EA-96-133 & EA 96-136 - South Texas 1 & 2 (Houston Lighting & Power Company)
William T. Cottle, Group Vice
Houston Lighting & Power Company
Post Office Box 289
Wadsworth, Texas 77483
SUBJECT: NOTICE OF VIOLATION AND PROPOSED IMPOSITION OF CIVIL PENALTIES - $200,000 (DOL CASE NOS. 93-ERA-016 & 95-ERA-OO4)
Dear Mr. Cottle:
This refers to the matters discussed at the predecisional enforcement conference conducted on July 19, 1996 in the NRC's Arlington, Texas office. As discussed in the NRC's June 19, 1996 letter to you, the conference was conducted to discuss two apparent violations of 10 CFR 50.7, Employee Protection, involving discrimination against employees who had engaged in protected activities. Each apparent violation involved Houston Lighting & Power Company (HL&P) contractors -- Ebasco Services, Inc. (Ebasco) or Raytheon Engineers and Constructors, Inc. (Raytheon) -- discriminating against employees at HL&P's South Texas Project Electric Generating Station (STP). A letter documenting the conference, including the outline from HL&P and Raytheon's conference presentation, was sent to you and placed in the NRC Public Document Room (PDR) on July 31, 1996. The transcript of the conference also has been placed in the PDR.
Both apparent violations were investigated by the Department of Labor (DOL) and NRC's findings are based on the DOL determinations with respect to the two complaints. As indicated in our June 19 letter, the NRC normally relies on DOL determinations in deciding whether violations of NRC employee protection requirements occurred. The NRC recognizes that HL&P was not a party to either proceeding before the DOL; however, this does not relieve HL&P of its responsibility for the actions of its contractors. Thus, based on the decisions by DOL in these cases, and in the absence of compelling evidence to the contrary, the NRC has determined that violations of 10 CFR 50.7 occurred.
These violations are described in the enclosed Notice of Violation and Proposed Imposition of Civil Penalties. A Notice of Violation is being issued to Raytheon for the second violation described below, but not for the first violation since Raytheon was not a respondent in that DOL case. That Notice of Violation is being distributed to the same distribution list, so you will receive a copy.
The first violation (EA 96-133) is based on findings from a DOL proceeding (93-ERA-016) in which the Secretary of Labor (SOL), in a decision issued March 13, 1996, found that Thomas H. Smith was the subject of employment discrimination in 1991 when he was subjected to a hostile work environment in retaliation for raising concerns about scaffolding practices. The retaliatory treatment in Mr. Smith's case consisted of offensive cartoons depicting Mr. Smith as a whistleblower. The Secretary's decision reversed a February 17, 1994 decision issued by the Administrative Law Judge (ALJ), who concluded that the actions taken were of an abusive and harassing nature, but did not constitute discrimination. At the time of the discriminatory treatment, Mr. Smith was an employee of Ebasco Services, Inc. (Ebasco), whose contract with HL&P was purchased by Raytheon Engineers and Constructors, Inc. (Raytheon) in December 1993.
The second violation (EA 96-136) is based on a DOL proceeding (95-ERA-004) in which the presiding ALJ, in a Recommended Decision and Order issued September 29, 1995, found that Earl V. Keene was subjected to discriminatory treatment in 1994 after he raised concerns about signing off for electrical maintenance work he did not perform. The discriminatory treatment in Mr. Keene's case consisted of his inclusion in a March 24, 1994 reduction in force, his receiving a lower performance appraisal rating, and his having been subjected to fitness-for-duty testing on May 24, 1994 when he returned to the STP facility with another individual who was completing documentation related to pending employment. At the time of the discriminatory treatment, Mr. Keene was an employee of Raytheon. Raytheon personnel at the conference noted their disagreement with the ALJ's findings and indicated a brief has been filed with the SOL describing their bases for their disagreement. The DOL's Administrative Review Board, which has been delegated the authority to decide these cases for the Secretary of Labor, has not issued a final decision in this case.
