Phillips 66 Company
Union settlement-rescission dispute remanded for evidence
Apply this precedent to your situation
This is citable Commission precedent from 1993, and it may have been appealed since. Ezel checks how it stands today and answers your situation, with citations.
Plain-English summary
After an explosion and fire caused fatalities and injuries at Phillips 66's Houston Chemical Complex, OSHA issued citations proposing more than $5.6 million in penalties. The Secretary and Phillips later reached a $4 million main settlement that also established a corporate process safety management program with implementation periods of up to six and a half years. The employees' union initially objected, then agreed in supplemental agreements to withdraw its objections in exchange for participation in PSM implementation meetings. It soon sought to rescind that withdrawal, claiming a mistake about whether an international union representative could attend the meetings, and the ALJ granted rescission without an evidentiary hearing. The Commission held that it had ancillary jurisdiction to review the entire settlement, including remedies for non-cited plants, and that the two supplemental agreements formed one tripartite agreement governed by federal common law. It remanded for an evidentiary hearing on whether a mistake justified rescission. If rescission were justified, the ALJ was to hear the union's abatement-period objections with the Secretary bearing the burden of proving reasonableness; otherwise, the objections would remain withdrawn and the main settlement would be reviewed for approval.
Decision snapshot
- Cited standard(s): 29 U.S.C. § 654(a)(1) and 29 C.F.R. § 1910.119
- Outcome: The case was remanded for an evidentiary hearing on whether the union's supplemental settlement agreement should be rescinded for mistake.
- Key point: OSHRC may approve an integrated settlement covering cited and non-cited conditions, but a disputed rescission of that settlement must be resolved on an evidentiary record under federal common law.
Full text (OSHRC public release)
UNITED STATESof AMERICA
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
One Lafayette Centre
1120 20th Street, N.W. - 9th Floor
Washington, DC 20036-3419
FAX.
COM (202) 60+5050
fls (202) 60&5050
..
SECRETARY OF LABOR,
Complainant,
v.
..
PHILLIPS 66 COMPANY,
Respondent. Docket No. 90-1549
..
OIL, CHEMICAL AND ATOMIC WORKERS ..
INTERNATIONAL UNION, AND ITS ..
LOCALS 4-227 AND 2-578, ..
Authorized ..
Employee Representative. .
.
DECISION
BEFORE: FOULKE, Chairman, and MONTOYA, Commissioner.
BY THE COMMISSION:
On October 23, 1989, an explosion and fire occurred at Phillips 66 Company’s
(“Phillips”) plant called the Houston Chemical Complex (“HCC”) causing fatalities and
numerous injuries. The Department of Labor’s Occupational Safety and Health
Administration (“OSHA”) inspected the plant and issued numerous citations on April 19,
1990. In addition to citing Phillips for violations of general industry standards concerning
emergency exit plans, respirator use, and hazard communication, the Secretary also cited the
company for serious, willful violations of the “general duty clause,” 29 U.S.C. 8 654(a)(l),
section 5(a)( 1) of the Occupational Safety and Health Act of 1970, 29 U.S.C. $5 651-678,
for failure to furnish 566 employees with a workplace reasonably free of hazards. The
citations proposed penalties ‘amounting to over $5.6 million and required “immediate”
abatement of many conditions. The balance of the violative conditions were to be abated
in a matter of months. Phillips filed a timely notice of contest, and settlement negotiations
2
ensued. Although the authorized employee representative, the oil. Cht3micd LlliL m .
4
\liJ1711i
Workers International Union and its Locals 4-227 and 2-578 (“OCALV” N %IC i;;:!S:T’* i,i Ll,,
invited to take part in these discussions, it chose not to participate at that stage, On
August 37 1991 $ seventeen
Au, months after the citations had been issued, the Secretan, d of
Labor and Phillips reached an agreement (“Main Agreement”). The IbkCnAgreement not
only settled the contested citations for conditions at the HCC plant, but also established a
corporate-wide process safety management (“PSM”) program’ covering the cited plant and
several other, non-cited plants as well. The timetables for implementing various stages of
this program ranged from one to six and a half years.2
The settling parties submitted their agreement to the judge for approval. On
September 5,1991, before the end of the lo-day period specified in Commission Rule 100(c)
for considering employee objections to settlement agreements, the administrative law judge
approved this Main Agreement. The union, which had elected party status, filed a letter
with the Commission objecting to the reduction of penalties and claiming that it had been
deprived of its opportunity to review the agreement for the reasonableness of the abatement
periods. The Secretary concurred that the judge had approved the settlement prematurely.
The Commission, treating the union’s letter as a petition for discretionary review, set
aside the judge’s approval order and remanded the case to him for “development of the
necessary factual record and determination of the merits of the union’s objection to the
abatement periods prescribed by the . settlement
.
agreement.” In response to the Secretary’s
contention that the union would have no standing to object to portions of the settlement
agreement involving non-cited plants, the Commission stated, “[w]e express no opinion on - , .
the merits of that contention at this time,” directing the parties to present their positions to
the judge.
’ The PSM plan requires the completion of process hazard analyses for each location to prevent the incidence
and mitigate the consequences of a release of various harmful chemicals. The employer must also examine
its safety procedures during each phase of its operations. Corrective actions may include development of
contingency and emergency response planning, control over ignition sources, detonation traps, location of
physical facilities, employee training, and assignment of management authority and responsibility.
’ Although at the time of the inspection the Secretary had not issued a standard governing process safety
management, a PSM standard has since
e been
, promulgated. 29 C.F.R. 8 1910.119.
3
On remand, however, the union settled with the Secretary and L+*ithPhi/lip + Lc;!~’
M
0f two separate “Supplemental Agreements” therebv. eliminating tht: need for ‘1 i:~;ir;~~.
Y
under the terms of these agreements, the union agreed to withdraw its objections to the
ivain Agreement (including its extended abatement schedule) in exchange for notice of, and
an opportunity to attend, all meetings between OSHA and Phillips regarding the implemen-
tation of the corporate-wide PSM program. In keeping with the terms of the Supplemental
Agreements, the union filed a “withdrawal of objections” in a November 5, 1991 letter to
the judge and asked that the Main Agreement be approved immediately.
One week later, however, on November 12, 1991, the union notified the judge that
it wished to rescind that withdrawal of objections, claiming that it had made a mistake in
entering into the Supplemental Agreement with Phillips because, in the union’s view, the
agreement inadvertently failed to refer to the attendance of an International union
representative at certain meetings. According to the union’s lawyer,3 earlier that November
12th morning, Phillips’ lawyer called off the first PSM strategy meeting under the Main
Agreement, because, in the company’s view, the union had breached the Supplemental
Agreement by sending a representative of the International union to the meeting. The
company maintained that the only designated representative under the agreement was the
local union official, while the union claimed that someone from the International union was
also entitled to attend.4 The union did not ask the judge (or any other court) to enforce
the Supplemental Agreement as the union interpreted it, but sought instead to have the
contract voided altogether on the grounds of mistake.
3 We would emphasize that no evidentiary hearing was held in this case. The only “evidence”--other than
a batch of citations and three settlement agreements -- is the “certification” of the Union’s lawyer (signed
under penalty of perjury) as to what happened during the supplemental settlement negotiations and what
happened on November 12, 1991 at the first PSM strategy meeting under the Main Agreement. We have no
sworn testimony from Phillips or the Secretary as to what transpired.
’ Under the Supplemental Agreements, Phillips and the Secretary agree “to provide OCAW’s designated
representatives with notice of and opportunity to attend all meetings.” The agreements also state: The
designated representatives of OCAW are the Chairman of the Phillips plant group Workmen’s Committee
(HCC) and the President of OCAW Local 2-578 (Woods Cross).” Woods Cross was the non-cited plant in
Utah. Elsewhere in the agreements, OCAW international union officials are listed as being permitted to
discuss confidential information with the designated representative.
4
Despite resistance on the part of the Secretary and Phillips. ~v~o TALCJ T’\J~
enforcement of the Main Agreement, the judge summarily granted tht: mm’~ r.;:wn to
rescind. thus halting the implementation of the AMainAgreement ard again recpiring a
hearing on the union’s objections. By order of December 18, 1991, the judge directed the
parties to prepare for a hearing on the reasonableness of the abatement periods in the LVain
Agreement. The Secretary sought interlocutory review of this order, but the Commission
denied review.
In preparation for the hearing on the reasonableness of the abatement periods, the
judge issued an order on March 12, 1992, defining the scope of the issues and allocating the
burden of proof. When the union discovered from this order that the only subject of the
hearing was the abatement periods for those conditions actually cited at the HCC plant (to
which the union had no objection), that the corporate-wide PSM program was not to be an
issue at all, and. that the burden was to be on the union to prove the abatement periods -
were unreasonable, it informed the judge that a hearing would “not serve any useful
purpose” and asked for a final order so it could appeal to the Review Commission. On
April 6, 1992, the judge issued an order approving the Main Agreement.
The union petitioned for discretionary review of the judge’s April 6, 1992 settlement
approval order which, in keeping with his earlier order, had effectively rebuffed the union’s
objections to the extended abatement schedule in the Main Agreement. The Secretary
cross-petitioned for review of the judge’s December l&l991 order. Commissioner Montoya
directed the case for review in two directions for review dated March 23 and May 7, 1992.
Oral argument was heard on November 17, 1992. .
I. Jutidictiim
The Secretary and Phillips ultimately seek Commission approval of their Main
Agreement, while the union requests that the Commission withhold its approval until the
union has had an opportunity to challenge the abatement dates in the agreement. These
contentions raise the threshold question of whether the Commission’s authority extends to
agreements covering actions to be taken to change conditions that are not actually the
.
5
subject of any Ci~~tid Neither the parties nor the judge addressed the jurisdi;r: >I:.:: :+\~c
below, but we raised it ma sporzte at oral argument.
We conclude that under Commission precedent, our jurisdiction does extend to such
matters. In Davies Can CO., 4 BNA OSHC 1237, 1976-V CCH OSHD fl 20,704 (NO. 8182,
1976), the Commission assured a reluctant administrative law judge that he could have .
approved a corporate-wide settlement (covering both cited and non-cited conditions) in full.
The employer in Davies Can had admitted in. the settlement agreement that noise levels in
its Florida plant, as well as in its Ohio and Pennsylvania plants, exceeded the levels
permitted by the applicable standard. The judge approved the agreement as to the cited
Florida plant, but declined--for lack of jurisdiction--to approve the portions relating to plants
not mentioned in the citation. On review, the Commission drew on powers analogous to a
court’s “ancillary jurisdiction” to ratify the entire agreement as a whole. The Commission
explained:
In its simplest terms, the concept of ancillary jurisdiction provides that once
jurisdiction attaches to the primary dispute, a court is considered to have
jurisdiction over ‘subsidiary’ or ‘subordinate’ matters ‘even though it might not
independently be able to adjudicate them.’ The analogy holds up so long as
the subject matter is within the framework of the Commission’s adjudicative
duties under the Act.
Id. at 1238, 1976-77 CCH OSHD at 24,828, (citing Jersey Land & Dev. Cop v. United States
342 F. Supp. 48, 52 (D.N.J. 1972)). * Since the Secretary would be empowered to cite the
employer concerning the plants, and the employer would have a right to contest the
citations, the Commission saw the matter as falling within the scope of its authority. The
decision in Davies Can is factually similar to the case now on review and provides clear
Commission precedent on point. In fact, at oral argument, counsel for the Secretary
characterized Davies Can as being “on all fours” with the case now under consideration.
The concept of ancillary jurisdiction enables adjudicative bodies to serve both the
parties’ interests and the public’s interest in judicial economy at the same time:
5 This question is related to, but not the same as, the question of whether employee representatives have
standing to challenge abatement dat,es set forth in such agreements. That question is addressed in Oi&
Chemical and Atomic Workers Intl. Union (MC Fertilizer), Docket 91-3349 (August 20, 1993) also issuedtoday.
6
It is clear that the district court has the power to enforce: sett!ement
agreements reached by the parties in federal cases because ~)th~nvist: the
court would be frustrated in its effort to resolve cases over which it has been
given explicit jurisdiction by Congress. But it is equally true that the court’s
jurisdiction to enforce a settlement agreement must derive from its original ju-
risdiction over the complaint. Federal courts do not have common law
contracts jurisdiction, and they cannot enforce settlement agreements except
insofar as those agreements are ancillary to the resolution of cases over which
they do have jurisdiction.
United States v. Or Constr. CO., 560 F.2d 765 (7th Cir. 1977). Since the parties have chosen
to incorporate non-cited matters in an agreement they want treated as a whole and as a final
order, the non-cited matters are ancillary to the resolution of a case over .which even the
parties agree we do have jurisdiction.
The parties do not want the Commission to approve only those portions of the
settlement agreement related to citations, nor does the Commission have any interest in
severing settlement agreements or approving them in piecemeal fashion. Because we cannot
know what each party considers to be a satisfactory quidpro quo, our approving anything less
than the parties’ complete, integrated agreement would inevitably leave one party, or both,
bound by a reformed contract they never intended to make. This would only deter other
parties from attempting to negotiate settlements, a result that would far from serve the
interests of the employees the Act seeks to protect.
The Act provides a single, orderly enforcement scheme: If a violation is found during
an inspection, the Secretary must issue a citation and may propose a penalty, sections 8
through 10(a) of the Act, 29 U.S.C. 55 657 through 659(a); the Secretary may prosecute
contested citations in enforcement proceedings before the Commission, section 10(c) of the
Act, 29 U.S.C. 9 659(c); the Commission has sole authority to assess penalties, section 17(j)
of the Act, 29 U.S.C. 5 666(j); the Secretary may seek enforcement of Commission orders,
section 11(b) of the Act, 29 U.S.C. 8 660(b). See Donovan tr, OSHRC (Mobil Oil), 713 F.2d
918, 926 (2d Cir. 1983). The Act offers only one way to obtain summary enforcement of a
Commission final order, whether that order be the result of litigation or settlement, and that
is to follow the enforcement scheme set forth in the Act. With the authority to litigate a
case comes the authority not to. The Secretary’s power to settle claims advances the central
. .
