THORLEIF LARSEN AND SON, INC.

OSHRC Docket No. 370

Occupational Safety and Health Review Commission

October 11, 1974

[*1]

Before MORAN, Chairman; VAN NAMEE and CLEARY, Commissioners

OPINIONBY: CLEARY

OPINION:

CLEARY, COMMISSIONER: On December 17, 1971, respondent was issued a citation alleging that it had violated section 5(a)(1) of the Occupational Safety and Health Act of 1970 (29 U.S.C. 651 et seq., hereinafter referred to as "the Act"). A penalty of $550 was proposed by the Secretary. Respondent timely filed a notice of contest.

On May 19, 1972, Administrative Law Judge Joseph L. Chalk issued a decision affirming the citation and adopting the proposed penalty, the "appropriateness" of which was the subject of a stipulation between the parties. On May 26, 1972, former Commissioner Alan F. Burch directed that the Judge's decision be reviewed by the Commission pursuant to section 12(j) of the Act. In directing review of that decision, submissions were invited from the parties on the appropriateness of the proposed penalty and the manner in which it was determined. On January 17, 1973, the Commission, holding that section 17(j) of the Act requires that the Commission,

. . . must perform its statutory duty to determine what, if any, penalty is appropriate in a case before it . . .

concluded that [*2] such a responsibility ". . . cannot be derogated by a stipulation between the parties." The Commission on January 17, 1973, ordered that the case be remanded to the Judge for the adducement of evidence upon which the Commission could base an appropriate penalty assessment. It was further ordered that if such evidence was not adduced, a penalty of $0 was to be assessed. n1

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n1 The Secretary filed a Petition for Review with the United States Court of Appeals for the Seventh Circuit, seeking review of the Commission's order of remand of January 17, 1973. On January 22, 1974, the Court granted the Commission's motion to dismiss the Petition for Review on the grounds that the Commission decision dated January 17, 1973, was not a "final order" within the meaning of section 11(b) of the Act.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

Upon remand, complainant refused to come forward with evidence as to the appropriateness of the penalty he originally proposed and relied upon the stipulation. Thereafter, the Judge, as directed by the Commission order of [*3] remand of January 17, 1973, assessed a penalty of $0 for the violation previously found.

The Judge's February 7, 1973, order was thereafter directed for review by Chairman Moran on February 23, 1973. On March 15, 1973, Chairman Moran purported to withdraw the February 23, 1973, direction for review. Pursuant to a direction to the Executive Secretary of the Commission by a majority of its members, the parties were notified on March 27, 1973, that the case was still pending on review before the Commission.

Thus, the case is now before us pursuant to the February 23, 1973, direction for review as reaffirmed by the Commission in its notice to the parties dated March 27, 1973.

The threshold issue in this case is whether a member of the Commission, having exercised his authority to direct review of an Administrative Law Judge's decision may, subsequent to the expiration of the 30-day review period, unilaterally withdraw the direction for review.

Section 12(j) of the Act provides, in part, that:

. . . the report of the hearing examiner shall become the final order of the Commission within thirty days . . . unless within such period any Commission member has directed that such report [*4] shall be reviewed by the Commission. (Emphasis added).

It is the statutory right of each member of the Commission to direct review of any case. Such a direction for review confers jurisdiction upon the Commission as a whole. Unilateral withdrawal of a direction for review by the initiating member susequent to the expiration of the 30-day review period would have the effect of denying the other members of the Commission an opportunity to act on the case and be inconsistent with section 12(f) of the Act. We thus hold that while unilateral action by any member of the Commission is effective to confer jurisdiction, once the jurisdiction of the Commission attaches, official action on the case can be taken only by a majority of its members.

Accordingly, we conclude that a member of the Commission cannot, subsequent to the expiration of the 30-day review period, unilaterally withdraw a direction for review that he initiated.

We now turn to the question of assessing an appropriate penalty in this case. Judge Chalk, in his February 7, 1973, decision and order states that in view of complainant's intention not to adduce further evidence on the penalty he was ". . . left [*5] with no choice other than to implement the other facet of the Commission's mandate." Accordingly, he assessed a penalty of $0.

At the outset we note that the imposition of a monetary penalty upon the finding of a serious violation is mandated by section 17(b) of the Act. We thus specifically reverse that portion of our order wherein we directed the Judge to assess a civil penalty of $0.

In this case and in ones similar to it we have been confronted with balancing competing interests in regard to penalty assessments.

Clearly, we have the obligation to assess all civil penalties. n2 Similarly, once a citation is contested, the Secretary's proposed penalty is only advisory n3 and any stipulation as to the "appropriateness" of the proposed penalty is not binding upon the Commission. n4

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n2 Section 17(j) of the Act; Brennan v. O.S.H.R.C. and Interstate Glass Co., 487 F.2d 438 (8th Cir. 1973).

n3 Brennan v. O.S.H.R.C. and Interstate Glass Co., supra note 2.

n4 While parties may stipulate as to facts, it is elemental that a stipulation as to issues of law is not binding upon the court. Sanford's Estate v. C.I.R., 308 U.S. 39 (1939), reh. denied 308 U.S. 637 (1939).

