DAYTON TIRE & RUBBER COMPANY
OSHRC Docket No. 2719
Occupational Safety and Health Review Commission
January 29, 1975
[*1]
Before MORAN, Chairman; VAN NAMEE and CLEARY, Commissioners
OPINIONBY: CLEARY
OPINION:
CLEARY, COMMISSIONER: The issue in this case is both narrow and of first impression. Review was directed on November 15, 1973, pursuant to section 12(j) of the Occupational Safety and Health Act of 1970 (29 U.S.C. 651 et seq. ) (hereinafter "the Act") of Judge Goldstein's decision of November 6, 1973. The issue raised for review is whether the respondent is responsible for complying with the recordkeeping requirements. Judge Goldstein resolved the issue in the negative. We reverse.
Respondent maintains a warehouse for the storage and distribution of tires where it employs clerical, supervisory and security personnel. In addition, approximately 65 warehouse workers are provided to respondent by Manpower, Inc., a personnel referral service.
On February 2, 1973, the warehouse was inspected by a compliance officers of OSHA. On March 23, 1973, a citation was issued containing 19 items, of which only three (dealing with the reporting regulations n1 promulgated by the Secretary pursuant to section 8(c)(1) of the Act (29 U.S.C. § 657(c)(1)) were contested by respondent.
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n1 The regulations are:
29 CFR § 1904.2. "Each employer subject to the [A]ct shall maintain in each establishment, a log of occupational injuries and illnesses."
29 CFR § 1904.4: "In addition to the log of occupational injuries and illnesses provided for under § 1904.2, each employer subject to the [A]ct shall maintain at each establishment a supplementary record of occupational injuries and illnesses on which he shall record each recordable occupational injury or occupational illness in the detail prescribed in the instructions accompanying Occupational Safety and Health Administrative Form OSHA No. 101.
29 CFR § 1904.5(d)(1)(a): "Each employer subject to the [A]ct shall compile an Annual Summary of Occupational Injuries and Illnesses, based on the information contained in the Log of Occupational Injuries and Illnesses."
29 CFR § 1904.5(d)(1)(b): "The summary shall be maintained at each establishment."
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As to the warehouse workers, n2 respondent admits that the records were not maintained at the warehouse facility as required, but [*3] denies that it is the employer of the warehouse workers. Thus, the question becomes: for the purposes of section 8(c)(1) of the Act and the regulations regarding recordkeeping, is respondent the responsible employer under the facts of this case?
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n2 Respondent has not contested the finding of responsibility as to his clerical, supervisory, and security employees.
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Under the arrangement between respondent and Manpower, Inc., Manpower recruits, interviews, and screens prospective warehouse laborers who are then referred to the respondent for final selection. Respondent trains, equips, supervises and disciplines these workers. Respondent sets hours of work, vacation periods, and assignments. The workers belong to a union. Some of these workers have worked for respondent for a period of years. Only respondent exercises supervisory control over the workers. Respondent's warehouse manager stated that the workers are "an integral part of Dayton's business." The workers themselves considered Dayton as their employer, [*4] and some considered their jobs permanent. n3
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n3 The parties have hotly contested whether Manpower will re-assign a worker fired by respondent. The issue is simply resolved: when a worker is fired, he is effectively out of a job, whether or not Manpower tries to re-assign him.
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On the other hand, the workers are paid with Manpower checks. Manpower pays the social security taxes, State unemployment compensation contributions and workmen's compensation premiums. Manpower prepares and files all necessary governmental and statistical reports, including OSHA Forms 100, 101, and 102, the subjects of this inquiry. In case of an accident involving warehouse labor, the respondent reports the incident to Manpower on Manpower forms. There was no formal contract between respondent and the workers. However, respondent reimbursed Manpower for all its costs, including wages, taxes and, premiums, and a profit was paid as well.
However, the workers received their Manpower checks from a Dayton employee. Furthermore, [*5] Manpower's manager testified that Manpower merely took the place of a "personnel department."
The statutory definition of the term "employer" in section 3(5) of the Act sheds no light on the issue involved, although it should certainly not be read to derogate from the remedial statutory purposes. Also, there is no regulatory definition of the term "employer" in Part 1904.
