OSHRC Docket Nos. 11014; 12214

Occupational Safety and Health Review Commission

November 14, 1975


Before BARNAKO, Chairman; MORAN and CLEARY, Commissioners


T. A. Housh, Jr., Regional Solicitor, U.S. Department of Labor

Herman Grant, Regional Solicitor, U.S. Department of Labor

O. L. Houts, Chicago, Rock Island & Pacific Railroad Company, for the employer



CLEARY, Commissioner:

Pursuant to section 12(j) of the Occupational Safety and Health Act of 1970, 29 U.S.C. 651 et seq., [hereinafter cited as the "Act"] review has been directed in these consolidated cases to determine (a) whether section 4(b)(1) n1 of the Act exempts the respondent employer from the Act's provisions and (b) if not, whether an injunction n2 obtained in bankruptcy by respondent under 11 U.S.C. 205(j), restraining the commencement and continuation of suits or enforcement of judgments against respondent, is applicable to this proceeding.

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n1 That section reads:

Nothing in this Act shall apply to working conditions of employees with respect to which other Federal agencies, and State agencies acting under section 274 of the Atomic Energy Act of 1954, as amended (42 U.S.C. 2021), exercise statutory authority to prescribe or enforce standards or regulations affecting occupational safety or health.

n2 Paragraph 9 of the District Court order is reprinted in full in the Appendix to this decision.


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Having considered the entire record, we answer both questions in the negative. The decisions of the Administrative Law Judges finding respondent in violation of the Act are afrfirmed insofar as they are consistent with this opinion.

On October 30, 1974, respondent, in Docket No. 11014, was issued a citation, resulting from a September 10, 1974, inspection of its workplace in Kansas City, Kansas, alleging non-compliance with section 5(a)(2) of the Act for failure to comply with the occupational safety and health standards published at 29 CFR 1903.2, 1904.2, 1904.4, 1904.5, 1910.141(b)(1)(ii), 1910.141(c)(1)(i), 1910.141(c)(1) & (2), and 1910.252(a)(2)(iv)(c). Total penalties of $160 were proposed by the Secretary.

Respondent timely filed its notice of contest claiming that under section 4(b)(1) of the Act the Secretary had no authority to issue the citations since respondent is subject to the jurisdiction of the Department of Transportation under 45 U.S.C. 431 et seq. On December 4, 1974, the Secretary of Labor filed his complaint. Respondent filed a motion to dismiss on [*3] the basis of its section 4(b)(1) argument. The motion was denied by Judge Joseph L. Chalk on January 30, 1975. On February 14, 1975, Judge Chalk wrote to the parties, indicating that the question of the validity of respondent's 4(b)(1) defense had been decided by the Commission in Union Railroad Co., No. 4318 (November 22, 1974) and Southern Pacific Transport. Co., No. 1348 (November 15, 1974). Following these decisions the Judge indicated that the recordkeeping allegations, which he considered to include the 1903.2 and 1904.2 violations, would be dismissed. The Judge proposed to enter a summary order affirming the remaining violations, unless respondent indicated in writing before March 3, 1975, that it desired a hearing on the merits. Respondent failed to reply to the Judge's letter. Whereupon, Judge Chalk issued on March 4, 1975, an order vacating the recordkeeping charges and the $160 proposed penalties relating to them and affirming the remaining items for which no penalties were assessed.

Review before the full Commission was directed on the section 4(b)(1) issue on April 1, 1975. On May 6, 1975, respondent submitted a Supplemental Motion to Dismiss in which [*4] it set forth its claim that an injunction obtained under the Bankruptcy Act on March 11, 1975, in the United States District Court for the Northern District of Illinois, Eastern Division, restraining all persons from continuing any proceeding against it, required the dismissal of this proceeding.

The second citation, Docket No. 12214, was issued on January 15, 1975, following an October 8, 1974, inspection of respondent's Joliet, Illinois, workplace. It alleged a violation of section 5(a)(2) of the Act for failure to comply with the occupational safety and health standards published at 29 CFR 1903.2, 1910.106(d)(6)(ii)(a), 1910.106(b)(6), 1910.37(k)(2), 1910.25(d)(1)(i), 1910.106(d)(2)(i), 1910.157(d)(3)(iv), 1910.212(a)(5), 1910.157(a)(5) and 1910.309(a). Total penalties of $210 were proposed. As in Docket No. 11014, respondent timely contested the citation on section 4(b)(1) grounds. On February 20, 1975, the Secretary filed his complaint. Respondent filed no answer. On April 11, 1975, Judge Charles K. Chaplin issued an order to respondent to show cause by April 28, 1975, why its notice of contest should not be dismissed for failure to answer the complaint. [*5] Respondent failed to respond to the order, and on May 8, 1975, Judge Chaplin issued an order affirming the citation and proposed penalties. On May 11, 1975, the Commission received from respondent a motion to dismiss, dated May 6, 1975, reiterating both its section 4(b)(1) objections and the injunction argument. On June 3, 1975, review before the full Commission was directed on the issues raised by respondent's motion to dismiss.

