NACIREMA OPERATING COMPANY, INC.  

OSHRC Docket No. 4

Occupational Safety and Health Review Commission

February 7, 1972

  [*1]  

Before MORAN, Chairman; VAN NAMEE and BURCH, Commissioners

OPINIONBY: MORAN

OPINION:

  MORAN, CHAIRMAN: On November 4, 1971, Hearing Examiner David H. Harris issued his recommended decision and order in the above captioned case directing that Respondent Employer take certain action.   Thereafter, on December 6, 1971, I directed that the report of the Hearing Examiner in this case be reviewed by the Commission in accordance with Section 12(j) of the Occupational Safety and Health Act of 1970 (29 U.S.C. 651 et seq., 84 Stat. 1590, hereafter "the Act").

The Commission has reviewed the rulings of the Hearing Examiner and finds no prejudicial error therein.   The Commission has also reviewed the entire record in this case and has considered the briefs, arguments and exceptions of the parties.   We adopt the Hearing Examiner's recommended decision and order only to the extent consistent with the following.

The employer was cited for violation of two separate occupational safety and health standards which had been promulgated by the Secretary of Labor pursuant to Section 6 of the Act and with which the employer was required to comply by virtue of Section 5(a)(2) of the Act.   These two standards will [*2]   be referred to according to their designation in the Code of Federal Regulations and will be discussed separately.

  First: 29 CFR 1504.73(b)(1)

The employer conceded that he was in violation of this standard and questioned only the appropriateness of the proposed penalty. The violation resulted from the operation of a forklift tractor not equipped with an overhead guard.

Section 17(j) of the Act provides that:

The Commission shall have 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.

The record shows that the Secretary of Labor's agent -- the Area Director for the Baltimore Area Office of the Occupational Safety and Health Administration -- considered the four criteria set forth in the cited section in arriving at the penalty of $700 which he proposed for the employer's violation of this regulation.

He testified that he commenced consideration with the statutory maximum penalty of $1,000 which is authorized in the   [*3]   Act for a violation of this type and then applied a 30 percent reduction which he arrived at by allowing 10 percent off for the size of the business of the employer being charged and 20 percent on the employer's history of previous violations.   He considered but allowed no credit for the two remaining criteria: good faith and gravity of the violation.   The Hearing Examiner found that the $700 penalty, as proposed by the Secretary for the said violation, was "not unreasonable" and affirmed the same.

The Commission cannot agree with the result, nor with the methodology employed by the Area Director in calculating the penalty he proposed.   He began with   the maximum penalty and then discounted it. n1 Regardless of how the $700 figure was arrived at, the question before the Commission now is whether it was appropriate under the circumstances in this case.   We find that it was not.   Each of the four criteria set forth in Section 17(j) for determining the "appropriateness of the penalty" will be discussed individually.

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n1 A penalty could also be arrived at by the inverse method: starting from zero and building to an appropriate amount.   While such a method admittedly would be more difficult to administer, it would avoid the difficulty of a de facto minimum penalty (See n. 6, infra ).

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The record contains abundant credible evidence of the employer's good faith efforts to assure his employees a safe and healthful workplace.   The Hearing Examiner found that:

Nacirema has conducted many safety meetings for its employees since 1954 at which its policy of strict adherence to federal safety regulations was stressed, as well as its policy that if an employee was not in safe position to work, he should stop work until such time as the situation was corrected.

Evidence also demonstrates that this employer was making the type of progress in reducing occupational injuries which the Act, under which it was cited, is intended to foster.   For example, the record contains uncontradicted testimony that:

. . . in the year 1954, every 1,900 manhours someone was hurt.   It might have been a bruise or a scratch or a cut or it may have been serious. . . . in the year 1970, every 4,200 manhours someone was hurt, so we have increased the interval better than half.

Good faith should be determined by a review of the employer's own occupational safety and health program, its commitment to the objective [*5]   of assuring safe and healthful working conditions, and its cooperation with other persons and organizations (including the   Department of Labor) seeking to achieve that objective.   The record in this case convinces us that this employer deserves a great deal of consideration for each of these when arriving at the amount of the final penalty.