In addition to the potential for violations of this type to have an effect on safety, each of these violations raises significant regulatory concerns. In the case involving Mr. Smith, the SOL found that Mr. Smith had been subjected to a hostile work environment. In this case, Ebasco managers appear to have been aware of the harassment of Mr. Smith and allowed it to continue for approximately two and a half months. Thus, this violation has been classified at Severity Level II in accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600. In the case involving Mr. Keene, it is significant that the discriminatory treatment of Mr. Keene occurred in 1994, after HL&P had initiated efforts to address the environment at STP for raising concerns, including actions that were specifically addressed to contractors and their supervisors. This violation, which involved discrimination by first line supervisors, is of significant regulatory concern and is classified at Severity Level III in accordance with the Enforcement Policy.
Despite these violations having occurred some time ago, they are important because, absent prompt and decisive corrective action, such violations--and claims of discrimination that remain unresolved-- can affect perceptions and have a chilling effect on the willingness of other employees to raise concerns to their employer or to the NRC. At the July 19 conference, HL&P and Raytheon discussed at length the broad and comprehensive actions taken, both prior to and after the DOL decisions in the specific cases, to foster an environment at STP in which employees would feel free to raise concerns without fear of retaliation. Raytheon's corporate actions include the development of a hotline for reporting concerns and an employee concerns program procedure, issued March 20, 1996. Raytheon's actions at STP include posting copies of relevant requirements and the DOL's decision in the Smith case, and additional training for managers and supervisors. HL&P has taken numerous actions since 1993 to enhance the environment for raising concerns at STP, to assure that employees are aware of the various means for raising concerns, and to improve the STP employee concerns program. These actions include implementing a new employee concerns program, hiring a new manager for this program and having the manager of this program report directly to the group vice president, conducting periodic assessments of the environment and actions to make the employee concerns program more accessible and responsive to employee concerns. In response to the specific cases at issue, HL&P investigated the concerns raised by the employees, re-evaluated its past actions and has made presentations to Raytheon personnel on the STP employee concerns program. Many of the actions taken by HL&P began in 1993 in response to other discrimination issues that were pending at the time. One of these earlier issues resulted in the NRC proposing a $160,000 civil penalty on September 5, 1995, based on the NRC's determination that David Lamb and James Dean were laid off in 1992 in retaliation for their raising concerns about STP security issues 1 (EA 95-077).
The NRC acknowledges the comprehensive nature of the actions taken by HL&P and Raytheon to address the environment for raising concerns at STP. However, despite HL&P and Raytheon taking comprehensive actions with regard to the overall site environment, actions in response to these specific instances of discrimination were not taken until adjudicatory findings were made against Ebasco and, as of the date of the conference, no corrective actions were described that would foster a sense of individual accountability for this objectionable behavior. For example, when asked at the conference whether the supervisors who were involved in these matters were counseled, the answer from Raytheon was that there had been no action to conduct individual counseling. Clearly some action should have been taken to assure that the individuals involved in these matters understand the protections afforded employees by law, the significance of violating such protections, and the possible consequences of doing so. Although the NRC understands that following the conference, steps were taken to ensure that the Raytheon supervisors involved in the discriminatory acts had been counseled, this fundamental corrective action should have been taken much earlier. This delay in counseling the supervisors gains additional regulatory significance because the delay may have created, or perpetuated, the perception among other employees that you were not serious about preventing these types of violations from occurring and may have detracted from your otherwise comprehensive actions to address these matters.
In accordance with the Enforcement Policy, a civil penalty is considered for violations at or above Severity Level III. Because the NRC considers these violations willful, in that there was a deliberate intent to discriminate, 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. No credit is due for identification because these violations were identified as a result of the DOL's adjudicatory process. With respect to corrective action, the NRC finds your corrective actions with respect to the overall site environment satisfactory, but, for reasons discussed above, finds your corrective actions lacking with respect to these specific cases.
In the case involving Mr. Smith, the base value of a Severity Level II violation is $80,000. An adjusted penalty of $160,000 could result from applying the civil penalty assessment process, as described above, where no credit is given for identification or corrective action.2 In the case involving Mr. Keene, the base value of a Severity Level III violation is $50,000. As in the case involving Mr. Smith, giving no credit for identification or corrective action, an adjusted penalty of $100,000 could result from applying the civil penalty assessment process for this violation, resulting in total civil penalties of $260,000 for these combined violations. However, after balancing your failure to promptly counsel the individuals who caused the violations with your extensive actions taken to address the overall environment for raising concerns at your facility, the NRC has decided to assess total civil penalties of $200,000, in accordance with the discretion permitted in VII.B.6 of the Enforcement Policy. As indicated in the enclosed Notice, the civil penalties will be assessed at $100,000 each for EA 96-133, for the case involving Mr. Smith; and EA 96-136, for the case involving Mr. Keene.