7
***
purpose of the Act, which is to “reduce safety hazards and improve workiw 2 L’cT.~~~;v~:,
Doflovnrl V, I.&. Union, Allied [,1&s. Workem (cT/llirlpool), 722 F.2d 111% i-t?0 :hr:h Cir.
1983)? (citing Dale n/r. .kfadden Cons& Inc. v. Hod&on, 502 F.2d 278, 280 (9th Cir. 1974).
Under the Act’s enforcement scheme, the Secretary is not entitled to claim final order status
for a settlement agreement unless potential parties are accorded an opportunity to exercise
rights granted under section 10 of the Act. This cannot occur in the absence of Review
Commission jurisdiction.
Looking at the issue from a slightly different perspective, we consider Local NO. 93,
Intl.Assn. of Firefightersv. City ofCleveland,478 U.S. 501(1986), a case which stands for the
proposition that a court is not barred from entering a consent decree merely because the
decree provides broader relief than the court could have awarded after a trial. In that case,
. which the Secretary commended to us pending oral argument, certain minority firefighters
lodged a discrimination complaint against the city. The Supreme Court upheld a settlement
agreement that provided relief benefiting individuals who could not have maintained their
OWTI
action in court. The Secretary apparently offers this case to support his argument that
the Commission and the courts may approve settlement agreements like the one in this case
that encompass more than citations. We conclude that applying LocalNo.93 requires the
same result as Davies Can. If there had been a hearing on the citations in Davies
Can,the
Commission could not have ordered the company to abate noise hazards beyond those listed
for the Florida plant in the formal citation, i.e., hazards at the Ohio and Pennsylvania plants,
but the Commission could, and did, approve a settlement agreement accomplishing just that.
In this case, had the matter gone to a hearing on the citations, the Commission could not,
of its own accord, have affirmed an order compelling Phillips to implement a PSM plan at
any plant, because not all the hazards the corporate-wide PSM plan is intended to abate
were among the hazards formally listed in the citation. However, the Commission can, and
in this decision, does, approve a settlement agreement accomplishing just that.
The Supreme Court in Local No. 93 cautioned that “[tlhis is not to say that the
parties may agree to take action that conflicts with or violates the statute upon which the
complaint was based.” Id. at 526. In this case, in light of our resolution of the “rescission
.
8
issue,” i.e., the union’s attempts to rescind the agreement on the basis of mistake. dicta ir~!r:~ - .
we do not reach the ultimate issue of whether the .parties have agreed ~1 takt: action rhat
conflicts with the OSH Act by seeking approval of the Main Agreement without having first
defended the reasonableness of the abatement periods challenged by the emplovee
d
representative. That issue is addressed in Oil, Chemical and Atomic Workers Intl. union
(I&K Fertilizer), Docket 91-3349 (August 20, 1993).
We conclude that the Commission does have jurisdiction to review settlement
agreements as a whole, including those which cover actions to be taken to change conditions
that are not actually the subject of any citation.
II. Did the Judge Em in Granting the Union’s Motion for Rescission?
In his December 18, 1991 “Ruling on Post-Remand Motions,” the judge--without
. taking any evidence--granted the union’s motion to rescind its November $1991 withdrawal
of objections to the Main Agreement. As counsel for the union acknowledged at oral
argument, “I must say . . . one of our handicaps in this case is that, there is no record . . . .
There is no transcript. And we have said in our brief that, if the Commission is not ready
to affirm the judge’s decision on rescission, then it should be remanded for a hearing, so we
have a factual record to go on.” For the following reasons, and subject to the following
rulings, we remand this case to the judge for further evidentiary proceedings to develop the
relevant facts and resolve the remaining issues as outlined below.
A. Validity of the Union/Secretary Agmemmt
As a preliminary matter, we must resolve the issue of the impact of the
Union/Secretary agreement on this case. The union promised, in both Supplemental
Agreements, to withdraw its objections to the Main Agreement in exchange for the
opportunity to participate in the PSM plan meetings. As the Secretary points out, “[n]o
infirmities or misunderstandings have been alleged” as to the Union/Secretary agreement;
the union claimed that only the Union/Phillips agreement was based on a mistake. In other
words, the Secretary is arguing that the Union/Secretary agreement, technically left
unassailed by the union, remains intact regardless of whether the Union/Phillips agreement
stands or falls. The Secretary cites federal cases supporting the principle that settlement
agreements are contracts, and as such are binding and enforceable under familiar principles
. .
9
of contract law, not subject to unilateral rescission. Village of Kaktotik 1~.Wut. 689 F.‘d 2:~.
230 (D.c. Cir. 1982), Dacanay v, Mendma, 573 F.2d 1075? 1078 (9th Cir. 1975). .Srr+y 1’.
GL@& s. Am. SS. CO., 495 F.2d 1235 (5th Cir. 1974).
The union argues, on the other hand, that “[n]o agreement has ever existed between
Phillips and the Secretary whereby the Secretary can require Phillips to allow for the union’s
participation. Instead, both the Secretary and Phillips must contemporaneously perform
their respective duties to the union in order for the union to receive its due consideration.”
It ‘argues that without cooperation among the Secretary, Phillips and the union, no party
would receive the benefit of the bargain it had struck. Drawing on the traditional contract
principle of “mutuality of obligation,” the union contends that the Commission should not
look at the Union/Secretary agreement in a vacuum, as if the Union/Phillips agreement did
not exist. According to the union, “an agreement with the Secretary is worthless without a
concurrent agreement with Phillins.”
The judge’s decision Hers no clue as to how he viewed the interplay of the two
Supplemental Agreements. We conclude that while the two supplemental agreements are
drafted so that neither one refers to the other, the parties nevertheless intended to bind
themselves in a tripartite agreement, with interdependent rights and obligations. We
therefore find that the two supplemental agreements must be construed as one.
B. Abuse of Disctetim Based on Factual Emw
The union argued, in its brief in support of its rescission motion before the judge,
that the Supplemental Agreement was based on a mutual mistake and should therefore be
voided. The Secretary and Phillips countered that there was no such mistake and that the
language of the agreement was clear, unambiguous, and legally binding.
1. Judge’s Ruling and Parties’ Positiims
The judge’s ruling on the rescission motion did not address the parties’ contract law
arguments or their policy arguments favoring the finality of settlements. Instead, the judge
seemed to focus solely on how fast the union had discovered the problem. Although one
week had passed between the time the union agreed to withdraw its objections and the time
it tried to rescind that withdrawal, the judge came under the misimpression that the union
had changed its mind only thirty-six minutes later. Documents in the record show that at
10
hm
1756 p.m. on November 12, 1991, the Secretary had faxed the judge a copy et’ thz ~;:!~+l;
November 5, 1991 letter withdrawing its objections. Thirtv-six
4 minutes later. at 1:32 P.m. On
November L,7 the union faxed the judge a letter attempting to rescind the November 5th
.
withdrawal. The judge concluded that if the union SO quickly found reason to rescind its
withdrawal, “it is clear that no mutual meeting of the minds was reached.” He also stated
that “the essence of a settlement agreement is, of course, the uncoerced agreement of the
parties to the terms of the document” and that “the emergence of a mutually satisfactory
settlement agreement is the overriding consideration in these circumstances.” The judge
voided the Supplemental Agreements and reinstated the union’s objections, thus halting the
implementation of the Main Agreement.
The Secretary argues that because the judge appeared to be SO impressed with the
36.minute time lapse, his decision was based substantially on clear, factual error. He
contends that the judge abused his discretion and must be reversed. See, e.g., Sealtite Cop.,
15 BNA OSHC 1130, 1134 n.7, 1991 CCH OSHD ll 29,398, pp. 39,582.83 n.7 (No. 88-1431,
1991).
2. Analysis
The question “How soon was the mistake discovered and notice given?” is among the
dozen or so factors traditionally considered in determining whether a contract should be
voided on the basis of mistake. (Others include whether the mistaken fact was of substantial
importance; whether both parties, or only one, was mistaken and whether that party was
negligent; whether one party knew or had reason to know of the other’s misunderstanding;
and whether either party, or a third party, changed its position, precluding a return to the
status quo.) See 3 Co&n on Contracts, 3 597 (1960). However, the time-lapse factor is by
no means dispositive of the issue of whether a mistake existed, or if so, what remedy is
appropriate. Although the judge was mistaken as to the exact amount of time it took for
the trouble with the agreement to emerge, this does not mean that his decision must be
reversed for factual error. For the judge, the “overriding consideration” was the absence
of a “mutually satisfactory settlement agreement.” We therefore conclude that the judge’s
misunderstanding of the timing of the withdrawal does not, by itself, require reversal of his
order.
11
C. Rescission On G~OU&Sof Mistake
We turn finally to the issue of whether the Supplemental Agreement i$‘;tj pr~~perivd
rescinded on grounds of mistake. Mistake, along with fraud, illegality, and accident, are
generally accepted grounds for invalidating a contract. As counsel for Phillips, however,
explained at oral argument:
[The contract] is to be performed in Texas and Utah. It was negotiated in
Washington, D.C. Phillips 66 signed it, in Oklahoma. A representative of the
International Union was supposed to sign it in Denver. And it was drafted by
both myself and Mr. Wodka [counsel for the union]; myself, in Texas, and Mr.
Wodka, in New Jersey.
Now, I would not want to figure out that conflict of law problem,. and
I do not think it is necessary to.
These representations raise questions as to whether state law or federal common law
governs, but neither the union nor the Secretary explicitlv addresses the choice of law issues
4
that this case presents.
1. choice of Law
The union seems to rely heavily on Texas state law, citing two Texas cases to support
the notion that without a “meeting of the minds,” there can be no contract. Volp v.
Schlobohm, 614 S.W.2d 615 (Tex. Civ. App. 1981) and Smulcer v. Rogers, 256 S.W.2d 120
(Tex. Civ. App. 1953). The union also cites a legal treatise for the proposition that relief
is only appropriate in exceptional circumstances, where a mistake of both parties upsets the
very basis for the contract in such a way as to have a material effect on the agreed exchange
of performances.
The Secretary expresses no position on choice of law, but Phillips makes an argument
in another context, also relevant here, that the enforceability of settlement agreements in dis-
putes based on federal law is itself determined under federal law, citing 0~. The court in
that case, construing a settlement agreement of an action brought under the federal Miller
Act, stated:
It would be anomalous to utilize state law to determine the validity of the
settlement agreement reached by the parties in this case when federal law
governs the substantive rights of the parties and provides the basis on which
the parties were able to bring the matter into federal court in the first place,
and when jurisdiction over the settlement agreement only exists as a derivative
12
of the original federal action. We therefore hold that the enforceabilitv e i-~ftht:
. . . agreement must be decided as a matter of federal law.
Id. at 769.
Other circuits concur. E.g., Stider V. Circle K COP*, 923 F.zd 1404, 1406 (10th Cir.
1991) (“[allthough Title VII settlement agreements are contracts, they are inextricably linked
to Title VII. Federal common law governs the enforcement and interpretation of such
agreements because the ‘rights of the litigants and operative legal policies derive from a
federal source”‘); Ibarra v. Texas Employment Commn., 823 F.2d 873, 877 (5th Cir. 1987)
(court applies federal law to dispute involving consent decree under FUTA); GamewellMfg.
v. WAC Supply,Inc., 715 F.2d 112, 115 (4th Cir. 1983) (“Gamewell”) (court applies federal
law to resolve dispute over settlement of federal patent law case). Accordingly, we find that
disputes involving settlements of OSHA litigation are to be resolved in accordance with
federal common law principles.
2. Consi&?ratiOns on
Because there is a scant record in this case, the Commission knows very little about
the intentions of the parties other than what appears in the documents. According to the
union lawyer’s “certification” (the only evidence we have in this case other than the
documents, see supra note 3), the union “felt that if it could gain full access to the oversight,
review, and other consultations between OSHA and Phillips during the abatement period,
it might be able to encourage Phillips
. and OSHA to accelerate the abatement of those
hazards which the union believed were posing the greatest urgency for correction.” The
union’s lawyer continued in this submission with his version of what happened:. .
For purposes of efficiency, the agreement designated a local union official as
a contact point for OSHA and Phillips to use in sending correspondence to
the union and in making arrangements for meetings, but this person is not the
only union representative who may attend the meetings. In the last paragraph
of [the agreement], Phillips agreed to pre-approve several International Union
officials, including the assigned International Representative, to receive the
company’s confidential information. TIte union understood this paragraph as
Phillips’ agreement to the possible attendance of these International Union
oficiak at the meetings between Phillips and OSHA. Apparently, the union was
mistaken on this point.
13
(Emphasis added).
The Secretary characterizes the position taken by the union in this submission ;fs
“indefensible” and “unsupportable,” maintaining that neither he nor Phillips had anv4 reason
to suspect that the union was interpreting “designated representatives” as meaning someone
other than the two local officials specified in the agreement. Under the plain terms of the
contract, he argues, “there is no plausible basis l . . for asserting that a mistake has occurred,
preventing a meeting of the minds.” We find this contention particularly compelling on its
face. Phillips emphasized this point at oral argument, and the union offered nothing in the
way of explanation or rebuttal. On remand, the clear language of the agreement,
particularly the stated definition of “designated representative” in the Supplemental .
Agreements, shall weigh heavily in the judge’s consideration.