It is therefore incumbent upon the Commission to seek the meaning of the term "employer" by looking to the purpose of the reporting requirements, and the economic realities of the situation. Brennan v. Gilles & Cotting and O.S.H.R.C., No. 73-2471 (4th Cir., October 18, 1974).
Referring to S. 2193, 91st Cong., 2d Sess., § 8(c)(1) (1970), subsequently enacted, S. REP. NO. 91-1282, 91st Cong., 2d Sess. 16 (1970) notes that "Full and accurate information is a fundamental precondition for meaningful administration of an occupational safety and health program. . . . Thus an essential first action . . . should be the institution of an adequate statistical program." To the same effect see H.R. REP. No. 91-1291, 91st Cong., 2d Sess. 30 (1970) reporting on a similar provision in H.R. 19200, 91st Cong., 2d Sess. [*6] § 9(c) (1970).
We do not agree with respondent that the above policies are furthered by requiring only Manpower to maintain these records at respondent's establishment. n4 Manpower is a personnel referral agency and respondent merely pays Manpower to do its personnel-related recordkeeping and paper work. Manpower has no control over whatever hazards the workers may face. The Senate Report, supra at 31, states that "regulations [which the Secretary may promulgate] may . . . require employers to conduct periodic inspection to determine their own state of compliance. . . . " See § 8(c)(1) of the Act (29 U.S.C. § 657(c)(1)). We believe that only if respondent maintains these records can the necessary interrelation of recordkeeping with enforcement be achieved. It is difficult to believe that Manpower could conduct effective inspections, or recognize hazards and correct them. Manpower would depend entirely upon respondent for accurate reporting of injuries.
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n4 The record shows, and the parties agree, that Manpower's records are not now kept at the workplace. Presumably, if we held that Manpower is the employer in this context, then Manpower would be required to maintain the records at respondent's warehouse. However, Manpower is not a party to this action.
[*7]
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Both respondent and the Judge have placed too much emphasis on the lack of a formal contractual obligation between the workers and respondent ("lack of privity").
Also, the facts heretofore described point to the conclusion that Manpower is nothing more than an agent to which respondent has contracted the undertaking of its personnel activities. Hence, respondent is the "employer" for purposes of recordkeeping. Of course, nothing herein should be construed to mean that respondent may not use Manpower to keep its injury records, but it is respondent who has a non-delegable duty to keep accurate and complete records.
Respondent has strongly urged that it was misled by a Bureau of Labor Statistics Report No. 245, entitled "What Every Employer Needs to Know About OSHA Record Keeping." Questions 19 and 20 read as follows:
19. Q. How about Adam and Manpower and the type of employers who rent workers out by the day to do a specific job in a plant. Are these employers considered as contractors employed by the plant? [Emphasis added.]
A. Yes.
20. Q. If an employee who is working in a plant on [*8] a contract basis is injured, is he recorded on the plant records or on the records of the contractor?
A. The contractor is responsible for his employee's safety, so the contractor would record his injury on his records.
It is very clear that the crucial words here are "by the day." Nothing in the record suggests that these employees were hired by the day; In fact, some considered their jobs permanent, and some worked for respondent for a period of years. The reliance placed on the above by respondent was unjustified. We find that the warehouse employees are employees of respondent.
Inasmuch as respondent's good faith in this matter is apparent, we believe that because the necessary records were maintained (although at the wrong place and by the wrong person), no penalties should be assessed.
Accordingly, it is ORDERED that, insofar as it holds that the warehouse employees are not respondent's employees and thus "need not be included in the Respondent's reporting records for the purposes of this Act," the Judge's decision is reversed.
CONCURBY: VAN NAMEE
CONCUR:
VAN NAMEE, COMMISSIONER, concurring: This matter is simply resolved by the economic realities of the situation. [*9] N.L.R.B. v. Hearst Publications, Inc., 322 U.S. 111 (1944). In the light of this test Respondent is the employer of its warehousemen. It is enough to decide the case on this basis and to that extent and that extent only, I concur in Commissioner Cleary's opinion.
DISSENTBY: MORAN
DISSENT:
MORAN, CHAIRMAN, dissenting: The Commission concludes that respondent is responsible for keeping these records, principally because it has complete control over these warehouse workers and over the working conditions at the worksite. "Control" is a significant element in determining who is the responsible employer within the meaning of the Act. See Secretary v. Gilles & Cotting, Inc., 4 OSAHRC 1080 (1973), affirmed in Brennan v. Gilles & Cotting, Inc. and OSAHRC, 504 F.2d 1225 (4th Cir., 1974); Secretary v. Elmer Vath, Painting Contractor, 9 OSAHRC 833 (1974).
