” _________________________________??????????????????????????????????????????????????????????????????????? :SECRETARYOF LABOR,??????????????????????? :??????????????????????????????????????????????????????????????????????? :??????????????????????? Complainant,??????????????????????? :??????????????????????????????????????????????????????????????????????? :v.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0::ERIC K. HO,???????????????????????????????????????????????? :?????????? OSHRC Docket Nos. 98-1645 & :?????????????????????????????????????????????? ? 98-1646HO HO HO EXPRESS, INC.,??????????????????? :??????????????????????????????????????????????????????????????????????? :HOUSTON FRUITLAND, INC.,?????????????? :??????????????????????? Respondents.??????????????????????? :_______________________________???:\u00a0DECISIONBefore: RAILTON, Chairman; STEPHENSand ROGERS, Commissioners.BY THE COMMISSION:??????????? These cases arise out of theSecretary?s citations charging that Respondents Eric K. Ho (?Ho?) and twocorporations controlled by Ho ? Ho Ho Ho Express, Inc. (?Ho Ho Ho Express?) andHouston Fruitland, Inc. (?Houston Fruitland?) ? violated the Occupational Safetyand Health Act of 1970, 29 U.S.C. ?? 651-678 (?the Act?), at a worksite whereemployees were exposed to asbestos in the course of a project to renovate abuilding.? The Secretary alleges thatRespondents committed willful and serious violations by failing to comply withthe construction industry asbestos standard at 29 C.F.R. ? 1926.1101 and otherconstruction safety standards in Part 1926.?The Secretary also alleges an other than serious violation for failingto report an accident, contrary to section 1904.8.? In addition, the Secretary alleges thatRespondents willfully violated section 5(a)(1) of the Act, 29 U.S.C. ?654(a)(1), the ?general duty clause,? upon exposing employees to a hazard whenRespondents failed to recognize a natural gas line.??? ??????????? Respondents do not dispute theexistence of the violations themselves but raise legal issues regarding theapplication of the Act. For the reasons that follow, the Commission affirms thejudge?s conclusion that Ho is engaged in a business affecting interstatecommerce and, therefore, subject to the Act.?However, the Commission reverses that portion of the judge?s decision inwhich he determined that the two corporate Respondents were properly cited forthe violations. We also conclude that the judge erred in affirming violationsfor failure to comply with certain provisions of the asbestos standard asseparate violations for each exposed employee. In addition, we affirm thejudge?s decision that the violation pertaining to the misidentified gas linewas not willful.BACKGROUND??????????? OnOctober 27, 1997, Ho, acting as an individual,1 purchased a defunct hospital andadjoining medical office building in Houston, Texas, for the purpose ofdeveloping the property as residential housing.?There is no dispute that Ho was aware asbestos was present at the site.Ho signed a property disclosure statement which stated that the propertycontained asbestos, and the broker who handled the transaction gave Ho a copyof a study by an environmental consultant identifying asbestos fireproofing,floor tiles, and other asbestos materials. This report specifically cautionedthat ?any disturbance or alterations made to asbestos-containing materials mustbe handled by trained personnel who are licensed and registered with the TexasDepartment of Health (TDH) using proper procedures and respiratory protection.???????????? Despite this explicit warning, Hohired two individuals, Manuel Escobedo (?Escobedo?) and Corston Tate (?Tate?),who had previously done construction work for him personally or for therespondent corporations, to conduct the renovation work, including the removalof asbestos material from the building. Escobedo in turn hired 11 Mexicannationals who were illegal immigrants to assist with the work, which commencedaround January of 1998. There is no dispute that at most, the workers weregiven dust masks not suitable for protection against asbestos that they woreonly occasionally. They were not issued protective clothing as required by theasbestos standard. Ho also did not do any of the following: provide arespiratory protection program; conduct medical surveillance of the workers;conduct any asbestos monitoring; or implement any of the work practicesrequired by the standard, such as adequate ventilation and debris removal. Theworkers were not informed of the presence of asbestos, of the hazardsassociated with it, or of the appropriate work practices.? In short, the workers were given no trainingwhatsoever. Conditions at the site also violated other provisions of thestandard pertaining to such matters as identification of regulated areas,warning signs, decontamination areas, and pre-work assessments of the amount ofasbestos-containing material. Ho visited the site almost every day, and thereis no dispute that he was aware of these conditions. ??????????? OnFebruary 2, 1998, approximately a month after the work started, a cityinspector visited the site in response to a complaint of work being performedwithout a permit. He observed at least ten individuals scraping fireproofingmaterial with visible dust in their breathing area. A few of these workers haddust masks, but none had respiratory protection or protective clothing.? The city inspector issued a stop work orderciting the possibility of exposure to asbestos, and his order required thatcity approval be obtained before work could continue.? Ho then began negotiating for removal of theasbestos material with Alamo Environmental, a contractor that specializes inasbestos abatement. These negotiations continued until March 27, 1998, when Honotified Alamo by fax that he agreed to Alamo?s proposal. ??????????? However,during the period of time that Ho was negotiating with Alamo, he had resumedwork at the site under the same conditions with the exception that, followingthe city inspection, Ho directed that the work be performed at night.? Not only did the workers have their meals atthe site, some in fact lived at the site. During the night, when they wereworking, the gate to the property was locked, and the workers were kept inside.There was no portable water available to the workers and only one portabletoilet, which never was emptied during the time the workers were using it. Dueto the condition of the toilet, most workers wound up relieving themselves onthe ground around the property, or if they wished, Tate would allow them toleave the premises to use the restroom at a nearby commercial establishment. Ifthe employees needed anything, Tate, who had a key to the gate, was given moneyby the employees, and he would go off the site to make purchases for them.Again, there is no dispute that Ho visited the worksite during this period oftime and was aware of these conditions. ??????????? Theasbestos removal was conducted in this fashion until its completion on March10, 1998.? Having completed this portionof the renovation work, Ho directed that starting March 11, the remaining workwould continue during daylight hours. On March 11, an explosion and fireoccurred at the worksite, injuring Tate and two workers.? The following day, workers were summoned toHo?s office where they were given a release to sign. Under the terms of the release,each worker purported to acknowledge ?that such work was performed by him as anindependent contractor, and not as an employee of Eric Ho?.? In addition toacknowledging receipt of $1000 ?as full payment for the work performed by theundersigned,? each worker also agreed to accept an additional $100 in exchangefor releasing Ho from any claims arising or that might arise as a result of theexplosion and fire. These release forms were written in English, but aninterpreter was present who read the document in Spanish to the workers.??????????? Afterthe explosion, the TDH conducted an investigation. Samples taken of both debrisand the ambient air at the site showed levels of asbestos in excess of limitsprescribed by the United States Environmental Protection Agency as well asstate standards. The state authorities also notified Ho that the site remainedin an unsafe condition and that the building needed to be sealed by qualifiedpersonnel. Ho?s response was to direct several of the workers to installplywood over the windows. Again, the workers were not given any protectiveequipment when performing this work. Ho was subsequently convicted of criminalviolations of the Clean Air Act, 42 U.S.C. ?\u00a07413(c) (?CAA?). The FifthCircuit recently upheld those convictions. United States v. Eric Kung-ShouHo, 311 F.3d 589 (5th Cir. 2002) (?Ho?), cert. denied, 123 S.Ct.2274 (2003).APPLICABILITY OF THE ACT??????????? Thefirst issue before us is whether the judge properly concluded that the Actapplies to Ho?s activities. The Act applies to a ?person engaged in a businessaffecting commerce who has employees.? 29 U.S.C. ? 652(5). ?See Don Davis, 19 BNA OSHC 1477,1479, 2001 CCH OSHD ?\u00a032,402, p. 49,896 (No. 96-1378, 2001).Notwithstanding his efforts during the course of the work to treat the workersas independent contractors, Ho neither contends that he is not the employer ofthe eleven workers, nor does he dispute that he is the employer of Tate andEscobedo. Rather, Ho contends that the Secretary failed to establish that hisactivities constitute a ?business affecting commerce.???????????? Weagree with the judge?s decision that Ho?s activities at the worksitesufficiently affect interstate commerce so as to be subject to the Act.? In reaching this conclusion, we rely, as didthe judge, on Commission precedent holding that construction work, such as thatperformed by Ho, necessarily is covered by the Act.? See, e.g., Clarence M. Jones d\/b\/a C.Jones Co., 11 BNA OSHC 1529, 1983-84 CCH OSHD ? 26,516 (No. 77-3676, 1983)(construction work per se affects interstate commerce because there isan interstate market in construction materials and services). We also note thatthe circumstances here are analogous to those in Godwin v. OSHRC, 540F.2d 1013, 1016 (9th Cir. 1976), in which the employer was clearing land toplant a vineyard with the eventual objective of selling grapes to wineries orproducing and selling wine directly.? In Godwin,the court reasoned that because the clearing of land is an integral part of theprocess of manufacturing wine, the employer?s activities would have an effecton interstate commerce when ?taken together with land clearing byothers? and, therefore, the court concluded that unsafe working conditionsat the employer?s worksite would thereby affect all other similarly situatedbusinesses.? Id. at 1016 (emphasisadded).? As the court stated, ?[t]heeffect of permitting one business to use cheaper ? but more dangerous ? workmethods will tend to force competitors to cut their land clearing costssimilarly.? Id. (footnote omitted). Thus, the effect on interstatecommerce existed. Likewise, by conducting asbestos abatement withoutcontracting for such services, Ho deprived established asbestos abatementspecialists of the opportunity to perform the necessary work at his worksite, therebyaffecting the interstate market in asbestos control and removal. ??????????? TheFifth Circuit reached the same conclusion when it rejected Ho?s claim thatCongress lacked constitutional authority under the Commerce Clause to regulatehis work activities.2 ?The courtexplained that a regulation can reach intrastate commercial activity that byitself is too trivial to have a substantial effect on interstate commerce butwhich, when aggregated with similar and related activity, can substantiallyaffect interstate commerce.? Ho,311 F.3d at 599.? As the court noted,this rule has come to be known as the ?aggregation? principle.? Id. at 598-99 (citing Wickardv.? Filburn, 317 U.S. 111(1942)).? The court expressly held that Ho?sfailure to use the services of licensed asbestos abatement providers had aneffect not only on the providers of such services but also on the commercialreal estate market itself.? Id. at603-04.? Thus, the court determined thatHo ?deprived licensed abatement companies of a promising business opportunity.?Id. at 603.? Because ?thesesubstantial effects on the asbestos removal market are direct, not attenuated,?the court found that the use of the aggregation principle was justified.? Id.?The court further concluded that: Ho?sillicit asbestos removal project likely would reduce the number of companiesproviding asbestos removal services. Fewer companies means that conscientiousproperty owners would have more trouble locating licensed abatement companiesand likely would have to pay higher prices for the services of remainingcompanies. Furthermore, Ho would gain a commercial advantage over conscientiousproperty owners who must pay these higher prices for asbestos removal.Id. at 604.? Seealso Lacy, 628 F.2d at 1228 (court held that under statutes such as the Actthat use the terminology ?affect commerce,? coverage exists ?so long as thebusiness is in a class of activity that as a whole affects commerce?).??????????? Basedon these authorities, we therefore conclude that the judge properly found Ho tobe engaged in a business affecting commerce.3 ?LIABILITY OF THE CORPORATIONS??????????? Theprimary issue before us is whether the two corporations as well as Ho as anindividual can properly be cited for the violations. The judge concluded thatthe corporations are responsible for the violative conditions under either oftwo theories that apply Fifth Circuit law: (1) that the respondent corporationsare merely the ?alter ego? of their shareholder, Ho, and under the ?reverse-piercing?doctrine, they are liable for his obligations; or (2) that the respondentcorporations constitute a ?sham to perpetrate a fraud? and, thus, theircorporate fictions should be disregarded in order to hold Ho liable.?? We conclude that the judge?s factualfindings are not supported by the evidence and that the judge misconstrued therelationship between Ho and the corporations.??????????? Hoowns 67 percent of the stock of Houston Fruitland and Ho Ho Ho Express.? The remaining shares are held by various minorityshareholders. Ho is president of Houston Fruitland and his wife, Melissa, issecretary. Ho is both president and secretary of Ho Ho Ho Express. HoustonFruitland has about 20 employees and is a fruit and vegetable wholesaler. Ho HoHo Express is an ICC common carrier that does 90 percent of its businessproviding transportation services for Houston Fruitland and has approximately32 employees.? ??????????? Hofinanced the $700,000 purchase price of the medical and hospital buildingssubject to the cited renovation work in the following manner: Ho Ho Ho Expressand two other corporations4 advanced a total of $440,000 to Houston Fruitland, which in turn put up$180,000 of its own funds, $80,000 of which came from the proceeds of the saleof a building owned by Houston Fruitland. This aggregate of $620,000 wasrecorded on Houston Fruitland?s general ledger as a credit due to HoustonFruitland from Ho. An undisclosed ?outside source? provided the remaining$80,000.? A similar arrangement existedfor the payment of wages to the workers and the purchase of supplies andequipment for the renovation work. Generally speaking, these expenses were paidbased on invoices submitted to Ho by Tate and Escobedo.??????????? ??????????? As the principal shareholder, Howould customarily initiate transfers of funds among himself, Ho Ho Ho Express,and Houston Fruitland.? Each suchtransfer was documented as a debit owed by one corporation to the other or as adebit owed by Ho. There were no loan documents, no interest due, no schedulefor repayment, and no representation that Ho ever fully repaid any of hisloans. On the other hand, although the record is not completely explicit, thereis evidence of some amount of repayment by Ho. ??????????? Anemployee of Ho Ho Ho Express, Melba Gomez, performed services as Ho?sassistant, including what she described as Ho?s ?personal agenda,? such astaking personal phone calls, handling certain investments for Ho, and doingsome personal errands for Ho. Gomez assisted Ho in his dealings with the realestate broker for the hospital purchase and on occasions when Ho was out oftown, she made several visits to the worksite to check whether Tate neededanything. She also wrote in Spanish or translated some documents pertaining tothe work at the site. ????? ???????????? Inholding that the corporations were alter egos of Ho and, therefore, thecorporate veil could be ?reverse-pierced? so as to impose liability on thecorporations, the judge cited Permian Petroleum Co. v. Petroleos Mexicanos,934 F.2d 635 (5th Cir. 1991), which recognizes the concept of reverse-piercingwhere ?a party seeks to hold a corporation liable for the obligations of ashareholder.?? Id. at 643.? Permian concerned a dispute as to theamount of natural gas that had been delivered pursuant to a contract. The issuebefore the Fifth Circuit was whether Permian?s corporate form should bedisregarded for purposes of the contract.?Relying on Texas state law, the court concluded that an alter egorelationship exists ?where there is such unity between corporation andindividual that the separateness of the corporation has ceased.?? Id. According to the Permiancourt, ?[w]hether the alter ego doctrine applies depends upon the followingfactors:?the total dealings of thecorporation and the individual, including the degree to which corporateformalities have been followed and corporate and individual property have beenkept separately, the amount of financial interest, ownership and control theindividual maintains over the corporation, and whether the corporation has beenused for personal purposes.Id. at 643 (citing Castleberryv. Branscum, 721 S.W. 2d 270, 272 (Tex. 1986)). ??????????? Relying upon these factors, thejudge found that Ho ?solely directs the activities of both corporations,? andfunds are moved between the corporations and disbursed at Ho?s directionwithout the observance of corporate formalities.? The judge concluded that Ho Ho Ho Express andHouston Fruitland are ?alter egos? of Ho because Ho and the two corporationsare ?financially interconnected? and Ho would not have been able to conduct hisattempted renovation project if he had not had access to the corporateresources. Upon determining that Ho?s interests were ?indistinguishable? fromthose of the corporations, the judge found that the Secretary properly treatedthe corporations as Ho?s alter egos. ??????????? Inaddition to Permian, the Secretary contends on review that the FifthCircuit?s subsequent decision in Century Hotels v. United States, 952F.2d 107 (5th Cir. 1992), provides additional support for the judge?sconclusion that Ho Ho Ho Express and Houston Fruitland were properly treated asalter egos of Ho.? In Century Hotels,the court upheld a federal tax levy by the Internal Revenue Service under theInternal Revenue Code, 26 U.S.C. ? 7426, against family-held corporations forthe tax liability of individual family members. In determining whether acorporation is an alter ego of a stockholder, the court held that the ?totalityof the circumstances? must be taken into consideration. Id. at 110.? See also U.S. v. Jon-T Chemicals, Inc.,768 F.2d 686, 694 n.8 (5th Cir. 1985).? ??????????? Whilethese Fifth Circuit cases establish that the doctrine of ?reverse-piercing? isrecognized under Texas state law and may be applied not only in disputesbetween private parties but also to actions under federal statutes where thefederal government or a federal agency is a party seeking to made whole,5 these precedents do not address the application of thedoctrine in the context of remedial social legislation such as the Act.? In United States v. WRW Corp., 986F.2d 138 (6th Cir. 1993), however, the court held that individual corporateofficers and shareholders could be held liable for civil penalties assessedagainst a corporation for violations of the Federal Mine Safety and Health Actof 1977, 30 U.S.C. ? 801 et. seq.?The court concluded that it was appropriate to pierce the corporate veilafter considering such factors as whether corporate formalities were observed,whether the individuals diverted corporate funds, and whether corporate and personalfunds were commingled.? See alsoUnited States v. Bestfoods, 524 U.S. 51, 64-65 (1998) (corporate veil maybe pierced to hold parent corporation liable for actions of a subsidiary inviolation of the Comprehensive Environmental Response, Compensation, andLiability Act, 42 U.S.C. ? 9607(a)(2)).6 Insofar as ?reverse-piercing? is acorollary principle to piercing the corporate veil, we find that it may haveapplication in the context of determining liability under a remedial statute.??????????? Uponconsideration of the relevant precedent and the various factors set forth inthese cases, we see no basis to construe the record evidence to imposeliability upon the respondent corporations.?In reaching this conclusion, we are guided by the holding in the FifthCircuit that ?[t]he corporate form?is not lightly disregarded, since limitedliability is one of the principal purposes for which the law has created thecorporation.? Krivo Indus. Sup. Co. v. National Distillers & Chem. Corp.,483 F.2d 1098, 1102 (5th Cir. 1973).? AsRespondents correctly point out in their brief on review, the limited recordbefore us indicates that Ho Ho Ho Express and Houston Fruitland are existingcompanies that conduct operations and have employees engaged in activitiesbearing no relationship to the property redevelopment project initiated by Ho.There is nothing in the record to suggest that these freight hauling andproduce growing operations, respectively, are not legitimate, ongoingenterprises from which the companies derive the bulk if not the entirety oftheir revenues. Nor is there anything to suggest that the companies do notexist for the purpose of performing services related to these activities.Notwithstanding the judge?s contrary factual finding, there is no evidenceregarding the management of these activities or to show Ho?s role, if any, indirecting the day-to-day conduct of those corporate operations.? Moreover, the Secretary has not establishedon this record that Ho personally has that responsibility. On these facts, weare unable to hold, as did the court in Century Hotels, that thecorporations in question are ?mere business conduit[s] for the purposes of thecontrolling entity,? 952 F.2d at 112.? SeeVergona Crane Co., 15 BNA OSHC 1782, 1783, 1991-93 CCH OSHD ?