It is generally true that if the language of a settlement agreement is unambiguous, its
meaning must be discerned within the “four comers” of the agreement. United stcz~~ V.I77’
I U.S. 223, 236 (1975). However, parol evidence, ie., extrinsic oral or
Cont. Baking Co., 420
written testimony, is admissible to prove fraud, illegality, accident or mistake, even if the
testimony contradicts the terms of a complete integration in writing. See 3 Corbin, 3 580.
In the case now under consideration, the definition of “designated representative” and the
role of the designated representative in the PSM plan seems to us to be unambiguously set
forth in the contract. On remand, relevant parol evidence, if any, will be admissible.
III. otder
We remand this case to the judge for an evidentiary hearing on the issue of whether
the Supplemental Agreement was based on a mistake requiring rescission under principles
of federal common law.
If the judge finds reason to rescind the Supplemental Agreement, thus releasing the
union from its terms, the judge shall then conduct a hearing on the merits of the union’s
substantive claims of unreasonable abatement periods, in accordance with our decision in
IlMC F’etiZheE6 If, on the other hand, the judge finds no cause to rescind the Supplemental
6 In any such hearing, the burden of proving reasonableness of the abatement periods shall reSt with the
Secretary. See ffiwecki-Berylco Indus., 1 BNA OSHC 1210, 1971-73 CCH OSHD fl 15,682 (No. 1942, 1973),
and Commission Rule 38(a).
14
Agreement, the union’s objections to the Main Agrmnent will be automaticall~~ ~~~~~~~~~~~~~~
*
as agreed to in the Supplemental Agreement. The judge shall then review and appri>tc the
LMain Agreement, as already sought by the parties, in accordance.with IMC Fertilizer.
_A_&
Edwin G. Foulke, Jr.
Chairman
Yyy
Velma Montoya
Commissioner
.
Dated: August 20, 1993
UNITED STATES OF AMERICA
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
One Lafayette Centre
1 I 20 20th Street, WV. - 9th Floor
Washington, DC 20036-3419
=4x
COM !202)606-9%
FTS (202)6064050
Secretary of Labor,
Complainant,
..
v. ..
Docket No. 90-1549
..
PHILLIPS 66 COMPANY,
Respondent.
..
OIL, CHEMICAL AND ATOMIC ..
’ WORKERS INTERNATIONAL ..
UNION, AND ITS LOCALS ..
..
4-227 and 2-578, .
Authorized ..
Employee Representative. ..
NOTICE OF COMMISSION DECISION AND REMAND ORDER
The attached Decision and Order of Remand by the Occupational Safety and Health Review
Commission was issued on Aueust 20, 1993. The case will be referred to the Office of the Chief
Administrative Law Judge for further action.
FOR THE COMMISSION
August 20, 1993
Date Ray H. Darling, Jr.
Executive Secretary
Docket NO. 90-1549
XOTICE IS GIVEN TO THE FOLLOWING:
Daniel J. Mid, Esq.
Counsel for Regional Trial Litigation
Office of the Solicitor, US. DOL
Room S4004
200 Constitution Ave., N.W.
Washington, D.C. 20210
James E. White, Esq.
Regional Solicitor
Office of the Solicitor, U.S. DOL
Suite 501
525 S. Griffin Street
Dallas, TX 75202
R. Michael Moore, Esq.
Fulbright & Jaworski
1301 McKinney, Suite 5100
Houston, TX 77010
Steven H. Wodka, Esq.
21 Rosslyn Court
Little Silver, NJ 07739
George H. Cohen, Esq.
Jeremiah A. Collins, Esq.
Bredhoff & Kaiser
1000 Connecticut Ave., N.W.
Washington, D.C. 20036
Gregory Mooney
General Counsel
Oil, Chemical and Atomic
Workers International Union
P.O. Box 2812
Denver, CO 80201
James R. Mob, Esq.
Wildman, Harrold, Allen and Dixon
335 West Wacker Drive
Chicago, IL 6060601229
Prentice H. Marshall, Jr., Esq.
Sidley & Austin
One First National Plaza
Chicago, IL 60603
Louis G. LaVecchia
Administrative Law Judge
Occupational Safety and Health
Review Commission
Federal Building, Room 7811
1100 Commerce Street
Dallas, TX 75242.0791
UNITED STATES OF AMERiCA
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
1825K STREET N.W.
4TH FLOOR
WASHINGT=ON D.C. 20006-I 246
.
.
.
Secretary of Labor, .
Complainant, :
.
v. .. Docket No. 90-1549
Phillips 66 Company, .
l
Respondent. :
..
NOTICE OF DOCKEllNG
The Administrative Law Judge’s Report in the above referenced case was docketed with the
Commission on September 13,199l. The decision of the Judge will become a final order of the
Commission on October 15, 1991 unless a Commission member directs review of the decision
on or before that date. ANY PAFW DESIRING REVIEW OF THE JUDGE’S DECISION BY THE
COMMISSION MUST FILE A PtON FOR DISCRETIONARY REVIRN. Any such petition should
be received by the Executive Secretary on or before October 3,199l in order to permit sufficient
time for its review. See Commission Rule 91, 29 C.F.R. Q 2200.91.
All further pleadings or communications regarding this case shall be addressed to:
Executive Secretary
Occupational Safety and Health
Review Commission
1025 K St., N.W., Room 401
Washington, D. C. 20006-t 246
Petitioning parties shall also mail a copy to:
Daniel J. Mick, Esq.
Counsel for Regional Trial Litigation
Office of the Solicitor, U.S. DOL
Room S4004
200 Constitution Avenue, N.W.
Washington, D.C. 20210
If a Direction for Review is issued by the Commission, then the Counsel for Regional Trial
Litigation will represent the Department of Labor. Any party having questions about review rights
may contact the Commission’s Executive Secretary or call (202) 634-7950.
FOR THE COMMISSION
‘W
Q
//c CL”3
W
September 13, 1991
Date Ray H. Darling, Jr.
Executive Secretary
Xcket No. 90-1549
NOTICE IS GIVEN TO THE FOLLOWING:
Daniel J. Mick, Esq.
Counsel for Regional Trial Litigation
Office of the Solicitor, U.S. DOL
Room 54004
200 Constitution Ave., N.W.
Washington, DC. 20210
James E. White, Esq.
Regional Solicitor
Office of the Solicitor, U.S. DOL
Suite 501
525 S. Griffin Street
Dallas, TX 75202
- R. Michael Moore,’ Esq.
Fulbright & Jaworski
1301 McKinney, Suit8 5100
Houston, Texas 7701 O-3095
Tom Gentry
President
Oil, Chemical and Atomic Workers .
International Union
Local No. 4-227
2306 Broadway
Houston, TX 77012
Louis G. LaVecchia
Administrative Law Judge
Occupational Safety and Health
Review Commission
Federal Building, Room 7811
. 1100 Commerce Street
Dallas, TX 75242-0791
l
.
UNITED STATES OF AMERICA
OCCUPATIONAL SAFETY AND HEALTH REVIEW COM&WSION
LYNN MARTIN, Secretary of Labor, 9
United States Department of Labor, §
Q
Complainant, 9
§ OSHRC Docket
V. 9 No. 90-1549
9
PHILLIPS 66 COMPANY, Q
9
Respondent. §
NG SETTLEMENT AGmNT
A Stipulation and Settlement Agreement has been filed in this case
which disposes of all issues pending before the Review Commission.
Upon
consideration, it is ORDERED:
1. The Stipulation and Settlement Agreement is approved and its
terms are incorporated into this Order.
The citations are afXiied as modified in that Agreement.
an3573
. ,
UNITED STATES OF AMERICA
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
LYNN MARTIN, Secretary of Labor, §
United States Department of Labor, §
§
Complainant, §
Q OSHRC Docket
V. § No. 90-1549
§
PHILLIPS 66 COMPANY, 9
§
Respondent. §
STIPULATION AND SETTLEMENT AGREEMENT
Phillips 66 Company (“Phillips”) and Lynn Martin, Secretary of Labor,
United States Department of Labor (“Secretary” or “OSHA”), in settlement of the
captioned case, pursuant to 29 C.F.R. Q 2200.100, hereby agree to the following.
This Agreement disposes of any and all issues contained in that case.
1. To supplement and enhance existing safety practices and
procedures, Phillips agrees to implement process safety management procedures at
its Houston Chemical Complex (“HCC”) pursuant to the terms of this Agreement.
The goal of the process safety management system is to prevent the incidence and
mitigate the consequences of uncontrolled releases of highly hazardous chemicals.
The process safety management system shall: (1) provide a systematic approach to
identifying, evaluating, and controlling hazards in the processes listed herein;
(2) provide a management structure to address the findings of’ the process hazard
analysis; (3) recommend corrective action; and (4) confirm and document completion
or other disposition of recommended corrective actions. The core component of the
process safety management system at HCC shall be a process hazard analysis for
each process that has the potential for an uncontrolled release of highly hazardous
chemicals, and separate process safety management analyses to assess factors
bearing on the overall safety of the HCC. The processes subject to this Agreement
are as follows: (1) polyethylene units; (2) developmental unit; (3) polypropylene
unit; (4) K-Resin unit; and (5) neohexene unit.
2. The process hazard analysis shall be conducted by Phillips or
under its direction utilizing a methodology that will best address the hazards of the
particular process at issue. The process hazard analysis shall include, but not be
confined to, (1) a human factors analysis of working conditions that may adversely
impact the safety performance of HCC personnel and potentially contribute to
accident event sequences, and (2) an analysis of the safety effectiveness of process
hardware, piping, valving, and instrumentation, especially during maintenance
operations or upset/emergency conditions. The process hazard analysis shall be
performed by individuals with expertise in engineering and in process operations.
The team shall include at least one person with experience and knowledge specific to
the hazard or process under evaluation, and be led by an independent consultant.
Such independent consultant has been retained by Phillips.
3. In addition to the process hazard analysis, Phillips will address
the following issues in separate process safety management analyses to ensure that
these areas conform with applicable OSHA standards or generally accepted industry
practices: (a) the adequacy of its safety permit and hot work permit procedures,
including enforcement; (b) compliance with OSHA’s standard regarding
lockout/tagout of energy sources during maintenance operations; (c) proper
classification of hazardous locations and control over the introduction of ignition
sources into such hazardous locations; (d) contingency planning for upset conditions
.
and emergency response planning; (e) upset and emergency condition detection
systems, and systems to mitigate the scale of hazardous chemical releases; (f) the
siting, separation, design and configuration of physical facilities and equipment to
ensure that the facilities are designed, maintained, inspected, tested and operated in
a safe manner; (g) the training of operators, technicians, and maintenance
personnel, including HAZCOM training, (h) the safety of existing Standard
Operating Procedures and maintenance procedures; and (i) the assignment of
authority and responsibility to identify and correct hazardous conditions.
4. Phillips agrees that the process safety management system will
promptly address the findings of each process hazard analysis and process safety
management analysis and develop appropriate recommendations. This management
system shall (1) implement and document any actions taken pursuant to the process
hazard/process safety management analyses; (2) communicate such actions to
\RhW5O?.D[R\0025478.06 -3 a
operations, maintenance or other personnel who work in the facility, including
contractor employees whose working conditions are affected by the findings and
recommendations of an analysis; and (3) assure that all corrective action is
imp emented according to this Agreement.
Phillips management will prepare written responses to each process
haz i .rd analysis. If, upon consideration of the recommendations contained in the
process hazard analysis, management determines that corrective action’ is required,
that action will be taken. If management disagrees with a hazard assessment or
recommendation contained in a process hazard analysis, the written response shall
explain and justify the disagreement.
5. Within thirty (30) days after execution of this Agreement,
Phillips shall provide the OSlU Houston Area Office with the name of a
management contact person for HCC. The management contact person shall meet
with the OSHA Houston Area Director within sixty (60) days there&r, and as
necessary to review actions planned or undertaken by HCC pursuant to this
Agreement. Such meetings can be requested by OSHA or Phillips.
60 Phillips agrees to provide the OSHA Houston Area Of&e with a
certified copy of the process hazard/process safety management analyses and any
management responses thereto, and to review with OSHA any comments or
recommendations it may have upon request.
7 a Phillips agrees to conduct the process hazard/process safety
management analyses required by this Agreement, provide copies of’ such analyses
and management responses to OSHA, and address any recommended corrective
actions contained in or arising from such analyses, in accordance with the following
schedule:
Task ComDletion Date
-
Identify process hazard/process safety 30 days from date of final
management analysis staff. Commission Order -
Complete process hazard/process 1 year from same
safety management analyses. -
Provide OSHA Houston Area Office 1 year from same
with process hazard/process safety
management analyses.
4 l Provide OSHA Houston Area Office 30 days from completion of
with management responses. analyses
- Complete actions recommended by As soon as practicable, but
process hazard/process safety within 2 years from completion
management analyses. of Step 28. If the schedule contained herein cannot be met, OSHA will not
unreasonably deny a timely-filed petition for modification of abatement. 29 C.F.R. . -
7 1903.14a.
9. Phillips further agrees that on or before the scheduled
completion date for each numbered task in Paragraph 7 above, it will transmit
written verification to the OSHA Houston Area Office that the task has been
completed as scheduled.
\RMOO507.DI.R\OO25478.06 -5 I)
10 . Phillips further agrees to provide to OSHA an evaluation, to be
conducted by an independent consultant, of the adequacy of settling leg maintenance
procedures performed while polyethylene reactors are in operation. This evaluation
will be forwarded to the OSHA Houston Area Office no later than six (6) months
from the date of a final Commission Order.
11 l If OSHA disagrees with Phillips’ determination of (1) the
assessment of a process safety hazard, (2) the need for corrective action, or (3) an
appropriate time frame for executing corrective action, OSEIA will state its points of
disagreement, and the reasons therefor, in writing so that Phillips may review them.
OSHA and Phillips will then engage in good faith discussions to resolve the
disagreement. This paragraph shall not limit OSHA’s right to tise, as appropriate,
enforcement methods provided by the OSH Act.
.