[*6]

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

On the other hand, we have the overall obligation ". . . to assure so far as possible every working man and woman in the Nation safe and healthful working conditions . . ." n5 through our quasi-judicial role in the administration of the Act. Both the Administrative Procedure Act n6 and the Commission Rules of Procedure n7 expressly encourage settlement. Further, it is clear that the prompt resolution of contested cases works to the advantage of all parties and the affected employees. We also acknowledge that recommendations of the Secretary, charged with enforcement of the Act, are entitled to at least careful consideration by this Commission. n8

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n5 Section 2(b) of the Act.

n6 5 U.S.C. 554 et seq.

n7 29 CFR 2200 et seq.

n8 Cf. Brennan v. Southern Contractors Service, 492 F.2d 498 (5th Cir. 1974).

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

Consistent with our duties and obligations, and mindful of the competing factors as discussed above, we hold [*7] that in cases where all parties have agreed to the appropriateness of a specific penalty the Commission will refrain from exercising its right to make a de novo penalty assessment if: (1) There is no objection to the agreed upon penalty from any party, authorized employee representative, or affected employee, and (2) The amount of the agreed upon penalty is "not clearly repugnant to the purposes and policies of the Act." n9 Under this holding there is neither automatic approval of the Secretary's proposed penalty nor automatic de novo assessment of a penalty by the Commission in those cases meeting the above criteria. We are of the belief that this policy best effectuates the purposes of the Act while facilitating and encouraging settlements without diminishing the rights of the parties before the Commission. n10

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n9 Speilberg Manufacturing Company, 112 N.L.R.B. 1080, 1082 (1955). We note that the National Relations Board has in Speilberg, supra, established a policy of withholding its processes where private methods of settlement are adequate.

Under the Speilberg doctrine the Board will dismiss unfair labor practice complaints where the issues therein have been resolved in arbitration awards which have resulted from "fair and regular" proceedings which are "not clearly repugnant to the purposes and policies" of the National Labor Realtions Act. Associated Press v. N.L.R.B., 492 F.2d 662, 666 (D.C. Cir. 1974).

n10 See Brennan v. O.S.H.R.C. and Gerosa, Inc., 491 F.2d 1340, 1345 n. 15 (2d Cir. 1974).

[*8]

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

We take official notice of the Compliance Operations Manual, duly promulgated by the Secretary of Labor. The Manual contains detailed instructions to the issuing officer as to the method to be used to compute proposed penalties. These instructions require the issuing officer to take into account the criteria for penalty assessments set forth in section 17(j) of the Act. Therefore, we conclude that where a proposed penalty assessment has been issued in the usual course of business by an Area Director or his delegate, there is a rebuttable presumption that the criteria required by section 17(j) to be considered, have, in fact, been taken into account. It follows that the amount of a specific penalty which is the subject of a stipulation between the parties after the issuance of a notification of proposed penalty has also been arrived at after consideration of the section 17(j) criteria. n11

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n11 This does not constitute any general endorsement of the Secretary's method of computing proposed penalties concerning serious violation. See Nacerima Operating Co., Inc., No. 4 (February 7, 1972).

[*9]

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

Applying the above holding to the facts of this case we find that the parties have agreed to the appropriateness of the proposed penalty, that the authorized employee representative affirmatively stated at the hearing that it had no objection to this agreement, and the amount of the proposed penalty is not clearly repugnant to the purposes and polices of the Act.

Accordingly, it is ORDERED that a penalty of $550 is to be assessed for the serious violation previously affirmed by the Commission.

January 17, 1973

Before MORAN, Chairman; VAN NAMEE and BURCH, Commissioners

ORDER OF REMAND

BURCH, COMMISSIONER: On May 19, 1972, Judge Joseph L. Chalk issued his recommended decision and order in the instant case, affirming the Secretary's citations for one serious and three non-serious violations and the notification of proposed penalties in a total amount of $688.

On May 26, 1972, I directed that the proposed decision and order be reviewed by the Commission pursuant to section 12(j) of the Occupational Safety and Health Act of 1970 (29 U.S.C.A. 651 et seq., 84 Stat. 1590, hereinafter referred to as "the [*10] Act").

The Commission has reviewed the briefs filed by the parties and has considered the entire record in this case. We adopt the Judge's recommended decision and order insofar as it comports with this decision.

On December 17, 1971, respondent was issued a citation for one alleged serious violation and a citation for three alleged other than serious violations of the Act together with a notification of proposed penalty in a total amount of $688. Respondent filed a timely notice of contest only as to the serious citation. Since no contest was filed within the statutory 15 day working period as to the citation for other than serious violations, that citation together with the notification of proposed penalty therefor became the final order of the Commission.

While there was some uncertainty in the pleading stage of this proceeding whether the parties considered the penalty proposed for the serious violation to be in issue, it was stipulated at the commencement of the hearing that said proposal was not in issue. Judge Chalk accepted that stipulation and, consequently, no evidence was adduced at the hearing with regard thereto.

In directing that this decision be reviewed by [*11] the Commission, submissions were invited from the parties on the appropriateness of the proposed penalty and the manner in which it was determined.

In responding to that invitation, the Secretary failed to provide the Commission with information relevant to the issue of penalty assessment, urging instead that since the proposed penalty was not contested, it is not in controversy and hence not reviewable.

We find complainant's argument with respect to the Commission's jurisdiction in this case to be without merit.

Sections 17(j) and 10(a) of the Act establish the Commission's authority to assess civil penalties once a citation has been contested, regardless of whether the amount of the penalty has been placed in issue by a party to the proceeding. Section 10(a) states, in relevant part, that "If . . . the Secretary issues a citation . . . he shall . . . notify the employer . . . of the penalty, if any, proposed to be assessed under section 17. . ." [Emphasis added]. If not contested, it is specified that ". . . the citation and the assessment, as proposed, shall be deemed a final order of the Commission. . . ." Section 17(j) provides that: "The Commission shall have [*12] authority to assess all civil penalties provided in this section, giving due consideration to the appropriateness of the penalty with respect to the size of the business of the employer being charged, the gravity of the violation, the good faith of the employer, and the history of previous violations " [Emphasis added].

