MAXWELL WIREBOUND BOX CO., INC.  

OSHRC Docket No. 15965

Occupational Safety and Health Review Commission

August 29, 1980

  [*1]  

Before CLEARY, Chairman; BARNAKO and COTTINE, Commissioners.  

COUNSEL:

Baruch A. Fellner, Office of the Solicitor, USDOL

Bobbye D. Spears, Regional Solicitor, U.S. Department of Labor

Jospeh P. Jordan, for the employer

Carr G. Dodson, for the employer

OPINION:

DECISION

BY THE COMMISSION:

A decision of Administrative Law Judge Paul L. Brady, dated April 4, 1977, is before the Commission pursuant to section 12(j) n1 of the Occupational Safety and Health Act of 1970, 29 U.S.C. § §   651-678 ("the Act").   In his decision, n2 Judge Brady denied Respondent's petition for modification of abatement. Respondent, Maxwell Wirebound Box Co., Inc. ("Maxwell"), in its Petition for Discretionary Review, asks the Commission to decide whether the judge erred in (1) determining that Respondent's notice of contest was not a contest of the merits of the violation but only a petition for modification of the abatement date; (2) permitting the Secretary of Labor ("Secretary") to conduct a discovery inspection by non-federal employees in the face of Respondent's claim of trade secrets and without any showing why federal employees could not adequately conduct such inspection; (3) granting the Secretary's motions for   [*2]   continuance, one of them indefinitely; and (4) refusing to hear testimony on the merits of the citation.   We reverse the judge's determination that Respondent did not contest the merits of the citation. n3 We affirm the judge's ruling concerning the discovery inspection and his granting of continuances to the extent that those actions are consistent with this decision.

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

n1 29 U.S.C. §   661(i).

n2 During the course of pre-hearing proceedings in this case, Judge Brady issued two orders that also are on review at this tire.   In an order dated May 17, 1976, the judge limited the scope of the hearing to the issue of whether a petition for modification of the abatement dates should be granted, ruling that Respondent had not contested the merits of the citation.   In a second order issued on August 18, 1976, the judge granted a motion made by the Secretary to compel entry by a non-federal employee upon Respondent's property for the purpose of preparing expert testimony relating to the amount of time necessary to implement feasible engineering or administrative controls.

n3 Although Respondent does not specifically seek reversal of the judge's denial of its petition for modification of abatement, that issue is necessarily related to an issue that is on review, i.e., whether the merits of the alleged violations were contested.

  [*3]  

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

I

Respondent is engaged in the manufacture of wirebound wooden boxes. Following an inspection on November 4, 1975, Maxwell was issued a citation alleging nonserious violations of the Act for failure to comply with the standards at 29 C.F.R. § §   1910.95(b)(1) and (b)(3). n4 On November 26, 1975, within the 15-day contest period, n5 Maxwell filed a document entitled "NOTICE OF INTENTION TO CONTEST/PETITION FOR MODIFICATION OF ABATEMENT." While that notice appears to contest only the abatement dates, it is possible to infer, through its use of the terms "contest," "alleged violations" and "any noise deficiencies," that Respondent also intended to contest the merits of the citation.   Respondent also indicated that it was participating in an industry-wide noise control program and that it

has no basis upon which to submit a plan until the independent engineering firm completes its report and has no basis upon which to reduce or utilize feasible engineering or administrative controls to protect against hazardous noise levels or impulsive or impact noise levels.

In its answer to the complaint, Respondent [*4]   clearly stated that it was "contesting the citation in total and in the alternative requesting a delay of the [abatement] date . . . ." Respondent also specifically denied in its answer that it was in violation of the Act.

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

n4 Those standards provide as follows:

§   1910.95 Occupational noise exposure.

* * *

(b)(1) When employees are subjected to sound exceeding those listed in Table G-16, feasible administrative or engineering controls shall be utilized.   If such controls fail to reduce sound levels within the levels of Table G-16, personal protective equipment shall be provided and used to reduce sound levels within the levels of the table.

* * *

(3) In all cases where the sound levels exceed the values shown herein, a continuing, effective hearing conservation program shall be administered.

n5 See 29 U.S.C. §   659(a).