A finding of control has not, however, been an absolute prerequisite for holding that a responsibility exists to comply with standards promulgated under this Act. See Secretary v. Southeast Contractors, 8 OSAHRC 285 (1974); Secretary v. Frohlick Crane Service, 9 OSAHRC 531 (1974).
Here, the court below concluded [*10] that there was a contract of employment between the warehouse workers and Manpower, Inc. Manpower paid their wages, social security taxes, state and federal unemployment compensation contributions and workman's compensation premiums. These workers were reported as Manpower employees to the state and federal taxing departments. All payroll, accident and statistical reports, including the OSHA forms here in question, were kept and reported by Manpower.
Respondent relied upon Bureau of Labor Statistics Report 412 which was distributed by complainant. Entitled What Every Employer Needs to Know About OSHA Recordkeeping, it refers to the type of situation that exists here:
Q. How about Adam and Manpower and the type of employers who rent workers out by the day n5 . . . . Are these employers considered as contractors employed by the plant?
A. Yes.
Q. If an employee who is working in a plant on a contract basis is injured, is he recorded on the plant records or on the records of the contractor?
A. The contractor is responsible for his employee's safety . . . [and] would record his injury on his records.
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n5 The lead opinion attempts to distinguish this quote from the facts herein by applying its meaning only to employees hired "by the day." Does this mean that an employee who works for two day stints would not be within the meaning of the quote? I believe the court below correctly indicated that "by the day" refers to the nature of the employment, not its duration.
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It is clear, therefore, that Manpower is the employer of these workers, and that it kept the records for the purposes mandated in 29 U.S.C. § 657(c)(1). n6
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n6 This section provides that employers ". . . shall make, keep and preserve, and make available to the Secretary . . . such records regarding his activities relating to this Act as . . . may [be] prescribe[d] by regulation as necessary or appropriate for the enforcement of the Act or for developing information [hereunder] . . . ."
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At issue, then, is whether this respondent should also [*12] be required to keep records that are already available from Manpower. I do not believe the purposes of the Act so require.
Section 657(c)(1) is directed to the availability of full and accurate information. See the Report of the Subcommittee on Labor of the Committee on Labor and Public Welfare, U.S. Senate, Leg. Hist. of the Occupational Safety and Health Act. (S. 2193, P. 156), 92d Congress, 1st Sess.
No dispute exists that these records were available. In what way, then, are the remedial purposes of § 657(c)(1) enhanced by requiring respondent to additionally keep and record this information?
29 U.S.C. § 657(d) provides that:
Unnecessary duplication of efforts in obtaining information shall be reduced to the maximum extent feasible.
The Commission's action, requiring respondent to duplicate the information already available, effectually undermines the Congressional intent, and creates additional federal paperwork burdens. Another triumph for bureaucracy!
[The Judge's decision referred to herein follows]
GOLDSTEIN, JUDGE: This case arises under the Occupational Safety and Health Act of 1970 and involves the application of the recordkeeping regulations promulgated [*13] thereunder. After an inspection of the Respondent's worksite in Springdale, Ohio, the Occupational Safety and Health Administration issued it a Citation alleging the violation of 19 regulations. The Respondent contested only the three Items of the Citation relating to the reporting provisions and the penalties proposed therefor. After the formal documents of protest, the Complaint and the Answer were filed, and a hearing was held in Dayton, Ohio.
The Citation and Complaint alleged that with respect to those individuals performing services at its Springdale, Ohio, worksite, the Respondent failed to comply with the following three regulations:
1904.2 Log of occupational injuries and illnesses.
Each employer subject to the act shall maintain in each establishment, a log of occupational injuries and illnesses.
§ 1904.4 Supplementary record.
In addition to the log of occupational injuries and illnesses provided for under § 1904.2, each employer subject to the act shall maintain at each establishment a supplementary record of occupational injuries and illnesses on which he shall record each recordable occupational injury or occupational illness in the detail prescribed in the [*14] instructions accompanying Occupational Safety and Health Administration Form OSHA No. 101.