Thus, where a notice of contest is not filed, the proposed assessment is "deemed" a final order of the Commission. However, where there is a contest, the Commission must perform its statutory duty to determine what, if any, penalty is appropriate in a case before it, taking into consideration those criteria set forth in section 17(j). This responsibility, having been delegated to the Commission, cannot be derogated by a stipulation between the parties.

The Secretary has presented no evidence upon which the Commission may base an appropriate penalty assessment pursuant to its exclusive statutory responsibility. The case must be remanded for adducement of such evidence. In the event that this evidentiary void is not filled, a penalty of $0 is to be assessed.

Accordingly, it is ORDERED that (1) the Judge's order is amended to provide that the citation [*13] for serious violation is affirmed and (2) the case is remanded so that evidence may be adduced on the appropriateness of the penalty.

MORAN, CHAIRMAN, dissenting: There are six principal reasons why I dissent from this decision of the Commission.

FIRST: By proclaiming that it must decide the amount of the penalty when there is no dispute between the parties on that issue, the Commission has come forth with a difficulty to be applied to a solution in lieu of its statutory role which is exactly the reverse.

This Commission was created to resolve contested issues. When issues are not in dispute, the law gives no authority to the Commission to act. Nor should it. Congress has never established a government agency with authority to create disputes where none exist. It didn't do so with this Act.

It is said that one cannot contest the fact of a violation without also thereby putting in issue the amount of penalty proposed for the alleged violation. Even assuming that to be true as a general rule, it has no applicability in a case such as this where the parties took care to specifically exlude any consideration of the penalty by the Commission. They disagreed only on one issue: [*14] Did respondent violate Section 5(a)(1) of the Act as charged by complainant? No other question was before this Commission. The complainant determined that $550 was an appropriate penalty in this case and the respondent agreed that it was indeed a proper amount provided the Commission gave an affirmative answer to the question submitted. It has now given that answer. Nothing more need be done by this Commission.

The hopeless folly of the position taken in this case by the Commission is revealed in the very order it is forced to issue to the parties. In the decision, the Commission says it "must perform its statutory duty to determine what, if any, penalty is appropriate." But in the order, it confesses that it cannot perform that "duty" because no evidence was introduced on this matter. Consequently, in what may well be regarded as a bizarre fit of pique, coming from an adjudicatory body, the parties are told that if they don't introduce evidence so the Commission can decide what the penalty shall be, we won't allow any penalty at all. So there!

I submit that the helplessness relfected in the Commission's order is just cause for re-examination of the premise that caused it: [*15] The self-proclaimed "statutory duty to determine what, if any, penalty is appropriate." Such a re-examination would disclose that there is no such duty. The Commission simply has the "authority" to assess all civil penalties. It is not compelled to exercise that authority at any time.

SECOND: The decision in this case was rendered following a hearing. That hearing, like hearings conducted by other Federal adjudicatory bodies, was conducted in accordance with the Administrative Procedure Act. n1 The Administrative Procedure Act sensibly limits the agency to the resolution of only those issues upon which the parties are unable to agree. Section 554(c)(1) requires that the agency give all interested parties the opportunity for "the submission and consideration of . . . offers of settlement, or proposals of adjustment when time, the nature of the proceeding, and the public interest permit." Section 554(c)(2) further requires the opportunity for a hearing in accordance with Section 556 and 557 of Title 5, U.S. Code, only " to the extent that the parties are unable . . . to determine a controversy by consent . . .," Section 556(c)(6) emplowers an administrative agency [*16] to "hold conferences for the settlement or simplification of the issues by consent of the parties. " Section 557(c)(3)(A) requires that administrative agencies make findings and conclusions "on all the material issues of fact, law or discretion presented on the record " (emphasis supplied).

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n1 Section 10(c) of the Act requires that all Review Commission hearings be conducted in accordance with Section 554 of Title 5, United States Code.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

Clearly, in this case, the Commission has failed to observe the statutory mandates for adjudicatory bodies indicated by the phrases underlined above.

Lest there be any doubt of the emphasis attached to settlements in the Administrative Procedure Act, the following is quoted to demonstrate purposes of its framers:

Sec. 5 Adjudications.

(b) Procedure -- the agency is required first to afford parties an opportunity for the settlement or adjustment of issues, followed, to the extent that issues are not so settled, by hearing and decision under sections 7 and 8.

The premliminary [*17] settlement-by-consent provision of this sub-section is of greatest importance. Such adjustments may go to the whole or any part of any case " (emphasis supplied). n2

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n2 Senate Report on Administrative Procedure Act, 79th Congress, 1st Session, S. Rep. No. 752 (1945).

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

It has also been said that, "the settlement by consent provision is extremely important because agencies ought not to engage in formal proceedings where the parties are perfectly willing to consent to judgments or adjust situations informally." n3

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n3 Statement by Representative Walter, 92 Cong. Rec. 5651 (Sen. Doc. page 361), Final Report at 41-42.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

There is no escape from the fact that this decision is in direct conflict with the Administrative Procedure Act.

THIRD: This decision will also mean additional and unnecessary costs in both time and money by extending the [*18] length of future proceedings before this Commission in order to obtain the additional evidence.