12. Phillips agrees to develop and maintain a compilation of written
safety information to enable Phillips and all exposed employees, including contractor
employees, to identify and understand the specific hazards posed by the processes
involving highly hazardous chemicals present at HCC. This safety information will
be communicated to all exposed employees, including contractor employees, and
shall describe the hazards of the highly hazardous chemicals used in the process, as
well as information pertaining to the equipment and technology involved in the
process. In addition, Phillips agrees to develop and implement written operating
procedures to provide clear instructions for safely conducting process and
\RM00507.DCR\00!2!5478.06 -6 m
maintenance operations consistent with the process safety information it develops.
The steps required by this paragraph shall be completed within 90 days of the
completion of the process hazard/process safety management analyses required
under q 7.
13 . Phillips agrees to train each employee involved in a covered
process or maintenance operation in an overview of the process and in pertinent
operating procedures for that process. The training will emphasize the specific
safety and health hazards of the process, and safe operating procedures and
practices applicable to the process. Refresher and supplemental training shall be
provided at least annually in the event the process does not undergo significant
change, or concomitantly with any process change or modification to ensure
understanding and adherence to the current operating procedures of the process or
maintenance operation. Such training will be completed prior to assigning an
employee to a process or maintenance operation.
14 . Phillips agrees to inform any contractor performing work on, or
near, a process, of the known potential fire, explosion or toxic release hazards
related to the contractor’s work and the process, and ensure that contractor
employees are trained in the work practices and emergency procedures necessary to
safely perform their job.
15 . Phillips will implement a process safety management system at
its Borger Refinery & NGL Process Center, Philtex/Ryton Complex, Sweeny
Refinery & Petrochemical Complex, and Woods Cross Refinery in accordance with
the terms and timetable provided in Appendix “A,” which is incorporated herein by
reference.
16l All documents or other information made available by Phillips
under this Agreement shall be handled in accordance with Section 15 of the OSH
Act, 29 U.S.C. Q 644, 18 USC. Q 1905, and 29 C.F.R. Q 1903.9. Phillips will have
the obligation to identifjt the document, information, or portion thereof that
contains proprietary or confidential information.
.
17. OSHA agrees not to issue citations to Phillips for any working
conditions identified in the process hazard analysis or any other analysis required by
this Agreement, provided such conditions are being or will be addressed in good
faith in accordance with this Agreement (including correction, if necessary). Phillips
agrees to allow OSHA access to HCC to determine progress and compliance with
this Agreement. OSHA agrees that, assuming good-faith implementation of this
Agreement by Phillips, it shall not conduct general schedule inspections, except that
OSHA may conduct monitoring inspections to determine compliance with this
Agreement. OSHA retains the right to conduct all other types of inspections
permitted under the OSH Act.
18. No later than six (6) months following Phillips’ verification that
it has completed all of the actions enumerated in Paragraphs 1 through 14 of this
Agreement, OSHA shall return to Phillips all copies of Phillips’ process hazard
.
analyses, written management responses, and other safety analyses. OSHA shall
not thereafter retain any such copies.
19. OSHA amends Citation No. 1, Inspection NO. 106612433 issued
April 19, 1990, to delete any characterization of the alleged violations contained
therein.
20 . Phillips agrees to pay the amount of FOUR MILLION
DOLLARS ($4,000,000.00) in settlement of Citations Nos. 1 and 2,. as amended,
Inspection No. 106612443 issued April 19, 1990, within thir@ (30) days of a final
Order of the Commission.
21 . The parties agree that this Settlement Agreement shall become
the final Order of the Commission and an agreed Order is attached hereto. The
terms hereof shall be subject to enforcement under Q 11(b) of the Act. Phillips
consents to the entry of such an Order by the Circuit Court of Appeals.
22 . The parties agree that the Citation as amended and Notification
of Proposed Penalty, Complaint, Answer, Stipulation and Settlement Agreement,
Phillips’ Notice of Contest, Phillips’ failure to continue to contest, Phillips’
abatement of the alleged violations, Phillips’ payment provided herein and the
Commission’s Final Order entered herein shall not constitute any evidence or
admission on the part of Phillips of any violation of the Occupational Safety and
Health Act or regulations or standards promulgated thereunder. None of the
foregoing shall be admitted into evidence, in whole or in part, in any proceeding or
litigation in any court, agency Or fOmm, except in proceedings brought directly
under the Act by the Secretary. The contents of the Stipulation and Settlement
Agreement are for the exclusive benefit of the parties hereto, and none of the
foregoing constitute evidence or an admission on the part of Phillips that any of the
conditions alleged in the Citations or Complaint existed or were a cause, proximate
or otherwise, of any accident, or damages, if any, resulting therefrom. Phillips is
entering into this Settlement Agreement without any prejudice to its rights to raise
any defense or argument in any future or pending cases before the Comm&ion or in
any other proceedings, including but not limited to the right to assert that any
future conditions identical or similar to those alleged in the original Citations or the
Complaint do not violate the Occupational Safety and Health Act or any standard
promulgated thereunder. By entering into this Settlement Agreement Phillips does
not admit the truth of any alleged facts, any of the characterizations of Phillips’
alleged conduct or any of the conclusions set forth in the Citations or Complaint
issued in this matter regarding the standards cited therein.
23 . Phillips certifies that the names and addresses of all authorized
employee representatives of affected employees are:
oil, Chemical and Atomic Workers
International Union, AFL-CIO
Local Union No. 4-227 (clerical group)
F. G. Bunch
2306 Broadway
Houston, Texas 77012
Telephone No. (713) 649-2714
Facsimile No. (713) 645-2426
Oil, Chemical and Atomic Workers
International Union, AFL-CIO (clerical group)
Joe Campbell
2306 Broadway
Houston, Texas 77012
Telephone No. (713) 649-2714
Facsimile No. (713) 6452426
Oil, Chemical and Atomic Workers
International Union, AFL-CIO
Local Union No. 4-227 (plant group)
B. G. Martinez
2306 Broadway
Houston, Texas 77012
Telephone No. (713) 649-2714
Facsimile No. (713) 645-2426
Oil, Chemical and Atomic Workers
International Union, AFLCIO -(plant group)
Joe Campbell
2306 Broadway
Houston, Texas 77012
Telephone No. (713) 649-2714
Facsimile No. (713) 645-2426 .
International Brotherhood of Electrical Workers
Local Union No. 716
G. G. Welch
1475 North Loop
Houston, Texas 77008
Telephone No. (713) 869-8900
Facsimile No. (713) 868-6342
International Brotherhood of Electrical Workers, AFL-CIO
J. D. Muhl
1475 North Loop
Houston, Texas 77008
Telephone No. (713) 869-8900
Facsimile No. (713) 868-6342
-ll-
Phillips further certifies that there are no other unions representing affected
employees except as set forth above.
24 . The Secretary certifies that service of the
Settlement Agreement was made on each authorized employee representative by
facsimile transmission on August 21, 1991. Affected employees have not raised
objections to the reasonableness of any abatement period specified herein.
25 . Each party agrees to bear its own fees and other expenses
incurred by such party in connection with any stage of this proceeding.
DATED August 22,199l.
FOR PHILLIPS 66 COMPANY ENT OF LABOR
BY 9 OL r( &wLLA&
8ohn VanBuskirk
Senior Vice President Deputy Assistant Secretary
Occupational Safety and Health
Administration
ROBERT P. DAVIS
Solicitor of Labor
Counsel for Phillips 66 Company
JAMES E. WHITE
Regional Solicitor
JACK F. OSTRANDER
Counsel for Occupational
Safety and Health
\RMW5O?.DIR\OO25478.06 ‘8 -12-
Senior Trial Attorney
JANICE L. HOLMES
Trial Attorneys
.
. .
APPENDIX “A” TO
STIPULATION AND SETTLEMENT AGREEMENT
BETWEEN PHILLIPS 66 COMPANY AND LYNN MARTIN,
SECRETARY OF LABOR. UNITED STATES DEPARTMENT OF LABOR
Phillips 66 Company (“Phillips”) and Lynn Martin, Secretary of Labor,
United States Department of Labor (“Secretary” or “OSHK’), hereby agree to the
following:
1 l Phillips agrees to implement a process safety management system
at its Borger Refinery & NGL Process Center, Philtex/Ryton Complex, Sweeny
Refinery & Petrochemical Complex, and Woods Cross Refinery. This system will be a
comprehensive process safety management system which includes but is not limited to
the steps described in the Agreement to which this ADDendix “A” is attached.
aa
2. Phillips agrees to abide by the following timetable:
Task Completion Date
-
Identify process hazard/process safeti 30 days from date of final Review
management analysis staff. . Commission Order -
Complete process hazard/process safety Two and one-half years from date
management analysis on the following of final Review Commission -
units: OrderSweenv: * 26.1 ARDS Unit, A Train 30 HF Alelation Unit 26.1 ARDS Unit, Trains A and B 28.1 DEA Regenerators and Sour Water Strippers 28.2 Sulfur Unit
\RM00507.D~R\0023602.08 - 1 B
.
15 Hexane Isom
3 FCC Unit
4 FCC Gas Plant
27.1 HOC Unit
27.2 HOC Gas Plant
43 Copper Treater
1oABc NGL Fractionation
17 Light Aromatics Recovery
19 Benzene Hydrogenation
Borger:
43 Sulfur Recovery Unit
22 HF Alkylation
9 Crude Unit
10 Crude Unit
.
34 Sulfur Recovery Unit
42 ARDS
11 Ethane Recovery Unit
29 Cat Cracker
28 Crude Unit
40 Cat Cracker
35 Amine Treater & Ha Dryers .
41 Hydrogen Unit
44 Amine & Sour Water Treater
6 Hexane Isom
Philtex:
Propylene Unloading and Storage
Ha System
SO, Unloading and Storage
Butadiene Unloading and Storage
woods cross:
7 HF Alkylation
10 Solvent Deasphalting
11 Straight Run Gas Plant
62 Propane Pit
\RMOO5O?.DER\-.06
3. Complete process hazard/process safety Four and one-half years from
management analysis on the following same
units:
Sweeny:
15 Benzene Hydrogenation
56 Waste Water System
22 Ethylene Plant
1OD NGL Fractionation
21 NGL Fractionation
11 Catalytic Reformer
14 Catalytic Reformer
24 Ethylene Plant
18 Propylene Fractionation
7 Heavy Aromatics Recovery
.
26.2 Hydrogen Purification Unit
20 Pentane Isomerization
25.2 Distillate HDS
Boreer:
19.2 Reformer
7 Reformer
22 NGL HDS
19 1 Naphtha HDS
19.3 Distillate HDS
36 HDS Treater
16. Propane Treater
4 Butane Isom *
5 Pentane Isom
6 Benzene Hydrogenation
26 Light Ends Recovery & Alky
Feed Treater
Philteq:
Dimethyl Sulfide Blending and Storage
Methyl Mercaptan Reaction and Storage
Propane Storage and Processing
Butane Storage and Processing
Anhydrous HCl Storage
Woods Cross:
4 TCC
6 Reformer
12 NHDS
68 Pressurized HC Storage
86 Pressurized HC Truck
Loading/Unloading
a7 Pressurized HC Railroad
..
Loading/Unloading
5 Vacuum
8 Crude
13 C5/C6 Isomerization
-
Complete process hazard/process safety Six and one-half years from same
management analysis on the following
units:Sweeny:
62 Clemens Terminal
68 Sweeny Tank Farm, #l
Pumphouse
88 Freeport Terminal #l
89 San Bernard Terminal
86 Truck Loading Rack
a7 Tank Car Loading Rack
6 MTBE Unit and Hydroisom
Unit
58 Pipelines
25 Crude Unit
9 Crude Unit
51 steam Plants
52 Water Treater
90 Jones Creek Terminal
92 Freeport Terminal #2Borger:
12 Pantex Cryogenic Gas Plant
No. 7 Cols. 35-42, 45
No. 1 Cols. 7, 9-12
No. 1 Cols. 13-17
No. 4 cols. 23-27
No. 4 Cols. 18-22
No. 6 Cols. 28-34
23 Straight Run Fractionator
Cols. 104,105,108,109,111,117
N-Butane Treater
2.1 Minalk Treater
13 Front end clean-up
NGL Train Rack
NGL Truck Rack
Above Ground Propane Storage and
Loading
MW NGL Feed System
E/P Caverns and Handling
Propane Caverns and Handling
Above Ground IC4 Storage and .
Handling
Above Ground NC4 Storage and
Handling
Isobutane Caverns and Handling
N-Butane Caverns and Handling
De-ethanized NGL Feed System
Alky Feed Caverns and Handling
Above Ground lC5 Storage and
Handling
Above Ground NC5 Storage and
Handling -
Complete actions recommended by As soon as practicable, but within
process hazard/process safety two years from completion of the
management analyses. process hazard/process safety
management analysis on each
unit3. Upon request by OSHA, Phillips shall make available to OSHA any
documents prepared pursuant to this Appendix “A” including verification of corrective
actions taken.
\RMOOW?.D[R\0023602.06
4. The parties recognize that circumstances may cause delays to occur,
such as construction or design problems and delays in obtaining necessary permits. If
the timetable contained herein cannot be met, Phillips will communicate that
information to OSHA, including the reason(s) for the delay and the expected completion
date(s). The parties agree that all undertakings by Phillips pursuant to this
Appendix “A” are part of a settlement of a dispute between the parties and do not
constitute an abatement of any unsafe condition.
5. All documents or other information made available by Phillips
under this Appendix shall be handled in accordance with Section 15 of the OSH Act,
29 U.S.C. Q 644, 18 U.S.C. 5 1905, and 29 C.F.R. 9 1903.9. Phillips will have the
obligation to identifjl the document, information, or portion thereof that contains
proprietary or confidential information. No later than six (6) months following
Phillips’ verification that it has completed all of the actions enumerated herein, OSHA
shall return to Phillips all copies of Phillips’ process hazard/process safety management
analyses, written management responses, and other safety analyses. OSHA shall not
thereafter retain any such copies.