The gravity of a particular violation can range from de minimis, where there is very low potential for injury or occupational illness, to severe, where death or serious physical injury would be likely. n2 In the opinion of the Commission, the gravity of this violation lies somewhere between these two extremes.

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n2 Between these two extremes lie both violations which the statute in Section 17(k) classifies as "serious," as well as those in other parts of Section 17 which are not so classified.   In this case, both the Secretary and the employer are in agreement that this offense fits the statutory description of a serious violation. One should not, however, confuse the categories for classifying violations (degree of hazard) with the criteria to be considered in assessing penalties.

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This employer, through neglect to exercise appropriate supervision, allowed an employee to operate a forklift tractor without an overhead guard, while the employee was engaged in loading boxes of sand bags, each of which was approximately 8 feet by 3 1/2 to 4 feet by 2 1/2 feet in size and weighed about 1,200 to 1,300 pounds.   In our opinion, this gives rise to a reasonable probability that the tractor operator may sustain serious injury or death.

Evaluation of the two criteria discussed above must necessarily be based largely on subjective judgments.   The remaining two can be measured much more precisely.

The employer's history of previous violations can be related exactly.   Since no evidence was introduced of prior occupational safety or health violations by this employer of any kind, there is no need for the Commission   to decide in this case whether past violations should be counted from the effective date of this Act or of the particular employer's coverage under the specific standard allegedly violated. n3

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n3 Section 4(b)(2) of the Act lists a number of laws under which occupational safety and health standards had been promulgated prior to the effective date of the Occupational Safety and Health Act of 1970.   The record shows that this employer had been subject to coverage under the Maritime Safety provisions of Public Law 85-742, the Act of August 23, 1958 (33 U.S.C. 941), since the date of its enactment.

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Although the Secretary in this case considered the employer to be a small business and allowed the maximum adjustment on his penalty assessment worksheet, n4 the evidence in this case is not sufficiently complete to make a precise determination on the size of the business of the employer being charged. A witness for the Secretary testified as to the number of employees and there was evidence that Nacirema was, in 1971, ninth largest of 10 major stevedore companies operating within the Port of New York with a minimum of 200,000 man-hours for the year.   No evidence was introduced as to the gross annual dollar volume of the employer's business, a criterion used in connection with the administration [*8]   of a number of Federal statutes to determine the size of a business. n5

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n4 For a discussion of the "penalty assessment worksheet" see n. 6, infra.

n5 E.g., Fair Labor Standards Act, 29 USCA 203(s), 52 Stat. 1060 as amended; Small Business Act, as amended, 15 USCA, 631 et seq., and see Small Business Size Standards Regulation and Revision thereto, 36 Fed. Reg. 4832, 5961, 7841, 8660 as amended, 9618, 17492, 20671 as amended, 21183.

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We believe that the four criteria to be considered in assessing penalties cannot always be given equal weight.   Obviously, for example, a particular violation   may be so grave as to warrant the assessment of the maximum penalty, even though the employer may rate perfect marks on the other three criteria.   Nor can a precise formula rationally be applied for considering each criterion as the Secretary's agent did in this case in reaching his proposed penalty. n6 The Commission is cognizant of the difficulties of the Secretary's task in proposing an appropriate penalty in the [*9]   many and diverse cases with which he is faced.   The formula   he has devised is an attempt to achieve uniformity in a decentralized operation.   He has set out to achieve the impossible.   He deserves credit for the attempt and this decision should not be interpreted as a criticism of his efforts.

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n6 The Secretary introduced as an exhibit a document entitled "Penalty Assessment Worksheet -- Serious Violations" and the Area Director testified that he used this worksheet to arrive at the $700 penalty he proposed for the violation of 29 CFR 1504.73(b)(1).   He further testified that the worksheet ". . . indicates an unadjusted penalty imposed of $1,000.   It also indicates in our internal procedures where certain credits can be given for good faith on the part of the employer, the size of the firm, and the past history -- violations, programmings, what have you -- of the employer."