FOURTH: A further result of this decision is to charge the plain meaning of Sections 10(a) and (c) of the Act. Those provisions clearly grant an unconditional option to an employer to contest either a citation or a proposed penalty. n4 Under the terms of those sections, an employer may opt to accept or contest a proposed penalty. This decision, however, eliminates this unconditional option. The Commission has re-written the statute de facto so that in now reads, in effect, "an employer may elect to contest either a citation or a proposed penalty, provided, however, that if he elects to contest a citation he must contest the penalty and evidence must be introduced so that the Commission may decide the issue of appropriateness." We thus see that the misinterpretation of the word "authority" in Section 17(j) so that it will mean "duty" alters the meaning of other sections of the Act.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n4 Section 10(a) states in pertinent part: "If, within 15 working days from the receipt of the notice issued by the Secretary the employer fails to notify the Secretary that he intends to contest the citation or proposed assessment of penalty . . ." (emphasis supplied).

Section 10(c) states in pertinent part: "If an employer notifies the Secretary that he intends to contest a citation issued under Section 9(a) or notification [of proposed penalty] issued under sub-section (a) or (b) of this section . . . the Commission shall afford an opportunity to a hearing (in accordance with section 554 of title 5, United States Code . . ." (emphasis supplied).

[*19]

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

FIFTH: This decision also runs contrary to the concept that disputes should be settled, to whatever extent possible, by consent of the litigants: a principle which appeared at one time to have been accepted by this Commission. This concept is part of the Commission's Rules of Procedure n5 and has been recognized in many decisions involving the withdrawal by an employer of a notice of contest previously filed, the method by which nearly half of all cases entered in this Commission to date have been disposed. In such cases, the Commission has permitted full settlement of a case without exercising its "duty" to assess penalties whenever a respondent moves to withdraw a notice of contest. n6

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n5 See 29 CFR 2200.100(a) "Settlement is encouraged at any stage. . . ."

n6 See, for example, Secretary of Labor v. Suddath of South Florida, Inc., One of these was the tender of payment by the employer of the amount of the penalty proposed by the Secretary of Labor.

[*20]

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

In such cases, the Commission has, without exception, permitted a respondent to agree with the complainant on the amount of the penalty. The only difference between this case and the withdrawal cases is that the respondent did not concede that he violated the Act. It is a distinction without meaning to say that a pre-trial agreement between the respondent and the complainant on the latter's penalty proposal is acceptable if the respondent concedes the violation prior to a hearing, but unacceptable if the violation is proved at the hearing.

The stipulation of the parties that a proposed penalty is appropriate if a violation is found is a partial settlement fully consistent with Commission Rule 100(a) and with the Commission's prior decisions on the complete settlement of a case resulting from the withdrawal of a notice of contest.

SIXTH: If this case is ultimately concluded, as I suspect it will be, with a finding that respondent violated the Act, but that he shall not be monetarily penalized because the parties wouldn't give the Commission the evidence it asked for, I submit that the final order [*21] should attempt to answer how such a disposition has enhanced the cause of occupational safety and health in any way other than to proclaim to all concerned that the Commission has the last word on penalties whenever an employer contests an enfocement action which goes to a hearing.

It is my opinion that this decision has not only added nothing to that worthy cause, but that it will prove to be a negative factor both to occupational safety and health in general and the Commission in particular.

The excellent brief filed by counsel for complainant had forebodings that the Commission would hold as it has in this case. It outlined the consequences which would result as follows:

Rather than passing on the merits of contested cases as advanced by the parties, the Commission would assume a larger role, combining its express adjudicative functions with assumed, general, and undefined powers approaching the prosecutorial level.

Employers and employees seeking a legitimate redress of one aspect (e.g. unreasonable abatement date) of the Secretary's series of enforcement actions (inspection, citation, abatement date, proposed penalty) would find themselves arguing uncontested matters. [*22] The chilling effect of such action on the part of the Commission would, at worst, raise questions of procedural fairness, and, at best, turn the Commission into a forum with few parties or controversies. Employers or employees seeking partial redress of perhaps legitimate grievances regarding the Secretary's enforcement action might elect to suffer a partial injustice rather than engage the Secretary and the Commission in a broader adversary proceeding with the possibility of receiving an adverse ruling regarding an issue not raised.

The "chilling effect" which the complainant feared is especially pertinent in a case such as this where all parties have agreed upon the amount to be assessed as a penalty. If, for example, the Secretary proposes a monetary penalty in an amount with which a respondent is inclined to agree, the respondent should feel free to pursue the course of requesting a hearing on the violation only, and, if desired, a review by this Commission, without fear that the penalty may be increased even after the hearing. The ruling in this case subjects a respondent to that risk even though he chooses to litigate only the fact of a violation. The net effect is [*23] to deter a respondent from requesting either a hearing or a review by the Commission itself. By inhibiting the use of contest procedures, this decision interferes with a respondent's right to "appeal" what he considers to be an erroneous citation. Such a result circumscribes the very purposes for our existence.

The adverse consequences of this decision have been related at some length. They are among the reasons why Congress specifically excluded this Commission, and all other agencies with adjudicatory powers, from deciding matters not in issue among the parties.