60 OSHA agrees not to issue citations to Phillips for any working
conditions identified in the process hazard analysis or any other analysis required by
this Appendix, provided such conditions are being or will be addressed in good faith in
accordance with this Appendix (including correction, if necessary). Phillips agrees to
allow OSHA access to the above facilities to determine progress and compliance with
this Appendix. OSm agrees that, assuming good-faith implementation of this
Appendix by Phillips, it shall not conduct general schedule inspections, except that
OSHA may conduct monitoring inspections to determine compliance with this
Agreement. OSHA retains the right to conduct all other types of inspections permitted
under the OSH Act.
DATED August 22, 1991.
UNITED STATESof AMERICA
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
One Lafayette Centre
1120 20th Street, N.W. - 9th Floor
Washington, DC 20036-3419
FAX.
COM (202) 60+5050
fls (202) 60&5050
..
SECRETARY OF LABOR,
Complainant,
v.
..
PHILLIPS 66 COMPANY,
Respondent. Docket No. 90-1549
..
OIL, CHEMICAL AND ATOMIC WORKERS ..
INTERNATIONAL UNION, AND ITS ..
LOCALS 4-227 AND 2-578, ..
Authorized ..
Employee Representative. .
.
DECISION
BEFORE: FOULKE, Chairman, and MONTOYA, Commissioner.
BY THE COMMISSION:
On October 23, 1989, an explosion and fire occurred at Phillips 66 Company’s
(“Phillips”) plant called the Houston Chemical Complex (“HCC”) causing fatalities and
numerous injuries. The Department of Labor’s Occupational Safety and Health
Administration (“OSHA”) inspected the plant and issued numerous citations on April 19,
1990. In addition to citing Phillips for violations of general industry standards concerning
emergency exit plans, respirator use, and hazard communication, the Secretary also cited the
company for serious, willful violations of the “general duty clause,” 29 U.S.C. 8 654(a)(l),
section 5(a)( 1) of the Occupational Safety and Health Act of 1970, 29 U.S.C. $5 651-678,
for failure to furnish 566 employees with a workplace reasonably free of hazards. The
citations proposed penalties ‘amounting to over $5.6 million and required “immediate”
abatement of many conditions. The balance of the violative conditions were to be abated
in a matter of months. Phillips filed a timely notice of contest, and settlement negotiations
2
ensued. Although the authorized employee representative, the oil. Cht3micd LlliL m .
4
\liJ1711i
Workers International Union and its Locals 4-227 and 2-578 (“OCALV” N %IC i;;:!S:T’* i,i Ll,,
invited to take part in these discussions, it chose not to participate at that stage, On
August 37 1991 $ seventeen
Au, months after the citations had been issued, the Secretan, d of
Labor and Phillips reached an agreement (“Main Agreement”). The IbkCnAgreement not
only settled the contested citations for conditions at the HCC plant, but also established a
corporate-wide process safety management (“PSM”) program’ covering the cited plant and
several other, non-cited plants as well. The timetables for implementing various stages of
this program ranged from one to six and a half years.2
The settling parties submitted their agreement to the judge for approval. On
September 5,1991, before the end of the lo-day period specified in Commission Rule 100(c)
for considering employee objections to settlement agreements, the administrative law judge
approved this Main Agreement. The union, which had elected party status, filed a letter
with the Commission objecting to the reduction of penalties and claiming that it had been
deprived of its opportunity to review the agreement for the reasonableness of the abatement
periods. The Secretary concurred that the judge had approved the settlement prematurely.
The Commission, treating the union’s letter as a petition for discretionary review, set
aside the judge’s approval order and remanded the case to him for “development of the
necessary factual record and determination of the merits of the union’s objection to the
abatement periods prescribed by the . settlement
.
agreement.” In response to the Secretary’s
contention that the union would have no standing to object to portions of the settlement
agreement involving non-cited plants, the Commission stated, “[w]e express no opinion on - , .
the merits of that contention at this time,” directing the parties to present their positions to
the judge.
’ The PSM plan requires the completion of process hazard analyses for each location to prevent the incidence
and mitigate the consequences of a release of various harmful chemicals. The employer must also examine
its safety procedures during each phase of its operations. Corrective actions may include development of
contingency and emergency response planning, control over ignition sources, detonation traps, location of
physical facilities, employee training, and assignment of management authority and responsibility.
’ Although at the time of the inspection the Secretary had not issued a standard governing process safety
management, a PSM standard has since
e been
, promulgated. 29 C.F.R. 8 1910.119.
3
On remand, however, the union settled with the Secretary and L+*ithPhi/lip + Lc;!~’
M
0f two separate “Supplemental Agreements” therebv. eliminating tht: need for ‘1 i:~;ir;~~.
Y
under the terms of these agreements, the union agreed to withdraw its objections to the
ivain Agreement (including its extended abatement schedule) in exchange for notice of, and
an opportunity to attend, all meetings between OSHA and Phillips regarding the implemen-
tation of the corporate-wide PSM program. In keeping with the terms of the Supplemental
Agreements, the union filed a “withdrawal of objections” in a November 5, 1991 letter to
the judge and asked that the Main Agreement be approved immediately.
One week later, however, on November 12, 1991, the union notified the judge that
it wished to rescind that withdrawal of objections, claiming that it had made a mistake in
entering into the Supplemental Agreement with Phillips because, in the union’s view, the
agreement inadvertently failed to refer to the attendance of an International union
representative at certain meetings. According to the union’s lawyer,3 earlier that November
12th morning, Phillips’ lawyer called off the first PSM strategy meeting under the Main
Agreement, because, in the company’s view, the union had breached the Supplemental
Agreement by sending a representative of the International union to the meeting. The
company maintained that the only designated representative under the agreement was the
local union official, while the union claimed that someone from the International union was
also entitled to attend.4 The union did not ask the judge (or any other court) to enforce
the Supplemental Agreement as the union interpreted it, but sought instead to have the
contract voided altogether on the grounds of mistake.
3 We would emphasize that no evidentiary hearing was held in this case. The only “evidence”--other than
a batch of citations and three settlement agreements -- is the “certification” of the Union’s lawyer (signed
under penalty of perjury) as to what happened during the supplemental settlement negotiations and what
happened on November 12, 1991 at the first PSM strategy meeting under the Main Agreement. We have no
sworn testimony from Phillips or the Secretary as to what transpired.
’ Under the Supplemental Agreements, Phillips and the Secretary agree “to provide OCAW’s designated
representatives with notice of and opportunity to attend all meetings.” The agreements also state: The
designated representatives of OCAW are the Chairman of the Phillips plant group Workmen’s Committee
(HCC) and the President of OCAW Local 2-578 (Woods Cross).” Woods Cross was the non-cited plant in
Utah. Elsewhere in the agreements, OCAW international union officials are listed as being permitted to
discuss confidential information with the designated representative.
4
Despite resistance on the part of the Secretary and Phillips. ~v~o TALCJ T’\J~
enforcement of the Main Agreement, the judge summarily granted tht: mm’~ r.;:wn to
rescind. thus halting the implementation of the AMainAgreement ard again recpiring a
hearing on the union’s objections. By order of December 18, 1991, the judge directed the
parties to prepare for a hearing on the reasonableness of the abatement periods in the LVain
Agreement. The Secretary sought interlocutory review of this order, but the Commission
denied review.
In preparation for the hearing on the reasonableness of the abatement periods, the
judge issued an order on March 12, 1992, defining the scope of the issues and allocating the
burden of proof. When the union discovered from this order that the only subject of the
hearing was the abatement periods for those conditions actually cited at the HCC plant (to
which the union had no objection), that the corporate-wide PSM program was not to be an
issue at all, and. that the burden was to be on the union to prove the abatement periods -
were unreasonable, it informed the judge that a hearing would “not serve any useful
purpose” and asked for a final order so it could appeal to the Review Commission. On
April 6, 1992, the judge issued an order approving the Main Agreement.
The union petitioned for discretionary review of the judge’s April 6, 1992 settlement
approval order which, in keeping with his earlier order, had effectively rebuffed the union’s
objections to the extended abatement schedule in the Main Agreement. The Secretary
cross-petitioned for review of the judge’s December l&l991 order. Commissioner Montoya
directed the case for review in two directions for review dated March 23 and May 7, 1992.
Oral argument was heard on November 17, 1992. .
I. Jutidictiim
The Secretary and Phillips ultimately seek Commission approval of their Main
Agreement, while the union requests that the Commission withhold its approval until the
union has had an opportunity to challenge the abatement dates in the agreement. These
contentions raise the threshold question of whether the Commission’s authority extends to
agreements covering actions to be taken to change conditions that are not actually the
.
5
subject of any Ci~~tid Neither the parties nor the judge addressed the jurisdi;r: >I:.:: :+\~c
below, but we raised it ma sporzte at oral argument.
We conclude that under Commission precedent, our jurisdiction does extend to such
matters. In Davies Can CO., 4 BNA OSHC 1237, 1976-V CCH OSHD fl 20,704 (NO. 8182,
1976), the Commission assured a reluctant administrative law judge that he could have .
approved a corporate-wide settlement (covering both cited and non-cited conditions) in full.
The employer in Davies Can had admitted in. the settlement agreement that noise levels in
its Florida plant, as well as in its Ohio and Pennsylvania plants, exceeded the levels
permitted by the applicable standard. The judge approved the agreement as to the cited
Florida plant, but declined--for lack of jurisdiction--to approve the portions relating to plants
not mentioned in the citation. On review, the Commission drew on powers analogous to a
court’s “ancillary jurisdiction” to ratify the entire agreement as a whole. The Commission
explained:
In its simplest terms, the concept of ancillary jurisdiction provides that once
jurisdiction attaches to the primary dispute, a court is considered to have
jurisdiction over ‘subsidiary’ or ‘subordinate’ matters ‘even though it might not
independently be able to adjudicate them.’ The analogy holds up so long as
the subject matter is within the framework of the Commission’s adjudicative
duties under the Act.
Id. at 1238, 1976-77 CCH OSHD at 24,828, (citing Jersey Land & Dev. Cop v. United States
342 F. Supp. 48, 52 (D.N.J. 1972)). * Since the Secretary would be empowered to cite the
employer concerning the plants, and the employer would have a right to contest the
citations, the Commission saw the matter as falling within the scope of its authority. The
decision in Davies Can is factually similar to the case now on review and provides clear
Commission precedent on point. In fact, at oral argument, counsel for the Secretary
characterized Davies Can as being “on all fours” with the case now under consideration.
The concept of ancillary jurisdiction enables adjudicative bodies to serve both the
parties’ interests and the public’s interest in judicial economy at the same time:
5 This question is related to, but not the same as, the question of whether employee representatives have
standing to challenge abatement dat,es set forth in such agreements. That question is addressed in Oi&
Chemical and Atomic Workers Intl. Union (MC Fertilizer), Docket 91-3349 (August 20, 1993) also issuedtoday.
6
It is clear that the district court has the power to enforce: sett!ement
agreements reached by the parties in federal cases because ~)th~nvist: the
court would be frustrated in its effort to resolve cases over which it has been
given explicit jurisdiction by Congress. But it is equally true that the court’s
jurisdiction to enforce a settlement agreement must derive from its original ju-
risdiction over the complaint. Federal courts do not have common law
contracts jurisdiction, and they cannot enforce settlement agreements except
insofar as those agreements are ancillary to the resolution of cases over which
they do have jurisdiction.
United States v. Or Constr. CO., 560 F.2d 765 (7th Cir. 1977). Since the parties have chosen
to incorporate non-cited matters in an agreement they want treated as a whole and as a final
order, the non-cited matters are ancillary to the resolution of a case over .which even the
parties agree we do have jurisdiction.
The parties do not want the Commission to approve only those portions of the
settlement agreement related to citations, nor does the Commission have any interest in
severing settlement agreements or approving them in piecemeal fashion. Because we cannot
know what each party considers to be a satisfactory quidpro quo, our approving anything less
than the parties’ complete, integrated agreement would inevitably leave one party, or both,
bound by a reformed contract they never intended to make. This would only deter other
parties from attempting to negotiate settlements, a result that would far from serve the
interests of the employees the Act seeks to protect.
The Act provides a single, orderly enforcement scheme: If a violation is found during
an inspection, the Secretary must issue a citation and may propose a penalty, sections 8
through 10(a) of the Act, 29 U.S.C. 55 657 through 659(a); the Secretary may prosecute
contested citations in enforcement proceedings before the Commission, section 10(c) of the
Act, 29 U.S.C. 9 659(c); the Commission has sole authority to assess penalties, section 17(j)
of the Act, 29 U.S.C. 5 666(j); the Secretary may seek enforcement of Commission orders,
section 11(b) of the Act, 29 U.S.C. 8 660(b). See Donovan tr, OSHRC (Mobil Oil), 713 F.2d
918, 926 (2d Cir. 1983). The Act offers only one way to obtain summary enforcement of a
Commission final order, whether that order be the result of litigation or settlement, and that
is to follow the enforcement scheme set forth in the Act. With the authority to litigate a
case comes the authority not to. The Secretary’s power to settle claims advances the central
. .
7
***
purpose of the Act, which is to “reduce safety hazards and improve workiw 2 L’cT.~~~;v~:,
Doflovnrl V, I.&. Union, Allied [,1&s. Workem (cT/llirlpool), 722 F.2d 111% i-t?0 :hr:h Cir.
1983)? (citing Dale n/r. .kfadden Cons& Inc. v. Hod&on, 502 F.2d 278, 280 (9th Cir. 1974).