The worksheet provides that the "unadjusted penalty" (which is specified as $1,000) percentage adjustment factors may be applied to reduce the $1,000 figure.   The maximum adjustment factors listed are: 20 percent for "good faith," 10 percent for "size" and 20 percent for "history."

The employer's brief (properly) notes that the use of this formula will always produce a proposed penalty of no less than $500, whereas Section 7(b) of the statute specifies not a minimum but a maximum penalty for a serious violation.

It is also noted that the worksheet allows no adjustment factor for the gravity of the offense, apparently on the assumption that all serious violations are equal in gravity.

This formula approach could also be criticized because it would not permit a penalty in excess of $500, regardless of the gravity of the offense, if the Secretary found reason to allow the maximum adjustment percentage for good faith, size, and history.   Conversely, as previously indicated, the formula does not permit a penalty of less than $500 in instances where the gravity of the violation (not the degree of hazard) is determined to be significantly less than severe.

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Nevertheless, in the opinion of the Commission, no matter how desirable uniform treatment of violations may be, the achievement of a just result in each case is the standard by which our deliberations must be guided.

In view of what has been stated above concerning this employer's good faith, and considering the absence of evidence of prior violations and the matters stated heretofore concerning the size of the business, we believe that the principal factor to be considered in assessing an appropriate penalty for this violation is the gravity of the offense.

In determining the gravity of the violation, we have considered, in addition to what has previously been stated, the evidence adduced at the hearing which indicates that this employer ordinarily used forklift tractors equipped with overhead guards; that when one such tractor broke down it was replaced by a fork lift without an overhead guard; that work was then suspended and an order was given for the installation of an overhead guard but, because of the employer's neglect to exercise proper supervision, work was resumed before the overhead guard [*11]   was installed.

The foregoing leads the Commission to conclude that an appropriate penalty for this violation is $350.

Second: 29 CFR 1504.7

The employer was also cited for a violation of 29 CFR 1504.7 which, in pertinent part, requires that:

Within 48 hours after the occurrence of an accident . . . resulting   in an employee's admission to a hospital as a bed patient, the employer shall file a copy of Bureau of Employees Compensation Form US 202 . . . with the Field Safety Consultant of the Bureau of Labor Standards serving the area where the accident occurred. . . . n7

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n7 No question as to the applicability or meaning of this standard was raised at the hearing.   The Commission therefore will treat it as valid and capable of being understood by the employer.   It is noted for the record that the Bureau of Labor Standards was assimilated into the Occupational Safety and Health Administration on April 28, 1971, pursuant to an administrative order of the Secretary of Labor (Secretary's Order No. 12-71, 36 Fed. Reg. 8754), and that the accident reporting requirements of this standard were changed after this case went to hearing, 36 Fed. Reg. 25229.

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It is undisputed that, on June 11, 1971, employee Raymond Zientak was injured while operating a forklift tractor. He was admitted to a hospital on the same day and remained in the hospital until at least June 18, 1971.   The employer failed to notify the Bureau of Labor Standards until on or after June 21, 1971.

The Secretary determined that this was not a serious violation and proposed no monetary penalty.

The Hearing Examiner found that it was "not reasonable to propose no penalty" for this violation and assessed a penalty of $100.

The employer admits the violation, but contends that the Hearing Examiner erred in assessing a penalty because the parties entered into a stipulation (with the consent of the Examiner) eliminating this matter from the issues to be tries.

The stipulation was introduced into evidence.   It provides, in pertinent part, that:

1.   The following issues will not be contested:

(a) Whether the case of a forklift truck not equipped with overhead guards in longshoring operations was in violation of 29 CFR 1504.73(b)(1).

  (b) Whether the failure to report an accident requiring [*13]   hospitalization of an employee was in violation of 29 CFR 1504.7.

2.   The following issues will be contested:

(a) Whether operating the forklift without an overhead guard, in violation of 29 CFR 1504.73(b)(1) was a serious violation. And whether the assessment of a $700.00 penalty is proper.

(b) Whether the proposed penalty of $700.00 is excessive.