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

Following a pre-hearing conference, called to discuss the scope of the contest, and after the parties had filed briefs concerning the issue, the judge ruled that the notice of contest unambiguously [*5]   requested only an extension of the abatement dates.   He therefore held that the citation itself had become a final order of the Commission, citing Florida East Coast Properties, Inc., 74 OSAHRC 5/C7, 1 BNA OSHC 1532, 1973-74 CCH OSHD P17,272 (No. 2354, 1974) ("Florida East Coast"). n6 The judge noted that:

A different result may have been reached in this case if the notice had been filed by a 'non-legal employer,' or if it was subject to various interpretations for the purposes of determining intent.

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

n6 This earlier ruling of the judge is also on review.   See note 2 supra.

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

On review, Maxwell argues that it clearly contested the merits of the citation in its notice of contest, that the Commission has construed more ambiguous notices of contest as reaching the merits of the citations, and that the Commission should follow its policy of interpreting notices of contest in the light most favorable to a respondent.   The Secretary, on the other hand, argues on review that Maxwell clearly requested only an extension [*6]   of time to abate in its notice of contest and that the Commission had erred in establishing a policy that allows a respondent to "expand its notice of contest in the answer," citing William W. Turnbull, d/b/a Turnbull Millwork Co., 75 OSAHRC 16/A13, 3 BNA OSHC 1781, 1975-76 CCH OSHD P20,221 (No. 7413, 1975) ("Turnbull").

II

In Gilbert Manufacturing Co., Inc., 79 OSAHRC 68/A2, 7 BNA OSHC 1611, 1979 CCH OSHD P23,782 (No. 76-4719, 1979) ("Gilbert"), we held that an employer's letter that requests only an extension of the abatement date will be treated as a petition for modification of abatement under Commission Rule 34, 29 C.F.R. §   2200.34.   We concluded that "there should not be a distinction in the manner that employers' requests for extensions of abatement dates should be processed depending on whether the requests are filed within the 15-day contest period." Gilbert overruled our earlier decisions in Philadelphia Coke Division, Eastern Associated Coal Corp., 2 BNA OSHC 1171, 1974-75 CCH OSHD P18,572 (No. 6448, 1974) ("Philadelphia Coke Division"), and Eastern Knitting Mills, Inc., 74 OSAHRC 82/A2, 1 BNA OSHC 1677, 1973-74 CCH OSHD P17,691 (No. 2019,   [*7]   1974), to the extent that they held that a request solely for an extension of the abatement date filed within the 15-day contest period gave the Commission jurisdiction over the entire citation.

In Gilbert, however, we recognized that an initial request for relief filed by an employer may not always be clear as to whether the employer's intent was to seek modification of the abatement date alone or also to contest the citation.   Respondent's initial request for relief in this case is an ambiguous one as envisioned by Gilbert which requires that we decide whether the document was a petition for modification of abatement or a notice of contest of the entire citation.   Continuing to follow that portion of Philadelphia Coke Division not overruled by Gilbert, that requests for relief filed within the 15-day contest period be given a liberal interpretation, Respondent's initial request for relief must be read as a contest to the citation as well as a request for extention of time for abatement.

Moreover, in Turnbull, the Commission held that a notice of contest that is limited to the proposed penalty would be construed as a contest of the citation as well where respondent [*8]   indicated in a later pleading that its true intent in filing the original notice was to contest both the citation and the proposed penalty. See Gil Haugan, d/b/a Haugan Construction Co., 77 OSAHRC 182/G3, 5 BNA OSHC 1956, 1977-78 CCH OSHD P22,248 (No. 14675, 1977), aff'd, 586 F.2d 1263 (8th Cir. 1978). Under the Turnbull test, therefore, we consider the intent of the employer at the time of filing its original request for relief as clarified by that employer's later pleadings.   We now hold that the Turnbull test shall apply to initial requests for relief which appear to be limited to the time for abatement and would normally proceed under Commission Rule 34 pursuant to Gilbert. n7 Thus, an initial request for relief solely directed to the time allowed for abatement and filed within the fifteen day contest period will be construed as a notice of contest to the citation where later "pleadings" n8 demonstrate that Respondent's intent at the time of filing the initial request was to contest the citation.