Therefore, to emphasize the importance of protecting individuals against discrimination and taking comprehensive corrective action that includes establishing accountability for violations of this requirement, I have been authorized, after consultation with the Director, Office of Enforcement, and the Deputy Executive Director for Nuclear Reactor Regulation, Regional Operations and Research, to issue the enclosed Notice of Violation and Proposed Imposition of Civil Penalties (Notice) in the amount of $200,000.
You are required to respond to this letter and should follow the instructions specified in the enclosed Notice when preparing your response. As stated in a footnote to the Notice, HL&P may defer its response to the civil penalty assessed for Violation 2 in the Notice until 30 days following the DOL Administrative Review Board decision in 95-ERA-004. In your response, you should document the specific actions taken and any additional actions you plan to prevent recurrence. After reviewing your response to this Notice, including your proposed corrective actions and the results of future inspections, the NRC will determine whether further NRC enforcement action is necessary to ensure compliance with NRC regulatory requirements.
In accordance with 10 CFR 2.790 of the NRC's "Rules of Practice," a copy of this letter, its enclosure, and your response will be placed in the NRC Public Document Room (PDR). To the extent possible, your response should not include any personal privacy, proprietary, or safeguards information so that it can be placed in the PDR without redaction.
Sincerely, /s/ L. J. Callan Regional Administrator
Docket Nos. 50-498; 50-499
License Nos. NPF-76; NPF-80
Enclosure: Notice of Violation and
Proposed Imposition of Civil Penalties
Lawrence E. Martin, General Manager
Nuclear Assurance & Licensing
Houston Lighting & Power Company
P.O. Box 289
Wadsworth, Texas 77483
Mr. J. C. Lanier/Mr. M. B. Lee
City of Austin
Electric Utility Department
721 Barton Springs Road
Austin, Texas 78704
Mr. K. J. Fiedler/Mr. M. T. Hardt
City Public Service Board
P.O. Box 1771
San Antonio, Texas 78296
Jack R. Newman, Esq.
Morgan, Lewis & Bockius
1800 M. Street, N.W.
Washington, D.C. 20036-5869
Mr. G. E. Vaughn/Mr. C. A. Johnson
Central Power & Light Company
P.O. Box 289
Mail Code: N5012
Wadsworth, Texas 77483
INPO - Records Center
700 Galleria Parkway
Atlanta, Georgia 30339-5957
Mr. Joseph M. Hendrie
50 Bellport Lane
Bellport, New York 11713
Bureau of Radiation Control
State of Texas
1100 West 49th Street
Austin, Texas 78756
John L. Howard, Director
Office of the Governor
P.O. Box 12428
Austin, Texas 78711
Judge, Matagorda County
Matagorda County Courthouse
1700 Seventh Street
Bay City, Texas 77414
Houston Lighting & Power Company
Three Metro Center
Bethesda, Maryland 20814
Rufus S. Scott, Associate
Houston Lighting & Power Company
P.O. Box 61867
Houston, Texas 77208
Joseph R. Egan, Esq.
Egan & Associates, P.C.
2300 N Street, N.W.
Washington, D.C. 20037
Mr. J. W. Beck
Little Harbor Consultants, Inc
44 Nichols Road
Cohasset, MA 02025-1166
David R. Hyster
Vice President, Nuclear Services
Raytheon Engineers and Constructors
P.O. Box 8223
30 South 17th St.
Philidelphia, PA 1910-8223
Assistant Human Resources Counsel
141 Spring Street
Lexington, Massachusetts 02173-7899
Thomas H. Smith
Bay City, Texas 77414
Earl V. Keene
909 Virnham Woods Blvd.
Pasadena, Texas 77503
Timothy Sloan, Esq.
P.O. Box 2171
Bay City, Texas 77404-2172
Ms. Billie Garde, Esq.
Hardy & Johns
2 Houston Center, Suite 500
Houston, Texas 77010
Edward A. Slavin, Jr., Esq.