In a later stipulation of fact also introduced into evidence, the parties agreed that the "operation of a forklift truck . . . without an overhead guard . . . was a serious violation."

After this stipulation was admitted, the Hearing Examiner stated:

. . . I think this is all that remains in view of the stipulation -- and then determine whether or not the remaining issue -- not determine but get on the record the testimony, if we cannot agree, as to that point: the remaining issue as to the reasonableness of the assessment.

Discussing the stipulation on the record, counsel for the employer and the Examiner engaged in the following colloquy:

[Counsel]: The only thing we contest is the unreasonableness of the penalty.

The Presiding Examiner: I understand.

Arguably, the understanding thus stated may have left the Examiner with the [*14]   impression that he had two issues to resolve: the proper penalties for the admitted violations of 29 CFR 1504.73(b)(1) and of 29 CFR 1504.7.   The record indicates, however, that neither the employer nor the Secretary understood this to be the case.   Each confined his evidence and argument to the violation of 29 CFR 1504.73(b)(1).

In the Secretary's memorandum in support of proposed   conclusions the law submitted to the Examiner after the hearing, he stated the issues thus:

Is the proposed penalty of $700 excessive, where it is within the limits permitted by the Occupational Safety and Health Act, reflects the serious nature of the violation, and gives employer due credit for good faith, previous safety history, and business size?

He made no argument concerning the proposal of no penalty for the violation here under discussion.

The Commission finds that the stipulation was inartfully drawn but that the conduct and statements of the parties both during and after the hearing clearly indicate that the parties intended to exclude from the hearing both the issues of whether 29 CFR 1504.7 had been violated by the employer and whether the Secretary of Labor's assessment of no [*15]   penalty therefor was proper.   In our opinion, the Hearing Examiner's finding that "it was not reasonable to propose no penalty for the violation of 29 CFR 1504.7 by Nacirema" departed from the stipulated issues. n8

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n8 A Hearing Examiner is under no absolute compulsion to accept stipulations.   Where he does not intend to do so, the Commission believes he should so advise the parties prior to the conclusion of the hearing in order to allow them the opportunity to present evidence and argument on such matters.

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Accordingly, the Commission affirms the action of the Secretary and does not adopt the Hearing Examiner's findings, conclusions and recommended assessment of penalty as to this violation.

[The Judge's decision referred to herein follows]

HARRIS, JUDGE, OSAHRC: This is an action under Section 10(c) of the Occupational Safety and Health   Act of 1970, 29 USC 651 et seq. (hereinafter referred to as OSHA), to review two citations issued by the Secretary of Labor (hereinafter Secretary) pursuant to Section   [*16]   9(a) and a proposed assessment of penalty thereon issued pursuant to Section 10(a) of OSHA.

One citation (P-1), issued on June 30, 1971, alleges that Nacirema Operating Company, Inc., the employer (hereinafter Nacirema), in a work place under its ownership, operation or control located on board the steamship President Madison, berthed at Dundalk Marine Terminal, Baltimore, Maryland, ". . . failed to report an accident that resulted in an injury to an employee that required his admission to a hospital within 48 hours," in violation of "Part 1504 Safety and Health Regulations for Longshoring 1504.7." A footnote to this citation states that the violation alleged is not a serious violation within the meaning of OSHA but that it has "a direct or immediate relationship to occupational safety and health." The citation requires that the alleged violation be corrected "Within 48 hours."

The second citation (P-2), also issued on June 30, 1971, alleges that Nacirema, on the said steamship, was engaged in "loading and unloading cargo in #4 lower hold" and that a "Fork Lift Truck working in #4 lower hold was not equipped with an overhead guard. While operator was working with this equipment,   [*17]   a draft fell from the forks on top of the operator, causing serious injury," in violation of 29 CFR 1504.73(b)(1).   The citation requires that the alleged violation be corrected immediately and charges that the violation is a serious one according to the provisions of Section 17(k) of OSHA.