[The Judge's decision referred to herein follows]

CHALK, JUDGE: The issue that appeared to divide the parties during the hearing of this case in Indianapolis, Indiana, on March 29, 1972, was whether Respondent can be held responsible under the Occupational Safety and Health Act of 1970 for the partial collapse of a concrete block wall it was in the process of erecting to enclose one side of a building being constructed at a worksite in the foregoing city on November 12, 1972. This incident resulted in the death of Respondent's foreman on the job, and the serious injury of three other of its employees, and [*24] formed the basis for the serious violation alleged in Citation Number 1, together with the proposed penalty of $550.00 therefor. n1

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n1 Respondent did not contest Citation Number 2 alleging three non-serious violations and the penalties proposed therefor.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

All basic jurisdictional facts -- that Respondent is and was on the date in question an employer within the meaning of the Occupational Safety and Health Act of 1970, and that the case is lawfully before this Commission by virtue of the issuance of Citation Number 1 for Serious Violation by the Secretary of Labor, accompanied by a Notification of Proposed Penalty, and the timely filing by Respondent of a Notice of Contest -- are established by the record either by stipulation or judicial notice, or both (Tr 9-12, 236; Record Exs. 1, 2, 3). Respondent also stipulated that it constructed the wall that partially collapsed and that the death and injuries resulted therefrom (Tr 78-81). Respondent also stated that it did not contest the reasonableness of the proposed [*25] penalty or the seriousness of the contested alleged violation in the event that a determination is reached that the evidence, in proper quantum, sustains the allegation (Tr 12-13). Finally, no party appeared to dispute the fact that the day of the incident was somewhat windy (Tr 39-41, 124, 126, 181; C Ex. C).

The Citation in question alleges a violation of Section 5(a)(1) of the Act, the general duty clause placing responsibility upon an employer to furnish his employees a place of employment free of recognized hazards causing or likely to cause death or serious injury, in that Respondent failed

. . . to provide a safe workplace in that the company allowed an 8 inch thick concrete block wall to be erected which was 29 courses in height and approximately 100 feet long with no horizontal or verticle ties. Shoring and bracing was not provided to prevent collapse of the wall due to wind or other forces . . . n2

A "course" is eight inches wide, eight inches high, and sixteen inches long (Tr. 67). It was not disputed that the wall was a free-standing, not weight-bearing, wall, and that the portion of it that fell was approximately at the second floor level and above, [*26] was within about five feet of the roof line, and was nineteen feet and four inches high and about one hundred feet long (Tr. 35-36, 66, 67, 87, 88, 123; C Exs. A, B, C).

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n2 The Complaint, omitting the allegation relating to the absence of horizontal or verticle ties, is worded as follows: "Respondent, at the aforementioned workplace, violated section 5(a)(1) of the Act by failing to furnish its employees employment and a place of employment which are free from recognized hazards that were causing or were likely to cause death or serious physical harm to its employees in that respondent failed to protect such employees from the hazard of a concrete block wall collapsing on them by its failure to shore or brace the wall to prevent its collapse."

This variance between the Citation and the Complaint will be discussed infra in this decision.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

Most of the witnesses called by both sides may be classified as experts, because of their long association with the masonary construction industry. They all inspected the scene [*27] of the accident after it occurred (Tr 26-31, 57-65, 101-106, 120-121, 171-173, 206-297). Unquestionably, they unanimously believed that a free-standing wall of substantial height, as involved in this case, is dangerous if not anchored to the horizontal and verticle steel beams as it is being built (Tr. 35, 40-41, 72-75, 195). In the opinion of one of these witnesses appearing for Complainant,

. . . It's a wonder it didn't go before . . . there is just nothing there. It is setting out in the breeze and the wind, or vibration from a semi [sic] going by (Tr 73-74).

Even Respondent's vice president described such a wall as dangerous (Tr 195). One of Complainant's witnesses testified that it was common knowledge within the industry that such a wall is a recognized hazard, whereas another testified that the wall in question would have survived the wind had it been anchored as called for in the specifications (Tr 40-41, 75). Finally, Respondent's president testified that it "would not be a common practice" to build such a wall without securing it to the beams and columns (Tr 160).

The original specifications for the building in question called for the installation of [*28] delta anchors to tie the wall to the steel beams and columns, only to the third floor level (Tr 149; R. Ex 5). Respondent, the masonary subcontractor on the job, was not responsible for supplying or welding the anchors to the steel, but was responsible for imbedding the steel bands attached to the anchors into the concrete blocks with mortar (Tr 144-149, 162-169; R Exs. 3, 4, and 5).

Difficulty arose during construction, however, because the anchors were never delivered and welded to the beams and columns, despite Respondent's repeated inquiries (Tr 174-175, 208-209). Finally, the general contractor's foreman instructed Respondent's foreman to put the wall up without anchors (Tr 175, 210). Recognizing the danger involved, Respondent's vice president instructed its deceased foreman, who replaced the previous foreman several weeks before the accident, to "put . . . re-bars vertical, slush them, take No. 9 wire and tie around them, and then tie the wire at the back of the column." (Tr. 173, 179, 190-191, 207). n3 While the re-bars were installed in the wall at appropriate places as it was being built, the wires were never attached to the beams and columns -- the wall was "standing [*29] free" (Tr. 126-130, 135). That portion of the wall above the second floor level that fell had been under construction for about four days (Tr. 123).

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n3 A re-bar tie consists of a metal bar two and one half or three feet long and about one half inch thick that is embedded into the holes of the concrete blocks with mortar. Attached to the bars are wires that are wrapped around the columns and beams and then tied (Tr 93, 126-129, 179-180). Re-bar ties can be used as a permanent anchor on a free-standing wall (Tr 93).

