United States Nuclear Regulatory Commission - Protecting People and the Environment

EA-99-110 - U. S. Enrichment Corporation

December 20, 1999

EA 99-110

Mr. J. N. Adkins
Vice President - Production
United States Enrichment Corporation
Two Democracy Center
6903 Rockledge Drive
Bethesda, MD 20817

SUBJECT: NOTICE OF VIOLATION AND PROPOSED IMPOSITION OF CIVIL PENALTY -$88,000 (NRC OFFICE OF INVESTIGATIONS REPORT NO. 3-1998-033)

Dear Mr. Adkins:

This refers to the investigation completed by the NRC Office of Investigations (OI) on March 26, 1999, at the United States Enrichment Corporation's (Corporation) Paducah Gaseous Diffusion Plant. Based on the findings of the investigation, an apparent violation was identified involving discrimination against the former Manager of Quality Systems (Manager of QS) at the Paducah facility by his supervisor, the Manager of Safety, Safeguards, and Quality. On May 18, 1999, the NRC provided a copy of the synopsis of the OI report and a summary of the relevant facts to the Corporation. A closed, transcribed, predecisional enforcement conference was held on June 30, 1999, in the NRC Region III office between representatives of the Corporation, including the Manager of Safety, Safeguards, and Quality, and the NRC to discuss the apparent violation, its cause, and your corrective actions.

After a review of the information developed during the investigation, the information provided during the predecisional enforcement conference, and the information provided subsequent to the conference, including information provided by the Manager of QS in a letter dated July 17, 1999, and by the Corporation and the Manager of Safety, Safeguards, and Quality in separate letters dated July 23, 1999, the NRC has determined that a violation of NRC requirements occurred. The violation is cited in the enclosed Notice of Violation and Proposed Imposition of Civil Penalty (Notice) and the circumstances surrounding it are described in the previously provided OI report summary. The violation involved employment discrimination in violation of the Commission's requirements in 10 CFR 76.7, "Employee Protection," by the Manager of Safety, Safeguards, and Quality against the Manager of QS.

The Manager of QS had raised nuclear safety concerns. Among other issues, he had informed his supervisor that the Paducah Plant Quality Assurance Plan (QAP) did not incorporate all of the requirements of ASME NQA-1, "Quality Assurance Program for Nuclear Facilities." The Manager of QS also told his supervisor he was concerned that the Quality System Group's ability to effectively perform its responsibilities, as outlined in the QAP (e.g., auditing vendors, dedicating commercial grade components, and conducting receipt inspections of new materials), was being negatively impacted by a requirement to perform non-QAP activities; specifically, in-plant surveillances. Thereafter, the Manager of QS was transferred from a managerial position in the Safety, Safeguards and Quality Department to a non-managerial position in the Training Department on August 10, 1998.

At the predecisional enforcement conference, the Corporation's representatives stated that the Manager of QS was transferred due to legitimate performance considerations. The NRC recognizes that the Corporation can assign, transfer, rate, or discipline its employees for legitimate reasons. However, the NRC concluded, based on the record developed in this matter, that performance considerations were not the only reason the Manager of QS was transferred. The NRC determined that the decision to transfer the Manager of QS was due, in part, to his participation in protected activities.

Since the adverse employment action was taken against the Manager of QS by the Manager of Safety, Safeguards, and Quality, a mid-level plant management official, this violation has been categorized in accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600, at Severity Level II.

In accordance with the Enforcement Policy, a base civil penalty in the amount of $88,000 is considered for a Severity Level II violation. Because the Paducah Plant was the subject of escalated enforcement actions within the two years preceding this violation,(1) the NRC considered whether credit was warranted for Identification and Corrective Action in accordance with the civil penalty assessment process in Section VI.B.2 of the Enforcement Policy. Credit was not warranted for the Identification factor because the OI investigation identified the violation. Normally, credit for Corrective Action is not warranted when corrective actions are not taken or proposed as of the date of the predecisional enforcement conference. The assessed civil penalty without credit for Identification or Corrective Action would normally be twice the base penalty. However, the NRC learned since the conference that the Corporation has proposed extensive actions to address the safety conscious work environment at its facilities and reached a settlement with the Manager of QS. In a letter dated October 29, 1999, the Corporation described programs that it has implemented or plans to implement to ensure a safety conscious work environment at its NRC-certified facilities. The Corporation's letter indicated that the initiatives are designed to: (1) help management effectively address employee concerns; (2) improve employees' confidence in line management and the employee concern program; and (3) strengthen management expectations in a nuclear-safety conscious work environment. As indicated in the Corporation's letter, initial management training sessions were implemented in June 1999, prior to the predecisional enforcement conference. In recognition of the broad measures the Corporation has taken and plans to take to improve the nuclear safety conscious work environment, the NRC is exercising the discretion authorized in the Enforcement Policy, Section VII.B.6, and mitigating the amount of the civil penalty.