On the same date, June 30, 1971, the Secretary issued a Notification of Proposed Penalty (P-4),   wherein it is proposed to assess a penalty of $700 on the serious violation and no penalty on "other violations." n1

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n1 While the Notice of Proposed Penalty, (P-4), refers the allegation of serious violation to "Citation No. 1" and "other violations" to "Citation No. 2, Item 2," the citation alleging the nonserious violation, (P-1), and the citation alleging the serious violation, (P-2), are both numbered "1".

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Nacirema, by letter dated July 6, 1971 (P-5), contested the citations and the proposed assessment of penalty.   The matter was referred to the Occupational Safety and Health Review Commission for hearing pursuant to Section [*18]   10(c) of OSHA on July 12, 1971.   The undersigned was appointed as presiding examiner and the within matter assigned to him for hearing pursuant to Section 12(e) of OSHA on July 19, 1971.

Pursuant to notice, a pre-hearing conference and the hearing were held on August 11, 1971, at Baltimore, Maryland.

Nacirema appeared and was represented by its Director of Safety, Mr. Theodore R. Alff (Tr. 3-4).

Nacirema stipulated that the use of a forklift tractor without an overhead guard by its employee, Raymond Zientak, on June 11, 1971, while stowing cargo on the steamship President Madison, was a serious violation within the meaning of Section 17(k) of OSHA; that it failed to report an accident resulting in the hospitalization of an employee within 48 hours, as is required by 29 CFR 1504.7; and that it intended to contest only the reasonableness of the proposed penalty (Tr. 9-11; 22; 27; P-8, P-9).   It admitted ownership of the forklift tractor used by its employee, Raymond Zientak, on June 11, 1971 (Tr. 23).

Having considered the entire record and the exhibits together with the stipulations, representations   and admissions of the parties, it is concluded that the substantial evidence [*19]   on the record considered as a whole, supports the following findings of fact:

FINDINGS OF FACT

1.   Nacirema is a corporation incorporated under the laws of the State of New York under the name Nacirema Operating Company, Inc. (P-9, par. 1).

2.   Nacirema, since at least 1954, was engaged in the business of ship's agent including the supplying of stevedoring and longshoring services in ports along the eastern coast of the United States including Baltimore, Maryland (Tr. 7; P-9; R 1 through 9 incl.).

3.   On June 11, 1971, Nacirema employed employees in longshoring operations on board the steamship President Madison berthed at the Dundalk Marine Terminal, Baltimore, Maryland (Tr. 71; P-9, par. 4).

4.   Raymond Zientak, one of the employees of Nacirema was engaged in loading cargo, including boxes of sand bags, into the lower hold in #4 hatch of the President Madison which was bound for Vietnam (Tr. 35-36; 55; 71; 73; P-13; P-14).

5.   The boxes of sand bags being loaded in #4 hold of the President Madison were approximately 8 feet by 3 1/2-4 feet by 2 1/2 feet in size and weighed about 1200 to 1300 lbs. each (Tr. 56; P-13; P-14).

6.   At about 11:45 a.m. a forklift tractor being [*20]   used by the said Zientak to pile boxes of sand bags broke down (Tr. 56) and was removed from the hold just before Zientak went to lunch (Tr. 57).

7.   One Marion Chrusniak was the foreman employed by Nacirema on June 11, 1971, in charge of a group of employees loading cargo on the steamship President Madison which included said Zientak (Tr. 70-71; 73).

  8.   Chrusniak was informed about the breakdown of the forklift tractor being used by Zientak (Tr. 74).

9.   The only forklift tractor available to replace the defective forklift was a tractor, #347, from which the head guard had been removed to permit it to operate underneath the deck in #5 hatch (Tr. 74; 75; 77).

10.   Lunch was called early, about 11:45 a.m., because work was held up by the defective forklift (Tr. 74).

11.   #347 was taken out of #5 hatch near lunch time about 11:00 a.m. and its driver, one Snooks, was told by Chrusniak to have a head guard put on the tractor by the mechanics from the gear room (Tr. 76-77).

