United States Nuclear Regulatory Commission - Protecting People and the Environment

EA-97-461 - Millstone 1, 2, 3 (Northeast Nuclear Energy Company)

March 9, 1999

EA 97-461

Mr. R. P. Necci, Vice President, Nuclear
      Oversight and Regulatory Affairs
c/o Mr. David A. Smith, Manager, Regulatory
      Affairs for Millstone Station
NORTHEAST NUCLEAR ENERGY COMPANY
Post Office Box 128
Waterford, Connecticut 06385

SUBJECT: NOTICE OF VIOLATION AND PROPOSED IMPOSITION OF CIVIL PENALTIES - $88,000
(Office of Investigations Report 1-97-039)

Dear Mr. Necci:

This refers to the subject investigation conducted by the NRC Office of Investigations (OI) at Northeast Nuclear Energy Company's (NNECo) Millstone Station after you had informed the NRC, in September 1997, that separate investigations by your Employee Concerns Program, as well as by your contractor, Little Harbor Consultants, had found that two contractor employees in your Motor Operated Valve (MOV) department, had been retaliated against for engaging in protected activities. The OI investigation confirmed those findings, noting that the terminations of the two contractor employees constituted discrimination. The synopsis of the subject OI report was forwarded to you with our letter, dated August 26, 1998. Although that letter offered you the opportunity for an enforcement conference, you declined a conference and instead sent the NRC a response, dated September 30, 1998, in which you admitted that the violation occurred, and also described the causes and corrective actions.

The termination of the employment of the two contractor employees occurred in August 1997, after the two individuals had raised concerns about the MOV program manual and the process by which the manual was being reviewed. The terminations were recommended by the then MOV Supervisor, and were supported by the then MOV Manager, both of whom were also contractor employees. Further, the recommendation was neither questioned nor objected to by the Recovery Officer involved with management oversight of the MOV program activities, after the MOV Manager briefed him on the recommendation, nor was it questioned by other Departments within NNECo, including the Contracts or Legal Departments during their reviews, as you acknowledged in your September 30, 1998, letter to the NRC.

One of the contractor engineers, who had raised questions regarding the adequacy of the MOV program manual, requested a copy of the manual for his review on or about July 22, 1997. Although the MOV Supervisor had indicated, in a meeting with his staff that day, that he would provide the manual for review the next day after incorporating some revisions, the individual was not provided a copy by the MOV Supervisor, and the supervisor had sent an email to his department indicating that no one had requested to review the manual. In a telephone conversation on July 23, 1997, the individual questioned the MOV Supervisor about the process for review of the manual. The supervisor requested that the individual come to the MOV Manager's office to discuss the issue. After the individual refused to come to the MOV Manager's office despite repeated requests, the supervisor considered the individual's actions to be insubordinate. The supervisor contends this insubordination was the principal basis for recommending termination of the individual's employment.
The MOV Supervisor also contended that he had additional performance-related reasons to recommend termination of the contractor's employment. He contended that the contractor employee had not completed an assignment and had worked on several projects outside the scope of his assigned duties without approval. However, there was no evidence documenting such problems at the time they occurred, nor was there evidence that the MOV Supervisor brought such issues to the contractor employee's attention.

The second contractor engineer had also expressed a desire to the MOV Supervisor to complete a review of the MOV program manual for adequacy and accuracy. He had principal responsibility for a critical item that would be incorporated in the manual, and had raised issues relating to the completion of the manual. The MOV Supervisor sought this contract employee's termination because of an alleged failure to meet deadlines and because of an incident in which the employee had allegedly raised his voice with the MOV Supervisor and threatened to quit. Similar to the first contractor employee, the MOV Supervisor had not documented perceived performance problems involving the second contractor employee at the time of occurrence.

Notwithstanding the MOV Supervisor's articulated reasons for seeking the termination of the two contractor employees, the NRC has concluded that the terminations were motivated, at least in part, by the individuals' engagement in protected activities. The recommendation for termination that was made was close in time to the protected activities. Further, although the supervisor stated that he had other concerns regarding the individuals' performance since at least June 1997, as noted, these concerns were not discussed with the individuals nor were they documented in the supervisor's log book until July 22, 1997, two days before the MOV Supervisor recommended the terminations to NNECo's Contracts Department. In addition, OI's investigation elicited evidence that the MOV Supervisor and Manager felt pressure to complete the MOV program manual in accordance with NNECo's schedule and perceived the two contractor employees as roadblocks in that effort.