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

A witness who visited the scene on the day of, but after, the accident re-visited the scene three days later. On the second visit, he observed that another wall Respondent had built on another side of the building had been lashed to the columns by means of "2 by 4's inserted in the web of the block, lashed to the columns." These "2 by 4's" had not been there on the day of the accident (Tr 109-112).

Respondent's vice president testified that if the re-bars were not tied to the beams and columns, [*30] it was the fault of the deceased foreman (Tr 190). This same witness testified that he usually visited the job site about noce a week and that no one else in authority would have done so (Tr 195-196). Respondent's president also testified that it was the responsibility of the deceased foreman to see that the re-bars were tied and that said foreman was Respondent's "agent" (Tr 156-157).

After the accident, two other walls that Respondent had built at the jobsite were torn down. One ws replaced by another concrete block wall that was appropriately anchored (Tr 231-232). The specifications for a new wall to replace the one that fell called for delta anchors above the third floor level (Tr 199-204; C Ex K, R Ex 6).

Referring to the wall that fell, some of Complainant's witnesses referred to it as that portion of the wall from the second floor level upwards toward the roof, whereas Respondent's witnesses referred to it as that portion of the wall extending from the third floor level upwards toward the roof. This discrepancy was resolved by the explanation of several witnesses that the building was intended to be three stories high, but that at the time of the accident, there was [*31] only one floor between the ground floor level and the roof (Tr 85, 125-126). Hence, Respondent's witnesses' testimony that delta anchors were not specified for the third floor level related to that portion of the wall involved in the accident.

In regard to the variance I previously noted between the Citation and the Complaint, it is an accepted principle of law that an individual charged with a violation of the law is entitled to know specifically what the charge is, so as to permit him to prepare his defense (NLRB v. Bradley Washfountain Company, 192 F2d 144, 149 (7th Cir., 1951)). As a corollary to that principle, there is a denial of due process to the party charged when the issues are not clearly defined (id.).

While I am obviously unable to determine with any degree of certainty why the Secretary's Complaint deviated from the Citation in this case, I am fully satisfied, for the reasons that follow, that it was inadvertent, that no amendment of the basic charge was intended, that Respondent was fully aware of the charge throughout the proceedings, and that Respondent sustained no prejudice in any way. Firstly, the opening statement at the hearing of the Labor Department's [*32] attorney dealt with the alleged violation in terms of the Citation and the Respondent's attorney responded in such a way as to clearly indicate that he was aware of the nature of the charge. Secondly, the entire case was prosecuted and defended on the basis of whether permanent type anchors or ties were required, whose responsibility it was to furnish and install them, and whether re-bar ties were a satisfactory substitute and were installed and tied around the structural steel. Finally, shoring and bracing, strictly a temporary measure, was never really in issue in this case, for it is impractical to shore and brace a wall of the height involved -- it is "not done in the trade," and it is not resorted to when ties or anchors are to be installed (Tr 37-41, 47, 71, 76-77, 86-90, 115-118; C Ex I). Accordingly, the defect in the complaint presents no barrier in and of itself to affirmance of the violation as alleged in the Citation.

In his posthearing Statement of Position and Memorandum of Law, Respondent's attorney, in urging that the Citation and proposed penalty be vacated, argues inter alia that if the wall constituted a hazard, Respondent was not at fault. Rather, continues [*33] the argument, fault should be assessed against the architect who designed the wall without anchors at and above the third floor level, the subcontractor who failed to supply and install the anchors to the beams and columns, or the general contractor who directed Respondent to build the wall without the anchors. Much the same argument was advanced throughout the hearing.

While other contractors or individuals in similar factual settings may be responsible under tort law for their acts of commission or omission that result in death or injury to another's employees, such a fact, when established, does not relieve the employer in question of his unique obligation under the Act to furnish each of his employees a place of employment free from recognized hazards that are causing or are likely to cause death or serious bodily harm to his employees, especially under circumstances where the employer perceives the potentiality of a hazard and initiates measures calculated to avoid it (Sec. 5(a)(1)). Thus, the short answer to this assertion is simply that an employer's obligation under the Act is not something that can be contracted away. Moreover, under well-recognized concepts [*34] of law on the subject of principals and agents, and employer must be held accountable for the acts of his agents in failing to properly carry out his directives, particularly under circumstances reflected by this record where the employer fails to exercise proper supervision to insure that his directives are obeyed. Indeed, the law would afford little or no protection to the employee if the employer were allowed to shift the blame for a tragic error to his subordinates. It follows, therefore, that Respondent's argument is not persuasive and cannot be sustained.

I have carefully reviewed Respondent's other contentions contained in his brief and find them similarly unpersuasive.

Upon consideration of the entire record and the proposed findings of fact, conclusions of law, and briefs submitted by the parties, I reach the following:

FINDINGS OF FACT

1. That Respondent is and was at all times in question an employer operatings a business affecting the commerce of the United States.

2. That on November 12 and 15, 1971, a compliance officer of the Occupational Safety anf Health Administration inspected a worksite in Indianapolis, Indiana, where Respondent had subcontracted to and [*35] had partly constructed a concrete block wall, a portion of which had collapsed and killed one of its employees and injured three others, which said inspection resulted in the issuance on December 17, 1971, of the Citation for Serious Violation and the proposed penalty in issue.

3. That Respondent filed a Notice of Contest within the time prescribed.

4. That the portion of the wall that collapsed was approximately at the second floor level and extended on up to within about five feet of the roof level, and was eight inches wide, nineteen feet four inches high, and about one hundred feet long.