\u00a029,775,p. 40,496 (No. 88-1745, 1992) (two corporations can be ?regarded as a singleentity where?they share a common worksite, have interrelated and integratedoperations, and share a common president, management, supervision, orownership?).??????????? Unquestionably, the casual manner inwhich funds were routinely transferred amongst Ho and the respondentcorporations indicates a somewhat lax attitude toward the corporate structure.However, we cannot find on this record that the corporate formalities weredisregarded. Ho Ho Ho Express and Houston Fruitland maintained separate anddistinct bank accounts as well as the appropriate corporate ledgers. Alldisbursements for project expenses were recorded in the corporate ledgers asaccounts receivable, and disbursements made directly to Ho were shown ascredits due from Ho in a specific shareholder account. There is no contentionby the Secretary, nor any evidence to show, that this recordkeeping was in anyway inaccurate or misleading. Moreover, while Respondents submitted copies ofpersonal income tax schedules filed by the corporate stockholders for the taxyears 1996, 1997, and 1998, the Secretary failed to put in the record anyfinancial statements, corporate tax returns, or any other evidence from whichwe could determine what proportion of corporate revenues were spent on Ho?sredevelopment project. We therefore cannot ascertain whether the expenditureson the project represent a minor or significant amount of corporate resources.Indeed, the record fails to establish even the source of the funds that thecorporations disbursed to Ho. While corporate funds were clearly used forpayment of expenses relating to the project, including the purchase of theproperty, the most that we can conclude from that evidence alone is that thecorporations had a financial interest in the project. However, as the FifthCircuit noted in Krivo, 483 F.2d at 1104, the mere loan of money by acorporation does not in itself make the lender liable for the actions of theborrower.? ??????????? Similarly,there is no evidence from which we can determine what assets the companiesactually owned, let alone any showing that Ho actually diverted those assets tohis personal use.? The fact thatcorporate employees may have performed some personal tasks for Ho, includingsome activities relating to the work at the site, is in our view insufficientin the totality of the circumstances to establish that the corporate formshould be disregarded. In concluding that a corporation was the alter ego ofthe taxpayer, the court in Century Hotels relied in part on factsshowing that the taxpayer claimed to own no property, all his personal expenseswere paid by the corporation, he lived in a house owned by this and otherfamily corporations, and when the house was sold, he received a portion of theproceeds.? Plainly, Ho?s relationshipwith the cited corporations does not rise to the level that the court founddispositive in that case.? Cf. ZahraSpiritual Trust v. United States, 910 F.2d 240 (5th Cir. 1990) (governmentfiled tax liens against assets of corporations for tax liability of individualtaxpayers where corporate funds paid personal expenditures for taxpayers,taxpayers lived in homes owned by corporations with no lease agreement orobligation to pay rent, and one corporation was formed for the sole purpose ofholding title to real estate as a nominee of the taxpayers).? Accordingly, we find that the judge erred inconcluding that the respondent corporations are merely the alter egos of Ho.??????????? Wenow turn to the second basis for the judge?s decision to hold the respondentcorporations liable ? the ?sham to perpetrate a fraud? doctrine. The purpose ofthis doctrine is to prevent the corporate structure from being used to disguisefraud or illegality or to otherwise create an injustice. Permian, 934F.2d at 644. The doctrine is broader than that of ?alter ego,? as it is basedon principles of equity, in which the court seeks to determine whether thecorporate form breaches ?some legal or equitable duty which?the law declaresfraudulent because of its tendency to deceive others, to violate confidence, orto injure public interests.? Id. (quoting Archer v. Griffith, 390S.W.2d 735, 740 (Tex. 1964)). See also Bestfoods, 524 U.S. at 62.? However, the question of whether thecorporate form creates an injustice, while equitable in nature, like the alterego doctrine, depends on the overall factual circumstances and requires thecourt to find that on the facts of the case, adherence to the corporate formwould result in injustice or inequity. Permian, 934 F.2d at 644; Castleberry,721 S.W.2d at 273.??????????? Infinding this test to have been met, the judge made a factual finding that Ho?commingled? corporate assets with his own and then concluded that Ho sought toinvoke the ?fiction? of the corporation to ?protect? corporate assets. Thejudge held that Ho?s action was fraudulent because it ?frustrates theSecretary?s ability to enforce the Act through the effective enforcement ofcivil penalties.? In her brief on review, the Secretary similarly argues thatthe ?sham to perpetrate a fraud? doctrine is needed to prevent Ho from?insulating? the corporate assets from liability for OSHA penalties.??????????? Aswe have already found, the two corporations here are functioning entitieshaving employees and performing work activities of a nature, and at locations,separate and distinct from Ho?s redevelopment project. There is no indicationon this record that the corporate structure is such as to have a propensity to bedeceptive or injurious. Cf. Permian (formation of another companyperforming the same business as its predecessor created confusion as to theamount of gas delivered pursuant to the contract and thereby injured thebeneficiary of that contract); Castleberry (formation of a new companyconducting the same business, furniture moving, as an existing company for thepurpose of coercing a major shareholder in the existing company to liquidatehis interest). The cases on which the judge and the Secretary rely aredistinguishable as they involve either federal statutes whose purpose is therecovery of monies owed to the government or, as in Permian, a privatecause of action for money due under a contract. In those cases, whether assetswere concealed or made unavailable through the corporate structure is ofsubstantive significance. ??????????? TheAct, on the other hand, is a regulatory statute whose purpose is to preventemployers from exposing their employees to hazardous working conditions. Withthe exception of one occasion in which a truck belonging to Ho Ho Ho Expresswas observed at the project, the respondent corporations have no other apparentconnection to the worksite, no employees at the site, and, so far as can bedetermined on the record before us, no obligation to correct or abate thehazardous working conditions in question. There is simply no evidencewhatsoever that Ho Ho Ho Express or Houston Fruitland were created for thepurpose of concealing, or that they operate to conceal, the identity of theemployer of the exposed employees in these cases, or that the corporatestructure otherwise hinders or obstructs the corrective purposes of the Act.Accordingly, no safety or health purpose under the Act exists to warrantholding the corporations as citable entities in these cases.??????????? Furthermore,the Secretary has not established that maintaining the corporate form herewould work an injustice by rendering corporate assets unavailable for thepayment of civil penalties. In the first place, the Secretary?s position isfundamentally inconsistent insofar as she asks us to conclude that thecorporations and Ho are merely alter egos in part because Ho uses corporateassets for his personal projects, while at the same time, asks us to assumethat Ho would not use corporate assets for the payment of any assessedpenalties. In any event, the Secretary?s position is totally speculative. Thereis not even a representation by the Secretary that she has any basis on whichto conclude that assets would not be made available for the payment of whateverpenalties we might assess in our decision. Moreover, section 17(l) of the Act,29 U.S.C. ? 666(l), affords the Secretary access to the federal district courtsto pursue civil actions for the recovery of penalties. ??????????? Evenassuming that Ho would not be forthcoming with respect to the payment ofpenalties, the Secretary has failed to show that these penalty collectionprocedures would not allow her access to the corporate assets or that she wouldbe unable to make to the district court the same arguments she seeks to advancebefore us at this time. Indeed, the latter was precisely the situation beforethe Sixth Circuit in WRW, where the court upheld a judgment by adistrict court under 30 U.S.C. ? 820(j), the Mine Safety Act?s counterpart to29 U.S.C. ? 666(l), which likewise authorizes civil actions in district courtfor recovery of penalties. In its decision, the court made clear that in apenalty collection action the district court could properly disregard thecorporate structure under either an equity or alter ego theory. WRW, 986F.2d at 143. See also L.R. Willson & Sons, Inc., 18 BNA OSHC1641, 1999 CCH OSHD ? 31, 740 (No. 93-0785, 1999) (discussion of proceedings indistrict court as exclusive forum for raising arguments regarding penaltycollection). We therefore conclude that in the circumstances presented here,the Secretary has failed to establish grounds for us to hold the respondentcorporations liable under either the ?alter ego? or the ?sham to perpetrate afraud? doctrines.I.? PROPRIETY OF CITING VIOLATIONS ON APER EMPLOYEE BASISA.? Background to Secretary?s per employeecitationsTheSecretary charges Ho with multiple violations of the respirator and trainingprovisions of the asbestos standard.?Specifically, Items 5 through 15 of Citation 2 allege eleven willfulviolations of the respirator standard, former 29 C.F.R. ? 1926.1101(h)(1)(i),on a per-employee basis, and Items 17 through 27 of Citation 2 allege elevenwillful violations of the asbestos training standard, 29 C.F.R. ??1926.1101(k)(9)(i) and (k)(9)(viii), also on a per-employee basis.? Ho does not challenge the judge?s decisionaffirming these items but argues that the respirator items should be groupedinto one item and the training items likewise grouped into one item.? The Secretary cites prior Commissiondecisions, including our decisions in Caterpillar, Inc., 15 BNAOSHC 2153, 1991-93 CCH OSHD ? 29,962, p. 41,005 (No. 87-922, 1993), and HartfordRoofing, Inc., 17 BNA OSHC 1361, 1995-97 CCH OSHD ? 30,857 (No. 92-3855,1995), for the proposition that our precedents allow per-instance violationsand penalties. She asks the Commission to affirm the per-employee citationitems issued to Ho and the separate penalties she proposes for those itemsbecause in her view both of the standards cited here implicate individualemployee protection. While we agree that Ho is one of the worst employers theCommission has had come before it, we cannot allow harsh facts to result in badlaw ? a result which would clearly follow should we accept the Secretary?sproposed penalties. The law regarding how employers who are considered?bad actors? should be penalized for violations of the Act is still developing.This is evident both from the nature of the cases that have come before ussince 1986, as well as from the Secretary?s adoption in 1990 of a compliancedirective that she characterizes as her ?egregious\/willful penalty policy.? SeeOSHA Instruction CPL 2.80, Handling of Cases to be Proposed forViolation-by-Violation of Penalties, 1 BNA OSHR Ref. File 21:9649, 9650,1990 CCH ESHG New Developments, ? 10,662, pp. 13,589-90 (Transfer Binder)(October 1, 1990).[1] Againstthis backdrop, we consider the Secretary?s arguments in support of theper-employee violations alleged here and the separate penalties she hasproposed.? B.? The Commission?s decisions in Caterpillarand Hartford Roofing TheCommission has taken several steps on the road to assessing individualpenalties for per-instance violations of regulations and standards, and we arenot persuaded here to depart from those precedents.? We note that a review of our prior decisionsindicates that the Commission has considered two different aspects of assessingpenalties on a violation-by-violation basis: in Caterpillar, the violationsat issue were cited per-instance and in Hartford Roofing, the violationsat issue were cited per-employee.? TheSecretary relies on Caterpillar and Hartford Roofing as supportfor her alleged authority to cite Ho on a per-employee basis.? However, we fail to see how these casesrecognize the authority the Secretary claims here.? In Caterpillar,where violations of the recordkeeping standard at section 1904.2(a) were atissue, the Commission held that per-instance violations and penalties areappropriate when the cited regulation or standard clearly prohibit individualacts rather than a single course of action. Caterpillar, 15 BNA OSHC at2172-73, 1991-93 CCH OSHD at pp. 41,005-06. Thus, in Caterpillar weconcluded it was permissible to assess individual penalties for each instanceof violation based on an employer?s failure to make a proper recordkeepingentry on its OSHA injury and illness logs.?Id.? We note, however, thatour decision was not tied to egregious conduct on the part of the cited employer.? Having found that the established violationswere not willful, we assessed individual penalties of other than seriousviolations. Id. at 2177-78. See also Kaspar Wire Works, Inc., 18BNA OSHC 2178, 2000 CCH OSHD ?\u00a032,134 (No. 90-2775, 2000), aff?d,268 F.3d 1123 (D.C. Cir. 2001) (separate penalties were assessed for individualrecordkeeping infractions characterized as both willful and other thanserious).[2] In HartfordRoofing, the Commission refused to find individual violations cited on aper-employee basis for an employer?s failure to guard a roof perimeter.? We concluded that the violations alleged inthat case concerned a single work practice or condition:Some standards implicate theprotection, etc. of individual employees to such extent that the failure tohave protection in place for each employee permits the Secretary to cite on aper-instance basis.? However, where asingle practice method or condition affects multiple employees, there can beonly one violation of the standard. HartfordRoofing, 17 BNA OSHC at 1365, 1995-97 CCH OSHD at p. 42,935 (footnoteomitted).In subsequent decisions, theCommission has applied the principle set out in Hartford Roofing toassess one penalty for a single violation involving the exposure of multiple employeesto a single recognized hazard (Arcadian Corp., 17 BNA OSHC 1345, 1995-97CCH OSHD ?\u00a030,856, p. 42,918 (No. 93-3270, 1995), aff?d, 110 F.3d1192 (5th Cir. 1997)), and to assess multiple penalties for multiple violationsof a standard which prescribes conduct specific to individual employees (SandersLead Co., 17 BNA OSHC 1197, 1993-95 CCH OSHD ? 30,740 (No. 87-260,1995)).? The key to all of thesedecisions was the language of the statute or the specific standard orregulation cited.[3] ? ?We now turn to the issue of whether the language ofthe standards cited here deal with a single work practice or prescribe conductthat is unique and specific to each employee.C.? Analysis? 1.? The per employee respirator charges??????????? As noted above, Items 5 through 15allege per-employee violations of the respiratory protection standard forasbestos set forth at former 29 C.F.R. ? 1926.1101(h)(1)(i).[4] ?This standard provides:(h) Respiratory protection. (1) General.? The employer shall provide respirators, andensure that they are used, where required by this section.? Respirators shall be used in the followingcircumstances:? (i) During all Class I asbestos jobs.?.Item 5 of the citation istypical of the eleven items cited under this standard:[5]The employer didnot provide respirators and ensure that they were used during all class 1asbestos jobs:(a) at 11101 Bellaire Boulevard,Houston, Texas, during the removal of asbestos contaminating materials (ACM) onor before March 11, 1998, appropriate respiratory protection was not providedto Martin Bernal.?.??????????? The judge affirmed these elevenitems, relying on the Commission?s decisions in Caterpillar and HartfordRoofing. We find the judge?s reliance upon these decisions to be misplaced.The judge cited Caterpillar for the proposition that separate penaltiesmay be proposed and assessed for separate violations of a single standard.However, as previously noted, Caterpillar did not address the proprietyof alleging discrete citation items on a per-employee basis but rather on aper-instance basis.? In addition, thejudge relied upon the Commission?s reference in Hartford Roofing to thegeneral industry standard for respiratory protection, section 1910.134, which wasnot the standard at issue in that case.?Specifically, the Commission mentioned the standard in a purelyhypothetical context:For example, [section]1910.134 sets forth the requirements for the use of respirators where effectiveengineering controls are not sufficient to control atmospheric contamination.As long as employees are working in a contaminated environment, the failure toprovide each of them with appropriate respirators could constitute separate anddiscrete violations (sic).?? However, ifthe employer is able to reduce the level of the air contaminants to acceptablelevels, that single action would render the standard inapplicable.17 BNA OSHCat 1366, 1995-97 CCH OSHD at p. 42,937.?Because the Commission?s comments regarding the propriety ofper-employee citations under the respiratory protection standard were notdispositive to its interpretation of the guardrail standard at issue there, wefind this passage to be nothing more than dicta.??????????? On review, as noted above, the Secretary relies on thewording of the cited respiratory protection standard to support her positionthat it prescribes per-employee penalties.?However, we find nothing in the plain language of the cited standard,its preamble when promulgated and when corrected, or the Secretary?s writteninterpretations of the cited standard, to support her claim that violations ofthis standard can be cited per-employee.?Nor do we find support for the Secretary?s position in her compliancedirective on the egregious\/willful penalty policy or her practice of issuingcitations under the respirator provisions of the cited standard (other thanthis case) to support her argument. None of these sources serve to notify theregulated community that this particular standard may be used to penalizeemployers on a per-employee basis.? Whilesome standards must of necessity be individualized ? such as recording an entryin an OSHA log, fitting a respirator to an employee, and determining anemployee?s blood lead level ? standards of general prescription, such as therespirator standard cited here, do not by their plain terms provide fair noticethat an employer may be penalized on a per-employee basis. ??????????? As Ho argues, section1926.1101(h)(1) imposes different requirements for the provision and use ofrespirators depending upon the nature of the asbestos work being conducted. Tothe extent the standard differentiates between employees, it does so based onthe nature of the hazard to which the employees are exposed and not onpersonal characteristics peculiar to the employees as individuals. Section1926.1101(h)(1)(i) does not require any special unique testing of the employee? it simply requires that employers provide respirators and ensure their use duringClass I asbestos work, addressing protection of the employees in the groupperforming the specified work as a whole.?The language of this section requiring that employers ?ensure that theyare used,? merely goes to establishing noncompliance with the terms of thestandard ? in this case, it is undisputed that there was noncompliance with thestandard.[6]? However, the plain language of the standardaddresses employees in the aggregate, not individually.? To prove a violation of the standard, itmakes no difference whether one or all eleven of Ho?s employees were notprovided or using respirators.? ??????????? Ho?s noncompliance with section1926.1101(h)(1)(i) stems directly from a single act ? his failure to providethe appropriate respiratory protection for the type of work performed by thisgroup of employees.? See HartfordRoofing, 17 BNA OSHC at 1365, 1995-97 CCH OSHD at p.\u00a042,935 (where asingle practice method or condition affects multiple employees, there can beonly one violation of the standard).?Accordingly, we find that the cited respiratory protection standard forasbestos, section 1926.1101(h)(1)(i), is stated in general performance termswhich refer to a single course of conduct rather than an individualized duty,and therefore does not provide fair notice to an employer that it may bepenalized on a per-employee basis for violations of the standard. For thesereasons, we see no basis for citing violations of section 1926.1101(h)(1)(i) ona per-employee basis.2.?The per employee training charges??????????? Items17 through 27 allege per-employee violations of the employee trainingprovisions of the asbestos standard set forth at 29 C.F.R. ? 