12.   The gear room was 1/2 mile from the ship (Tr. 76).

13.   No instructions were given Zientak concerning forklift tractor #347 by the foreman (Tr. 80-81).

14.   Lunch ended at 1:00 p.m. by a whistle [*21]   blast by Chrusniak (Tr. 44; 57).

15.   Tractor #347, weighing 4 tons (Tr. 67-68), was put down into #4 hold at 1:00 p.m. after remaining with the hoisting gear attached to it from the time it was taken out of #5 hold (Tr. 80).

16.   The day was very busy, no gear men or mechanics were available and the forklift waited for a head guard to be put on (Tr. 75).

17.   At 1:00 p.m. #347 was put down into #4 hold without a head guard (Tr. 44; 75-77; 80; P-9, par. 5; P-10).

18.   Nacirema's foreman knew that the forklift tractor was put down into #4 hold for Zientak and that it did not have an overhead guard (Tr. 76; 114).

19.   Nacirema's foreman was at #2 hatch of the ship at the time of the accident (Tr. 79).

  20.   There was room enough in #4 hold to operate a forklift tractor equipped with a head guard (Tr. 69; 75).

21.   When Zientak returned to work in #4 hold at 1:00 p.m. he saw that the forklift tractor which had been assigned had no head guard. He yelled up to the deck to advise that there was no head guard but received no reply and he proceeded to use the forklift tractor (Tr. 69-70).

22.   Machines are assigned to the men by the foreman on the pier or the foreman on the [*22]   ship (Tr. 66-67) and the men are expected to use the machine if it will do the work (Tr. 68).

23.   Zientak used the forklift tractor without a head guard because it had been assigned to him and he feared he would be discharged if he did not do so (Tr. 66-67).

24.   At approximately 1:30 p.m. (Tr. 108; 114; P-16) the top one of two boxes of sand bags on forklift tractor #347, which had no head guard, became dislodged and fell striking Zientak, its operator (Tr. 59; 61-62).

25.   Zientak sustained bruises and a decompression fracture of the first lumbar vertebra and was removed to a hospital where he remained from June 11 to June 27 (Tr. 63; P-12).

26.   A very substantial probability exists that the use of a forklift tractor without a head guard to lift and pile boxes of sand bags weighing about 1200 lbs. each may result in serious injury or death (Tr. 9-10; 12; 83; 93; P-9, par. 8).

27.   Nacirema's foreman and its safety man, Frank Clark, had knowledge that an employee had been injured within minutes after the accident and were present when the injured employee was removed to a hospital (Tr. 79).

  28.   Nacirema's Terminal Superintendent was informed of the accident at approximately [*23]   1:45 p.m. on June 11, 1971 (Tr. 108; 113).

29.   The Superintendent called the hospital to inquire about the injured employee's condition on June 11, 1971, once between 3:30 and 4:30 p.m. and again between 8:00 and 8:30 p.m. (Tr. 109; 116).

30.   Nacirema's safety man, Frank Clark (Tr. 121) telephoned the hospital once, between 9:00 and 9:30 p.m. on June 11, 1971 (Tr. 109), to inquire as to the employee's condition and Clark also visited the hospital to check further (Tr. 116; 121).

31.   Nacirema made no further inquiry as to the injured employee's condition (Tr. 117-118) and was informed that the injured employee was still confined to the hospital on June 18, 1971, by an employee of the Department of Labor who was engaged in investigating the accident (Tr. 119).

32.   Nacirema failed to give gral or written notice of the accident involving said Zientak to the person in charge of the office of the Field Safety Consultant of the Bureau of Labor Standards serving the area where the accident occurred before June 21, 1971 (Tr. 39; 41; 44).

33.   Nacirema failed to file a copy of Bureau of Employee's Compensation Form US 202 with the Field Safety Consultant of the Bureau of Labor Standards [*24]   serving the area where the accident occurred within 48 hours after the occurrence of the accident resulting in Zientak's admission to a hospital as a bed patient on June 11, 1971 (Tr. 39; 41; 44; P-9, par. 7; P-16).

