Norfolk Shipbuilding & Drydock Corp. v. Nance

• Decision Date: 09 January 1989
• Docket Number: No. 87-3892,87-3892
• Citation: 858 F.2d 182
• Parties: NORFOLK SHIPBUILDING & DRYDOCK CORPORATION, Petitioner, v. Robert T. NANCE, Respondent.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 182

858 F.2d 182

1989 A.M.C. 1520

NORFOLK SHIPBUILDING & DRYDOCK CORPORATION, Petitioner, v. Robert T. NANCE, Respondent.

No. 87-3892.

United States Court of Appeals Fourth Circuit.

Argued July 6, 1988.

Decided Sept. 27, 1988.

Rehearing and Rehearing In Banc Denied Jan. 9, 1989.

F. Nash Bilisoly, IV, Thomas M. Lucas (Vandeventer, Black Meredith & Martin, Norfolk, Va., on brief) for petitioner.

Willard James Moody, Jr. (Moody, Strople & Lawrence, Portsmouth, Va., on brief) for respondent.

Before WINTER, Chief Judge, and MURNAGHAN and SPROUSE, Circuit Judges.

HARRISON L. WINTER, Chief Judge:

Norfolk Shipbuilding & Drydock Corporation (Norfolk) petitions to set aside an order of the Benefits Review Board (the Board) affirming the decision and order of an Administrative Law Judge that required Norfolk to reinstate Robert T. Nance to his former position with back pay and to pay a penalty to the Deputy Commission. ¹ The decision and order were entered pursuant to Sec. 49 of the Longshoremen's and Harbor Worker's Compensation Act, 33 U.S.C. Sec. 948a (1976) (the Act.). ² The ALJ found that Nance had proved that Norfolk retaliated against him in violation of Sec. 49 of the Act by discharging him from his job after the parties entered into an agreement to settle Nance's pending claims for disability compensation, age discrimination and discrimination under Sec. 49, and a grievance to his union.

The principal questions before us are whether testimonial evidence purportedly demonstrating that Nance voluntarily agreed to quit his job as partial consideration for the settlement was erroneously excluded by the ALJ, and whether the Board erred in sustaining the ALJ's finding that Norfolk had the requisite discriminatory intent to violate Sec. 49.

We perceive no reversible error on the part of the ALJ or the Board, and conclude that the Board's order should be affirmed and enforced.

I.

On January 13, 1983, Norfolk and Nance entered into an agreement to settle Nance's various claims against Norfolk for a lump sum payment. They stated the terms of the settlement on a government settlement form, Form LS-471, signed by their respective counsel, and submitted it to the Deputy Commissioner, all as required by 33 U.S.C. Sec. 908(i) and 20 C.F.R. Sec. 702.241-243. On the same day, the agreement was approved by Deputy Commissioner Basil Voultsides of the Office of Workers' Compensation Programs. As the ALJ found, the LS-471 did not contain a "provision expressly or impliedly permitting Employer to discharge Claimant after consummation of the settlement." In addition to making no mention that Nance would be discharged or that he would quit his employment, the parties described the type of employment that Nance, despite his injuries, could still perform. Shortly after March 7, 1983, Nance, who had been in lay-off status, received a letter from Norfolk advising him that his job had been terminated and all of his insurance benefits had been cancelled. Before the ALJ, Norfolk proffered evidence that as part of the settlement Nance and it had verbally agreed that Nance's employment would be terminated. Nance's proffered evidence was a denial of the existence of any such agreement. The ALJ ruled that Norfolk's evidence was inadmissible and he refused to receive it.

Noting that Paragraph IV of Form LS-471 provides for "Action of the Deputy Commissioner" in order to make the settlement effective, the ALJ concluded that settlement procedures under the Act clearly contemplated that the complete agreement must be set forth in writing as a prerequisite to approval:

[T]he text of an LS-471 makes it clear that agreements extrinsic to that document are not to be considered in the approval process. It is apparent from the face of the LS-471 that it is intended to be the complete and integrated statement of the agreement between Claimant and Employer. Nor are there any ambiguities in the document requiring resolution. The LS-471 must, on its face, be considered an integrated agreement incorporating into a single written memorial all prior negotiations. There is accordingly, a conclusive presumption that the LS-471 incorporates the whole contract and is the sole evidence of the agreement. Employer may not, therefore, adduce evidence to show that Claimant had as part of the settlement agreed to voluntary termination of his employment after the settlement in an attempt to vary the terms of the agreement.

Accordingly, he refused to receive Norfolk's evidence of an oral agreement as part of the settlement to terminate Nance's employment.