5. That the entire wall was a free-standing, not weight bearing, wall that was not anchored or tied to the beams and columns, or otherwise shore and braced.

6. That shoring and bracing is a temporary measure not resorted to when a wall is to be anchored to the beams and columns and that it would have been impractical if not impossible to shore and brace the wall because of its height.

7. That the specifications for the wall in question called for delta anchors to the second floor level and that the delta anchors were never supplied and welded to the beams and columns.

8. [*36] That Respondent did not have the responsibility of supplying or welding the delta anchors to the beams and columns but did have the responsibility of affixing the wire bands attached to said anchors to the concrete blocks with mortar as the wall was being built.

9. That the general contractor authorized Respondent to build the wall without anchors, and that Respondent recognized the inherent danger that could have resulted therefrom and ordered its foreman to install re-bars and ties, a satisfactory substitute, and to anchor the wall to the beams and columns.

10. That the re-bars and ties were properly affixed to the concrete blocks but were never tied to the beams and columns.

11. That a free-standing wall of the height and width of the wall in question, not tied or anchored to the beams and columns, will in all probability collapse from the least amount of wind or vibration and that such an unanchored wall constitutes a recognized hazard that is likely to cause death or serious physical harm.

CONCLUSIONS OF LAW

1. That this Commission has jurisdiction over the cause.

2. That Respondent's responsibility under the act to its employees is not affected by the fact [*37] that other contractors or individuals may bear tort liability for the accident.

3. That Respondent is responsible for the failure of its foreman to cause the re-bars affixed to the wall to be tied to the beams and columns.

4. That the violation as alleged in Citation Number 1 for Serious Violation is supported by substantial evidence and should be affirmed.

5. That the proposed penalty for the violation as alleged in Citation Number 1 for Serious Violation is appropriate under the circumstances of the case and should be affirmed.

6. That the uncontested Citation Number 2 for nonserious violations and penalties proposed therefor may be affirmed.

Citation Number 1 for Serious Violation, the violation as alleged in the Citation, and the proposed penalty therefor in the amount of $550.00 are affirmed. Citation Number 2 and proposed penalties therefor totalling $138.00 are also affirmed.

It is so ORDERED.

CONCURBY: MORAN

CONCUR:

MORAN, CHAIRMAN, concurring: What we are doing today is affirming Judge Chalk's decision of May 19, 1972. I concur in that result for reasons I spelled out in some detail in the January 1973 remand order.

I don't think the lead opinion's attempt to attach [*38] conditions to the acceptance of stipulated penalty assessments is either wise or proper. In my judgment, if the parties agree on the disposition of any issue in dispute that agreement should end the litigation thereon. It is not for this Commission to determine whether a settlement agreement is repugnant to the Act's policies. Our duties are strictly adjudicatory. The only occupational safety and health policymaker under the Act is the Secretary of Labor.

. . . the Act imposes policy-making responsibility upon the Secretary, not the Commission. Whatever "policies" the Commission establishes are indirect. Only those established by the Secretary are entitled to enforcement and defense in court. Madden v. Hodgson et al., F.2d, (9th Cir., No. 72-1874, decided July 29, 1974) (emphasis supplied).

In the case before us, the Secretary has agreed to the disposition. That disposition therefore becomes his policy. Since no party to this action disputes it, it is entitled to enforcement. This should be the rule the Commission follows and I think it will be.

With regard to the issuance and subsequent withdrawal of a direction for review under 29 U.S.C. 661(i), I [*39] agree with the ruling that "while unilateral action by any member of the Commission is effective to confer jurisdiction, once the jurisdiction of the Commission attaches, official action on the case can be taken only by a majority of its members." That is the only sensible rule and seems to be mandated by the Act in 661(e).

Query, however, whether Judge Chalk's February 7, 1973 order was reviewable. That merely restated the Commission ruling of a month earlier. The Commission ruled as follows:

The Secretary has presented no evidence upon which the Commission may base an appropriate penalty assessment. . . . The case must be remanded for adducement of such evidence. In the event this evidenciary void is not filled, a penalty of $0 is to be assessed.

When this ruling came out, the Secretary refused to even show up for a hearing let along fill any "evidenciary void." So Judge Chalk's decision after remand was simply a report that he couldn't get any evidence and a recitation of what the Commission had already decided: "a penalty of $0."

Can a single member order such a decision reviewed? I don't think so, which is why I subsequently withdrew the Direction for Review [*40] of February 23, 1973.

Finally, the lead opinion's discussion of the factors taken into consideration when a penalty is proposed should have no bearing on this case. If all parties agree on a penalty, it makes no difference how the specific amount thereof was arrived at. The discussion seems to be saying that the penalty proposal is O.K. since "the issuing officer" took into account the four criteria set forth in 29 U.S.C. 666(i) before deciding upon any amount. This is totally immaterial. The Act sepcifies that this consideration shall be given by the Commission. The Commission has not delegated this authority to any agent of the Department of Labor and certainly will not be doing so as the result of matters decided herein.