1926.1101(k)(9)(i)and (k)(9)(viii). These standards provide:(k) Communicationof hazards?. (9) EmployeeInformation and Training.??? (i) The employer shall at no cost tothe employee, institute a training program for all employees who are likely tobe exposed in excess of a PEL and for all employees who perform Class I throughIV asbestos operations, and shall insure their participation in the program.?.???? (viii) The training program shall be conducted in amanner that the employee is able to understand. In addition to the contentrequired by provisions in paragraph (k)(9)(iii) through (vi) of this sectionthe employer shall insure that each such employee is informed of the following:?.Item 17 of the citation is typical of the eleven itemscited under these provisions:[7]Citation 2 Item 17a??Type of Violation: Willful29 C.F.R. 1926.1101(k)(9)(i): The employer did not institute a trainingprogram for all employees who performed Class I through Class IV asbestosoperations:(a) at 11101 BellaireBoulevard, Houston, Texas. During the removal of asbestos-containing materials(ACM) on or before March 11, 1998, a training program was not instituted forMartin Bernal.Date ByWhich Must be Abated:? Corrected DuringInspectionProposedPenalty:? $49,000.00???????? Citation 2 Item 17b?? Type of Violation: Willful29 C.F.R. 1926.1101(k)(9)(viii):The employer did not ensure that each employee was informed of recognizingasbestos, including the requirement in paragraph (k)(1) of this section topresume that certain building materials contain asbestos; the health effectsassociated with asbestos exposure; the relationship between smoking andasbestos in producing lung cancer; the nature of operations that could resultin exposure to asbestos, the importance of necessary protective controls tominimize exposure including, as applicable, engineering controls, workpractices, respirators, housekeeping procedures, hygiene facilities, protectiveclothing, decontamination procedures, emergency procedures, and any necessaryinstruction in the use of these controls and procedures; the purpose, theproper use, fitting instructions, and limitations of respirators as required by29 C.F.R. 1910.134; the appropriate work practices for performing the asbestosjob; medical surveillance program requirements; the content of this standardincluding appendices; the names, addresses and phone numbers of public healthorganizations which provide information, materials and\/or conduct programsconcerning smoking cessation; and the requirements for posting signs andaffixing labels and the meaning of the required legends for such signs andlabels: (a) at 11101Bellaire Boulevard, Houston, Texas, during the removal of asbestos-containingmaterials (ACM) on or before March 11, 1998, this information was not providedto Martin Bernal.Date ByWhich Violation Must be Abated:?Corrected During Inspection In his decision, the judge concluded that a training program would notabate all eleven alleged violations. He acknowledged, however, that a singletraining program would be sufficient if all eleven of the cited employeesattended.? The Secretary, in her brief tous, argues: ?The provisions state that the instruction shall be directed to theindividual employee. The provisions also require that the employer makeindividualized determination of the class of work to be performed by theemployee.?[8]? We discern no basis for citing on a per-employeebasis under the cited standard.? Thelanguage of section 1926.1101(k)(9)(i) clearly refers to the obligation to have?a training program? ? one program ? for ?all employees? who fall into thecovered categories.?? Thus, the focus ofthe standard is on the employer?s duty to train and impart information toemployees generally, and the workplace condition to which the standard isdirected is the absence of the appropriate training program.[9] ?Contrary to the Secretary?s contention, themere use of the terminology? ?each suchemployee? under (k)(9)(viii) does not demonstrate that these provisions definethe relevant workplace conditions in terms of exposure of individualemployees.? See Secretary v. ArcadianCorp., 110 F.3d 1192, 1198 (5th Cir. 1997) (the phrase ?each of hisemployees? in the Act?s general duty clause is an inclusive expression which?means that an employer?s duty extends to all employees, regardless of theirindividual susceptibilities?).Like the general respiratory standard, the training standard is stated inperformance terms. Indeed, that is precisely how the Secretary characterizesthe standard in its preamble: By stating the trainingrequirement in performance-oriented terms, the standard gives each employerflexibility in designing a training course suited to its operation whileassuring that each employee receives training that covers all of the asbestos-relatedtasks that employee performs.61 Fed. Reg.43,454, 43,455 (August 23, 1996). The word ?each? as used in the trainingprovisions is used in the sense of inclusiveness and not in the sense of?per employee.?? We note also that the1994 amendments to this standard essentially carried over the requirement ofthe 1986 standard. Indeed, the language used in section 1926.1101(k)(9)(viii)is almost precisely the language used in section 1926.58(k)(3)(iii)(1986).[10] Our conclusion that the trainingstandard is written in inclusive terms is supported by other statements made bythe Secretary, including OSHA instruction CPL 2-2.63, Inspection Proceduresfor Occupational Exposure to Asbestos (1996). This instruction includesappendices that provide guidelines and clarifications relating to specificprovisions of the standard. For example, Appendix B refers to employeescollectively rather than individually:???????????? Training is to be provided:?.(2)? To all employees exposed at or above the PEL.(3) To allemployees who perform Class I through Class VI asbestos operations.?.See Appendix B to CPL 2-2.63.? The appendix also states that Class Iasbestos operations training is to be equivalent in ?curriculum, training andlength? to asbestos training requirements specified by the EnvironmentalProtection Agency and should take place over the course of four days. Id.(citing 40 C.F.R. part 763, subpart E, appendix C).? All of these requirements are directed to thecontent of the program, not the individual employee. ??????????? AppendixB also describes the requirements of paragraph (viii) in terms of content.Under the heading ?Unclassified Asbestos Operations,? ? operations whereemployees are exposed above the PEL ? the instruction states that training?shall meet the requirements of (k)(9)(viii),? the provisions of which spellout the training course content.[11] Id.?? Accordingly, we find that the trainingprovisions of the asbestos standard, sections 1926.1101(k)(9)(i) and(k)(9)(viii), are stated in general performance terms which refer to employeescollectively rather than individually, and therefore do not provide fair noticeto an employer that it may be penalized on a per-employee basis for violationsof the standard.? For these reasons, wesee no basis for citing violations of sections 1926.1101(k)(9)(i) and(k)(9)(viii) on a per-employee basis.[12]D. DeferenceConsiderationsThough notexpressly argued by the Secretary on review, we note that the Secretary has previouslyclaimed that the Commission must defer to her interpretation of standards, suchas those cited here, as defining the unit of prosecution on a per-employeebasis.? See, e.g., Hartford Roofing,17 BNA OSHC at 1366, 1995-97 CCH OSHD at p.\u00a042,936.? ??In Martinv. OSHRC (CF & I Steel Corp.), 499 U.S. 144, 157-158 (1991) (?CF& I?), the Supreme Court held that the Commission and reviewing courtsmust defer to the Secretary?s interpretation of an ambiguous regulation only ifit is reasonable, taking into account ?whether the Secretary has consistentlyapplied the interpretation embodied in the citation,? ?the adequacy of noticeto regulated parties,? and ?the quality of the Secretary?s elaboration ofpertinent policy considerations.?? SeeEhlert v. United States, 402 U.S. 99, 105 (1971); 5 U.S.C. ?706(2)(A).? To the extent that ourconclusion in this case implicitly raises the issue of deference, we believethat the following considerations would make it difficult, if not impossible,for us to find that the Secretary?s interpretation of these standards isreasonable.??????????? First, we note that the Secretary?s theory of whatactually constitutes an individual violation under the standards cited hereremains uncertain even on review.? In heropening brief, the Secretary initially refers to the violations in question as?per employee,? but later claims with regard to the alleged training violationsthat ?[e]ach time a worker began working without being trained, there wouldhave been a separate violation of the training provisions.?[13] ?This same argument is repeated in her replybrief, but extended to include the alleged respiratory protection violations, i.e.that a separate violation occurred ?each time an employee began work withoutrespiratory protection.? The Commission is left to wonder whether the trainingand respirator allegations are cited per employee, per-day, or on some otherbasis?? For example, does the Secretarycontend that a violation occurred each time an employee returned to work aftera break?? The Secretary provides noexplanation for this inconsistent interpretation.? See CF & I, 499 U.S. at 157; UnarcoComm. Prods., 16 BNA OSHC 1499, 1502-3, 1993-95 CCH OSHD ? 30,294,p.\u00a041,732 (No. 89-1555, 1993). As indicatedin our analysis, we fail to see how an employer, much less a conscientious onewho attempts to comply with OSHA?s regulations, can be said to have noticemerely from the language of the cited standards that its failures to providerespirators and the requisite training can result in per-day, per-employeeviolations.? The Secretary has it withinher authority to draft standards in such a fashion so as to prescribeindividual units of prosecution or penalty units, placing the regulatedcommunity on notice that violations can be cited on an individualizedbasis.? As the Fifth Circuit observed in DiamondRoofing v. OSHRC, 528 F.2d 645 (5th Cir. 1976):An employer?isentitled to fair notice in dealing with his government.? Like other statutes and regulations whichallow monetary penalties against those who violate them, an occupational safetyand health standard must give an employer fair warning of the conduct itprohibits or requires, and it must provide a reasonably clear standard ofculpability to circumscribe the discretion of the enforcing authority and itsagents.Id. at 649.? Where a standard does not provide employerswith fair notice, the Secretary has the authority to amend it.? As the Eleventh Circuit stated in GeorgiaPacific Corp. v. OSHRC, 25 F.3d 999 (11th Cir. 1994):The Secretary, as enforcer of the Act, retains the responsibility tostate with ascertainable certainty what is meant by the standards she haspromulgated?.[A regulation must] give sufficient guidance to those who enforceOSHA penalties, to those who are subject to civil penalties, or to those courtswho may be charged to interpret and apply the standards.? When a regulation fails [to do this]?, theSecretary should remedy the situation by promulgating a clearer regulation thanforcing the judiciary to press the limits of judicial construction.Id. at 1005-06(citations omitted).? Our decisionssubsequent to Caterpillar and Hartford Roofing, including KasperWire Works and Sanders Lead, affirm this course of action.Moreover, the Secretary?s own policy set forth in her complianceinstruction for violation-by-violation penalties indicates that she willinterpret certain standards, such as those cited here, as permittingper-employee violations in cases involving ?bad actor? employers, but in allother cases, she will cite the same conduct under the same standards as singleviolations that treat all exposed employees as a group.? In other words, the Secretary advances whatshe calls different but diametrically opposed ?reasonable? interpretations ofthe same standard. This is wholly inconsistent with her contention that suchstandards prescribe a per-employee duty.?Finally, wenote that the stated purpose of the Secretary?s egregious\/willful penaltypolicy is to increase proposed penalties. Proposed penalties, however, are justthat, proposals. Under section 10 of the Act, 29 USC ? 659, the Secretary hasonly limited authority concerning imposition of civil penalties.[14]?The Commission has the express grant of the soleauthority to determine penalties.?Section 17(j) of the Act, 29 U.S.C. ? 666(j).? See also Wheeling-Pittsburgh Steel Corp.,16 BNA OSHC 1780, 1784, 1993-95 CCH OSHD ? 30,445, p. 42,040 (No. 91-2524,1994). Congressional intent is thus plainly manifested that the Commissionshall be the final arbiter of penalties when the Secretary?s proposals arecontested.? Thus, the Commission ismandated by section 10(c) of the Act to issue an order, based upon findings offacts, affirming, modifying, or vacating the Secretary?s proposed penalty.[15] ?The Secretary?s proposed penalty is merelyadvisory, and it is the Secretary?s burden to establish the facts supportingher proposed penalties.? Hern IronWorks, Inc., 16 BNA OSHC 1619, 1621-22, 1993-95 CCH OSHD ? 30,363, pp.41,881-82 (No. 88-1962, 1994) (quoting Brennan v. OSRHC (Interstate GlassCo.), 487 F.2d 438, 442 (8th Cir. 1973)).?Upon consideration of the proven facts, the Commission determines theappropriate penalties de novo.[16] ?See, e.g., California Stevedore & BallastCo. v. OSHRC, 517 F.2d 986 (9th Cir. 1975); Brennan v. OSHRC, 487F.2d 438, 441 (8th Cir. 1973).?Accordingly, wedo not give deference to the Secretary?s penalty directives because we do notview them to be an exercise of the Secretary?s delegated lawmaking authority.[17] ??E.? ConclusionFor all the reasons stated above, we affirm oneviolation of the Act for Respondent?s failure to comply with ? 1926.1101(h)(i)and one violation of the Act for Respondent?s failure to comply with ?1926.1101(k)(9). As set forth below in our penalty discussion, we assess thestatutory maximum penalty of $70,000 for each of these violations.[18]??WILLFULNESS OF THEGENERAL DUTY CLAUSE VIOLATION??????????? Afterthe workers completed the asbestos removal that they had been doing at night,Ho?s next work assignment was to have the building washed. Although Ho declinedto make fresh water available to the workers, he had been informed that eitherthe sprinkler system or fire hydrants had not been cut off and thus remainedavailable for use. However, Ho evidently was not aware of where access to thewater supply might be obtained. On March 11, at Ho?s direction, Tate lookedaround the building and came upon two valves that he thought might be waterlines. When Ho paged Tate to discuss the valves that Tate had located, Hoinstructed Tate to open one of the lines to see what it contained.[19] When Tate loosened the valve, itpopped open and began venting gas under pressure. Tate asked two of the workersto help him plug the line and then went to move his van that was nearby. WhenTate started the engine on his van, the gas ignited causing a fire andexplosion, which injured him and the two other workers.[20]?????????? ??????????? Indocket no. 98-1646, the Secretary alleged a willful violation of section5(a)(1) of the Act in that an employee was required to open a pipe of unknowncontent. Respondents stipulated at the hearing that the failure to identify agas line constituted a recognized hazard under section 5(a)(1).[21]? However, the judge declined to find the violation willful onthe ground that the Secretary had not introduced evidence to show that Ho had aheightened awareness that instructing Tate to open the pipe might be hazardous,or that Ho consciously disregarded a known safety hazard.? We agree. ??????????? In order to establish that aviolation is willful, the Secretary must show that it was committed voluntarilywith an intentional disregard of the Act or plain indifference to employeesafety. Sal Masonry Contrac., Inc., 15 BNA OSHC 1609, 1611, 1991-93 CCHOSHD ? 29,673, p.\u00a040,208 (No. 87-2007, 1992). The Secretary does notcontend that there is direct evidence to show Ho?s state of mind specificallywith respect to his instruction to Tate to open the pipe, but she contends thatthe violation nevertheless should be found willful because Ho generallymanifested a disregard of or indifference to employee safety by the manner inwhich he had the asbestos removal work conducted.??????????? ?Notwithstanding the Secretary?s argument, theauthorities she cites to us are all cases in which there is a factual record asto the employer?s state of mind with regard to the specific circumstances ofthe violation in issue. See, e.g., Central Soya de Puerto Rico v.Secretary of Labor, 653 F.2d 38, 39-40 (1st Cir. 1981) (repeated warningsof the defective floor in question). In determining an employer?s subjectivestate of mind, the employer?s attitude toward compliance can be evaluated onlyby the external objective evidence and testimony. Brock v. Morello Bros.Construction, 809 F.2d 161, 165 (1st Cir. 1987).? The Commission has held that an employer canmanifest a general good faith but nevertheless be found in willful violationbased on the particular circumstances relating to the violation in question.? See Aviation Constructors, Inc.,18 BNA OSHC 1917, 1923-24, 1999 CCH OSHD ? 31,933, pp. 47,377-78 (No. 96-593,1999), and cases cited therein. However, we find no authority, and none iscited to us, holding the converse ? that violations committed by a ?bad actor,?which is a fitting description of the Respondent in this case, can be presumedwillful absent evidence specifically addressing the employer?s state of mindwith respect to the cited conditions at issue.[22]??????????? Furthermore,it is well-settled that the Secretary has a more stringent and more difficultburden of proof to show willfulness where the employer is charged with aviolation of section 5(a)(1) than she does where failure to comply with aspecific standard is concerned. In section 5(a)(1) violations, ?a more concreteevidentiary showing is required.? Kus-Tum Builders, Inc., 10 BNA OSHC1128, 1131, 1981 CCH OSHD ? 25,738, p. 32,106 (No. 76-2644, 1981). TheSecretary must not only show that the employer had knowledge that a hazardouscondition existed but must also adduce evidence that the employer intentionallydisregarded or was indifferent to employee safety with respect to the hazard inquestion. General Dynamics Land Sys. Div., Inc., 15 BNA OSHC 1275, 1287,1991-93 CCH OSHD ? 29,467, p. 39,759 (No. 83-1293, 1991), aff?d withoutpublished opinion, 985 F.2d 560 (6th Cir. 1993). See also GeorgeCampbell Painting Corp., 17 BNA OSHC 1979, 1982-83, 1995-97 CCH OSHD?\u00a031,293, pp.\u00a043,979-80 (No. 93-0984, 1997) (finding section 5(a)(1)violation not willful where evidence failed to show either employer?s actualknowledge of the hazard or intentional disregard of or indifference to safety).Plainly, the Secretary?s argument in these cases runs counter to thiswell-settled precedent, and she presents no basis for disregarding our establishedcase law. Accordingly, we conclude that the judge properly found the Secretaryfailed to prove that the violation of section 5(a)(1) was willful in nature asalleged.PENALTIES??????????? Weturn now to the assessment of appropriate penalties. Under section 17(j) of theAct, 29 U.S.C. ? 666(j), penalties are determined based on the size of theemployer?s business, the gravity of the violations, the employer?s good faith,and the employer?s history of previous violations. S\u00a0&\u00a0GPackaging Co., 19 BNA OSHC 1503, 1509, 2001 CCH OSHD ? 32,401, p. 49,893(No. 98-1107, 2001). The statutory maximum civil penalty is $70,000 for awillful violation and $7,000 for both serious and other than seriousviolations. 29 U.S.C. ? 666(a)-(c). ??????????? Inaddition to the willful violations, the Secretary charged Respondents witheight serious violations in docket no. 98-1645, and four serious and one otherthan serious violation in docket no. 98-1646. Although the Secretary consideredthe violations, particularly those involving provisions of the asbestosstandard, to be of high gravity, she also determined that Respondents had noprior history of violations, and she regarded them as small employers based onthe aggregate number of persons employed both by Ho and the cited corporations? approximately 60 individuals. She therefore proposed penalties ? $4,900 foreach serious violation and $49,000 for each willful violation ? considerablybelow the statutory maximum for all the violations, including those of theasbestos standard. The judge in turn concluded that the Secretary hadoverstated the gravity of the violations, and therefore, assessed somewhatlower penalties ranging from $1,900 for the serious violations and $39,000 foreach willful violation, except in the case of the other than serious violationof the reporting provision at section 1904.8, for which the judge assessed the Secretary?s proposedpenalty of $700. We conclude, for those violations that we affirm, that boththe judge?s assessments and the Secretary?s proposals are inappropriately low.??????????? Under the Act, the Commission hasthe discretion to assess the penalties it finds appropriate. Section 17(j), 29U.S.C. ? 666(j).? In doing so, theCommission may review the judge?s assessment de novo. QualityStamping Prods. Co., 16 BNA OSHC 1927, 1993-95 CCH OSHD ?\u00a030,516 (No.91-414, 1994). The Commission, furthermore, may, where appropriate, assess apenalty higher than that proposed by the Secretary. R.G. Friday Masonry,Inc., 17 BNA OSHC 1070, 1075, 1993-95 CCH OSHD ? 30,682, p. 42,581 (Nos.91-1873, 1995 (consolidated)). Although gravity normally is the mostsignificant consideration, each factor can be accorded the weight that isreasonable in the circumstances. Merchant?s Masonry, Inc., 17 BNA OSHC1005, 1006, 1993-95 CCH OSHD ? 30,635, p. 42,444 (No. 92-424, 1994).??????????? Inthese cases, we conclude that Ho?s extreme lack of good faith warrantsassessment of the statutory maximum penalty. Ho?s appalling lack of concern forthe health and safety of his employees is well demonstrated by the facts ofrecord. Ho?s lack of good faith goes beyond the obvious ? he hiredinexperienced and untrained employees and knowingly exposed them to a hazardoussubstance without providing any of the protective measures required by thestandards, and he continued to do so even after he was informed that hisactivities were in violation of local codes and was instructed to stop work. Hoalso took advantage of foreign workers who were in the country illegally andtherefore were not in a position to exercise their statutory right to a safeworkplace. Equally, if not more, significant is the fact that Ho concealed hisasbestos removal operation by working at night, behind locked gates with thework crew confined, and conducted and completed the work in this secretive mannerat the same time that he was purportedly negotiating a contract with aqualified asbestos abatement contractor as the city inspector had directed. Wesimply cannot excuse the attitude of an employer that treats matters of healthand safety as a game with the apparent objective of circumventing the relevantregulatory authorities. For these reasons, we assess the statutory maximumpenalty for each violation. See Hern Iron Works, Inc., 16 BNA OSHC 1619,1624-25, 1993-95 CCH OSHD ? 