A Dispute Resolution at the Workplace
Abstract
Companies are moving away from expensive litigation and opting for more time and cost effective methods for resolving disputes, including my present employer, Marathon Oil Company (“Marathon”). A recent incident and the resolution technique used by Marathon are presented along with an analysis of the effectiveness of the technique used.
An Assessment of
A Dispute Resolution at the Workplace
On November 8, 1999, Marathon Ashland Petroleum (“MAP”), Catlettsburg, Kentucky refinery, owned 68% by my employer, Marathon Oil Company (“Marathon”), had a tank rupture incident submitted for investigation. On this day, water in the bottom of tank 845 reached the boiling point and expanded into steam causing a foam-over of gas oil. The weld between the roof and top of the tank failed and allowed the foam mixture to erupt through openings in the top of the tank. The oil mist was sprayed into the air on and off the refinery’s property. The erupted oil made its way into the parking lot behind the control lab of the refinery where it contacted several parked cars. The liquid traveled down the road and into nearby storm sewers.
This event was typical of a foam-over caused by water vaporizing in hot oil. The source of the water was not concluded due to limited availability of data. The tank was removed from service and several in-house corrective actions were initiated. Refinery personnel were alerted to the potential hazards of water in a hot atmospheric storage tank. Production planning was revised to ensure all process limitations were incorporated into the plan. Finally, internal process limits were modified to comply with new post-incident guidelines set forth by Marathon.
MAP’s Catlettsburg refinery received a notice of violation from the Kentucky Natural Resources and Environmental Cabinet (“the Cabinet”) regarding the rupture of tank 845. MAP has been involved in discussions with the Cabinet to resolve this issue. MAP and the Cabinet chose to pursue the mutual settlement program. The Mutual Settlement Program offered MAP and the Cabinet the opportunity to settle the alleged violation without expensive and time-consuming litigation. Once the violation was referred to the Mutual Settlement Program, MAP received a settlement offer asking for payment of a penalty of $150,000. Negotiations of the actual amount to pay regarding the penalty are still in progress and the final penalty accessed to MAP is expected to range from $90,000 to $120,000. MAP believes that the matter will be resolved in 2003.
I feel that the decision to refer the settlement to a third party was effective. In this incident, the Mutual Settlement Program acts as a mediator between the Cabinet and MAP. The management and staff of MAP are not diverted from normal revenue-earning activities by choosing to forgo a trial and settle to have the matter negotiated through an independent party. Furthermore, the likelihood of the working relationship [next page]