34.   Neither Nacirema's "safety man" Frank Clark, who visited the hospital to check on Zientak's condition (Tr. 116; 121), or any of the hospital attendants involved, were produced to give testimony concerning   conversations with Nacirema's Superintendent or said Frank Clark relative to a mix-up of x-rays nor was their absence explained (Tr. 121-122).

35.   On June 18, 1971, the Department of Labor received the first information that an accident had occurred on the President Madison, from an unidentified source, and thereupon commenced its investigation (Tr. 38-39; 84).

36.   No penalty was proposed by the Department of Labor on the citation (P-1), charging failure to notify or report within 48 hours (Tr. 86; P-6).

37.   The violation charging failure to notify or report (P-1), was determined to be a "not serious" violation (Tr. 86).

38.   No evidence was introduced to establish that the violation charged in the citation alleging failure to notify or report the [*25]   accident herein (P-1), did not have a direct or immediate relationship to occupational safety and health.

39.   The President Madison sailed from Baltimore, Maryland, on June 19, 1971 (Tr. 40-41).

40.   The forklift tractor involved in the accident to Zientak on June 11, 1971, was not located until early in July and had been supplied with a head guard which had to be removed for the purpose of taking photographs (Tr. 50; P-10).

41.   The damage to the steering wheel and seat of the forklift tractor done by the falling box of sandbags on June 11, 1971 (Tr. 81), had been repaired when it was located and photographed early in July (Tr. 49-50; P-10).

42.   The failure to make prompt reports of accidents increases the difficulty of determining the causes thereof and directly affects the capability of the Department   of Labor to recommend preventive procedures (Tr. 91).

43.   Over the past six years, during many of the safety meetings for its employees held by Nacirema, a Department of Labor representative had requested that accidents on shipboard be reported as soon as possible (Tr. 91: 94).

44.   Nacirema has conducted many safety meetings for its employees since 1954 at which [*26]   its policy of strict adherence to federal safety regulations was stressed as well as its policy that if an employee was not in safe position to work he should stop work until such time as the situation was corrected (Tr. 78; 94; 95; 111; 112; 123; 124-125).

45.   Nacirema's frequency rate in the combined accident experience of the major stevedore companies operating within the Port of New York with a minimum of 200,000 man hours for the year, is al follows: For the year 1964, fourth lowest of 16; for 1965, second lowest of 16; for 1966, sixth lowest of 15; for 1967, fourth lowest of 13; for 1968, third lowest of 14; for 1970, fourth lowest in 11; and for the first quarter of 1971, second lowest in 10 (R 1 through R 7, incl.).

46.   Nacirema, the ninth largest, had a frequency rate of eleventh lowest in the combined accident experience of 18 stevedore companies operating in Baltimore, Maryland, for the period January 1 to August 11, 1970 (Tr. 95; P-18).

47.   Nacirema had no previous citations for violation of 29 CFR 1504.73(b)(1) since the enactment of the Longshoremen's and Harbor Workers' Compensation Act (33 U.S.C. 941 et seq.), a period of 12 years (Tr. 95).

48.   No evidence   [*27]   appears of record to support a determination by the Area Director, Occupational   Safety and Health Administration, Department of Labor, to assess no penalty against Nacirema for violation of 29 CFR 1504.7 (Tr. 86; P-6).

49.   In computing the proposed penalty for violation of 29 CFR 1504.73(b)(1), use of a forklift tractor with no overhead guard, as aforesaid, a maximum allowance of 20% of $1000 was given the employer for its past history which includes programming, frequency rate and the number of past violations (Tr. 87; 89; 94; P-7).

50.   Nacirema's failure to report the accident herein was a factor in the refusal to allow any credit for good faith by the said Area Director in proposing the assessment of the penalty for violation of 29 CFR 1504.73(b)(1), aforesaid (Tr. 87; 90-92; P-7).

51.   Nacirema concedes due service of the citations herein, P-1 and P-2, and the Notification of Proposed Penalty, P-4 (Tr. 12).

52.   No employees of Nacirema, other than prospective witnesses, were present or expressed a desire to participate in the proceedings (Tr. 25-26).