Under the Act’s enforcement scheme, the Secretary is not entitled to claim final order status
for a settlement agreement unless potential parties are accorded an opportunity to exercise
rights granted under section 10 of the Act. This cannot occur in the absence of Review
Commission jurisdiction.
Looking at the issue from a slightly different perspective, we consider Local NO. 93,
Intl.Assn. of Firefightersv. City ofCleveland,478 U.S. 501(1986), a case which stands for the
proposition that a court is not barred from entering a consent decree merely because the
decree provides broader relief than the court could have awarded after a trial. In that case,
. which the Secretary commended to us pending oral argument, certain minority firefighters
lodged a discrimination complaint against the city. The Supreme Court upheld a settlement
agreement that provided relief benefiting individuals who could not have maintained their
OWTI
action in court. The Secretary apparently offers this case to support his argument that
the Commission and the courts may approve settlement agreements like the one in this case
that encompass more than citations. We conclude that applying LocalNo.93 requires the
same result as Davies Can. If there had been a hearing on the citations in Davies
Can,the
Commission could not have ordered the company to abate noise hazards beyond those listed
for the Florida plant in the formal citation, i.e., hazards at the Ohio and Pennsylvania plants,
but the Commission could, and did, approve a settlement agreement accomplishing just that.
In this case, had the matter gone to a hearing on the citations, the Commission could not,
of its own accord, have affirmed an order compelling Phillips to implement a PSM plan at
any plant, because not all the hazards the corporate-wide PSM plan is intended to abate
were among the hazards formally listed in the citation. However, the Commission can, and
in this decision, does, approve a settlement agreement accomplishing just that.
The Supreme Court in Local No. 93 cautioned that “[tlhis is not to say that the
parties may agree to take action that conflicts with or violates the statute upon which the
complaint was based.” Id. at 526. In this case, in light of our resolution of the “rescission
.
8
issue,” i.e., the union’s attempts to rescind the agreement on the basis of mistake. dicta ir~!r:~ - .
we do not reach the ultimate issue of whether the .parties have agreed ~1 takt: action rhat
conflicts with the OSH Act by seeking approval of the Main Agreement without having first
defended the reasonableness of the abatement periods challenged by the emplovee
d
representative. That issue is addressed in Oil, Chemical and Atomic Workers Intl. union
(I&K Fertilizer), Docket 91-3349 (August 20, 1993).
We conclude that the Commission does have jurisdiction to review settlement
agreements as a whole, including those which cover actions to be taken to change conditions
that are not actually the subject of any citation.
II. Did the Judge Em in Granting the Union’s Motion for Rescission?
In his December 18, 1991 “Ruling on Post-Remand Motions,” the judge--without
. taking any evidence--granted the union’s motion to rescind its November $1991 withdrawal
of objections to the Main Agreement. As counsel for the union acknowledged at oral
argument, “I must say . . . one of our handicaps in this case is that, there is no record . . . .
There is no transcript. And we have said in our brief that, if the Commission is not ready
to affirm the judge’s decision on rescission, then it should be remanded for a hearing, so we
have a factual record to go on.” For the following reasons, and subject to the following
rulings, we remand this case to the judge for further evidentiary proceedings to develop the
relevant facts and resolve the remaining issues as outlined below.
A. Validity of the Union/Secretary Agmemmt
As a preliminary matter, we must resolve the issue of the impact of the
Union/Secretary agreement on this case. The union promised, in both Supplemental
Agreements, to withdraw its objections to the Main Agreement in exchange for the
opportunity to participate in the PSM plan meetings. As the Secretary points out, “[n]o
infirmities or misunderstandings have been alleged” as to the Union/Secretary agreement;
the union claimed that only the Union/Phillips agreement was based on a mistake. In other
words, the Secretary is arguing that the Union/Secretary agreement, technically left
unassailed by the union, remains intact regardless of whether the Union/Phillips agreement
stands or falls. The Secretary cites federal cases supporting the principle that settlement
agreements are contracts, and as such are binding and enforceable under familiar principles
. .
9
of contract law, not subject to unilateral rescission. Village of Kaktotik 1~.Wut. 689 F.‘d 2:~.
230 (D.c. Cir. 1982), Dacanay v, Mendma, 573 F.2d 1075? 1078 (9th Cir. 1975). .Srr+y 1’.
GL@& s. Am. SS. CO., 495 F.2d 1235 (5th Cir. 1974).
The union argues, on the other hand, that “[n]o agreement has ever existed between
Phillips and the Secretary whereby the Secretary can require Phillips to allow for the union’s
participation. Instead, both the Secretary and Phillips must contemporaneously perform
their respective duties to the union in order for the union to receive its due consideration.”
It ‘argues that without cooperation among the Secretary, Phillips and the union, no party
would receive the benefit of the bargain it had struck. Drawing on the traditional contract
principle of “mutuality of obligation,” the union contends that the Commission should not
look at the Union/Secretary agreement in a vacuum, as if the Union/Phillips agreement did
not exist. According to the union, “an agreement with the Secretary is worthless without a
concurrent agreement with Phillins.”
The judge’s decision Hers no clue as to how he viewed the interplay of the two
Supplemental Agreements. We conclude that while the two supplemental agreements are
drafted so that neither one refers to the other, the parties nevertheless intended to bind
themselves in a tripartite agreement, with interdependent rights and obligations. We
therefore find that the two supplemental agreements must be construed as one.
B. Abuse of Disctetim Based on Factual Emw
The union argued, in its brief in support of its rescission motion before the judge,
that the Supplemental Agreement was based on a mutual mistake and should therefore be
voided. The Secretary and Phillips countered that there was no such mistake and that the
language of the agreement was clear, unambiguous, and legally binding.
1. Judge’s Ruling and Parties’ Positiims
The judge’s ruling on the rescission motion did not address the parties’ contract law
arguments or their policy arguments favoring the finality of settlements. Instead, the judge
seemed to focus solely on how fast the union had discovered the problem. Although one
week had passed between the time the union agreed to withdraw its objections and the time
it tried to rescind that withdrawal, the judge came under the misimpression that the union
had changed its mind only thirty-six minutes later. Documents in the record show that at
10
hm
1756 p.m. on November 12, 1991, the Secretary had faxed the judge a copy et’ thz ~;:!~+l;
November 5, 1991 letter withdrawing its objections. Thirtv-six
4 minutes later. at 1:32 P.m. On
November L,7 the union faxed the judge a letter attempting to rescind the November 5th
.
withdrawal. The judge concluded that if the union SO quickly found reason to rescind its
withdrawal, “it is clear that no mutual meeting of the minds was reached.” He also stated
that “the essence of a settlement agreement is, of course, the uncoerced agreement of the
parties to the terms of the document” and that “the emergence of a mutually satisfactory
settlement agreement is the overriding consideration in these circumstances.” The judge
voided the Supplemental Agreements and reinstated the union’s objections, thus halting the
implementation of the Main Agreement.
The Secretary argues that because the judge appeared to be SO impressed with the
36.minute time lapse, his decision was based substantially on clear, factual error. He
contends that the judge abused his discretion and must be reversed. See, e.g., Sealtite Cop.,
15 BNA OSHC 1130, 1134 n.7, 1991 CCH OSHD ll 29,398, pp. 39,582.83 n.7 (No. 88-1431,
1991).
2. Analysis
The question “How soon was the mistake discovered and notice given?” is among the
dozen or so factors traditionally considered in determining whether a contract should be
voided on the basis of mistake. (Others include whether the mistaken fact was of substantial
importance; whether both parties, or only one, was mistaken and whether that party was
negligent; whether one party knew or had reason to know of the other’s misunderstanding;
and whether either party, or a third party, changed its position, precluding a return to the
status quo.) See 3 Co&n on Contracts, 3 597 (1960). However, the time-lapse factor is by
no means dispositive of the issue of whether a mistake existed, or if so, what remedy is
appropriate. Although the judge was mistaken as to the exact amount of time it took for
the trouble with the agreement to emerge, this does not mean that his decision must be
reversed for factual error. For the judge, the “overriding consideration” was the absence
of a “mutually satisfactory settlement agreement.” We therefore conclude that the judge’s
misunderstanding of the timing of the withdrawal does not, by itself, require reversal of his
order.
11
C. Rescission On G~OU&Sof Mistake
We turn finally to the issue of whether the Supplemental Agreement i$‘;tj pr~~perivd
rescinded on grounds of mistake. Mistake, along with fraud, illegality, and accident, are
generally accepted grounds for invalidating a contract. As counsel for Phillips, however,
explained at oral argument:
[The contract] is to be performed in Texas and Utah. It was negotiated in
Washington, D.C. Phillips 66 signed it, in Oklahoma. A representative of the
International Union was supposed to sign it in Denver. And it was drafted by
both myself and Mr. Wodka [counsel for the union]; myself, in Texas, and Mr.
Wodka, in New Jersey.
Now, I would not want to figure out that conflict of law problem,. and
I do not think it is necessary to.
These representations raise questions as to whether state law or federal common law
governs, but neither the union nor the Secretary explicitlv addresses the choice of law issues
4
that this case presents.
1. choice of Law
The union seems to rely heavily on Texas state law, citing two Texas cases to support
the notion that without a “meeting of the minds,” there can be no contract. Volp v.
Schlobohm, 614 S.W.2d 615 (Tex. Civ. App. 1981) and Smulcer v. Rogers, 256 S.W.2d 120
(Tex. Civ. App. 1953). The union also cites a legal treatise for the proposition that relief
is only appropriate in exceptional circumstances, where a mistake of both parties upsets the
very basis for the contract in such a way as to have a material effect on the agreed exchange
of performances.
The Secretary expresses no position on choice of law, but Phillips makes an argument
in another context, also relevant here, that the enforceability of settlement agreements in dis-
putes based on federal law is itself determined under federal law, citing 0~. The court in
that case, construing a settlement agreement of an action brought under the federal Miller
Act, stated:
It would be anomalous to utilize state law to determine the validity of the
settlement agreement reached by the parties in this case when federal law
governs the substantive rights of the parties and provides the basis on which
the parties were able to bring the matter into federal court in the first place,
and when jurisdiction over the settlement agreement only exists as a derivative
12
of the original federal action. We therefore hold that the enforceabilitv e i-~ftht:
. . . agreement must be decided as a matter of federal law.
Id. at 769.
Other circuits concur. E.g., Stider V. Circle K COP*, 923 F.zd 1404, 1406 (10th Cir.
1991) (“[allthough Title VII settlement agreements are contracts, they are inextricably linked
to Title VII. Federal common law governs the enforcement and interpretation of such
agreements because the ‘rights of the litigants and operative legal policies derive from a
federal source”‘); Ibarra v. Texas Employment Commn., 823 F.2d 873, 877 (5th Cir. 1987)
(court applies federal law to dispute involving consent decree under FUTA); GamewellMfg.
v. WAC Supply,Inc., 715 F.2d 112, 115 (4th Cir. 1983) (“Gamewell”) (court applies federal
law to resolve dispute over settlement of federal patent law case). Accordingly, we find that
disputes involving settlements of OSHA litigation are to be resolved in accordance with
federal common law principles.
2. Consi&?ratiOns on
Because there is a scant record in this case, the Commission knows very little about
the intentions of the parties other than what appears in the documents. According to the
union lawyer’s “certification” (the only evidence we have in this case other than the
documents, see supra note 3), the union “felt that if it could gain full access to the oversight,
review, and other consultations between OSHA and Phillips during the abatement period,
it might be able to encourage Phillips
. and OSHA to accelerate the abatement of those
hazards which the union believed were posing the greatest urgency for correction.” The
union’s lawyer continued in this submission with his version of what happened:. .
For purposes of efficiency, the agreement designated a local union official as
a contact point for OSHA and Phillips to use in sending correspondence to
the union and in making arrangements for meetings, but this person is not the
only union representative who may attend the meetings. In the last paragraph
of [the agreement], Phillips agreed to pre-approve several International Union
officials, including the assigned International Representative, to receive the
company’s confidential information. TIte union understood this paragraph as
Phillips’ agreement to the possible attendance of these International Union
oficiak at the meetings between Phillips and OSHA. Apparently, the union was
mistaken on this point.
13
(Emphasis added).
The Secretary characterizes the position taken by the union in this submission ;fs
“indefensible” and “unsupportable,” maintaining that neither he nor Phillips had anv4 reason
to suspect that the union was interpreting “designated representatives” as meaning someone
other than the two local officials specified in the agreement. Under the plain terms of the
contract, he argues, “there is no plausible basis l . . for asserting that a mistake has occurred,
preventing a meeting of the minds.” We find this contention particularly compelling on its
face. Phillips emphasized this point at oral argument, and the union offered nothing in the
way of explanation or rebuttal. On remand, the clear language of the agreement,
particularly the stated definition of “designated representative” in the Supplemental .
Agreements, shall weigh heavily in the judge’s consideration.
It is generally true that if the language of a settlement agreement is unambiguous, its
meaning must be discerned within the “four comers” of the agreement. United stcz~~ V.I77’
I U.S. 223, 236 (1975). However, parol evidence, ie., extrinsic oral or
Cont. Baking Co., 420
written testimony, is admissible to prove fraud, illegality, accident or mistake, even if the
testimony contradicts the terms of a complete integration in writing. See 3 Corbin, 3 580.
In the case now under consideration, the definition of “designated representative” and the
role of the designated representative in the PSM plan seems to us to be unambiguously set
forth in the contract. On remand, relevant parol evidence, if any, will be admissible.
III. otder
We remand this case to the judge for an evidentiary hearing on the issue of whether
the Supplemental Agreement was based on a mistake requiring rescission under principles
of federal common law.