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

n7 In his separate opinion in Gilbert, Commissioner Cottine agreed with the majority's decisior to overrule Philadelphia Coke Division, supra, and Eastern Knitting Mills, Inc., supra. However, he declined to join the majority in construing notices of contest limited to the abatement date as petitions for modification of abatement under Commission Rule 34, 29 C.F.R. §   2200.34.   In his view, any document filed within the 15-day review period should be treated as a notice of contest unless the document affirmatively reveals the employer's intent to pursue his claim as a petition for modification of abatement. Commissioner Cottine also stated:

In addition, I would apply the sound rationale of Turnbull, supra, to objectively interpret any ambiguous document in order to determine the appropriate scope of the employer's contest.

79 OSAHRC 68/A2 at B7, 7 BNA OSHC at 1617, 1979 CCH OSHD P23,782 at p. 28,850. Accordingly, he joins the majority in this case in construing the document filed on November 26, 1975, as a contest of the merits of the citation as well as the abatement dates.

n8 In Gilbert, recognizing that under certain circumstances petitions for modification of abatement are not forwarded to the Commission by the Secretary, see Commission Rule 34, 29 C.F.R. §   2200.34, the Commission noted that

if the employer's request for relief is ambiguous so that any question arises concerning whether the employer wishes to also contest the citation or if the employer disputes the Secretary's interpretation of its request, the matter is to be referred to the Commission for appropriate action.

7 BNA OSHC at 1615, 1979 CCH OSHD at p. 28,848.

  [*9]  

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

In this case, Respondent indicated in its answer to the complaint that its intention at the time it filed its notice of contest was to contest the citation and in the alternative to request a modification of the abatement date.   We conclude, therefore, that the merits of the citation, as well as the abatement dates, are in issue.   Accordingly, this case will be remanded to the judge for a hearing on the merits.

III

Respondent also argues on review n9 that the judge erred in permitting the Secretary to conduct a pre-hearing discovery inspection by a non-federal employee, citing the Commission decision in Reynolds Metals Co., 78 OSAHRC 51/F1, 3 BNA OSHC 1749, 1975-76 CCH OSHD P20,214 (No. 4385, 1975) ("Reynolds I"). Respondent requests that the Secretary's expert not be permitted to testify at any hearing on the merits.   The Secretary argues that Maxwell did not prove the existence of trade secrets and that the judge issued a protective order "[i]n an abundance of caution . . . ." The Secretary also contends that the Commission decision in Reynolds I employs an unnecessarily restrictive method [*10]   of protecting trade secrets and should be overruled.

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

n9 Respondent previously petitioned for interlocutory appeal of right with respect to the judge's order granting the Secretary's motion to compel entry on Respondent's property.   Respondent objected to the order on the ground that the entry should be limited to federal employees because trade secrets would be revealed during the entry.   That petition for interlocutory appeal of right, filed under former Commission Rule 11(b), 29 C.F.R. §   2200.11(b)(1979) (revoked 44 Fed. Reg. 70,106, 70,110 (1979)), was denied on September 8, 1976 on the ground that "Interlocutory Review of a judge's order which interprets and applies Commission precedent is not warranted." Commissioner Cottine, who was not a member of the Commission when Respondent's petition was denied, notes that it was error for the Commission not to consider and decide the merits of that interlocutory appeal. Unlike the current rule 75, which makes all interlocutory appeals subject to Commission acceptance, 29 C.F.R. §   2200.75(b), (c), as amended, 44 Fed. Reg. 70,106 70,111 (1979), former Rule 11(b) mandated Commission consideration of this type of interlocutory appeal. See generally 28 U.S.C. §   1292(a) (interlocutory appeals of right), §   1292(b) (interlocutory appeals by permission).   Though the Respondent did take an interlocutory appeal, it could have waited for the judge's final decision and then sought review of the interlocutory order.   29 C.F.R. § §   2200.90, 2200.91 (1979).   See generally 9 Moore's Federal Practice PP10.16, 110.18 (1980).   Therefore, Commissioner Cottine considers the present Commission review of these issues to have restored the Respondent to the position it enjoyed prior to the erroneous denial of the interlocutory appeal.