DISSENTBY: VAN NAMEE; MORAN

DISSENT:

VAN NAMEE, COMMISSIONER, dissenting: When this matter was first before us we said "[t]he Secretary has presented no evidence upon which the Commission may base an appropriate penalty assessment." n12 We therefore did not assess a penalty. n13 Had we made a dollar figure assessment, a reviewing court could not affirm under 29 U.S.C. 660 because the assessment would not have been based on substantial evidence. See Universal [*41] Camera Corp. v. N.L.R.B., 340 U.S. 474 (1951). And had we assessed a dollar figure it could be said that we had abused our discretion. See Brennan v. O.S.H.R.C. and Interstate Glass Co., 487 f.2d 442 (8th Cir., 1973); Brennan v. O.S.H.R.C. and REA Express, Inc., 495 F.2d 822 (2d Cir., 1974). Accordingly, we remanded the case so that the evidentiary void could be filled.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n12 BNA 1 O.S.H.C. 1095, 1096, CCH Employ. S. & H. Guide para. 15,401 (1973).

n13 U.S.C. 659(c) requires the Commission to "issue an order, based on findings of fact, affirming, modifying, or vacating the Secretary's . . . proposed penalty" in contested cases. For penalty assessment purposes the necessary facts upon which findings are to be based are the gravity of the violation and the size, safety history, and good faith of the contesting employer (29 U.S.C. 666(i)).

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

Unfortuantely, the void has not been filled. The Secretary still insists that he can dictate the amount of penalty by way of stipulation. He argues that [*42] the issue is thereby removed from a contested proceeding. Chairman Moran agrees. But as I have pointed out, their position, when carried to the extreme, would place us in the position of assessing a penalty when no violation has occurred. n14

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n14 Florida East Coast Properties, Inc.,

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

Commissioner Cleary, on ths other hand, would fill the void in this case by giving evidentiary status to the notice of proposed penalties. He would create a rebuttable presumption in favor of the Secretary. Thus, he would shift the burden to the employer to show why he should not be penalized in the amount proposed. In my view his position does violence to the concept that a proceeding before this Commission is a de novo proceeding. See Brennan v. O.S.H.R.C & Interstate Glass Co., supra. Moreover, his position would negate the concept that we are "designed to prevent the Secretary from imposing excessive [*43] punitive measures." Dale M. Madden Construction, Inc., v. O.S.H.R.C. and Hodgson, No. 72-1874,    F.2d   , unofficially reported, BNA 2 O.S.H.C. 1101, 1103, CCH Employ. S. & H. Guide, para. 18,354 (9th Cir., July 29, 1974). Finally, and notwithstanding note 11 in the lead opinion, I view his decision as a repudiation of Nacerima Operating Co., Inc., 1 OSHARC 33, BNA 1 O.S.H.C. 1001, CCH Employ. S. & H. Guide, para. 15,032 (Rev. Com'n., 1972). If one accepts the notification of proposed penalty for a serious violation as creating a rebuttable presumption, then one must necessarily endorse the method of arriving at the proposal. We rejected the Secretary's method in Nacerima.

Finally, both of my colleagues have seen fit to address a non-issue in this case; they concern themselves with the question of whether this case is on review. Since it is a non-issue I do not join in either opinion. In any event the Court of Appeals for the Seventh Circuit determined that the case was still on review since it dismissed the Secretary's petition for judicial review as being premature. No. 73-1232 (January 22, 1974).

[The Judge's decision referred to herein follows]

CHALK, [*44] JUDGE: On May 19, 1972, I issued a decision and order affirming Citation Number 1 for Serious Violation and assessing a penalty therefor in the amount of $550.00. I reached the penalty assessment on the basis of Respondent's assertion at the hearing that it did not contest the reasonableness of the penalty of $550 proposed by the Secretary at the time the citation was issued, provided I found the alleged violation supported by substantial evidence and stipulation that a penalty in that amount was "not unreasonable" (Tr. 12). n1

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n1 In its Notice of Contest, Respondent contested the Citation in question without any mention of the proposed penalty. I considered this form of contest as placing the proposed penalty in issue only to the extent of avoiding a penalty in the event Respondent's contest of the Citation were sustained.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

On May 26, 1972, Commissioner Alan F. Burch directed review on my decision and order, pursuant to the provisions of section 12(j) of the Occupational Safety and Health Act of 1970 (29 USCA 661(i)), [*45] therein noting the record void of evidence bearing upon the penalty issue and inviting submissions thereon. The Secretary responded with a brief, but apparently declined to submit evidence. Thereafter, in a decision issued on January 17, 1973, the majority of the Commission held that where only the Citation is contested, the Commission nevertheless has the statutory duty to reach a penalty determination based upon evidence of the size of the employer's business, and its good faith and history of prior violations, as well as the gravity of the violation, notwithstanding a stipulation of the parties similar to that in this case, (Sec. 17(j) of the Act). Accordingly, the Commission affirmed the Citation for Serious Violation, but remanded the case to me for adducement of such evidence and assessment of an appropriate penalty based thereon. The Order of the Commission further provided:

In the event that this evidentiary void is not filled, a penalty of $0 is to be assessed.

After reassignment of the case to me on February 2, 1973, pursuant to the foregoing remand, a letter, dated February 1, 1973, from the Office of the Solicitor, Department of Labor, to the Executive [*46] Secretary, was received by the Commission on February 5, 1973, stating:

This is to inform the Commission that we do not agree with the majority decision . . ., that we believe the stipulation of the parties respecting the appropriateness of the penalties is binding upon the Commission, and that we do not intend to adduce further evidence on the penalty, if a further hearing is held.

The Secretary's letter forecloses any further attempt on my part to assess a penalty in accordance with section 17(j) of the Act. Thus, I am left with no choice other than to implement the other facet of the Commission's mandate. n2

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n2 Section 17(b) of the Act prescribes that a civil penalty of up to $1,000 shall be assessed for each serious violation.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

A penalty of $0 is assessed.

It is so ORDERED.