While the NRC is concerned with the termination recommendations made by the then MOV Supervisor, and the support for them by the then MOV Manager, the NRC is equally concerned with the failures by the responsible Recovery Officer, as well as other departments within NNECo, including the Contracts and Legal Departments, who had the opportunity to question the appropriateness of the recommended terminations but failed to do so. As noted in the Little Harbor report, both the Contracts and Legal Departments failed to recognize the potential for retaliation during the termination review process. The Little Harbor report also noted that neither Department asked for any substantiation of the alleged performance issues that were the basis for the terminations, even though the Contracts Department had been provided some knowledge about problems within the MOV Department. In fact, the actual letters releasing the individuals were prepared by NNECo's Contracts Department. Further, as also noted in the Little Harbor report, your senior management was slow in recognizing and responding to the indications of retaliation.

The NRC recognizes that subsequent to these findings, you took significant action to reverse the terminations, as well as improve the climate at the Millstone station to ensure that a work environment exists such that employees feel free to raise safety concerns. Nonetheless, the actions by the then MOV Supervisor and MOV Manager in recommending the terminations, and the lack of questioning the appropriateness of the terminations by the responsible Recovery Officer, as well as other NNECo Departments, resulted in a significant violation of the employee protection standards set forth in 10 CFR 50.7. Given that individuals above a first line supervisor contributed to the violation, the violation is categorized at Severity Level II in accordance with the NRC Enforcement Policy, "General Statement of Policy and Procedures for NRC Enforcement Actions," NUREG-1600 (Enforcement Policy).

In accordance with the Enforcement Policy, a base civil penalty in the amount of $88,000 is considered for a Severity Level II violation. Since this case involves a Severity Level II violation, 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 is warranted for Identification since the violation was initially identified by your Employee Concerns Program. Credit is also warranted for Corrective Actions which were considered comprehensive. These actions, which were described in your March 31, 1998, and September 30, 1998 letters to the NRC, included, but were not limited to: (1) rescinding the terminations, retracting the termination letters, and offering reinstatement to the two individuals whose employment was terminated; (2) conduct of an Employee Concerns Oversight Panel survey in September 1997 to ensure that there was no lingering effect in the MOV department; (3) conduct of a self-assessment by the Contracts Department in October 1997 to preclude repetition; (4) conduct of a meeting of all first line and above supervisors to discuss the topic of a safety conscious work environment; and (5) creation of an Executive Review Board to review all proposed discipline more severe than a verbal warning.

However, the enforcement policy also states that Severity Level I or II violations should normally result in a civil penalty regardless of the consideration of identification and corrective action. Consistent with the policy, and to emphasize the significance that the NRC attaches to any finding of discrimination, as well as the importance of current management ensuring a safety conscious work environment where employees feel free to raise safety concerns, a civil penalty is warranted in this case, particularly given:  (1) the failures by the responsible Recovery Officer and the Contracts and Legal Departments to question the basis for the proposed terminations, despite the opportunities to do so; (2) the failures by senior management in not identifying the management problems in the MOV Department in sufficient time to prevent the terminations, and in being slow in recognizing and responding to the indications of retaliation, as noted in the Little Harbor report; (3) the failure by management to provide training to its contractor supervisors relating to the NRC's employee protection regulation, notwithstanding the Commission's Order dated October 24, 1996, concerning the need to address actions involving a lack of a safety conscious work environment, and to ensure that employees can raise safety concerns without fear of retaliation; and (4) the past history of discrimination violations involving the Millstone station, as evidenced by the three discrimination civil penalties issued between 1993 and 1996. Therefore, 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 propose a base civil penalty in the amount of $88,000 for the violation set forth in the enclosed Notice. But for your identification of the violation in September 1997, as well as your prompt rescission of the terminations of the two individuals, the civil penalty amount would have been higher.