30,363, pp. 41,884-85 (No. 88-1962, 1994) (based onthe employer?s lack of good faith, Commission increases the penalty above thatassessed by the judge).ORDER??????????? For thereasons stated, the citations are vacated as to Respondents Ho Ho Ho Expressand Houston Fruitland. As to Respondent Ho, we order the following disposition:in docket no. 98-1645, items 1, 2, 3, 4, 16, and 28 of citation no. 2 areaffirmed as willful violations and each is assessed a penalty of $70,000.? We affirm one willful violation of formersection 1926.1101(h)(1)(i) for which a penalty of $70,000 is assessed. We alsoaffirm one violation of section 1926.1101(k)(9)(i) and (k)(9)(viii), for whicha penalty of $70,000 is assessed.? Items1 through 8 of citation no. 1 are affirmed as serious violations, and a penaltyof $7000 is assessed for each item. In docket no. 98-1646, citation no. 2, item1 is affirmed as a serious but not willful violation, and a penalty of $7000 isassessed. Items 1 through 4 of citation no. 1 are affirmed as seriousviolations, and a penalty of $7000 is assessed for each item. Citation no. 3alleging an other than serious violation is affirmed and a penalty of $7000 isassessed. The total penalty assessed against Ho is $658,000.??????????? SoORDERED.\u00a0\/s\/??????????????????????????????????????????? W. Scott RailtonChairman??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? \u00a0??????????????????????????????????????????????????????????????????????? ??????????????????????? \/s\/??????????????????????????????????????????? ??????????????????????????????????????????????????????????????????????????????????????????????? JamesM. StephensCommissionerDated:? September29, 2003\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0ROGERS, Commissioner, concurring and dissenting:I concur with the majority in findingthe Act applicable to the work performed by Eric Ho, and in finding that theSecretary has not met her burden of proof to hold the respondent corporations,Ho Ho Ho Express and Houston Fruitland, liable in this proceeding.? I also agree that the Secretary has notestablished that the violation of Section 5(a)(1) was willful.? I must respectfully dissent, however, fromthe majority?s decision today to overturn Judge Barkley?s well-reasoned opinionthat the Secretary properly cited the violations of the respiratory protectionstandard, 1926.1101(h)(1)(i), and the employee training standard, 1926.1101(k)(9)(i)and (viii), on a per employee basis.[23] In my view, this dispositionconstitutes a radical departure from settled Commission and court precedentrecognizing the Secretary?s authority to issue multiple citations forviolations of the same standard where the standard can reasonably be read topermit multiple units of violation.The conduct at issue here is amongthe worst I have seen in my tenure on the Commission.? Eric Ho knowingly and willfully directedeleven employees hired for a building renovation project? ? apparently undocumented workers from Mexicowith little or no English proficiency ? to remove asbestos-containing materialswithout providing them effective protective equipment.? None of the eleven workers were providedappropriate respirators or received any training.? Neither were the workers informed of thepresence of asbestos nor apprised of its dangerous carcinogenicproperties.? Moreover, Ho persisted inexposing these workers to the risk of fatal lung disease even after a city buildinginspector shut down the worksite, at which time he began secretly operating atnight behind locked gates.? In additionto the OSH Act citations here,[24]?Ho?s actions have led to a Federal criminal conviction under the CleanAir Act and administrative proceedings by the Texas Department of Health.The Review Commission and theSecretary have specific roles to play under the ?split-enforcement? model ofthe Act.? The Commission has theauthority to adjudicate various disputes under the Act, including disputes overthe Secretary?s legal authority to take various enforcement actions.? The Secretary enforces the Act and, as such,is charged with making prosecutorial decisions within the bounds of her legalauthority.? By their decision in thiscase, however, my colleagues have exceeded the scope of the Commission?sauthority.? In seeking to disallow theSecretary of Labor?s lawful exercise of her prosecutorial discretion to issueper employee citations for Eric Ho?s flagrant and egregious violations offederal law, the Commission runs afoul of the statutory scheme. The Supreme Court has ruled that?enforcement of the Act is the sole responsibility of the Secretary? and that?only the Secretary has the authority to determine if a citation should beissued to an employer for unsafe working conditions. . . .?? Cuyahoga Valley R. Co. v. United Transp.Union, 474 U.S. 3, 6-7 (1985) (citations omitted).? In contrast, the Court found that ?[t]heCommission?s function is to act as a neutral arbiter? and noted that for ?theCommission to make both prosecutorial decisions and to serve as the adjudicatorof the dispute? would be ?a commingling of roles that Congress did notintend.?? Id. at 7.? The Court later explained that ?Congressintended to delegate to the Commission the type of nonpolicymaking adjudicatorypowers typically exercised by a court in the agency-review context.?? Martin v. OSHRC (CF&I), 499 U.S.144, 154 (1991)(?CF&I?).?Thus, while the Secretary possesses the ?power to render authoritativeinterpretations of OSH Act regulations,???the Commission is authorized to review the Secretary?s interpretationsonly for consistency with the regulatory language and for reasonableness.?? Id. at 152, 154-55.Heretofore, the Commission hasaddressed per instance and per employee citation authority in numerous cases,evaluating the Secretary?s exercise of her discretion pursuant to the?consistency with the regulatory language? and ?reasonableness? guidelinesarticulated in CF&I.? In CaterpillarInc., 15 BNA OSHC 2153, 1991-93\u00a0CCH OSHD ?\u00a029,962 (No. 87-0922,1993)(?Caterpillar?), where the Secretary issued per instance citationsfor violations of the recordkeeping standard, the Commission held that the?test of whether the Act and the cited regulation permits multiple or singleunits of prosecution is whether they prohibit individual acts, or a singlecourse of action.? Id. at 2172, 1991-93\u00a0CCH OSHD at p. 41,005(citation omitted). Affirming separate violations for each of Caterpillar?s 167failures to record, the Commission concluded that a regulation that requires anemployer to ?enter each recordable injury? ?can reasonably be read to involveas many violations as there were failures to record. . . .? Id. at 2173,1991-93\u00a0CCH OSHD at p. 41,006.?Accord Pepperidge Farm, Inc., 17 BNA OSHC 1993, 2001, 1995-97 CCHOSHD ?\u00a031,301, p. 44,011(No. 89-0265, 1997) (affirming 176 recordkeepingviolations); Kaspar Wire Works, Inc., 18 BNA OSHC 2178, 2185, 2000 CCHOSHD ? 32,134, p. 48,410 (No. 90-2775, 2000) (affirming 357 willfulrecordkeeping violations), enf?d, 268 F.3d 1123, 1130 (D.C. Cir. 2001)(?the availability of [section 17(a)] penalties is consistent with the generalprinciple that each violation of a statutory duty exposes the violator to aseparate statutory penalty?).Similarly, in Sanders Lead Co.,17 BNA OSHC 1197, 1993-95 CCH OSHD ?\u00a030,740 (No. 87-260, 1995)(?SandersLead?), the Commission considered whether the Secretary properly cited theemployer on a per employee basis for its failure to comply with a respiratorfit-test standard that required employers to ?perform either quantitative orqualitative face fit tests at the time of initial fitting and at least everysix months thereafter for each employee wearing negative pressure respirators.?Id. at 1203, 1993-95 CCH OSHD at p.\u00a042,695.? Upholding the Secretary?s per employeecitations, the Commission found that the ?standard requires the evaluation ofindividual employees? respirators under certain unique circumstances peculiarto each employee,? and ?conclude[d]? thatthe language of the respirator fit-test standard permits a per-instanceassessment.?? Id.? In addition, in determining that violationsof a medical removal protection standard could also be cited separately, theCommission emphasized that it ?is not the single decision by an employer not toremove employees, but the language of the standard that is determinative.?? Id. at 1200, 1993-95 CCH OSHD atp.\u00a042,692.While a divided Commission laterrejected the Secretary?s issuance of per employee citations for a roofingcontractor?s violation of a guardrail standard, stating that ?a singlepractice, method or condition [that] affects multiple employees . . .? can be only one violation of the standard,?the majority noted that ?[s]ome standards implicate the protection . . . ofindividual employees to such an extent that the failure to have the protectionin place for each employee permits the Secretary to cite on a per-instancebasis.?? Hartford Roofing Co., 17BNA OSHC 1361, 1365, 1995-97 CCH OSHD ?\u00a030,857, p. 42,935 (No. 92-3855,1995)(?Hartford Roofing?).? Themajority cited as an example of permissible per instance citations theviolation of a standard requiring respirator use where engineering controls areinsufficient, noting that? ?[a]s long asemployees are working in a contaminated environment, the failure to provideeach of them with appropriate respirators could constitute a separate anddiscrete violation.? Id. at 1366, 1995-97 CCH OSHD atp.\u00a042,937.? The Commission explainedthat the ?condition or practice at which the standard is directed, within themeaning of section 3(8) of the Act? is ?the individual and discrete failure toprovide an employee working within a contaminated environment with a properrespirator.?[25] ?Id. at 1366-67, 1995-97 CCH OSHD atp.\u00a042,937.? The Commission alsoemphasized the Secretary?s discretion, under a standard which allows ?theSecretary to consider each failure to comply with a standard as a discreteviolation,? to either cite the failures to comply separately or group them ?asif they were one violation? for penalty purposes.? Id. at 1367, 1995-97 CCH OSHD atpp.\u00a042,937-38.In the only case yet to considermultiple citations issued under a training standard, the Commission stated thatthe language of a training standard providing that ??[t]he employer shallinstruct each employee? ? clearly may be read to permit the Secretary to citeseparate violations based on the failures to train individual employees.?? Andrew Catapano Enterp. Inc., 17 BNAOSHC 1776, 1780, 1995-97 CCH OSHD ?\u00a031,180, p.\u00a043,607 (No. 90-0050, 1996)(consolidated)(?Catapano?).? The Commission affirmed but a single citationin Catapano, however, because the number of citations was based on thenumber of inspection days the same group of untrained employees worked, ratherthan on the number of employees who Catapano failed to train. As the Commissionnoted, ?[o]nly the date changed[–] [a]s far as this record establishes, theemployees did not change, and the working conditions and applicable regulationsdid not change.? Id.? The FifthCircuit, in which the case before us arises, has also posited that anindividual employee may be a ?unit of violation? where the ?regulated conditionor practice is unique to the employee (i.e., failure to train or remove aworker).?? Reich v. Arcadian Corp.,110 F.3d 1192, 1198-99 (5th Cir. 1997) (affirming Commission decision rejectingper employee violations of general duty clause for single hazardous condition)(?Arcadian?).? Here, the Secretary cited Ho forviolations of the asbestos standard, 29 C.F.R. ?\u00a01926.1101, for failing toprovide and ensure the use of respirators and to provide required informationto each of the eleven employees.? In myview, the numerous detailed and explicit provisions of this standard thatprescribe individualized employee-specific actions make clear that theviolations here are ?individual acts? that may be prosecuted on a per employeebasis. Under the cited standards, the violative conditions are the failures toprovide respirators to each employee (and ensure their use by each employee)and the failures to train each employee, with each failure constituting adiscrete violative instance.[26]The respirator provision that Eric Hoviolated specifically requires the employer to ?provide respirators, and ensurethat they are used, where required by this section.?? 29 C.F.R. ?\u00a01926.1101(h)(1). The plainlanguage of this standard imposed a duty on the employer both to provide arespirator to each of the eleven exposed employees and to ensure therespirator?s use by each of the eleven exposed employees.? The employer could not comply by merelyproviding a few respirators or ensuring that only some of the employeesuse respirators. Rather, the standard imposes on the employer an individualizedduty that runs to each employee.? SeeKaspar Wire Works, Inc. v. Secretary of Labor, 268 F.3d 1123, 1130 (D.C.Cir. 2001) (?the availability of [section 17(a)] penalties is consistent withthe general principle that each violation of a statutory duty exposes theviolator to a separate statutory penalty?).?These requirements, as noted by the Commission in Hartford Roofing, providefor the type of individualized protection that would authorize per employeecitations.? Hartford Roofing, 17BNA OSHC at 1366, 1995-97 CCH OSHD at p.\u00a042,937.? Moreover, the requirements to?provide respirators, and ensure that they are used? do not exist in avacuum.? These requirements – and thenature of the duty they impose – must be viewed in the context of the asbestosrespiratory protection standard as a whole.?For example, the standard goes on to require, in section1926.1101(h)(4), fit testing.? The fittesting required under this standard is analogous to that found by theCommission in Sanders Lead to have been properly cited on a per employeebasis, as it ?requires the evaluation of individual employees? respiratorsunder certain unique circumstances peculiar to each employee.?? Sanders Lead, 17 BNA OSHC at 1203,1993-95 CCH OSHD at p.\u00a042,695.? Furthermore, the standard prescribesa list of respirators from which employers must choose based on theconcentration of asbestos exposure, but limits the employer?s options where anindividual employee chooses a powered air-purifying respirator instead of anegative-pressure respirator.? Section1926.1101(h)(2). The asbestos standard also requires institution of arespirator program and provides that ?[n]o employee shall be assigned to tasksrequiring the use of respirators if, based on his or her most recentexamination, an examining physician determines that the employee will be unableto function normally wearing a respirator, or that the safety or health of theemployee or of other employees will be impaired by the use of arespirator.?? Section1910.1101(h)(3)(iv).??? Under this scheme,respiratory protection is dependent on consideration of individual employeehealth conditions and choices ? the antithesis of a ?one size fits all?approach.? Accordingly, no single act ofabatement could cure the deficiencies here.?Proper abatement would have required that Eric Ho evaluate the healthcondition and personal preferences of each of his eleven employees in order todetermine the proper respirator protection that should have been provided toeach of them.? In any event, onerespirator would not suffice for compliance; eleven were required.In light of these detailedemployee-specific provisions, it strains credulity for the majority to claim?no basis? to read the standard as imposing ?individualized dut[ies].?[27]?It is one thing for the majority to disregard dicta in HartfordRoofing; it is quite another to ignore binding Commission precedent in SandersLead and to effectively overrule Caterpillar.Of course, even if the standard?swording did not so clearly require individualized respiratory protection, wemust defer to the Secretary?s interpretation that individualized protection isrequired unless that interpretation is not reasonable.[28]?CF&I, 499 U.S. at 154-55. The Secretary here interprets herregulation as imposing individualized duties running to each employee, aninterpretation that is at least consistent with the standard?s wordingand with the Commission?s analysis in Hartford Roofing (which predatesboth the violative conduct and the citation in this case).? In these circumstances the Secretary?sinterpretation is plainly reasonable and, accordingly, one to which theCommission must defer.The majority also argues that Hosomehow lacked notice that the respirator standard could be cited on a per-employeebasis, an argument that Ho himself does not make before us.[29]?However, in my view, there is no doubt that Ho was provided fair noticethat the respirator standard was susceptible to per-employee or per-instancecitation through Commission decisions such as Caterpillar, Sanders Leadand Hartford Roofing.? SeeCorbesco Inc. v. Secretary of Labor, 926 F.2d 422, 428 (5th Cir. 1991)(notice is provided through Commission decisions).? Additionally, contrary to the majority?sclaim, the Secretary?s 1990 directive on the egregious willful policy specificallydiscusses the asbestos in general industry respiratory protection standard, 29C.F.R. ? 1910.1001(g)(1) ? whose operative language, both at the time of the1990 directive and at the time of the violative conduct, was identicalto the cited asbestos in construction respiratory protection standard – in acontext which makes clear that the Secretary views that standard (and thus thecited standard) as susceptible to per-employee citation.? CPL 2.80, section H.3.d.(2)(b).? Certainly, in light of these decisions and CPL2.80, Ho had sufficient fair notice that the standard here could be socited such that if he had any doubt, he ?had a duty to at least inquire..\u00a0. .?? See Corbesco,926 F.2d at 428.Even if requisite notice were somehowfound to be lacking for the Secretary?s reasonable interpretation in thiscase, the interpretation would apply prospectively, holding the currentrespondent harmless for the lack of notice.?See Diebold v. Marshall, 585 F.2d 1327, 1338 (6th Cir.1978).[30]Ho was also cited under 29 C.F.R.?\u00a01926.1101(k)(9)(i) and (viii), with the two provisions grouped under oneseparate item, for his failure to provide required information to each of theeleven employees.? The provision at subsection(i) requires the employer to institute a training program for all employees incertain categories and, of particular importance, to ?ensure theirparticipation in the program.?? It is notenough for the employer just to institute a training program. The employer hasa discrete and affirmative obligation to?determine which individual employees meet the criteria in the standardand then ensure that each individual receives the required training. Theemployer?s duty thus runs to each employee. Moreover, subsection (viii) furtherrequires that the training program ?be conducted in a manner that the employeeis able to understand? and requires the employer to ?ensure that each suchemployee is informed? of a number of specific topics.? These duties are unequivocally directedseparately to each affected employee.[31]?Despite these explicit mandates, themajority inexplicably fails to perceive the individualized nature of the duty.Contending that the duty owed under the asbestos training standard is not focusedon individual employee protection, my colleagues refer to the August\u00a023,1996 amendment to section 1926.1101(k)(9), where the Secretary explained that:By statingthe training requirement in performance-oriented terms, the standard gives eachemployer flexibility in designing a training course suited to its operationwhile assuring that each employee receives training that covers all of theasbestos-related tasks that employee performs.61 Fed. Reg. 43,454, 43,455(August 23, 1996).? Earlier in the preamble,the Secretary emphasized the individualized nature of the employer?sobligation:Propertraining is vital to assure that workers who remove or disturbasbestos-containing materials are aware of the hazards of asbestos exposure andunderstand the requirements of the standard that, if followed, will minimizesuch exposure. The standard?s training provisions are designed to assure that eachemployee receives a degree of training appropriate to the nature of theasbestos-related tasks that employee performs. Id. (emphasis added).?My colleagues argue that the standard is ?stated in general performanceterms which refer to employees collectively rather than individually. . ..?? But without first analyzing the tasksof each employee, the employer simply cannot determine what training isappropriate for that employee.[32] ?Moreover, the Secretary reiterated that thetraining provisions were designed to ?assure? that ?each employee? receivedappropriate training.?? Here again, theemployer?s duty is employee-specific.[33]Furthermore, the Secretary goes on toexplain that ?all training must be conducted in a manner that is comprehensibleto the employee . . . [–] [a] worker?s ability to obtain a timely response to questionshe or she may have about the content of the training is also a key to workercomprehension.?? Id.? This focus on the individual employee and theneed to ensure that each worker has the opportunity to have his or herquestions answered underscores the recognition that without adequate training,an individual employee is unable to effectively protect him or herself fromworkplace hazards.? This focus alsounderscores the clear mandate of this standard as one that prescribes?individual acts.?? For, as with therespirator violation, no single act of abatement could cure the full trainingdeficiencies here.? Proper abatementrequires eleven separate acts tailored to each employee ? at a minimum byensuring each employee?s participation in any group training.? In light of these detailed employee-specificprovisions establishing duties that run from the employer to each individualemployee, it is incredible that my colleagues claim to find nothing in thelanguage of the standard to require consideration of any factors ?unique toindividual employees.?Even if the wording of the trainingstandard did not plainly lead to the conclusion that the Secretary could citeon a per employee basis, we must defer to the Secretary?s contention that thestandard supports that interpretation if it is reasonable.? The Secretary here interprets her trainingstandard as imposing individualized duties running to each employee.? Her interpretation is consistent with boththe Fifth Circuit?s analysis in Arcadian and the Commission?s analysisin Catapano (which both predate both the violative conduct and thecitation in this case), where the court viewed a failure to train as acondition or practice ?unique to the employee? and the Commission viewed atraining standard as subject to per employee citation.[34]?In these circumstances, it is difficult to imagine how the standardcould not ?reasonably be read to involve as many violations as there werefailures to? provide training.