  [*11]  

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

In Reynolds I we held that the Secretary is limited to using a federal employee to conduct a discovery inspection if (1) inspection by an outside expert would endanger a respondent's trade secrets, and (2) the Secretary failed to show good cause why it is necessary to use an outside expert.   In Reynolds Metal Co., 78 OSAHRC 51/D4, 6 BNA OSHC 1667, 1978 CCH OSHD P22,806 (No. 4385, 1978) ("Reynolds II"), the Commission clarified its position as expressed in Reynolds I that the employer is required to establish the existence of trade secrets before the Secretary has to show good cause for the use of a non-federal expert.   Although Reynolds I was Commission precedent at the time, the judge permitted the Secretary to use a non-federal employee to inspect Maxwell's premises without requiring Maxwell to prove its claim that it had trade secrets to protect, n10 and in spite of the Secretary's failure to either claim or offer any evidence that appropriate federal employees were unavailable to inspect Respondent's premises.   The judge, in permitting entry by a non-federal employee, concurrently [*12]   issued a protective order. Note 11 infra. In addition, the contract for services entered into between the non-federal employee and the Occupational Safety and Health Administration contained a specific provision under which the non-federal employee agreed "not to reveal or discuss with any person any information . . . found to be a trade secret . . . ." The judge held that his ruling was not inconsistent with Reynolds I, stating that the presence of a non-federal employee would not compromise any of Maxwell's trade secrets "to a greater extent than did the inspection which preceded the issuance of the citation, or the involvement of the industry retained firm."

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

n10 Maxwell claimed that its trade secrets consisted of the design, application, and use of its machinery in general; the unique accessory components of at least one such machine; the design of boxes prepared for Maxwell's customers; and the names of its customers, which are stamped on the products manufactured for them.   Judge Brady made no clear finding that Respondent had trade secrets that are likely to be revealed to a non-federal employee expert during a discovery entry.   On the one hand, the judge stated that Respondent's cooperation with an industry-wide noise control program "would appear inconsistent with Respondent's position that its operation involves trade secrets . . . ." On the other hand, the judge proceeded to "balance" the Secretary's need for discovery against Respondent's "right to safeguard any trade secrets." This case is now controlled by our decision in Owens-Illinois, Inc., 78 OSAHRC 105/C8, 6 BNA OSHC 2162, 1978 CCH OSHD P23,218 (No. 77-648, 1978).   Accordingly, there is no need for the judge on remand to decide whether Respondent has established the existence of trade secrets unless the Secretary or his expert do not agree to the new protective order to be issued pursuant to our instructions.

  [*13]  

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

After the issuance of the judge's decision in this case, the Commission issued its decision in Owens-Illinois, Inc., 78 OSAHRC 105/C8, 6 BNA OSHC 2162, 1978 CCH OSHD P23,218 (No. 77-648, 1978) ("Owens-Illinois") and overruled the Reynolds cases to the extent they were inconsistent with Owens-Illinois. We held that the possibility that trade secrets will be disclosed does not warrant barring discovery inspections by non-federal employees, since trade secrets can be adequately protected by the issuance of an appropriate protective order. The judge's ruling in this case, granting discovery by a non-federal employee who had agreed not to reveal trade secrets, is basically consistent with the Commission decision in Owens-Illinois. Under that decision, however, Respondent is entitled to a more stringent protective order. n11 On remand, therefore, the judge should issue a new protective order that conforms to the Owens-Illinois requirements.   If the Secretary agrees to be bound by that protective order, no showing of trade secrets is necessary, and any expert who accepts the terms of [*14]   the order may testify at the hearing on the merits.   If the Secretary does not agree to be bound by the protective order, the order should be entered if Respondent proves the existence of trade secrets that are likely to be revealed by the requested entry. n12

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

n11 The protective order granted by the judge offered substantially less protection than the Commission requires under Owens-Illinois. In that case, we held that a protective order should (1) require that the Secretary provide the employer with a resume of the expert who is to conduct the discovery inspection and give the employer an opportunity to challenge the selection of the expert on the ground that he is closely aligned with a competitor of the employer; (2) require the expert to sign and comply with an oath that any trade secret information he obtains during the discovery inspection shall not be disclosed except to the Secretary's representatives involved in litigaton and in proceedings before the Review Commission; (3) require the Secretary to include in his contract with the expert a non-disclosure provision identical to the oath, and a provision stating that it is the express intent of the parties that the employer be a beneficiary of the non-disclosure provision with a right to enforce it; and (4) include within its coverage the Secretary and anyone acting on his behalf.   The judge in this case ordered only that any information obtained by the expert with reference to trade secrets was to be used solely for the purposes of this proceeding and revealed only during the course of the proceeding.   As noted above, the expert, in his contract with the Secretary, specifically promised not to reveal any trade secret information.