CONCLUSIONS OF LAW

1.   At all times herein the respondent, Nacirema, was an employer engaged in a business affecting [*28]   commerce within the meaning of Section 3 of OSHA.

2.   Nacirema, by its employment of longshoremen herein was and is subject to the provisions of the Longshoremen's and Harbor Workers' Act, as amended, 33 U.S.C. 901, et seq., and the regulations issued thereunder, including 29 CFR 1504.7 and 1504.73(b)(1), which were in effect prior to and on April 28, 1971.

3.   Pursuant to Section 6(a) of OSHA, the Secretary,   on May 29, 1971, adopted the standards prescribed by 29 CFR Part 1504 which were in effect on April 28, 1971 (29 CFR 1910.16; 36 FR 10469).

4.   Nacirema is and all times herein was subject to OSHA and regulations adopted and issued thereunder of the Secretary.

5.   Part 1504 of 29 CFR provides, among other things, as follows:

§   1504.7 Notification of Accidents resulting in fatalities or serious injuries

Within 48 hours after the occurrence of an accident causing the death of an employee or resulting in an employee's admission to a hospital as a bed patient, the employer shall file a copy of Bureau of Employees' Compensation Form US 202 (approved by Budget Bureau No. 44-R 887.2) with the Field Safety Consultant of the Bureau of Labor Standards serving the area [*29]   where the accident occurred (in addition to such filing as is required by 20 CFR 31.3) unless prior thereto and as soon after the accident as feasible the employer has given oral or written notice of the accident to the person in charge of such office in sufficient detail to permit the accident to be identified readily.

§   1504.73 Mechanically-powered vehicles used aboard vessels

(b) Overhead guards for fork lift trucks:

(1) Except as noted in subparagraph (5) of this paragraph, fork lift trucks shall be equipped with overhead guards securely attached to the machines.   The guards shall be of such design and construction as to protect the operator from boxes, cartons, packages, bagged material, and other similar individual items of cargo which may fall from the load being handled or from stowage.

(5) The overhead guard may be removed only at times when the construction of the truck is such that the presence of such a guard would prevent the truck from entering working spaces, and if the operator cannot be injured by low overhead obstructions.

6.   Nacirema's failure to report the accident of June 11, 1971, herein, was a violation of 29 CFR 1504.7; 29 CFR 1910.16.

  7.   [*30]   The aforesaid Area Director's determination that the within violation of 29 CFR 1504.7 was not a serious violation within the meaning of Section 17(k) of OSHA, is, under the circumstances herein not unreasonable.

8.   A determination by the Secretary affecting the allowance of a credit for good faith by an employer in assessing a proposed penalty may properly be considered in the assessment of penalties for other violations by the same employer.

9.   Under the circumstances herein it was not reasonable to propose no penalty for the violation of 29 CFR 1504.7 by Nacirema.

10.   Nacirema was in violation of 29 CFR 1504.73(b)(1) by reason of the use of the forklift tractor herein without an overhead guard.

11.   The violation of 29 CFR 1504.73(b)(1) was a serious violation, as defined by section 17(k) of the Act, because there was a substantial probability that death or serious physical harm could result from the use of a forklift tractor without an overhead guard under the conditions and in the circumstances as hereinabove described.

12.   The proposed penalty, P-4, for violation by Nacirema of 29 CFR 1504.73(b)(1) is not unreasonable under the circumstances herein.

ORDER

In view [*31]   of the foregoing, it is therefore ORDERED that:

1.   The Secretary's citation, P-1, charging a violation of 29 CFR 1504.7 by Nacirema be and the same is hereby affirmed;

2.   The proposed assessment of no penalty for "other violations," P-4, be and the same is hereby vacated:

  3.   Pursuant to Section 17(j) of OSHA a penalty of $100 be and the same is hereby assessed against Nacirema for its violation of 29 CFR 1504.7;

4.   The Secretary's citation, P-2, charging a violation of 29 CFR 1504.73(b)(1) and the penalty of $700 assessed against Nacirema therefor P-4, be and the same are hereby affirmed.