[35]?See Caterpillar, 15 BNA OSHC at 2173, 1991-93\u00a0CCH OSHDat p.\u00a041,006.In light of established Commissionand court precedent, I simply cannot fathom my colleagues? conclusion here thatthe Secretary lacks the authority to issue per employee citations for Ho?sviolations of the cited respirator and training standards.? Each of the standards requires the employerto perform duties specifically for the benefit of each employee, thesatisfaction of which for any one employee would do nothing for the others.Surely, at a minimum, the language and intent of these standards reasonablycan be read to prohibit individual acts.?By ignoring this truth, my colleagues are implicitly overruling Caterpillarand Sanders Lead.? In so doing,they upset the balance between the Secretary and the Commission so carefully drawnby the Court in CF&I.[36]? Accordingly, because I believe we must abide by clear andwell-developed precedent, and because I see no valid basis upon which todeprive the Secretary of her authority to effectively enforce the Act, Ivigorously dissent.\u00a0\/s\/??????????????????????????????????????????? Thomasina V. RogersCommissioner\u00a0Date:September 29, 2003\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0 SECRETARY OF LABOR, \u00a0 \u00a0 ???????????????????????????? Complainant, \u00a0 \u00a0 ????????????????????????????????????? v. \u00a0 OSHRC DOCKET NO. 98-1645 and 98-1646 (CONSOLIDATED) \u00a0 ERIC K. HO individually, d\/b\/a HO HO HO EXPRESS, HOUSTON FRUITLAND, HO HO HO EXPRESS, INC. and HOUSTON FRUITLAND, INC. and its successors, \u00a0 \u00a0 ????????????????????????????? Respondent. \u00a0 \u00a0\u00a0APPEARANCES:\u00a0For the Complainant:MarySchopmeyer, Esq., Suzanne Dunne, Esq., Office of the Solicitor, Department ofLabor, Dallas, Texas\u00a0For the Respondent:?? Tom M.Davis, Jr., Esq., Rhett Phares, Esq., Davis & Shank, Houston, Texas; LeeHamel, Esq., Houston, Texas \u00a0Before: ?????????? Administrative Law Judge: James H. Barkley\u00a0??????????????????????????????????????????????????????????? DECISIONAND ORDER\u00a0This proceeding arises under the Occupational Safetyand Health Act of 1970 (29 U.S.C. Section 651 et seq.; hereafter calledthe AAct@).The Secretary maintains that Respondents, Eric K. Ho individually, d\/b\/a Ho Ho Ho Express, Houston Fruitland, HoHo Ho Express, Inc. and Houston Fruitland, Inc. and its successors, at all times relevant to this action maintained a place ofbusiness at 11101 Bellaire, Houston, Texas, where they wereengaged in construction. On March 12 through August 31, 1998, theOccupational Safety and Health Administration (OSHA) conducted an inspection ofHo=s 11101 Bellaire, Houston, Texaswork site.? As a result of thatinspection, Respondents were issued citations allegingviolations of the Act together with proposed penalties.? By filing a timely notice of contest Respondents brought this proceeding before the Occupational Safetyand Health Review Commission (Commission).On April 27-29, 1999, a hearingwas held in Houston, Texas.?The parties have submitted briefs on the issues and this matter is readyfor disposition.???????????????????????????????????????????????????????????????????????? JurisdictionRespondent Erik K. Ho admits he was the employerat the work site, but denies he is an employer engaged in a business affectingcommerce and subject to the requirements of the Act.? Respondent maintains that Ho Ho Ho Express, Inc.,and Houston Fruitland, Inc. were not employers at the work site and asks thatthey be dismissed from the case.FactsHouston Fruitland, Inc. is a privately ownedcorporation established in 1984 (Exh. C-47, p. 9).? Eric K. Ho owns a 66.667% share of thecorporation.? The remaining shares areowned by Ho=s familymembers (Exh. C-47, p. 9).? Ho is thepresident and CEO of Houston Fruitland, and directs its day to dayactivities.? Ho=s wife, Melissa Ho acts as secretary.? Mr. and Mrs. Ho are the only officers of thecorporation (Exh. C-47, p. 12).Ho Ho Ho Express, Inc., also a privately heldcorporation, was established in 1991 (Exh. C-47, p. 10).? Until January, 21, 1998 Eric Ho owned 100% ofHo Ho Ho Express; in January 1998 33.333% of the corporation=s shares were transferredto a family member (Exh. C-47, p. 10).?Eric Ho acts as both president and secretary of the corporation, anddirects its day to day activities; there are no other officers (Exh. C-47, p.12).??? Debbie Chan testified that she worked for Eric Hofrom November 1994 to March 31, 1998.?For the first two years she was listed as an employee of Norris Produce;after that she was formally employed by Houston Fruitland (Tr. 623-24).? Chan stated that she was an account clerk incharge of payroll and month end financial reports (Tr. 624).? In addition to Houston Fruitland, Inc., Chanalso balanced checkbooks for Ho Ho Ho Express, Cal-Sierra, Foothill and Norris(Tr. 624-25).? Chan testified that Eric and Melissa Ho, Eric Ho=s wife, had sole authorityto sign checks for Houston Fruitland (Tr. 625).?Chan stated that when there was an insufficiency of funds to cover acheck for Houston Fruitland, Mr. Ho would transfer money into the account fromHo Ho Ho Express (Tr. 626).? Chantestified that monies transferred to Houston Fruitland were not repaid to Ho HoHo Express, however, if Ho Ho Ho Express later needed cash, Eric Ho wouldtransfer funds into its account from Houston Fruitland=s (Tr. 628).?Eric Ho admits that he paid bills includingwages, using the accounts of his different businesses interchangeably (Tr.626).? Chan testified that Corston Tate,who worked for Eric Ho as a carpenter for approximately 5 years, and worked atthe Bellaire hospital site beginning in December 1997 (Tr. 246-47, 252), waspaid out of both Houston Fruitland=sor Ho Ho Ho Express=accounts (Tr. 629, Exh. C-38).?Scaffolding for use on the Bellaire project was rented by and paid forby Ho Ho Ho Express, Inc. (Tr. 241-42).?Eric Ho authorized Manuel Escobedo to hire Mexican laborers to work atthe Bellaire site, and issued Escobedo checks drawn on Ho Ho Ho Express Inc.=s account to pay theirwages (Tr. 425-31; Exh. C-3).? BillGolding, the loss prevention manager for the rental company, Betco Scaffolding,testified that the company, Ho Ho Ho Express, Inc., had to open an account,fill out a credit application and pass a credit check before it could rentequipment (Tr. 241-43; Exh. C-43).? Ho HoHo Express had a contract with USA Waste Services (USA) to haul awaynon-hazardous wastes from the Bellaire site; Ho Ho Ho Express was invoiced, andpaid for USA=sservices by checks issued on their account (Exh. C-1).Chan testified that she recorded monies borrowedby Eric Ho from Ho Ho Ho Express and\/or Houston Fruitland under a ledger entrylabeled Adue fromshareholder@ (Tr.629-31).? Chan stated that Ho took outmoney whenever he wanted to, that no other approval was required, and that noloan documents were drawn up (Tr. 630).?Chan stated that the debts were not repaid by Ho (Tr. 630).Eric Ho contracted to buy the Bellaire hospitalwhich is the subject of this action, and provided $10,000.00 earnest money inthe form of a check drawn on Houston Fruitland, Inc. (Tr. 39, Exh. C-21).? Chan noted that Ho Ho Ho Express= January 1999 ledger pagecontains an entry indicating that Eric Ho owed the company the sum of$619,620.00 which was paid to Stewart Title for the Bellaire property (Tr. 634;Exh. R-2, p. 10).DiscussionRespondent argues that Eric Ho, individuallyowned the Bellaire hospital property and was the employer of Manuel Escobedoand Corston Tate, whom he hired to conduct clean up operations at theproperty.? Ho=s operations, described fully in the recordbelow, included Aalteration@ of the cited property, anactivity which falls under OSHA=sconstruction standards at 29 CFR ‘1926,See ‘1926.1Purpose and Scope.? The Commissionhas held that construction is in a class of activity which as a whole affectsinterstate commerce.? Clarence M.Jones d\/b\/a C. Jones Company, 11 BNA OSHC 1529, 1983 CCH OSHD &26,516 (No. 77-3676,1983).??? Respondent Eric Ho, therefore,is an employer engaged in a business affecting commerce and is subject to therequirements of the Act.Respondent admits that Eric Ho used Ho Ho HoExpress= checkingaccount to Afacilitate@ his payment of wages,worker expenses, vendors and suppliers (Respondents= post-hearing brief at p.3).? Respondent maintains, however, that neitherHo Ho Ho Express, Inc., nor Houston Fruitland, Inc. were the employers of theexposed employees, and so are not liable for any of the alleged OSHAviolations.? The Fifth Circuit, in which this case arises, hasrecognized that the corporate form may be disregarded under the Aalter ego@ doctrine in cases where Athere is such unity betweencorporation and individual that the separateness of the corporation has ceased@ Permian Petroleum Co.v. Petroleos Mexicanos (Permian), 934 F.2d 635, 643 (5th Cir. 1991), citingCastleberry v. Branscum 721 S.W.2d 270 (Tex. 1986).? Whether the doctrine applies depends on:. . .the total dealings of the corporation and the individual,including the degree to which corporate formalities have been followed andcorporate and individual property have been kept separately, the amount offinancial interest, ownership and control the individual maintains over thecorporation, and whether the corporation has been used for personal purposes.\u00a0Id.? The courtwent on to state that the Aalterego@ doctrine may be appliedin cases where a party seeks to hold a corporation liable for the obligationsof a shareholder.It is clear that the interests of Eric Ho,Houston Fruitland, Inc. and Ho Ho Ho Express, Inc., are indistinguishable.? Eric Ho is the primary shareholder in bothcorporations, and was the sole shareholder in Ho Ho Ho Express untilimmediately before the OSHA inspection.?Ho solely directs the activities of both corporations.? Funds are moved from corporation tocorporation, and disbursed at Ho=sdirection; no corporate formalities are followed.? Ho uses corporation employees to performpersonal chores and corporation assets to finance his own projects, i.e. theBellaire hospital.? In this case the Complainant has properlyincluded the corporations named in the caption of this citation, in that thosecorporations are merely the alter egos of Eric K. Ho. Furthermore, in Permian the Fifth Circuitrecognized a separate doctrine under which a party may hold a corporationliable for a shareholder=sobligations, i.e. the Ashamto perpetrate a fraud doctrine.@? Id.?The court held that the purpose of the doctrine is to prevent the use ofthe corporate entity as a cloak to work injustice; moreover, Athe sham to perpetratefraud doctrine does not require proof of actual fraud, the party invoking thedoctrine must only demonstrate constructive fraud.? Id. at 644.? The court noted that the state of Texas hasdefined constructive fraud as Athebreach of some legal or equitable duty which, irrespective of moral guilt, thelaw declares fraudulent because of its tendency to deceive others, to violateconfidence, or to injure public interests. Id. citing; Archer v.Griffith, 390 S.W.2d 735, 740 (Tex.1964).In this case Ho contrives to injure the public=s interest in safe andhealthful working conditions assured under the Act.? After comingling corporate assets with thoseof his own to fund the Bellaire project, Ho now invokes the corporate fictionto protect corporate assets, the very assets which were used in furtherance of theproject giving rise to the cited violations.?\u00a0Ho=sattempt to shield the corporate assets constitutes constructive fraud, in thatit frustrates the Secretary=sability to enforce the Act through the effective assessment of civilpenalties.?? This judge finds that Ho Ho Ho Express, HoustonFruitland, Ho Ho Ho Express, Inc. and Houston Fruitland, Inc. and itssuccessors are properly named as Respondents in this matter pursuant to the Asham to perpetrate a frauddoctrine@ set forth inPermian, supra.?????? ?????????????????????????????????????????????????????????????????? Statementof FactsRoy Elledge, Jr., a commercial real estatebroker, negotiated the sale of the Bellaire Boulevard hospital property to EricHo (Tr. 31-32, 51).? Elledge testifiedthat the prior owners, AMA Holding, USA, provided him with a Phase Oneenvironmental report that had been completed on the property (Tr. 34,C-17).? The report indicated that theBellaire hospital building was likely to contain asbestos, which was widelyused in fire resistant construction prior to 1978 (Tr. 36).? Elledge testified that he gave Eric Ho a copyof the site assessment in October, 1997 (Tr. 36).? The report states, inter alia, that alimited site inspection was conducted by CON-TEST on May 6, 1994, and that:The following ACBMs were identified during the inspection ofthe subject site: ?*? Friable Materials -Spray Applied Fireproofing*? Potentially FriableMaterials – Black Mastic*? Non-Friable Materials- Floor Tiles? \u00a0The report refers the reader to Appendix F for recommendedresponse actions (Exh. C-17, Sec. V).? At”1.D.3. and 1.F.,respectively, Appendix F notes that:Asbestos-containing spray applied fireproofing is friable andcan cause significant damage if accidentally disturbed.? Extreme caution needs to be used when workingaround non-friable asbestos-containing fireproofing materials.\u00a0?????????????????????????????????????????????????????????????????????????????? ** *Before renovation occurs thoroughly inspect for and testsuspect materials that may not have been previously sampled.? Any disturbance or alterations made to asbestos-containingmaterials must be handled by trained personnel who are licensed and registeredwith the Texas Department of Health (TDH) using proper procedures andrespiratory protection.\u00a0Elledge testified that his discussion of the report with Mr. Howas cursory, but that he did tell Ho that there was asbestos in the building,and recommended that Ho obtain a Phase Two assessment to ascertain the severityof the asbestos contamination (Tr. 37).Elledge testified that on October 27, 1997, EricHo contracted to buy the Bellaire hospital (Tr. 39, Exh. C-21).? On that same date, Ho signed a CommercialProperty Condition Statement, stating that he was aware of the presence of bothfriable and non-friable asbestos on the site (Tr. 41-43; Exh. C-19). The saleof the hospital property was finalized on December 8, 1997; payment was in theform of a wire transfer from Houston Fruitland (Tr. 40).Corston Tate testified that for approximatelyfive years prior to the relevant period, he worked for Eric Ho as a carpenter,remodeling the facilities at Ho Ho Ho Express, Houston Fruitland and Cal-SierraProduce (Tr. 246-47, 250, 300).? Tatetestified that Ho assigned projects to him, and would check his work, though hegenerally worked without supervision (Tr. 248-49).? Tate testified that he was paid by check; thechecks were drawn on Ho Ho Ho Express=account (Tr. 249).? Tate stated that hefirst began work at the Bellaire property in November or December of 1997 (Tr.252).? Tate initially worked days in theprofessional building, tearing out cabinets and carpet (Tr. 255-56, 258).? Tate testified that he put the debris intodumpsters (Tr. 257).? Approximately twicea week, when the dumpsters were full, he would call Ho Ho Ho Express, and theywould send out a truck to empty the dumpster (Tr. 257-58).? Tate testified that around January 1998, workbegan in the hospital building; Ho sent in workers to began tearing outsheetrock walls, and scraping the asbestos containing fireproofing they foundbehind it (Tr. 259-63).? Tate stated thathe and Manuel Escobedo would pick up the workers, all of whom were Mexicannationals, and bring them to the site in Tate=svan (Tr. 275).? Tate testified that EricHo came out to the site every day to inspect the work (Tr. 262-63).? Tim Stewart, a structural inspector for the Cityof Houston (Tr. 56), testified that on February 2, 1998, he received andinvestigated a complaint that work was going on at the Bellaire Boulevardproperty without a permit (Tr. 57).?Stewart testified that when he arrived on the site, approximately 10workers were demolishing partition walls, and using putty knives to scrapefireproofing off the beams, the columns and the pin deck, i.e. thebottom of the second floor decking above the decorative ceiling? (Tr. 58, 60, 73).?? Stewart stated that some workers were onscaffolds scraping immediately over their heads, and that he observed dustfalling into their breathing zones, onto their shoulders and hair (Tr.74).? Stewart testified that a few of theworkers had on white paper dust masks, see Exh. C-2, but that most werenot wearing any kind of personal protective equipment [PPE](Tr. 59, 73).[37]? Rather they were dressed in dust coveredstreet clothes (Tr. 71-72).? The buildingwas not sealed or any of the scraping areas contained (Tr. 77).? Stewart testified that he spoke to Ho=s representative, CorstonTate, about permits for the ongoing work (Tr. 62).? Because no permits were produced, Stewartissued a stop work order, citing a possible asbestos abatement violation, andred tagged the property (Tr. 63, 75-76).Tate admitted that the inspector ordered them tostop work and to board up the hospital building or face a $500.00 apiece fine(Tr. 264).? Tate stated that he acceptedthe paperwork the inspector gave him and called Ho (Tr. 265).? Tate testified Ho had him bring the paperworkto him; that Ho read the documents and laughed and joked about them (Tr. 266).? Tate testified that work stopped at thehospital, and that some of the men who had been working there came over to theprofessional building and helped with the work there for a while (Tr.268).? Don Weist is the operations manager at AlamoEnvironmental (Alamo), which specializes in asbestos abatement (Tr. 78).? Weist testified that in February, 1998, EricHo asked Alamo to provide him with an estimate for the removal of asbestosfireproofing at the Bellaire hospital site (Tr. 79-80, 85).? Weist met Ho at the site on February 10,1998, at which time he examined the building and took photographs? (Tr. 80-81, 271-72; Exh. C-28).? Weist prepared a bid for $159,876.00 and onFebruary 13 faxed it to Ho at Houston Fruitland, the business address providedby Ho (Tr. 86-87; Exh. C-23).[38]Ho did not hire Alamo, however, and work resumedin the hospital building shortly thereafter. Corston Tate testified that workstarted up again approximately a week after the city inspection (Tr. 268).? Tate testified, however, that when workresumed, Ho wanted the men to work at night (Tr. 268).?? Tate stated that a crew began scrapingfireproofing off the beams in the hospital building under the direction of aJaime [Contreras] (Tr. 272).[39]? Tate testified that Ho inspected the workwhen he was in town, and that his Secretary, Melba, would come out to the sitewhen Ho was away (Tr. 274-75).[40]? Late in February, Ho became dissatisfied withthe progress of the work and entered into an agreement with Tate, under whichTate would receive $100.00 a day to stay on the site at night and supervise theprogress of the removal of the fireproofing (Tr. 276-78; Exh. C-37).? Tate spoke no Spanish, however, and soprovided no supervision other than to tell Ho how many men showed up for workat night and to go into the building with Melba, who was afraid to go into thedark hospital alone (Tr. 280-81, 284).?In addition, Tate would go to Home Depot to buy additional tools,scrapers and dust masks (Tr. 283-84).?Tate was reimbursed for the supplies by Ho Ho Ho Express, Inc. (Tr. 284).? The remainder of the time Tate stated that hewould sleep in his van (Tr. 285).?????????Saul Martinez Manzano, a 27 year old laborer fromSan Luis de la Paz, Guanajuato, started work at the Bellaire hospital site onDecember 23, 1997 (Tr. 116-17). ?Manzano,who speaks only Spanish, was recruited by a Manuel Escobedo, but understoodthat the Bellaire work was done for the benefit of Mr. Ho, and considered Hohis employer (Tr. 117-19).? Manzanotestified that he worked three or four days scraping asbestos fireproofing froma ladder at the Bellaire hospital site prior to the state inspector visitingthe site on February 2, 1999 (Tr. 118-21; Exh. 28, #4).? Manzano stated that he sometimes wore a whitedust mask, but not usually; no one told him he had to wear the mask (Tr. 120;Exh. C-2).Manzano testified that after the inspector closedthe hospital site down, Manuel sent him to a different building, where he toreout carpeting for about a week (Tr. 121-22).?Manzano stated that after about a week, he was sent back to the hospitalto resume asbestos removal at night (Tr. 122-23).? Manzano stated that he worked all night, allweek (Tr. 123).? The night work wassupervised by Jaime Contreras, and Manuel Escobedo (Tr. 123, 125); Manzano waspaid in cash from funds Contreras got from Eric Ho (Tr. 133-34).? Manzano worked with other young men in their20’s, some of whom he grew up with, including Armando Manzano, Able Manzano,Miguel Trejo, Frederico and Martin Contreras, and a worker named Carlos (Tr.129-30).? In all, Manzano stated therewere ten men on the crew (Tr. 129).? Mr.Ho occasionally came by the site and, through an interpreter, directed the crewto be sure to thoroughly clean the asbestos fireproofing off the beams (Tr.125-26).? Manzano stated that the crewwas paid $50.00 per cleaned section (Tr. 132).??As before, Manzano worked in his street clothes;he no longer bothered with a mask, because he couldn=t stand it in the heat; there was noventilation on the site (Tr. 128, 134).?After scraping the beams Manzano stated that the powder was swept up andplaced in bags (Tr. 124).? The crew wasdirected not to place the bags in the dumpsters because of Athe hazard,@ though Manzano was nottold what the hazard was (Tr. 124, 139).?Manzano testified that he did not know that the powder containedasbestos, or that breathing the powder was hazardous (Tr. 131).? There were no warning signs in the building;no medical exams were provided for the workers (Tr. 134).? Manzano testified that the workers ate anddrank on the site (Tr. 134).? There wasno running, or potable water provided by Ho, though some of the workers livedon site; Manzano stayed on site for about a week (Tr. 137).? If the workers wanted something to drink,they gave money to Corston Tate, who would leave the site to buy water and\/orsoft drinks (Tr. 134).? There was oneportable bathroom on the site; Manzano testified that the toilet was full, andwas not cleaned during the period he worked on the site (Tr. 133-37).? The site was fenced and the gate locked withthe workers