If the judge finds reason to rescind the Supplemental Agreement, thus releasing the
union from its terms, the judge shall then conduct a hearing on the merits of the union’s
substantive claims of unreasonable abatement periods, in accordance with our decision in
IlMC F’etiZheE6 If, on the other hand, the judge finds no cause to rescind the Supplemental
6 In any such hearing, the burden of proving reasonableness of the abatement periods shall reSt with the
Secretary. See ffiwecki-Berylco Indus., 1 BNA OSHC 1210, 1971-73 CCH OSHD fl 15,682 (No. 1942, 1973),
and Commission Rule 38(a).
14
Agreement, the union’s objections to the Main Agrmnent will be automaticall~~ ~~~~~~~~~~~~~~
*
as agreed to in the Supplemental Agreement. The judge shall then review and appri>tc the
LMain Agreement, as already sought by the parties, in accordance.with IMC Fertilizer.
_A_&
Edwin G. Foulke, Jr.
Chairman
Yyy
Velma Montoya
Commissioner
.
Dated: August 20, 1993
UNITED STATES OF AMERICA
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
One Lafayette Centre
1 I 20 20th Street, WV. - 9th Floor
Washington, DC 20036-3419
=4x
COM !202)606-9%
FTS (202)6064050
Secretary of Labor,
Complainant,
..
v. ..
Docket No. 90-1549
..
PHILLIPS 66 COMPANY,
Respondent.
..
OIL, CHEMICAL AND ATOMIC ..
’ WORKERS INTERNATIONAL ..
UNION, AND ITS LOCALS ..
..
4-227 and 2-578, .
Authorized ..
Employee Representative. ..
NOTICE OF COMMISSION DECISION AND REMAND ORDER
The attached Decision and Order of Remand by the Occupational Safety and Health Review
Commission was issued on Aueust 20, 1993. The case will be referred to the Office of the Chief
Administrative Law Judge for further action.
FOR THE COMMISSION
August 20, 1993
Date Ray H. Darling, Jr.
Executive Secretary
Docket NO. 90-1549
XOTICE IS GIVEN TO THE FOLLOWING:
Daniel J. Mid, Esq.
Counsel for Regional Trial Litigation
Office of the Solicitor, US. DOL
Room S4004
200 Constitution Ave., N.W.
Washington, D.C. 20210
James E. White, Esq.
Regional Solicitor
Office of the Solicitor, U.S. DOL
Suite 501
525 S. Griffin Street
Dallas, TX 75202
R. Michael Moore, Esq.
Fulbright & Jaworski
1301 McKinney, Suite 5100
Houston, TX 77010
Steven H. Wodka, Esq.
21 Rosslyn Court
Little Silver, NJ 07739
George H. Cohen, Esq.
Jeremiah A. Collins, Esq.
Bredhoff & Kaiser
1000 Connecticut Ave., N.W.
Washington, D.C. 20036
Gregory Mooney
General Counsel
Oil, Chemical and Atomic
Workers International Union
P.O. Box 2812
Denver, CO 80201
James R. Mob, Esq.
Wildman, Harrold, Allen and Dixon
335 West Wacker Drive
Chicago, IL 6060601229
Prentice H. Marshall, Jr., Esq.
Sidley & Austin
One First National Plaza
Chicago, IL 60603
Louis G. LaVecchia
Administrative Law Judge
Occupational Safety and Health
Review Commission
Federal Building, Room 7811
1100 Commerce Street
Dallas, TX 75242.0791
UNITED STATES OF AMERiCA
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
1825K STREET N.W.
4TH FLOOR
WASHINGT=ON D.C. 20006-I 246
.
.
.
Secretary of Labor, .
Complainant, :
.
v. .. Docket No. 90-1549
Phillips 66 Company, .
l
Respondent. :
..
NOTICE OF DOCKEllNG
The Administrative Law Judge’s Report in the above referenced case was docketed with the
Commission on September 13,199l. The decision of the Judge will become a final order of the
Commission on October 15, 1991 unless a Commission member directs review of the decision
on or before that date. ANY PAFW DESIRING REVIEW OF THE JUDGE’S DECISION BY THE
COMMISSION MUST FILE A PtON FOR DISCRETIONARY REVIRN. Any such petition should
be received by the Executive Secretary on or before October 3,199l in order to permit sufficient
time for its review. See Commission Rule 91, 29 C.F.R. Q 2200.91.
All further pleadings or communications regarding this case shall be addressed to:
Executive Secretary
Occupational Safety and Health
Review Commission
1025 K St., N.W., Room 401
Washington, D. C. 20006-t 246
Petitioning parties shall also mail a copy to:
Daniel J. Mick, Esq.
Counsel for Regional Trial Litigation
Office of the Solicitor, U.S. DOL
Room S4004
200 Constitution Avenue, N.W.
Washington, D.C. 20210
If a Direction for Review is issued by the Commission, then the Counsel for Regional Trial
Litigation will represent the Department of Labor. Any party having questions about review rights
may contact the Commission’s Executive Secretary or call (202) 634-7950.
FOR THE COMMISSION
‘W
Q
//c CL”3
W
September 13, 1991
Date Ray H. Darling, Jr.
Executive Secretary
Xcket No. 90-1549
NOTICE IS GIVEN TO THE FOLLOWING:
Daniel J. Mick, Esq.
Counsel for Regional Trial Litigation
Office of the Solicitor, U.S. DOL
Room 54004
200 Constitution Ave., N.W.
Washington, DC. 20210
James E. White, Esq.
Regional Solicitor
Office of the Solicitor, U.S. DOL
Suite 501
525 S. Griffin Street
Dallas, TX 75202
- R. Michael Moore,’ Esq.
Fulbright & Jaworski
1301 McKinney, Suit8 5100
Houston, Texas 7701 O-3095
Tom Gentry
President
Oil, Chemical and Atomic Workers .
International Union
Local No. 4-227
2306 Broadway
Houston, TX 77012
Louis G. LaVecchia
Administrative Law Judge
Occupational Safety and Health
Review Commission
Federal Building, Room 7811
. 1100 Commerce Street
Dallas, TX 75242-0791
l
.
UNITED STATES OF AMERICA
OCCUPATIONAL SAFETY AND HEALTH REVIEW COM&WSION
LYNN MARTIN, Secretary of Labor, 9
United States Department of Labor, §
Q
Complainant, 9
§ OSHRC Docket
V. 9 No. 90-1549
9
PHILLIPS 66 COMPANY, Q
9
Respondent. §
NG SETTLEMENT AGmNT
A Stipulation and Settlement Agreement has been filed in this case
which disposes of all issues pending before the Review Commission.
Upon
consideration, it is ORDERED:
1. The Stipulation and Settlement Agreement is approved and its
terms are incorporated into this Order.
The citations are afXiied as modified in that Agreement.
an3573
. ,
UNITED STATES OF AMERICA
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
LYNN MARTIN, Secretary of Labor, §
United States Department of Labor, §
§
Complainant, §
Q OSHRC Docket
V. § No. 90-1549
§
PHILLIPS 66 COMPANY, 9
§
Respondent. §
STIPULATION AND SETTLEMENT AGREEMENT
Phillips 66 Company (“Phillips”) and Lynn Martin, Secretary of Labor,
United States Department of Labor (“Secretary” or “OSHA”), in settlement of the
captioned case, pursuant to 29 C.F.R. Q 2200.100, hereby agree to the following.
This Agreement disposes of any and all issues contained in that case.
1. To supplement and enhance existing safety practices and
procedures, Phillips agrees to implement process safety management procedures at
its Houston Chemical Complex (“HCC”) pursuant to the terms of this Agreement.
The goal of the process safety management system is to prevent the incidence and
mitigate the consequences of uncontrolled releases of highly hazardous chemicals.
The process safety management system shall: (1) provide a systematic approach to
identifying, evaluating, and controlling hazards in the processes listed herein;
(2) provide a management structure to address the findings of’ the process hazard
analysis; (3) recommend corrective action; and (4) confirm and document completion
or other disposition of recommended corrective actions. The core component of the
process safety management system at HCC shall be a process hazard analysis for
each process that has the potential for an uncontrolled release of highly hazardous
chemicals, and separate process safety management analyses to assess factors
bearing on the overall safety of the HCC. The processes subject to this Agreement
are as follows: (1) polyethylene units; (2) developmental unit; (3) polypropylene
unit; (4) K-Resin unit; and (5) neohexene unit.
2. The process hazard analysis shall be conducted by Phillips or
under its direction utilizing a methodology that will best address the hazards of the
particular process at issue. The process hazard analysis shall include, but not be
confined to, (1) a human factors analysis of working conditions that may adversely
impact the safety performance of HCC personnel and potentially contribute to
accident event sequences, and (2) an analysis of the safety effectiveness of process
hardware, piping, valving, and instrumentation, especially during maintenance
operations or upset/emergency conditions. The process hazard analysis shall be
performed by individuals with expertise in engineering and in process operations.
The team shall include at least one person with experience and knowledge specific to
the hazard or process under evaluation, and be led by an independent consultant.
Such independent consultant has been retained by Phillips.
3. In addition to the process hazard analysis, Phillips will address
the following issues in separate process safety management analyses to ensure that
these areas conform with applicable OSHA standards or generally accepted industry
practices: (a) the adequacy of its safety permit and hot work permit procedures,
including enforcement; (b) compliance with OSHA’s standard regarding
lockout/tagout of energy sources during maintenance operations; (c) proper
classification of hazardous locations and control over the introduction of ignition
sources into such hazardous locations; (d) contingency planning for upset conditions
.
and emergency response planning; (e) upset and emergency condition detection
systems, and systems to mitigate the scale of hazardous chemical releases; (f) the
siting, separation, design and configuration of physical facilities and equipment to
ensure that the facilities are designed, maintained, inspected, tested and operated in
a safe manner; (g) the training of operators, technicians, and maintenance
personnel, including HAZCOM training, (h) the safety of existing Standard
Operating Procedures and maintenance procedures; and (i) the assignment of
authority and responsibility to identify and correct hazardous conditions.
4. Phillips agrees that the process safety management system will
promptly address the findings of each process hazard analysis and process safety
management analysis and develop appropriate recommendations. This management
system shall (1) implement and document any actions taken pursuant to the process
hazard/process safety management analyses; (2) communicate such actions to
\RhW5O?.D[R\0025478.06 -3 a
operations, maintenance or other personnel who work in the facility, including
contractor employees whose working conditions are affected by the findings and
recommendations of an analysis; and (3) assure that all corrective action is
imp emented according to this Agreement.
Phillips management will prepare written responses to each process
haz i .rd analysis. If, upon consideration of the recommendations contained in the
process hazard analysis, management determines that corrective action’ is required,
that action will be taken. If management disagrees with a hazard assessment or
recommendation contained in a process hazard analysis, the written response shall
explain and justify the disagreement.
5. Within thirty (30) days after execution of this Agreement,
Phillips shall provide the OSlU Houston Area Office with the name of a
management contact person for HCC. The management contact person shall meet
with the OSHA Houston Area Director within sixty (60) days there&r, and as
necessary to review actions planned or undertaken by HCC pursuant to this
Agreement. Such meetings can be requested by OSHA or Phillips.
60 Phillips agrees to provide the OSHA Houston Area Of&e with a
certified copy of the process hazard/process safety management analyses and any
management responses thereto, and to review with OSHA any comments or
recommendations it may have upon request.
7 a Phillips agrees to conduct the process hazard/process safety
management analyses required by this Agreement, provide copies of’ such analyses
and management responses to OSHA, and address any recommended corrective
actions contained in or arising from such analyses, in accordance with the following
schedule:
Task ComDletion Date
-
Identify process hazard/process safety 30 days from date of final
management analysis staff. Commission Order -
Complete process hazard/process 1 year from same
safety management analyses. -
Provide OSHA Houston Area Office 1 year from same
with process hazard/process safety
management analyses.
4 l Provide OSHA Houston Area Office 30 days from completion of
with management responses. analyses
- Complete actions recommended by As soon as practicable, but
process hazard/process safety within 2 years from completion
management analyses. of Step 28. If the schedule contained herein cannot be met, OSHA will not
unreasonably deny a timely-filed petition for modification of abatement. 29 C.F.R. . -
7 1903.14a.
9. Phillips further agrees that on or before the scheduled
completion date for each numbered task in Paragraph 7 above, it will transmit
written verification to the OSHA Houston Area Office that the task has been
completed as scheduled.
\RMOO507.DI.R\OO25478.06 -5 I)
10 . Phillips further agrees to provide to OSHA an evaluation, to be
conducted by an independent consultant, of the adequacy of settling leg maintenance
procedures performed while polyethylene reactors are in operation. This evaluation
will be forwarded to the OSHA Houston Area Office no later than six (6) months
from the date of a final Commission Order.
11 l If OSHA disagrees with Phillips’ determination of (1) the
assessment of a process safety hazard, (2) the need for corrective action, or (3) an
appropriate time frame for executing corrective action, OSEIA will state its points of
disagreement, and the reasons therefor, in writing so that Phillips may review them.
OSHA and Phillips will then engage in good faith discussions to resolve the
disagreement. This paragraph shall not limit OSHA’s right to tise, as appropriate,
enforcement methods provided by the OSH Act.
.
12. Phillips agrees to develop and maintain a compilation of written
safety information to enable Phillips and all exposed employees, including contractor
employees, to identify and understand the specific hazards posed by the processes
involving highly hazardous chemicals present at HCC. This safety information will
be communicated to all exposed employees, including contractor employees, and
shall describe the hazards of the highly hazardous chemicals used in the process, as
well as information pertaining to the equipment and technology involved in the
process. In addition, Phillips agrees to develop and implement written operating
procedures to provide clear instructions for safely conducting process and
\RM00507.DCR\00!2!5478.06 -6 m
maintenance operations consistent with the process safety information it develops.
The steps required by this paragraph shall be completed within 90 days of the
completion of the process hazard/process safety management analyses required
under q 7.