35 S.E. 8th Terrace
Deerfield Beach, Florida 33441-4340
PROPOSED IMPOSITION OF CIVIL PENALTIES
Houston Lighting & Power Company Docket Nos. 50-498; 50-499 South Texas Project Electric License Nos. NPF-76; NPF-80 Generating Station EAs 96-133; EA 96-136
Based on the NRC's review of a March 13, 1996 Secretary of Labor's Decision and Order of Remand in the case of Thomas H. Smith (93-ERA-016) and a September 29, 1995 DOL Administrative Law Judge's Recommended Decision and Order in the case of Earl V. Keene (95-ERA-004), violations of NRC requirements were identified. In accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions," NUREG-1600, the Nuclear Regulatory Commission proposes to impose civil penalties 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 violations and associated civil penalties are set forth below:
10 CFR 50.7 states, in part, that discrimination by a Commission licensee or a contractor of a Commission licensee against an employee for engaging in certain protected activities is prohibited. The activities which are protected are defined in Section 211 of the Energy Reorganization Act, as amended, and include, but are not limited to, reporting of safety concerns by an employee to his employer or the NRC.
1. Contrary to the above, the Secretary of Labor found in a decision issued March 13, 1996, that Thomas H. Smith was the subject of employment discrimination from October to December 1991, when he was subjected to a hostile work environment in retaliation for raising concerns about scaffolding practices, a protected activity. At the time of the discriminatory action, Mr. Smith was an employee of Ebasco Services, Inc., a contractor of the licensee. (01012)
This is a Severity Level II violation (Supplement VII).
Civil Penalty - $100,0002. Contrary to the above, a Department of Labor Administrative Law Judge found in a recommended decision and order issued September 29, 1995, that Earl V. Keene was the subject of employment discrimination in 1994 for raising concerns about signing off on electrical maintenance work he did not perform, a protected activity. The discriminatory treatment included being selected for a March 24, 1994 reduction in force, receiving a lower performance appraisal rating, and being subjected to fitness-for-duty testing on May 24, 1994. At the time of the discriminatory actions, Mr. Keene was an employee of Raytheon Engineers and Constructors, Inc., a contractor of the licensee. (02013)
This is a Severity Level III violation (Supplement VII).
Civil Penalty - $100,000
Pursuant to the provisions of 10 CFR 2.201, Houston Lighting & Power Company (HL&P or Licensee) 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 Penalties (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 to why the license 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. Under the authority of Section 182 of the Act, 42 U.S.C. 2232, this response shall be submitted under oath or affirmation.
Within the same time as provided for the response required above under 10 CFR 2.201, the Licensee may pay the civil penalties by letter addressed to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, with a check, draft, money order, or electronic transfer payable to the Treasurer of the United States in the amount of the civil penalty proposed above, or the cumulative amount of the civil penalties if more than one civil penalty is proposed, or may protest imposition of the civil penalties in whole or in part, by a written answer addressed to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission.<3> Should the Licensee fail to answer within the time specified, an order imposing the civil penalties will be issued. Should the Licensee elect to file an answer in accordance with 10 CFR 2.205 protesting the civil penalties, in whole or in part, such answer should be clearly marked as an "Answer to a Notice of Violation" and may: (1) deny the violations 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 penalties should not be imposed. In addition to protesting the civil penalties in whole or in part, such answer may request remission or mitigation of the penalties.
In requesting mitigation of the proposed penalties, 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 2.201, but may incorporate parts of the 10 CFR 2.201 reply by specific reference (e.g., citing page and paragraph numbers) to avoid repetition. The attention of the Licensee is directed to the other provisions of 10 CFR 2.205, regarding the procedure for imposing a civil penalties.
Upon failure to pay any civil penalties 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 penalties, 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, letter with payment of civil penalties, and Answer to a Notice of Violation) should be addressed to: James Lieberman, 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 IV, 611 Ryan Plaza Drive, Suite 400, Arlington, Texas 76011, and a copy to the NRC Resident Inspector at the facility that is the subject of this Notice.
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. However, if you find it necessary to include such information, you should clearly indicate the specific information that you desire not to be placed in the PDR, and provide the legal basis to support your request for withholding the information from the public.
Dated at Arlington, Texas,
this 19th day of September 1996
1. HL&P was permitted to defer payment of that penalty pending a final decision of the Secretary of Labor.
2. Although the NRC is limited by statute to $100,000 per violation per day, a violation of 10 CFR 50.7 involving a hostile work environment is viewed as a continuing violation that may result in higher civil penalties being assessed.