n12 Commissioner Barnako would require the judge on remand to reconsider the trade secrets issue.   He adheres to the view he expressed in Owens-Illinois in which he reaffirmed his position in Reynolds I and the Commission's subsequent decision in the same case (Reynolds II). The judge is to enter factual findings on the threshold question of whether Maxwell has trade secrets which a discovery inspection would endanger.   On the issue of whether Maxwell has the requisite trade secrets, the burden is upon Maxwell to establish their existence.   If Maxwell proves the existence of trade secrets that would be endangered by a discovery inspection, the Secretary must show good cause why it is necessary to use a non-Federal expert.   The judge is then to enter findings with respect to the good cause issue.   If the judge concludes that the Secretary failed to show good cause, Commissioner Barnako would limit the Secretary to the use of a Federal expert to conduct the requested discovery. If the Secretary shows good cause for the use of non-Federal experts, Commissioner Barnako would agree to entry of a protective order meeting the requirements set forth in Owens.

  [*15]  

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

Respondent's final contention on review is that the judge erred in granting the Secretary's motions for continuances, one of which was granted indefinitely. The Secretary argues that the continuances were justified and that the granting of continuances is within the judge's discretion and should not be disturbed by the Commission absent a showing of prejudice to Respondent.

Within the course of these proceedings the Secretary requested and was granted two continuances. n13 Having examined the reasons for each of them, we conclude that the judge did not abuse his discretion in granting the continuance to postpone a hearing scheduled for October 20, 1976, because of the unavailability of the expert witness.   However, on July 13, 1976, the judge vacated a July 14 hearing date and continued the matter "generally, subject to further order of the Commission." The next hearing date eventually was set for October 20, 1976.   Under Commission Rule 61, n14 Commission judges have no discretion to grant a continuance of more than 30 days.   The Commission itself, however, has the discretion, as an administrative [*16]   agency,

to relax or modify its procedural rules adopted for the orderly transaction of business before it when in a given case the ends of justice require it.   The action . . . is not reviewable except upon a showing of substantial prejudice to the complaining party.

N.L.R.B. v. Monsanto Chemical Co., 205 F.2d 763 (8th Cir. 1953). n15 Respondent does not claim to be prejudiced by the indefinite continuance. Accordingly, we conclude that the judge's error was harmless.   Cf. Anheuser-Busch, Inc., 77 OSAHRC 10/E5, 4 BNA OSHC 1999, 1976-77 CCH OSHD P21,466 (No. 10609, 1977) (judge did not abuse discretion or prejudice employer by granting Secretary a continuance to procure additional expert testimony).

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

n13 We note that Respondent requested and received four continuances from the judge.   Only the continuances granted to the Secretary, however, are on review.

n14 Commission Rule 61, 29 C.F.R. §   2200.61, states:

Rule 61 Postponement of hearing.

(a) Postponement of a hearing ordinarily will not be allowed.

(b) Except in the case of an extreme emergency or in unusual circumstances, no such request will be considered unless received in writing at least 3 days in advance of the time set for the hearing.

(c) No postponement in excess of 30 days shall be allowed without Commission approval.

n15 See Commission Rule 108, 29 C.F.R. §   2200.108, which states:

Rule 108 Special circumstances; waiver of rules.

In special circumstances not contemplated by the provisions of these rules, or for good cause shown, the Commission may, upon application by any party or intervenor, or on its own motion, after 3 days notice to all parties and intervenors, waive any rule or make such orders as justice or the administration of the Act requires.

  [*17]  

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

Accordingly, it is ORDERED that the judge's order limiting the scope of the Respondent's contest to the issue of the modification of the periods for abatement is reversed.   We remand this case for further proceedings consistent with this decision.

SO ORDERED.