13 . Phillips agrees to train each employee involved in a covered
process or maintenance operation in an overview of the process and in pertinent
operating procedures for that process. The training will emphasize the specific
safety and health hazards of the process, and safe operating procedures and
practices applicable to the process. Refresher and supplemental training shall be
provided at least annually in the event the process does not undergo significant
change, or concomitantly with any process change or modification to ensure
understanding and adherence to the current operating procedures of the process or
maintenance operation. Such training will be completed prior to assigning an
employee to a process or maintenance operation.
14 . Phillips agrees to inform any contractor performing work on, or
near, a process, of the known potential fire, explosion or toxic release hazards
related to the contractor’s work and the process, and ensure that contractor
employees are trained in the work practices and emergency procedures necessary to
safely perform their job.
15 . Phillips will implement a process safety management system at
its Borger Refinery & NGL Process Center, Philtex/Ryton Complex, Sweeny
Refinery & Petrochemical Complex, and Woods Cross Refinery in accordance with
the terms and timetable provided in Appendix “A,” which is incorporated herein by
reference.
16l All documents or other information made available by Phillips
under this Agreement shall be handled in accordance with Section 15 of the OSH
Act, 29 U.S.C. Q 644, 18 USC. Q 1905, and 29 C.F.R. Q 1903.9. Phillips will have
the obligation to identifjt the document, information, or portion thereof that
contains proprietary or confidential information.
.
17. OSHA agrees not to issue citations to Phillips for any working
conditions identified in the process hazard analysis or any other analysis required by
this Agreement, provided such conditions are being or will be addressed in good
faith in accordance with this Agreement (including correction, if necessary). Phillips
agrees to allow OSHA access to HCC to determine progress and compliance with
this Agreement. OSHA agrees that, assuming good-faith implementation of this
Agreement by Phillips, it shall not conduct general schedule inspections, except that
OSHA may conduct monitoring inspections to determine compliance with this
Agreement. OSHA retains the right to conduct all other types of inspections
permitted under the OSH Act.
18. No later than six (6) months following Phillips’ verification that
it has completed all of the actions enumerated in Paragraphs 1 through 14 of this
Agreement, OSHA shall return to Phillips all copies of Phillips’ process hazard
.
analyses, written management responses, and other safety analyses. OSHA shall
not thereafter retain any such copies.
19. OSHA amends Citation No. 1, Inspection NO. 106612433 issued
April 19, 1990, to delete any characterization of the alleged violations contained
therein.
20 . Phillips agrees to pay the amount of FOUR MILLION
DOLLARS ($4,000,000.00) in settlement of Citations Nos. 1 and 2,. as amended,
Inspection No. 106612443 issued April 19, 1990, within thir@ (30) days of a final
Order of the Commission.
21 . The parties agree that this Settlement Agreement shall become
the final Order of the Commission and an agreed Order is attached hereto. The
terms hereof shall be subject to enforcement under Q 11(b) of the Act. Phillips
consents to the entry of such an Order by the Circuit Court of Appeals.
22 . The parties agree that the Citation as amended and Notification
of Proposed Penalty, Complaint, Answer, Stipulation and Settlement Agreement,
Phillips’ Notice of Contest, Phillips’ failure to continue to contest, Phillips’
abatement of the alleged violations, Phillips’ payment provided herein and the
Commission’s Final Order entered herein shall not constitute any evidence or
admission on the part of Phillips of any violation of the Occupational Safety and
Health Act or regulations or standards promulgated thereunder. None of the
foregoing shall be admitted into evidence, in whole or in part, in any proceeding or
litigation in any court, agency Or fOmm, except in proceedings brought directly
under the Act by the Secretary. The contents of the Stipulation and Settlement
Agreement are for the exclusive benefit of the parties hereto, and none of the
foregoing constitute evidence or an admission on the part of Phillips that any of the
conditions alleged in the Citations or Complaint existed or were a cause, proximate
or otherwise, of any accident, or damages, if any, resulting therefrom. Phillips is
entering into this Settlement Agreement without any prejudice to its rights to raise
any defense or argument in any future or pending cases before the Comm&ion or in
any other proceedings, including but not limited to the right to assert that any
future conditions identical or similar to those alleged in the original Citations or the
Complaint do not violate the Occupational Safety and Health Act or any standard
promulgated thereunder. By entering into this Settlement Agreement Phillips does
not admit the truth of any alleged facts, any of the characterizations of Phillips’
alleged conduct or any of the conclusions set forth in the Citations or Complaint
issued in this matter regarding the standards cited therein.
23 . Phillips certifies that the names and addresses of all authorized
employee representatives of affected employees are:
oil, Chemical and Atomic Workers
International Union, AFL-CIO
Local Union No. 4-227 (clerical group)
F. G. Bunch
2306 Broadway
Houston, Texas 77012
Telephone No. (713) 649-2714
Facsimile No. (713) 645-2426
Oil, Chemical and Atomic Workers
International Union, AFL-CIO (clerical group)
Joe Campbell
2306 Broadway
Houston, Texas 77012
Telephone No. (713) 649-2714
Facsimile No. (713) 6452426
Oil, Chemical and Atomic Workers
International Union, AFL-CIO
Local Union No. 4-227 (plant group)
B. G. Martinez
2306 Broadway
Houston, Texas 77012
Telephone No. (713) 649-2714
Facsimile No. (713) 645-2426
Oil, Chemical and Atomic Workers
International Union, AFLCIO -(plant group)
Joe Campbell
2306 Broadway
Houston, Texas 77012
Telephone No. (713) 649-2714
Facsimile No. (713) 645-2426 .
International Brotherhood of Electrical Workers
Local Union No. 716
G. G. Welch
1475 North Loop
Houston, Texas 77008
Telephone No. (713) 869-8900
Facsimile No. (713) 868-6342
International Brotherhood of Electrical Workers, AFL-CIO
J. D. Muhl
1475 North Loop
Houston, Texas 77008
Telephone No. (713) 869-8900
Facsimile No. (713) 868-6342
-ll-
Phillips further certifies that there are no other unions representing affected
employees except as set forth above.
24 . The Secretary certifies that service of the
Settlement Agreement was made on each authorized employee representative by
facsimile transmission on August 21, 1991. Affected employees have not raised
objections to the reasonableness of any abatement period specified herein.
25 . Each party agrees to bear its own fees and other expenses
incurred by such party in connection with any stage of this proceeding.
DATED August 22,199l.
FOR PHILLIPS 66 COMPANY ENT OF LABOR
BY 9 OL r( &wLLA&
8ohn VanBuskirk
Senior Vice President Deputy Assistant Secretary
Occupational Safety and Health
Administration
ROBERT P. DAVIS
Solicitor of Labor
Counsel for Phillips 66 Company
JAMES E. WHITE
Regional Solicitor
JACK F. OSTRANDER
Counsel for Occupational
Safety and Health
\RMW5O?.DIR\OO25478.06 ‘8 -12-
Senior Trial Attorney
JANICE L. HOLMES
Trial Attorneys
.
. .
APPENDIX “A” TO
STIPULATION AND SETTLEMENT AGREEMENT
BETWEEN PHILLIPS 66 COMPANY AND LYNN MARTIN,
SECRETARY OF LABOR. UNITED STATES DEPARTMENT OF LABOR
Phillips 66 Company (“Phillips”) and Lynn Martin, Secretary of Labor,
United States Department of Labor (“Secretary” or “OSHK’), hereby agree to the
following:
1 l Phillips agrees to implement a process safety management system
at its Borger Refinery & NGL Process Center, Philtex/Ryton Complex, Sweeny
Refinery & Petrochemical Complex, and Woods Cross Refinery. This system will be a
comprehensive process safety management system which includes but is not limited to
the steps described in the Agreement to which this ADDendix “A” is attached.
aa
2. Phillips agrees to abide by the following timetable:
Task Completion Date
-
Identify process hazard/process safeti 30 days from date of final Review
management analysis staff. . Commission Order -
Complete process hazard/process safety Two and one-half years from date
management analysis on the following of final Review Commission -
units: OrderSweenv: * 26.1 ARDS Unit, A Train 30 HF Alelation Unit 26.1 ARDS Unit, Trains A and B 28.1 DEA Regenerators and Sour Water Strippers 28.2 Sulfur Unit
\RM00507.D~R\0023602.08 - 1 B
.
15 Hexane Isom
3 FCC Unit
4 FCC Gas Plant
27.1 HOC Unit
27.2 HOC Gas Plant
43 Copper Treater
1oABc NGL Fractionation
17 Light Aromatics Recovery
19 Benzene Hydrogenation
Borger:
43 Sulfur Recovery Unit
22 HF Alkylation
9 Crude Unit
10 Crude Unit
.
34 Sulfur Recovery Unit
42 ARDS
11 Ethane Recovery Unit
29 Cat Cracker
28 Crude Unit
40 Cat Cracker
35 Amine Treater & Ha Dryers .
41 Hydrogen Unit
44 Amine & Sour Water Treater
6 Hexane Isom
Philtex:
Propylene Unloading and Storage
Ha System
SO, Unloading and Storage
Butadiene Unloading and Storage
woods cross:
7 HF Alkylation
10 Solvent Deasphalting
11 Straight Run Gas Plant
62 Propane Pit
\RMOO5O?.DER\-.06
3. Complete process hazard/process safety Four and one-half years from
management analysis on the following same
units:
Sweeny:
15 Benzene Hydrogenation
56 Waste Water System
22 Ethylene Plant
1OD NGL Fractionation
21 NGL Fractionation
11 Catalytic Reformer
14 Catalytic Reformer
24 Ethylene Plant
18 Propylene Fractionation
7 Heavy Aromatics Recovery
.
26.2 Hydrogen Purification Unit
20 Pentane Isomerization
25.2 Distillate HDS
Boreer:
19.2 Reformer
7 Reformer
22 NGL HDS
19 1 Naphtha HDS
19.3 Distillate HDS
36 HDS Treater
16. Propane Treater
4 Butane Isom *
5 Pentane Isom
6 Benzene Hydrogenation
26 Light Ends Recovery & Alky
Feed Treater
Philteq:
Dimethyl Sulfide Blending and Storage
Methyl Mercaptan Reaction and Storage
Propane Storage and Processing
Butane Storage and Processing
Anhydrous HCl Storage
Woods Cross:
4 TCC
6 Reformer
12 NHDS
68 Pressurized HC Storage
86 Pressurized HC Truck
Loading/Unloading
a7 Pressurized HC Railroad
..
Loading/Unloading
5 Vacuum
8 Crude
13 C5/C6 Isomerization
-
Complete process hazard/process safety Six and one-half years from same
management analysis on the following
units:Sweeny:
62 Clemens Terminal
68 Sweeny Tank Farm, #l
Pumphouse
88 Freeport Terminal #l
89 San Bernard Terminal
86 Truck Loading Rack
a7 Tank Car Loading Rack
6 MTBE Unit and Hydroisom
Unit
58 Pipelines
25 Crude Unit
9 Crude Unit
51 steam Plants
52 Water Treater
90 Jones Creek Terminal
92 Freeport Terminal #2Borger:
12 Pantex Cryogenic Gas Plant
No. 7 Cols. 35-42, 45
No. 1 Cols. 7, 9-12
No. 1 Cols. 13-17
No. 4 cols. 23-27
No. 4 Cols. 18-22
No. 6 Cols. 28-34
23 Straight Run Fractionator
Cols. 104,105,108,109,111,117
N-Butane Treater
2.1 Minalk Treater
13 Front end clean-up
NGL Train Rack
NGL Truck Rack
Above Ground Propane Storage and
Loading
MW NGL Feed System
E/P Caverns and Handling
Propane Caverns and Handling
Above Ground IC4 Storage and .
Handling
Above Ground NC4 Storage and
Handling
Isobutane Caverns and Handling
N-Butane Caverns and Handling
De-ethanized NGL Feed System
Alky Feed Caverns and Handling
Above Ground lC5 Storage and
Handling
Above Ground NC5 Storage and
Handling -
Complete actions recommended by As soon as practicable, but within
process hazard/process safety two years from completion of the
management analyses. process hazard/process safety
management analysis on each
unit3. Upon request by OSHA, Phillips shall make available to OSHA any
documents prepared pursuant to this Appendix “A” including verification of corrective
actions taken.
\RMOOW?.D[R\0023602.06
4. The parties recognize that circumstances may cause delays to occur,
such as construction or design problems and delays in obtaining necessary permits. If
the timetable contained herein cannot be met, Phillips will communicate that
information to OSHA, including the reason(s) for the delay and the expected completion
date(s). The parties agree that all undertakings by Phillips pursuant to this
Appendix “A” are part of a settlement of a dispute between the parties and do not
constitute an abatement of any unsafe condition.
5. All documents or other information made available by Phillips
under this Appendix shall be handled in accordance with Section 15 of the OSH Act,
29 U.S.C. Q 644, 18 U.S.C. 5 1905, and 29 C.F.R. 9 1903.9. Phillips will have the
obligation to identifjl the document, information, or portion thereof that contains
proprietary or confidential information. No later than six (6) months following
Phillips’ verification that it has completed all of the actions enumerated herein, OSHA
shall return to Phillips all copies of Phillips’ process hazard/process safety management
analyses, written management responses, and other safety analyses. OSHA shall not
thereafter retain any such copies.
60 OSHA agrees not to issue citations to Phillips for any working
conditions identified in the process hazard analysis or any other analysis required by
this Appendix, provided such conditions are being or will be addressed in good faith in
accordance with this Appendix (including correction, if necessary). Phillips agrees to
allow OSHA access to the above facilities to determine progress and compliance with
this Appendix. OSm agrees that, assuming good-faith implementation of this
Appendix by Phillips, it shall not conduct general schedule inspections, except that
OSHA may conduct monitoring inspections to determine compliance with this
Agreement. OSHA retains the right to conduct all other types of inspections permitted
under the OSH Act.
DATED August 22, 1991.
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