In such cases, the NRC may exercise its discretion not to take enforcement action when the licensee has addressed the overall work environment for raising safety concerns and has publicized that a complaint of discrimination for engaging in protected activity was made to the DOL, that the matter was settled to the satisfaction of the employee (the terms of the specific settlement agreement need not be posted), and that, if the DOL Area Office found discrimination, the licensee has taken action to positively reemphasize that discrimination will not be tolerated. Similarly, the NRC may refrain from taking enforcement action if a licensee settles a matter promptly after a person comes to the NRC without going to the DOL. Such discretion would normally not be exercised in cases in which the licensee does not appropriately address the overall work environment

(~, by using training, postings, revised policies or procedures, any necessary disciplinary action, et~>to comunicate its policy against discrimination) or in cases that involve: allegations of discrimination as a result of providing infonnation directly to the NRC, allegations of discrimination caused by a manager above first-line supervisor (consistent with current Enforcement Policy classification of Severity Level I or II violations), allegations of discrimination where a history of findings of discrimination {by the DOL or the NRC) or settlements suggests a programnatic 12

rather thap an isolated discri ination problem, or allegations of discrimination which appear particularly blatant or egregious.

Supplement VII - Miscellaneous Matters B. Severity Level II - Violations involving for example:

7. A failure to take reasonable action when observed behavior within the protected area or credible information concerning activities within the protected area indicates possible unfitness for duty based on dr~g or alcohol use; '

8. A deliberate failure of the licensee's Employee Assistance Program (EAP) to notify licensee's management when EAP's staff is aware that an individual's condition may adversely affect safety related activities; or

9. The failure of licensee management to take effective action in correcting a hostile work environment.

C. Severity Level III - Violations involving for example:

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8. A failure to assure, as required, that contractors or vendors have an effective fitness-for-duty program;

9. A breakdown in the fitness for duty program involving a number of violations of the basic elements of the fitness-for-duty program that collectively reflect a significant lack of attention or carelessness towards meeting the objectives of 10 CFR 26.10; or

10. Threats of discrimination or restrictive agreements which are violations under NRC regulations such as 10 CFR 50.7(f).

D. Severity Level IV - Violations involving for example:

4. Isolated failures to meet basic elements of the fitness-for-duty program not involving a Severity Level I, II, or III violation;

5. A failure to report acts of licensed operators or supervisors pursuant to 10 CFR 26.73; or 14

6. Discrimination cases which, in themselves, do not warrant a Severity level III categorization.

Dated at Rockville, MO, this.='1'-:t-day o f ~ ' 1994.

FOR THE NUCLEAR REGULATORY COMMISSION.

ry of the Comission.

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