It is now well settled that any exemption from OSHA coverage under section 4(b)(1) of the Act is an affirmative defense to be proved by respondent. Idaho Travertine Corp., No. 1134 (September 30, 1975); Southern Pacific Transport Co., No. 1348 (November 15, 1974), petition for review docketed, Nos. 74-3981 & 75-1091, 5th Cir., November 29, 1974 & January 10, 1975. Respondent has clearly not met its burden in this case. See Southern Pacific Transport. Co., supra. The Commission will, however, affirm Judge Chalk's order vacating the recordkeeping charges (29 CFR 1904.2, 1904.4, and 1904.5) on the basis of Southern Pacific Transport. Co., supra, wherein a divided Commission held that Department of Transportation [*6] regulations on this matter supplant the applicability of OSHA regulations to railroads under section 4(b)(1), and a still divided Commission adheres to this holding. n3 However, we reverse the vacation of the 29 CFR 1903.2 violation. The Judge erred in concluding that the Southern Pacific decision found that the OSHA regulation was inapplicable to railroads. This posting requirement is distinguished from the recordkeeping requirements in Part 1904.

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n3 For my own part, I adhere to my view that section 4(b)(1) does not exempt railroads from complying with OSHA recordkeeping requirements. See Southern Pacific Transport. Co., No. 1348 (November 15, 1974) (Cleary, Commissioner, concurring in part and dissenting in part).

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Concerning the injunction, the long-established rule in receiverships is that a business in reorganization is not exempt from compliance with valid laws. In re Penn Central Transport. Co., 347 F. Supp. 1356, 1366 (E.D. Pa. 1972). Thus, there is no question that respondent must [*7] continue to comply with the Act and that failure to do so could result in enforcement action being taken by the Secretary of Labor. If respondent contests a citation it is the plain statutory duty of this Commission to determine whether a violation of the Act has occurred.

Despite the sweeping language of 11 U.S.C. 205(j), it is clear that Congress did not give bankruptcy courts exclusive jurisdiction over all controversies that in some way affect the debtor. Calloway v. Brenton, 336 U.S. 132, 142 (1949).

In addition, cases have held that injunctions of this kind do not stay state or federal administrative proceedings. California Oil Co. v. Huffstutler, 322 F.2d 596 (5th Cir. 1963) (district court in bankruptcy proceeding had no power to enjoin Louisiana Conservation Commission from holding hearings relating to revision of certain drilling and production units); In re American Buslines, 151 F. Supp. 877 (D. Neb. 1957) (district court in bankruptcy proceeding did not possess power or authority to require a stay of proceeding before the N.L.R.B. to determine bargaining representative for employees of corporation being reorganized).

In In re American Buslines, [*8] supra, the district court found controlling the fact that Congress placed jurisdiction for determining appropriate bargaining units in the Board. As in the case of the N.L.R.B. this Commission has been vested with jurisdiction over cases involving citations issued under the OSHA.

Finally, the Court's order contemplates the conduct of proceedings by State and Federal agencies by providing for the payment of costs incurred before them. The order states the following:

3. The Debtor is authorized in its discretion, from time to time until the further order of this Court, out of funds now or thereafter in its possession, to pay all or any of the following, in whole or in part, without limiting the generality thereof:

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k. Court costs and costs incurred before various State and Federal Commissions or other administrative boards or tribunals. . .

Accordingly, it is ORDERED that:

1. The Judge's decision in No. 12214 is affirmed.

2. The Judge's decision in No. 11014 is affirmed, except that his vacating item 1 for failure to comply with 29 CFR 1903.2 is reversed. The $25 penalty proposed by the Secretary is assessed for that item.



MORAN, Commissioner, Dissenting: [*9]

The respondent is exempt from the Act's jurisdiction by virtue of 29 U.S.C. 653(b)(1). I therefore dissent for the reasons given in Belt Railway Company of Chicago, 20 OSAHRC (Docket No. 4616, October 17, 1975).