§ 1904.5(d)(1) Annual summary.
(a) Each employer subject to the act shall compile an Annual Summary of Occupational Injuries and Illnesses, based on the information contained in the Log of Occupational Injuries and Illnesses.
(b) The summary shall be maintained at each established.
The Respondent's position is that there was no violation of the regulations regarding recordkeeping since (1) the required forms for admitted employees were located at its main office in Dayton, Ohio; and (2) the required forms for warehouse labor were maintained by Manpower, Inc., Cincinnati, Ohio, the supplier of these workers.
The facts are not in substantial dispute. The Respondent corporation has its main office in Dayton, Ohio, and maintains an installation in Springdale, Ohio, for the storage and distribution of tires and tubes. There it employs supervisory, clerical, and security personnel, all admittedly in its employment. The records in question for these workers are maintained in Dayton.
In addition to the aforementioned employees, the Respondent utilizes the services of warehouse labor [*15] supplied by Manpower, Inc. in Cincinnati, Ohio. Under the arrangement between the two companies, Manpower recruits, interviews, and screens prospective warehouse laborers who are then referred to the Respondent in Springdale for final selection. Those individuals accepted by the Respondent are trained, supervised, and disciplined by it.
With respect to the warehouse labor, Manpower pays their wages, social security taxes, State unemployment compensation contributions and workmen's compensation premiums. Manpower also prepares and files all necessary governmental and statistical reports, including the OSHA Forms 100, 101, and 102, the subject of this inquiry. Manpower is reimbursed by the Respondent for all its labor and miscellaneous costs and a profit margin. In case of an accident involving warehouse labor, the Respondent reports the incident to Manpower on forms supplied by the latter. If a Manpower referral is separated from the Respondent's service, the individual is invited to return to Manpower for new work opportunities.
On the foregoing facts, the question arises as to whether or not the Respondent was required to maintain OSHA Forms 100, 101, and 102 at its Springdale [*16] worksite for any of the individuals who performed services there.
It is provided in Section 8(c)(1) of the Occupational Safety and Health Act of 1970 that:
Each employer shall make, keep and preserve . . . such records regarding his activities relating to this Act as the Secretary . . . may prescribe by regulation . . .
Pursuant thereto, the Secretary adopted regulations found in 29 CFR 1904.2; 1904.4; and 1905(d)(1) requiring "each employer" to maintain specified records of occupational accidents and injuries at each "establishment."
The term "establishment" is defined in the Regulation found at 29 CFR 1904.12(g)(1) as follows:
Establishment: A single physical location where business is conducted or where services or industrial operations are performed. (For example: a factory, mill, store . . . warehouse . . .)
There can be little dispute with the reporting requirements for supervisory, clerical, security, and other personnel admittedly in the employment of the Respondent at its Springdale, Ohio warehouse. Under the regulation heretofore mentioned, the employer must keep accident and safety records at each establishment. Inasmuch as the Respondent's warehouse [*17] was an establishment as defined by the Regulation; and inasmuch as the Respondent failed to maintain the required records at this place of business, the company was not in conformance with the recordkeeping requirements of the Act and regulations.
The question with respect to warehouse labor supplied by Manpower, Inc. working at the Respondent's Springdale, Ohio, premises presents a more difficult problem.
The Secretary submits that the economic realities of the employment situation should determine the relationship between warehouse labor supplied by Manpower and the Respondent. From this base he argues that the Respondent should be held to be the employer of Manpower supplied warehouse labor because the Respondent (1) made the larger investment in the business; (2) exercised day to day control over warehouse labor; (3) established a permanent type labor relationship between the parties; and (4) regarded the warehouse workers as an integral part of its business. It was further alleged that Manpower functions were merely administrative in nature, akin to an employment agency or bookkeeping operation.
On the other hand, the Respondent contends that cases arising under other statutes [*18] should not be determinative of the employment relationship, and that the economic realities do in fact dictate that Manpower, and not the Respondent, was the employer of the labor at the Springdale warehouse.
The record in this case as well as the comprehensive briefs and arguments have been carefully examined. They disclose initially that the contract of employment was between Manpower and the laborers, and not between the Respondent and these workers. In fact there was no contractual relationship between the Respondent and the workers in question. Normally to establish an employer-employee relationship there should be an agreement between the parties. The lack of this privity between the Respondent and the laborers tends to indicate that the Respondent was not the employer of this type of worker.