inside; Jaime Contreras had a key (Tr. 138). Miguel Trejo and Benjamin Mendez Contreras,called Minico, both testified, through an interpreter, that they are each 24years old and come from San Luis de la Paz, Guanajuato (Tr. 167, 196). Minicoand Trejo confirmed Manzano=stestimony, stating that they worked under the direction of Jaime Contreras orCorston Tate for a Chinese man (Tr. 171-72, 206).? Both Trejo and Minico identified Eric Ho, whowas in the courtroom, as their employer (Tr. 171, 176, 203).? Minico stated that Ho would check the workfrom time to time to ensure that the job was being completed satisfactorily(Tr. 173-74, 176).? Trejo and Minicotestified that they worked at the hospital from about 6:00 p.m. to 6:00 a.m.,scraping dry Asheetrock@ from pipes and collectingthe powder it created into garbage bags (Tr. 168-70, 180, 197-201; Exh. C-28,#4).? Trejo and Minico testified that heand the other workers, who were identified only as Saul, Miguel, Able, Martin,Jaime, Martin, Carlos, Hugo and Armando, filled about a hundred bags at thesite (Tr. 170, 178, 201).? The work was not performed in a contained area(Tr. 179-80).? No special clothing wasprovided, and no shower facilities were available (Tr. 178).? Both Trejo and Minico stated that at the endof a working day his face and street clothes were completely white, Minicotestified that he had trouble breathing through the powder that fell on his cheeksand upper lip (Tr. 174-75, 200).? Minicotestified that he was never asked to wear any type of monitoring device (Tr.179). Minico stated that the dust masks available didn=t do any good and that he and the otherworkers took them off (Tr. 175; Exh. C-2).?No one ever told Minico that he was scraping asbestos, or that it wasdangerous (Tr. 176).Minico testified that the work site was locked;only Tate or Jaime had a key (Tr. 183).?Minico further stated that there was nothing to drink on the site unlessthe workers brought it, or gave Tate money to buy it for them (Tr. 183, 185,192).? Minico testified that the singlebathroom facility was unusable because it was so dirty, and that the workersrelieved themselves in the surrounding fields (Tr. 183). Corston Tate confirmed the dangerous andunsanitary conditions described by the Mexican laborers, stating that the menworked twelve hour shifts, seven days a week, with no running water (Tr. 286,288).? Tate would take the laborers moneyand buy them water and\/or soft drinks if they asked him (Tr. 321); if the mendid not want to relieve themselves outdoors, they had the option of using thebathroom of a filling station or Jack-in-the-Box off the seven to eight acresite (Tr. 321-22, 331).? Fireproofing wascollected in unlabeled bags (Tr. 282).?No means were used to collect the dust created by scraping; the workersleft covered with the dust (Tr. 282, 287).?Dust masks were not used because the workers could not breathe in them(Tr. 289). Tate testified that he and Escobedo had discussed masks, but becausethey had no training in asbestos, they did not know what kind the men needed(Tr. 291-92, 299).Tate testified that on March 11, 1998, Ho toldhim that there was a water line somewhere on the site that was still turned on(Tr. 293).? Ho wanted to use the water towash the building down inside, and directed Tate to open up the first of twolines he had located and see whether it was a water line (Tr. 294).? Tate testified that he did not immediatelycomply, but that later Ho paged him, and Ajumpedon my case and told me, you know, to get on it@(Tr. 294).? Tate testified that he triedto crack the bolts on the pipe slightly, but that the line was pressurized andthe pipe popped open (Tr. 295).? The linewas in fact a natural gas line (Tr. 552).?When the pipe opened, pressurized natural gas began escaping (Tr.295).? Tate stated that he panicked at that point andwith Jaime Contreras and Martin Bernal tried to plug the pipe (Tr. 295).? Tate testified that his van was in the way,and that when he turned the ignition the gas from the pipe exploded (Tr.296).? Tate stated that all three menwere burned, Contreras had been hit and had blood running down his face (297).? Tate testified that his hands, face, and earswere burned, all the hair was burned off of his head; he spent three days inintensive care, two or three more days in the hospital, and was still under adoctor=s care at thetime of the hearing (Tr. 298). The testimony of Martin Bernal, who was burned inthe March 11, 1998 explosion corroborates, in material detail that of the otherwitnesses (Tr. 357-63).? Bernal spentfrom three to five days in the hospital (Tr. 364).??? Able Manzano Diaz testified that he worked in thehospital building, and slept on site beginning on December 23, 1998 (Tr. 333,341-42).? Diaz worked days, and thenswitched to nights after the city inspector closed down the work site (Tr.342-43).? Diaz= testimony of the working conditionscorroborates that of his fellow workers (Tr. 344-347, 350).? In addition, Diaz testified that on the dayfollowing the explosion, he and his fellow laborers were called into Ho=s office, and were given apaper to sign (Tr. 348-49).? Diaztestified that the paper was in English, but that there was a translatorpresent who read the document to the men present (Tr. 349, 354-55).? Diaz signed the paper, which identifies thesignatory as an independent contractor, and in return for a one time payment of$1,000.00 purports to release Eric Ho from all future claims or causes ofactions attributable to the March 11, 1998 explosion and fire (Tr. 353-55; Exh.C-39).? Nine employees, Saul Martinez, Carlos ManuelOrtiz, Armando Manzano Gonzales, Hugo Ledesma, Miguel Trejo, Martin C. M., AbelManzano Diaz, Benjamin Mendez, and Jaime Contreras Mendez signed releases inboth Spanish and English (See, Tr. 182, 353-55; Exh. C-39).? Don Weist testified that he received a responseto his February 13 asbestos removal bid in March, at which time Ho got in touchwith him, indicating that he wanted to proceed with the project, with somemodifications (Tr. 89).? Ho signed themodified proposal, and faxed the acceptance to Alamo on March 27, 1998 (Tr.91-92; Exh. C-25).? Weist testified thatapproximately four to five days later he received a call from Catherine McLainfrom Professional Service Industries, an environmental consultant firm (Tr. 93,500).? McLain asked Weist to meet her andthe Texas Department of Health on the site on April 3, 1998 to investigate apossible disturbance of the asbestos on the site (Tr. 93-94).? Weist testified that when they arrived on thesite they found that the bulk of the asbestos containing materials had beenremoved from inside the building, including fireproofing from beams (Tr. 94,96; Exh. C-29, #2).? Dust from thefireproofing lay on the floor and was anywhere from a sixteenth to a quarter ofan inch thick (Tr. 95; Exh. C-29, #1).?Unlabeled black garbage bags contained dry asbestos fireproofing andsheetrock (Tr. 98-99; Exh. C-29, #6).Catherine McLain testified that she took tapesamples of powder on window sills, counter tops, etc, and bulk samples from Asuspect materials@ inside the building onApril 10, 1998 (Tr. 508; Exh. C-35, p. 4).?The majority of the samples contained chrysotile asbestos in amountsgreater than 1%, the upper limit prescribed by the Environmental ProtectionAgency (EPA) and the Texas Department of Health, for unprotected demolitionwork (Tr. 509-10; Exh. C-35, p. 9).?Random air sampling results were: #1–1,275 S\/mm2 [structuresper millimeter squared]; #2–unanalyzable because particulate loading of thefilters exceeded 25% of the total; #3–3,400 S\/mm2 (Tr. 515-16; Exh.C-35).? Air samples exceed the EPA=s Asbestos HazardousEmergency Response Act=sclearance criteria of 70.0 S\/mm2 .?James T. Hendrix is a former asbestos consultant,who now works for the Texas Department of Health (Tr. 464).? Hendrix testified that on March 13, 1998, hevisited the Bellaire hospital site and took photographs of the site and samplesof suspected friable asbestos fireproofing from inside the building, Hendrixsampled material from the numerous black garbage bags on the site (Tr. 466,469; Exh. C-33), in addition to obtaining samples from the fire damaged areaand the mechanical room close to the emergency room entrance (Tr. 474).? Hendrix testified that all the samples offireproofing contained between 7 and 10% chrysotile asbestos (Tr. 475, 497;Exh. C-34).? Samples of floor tilecontained 2-3% chrysotile asbestos (Exh. C-34).?Vinyl flooring samples were found to contain no asbestos (Exh. C-34).[41]? Upon receiving the sampling results, Hendrixcalled Ho Ho Ho Express and spoke with their attorney (Tr. 479).? The Texas Department of Health notified EricHo at Ho Ho Ho Express of the sampling results, and advised him that thebuilding was unsafe and should be sealed by licensed asbestos personnel (Tr.479-81; Exh. C-32).? Hendrix testifiedthat on March 25 he returned to the site; at that time he observed a workmansitting in a second floor windowsill boarding windows without any PPE of anykind (Tr. 482-83).??? Miguel Trejo and Saul Manzano admitted that afterthe explosion they returned to the site; both stated that they spent three orfour days boarding up the windows of the hospital without the benefit of PPE(Tr. 154-55, 223-24).???????????????????? Don Nguyen, the OSHA Compliance Officerresponsible for investigation of the fire and explosion on the Bellaire site,testified that Ho had no hazard communication program for the Bellaire worksite (Tr. 553).? Nguyen stated that Hodid not ascertain the contents of the pipe he had Tate open before having theexposed employees work on or in the area of the pipe (Tr. 552).? Nguyen testified that there was no emergencycommunication system on the site; Corston Tate told Nguyen that he had to go toa nearby service station to use their phone (Tr. 537, 539, 544-45).? Nguyen stated that there was no means oftransporting injured workers from the site (Tr. 540).? Nguyen admitted, however, that Tate=s van could have been usedfor that purpose, when the van was on site, before it was destroyed in theexplosion (Tr. 542-43).? Nguyen testifiedthat Ho never reported the explosion to OSHA as required under ‘1904.8 (Tr. 576).?????????????????????????????????????????????????????????????? DOCKETNO. 98-1645The ViolationsSerious citation 1 of the citation docketed atOSHRC No. 98-1645, alleges that Respondents violated eight standards governingengineering and work practice controls mandated under 1926.1101 et seq.for the removal of ACM.? Willful citation2 of that docket number alleges 28 violations including violations of themonitoring, respiratory, and training requirements set forth at ‘1926.1101 et seq.? The Awillful@ violations are cited on anemployee by employee basis.? Respondentsreceived 11 citations for failure to provide respirators, naming each exposedemployee separately; and 11 citations for training and notificationviolations.? \u00a0Respondents do not contest the existence of thecited violations as established in the Secretary=sprima facie case; at hearing Respondents stated that the bases of theirdefense[42]were the jurisdictional questions addressed above, and the appropriateness ofthe proposed penalties (Tr. 24-27).?Respondents adduced no evidence to challenge the Secretary=s case in Docket No.98-1645 at the hearing, and Respondents do not challenge the existence of anyof the violations alleged in that matter in their post-hearing brief, whichaddressed only the jurisdictional and penalty issues.The violations have been established.WillfulnessRespondents maintain that there is no evidencethat any of the Respondents were aware of any OSHA asbestos standards or thatthey exhibited an intentional disregard for employee safety.? This judge disagrees.This judge notes that an employer has a duty toinquire into the requirements of the law.?Peterson Brothers Steel Erection Company, 16 BNA OSHC 1196,1991-93 CCH OSHD &30,052(No. 90-2304, 1993), aff=d.26 F.3d 573 (5th Cir. 1994).? Moreover, therecord adequately establishes that it is likely Eric Ho was aware of OSHAasbestos standards.? During his May 22,1998 deposition, Ho admitted he is a trained chemical engineer with a mastersin chemical engineering (Exh. C-46, p. 195).?Ho stated that his company, Ho Ho Ho Express, Inc., was licensed to haulhazardous waste materials, and that he personally was aware of the need tocomply with government regulations (Exh. C-46, p. 20).? Ho admitted that he knew that Texas regulatedasbestos removal work (Exh. C-46, p. 94-95).?Finally, proof of Ho=s actual knowledge of the OSHA asbestosstandards is not necessary to a finding of willfulness where there is evidenceof such reckless disregard for employee safety or the requirements of the law thatgenerally one can infer that if the employer had known of the standard orprovision, the employer would not have cared that the conduct or conditionsviolated it.? Williams Enterprises,Inc., 13 BNA OSHC 1249, 1986-87 CCH OSHD &27,893(No. 85-355, 1987).? See also Brock v.Morello Bros. Constr., 809 F.2d 161 (1st Cir. 1987).? The record is replete with evidence of Ho=s indifference to thesafety of his employees.? Ho knew that there was ACM in the Bellairehospital building when he purchased it.?The previous owners=site assessment indicated, inter alia, that the asbestos containingfireproofing was friable and could cause significant damage if disturbed.? The assessment provided Ho with notice thatsuch ACM must be removed by trained and licensed personnel, using properprocedures and respiratory protection.?Ho signed a property disclosure form indicating that he had been madeaware of the presence of friable asbestos in the building.? Nonetheless, with full knowledge of theconditions and the need for professional removal of the ACM, Ho began asbestosremoval with untrained, unprotected Mexican nationals, none of whom spokeEnglish or understood the hazards associated with asbestos.? Ho=sdisregard for the law is evidenced by his failure to obtain work permits forthe site, as required by the City of Houston and his surreptitious removal ofasbestos after the City attempted to close down the site.? When the ongoing work was discovered by an inspectorfor the City of Houston the Bellaire site was red tagged for probableviolations of asbestos abatement requirements.?Ho was ordered to cease its demolition operations.? However, the City=s attempt to close down Ho=s worksite failed.? After soliciting a bid for asbestos removalfrom a certified asbsestos abatement contractor, Ho chose to recommence removaloperations under cover of darkness with the same untrained, unprotectedlaborers, rather than engage the qualified contractor at the named bid price of$172,266.? Ho retained the qualifiedabatement contractor to complete the asbestos abatement only after the March11, 1998 explosion brought his nighttime activity to light and the TexasDepartment of Health onto the site.Not only does the evidence specificallydemonstrate Ho=sdisregard for his employees=exposure to asbestos, the record contains ample additional evidence of Ho=s indifference to thosesame workers= generalhealth and welfare.? Ho=s laborers worked 12 hourshifts 7 nights a week under substandard conditions: the workers were lockedinside the Bellaire site; they worked without electricity or ventilation;adequate sanitary facilities were not available; no potable water was provided.The record contains abundant evidence of Ho=s reckless disregard foremployee safety and for the requirements of the law generally.? The citations were correctly classified as Awillful.@?????? Citation Per EmployeeAs noted by the Secretary in her reply brief, theCommission has held that separate penalties may be proposed and assessed forsepa?rate violations of a single standard. Cater?pillar, Inc., 15 BNAOSHC 2153, 1991-93 CCH OSHD &29,962(No. 87-922, 1993).?? In HartfordRoofing Co., Inc., 17 BNA OSHC 1361, 1995 CCH OSHD &30,857 (No. 92-3855, 1995), the Commissionwent on to state that Asomestandards implicate the protection, etc. of individual employees to such anextent that the failure to have the protection in place for each employeepermits the Secretary to cite on a per instance basis.@? TheCommission explained that the Secretary=sdiscretion is limited only by the language of the standard itself. Id. at1366. For example, 29 C.F.R. ‘1910.134sets forth the requirements for the use of respirators where effectiveengineering controls are not sufficient to control atmospheric contamination.As long as employees are working in a contaminated environment, the failure toprovide each of them with appropriate respirators could constitute a separateand discrete violations (sic).. . . Id. at 1366.? ?It is clear under the test set forth by the Commission in Hartford,as well as in the example specifically used in their discussion in that case,that per employee citations for violation of the respirator standards arewithin the Secretary=sdiscretion.? Accordingly Respondents werecorrectly cited for each employee who was not provided with a respirator. In regard to the training violations, theCommission in Hartford suggested that where the employer=s compliance with the? Secretary=ssuggested abatement for any one of the cited violations would not necessarilyabate the others, citation on a per instance basis is proper. Id. at1366-67.? See also, ArcadianCorporation, 17 BNA OSHC 1345 (No. 93-3270, 1995); affd. 5th Cir.4\/28\/97.? It is clear that the adoptionof a training program, in itself, would not abate the 11 cited violations of ‘1926.1101(k)(9)(i) and(viii)[43],unless and until all 11 employees had been through any program instituted.? I find that it was within the Secretary=s discretion to cite theRespondent in this case on a per instance basis for violations of the trainingstandards for each employee not trained.PenaltyGravity.??In determining the gravity of a violation, the Commission has held thatthe judge must consider (1) the number of employees exposed to the risk ofinjury; (2) the duration of exposure; (3) the precautions taken against injury,if any; and (4) the degree of probability of occurrence of injury.? Kus-Tum Builders, Inc. 10 BNA OSHC1049, 1981 CCH OSHD &25,738(No. 76-2644, 1981).Eleven employees were exposed to the asbestosviolations for between four and six weeks.?No precautions were taken against injury.? Dr. George Delclos, a specialist in internal medicine,pulmonary medicine and occupational medicine (Tr. 644-46; Exh. C-44), testifiedthat the employees engaged in the removal of asbestos containing material (ACM)at the Bellaire site were subjected to intense asbestos exposures due to: 1)the employer=s use ofdry methods for removal of the sprayed ACM; 2) the laborers= increased breathingpatterns, resulting from the sustained physical demands of their work; 3) thefailure to promptly dispose of ACM after removal; 4) poor housekeepingpractices; 5) the absence of appropriate ventilation and air filtration,showering and washing facilities, and appropriate respiratory protection (Tr.661-62, 674-76, 696-99; Exh. C-44, p. 3-4).?Based on their high levels of daily exposure to asbestos, Delclosconcluded that the laborer=shad a greatly increased risk of developing pleural thickening, pleuraleffusions and\/or mesothelioma (Tr. 663, 668-71; Exh. C-44, p. 4).? Thickening of the lining of the lung, pleuralthickening, can limit the lung=sability to expand, resulting in shortness of breath (Tr. 668).? Pleural effusions, accumulations of fluidaround the lung, can result in chest pain and shortness of breath, and thoughthey resolve spontaneously may result in scarring (Tr. 668).? Mesothelioma is a rare, but invariablly fatalcancer of the lung pleura (Tr. 669, 674; Exh. C-44, p. 1).? Delclos testified that because there is a30-40 year latency period between asbestos exposure and the exposed workerdeveloping mesothelioma, the majority of the exposed workers, who were in theirmid-20’s, were exponentially more likely to develop the fatal cancer in theirmid fifties or thereafter, than the non-exposed population (Tr. 673-74).?? Delclos admitted that it was true that themajority of asbestos-exposed workers do not subsequently develop disease, andthat he could not, therefore, testify that the workers exposed in this casewould, more probably than not, develop an asbestos related disease (Tr. 672,706).? Delclos maintained, however, thatcompared to the non-exposed population, the exposed workers= increased chance ofcontracting an asbestos related disease was statistically significant (Tr. 672,703-06).? Delclos testified that of theapproximately 1,500 cases of mesothelioma reported every year, 80-100% are foundin people with an occupational exposure to asbestos (Tr. 702).Conclusion.? The Secretary proposed a penalty of $4,900.00for each of the Aserious@ violations and $49,000.00for each of the Awillful@ violations.? The Secretary took into account Respondents= size, aggregating theemployees of Ho at the Bellaire site and the employees of Ho Ho HoExpress.? Respondent is a small employer,with less than 100 total employees (Tr. 558).?None of the Respondents had a history of prior serious OSHA violations,and CO Nguyen recommended a full 10% reduction for history (Tr. 558).? Eric Ho, as an individual, claims that theproposed penalty is burdensome, but this issue is not raised by the corporateRespondents.Clearly Eric Ho, a man of education andexperience in toxic waste, made the calculated decision to expose theseemployees to a known carcinogen, without protection, a carcinogen that canproduce a lethal, non-treatable, non-operable cancer.? Ho exposed these employees to save himself$172,266, the cost to retain professionals to safely remove the asbestos.? The final consequences of that decision willnot be known until the latency period runs its course.? However, the gravity of the violations, andthe concommitant penalties must be established on the basis of the bestinformation available today.The gravity based penalties, prior to adjustmentfor size, good faith (or lack thereof) and history, were set at the statutorymaximum, $7,000.00 for the serious violations, and $70,000.00 for the willfulviolations.? The penalties were thenadjusted for size, good faith and history.?The resulting penalties were $4,900.00 and $49,000.00 respectively. The statutory maximum penalty must be reserved foronly the most egregious of circumstances, circumstances that resulted in adeath or permanently disabling injury.?The gravity of these violations is difficult to establish, but was bestdescribed by the Secretary=sexpert witness, Dr. Delclos.? It is clearthat the risk of harm to these workers is grave; the disease they were at thegreatest risk of developing, mesothelioma, is an invariably fatal cancer.? The seriousness of the possible consequencesmust be weighed, however, against the probability of harm.? Delclos described the results of the exposureas significantly increasing the risk of contracting mesothelioma, but stated,nonetheless, that it was unlikely that the exposed employees would contractmesothelioma.Based on Dr. Delclos= testimony, I find that the Secretaryoverstated the gravity of the asbestos violations.? I otherwise find the Secretary=s adjustments for size,good faith and history to be appropriate.?Reducing the gravity based penalty for the asbestos violations, andapplying the Secretary=sother adjustments, I find that $3,900.00 for the serious violations and$39,000.00 for the willful violations constitue an appropriate penalty. ????????? ??????????????????????????????????????????????????? DOCKETNO. 