Therefore, to emphasize the seriousness of a violation of the Commission's employee protection regulation, to emphasize the need for prompt identification of violations, and in recognition of the previous escalated enforcement actions, I have been authorized, after consultation with the Director, Office of Enforcement, to issue the enclosed Notice of Violation and Proposed Imposition of Civil Penalty (Notice) with the civil penalty assessed in the base amount of $88,000 for the Severity Level II violation.

You are required to respond to this letter and should follow the instructions specified in the enclosed Notice when preparing your response. The NRC will use your response, in part, to determine whether further enforcement action is necessary to ensure compliance with regulatory requirements.

In accordance with 10 CFR 2.790 of the NRC's "Rules of Practice," a copy of this letter, its enclosures, and your response will be placed in the NRC Public Document Room.

Sincerely,

Original Signed by

J. E. Dyer
Regional Administrator

Docket No. 70-7001
Certificate No. GDP-1

Enclosure: Notice of Violation and Proposed Imposition of Civil Penalty

cc w/encl :
H. Pulley, Paducah General Manager
L. L. Jackson, Paducah Regulatory Affairs Manager
J. M. Brown, Portsmouth General Manager
S. A. Toelle, Manager, Nuclear Regulatory
    Assurance and Policy
Paducah Resident Inspector Office
Portsmouth Resident Inspector Office
R. M. DeVault, Regulatory Oversight Manager, DOE
D. Jackson, Acting Site Manager, Paducah


NOTICE OF VIOLATION
AND
PROPOSED IMPOSITION OF CIVIL PENALTY

United States Enrichment Corporation
Paducah Gaseous Diffusion Plant
Paducah, Kentucky
Docket No. 70-7001
Certificate No. GDP-1
EA 99-110

During an NRC investigation completed on March 26, 1999, a violation of NRC requirements was identified. In accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions," NUREG-1600 (64 FR 61142), the NRC proposes to impose a civil penalty pursuant to Section 234 of the Atomic Energy Act of 1954, as amended (Act), 42 U.S.C. 2282, and 10 CFR 2.205. The particular violation and associated civil penalty are set forth below:

10 CFR 76.7(a) prohibits, in part, discrimination by the United States Enrichment Corporation (Corporation) Paducah Gaseous Diffusion Plant against an employee for engaging in certain protected activities. Discrimination includes discharge and other actions that relate to compensation, terms, conditions or privileges of employment. The protected activities were established in Section 211 of the Energy Reorganization Act of 1974, as amended, and in general are related to the administration or enforcement of a requirement imposed under the Atomic Energy Act or the Energy Reorganization Act. Protected activities include providing the Corporation with information about nuclear safety at an NRC-regulated facility.

Contrary to the above, the Corporation discriminated against the Manager of Quality Systems, through the actions of the Manager of Safety, Safeguards, and Quality, for having engaged in protected activities. Specifically, from March 1997 to June 1998, the Manager of Quality Systems engaged in protected activities when he expressed nuclear safety concerns to his supervisor, the Manager of Safety, Safeguards, and Quality. These safety concerns included: the Paducah Plant was not implementing all of the requirements of ASME NQA-1, "Quality Assurance Program for Nuclear Facilities," and implementation of the Paducah Plant Quality Assurance Program could be adversely impacted by a requirement for the Quality Systems Group to perform in-plant surveillances. Based, in part, on these protected activities, on August 10, 1998, the Manager of Safety, Safeguards and Quality transferred the Manager of Quality Systems from a managerial position in the Safety, Safeguards, and Quality Department to a non-managerial position in the Training Department at the Paducah Plant. (01012)

This is a Severity Level II violation (Supplement VII).
Civil Penalty - $88,000.