The ALJ further found the requisite discriminatory intent for a Sec. 49 violation in Norfolk's testimony as to why it sought a voluntary termination agreement. Norfolk employees testified that Norfolk had a practice of settling only those compensation claims in which the employee agreed to leave his or her job. The ALJ decision quoted the following testimony by Norfolk's Director of Safety and Workmens' Compensation:

All lump sum settlements have worked around the employee voluntarily quitting. The employee is usually unhappy at that point, and we want a clean slate.

* * *

* * * [N]ormally, the employee is unhappy. The medical information is becoming conflicting, that there are several doctors involved. You build a hostility situation where no matter what you do everybody is not going to be happy.

ALJ: This is because of the previous dealings on the claim, is that correct?

Witness: That is correct. So what you arrive at, a lump sum settlement to me means a clean slate for everyone and off you go on with the rest of your life and we close up our books, and that is it.

* * *

* * *

ALJ: You are talking about a clean slate. If I understand you correctly is that what you are saying is that you felt that in view of the preceding history of this Workers' Compensation claim that there may have been some friction, and as a result you wanted Mr. Nance out of the company for a clean slate, is that correct?

Witness: That is correct.

On the basis of what he terms "generalized animus against longshore claimants as a class" because of friction engendered in the claim process, and specific testimony that Norfolk wanted a "clean slate" in the case of Nance, the ALJ found that Norfolk discriminated against Nance for filing a compensation claim in violation of 33 U.S.C. Sec. 948a. ³

Finding sufficient specific evidence of retaliatory intent in the case before him, the ALJ declined to reach the question of whether Norfolk's policy of conditioning settlement on voluntary termination was consistent with Sec. 49. But on appeal, the Board ruled, in addition to affirming the findings and conclusions of the ALJ, that Norfolk's general policy of conditioning settlements upon a termination of employment was a violation of Sec. 49 as a practice running "counter to the beneficent purpose of the Act."

II.

This appeal presents two issues: whether the ALJ correctly excluded the proffered evidence; and whether there was substantial evidence of discriminatory intent against Nance to hold Norfolk in violation of Section 49, or, in the alternative, whether the Board erred in holding that Norfolk's general policy of conditioning settlement on voluntary termination agreements violated the Act. Because we conclude that the ALJ correctly excluded the proffered evidence of the alleged oral agreement, and because we conclude that there was substantial evidence to support the finding of a violation of Sec. 49 of the Act, we do not address the broader question of whether the Board erred as a matter of law in holding Norfolk's general policy to be a violation of Sec. 49. ⁴

III.

In reviewing cases arising under the Act, our standard of review is limited to the determination of whether the ALJ's findings are supported by substantial evidence in the record considered as a whole. If findings are so supported and are not arbitrary, they may not be disturbed. Dickens v. Tidewater Stevedoring Corp., 656 F.2d 74, 76 (4 Cir.1981).

The ALJ rejected Norfolk's proffered evidence of an oral agreement partly on the basis of the parole evidence rule. The parole evidence rule is a substantive rule of law, not a rule of evidence, which bars the admission of extrinsic evidence to vary or contradict the terms of a complete and integrated written agreement. While the ALJ referred explicitly to the rule, he also noted that the settlement form itself requires that the Deputy Commissioner approve settlements on the basis of the information disclosed in the form. The Board further noted that the Act both requires such approval and prohibits an employee from waiving rights to compensation except through approved settlements. Section 8(i)(1), 33 U.S.C. Sec. 908(i)(1), provides that the settlement be approved only under certain conditions:

[T]he deputy commissioner or administrative law judge shall approve the settlement within thirty days unless it is found to be inadequate or procured by duress.... No liability of an employer ... shall be discharged unless the application for settlement is approved by the deputy commissioner or administrative law judge....

Claimants are not permitted to waive their right to compensation except through settlements approved by the deputy commissioner, see 33 U.S.C. Secs. 915, 916. A regulation passed pursuant to the Act, 20 C.F.R. Sec. 702.242(a), expressly provides that the Form LS-471 must be a "self-sufficient" document, and 20 C.F.R. Sec. 702.242(b)(1) further provides that the settlement agreement include "[a] full description of the terms of the settlement....." ⁵ Thus this appeal presents an even stronger case for the exclusion of evidence not disclosed in the settlement form than a case involving a general application of the parole evidence rule in administrative proceedings. The terms of the settlement agreement, in conjunction with the statutes and regulations that govern its effect, prohibit enforcement of any...