The record further establishes that the employment arrangement of the parties has been in effect for some time. Under this program, Manpower selected workers have always been considered to be its employees, not those of the Respondent. Indicative of the fact that Manpower was the employer of the warehouse labor stationed at the Respondent's warehouse are the following [*19] circumstances: Manpower set and paid their wages, social security taxes, unemployment compensation contributions (both State and Federal), and workmen's compensation premiums; reported these workers as its employees to federal and local taxing units; and maintained all payroll and accident records. Governmental agencies accepted taxes and reports on the basis that Manpower was the employer.
On the other hand it is not denied that the Respondent exercised supervision over these workers, setting their hours of work, vacation periods, and daily routine.
On balance, however, it appears that there are more considerations leading to the conclusion that Manpower was the true employer. This long term understanding and arrangement should not be disturbed unless there are serious overriding factors, a situation not apparent in this case.
Control has always been regarded as one of the elements in determining an employment relationship. In day-to-day operations the warehouse laborers were under the supervision of the Respondent, but that situation is not necessarily determinative of the issue. In disputes of this type, the cases have frequently held that ultimate control is the true test. [*20] The facts in this case establish that ultimate or final control over these workers rested with Manpower. Thus, if the Respondent dismissed a laborer referred to it by Manpower, such worker was not necessarily unemployed. The employment relationship remained, and Manpower could refer him to other employment opportunities.
Finally, reliance may be placed upon a publication issued by the Bureau of Labor Statistics entitled What Every Employer Needs to Know About OSHA Recordkeeping. The questions and answers to items 19 and 20 are copied below:
19. Q. How about Adam and Manpower and the type of employers who rent workers out by the day to do a specific job in a plant. Are these employers considered as contractors employed by the plant?
A. Yes.
20. Q. If an employee who is working in a plant on a contract basis is injured, is he recorded on the plant records or on the records of the contractor?
A. The contractor is responsible for his employee's safety, so the contractor would record this injury on his records.
The Complainant is of the opinion that the words "by the day" are controlling, and that therefore the answer to question No. 19 should not be applicable [*21] to this case. Yet there appears to be no indication in the reply that emphasis should be placed upon those specific words. Had the Agency believed a different result should follow if the relationship was for more than one day, it could easily have added a proviso or caution that the same result might not ensue if the arrangement lasted longer than one day. Furthermore there would be considerable confusion in determining whether a two or three day or weekly work stint would change the interpretation. It appears that the purpose of the question and answer was to demonstrate the nature, rather than the duration, of the employment relationship. On this theory, the Respondent was justified in relying upon the plain words of the informational pamphlet to the effect that Manpower was the employer of its warehouse labor.
There remains the question of the proposed penalties with respect to the alleged violations of the regulations regarding recordkeeping. The Secretary has proposed a penalty of $200 for the failure of the Respondent to maintain the OSHA records at its Springdale, Ohio, establishment. The record discloses that the Respondent did in fact maintain all necessary [*22] records at its main office in Dayton, Ohio, and there thus does not appear to be any intent to violate the regulations. The misinterpretation of the regulations did not jeopardize the health, safety, or welfare of any individuals concerned. Under these circumstances no penalties should be imposed.
Upon the record in this case, I find that:
(1) The Respondent was in violation of all Items shown on the Citation dated March 23, 1973; and
(2) The Respondent was not the employer of the warehouse labor supplied to it by Manpower, Inc. at its Springdale, Ohio, warehouse.
It is therefore concluded (1) that at all times mentioned herein the Respondent was an employer within the meaning of Section 3 of the Occupational Safety and Health Act of 1970, and that the Occupational Safety and Health Review Commission has jurisdiction over the parties and subject matter; and (2) that the Respondent violated Section 5(a)(2) of the Act by violating the Occupational Safety and Health Standards as alleged in the Citation for Non-Serious Violations.
Based upon the foregoing findings of fact and conclusions of law, it is hereby ordered that the Citation by AFFIRMED, with the exception that employees [*23] of Manpower, Inc. need not be included in the Respondent's reporting records for the purpose of this Act; that the proposed penalties for the Violation of Items 1 and 3 be VACATED: and that all other proposed penalties be, and hereby are, AFFIRMED.