Pursuant to the provisions of 10 CFR 76.70, the Corporation is hereby required to submit a written statement or explanation to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, within 30 days of the date of this Notice of Violation and Proposed Imposition of Civil Penalty (Notice). This reply should be clearly marked as a "Reply to a Notice of Violation" and should include for each alleged violation: (1) admission or denial of the alleged violation; (2) the reasons for the violation if admitted, and if denied, the reasons why; (3) the corrective steps that have been taken and the results achieved; (4) the corrective steps that will be taken to avoid further violations; and (5) the date when full compliance will be achieved. If an adequate reply is not received within the time specified in this Notice, an order or a Demand for Information may be issued as why the certification should not be modified, suspended, or revoked or why such other action as may be proper should not be taken. Consideration may be given to extending the response time for good cause shown.

Within the same time as provided for the response required above under 10 CFR 76.70, the Corporation may pay the civil penalty proposed above, in accordance with NUREG/BR-0254 and by submitting to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, a statement indicating when and by what method payment was made, or may protest imposition of the civil penalty in whole or in part, by a written answer addressed to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission. Should the Corporation fail to answer within the time specified, an order imposing the civil penalty will be issued. Should the Corporation elect to file an answer in accordance with 10 CFR 2.205 protesting the civil penalty, in whole or in part, such answer should be clearly marked as an "Answer to a Notice of Violation" and may: (1) deny the violation listed in this Notice, in whole or in part; (2) demonstrate extenuating circumstances; (3) show error in this Notice; or (4) show other reasons why the penalty should not be imposed. In addition to protesting the civil penalty in whole or in part, such answer may request remission or mitigation of the penalty.

In requesting mitigation of the proposed penalty, the factors addressed in Section VI.B.2 of the Enforcement Policy should be addressed. Any written answer in accordance with 10 CFR 2.205 should be set forth separately from the statement or explanation in reply pursuant to 10 CFR 76.70, but may incorporate parts of the 10 CFR 76.70 reply by specific reference (e.g., citing page and paragraph numbers) to avoid repetition. The attention of the Corporation is directed to the other provisions of 10 CFR 2.205, regarding the procedure for imposing a civil penalty.

Upon failure to pay any civil penalty due which subsequently has been determined in accordance with the applicable provisions of 10 CFR 2.205, this matter may be referred to the Attorney General, and the penalty, unless compromised, remitted, or mitigated, may be collected by civil action pursuant to Section 234c of the Act, 42 U.S.C. 2282c.

The response noted above (Reply to Notice of Violation, statement as to payment of civil penalty, and Answer to a Notice of Violation) should be addressed to: Richard W. Borchardt, Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852-2738, with a copy to the Regional Administrator, U.S. Nuclear Regulatory Commission, Region III, 801 Warrenville Road, Lisle, IL 60532-4351.

Because your response will be placed in the NRC Public Document Room (PDR), to the extent possible, it should not include any personal privacy, proprietary, or safeguards information so that it can be placed in the PDR without redaction. If personal privacy or proprietary information is necessary to provide an acceptable response, then please provide a bracketed copy of your response that identifies the information that should be protected and a redacted copy of your response that deletes such information. If you request withholding of such material, you must specifically identify the portions of your response that you seek to have withheld and provide in detail the basis for your claim of withholding (e.g., explain why the disclosure of information will create an unwarranted invasion of personal privacy or provide the information required by 10 CFR 2.790(b) to support a request for withholding confidential commercial or financial information). If safeguards information is necessary to provide an acceptable response, please provide the level of protection described in 10 CFR 73.21.

In accordance with 10 CFR 19.11, you may be required to post this Notice within two working days.

Dated this 20th day of December 1999.


1. A Notice of Violation was issued on September 22, 1997, for a Severity Level III problem (EA 97-267), and a Notice of Violation and Proposed Imposition of Civil Penalty - $55,000 was issued on December 8, 1997 (EA 97-431).

 

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