The NRC has concluded that information regarding both the reason for the violation, and the corrective actions taken and planned to correct the violation and prevent recurrence, are already adequately addressed on the docket in your September 30, 1998 letter. Therefore, you are not required to respond to the provisions of 10 CFR 2.201 unless the description therein does not accurately reflect your corrective actions or your position. In that case, or if you choose to provide additional information, you should follow the instructions specified in the enclosed Notice. 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, and your response will be placed in the NRC Public Document Room (PDR).


Sincerely,

ORIGINAL SIGNED BY
JAMES T. WIGGINS


FOR Hubert J. Miller
Regional Administrator


Docket Nos. 50-245; 50-336; 50-423
License Nos. DPR-21; DPR-65; NPF-49

Enclosure: Notice of Violation and Proposed Imposition of Civil Penalty

cc w/encl:
B. Kenyon, President and Chief Executive Officer - Nuclear Group
L. Olivier, Senior Vice President & Chief Nuclear Officer
J. Carlin, Vice President - Human Services
F. Rothen, Vice President, Work Services
M. Brothers, Vice President - Operations
R. Necci, Vice President - Nuclear Oversight and Regulatory Affairs
D. Amerine, Vice President - Human Services
E. Harkness, Director, Unit 1 Operations
L. Cuoco, Esquire
G. Hicks, Director - Nuclear Training Services (CT)
J. Price, Director - Unit 2 Operations
C. Schwarz, Director - Unit 3 Operations
S. Sherman, Audits and Evaluations
J. Egan, Esquire
N. Burton, Esquire
V. Juliano, Waterford Library
J. Buckingham, Department of Public Utility Control
S. Comley, We The People
D. Katz, Citizens Awareness Network (CAN)
R. Bassilakis, CAN
J. Block, Attorney, CAN
S. Luxton, Citizens Regulatory Commission (CRC)
T. Concannon, Co-Chair for NEAC
E. Woollacott, Co-Chairman, NEAC
Representative G. Hamm
State of Connecticut SLO Designee


ENCLOSURE


NOTICE OF VIOLATION
AND
PROPOSED IMPOSITION OF CIVIL PENALTY

Northeast Nuclear Energy Company Millstone Units 1, 2, 3 Docket Nos. 50-245; 50-336; 50-423
License Nos. DPR-21; DPR-65; NPF-49
EA 97-461

During an NRC investigation conducted by the NRC Office of Investigations (OI), a violation of NRC requirements was identified. In accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions," NUREG-1600, 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 50.7 prohibits, in part, discrimination by a Commission licensee against an employee or contractor for engaging in certain protected activities. Discrimination includes discharge or other actions relating to the compensation, terms, conditions, and privileges of employment. The activities which are protected include, but are not limited to, reporting of safety concerns by an employee to his employer.

Contrary to the above, between July and August 1997, the licensee discriminated against two contractor employees within the Motor Operated Valve (MOV) Department due to their involvement in protected activities. Specifically, the employment of the contractor employees was terminated in August 1997, at least in part because the individuals had raised concerns about the MOV program manual and the process by which it was being reviewed. Each of the two terminations constitutes a separate instance of discrimination which is being combined as one violation. (01012)

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

Pursuant to the provisions of 10 CFR 2.201, Northeast Nuclear Energy Company (NNECo 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 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. However, the NRC has concluded that information regarding the reason for the violation, and the corrective actions taken and planned to correct the violation and prevent recurrence, is already adequately addressed on the docket in NNECo's September 30, 1998 letter. Therefore, NNECo is not required to respond pursuant to 10 CFR 2.201 unless the description therein does not accurately reflect NNECo's corrective actions or its position. 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 penalty 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 penalty in whole or in part, by a written answer addressed to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission. Should the Licensee fail to answer within the time specified, an order imposing the civil penalty will be issued. Should the Licensee 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 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 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 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 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, letter with payment of civil penalty, and Answer to a Notice of Violation) should be addressed to: Mr. 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 I 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. 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 bases 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.

Dated at King of Prussia, Pennsylvania
this 9th day of March 1999

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