Shaw Group ordered by NRC to institute sweeping improvements to protect whistleblowers

Source: Katz, Marshall & Banks, LLP

The Nuclear Regulatory Commission (NRC) has ordered the Shaw Group (NYSE: SHAW), a Fortune 500 corporation with over 28,000 employees, to institute sweeping improvements in how it responds to workers' safety complaints throughout its U.S. nuclear operations. The NRC's order follows a U.S. Department of Labor (DOL) ruling that a Shaw Group company broke federal law when it fired James Speegle, a painter foreman at the Tennessee Valley Authority's Browns Ferry Nuclear Plant near Florence, Alabama, in May 2004. 

The Shaw Group provides construction and maintenance services to over thirty operational nuclear power plants and related NRC-regulated facilities throughout the nation. On September 24, 2009, a DOL appeals panel found that Stone & Webster Construction, Inc., a Shaw Group subsidiary, violated Speegle's rights under federal whistleblower-protection law by terminating him at Browns Ferry. 

Prior to his termination, Speegle had pointed to serious problems with the protective paint coatings being applied to the plant's cooling systems. Improper coatings in a nuclear plant can cause paint debris to clog emergency cooling pumps and prevent a safe shutdown of the reactor in the event of an accident. At the time of Speegle's firing, Browns Ferry's Unit 1 had been closed for 25 years due to safety problems. Speegle insisted that Stone & Webster, which was hurrying to complete work under an $800 million contract with TVA to restart the troubled reactor, was endangering the plant and surrounding communities by applying substandard coatings in critical areas of the cooling system. The company fired him two days after he reported his concerns to the Nuclear Regulatory Commission. 

TVA later removed Stone & Webster from the project and spent millions re-doing the work about which Speegle had complained. In late 2008, the company paid $6.2 million to settle a False Claims Act case with the U.S. government, which had accused the company of widespread fraud on TVA construction contracts at nuclear plants, including the contract at Browns Ferry. 

Speegle's successful suit prompted the NRC take action against the Shaw Group under the commission's power to enforce whistleblower-protection regulations at U.S. nuclear plants. The resulting order requires the Shaw Group to take the following steps across its entire U.S. nuclear operations, and threatens the company with civil and criminal penalties if it fails to implement these measures: 

• Shaw Group must issue a written statement from senior management to all nuclear employees addressing the DOL ruling against the company in the Speegle case and identifying avenues through which nuclear workers can raise safety concerns. 

• The company is ordered to set up a high-level internal review board to scrutinize every serious disciplinary action at the company's nuclear job sites to ensure compliance with employee-protection laws and to prevent any "chilling effect" on what the NRC calls a "safety conscious work environment." 

• Shaw must conduct employee surveys at its nuclear sites to measure workers' views of the "safety conscious work environment," review the survey results for appropriate action, and make semi-annual reports to the NRC. 

• The company will collect data regarding labor grievances and disciplinary action and its compliance office will review the data quarterly and make needed recommendations to line management. 

• Shaw must train all nuclear supervisors and managers in the NRC's "safety conscious work environment" concept, training to all Shaw Nuclear Maintenance supervisors and above at Shaw nuclear maintenance sites, including an overview of regulatory requirements and case studies.

Speegle's attorney, David J. Marshall, welcomed the NRC's action. "This will make it a lot easier for Shaw Group's workers to speak out about nuclear safety," Marshall said, "The NRC's order also forces the company's upper-level management to take responsibility for any future retaliation against whistleblowers." Marshall praised also Speegle for the determination he has shown in prosecuting his whistleblower case against Stone & Webster. "James spoke out for the safety of his co-workers and his community. He fought back when the company fired him. And now he has made it safer for Shaw Group workers nationwide to blow the whistle on nuclear safety issues." 

David J. Marshall, Debra S. Katz and Matthew S. Stiff, attorneys at Katz, Marshall & Banks, LLP, and Frank B. Potts, attorney at Potts & Young Attorneys, LLP, represent Speegle in his case before the DOL.

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