98-1646 ?Docket No. 98-1646 alleges four Aserious@ items relating to the: 1)lack of proper equipment to transport injured employees; 2) failure to providepotable water; 3) absence of adequate toilet facilities; and 4) failure toinform employees of the hazards of unlabled pipes in their work areas.? The citation alleges one Awillful@ violation based on theexplosion and fire which resulted from breaking into the unidentified gas line.Finally, the Secretary cites, as Aotherthan serious@Respondents= failureto report the accident on the Bellaire work site to OSHA.The ViolationsHo contests only the merits of Awillful@ citation 2, item 1, whichalleges a violation of ‘5(a)(1)of the Act, i.e. for failure to furnish its employees a place ofemployment which was free from recognized hazards which were likely to causedeath or serious physical harm:Hazards of opening a pipe containing an unknownsubstance.? On or about March 11, 1998,at the jobsite at 11101 and 11105 Bellaire Boulevard where an employee wasrequired to open a pipe of unknown content.?A fire and explosion occurred when the pipe that an employee wasinstructed to open released natural gas.?\u00a0Ho maintains only that there is no evidence in the recordshowing that Respondent was aware of any recognized hazard.? The Secretary, however, need not establish thatthe employer had actual knowledge that a condition was hazardous.? The Secretary=sburden is met if she shows that a practice, procedure or condition under theemployer=s control isknown to be hazardous constructively, i.e. by the industry in general. \u00a0PelronCorporation, 12 BNA OSHC 1833, 1986 CCH OSHD &27,605(No. 82-388, 1986).? The evidence mustshow only that the employer knew, or with the exercise of reasonable diligencecould have known, of the violative conditions=existence. Tampa Shipyards, Inc., 15 BNA OSHC 1533, 1991-93 CCH OSHD &29,617 (Nos. 86-360,86-469, 1992).Respondent admitted at the hearing that tappinginto an unmarked line on a demolition site is a recognized hazard (Tr.567).? It is undisputed that theemployees suffered serious physical harm as a result of the hazard, and that afeasible means existed to eliminate or materially reduce the hazard, i.e. ascertainingthe contents of the line.? The evidenceshows that Ho knew of the physical condition cited.? The Secretary has, therefore, made out aviolation of ‘5(a)(1).?Tampa Shipyards, Inc., 15 BNAOSHC 1533, 1991-93 CCH OSHD &29,617? (Nos. 86-360, 86-469, 1992).WillfulnessDon Nguyen testified, without contradiction, thatHo instructed Corston Tate to open the unmarked line (Tr. 570).? Nguyen stated that Tate had no experience inprocedures for ascertaining the contents of an unmarked line (Tr. 570).? Though Tate was reluctant to open the line,Ho insisted (Tr. 571).In a recent case, Propellex Corporation(Propellex), No. 96-0265, slip op. at 14 (March 30, 1999), the Commissionfound that neither negligence nor the exercise of poor judgment demonstratesthe heightened awareness of illegality required to establish willfulness. Id.at pp. 14-15.? ??????????? While Eric Ho=sdirections to Tate to open the unknown pipe demonstrated poor judgment and\/ornegligence, the Secretary has not proved by a preponderance of the evidencethat Ho possessed a heightened awareness of the illegality of his conduct, orthat he consciously disregarded a known safety hazard. Id.?? The Secretary has not shown that Ho=s conduct here was Awillful,@ as contemplated by theAct.? Accordingly this item is not awillful violation.Penalty???????????????? As above, for the Aserious@ and Awillful@ citaitons, the Secretaryproposed the statutory maximum gravity based penalties, i.e. $7,000.00for the Aserious@ items and $70,000.00 forthe Awillful.@? After reductions for Respondent=s size and history,penalties of $4,900.00 were proposed for each of the four Aserious@ violations at citation1.? A penalty of $49,000.00 was proposedfor citation 2.? CO Don Nguyen testified that the failure toprovide potable water on the Bellaire work site could lead to dehydration,hospitalization and\/or death (Tr. 548-49).??Nguyen testified that Ho=sfailure to provide a sanitary portable toilet could result in the employee=s contacting human waste,and contracting diseases, specifically Hepatitis A, which may requirehospitalization and can lead to serious liver problems (Tr. 551).? Three employees were burned in the explosionand fire resulting from tapping into an unmarked line (Tr. 574).[44]? Nguyen testified that Respondents= employees were exposed toa number of dangerous conditions that could result in serious injuries, andthat the absence of a communication system, and readily availabletransportation could hinder any attempt to get medical attention for laborers(Tr. 557).? The Secretary has established that the violationscited at citation 1 were Aserious,@ as defined by theAct.? Nonetheles the Secretary did notshow that the gravity of these violations was as great as the employee exposureto a known carcinogen cited at Docket No. 98-1645, for which identicalpenalties were proposed.? The gravity ofthe cited violations is overstated, therefore, though the other adjustmentfactors are appropriate.? I find an appropriate penalty for items 1 through3 to be $1,900.00.? A penalty of$2,900.00 is appropriate for item 4, which relates indirectly to the fire andexplosion.? Citation 2, item 1, thoughnot found to be Awillful@ is affirmed as a Aserious@ violation.? The serious injuries caused by the citedviolation resulted in the hospitalization of three employees, as describedabove.? A penalty of $4,400.00 is deemedappropriate, and will be assessed for this item. A $700.00 penalty was proposed for Aother than serious@ citation 3.? The penalty was not contested, and is deemedappropriate.??????? ??????????????????????????????????????????????????????????????????? ORDERDocket No. 98-1645\u00a01.???????? Serious citation1, item 1, alleging violation of ‘1926.1101(e)(1)is AFFIRMED, and a penalty of $3,900.00 is ASSESSED.\u00a02.???????? Seriouscitation 1, items 2a through 2f, alleging violations of ‘1926.1101(g)(1), (3)(iii), (4)(ii), (4)(iv),(4)(vi), and (5) are AFFIRMED, and a combined penalty of $3,900.00 is ASSESSED.\u00a03.???????? Seriouscitation 1, item 3, alleging violation of ‘1926.1101(h)(3)(i)is AFFIRMED, and a penalty of $3,900.00 is ASSESSED.\u00a04.???????? Seriouscitation 1, item 4, alleging violation of ‘1926.1101(i)(1)is AFFIRMED, and a penalty of $3,900.00 is ASSESSED.\u00a05.???????? Seriouscitation 1, item 5, alleging violation of ‘1926.1101(j)(1)(i)is AFFIRMED, and a penalty of $3,900.00 is ASSESSED.\u00a06.???????? Seriouscitation 1, item 6, alleging violation of ‘1926.1101(k)(3)(i)is AFFIRMED, and a penalty of $3,900.00 is ASSESSED.\u00a07.???????? Seriouscitation 1, item 7, alleging violation of ‘1926.1101(k)(7)(i)is AFFIRMED, and a penalty of $3,900.00 is ASSESSED.\u00a08.???????? Seriouscitation 1, item 8, alleging violation of ‘1926.1101(m)(1)(i)(A)is AFFIRMED, and a penalty of $3,900.00 is ASSESSED.\u00a09.???????? Willfulcitation 2, item 1, alleging violation of ‘1926.1101(f)(1)(i)is AFFIRMED, and a penalty of $39,000.00 is ASSESSED.\u00a010.?????? Willfulcitation 2, item 2, alleging violation of ‘1926.1101(f)(1)(ii)is AFFIRMED, and a penalty of $39,000.00 is ASSESSED.\u00a011.?????? Willfulcitation 2, item 3, alleging violation of ‘1926.1101(f)(2)(i)is AFFIRMED, and a penalty of $39,000.00 is ASSESSED.\u00a012.?????? Willfulcitation 2, item 4, alleging violation of ‘1926.1101(g)(4)(i)is AFFIRMED, and a penalty of $39,000.00 is ASSESSED.\u00a013.?????? Willfulcitation 2, items 5 through 15, alleging 11 violations of ‘1926.1101(h)(1)(i) areAFFIRMED, and a penalty of $39,000.00 for each of the violations is ASSESSED.\u00a014.?????? Willfulcitation 2, item 16, alleging violation of ‘1926.1101(k)(3)(ii)(B)is AFFIRMED, and a penalty of $39,000.00 is ASSESSED.\u00a015.?????? Willfulcitation 2, items 17a through 27(b), alleging 11 violations of ‘1926.1101(k)(9)(i) and(k)(9)(viii) are AFFIRMED, and 11 combined penalties of $39,000.00 each areASSESSED.\u00a016.?????? Willfulcitation 2, items 28(a) and 28(b), alleging violations of ‘1926.1101(k)(8)(i) and(l)(2) are AFFIRMED, a combined penalty of $39,000.00 is ASSESSED.\u00a0Docket No. 98-1646\u00a017.?????? Serious citation1, item 1, alleging violation of ‘1926.50(e)is AFFIRMED, and a penalty of $1,900.00 is ASSESSED.\u00a018.?????? Seriouscitation 1, item 2, alleging violation of ‘1926.51(a)(1)is AFFIRMED, and a penalty of $1,900.00 is ASSESSED.\u00a019.?????? Seriouscitation 1, item 3, alleging violation of ‘1926.51(c)(1)is AFFIRMED, and a penalty of $1,900.00 is ASSESSED.\u00a020.?????? Seriouscitation 1, item 4, alleging violation of ‘1926.59(e)(1)(ii)is AFFIRMED, and a penalty of $2,900.00 is ASSESSED.\u00a021.?????? Willfulcitation 2, item 1, alleging violation of ‘5(a)(1)of the Act, is AFFIRMED as a Aserious@ violation, and a penaltyof $4,400.00 is ASSESSED.\u00a022.?????? Other thanserious citation 3, item 1, alleging violation of ‘1904.8 is AFFIRMED, and a penalty of $700.00is ASSESSED.\u00a0\u00a0\u00a0\u00a0?\/s\/ ????????????????????????????????James H. BarkleyJudge, OSHRC\u00a0Dated:??? September 2,1999\u00a0\u00a01When these cases wereoriginally docketed, they were captioned as ?Eric K. Ho, individually and d\/b\/aHo Ho Ho Express and Houston Fruitland, and Ho Ho Ho Express, Inc.? There is noevidence that as an individual, Ho ever represented himself as doing businessunder the names Ho Ho Ho Express or Houston Fruitland. Accordingly, we herebyamend the caption to reflect the correct legal designation of the Respondents. BoiseCascade Corp., 14 BNA OSHC 1993 n.2, 1991-93 CCH OSHD ? 29,222, p. 39,119 n.2(Nos. 89-3087 & 89-3088, 1991).2The issue before the Fifth Circuit was whether theapplication of the CAA to Ho?s activities exceeded Congress? authority underthe Commerce Clause, whereas the issue before us is whether Ho?s activitiescome within the coverage of the Act.? Asseveral federal courts have previously explained, the language ?businessaffecting commerce,? as used in the Act, indicates that Congress intended thecoverage of the Act to be as broad as constitutionally permissible.? In other words, coverage of workingconditions of employees is coterminous with the scope of the Commerce Clause. See,e.g., Usery v. Lacy (Aqua View Apartments), 628 F.2d 1226, 1229 (9thCir.? 1980); Godwin, 540 F.2d at1015; United States v. Dye Constr. Co., 510 F.2d 78, 83 (10th Cir.1975); Brennan v. OSHRC (John J. Gordon Co.), 492 F.2d 1027, 1030 (2dCir. 1974). We therefore conclude that the Fifth Circuit?s discussion regardingthe constitutional scope of the Commerce Clause is applicable to the issuebefore us here.3Ho relies on Austin Road Co. v. OSHRC, 683 F.2d905, 907-08 (5th Cir. 1982), in which the cited employer performed constructionwork solely within Texas but was a subsidiary of an interstate holding companythat included other subsidiaries that performed work both within and outsideTexas.? In Austin Road, the FifthCircuit held that the evidence the cited employer used equipment or vehiclesthat may have been manufactured in another state was insufficient to establishthat the employer?s activities affected commerce. The court also dismissed as?speculative and conclusionary? the administrative law judge?s finding thatwhile the cited employer did not perform any work in another state, its profitsand losses would necessarily affect both its parent company and its sistercompanies who were engaged directly in interstate commerce.? Id. at 908.Although the court in Austin Road acknowledgedthat Congress intended the Act to apply to ?the full extent of the authoritygranted by the commerce clause,? and cited many of the same authorities notedabove, including Wickard v. Filburn, it did not address the aggregationdoctrine ? though it is not apparent that the parties in that case presentedthe aggregation principle to the court.? Id.at 907.? In our consideration of theFifth Circuit?s recent criminal case decision concerning Ho, we do not regard AustinRoad as dispositive of the issue of coverage presented here.4Funds were received from Foothill Transportation,Inc., which is also owned by Ho, and from Cal-Sierra Produce, Inc. There isconflicting evidence in the record as to whether Ho has any ownership of thelatter company. Neither of these two companies were cited, and they are not inissue. 5TheJon-T-Chemicals case, for instance, involved prosecution under the FalseClaims Act for the recovery of funds owed by the individual defendants for thedisbursement of agricultural subsidies to which they were not entitled.6While it is clear that the alter ego doctrine can beapplied to determine liability under federal statutes, including the Act, thecourts acknowledge some question as to whether state or federal common lawshould be used to determine when the corporate veil may be pierced. Seediscussion in Bestfoods, 524 U.S. at 63 n.9. See also Moore v. OSHRC,591 F.2d 991 (4th Cir. 1979) (applying state law to determine the liability ofindividual corporate officers for violations of the Act occurring during theongoing operations of a dissolved corporation that was subsequentlyreinstated). The Fifth Circuit, however, has held that in cases that do notarise under diversity jurisdiction, as a matter of practice it does notdistinguish between state and federal law for purposes of veil piercing. CenturyHotels, 952 F.2d at 110 n.4 (citing Jon-T Chemicals, 768 F.2dat 690 n.6 (?federal and state alter ego tests are essentially the same?)). Inthese cases, the parties disagree on whether the judge properly applied thecriteria on which he relies but do not contend that the judge should have useddifferent factors in reaching his decision. Therefore, for purposes of thesecases, we will apply the criteria as set forth in the relevant Fifth Circuitdecisions. [1]This compliance directivemodified an earlier version of OSHA?s internal instructions as set out in theField Operations Manual (?FOM?). In pertinent part, those instructionsindicated, ?in egregious cases [?] i.e., willful, repeated and high gravity seriouscitations and failures to abate [?] an additional factor of up to the number ofviolation instances may…be applied.??See FOM, Chapter VI, ? A.2.i(4), p. VI-8 (September 21, 1987, amendedDecember 31, 1990).? The specificapproval of OSHA?s Assistant Secretary was required in order to proposepenalties of this kind.[2]In Caterpillar, theCommission noted that it had assessed per-instance penalties for separate anddistinct instances of violative conduct in only one previous case. Caterpillar,15 BNA OSHC at 2173, 1991-93 CCH OSHD at p. 41,005-06 citing Hoffman Constr.Co., 6 BNA OSHC 1274, 1275-76, 1977-78 CCH OSHD ? 22,489 (No. 4182, 1978)(separate penalties assessed where the violative condition occurred on distinctand separate scaffolds).? In cases subsequentto Caterpillar, the Commission has assessed separate penalties forviolations involving separate unguarded floors on a single building (J.A.Jones Constr. Co., 15 BNA OSHC 2201, 1991-93 CCH OSHD ? 29,964 (No.87-2059, 1993)) and separate trenches dug on different days (Andrew CatapanoEnterprises, Inc., 17 BNA OSHC 1776, 1778, 1995-97 CCH OSHD ? 31,180,p.\u00a043,605 (No. 90-0050, 1996) (consolidated)).\u00a0[3]As we indicated in HartfordRoofing, there is no authority for the Secretary?s implicit argument thatresolution of the issue regarding whether citing on a per-employee basis isappropriate depends upon the particular facts of the case as opposed to how thestandard in question defines the unit of prosecution. Both the majority anddissenting opinions in Hartford Roofing made this point abundantlyclear.? As the majority opinion stated:[T]he Secretary has no discretion todecide on a case by case basis, whether to cite violations on a per employeebasis or to combine all exposed employees into a single citation. If a workplace condition as defined by a standard constitutes a single violation for allexposed employees, the Secretary, under Section 9(a) of the Act would berequired to issue a citation for each of the violations?.17 BNA OSHC at 1367.? Similarly, Commissioner Weisberg?s dissentingopinion observed that ?[t]he key to each of the [Commissioner?s decisionsupholding per-instance citations] is the language of the standard or regulationthat has been cited.? Id. at 1374, 1995-97 CCH OSHD at p.\u00a042,945.\u00a0[4]This is the version ofsection 1926.1101(h)(1)(i) that was in effect at the time the violation wasalleged to have occurred, ?on or about March 11, 1998.?? The Secretary mistakenly quotes the amendedversion of the standard in her brief to the Commission, but it did not becomeeffective until April 8, 1998.? 63 Fed.Reg. 1152, 1298 (January 8, 1998).? \u00a0[5]Items 6 through 15 differfrom Item 5 only as to the name of the employee not provided with a respirator.[6]Despite our dissentingcolleague?s assertion to the contrary, there is no precedent for her positionthat the language ?ensure that they are used? imposes an individualized dutythat runs to each employee and, thus, evinces an intent to allow for citingviolations of that provision on a per-employee basis.? The fundamental flaw in the dissent?sanalysis is its conflation of the separate provisions of section1926.1101(h).? The dissent?s reliance on?numerous detailed and explicit provisions of this standard that prescribeindividualized employee-specific actions? are set forth in various paragraphs ?(2), (3), and (4) ? for which Ho was either not cited on a per-employee basisor not cited at all.? The Secretary onlycited Ho on a per-employee basis under paragraph (h)(1)(i), which specifies whenrespirators must be provided depending upon the nature of the asbestos workinvolved.? It is clear from otherprosecutions under section 1926.1101 that the Secretary has interpreted thesubsections of this regulation as setting forth a series of discreteobligations for which an employer may be separately cited.? See, e.g., Tierdael ConstructionCo. v. OSHRC, 340 F.3d 1110 (10th Cir. 2003)(separate violations allegedunder (e)(1), (f)(1)(i), (g)(1), (g)(7)(i), (g)(8), (h)(1), (i)(1), (j)(2)(i),(k)(8)(i), (k)(9)(iv)(C) of section 1926.1101, none of which were cited on aper-employee basis).? See also YellowFreight Systems, Inc., 17 BNA OSHC 1699, 1995-97 CCH OSHD ?\u00a031,105(No. 93-3292, 1996)(violations under various subsections of section 1910.134).Insofar as the Secretary may advance interpretations of her regulations throughadjudications, there is simply no basis here for concluding that an allegedviolation of section 1926.1101(h)(1)(i) necessarily implicated the otherprovisions of section 1926.1101(h).? Insum, the Secretary did not advance the dissent?s theory of prosecution, it isinconsistent with her other prosecutions, and it is one for which adequatenotice was not given.? Martin v. OSHRC(CF&I), 499 U.S. 144, 154-55, 157 (1991)(reasonableness of Secretary?sinterpretation measured in part by consistency with the regulatory language andby consistency of application).It necessarily follows thatthe dissent?s attempt to invoke Sanders Lead as binding fails insofar asthe respiratory fit-test standard (section 1910.1025(f)(3)(ii), which drawsupon the general industry respiratory protection standard set forth in section1910.134) was at issue.? Ho was not citedhere for noncompliance with a comparable fit-test requirement made applicableunder section 1926.1101(h)(3).?[7]Items 18 through 27 differfrom item 17 only as to the name of the employee not trained.[8]We note that such an?individualized determination? would not be necessary here since it is undisputed that alleleven of the cited employees were engaged in Class I asbestos operations.\u00a0[9]Wefind our dissenting colleague?s claim that ?[p]roper abatement requires elevenseparate acts tailored to each employee ? at a minimum by ensuring eachemployee?s participation in any group training? to be not only inconsistent,but an unreasonably stringent reading of what constitutes compliance under thisparticular training standard.? The firstpart of the dissent?s statement is plainly at odds with the latter part ? ifabatement under this standard consists of eleven separate acts, then anemployer would not be able to comply with the standard?s requirements byconducting any sort of group training.?The latter part of the dissent?s statement suggests that group training doesin fact remain an option for employers, but compliance with the standard hingesupon the employer?s ability to obtain 100% participation from his workforce. \u00a0[10]That standard provided asfollows: (iii) The training programshall be conducted in a manner that the employee is able to understand. Theemployer shall ensure that each such employee is informed of the following:?.This language was followed by eight subparagraphs,each of which set forth the components of the training program. The 1994amendments only added two additional subparagraphs that similarly state thecontent of the training program.?[11]The Secretary?sinterpretation of the standard as stated in compliance letters is to the sameeffect.? See, e.g., OSHA letterdated April 21, 1998, addressed to Ms. Sally Hagomarisino. See generally http:\/\/www.osha.gov\/SLTC\/constructionasbestos\/compliance.html.? [12]Our dissenting colleague contends that AndrewCatapano Enterprises, Inc., 17 BNA OSHC 1776, 1995-97 CCH OSHD ?