Horizon Homes, Inc.

Plain-English summary

Horizon was the general contractor at a worksite where OSHA cited an alleged scaffold guardrail violation. The company signed a settlement that left the guardrail item in place, even though it said the same item against a subcontractor had been withdrawn because the scaffold height did not trigger the standard. Horizon's counsel sought to withdraw from the settlement after noticing the item, but the judge denied the request and approved the agreement. The Commission found that the record raised a question whether the parties mistakenly included the guardrail item. It set aside the judge's order and remanded for consideration of whether mistake justified rescinding the settlement.

Decision snapshot

• Cited standard(s): 29 C.F.R. § 1926.451(g)(4)(i)
• Outcome: The Commission set aside approval of the settlement and remanded for a determination whether mistake warranted rescission.
• Key point: A settlement's written terms ordinarily control, but evidence of a possible mistake required the judge to consider whether the agreement should be rescinded.

Full text (OSHRC public release)

Horizon Homes, Inc., Docket No. 06-0095

SECRETARY OF LABOR,

Complainant,

v.

OSHRC Docket No. 06-0095

HORIZON HOMES, INC.,

Respondent.

APPEARANCES:

Oscar L. Hampton III, Attorney; Michael A. Stabler, Regional Solicitor; Howard M. Radzely,
Solicitor; U.S. Department of Labor, Washington, DC                                 

For the Complainant

Robert E. O’Connor, Jr., Esq.; Omaha, NE                   

For the Respondent

REMAND ORDER

Before: RAILTON, Chairman; ROGERS and THOMPSON, Commissioners.

BY THE COMMISSION:

In an order dated January 16, 2007, Administrative Law Judge Benjamin R. Loye denied
a request from Horizon Homes, Inc. (“Horizon”) to withdraw from a settlement agreement
(“Agreement”) with the Secretary. Horizon petitioned the Commission for review of the judge’s
order claiming, in part, that it had mistakenly signed the Agreement. On March 12, 2007,
Chairman Railton directed this case for review. For the following reasons, we remand this case
to the judge for further proceedings consistent with this opinion.

Background

In November 2005, the Occupational Safety and Health Administration (“OSHA”)
inspected a worksite operated by Horizon, the general contractor, and two of its subcontractors.
Thereafter, OSHA issued to Horizon one serious citation that included, among other items, an
alleged violation of the guardrail standard set forth at 29 C.F.R. § 1926.451(g)(4)(i). Separately,
according to Horizon, OSHA issued a citation to one of Horizon’s subcontractors for the
identical alleged violation—i.e., under the same guardrail provision for the same alleged
violative condition. Horizon maintains that in a subsequent settlement agreement with the
subcontractor, the Secretary withdrew the subcontractor’s guardrail citation item because the
height of the scaffold in question failed to trigger the cited standard’s applicability to the alleged
violative condition. The Secretary does not take issue with Horizon’s explanation of the status
of the citation issued to the subcontractor.

During settlement negotiations between the Secretary and Horizon, counsel for Horizon
sought a withdrawal of the guardrail citation item issued to Horizon because the Secretary had
withdrawn the same citation item issued to the subcontractor. Nevertheless, in the terms of the
parties’ executed Agreement submitted to the judge for approval on December 14, 2006, the
original citation—including the guardrail citation item—“remained as issued” to Horizon but all
proposed penalties were reduced.

On December 21, 2006, Horizon filed a Position Statement with the judge seeking to
withdraw from the Agreement. In the Position Statement, counsel for Horizon admitted his
“error in not seeing” the inclusion of the guardrail citation item in the Agreement but asserted
Horizon’s objection to a settlement that attributes guilt and establishes a penalty “for something
that did not occur.” In response, the Secretary denied knowledge of having any conversations
with Horizon agreeing to withdraw the guardrail citation item. The Secretary further stated that
on December 22, 2006, she sent by facsimile to Horizon’s counsel a proposed amended
settlement agreement withdrawing the guardrail citation item, but had received no response from
Horizon.

In denying Horizon’s request for withdrawal, the judge noted that the contractual nature
of a settlement agreement precludes unilateral rescission, absent “duress, harassment or
overbearing conduct.” He then concluded that Horizon had set forth no recognizable basis for
withdrawal from the Agreement.

Discussion

The Commission recognizes that settlement agreements are contracts to be enforced “in
accordance with federal common law principles.” Phillips 66 Co. , 16 BNA OSHC 1332, 1338,
1993 CCH OSHD ¶ 30,191, p. 41,543 (No. 90-1549, 1993). Thus, in determining whether a
settlement agreement is enforceable, the language of the written settlement agreement controls
unless the language is ambiguous, or there is fraud, duress, or mistake . Id. ; see also Callen v.
Penn. R.R. Co. , 332 U.S. 625, 630 (1948) (“One who attacks a settlement must bear the burden
of showing that the contract he has made is tainted with invalidity, either by fraud practiced upon
him or by a mutual mistake under which both parties acted.”); Anzueto v. Washington Metro.
Area Transit Auth. , 357 F. Supp. 2d 27 (D.D.C. 2004) (agreement that inadvertently, on
plaintiff’s part, settled previously filed Title VII claim was enforceable where there was no
evidence of mutual mistake, or unilateral mistake caused by other party).

Here, we find that the record raises the question of whether a rescission of the Agreement
is warranted. See Phillips 66 Co. , 16 BNA OSHC at 1339, 1993 CCH OSHD at p. 41,543 (case
remanded to determine whether an agreement “was based on a mistake requiring rescission
under principles of federal common law”). Specifically, the record suggests that the parties may
have mistakenly included the guardrail citation item in their Agreement. Indeed, subsequent to
the execution of the Agreement, the Secretary apparently provided counsel for Horizon with an
amended settlement agreement withdrawing this very citation item. The judge, however, did not
address in his ruling whether mistake warranted rescission.

Accordingly, we set aside the judge’s order and remand the case to him. On remand, the
judge shall review all relevant evidence in the record, including the Secretary’s claim to have
provided Horizon’s counsel with an amended settlement agreement, and determine whether the
parties made a mistake in executing the Agreement.

SO ORDERED.  

/s/

W. Scott Railton

Chairman

/s/

Thomasina V. Rogers

Commissioner

/s/

Horace A. Thompson III

Dated: April 3, 2007
                                                                           Commissioner

SECRETARY OF LABOR,

Complainant,

v.

OSHRC DOCKET NO. 06-0095

HORIZON HOMES, INC.,

Respondent.

DECISION AND ORDER

The parties have filed a Stipulation and Settlement Agreement in the above-captioned matter.
The content of that Stipulation and Settlement Agreement is incorporated by reference in this Order.

To date, Respondent has not complied with this judge’s January 16, 2007 Order denying its
motion to set aside the signed Settlement Agreement and directing posting of the agreement in accordance with Rule 7. Rather, in its January 22, 2007 filing, Respondent indicates its intent to appeal the
January 16, 2007 Order.

The Stipulation and Settlement Agreement is, therefore, approved so as to become a final Order
of the Commission for purposes of appeal.

SO ORDERED.

/s/

Benjamin R. Loye

Judge, OSHRC

Dated: April 3, 2007