EA-95-192 - Palo Verde (The Atlantic Group)

                                January 8, 1996

EA 95-192

Mr. Dennis McLaughlin, President
The Atlantic Group
North Commerce Park
5426 Robinhood Road
Norfolk, Virginia 23513

            (DEPARTMENT OF LABOR CASE NO. 94-ERA-009)

Dear Mr. McLaughlin:

This is in reference to your November 3, 1995, letter, in which you replied to
the NRC's October 6, 1995, letter requesting The Atlantic Group's (TAG)
perspective on a Department of Labor (DOL) proceeding involving a former TAG
employee at the Palo Verde Nuclear Generating Station (Palo Verde).  The NRC's
letter was prompted by a May 16, 1995, Recommended Decision and Order issued
by a DOL administrative law judge (ALJ) which found that TAG discriminated
against an electrical engineer as a result of his engaging in protected
activities, i.e., raising safety concerns, while he was employed by TAG at the
Palo Verde facility.  According to the ALJ's decision, the specific act of
discrimination involved TAG's Palo Verde site supervisor providing negative
information about this employee in response to an employment reference check
and in retaliation for the fact that the employee had engaged in a protected
activity.  The ALJ found that the information TAG's site supervisor provided
in response to the inquiry -- information about the employee's tardiness and
comments about the employee having complained of discrimination -- was
inconsistent with the type of information normally provided in response to
such inquiries.  The ALJ found that providing references is a "term or
condition of employment" and that the negative reference was "an adverse
employment action to which employees who did not engage in protected activity
were not subjected."  On June 19, 1995, the Secretary of Labor issued a
preliminary order providing the relief recommended by the ALJ.

In its October 6 letter, the NRC asked TAG to provide its position on whether
the action affecting this individual violated 10 CFR 50.7, which prohibits NRC
licensees or their contractors from discriminating against employees for
engaging in protected activities, and asked TAG to provide a description of
actions taken or planned to assure that this matter did not have a chilling
effect in discouraging other TAG employees from raising perceived safety
concerns.  TAG provided a detailed explanation as to why it did not believe
that 10 CFR 50.7 had been violated, and noted that it had nonetheless complied
with the Secretary of Labor's preliminary order and had taken actions to
assure that its employees were encouraged to raise safety concerns without
fear of retaliation.  TAG also provided its perspective on why this particular
matter did not and could not have a chilling effect on other employees.

The NRC has considered all of the information TAG provided as well as the
ALJ's recommended decision and order in coming to an enforcement decision in
this case.  We recognize that the circumstances in this case are rather
unusual in that the reference check may have been requested by a firm
representing the individual only to support the individual's claim that he was
the subject of discrimination.  We also recognize the actions subsequently
taken by TAG to encourage its employees to raise concerns.  Nonetheless, the
information provided by your site supervisor at Palo Verde is information that
could be negatively construed and could have affected a prospective employer's
willingness to hire your former employee.  The NRC concludes that the act of
providing potentially negative information about this individual, particularly
the fact that he had claimed discriminatory treatment while employed by TAG at
Palo Verde, violated 10 CFR 50.7.

Violations of 10 CFR 50.7 are considered significant.  Considering the
circumstances of this case, the violation has been categorized at Severity
Level III in accordance with the General Statement of Policy and Procedure for
NRC Enforcement Actions (Enforcement Policy), NUREG-1600.  A Notice of
Violation (Notice) is enclosed.  The NRC will reconsider this enforcement
action if the Secretary of Labor's review of this matter results in a decision
that discrimination did not occur. 

You are required to respond to this letter and should follow the instructions
specified in the enclosed Notice when preparing your response.  In your
response, you should document the specific actions taken and any additional
actions you plan to prevent recurrence.  As indicated in the Notice, you may
make reference to previous correspondence, specifically your November 3, 1995
letter, in responding to the Notice.  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.  A copy of this letter and enclosure are
also being provided to the Arizona Public Service Company under separate

The responses directed by this letter and the enclosed Notice are not subject
to the clearance procedures of the Office of Management and Budget as required
by the Paperwork Reduction Act of 1980, Pub. L. No. 96-511. 


                                     org signed by L. J. Callan
                                     L. J. Callan, 
                                     Regional Administrator

Enclosure:  Notice of Violation

NOTICE OF VIOLATION The Atlantic Group EA 95-192 Based on a U.S. Department of Labor Administrative Law Judge's May 16, 1995 Recommended Decision and Order (94-ERA-009), a violation of NRC requirements was identified. In accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions," NUREG-1600, the violation is listed below: 10 CFR 50.7(a) prohibits discrimination by a Commission licensee or contractor or subcontractor of any licensee against an employee for engaging in certain protected activities. Discrimination includes actions that relate to compensation, terms, conditions or privileges of employment. Protected activities are described 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 Energy Reorganization Act. Contrary to the above, on October 6, 1993, The Atlantic Group, a contractor to the Arizona Public Service Company, a licensee of the NRC, discriminated against one of its employees at the Palo Verde Nuclear Generating Station with respect to the terms and conditions of his employment by providing negative information in response to a reference check and in retaliation for the fact that the employee had engaged in a protected activity. Specifically, TAG's site supervisor at Palo Verde provided information about this employee concerning the fact that the employee had complained about discrimination after raising safety concerns. The evidence developed in the Department of Labor's hearing on this matter (94-ERA-009) indicates that providing this type of information was inconsistent with the site supervisor's normal practices and was an adverse action to which employees who did not engage in protected activity were not subjected. This is a Severity Level III violation (Supplement VII). Pursuant to the provisions of 10 CFR 2.201, The Atlantic Group is hereby required to submit a written statement or explanation to the U.S. Nuclear Regulatory Commission, ATTN: Document Control Desk, Washington, D.C. 20555, with a copy to the Regional Administrator, Region IV, and a copy to the Director, Office of Enforcement, within 30 days of the date of the letter transmitting this Notice of Violation (Notice). This reply should be clearly marked as a "Reply to a Notice of Violation" and should include for each violation: (1) the reason for the violation, or, if contested, the basis for disputing the violation, (2) the corrective steps that have been taken and the results achieved, (3) the corrective steps that will be taken to avoid further violations, and (4) the date when full compliance will be achieved. Your response may reference or include previous docketed correspondence, if the correspondence adequately addresses the required response. 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 such other action as may be proper should not be taken. Where good cause is shown, consideration will be given to extending the response time. Under the authority of Section 182 of the Act, 42 U.S.C. 2232, this response shall be submitted under oath or affirmation. 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 8th day of January 1996

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