\u00a031,180 (No. 90-50, 1996) (consolidated), provides support for interpreting thisstandard to allow per-employee violations based on the failure to trainindividual employees.? However, our colleagueis relying upon dicta that we find to be irrelevant to the holding ofthe case.? As the dissent concedes, theemployer in Catapano was not cited for failing to train eachemployee. Rather, the Secretary, after inspecting sevenworksites on different dates, issued seven citations, on a per-instancebasis, for failing to train a group of employees at each of the citedworksites. Interestingly, the violations were citedin this fashion despite the fact that the standard at issue in Catapano,section 1926.21(b)(2), provided that ?[t]he employer shall instruct eachemployee in the recognition and avoidance of unsafe conditions and theregulations applicable to his work environment to control or eliminate anyhazards or other exposure to illness or injury.?? (Emphasis added) The Commission found thatneither the cited group of employees nor the working conditions had changedfrom worksite to worksite; all that distinguished the citations were the datesof the inspections.? Id. at 1780,1995-97 CCH OSHD at p.\u00a043, 607.?Thus, the Commission concluded that only a single citation and penaltywere permitted under the language of the training standard and vacated all butone of the citations.? Id.? The result in Catapano isconsistent with our determination here.\u00a0[13]We note that such an approachexceeds the training standard?s own requirements.? Under section 1910.1101(k)(9)(ii), anemployer must only provide training ?prior to the time of initial assignmentand at least annually thereafter.?[14]The Secretary may proposesuch penalties, but she has no authority to convert her proposals into a finalorder of the Commission.? Such finalitymay be achieved only when: (1) the employer consents to the proposed penaltiesby not filing a notice of contest, in which event the proposed penalties becomea final order of the Commission by operation of law in accordance with section10(a) or 10(b) of the Act; or (2) the employer files a notice of contest tosubmit the issue of the appropriateness of the proposed penalties fordetermination by the Commission, in which event the Commission, by virtue ofsection 10 of the Act, has the exclusive authority to assess the appropriatepenalties.\u00a0[15]The Commission is grantedthe power to review either the citation or the proposed penalty or both undersection 10(c) of the Act:The Commission shall thereafter issue an order,based on findings of fact, affirming, modifying, or vacating the Secretary?scitation or proposed penalty, or directing other appropriate relief, and suchorder shall become final thirty days after its issuance.?10(c), 29 U.S.C. ? 659(c).\u00a0[16]The Secretary?s proposedpenalties are not accorded the same deference that her reasonableinterpretations of an ambiguous standard must be accorded.? See Martin v. OSHRC (CF & I), 499U.S. 144 (1991). See also Hern Iron Works, 16 BNA OSHC at 1621,1993-95 CCH OSHD at p.\u00a041,881 (rejecting Secretary?s contention that hispenalty proposals are entitled to ?substantial weight?).? Rather, it is the Commission?s penaltydeterminations that must be accorded deference.?See generally Reich v. Arcadian Corp., 110 F.3d 1192, 1199 (5thCir. 1997) (?[I]f we were to agree with the Secretary?s construction of theGeneral Duty Clause and hold that?penalties for violations of the Clause shouldbe fixed on a per employee basis, we would be usurping the Commission?sstatutorily ordained power to assess ?all? penalties.?).\u00a0[17]The Commission has long held that OSHA?s FOM and FieldInspection Reference Manual (?FIRM?) contain only guidelines for internalapplication that do not have the force and effect of law and create nosubstantive or procedural rights to employers. FMC Corp., 5 BNA OSHC1707, 1710, 1977-78 CCH OSHD ?\u00a022,060, p.\u00a026,573 (No. 13155, 1977), aview with which the courts have agreed. Secretary v. Manganas Painting Co.,70 F.3d 434, 437 (6th Cir. 1995) (citing Schweiker v. Hansen, 450 U.S.785, 789 (1981)); In re Establishment Inspection of Caterpillar, Inc.,55 F.3d 334, 339 (7th Cir. 1995) (guidelines not law but show policydetermination).? In fact, OSHA hasincluded language to this effect on the title page of the FIRM. FieldInspection Reference Manual, 4 CCH ESHG ? 7960 (OSHA Instruction CPL2.103, Sept. 26, 1994). Similarly, like the FOM and the FIRM, CPLs do not havethe force and effect of law. American Cyanamid Co., 15 BNA OSHC 1497,1503-04, 1991-93 CCH OSHD ?\u00a029,598, pp.\u00a040,066-67 (No. 86-681, 1992),rev?d on other grounds, 5 F.3d 140 (6th Cir. 1993).? \u00a0[18]We note that the Commissionhas considered the gravity of a violation to be the most significant factor in determiningan appropriate penalty and the number of employees exposed is one of theelements used to determine gravity.? See? 17(j) of the Act; Hartford Roofing, 17 BNA OSHC at 1366.? Thus, while we find no basis on which toassess per-employee penalties under the standards cited here, the fact thateleven employees were exposed to the cited conditions nonetheless plays a rolein our decision to assess the maximum penalty allowed by the Act for eachwillful violation.\u00a0[19]In their brief on review,Respondents argue that the judge erred in finding a? ? 5(a)(1) violation because Ho had noknowledge either of the decision to open the valve or that the valve was a gasline.? The judge specifically concludedthat Ho ?knew of the physical conditions cited? based on his counsel?sadmission at the hearing that tapping into an unmarked line was a recognizedhazard. Although Respondents did not petition for review of this issue and theCommission did not include it in the briefing notice, we agree with the judgethat knowledge has been established here.?See Trinity Indus. v. OSHRC, 206 F.3d 539 (5th Cir. 2000).? According to the unrebutted testimony of thecompliance officer, Ho instructed Tate to open the line in question andinsisted that he do so despite Tate?s expressed reluctance.? Moreover, as the employee assigned by Ho tosupervise part of the renovation project including the asbestos removaloperation conducted at night, Tate?s knowledge with regard to opening the lineis properly imputed to Ho.? Pride OilWell Serv., 15 BNA OSHC 1809, 1814, 1991-93 CCH OSHD ? 29,807 at p. 40,585(No. 87-692, 1992).\u00a0[20]One worker testified thatthe fire started as Tate and the other workers were trying to use the van topush a cover over or onto the pipe.? Thejudge did not credit this testimony.?[21]29 U.S.C.? 654(a)(1) requires an employer to provide?employment and a place of employment which are free from recognized hazardswhich are causing or are likely to cause death or serious physical harm.?[22]We reject the Secretary?s relianceon Ho?s failure to testify. Adverse inferences may be drawn with respect tofactual matters addressed in the record where a party does not testify. WoolstonConstr.Co., 15BNA OSHC 1114, 1122 n.9, 1991-93 CCH OSHD ?\u00a029,394, p. 39,573 n.9 (No.88-1877, 1991), aff?d without published opinion, No. 91-1413, 1992 U.S. App. LEXIS 15687 (D.C. Cir.May 22, 1992). In the absence of any affirmative evidence as to Ho?s state ofmind, we cannot merely infer, as the Secretary contends, that Ho was actuallyaware that opening the unlabeled valve would be hazardous.\u00a0[23]The standards require as follows:’\u00a01926.1101 Asbestos.. . . .(h) Respiratory protection. (1) General.The employer shall provide respirators, and ensure that they are used, where requiredby this section.? Respirators shall beused in the following circumstances:(i) During all Class I asbestos jobs.. . . .(k) Communication ofhazards.????? . . . .(9) Employee Information and Training. (i) Theemployer shall, at no cost to the employee, institute a training program forall employees who are likely to be exposed in excess of a PEL [permissibleexposure limit] and for all employees who perform Class I through IV asbestosoperations, and shall ensure their participation in the program.. . . .(viii) The training program shall be conducted in amanner that the employee is able to understand. In addition to the contentrequired by provisions in paragraphs (k)(9)(iii) through (vi) of this section,the employer shall ensure that each such employee is informed of the following:(A) Methods of recognizing asbestos, including therequirement in paragraph (k)(1) of this section to presume that certainbuilding materials contain asbestos;(B) The health effects associated with asbestosexposure;(C) The relationship between smoking and asbestos inproducing lung cancer;(D) The nature of operations that could result inexposure to asbestos, the importance of necessary protective controls tominimize exposure including, as applicable, engineering controls, workpractices, respirators, housekeeping procedures, hygiene facilities, protectiveclothing, decontamination procedures, emergency procedures, and waste disposalprocedures, and any necessary instruction in the use of these controls andprocedures. . . .(E) The purpose, proper use, fitting instructions, andlimitations of respirators. . . .(F) The appropriate work practices for performing theasbestos job;(G) Medical surveillance program requirements;(H) The content of this standard. . . .(I) The names, addresses and phone numbers of publichealth organizations which provide information, materials and\/or conductprograms regarding smoking cessation. . . . (J) The requirements for posting signs and affixinglabels and the meaning of the required legends for such signs and labels.\u00a0[24]The Secretary cited Ho for a number of violations,including eleven separate violations of both the employee respirator standardand the employee training standard at issue here, one violation for each of theeleven employees involved. [25]While my colleagues here correctly note that thediscussion of respirator standards in Hartford Roofing is dicta,the discussion was central to the Commission?s efforts to compare and contrast standardswhich allow per instance citation (a respirator standard) with those that donot (a guardrail standard).? By sweepingthis discussion ? and distinction ? away, the majority is implicitly reversing Caterpillarand its doctrinal foundation.[26]The majority?s strained and artificial attempt todistinguish Caterpillar because it dealt with ?per-instance? violationswhile this case deals with ?per-employee? violations thus falls flat on itsface.? Here, because of the language ofthe respective standards, each failure to provide respirators to each employeeand each failure to train each employee is a separate violative instance.? In Caterpillar, each failure to recorda recordable employee injury was a separate violative instance.[27]The majority makes much of the fact that all eleven ofthe employees here were engaged in Class I asbestos work. Yet the majorityitself acknowledges, citing Hartford Roofing, that ?there is noauthority? for the argument that the propriety of per-employee citation?depends upon the particular facts of the case as opposed to how the standardin question defines the unit of prosecution.??Similarly, the majority argues that Ho=s noncompliance with the respiratory protection standard ?stemsdirectly from a single act – his failure to provide the appropriate respiratoryprotection for the type of work performed by this group of employees.?? Yet the fact that Ho=s violations happened to result from a single act ordecision is irrelevant under Sanders Lead.? Sanders Lead, 17 BNA OSHC at 1200,1993-95 CCH OSHD at p.\u00a042,692.Two other pointsbear noting.? The majority argues thatthe language of the standard requiring employers to ?ensure that they are used??merely goes to establishing noncompliance with the terms of the standard.?? But those words are there for a purpose – toensure that the respirators are actually used, in this case, by eleven separateindividuals.? See Borton, Inc.v. OSHRC, 734 F.2d 508, 510 (10th Cir. 1984)(the term ?provided? means makeavailable, and could not be read as requiring use).? See also Stahl Roofing Inc., 19BNA OSHC 2179, 2183-84 n.5, 2002 CCH OSHD & 32,646, p. 51,220 n.5 (No.00-1268, 2003)(consolidated).The majority also arguesthat to ?prove a violation of the standard, it makes no difference whether oneor all eleven of Ho?s employees were not provided or using respirators.?? But that is equally true of a standard suchas the recordkeeping standard, which the Commission has determined is susceptibleto per-instance citations and where a violation can be proven if the employerfails to record even one injury.? SeeCaterpillar, 15 BNA OSHC at 2172-73, 1991 CCH OSHD atp.\u00a041,005.? Here, the employer?sduty extends to ensuring use of a respirator by each employee just as inthe recordkeeping context, it extends to recording each recordableinjury.\u00a0[28]By citing violations of a standard on a per-instancebasis and litigating the issue before the Commission, the Secretary isinterpreting the standard as imposing individualized duties and thus exercisingher ?delegated lawmaking powers? described in CF&I.? CF&I, 499 U.S. at 157.? As a result, the majority?s argument that theCommission does not give deference to the Secretary?s penalty directives, suchas CPL 2.80, misses the mark because it is her interpretation reflected in thecitation that we must consider for deference, not a penalty directive.? See OSHA Instruction CPL 2.80, Handlingof Cases To Be Proposed for Violation-By-Violation Penalties (October 21,1990)(?CPL 2.80?).? As the majorityconcedes, CPL 2.80 is merely internal guidance that helps guide the Secretary=s use of her prosecutorial discretion. [29]There is no dispute that Ho had fair notice and ?fairwarning of the conduct [the standard] .\u00a0.\u00a0. require[d]? ? to provideindividual respirators to each of the eleven employees.? See Diamond Roofing v. OSHRC,528 F.2d 645, 649 (5th Cir. 1976).[30]The majority really seems to be taking issue with theSecretary?s exercise of prosecutorial discretion.? See infra note 13.? But Ho cannot complain about the fact thatthe Secretary exercised her discretion here by citing him on a per-employeebasis or his lack of notice as to how the Secretary intended to exercise thatdiscretion here.? As Judge Posner pointedout in the criminal context, ?The risk of such variance [in severity ofenforcement] is inherent in the decision to commit a crime. . . .?? Prater v. U.S. Parole Commn., 802 F.2d948, 952 (7th Cir. 1986)(en banc).? AccordLawrence v. U.S., 179 F.3d 343, 348 (5th Cir. 1999), cert. denied,528 U.S. 1096 (2000)(?We allow the government discretion to decide whichindividuals to prosecute, which offenses to charge, and what measure ofpunishment to seek.?).? And Ho does notallege that the exercise of discretion here was somehow based on impermissiblegrounds.? See id. at 349.[31]The majority patently misreads the nature of anemployer?s obligation under the cited training standard by suggesting, infootnote 15, that an employer could comply with the standard, which requiresthe employer to ?ensure their [all employees who perform certain asbestosoperations] participation in the program,? even when not all such employeeshave participated.? While group trainingwould be permissible, the standard still requires that the employer ensure eachsuch employee participates ?prior to or at the time of initialassignment.?? Section1926.1101(k)(9)(ii).[32]As with the respiratory protection standard, themajority makes much of the fact that all of the eleven employees here wereengaged in Class I asbestos operations.?That particular fact is of no moment, however, for the reasons explainedin note 5, supra.[33]As further support, the majority quotes from AppendixB to OSHA Instruction CPL 2-2.63, Inspection Procedures for OccupationalExposure to Asbestos (1996), claiming the appendix refers to employeescollectively rather than individually. The quote from the majority is asfollows:Trainingis to be provided:….(2)To all employees exposed at or above the PEL.(3)To all employees who perform Class I through Class IV asbestos operations…..However, the majority=s selective quote has left out the next item, as follows:(4) Prior to or at the time of initial assignment andat least annually thereafter.This can only refer to the initialassignment of an individual employee.?See also section 1926.1101(k)(9)(ii). [34]As with the respiratory protection standard, themajority argues that Ho somehow lacked notice that the training standard couldbe cited on a per-employee basis, an argument that Ho himself does not makebefore us.? The notice argument isunavailing for the reasons discussed supra.? And there is no dispute that Ho had fairnotice and ?fair warning of the conduct [the standard] . . . require[d]? ? toprovide training to each of the eleven employees.? See Diamond Roofing v. OSHRC,528 F.2d 645, 649 (5th Cir. 1976).?Furthermore, as noted above, the Fifth Circuit has previously suggestedthat an individual employee may be a unit of violation in the case of a failureto train.? Arcadian, 110 F.3d at1198-99.? While that suggestion was inthe nature of dicta, it certainly provided notice that a trainingstandard could be so interpreted.?Accord Catapano, 17 BNA OSHC at 1780, 1995-97 CCH OSHD atp.\u00a043,607.[35]The majority argues that the Secretary ?advances what shecalls different but diametrically opposed ?reasonable? interpretations of thesame standard.?? They point out thatsometimes the Secretary will cite ?single violations that treat all exposedemployees as a group.?? But, as theCommission acknowledged in Hartford Roofing, where the standard allowsthe Secretary to cite on a per-instance basis, she ?also has the discretion togroup them for penalty purposes as if they were one violation.? HartfordRoofing, 17 BNA OSHC at 1367, 1995-97 CCH OSHD at pp.\u00a042,937-38.The majority?s seeming insistence that the Secretary must always exercise herprosecutorial discretion in exactly the same manner regardless of thefacts? – or else be accused ofinconsistency ? would effectively strip her of her discretion and either punishwell-meaning but negligent employers or eliminate an important tool to dealwith ?bad actor? employers.? In anyevent, the Secretary?s discretion to cite on a ?per employee? basis here isstrictly cabined by the number of employees whom Ho failed to train or providerespirators for.? The majority also claims that theSecretary suggests that per-day citation would also be appropriate.? It is not even clear that is what theSecretary is suggesting, since the discussion cited by the majority arose inthe context of the Secretary?s argument in her briefs that the employees workedon different dates.? In any event, anysuch suggestion was implicitly rejected by the Commission in Catapanoand is not reflected in the citations before us here.? The majority assiduously avoids, however, thereal question under our precedent ? can the standards here ?reasonably be read?to allow per-employee citation where the standards impose employee-specificduties?? Any fair reader must answer yes.[36]The Review Commission, as an administrative agency, isgenerally entitled to reconsider its precedent as long as the rationale for thechange is well-explained and not precluded by the Act or controlling courtprecedent.? See Brock v.Dun-Par Engd. Form Co., 843 F.2d 1135, 1137-38 (8th Cir. 1988)(?While theCommission may change its position, it must give adequate reasons for doingso.?).The majority?s decision here, by subsilentio reversing Commission precedent, reminds me of the comment of theCourt of Appeals for the Seventh Circuit in Butler Lime & Cement Co. v.OSHRC, 658 F.2d 544 (7th Cir. 1981), ?[t]he change of personnel whichobviously precipitated a change in decision calls to mind a frequent theme ofLaw Day observances ? one applicable not only to courts but to administrativebodies ? that decisions should result from a rule of law and not of men.?? Id. at 550 n.2.[37]? Thewhite dust masks are clearly? labeled A*Not a respirator, *Not government approved,*Not to be used when dust concentrations exceed appropriate government exposurelimits. !WARNING Using this mask against asbestos, silica, grain dust, spraypaints or other harmful substances may result in sickness or death.? If you are around harmful substances, use theproper government approved respirator.@[38]? Thebusiness card Ho gave to Weist lists not only Houston Fruitland Inc., but Ho HoHo Express Inc., and Cal-Sierra at the same address, phone and fax location(Exh. C-31).? [39]? Tatetestified that Manuel Escobedo did not supervise the laborers after theystarted working nights, as he had become ill and had been in and out of thehospital (Tr. 273).[40]? MelbaGomez testified that she worked for Ho Ho Ho Express as Eric Ho=s assistant from September 1997 until May1998 (Tr. 403, 407).? Gomez would handle theinventory, and take care of Ho=s personal agenda, answering his phone, buying his fish food (Tr. 404).[41]? Ofthree additional samples of debris taken from the second floor of the buildingon May 5, 1998, one contained 20% chrysotile asbestos, one contained 2% and onecontained no asbestos (Tr. 488-95; Exh. C-34).?[42]? Athearing Respondents=counsel stated that the violations were not at issue with Asome exceptions,@ but declined to identify which citationswere contested until after seeing the Secretary=s prima facie case.? Intheir brief, Respondents address the merits of Docket No. 98-1646, Willfulcitation 2, item 1, alleging violation of ‘5(a)(1).? This judge concludes,therefore, that that item is the exception to which Respondent referred at hearing.[43]’1926.1101(k)(9)(i) The employer shall, at nocost to the employee, institute a training program for all employees who arelikely to be exposed in excess of a PEL and for all employees who perform ClassI through IV asbestos operations, and shall ensure their participation inthe program.\u00a0’1926.1101(k)(9)(viii) The training program shall be conducted in amanner that the employee is able to understand.?In addition to the content required by provisions in paragraphs(k)(9)(iii) through (vi) of this section, the employer shall ensure thateach such employee is informed of the following:. . .[44]? Wherethe Secretary alleges that a violation is willful but fails to provewillfulness, a serious violation may be found where the parties have expresslyor impliedly consented to try the issue of whether the violation wasserious.?? Atlas Industrial Painters,15 BNA OSHC 1215, 1991-93 CCH OSHD &29,439 (No. 87-619, 1991).?Respondent=s neither objected to, nor rebutted theSecretary=s evidence showing the serious injuriesresulting from this violation.”