Taxpayers do not have to pay a Hanford contractor’s legal expenses for two racial discrimination lawsuits brought by its employees, according to a Tuesday ruling of the U.S. Court of Appeals for the Federal Circuit.
The appeals court upheld an April 2018 decision of the U.S. Court of Federal Claims that the Department of Energy did not need to reimburse Bechtel National $500,000 for its legal defense costs in discrimination lawsuits filed by two employees. Both were fired.
Bechtel argued that previously DOE had always reimbursed Bechtel for its costs to defend and settle lawsuits, including employment discrimination claims. Bechtel holds the DOE contract to design, build and start up the $17 billion vitrification plant at the Hanford nuclear reservation.
But in 2016 DOE denied payments for costs Bechtel incurred in defending employment discrimination lawsuits in 2012.
Bechtel declined to comment this week on the underlying cases, noting there was no admission of liability by Bechtel and that the matters had been settled to the satisfaction of both Bechtel and the former employees who sued.
The cases were not named in Bechtel’s lawsuit and appeal over reimbursement from the federal government, but in 2012 it settled two discrimination lawsuits.
Bechtel workers allege discrimination
In one, Linda Mims-Johnson said racist and sexual graffiti, drawings and threats were pervasive and severe in the restrooms and portable toilets that she was responsible for cleaning.
Once she found a drawing of a black man hanging from a noose with a statement that said “a good n----- is a dead n-----,” and threatening “you are next Linda,” according to court documents.
Other graffiti referenced the Ku Klux Klan and was sexually graphic, including a drawing of an African-American female being sodomized by a white male with a reference to then First Lady Michelle Obama.
She repeatedly complained to a supervisor but continued to be assigned to clean the restrooms and remove graffiti, according to her lawsuit. When she covered the graffiti with black spray paint, as instructed, new harassing graffiti appeared in white marker, the lawsuit said.
A few weeks after she filed a detailed complaint, she was fired, according to her lawsuit.
Bechtel said before the case was settled that she was not fired for any reason related to the complaints she made.
One of her job duties was graffiti abatement, but within days of her official complaint she was no longer assigned to the single restroom with the offensive graffiti, Bechtel said before the settlement was reached.
The second employee lawsuit settled in federal court in 2012 contains little detail of the allegations.
Willie S. Lockhart said he faced racial discrimination and harassment that Bechtel failed to eliminate.
Court considers likelihood of Bechtel losing cases
The appeals court said that the lower court appropriately applied a legal standard that costs may be reimbursed for settling discrimination claims only when a contract shows that plaintiffs had “very little likelihood” of winning a case.
The standard prevents contractors from having to pay costs of potentially frivolous lawsuits, but makes them responsible for costs of discrimination cases they might have lost if they had not settled.
Bechtel did not challenge the DOE determination that its former employees’ claims had more than very little likelihood of success in its appeal, the ruling issued Tuesday said.
The appeals court also pointed out that under DOE’s Bechtel contract, Bechtel was prohibited from discriminating against any employee because of race, color, religion, sex or national origin.
Bechtel did not seek reimbursement of the settlement amounts in addition to its costs of defending the lawsuits, likely because they were covered by insurance, according to the appeals court.
The vitrification plant project is committed to “a positive work environment that is free from discrimination, harassment, intimidation and retaliation,” said Bechtel spokesman George Rangel on Wednesday.
Bechtel says DOE contract terms at issue
Bechtel was still assessing the appeal’s court rationale in its ruling, Rangel said. He described the lawsuit as involving a “longstanding question of contractual interpretation.”
Bechtel argued in its case before the appeals court that because of the nature of the work performed by contractors such as Bechtel, DOE assumes virtually all operational and financial risk by reimbursing contractor costs.
Contractors might otherwise decline to do work “given the extreme risks associated with attempting to immobilize 56 million gallons of highly radioactive waste,” Bechtel said in court documents.
The vitrification plant is being built to turn much of the 56 million gallons of waste stored in Hanford’s underground tanks into a stable glass form for disposal. The site’s waste is left from the past production of plutonium for the nation’s nuclear weapons program.