S & S DIVING COMPANY

OSHRC Docket No. 77-4234

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

Associate Regional Solicitor, U.S. Dept. of Labor

Richard B. McNees, for the employer

OPINION:

DECISION

BY THE COMMISSION:

A decision of Administrative Law Judge Erwin L. Stuller is before the Commission for review pursuant to section 12(j), 29 U.S.C. §   661(i), of the Occupational Safety and Health Act of 1970, 29 U.S.C. § §   651-678 ("the Act").   At issue before the judge were two amended citations alleging four serious (citation 1) and three other than serious (citation 2) violations of the Act in that the Respondent, S & S Diving Company, failed to comply with various occupational safety and health standards published at 29 C.F.R. Part 1910, Subpart T -- Commercial Diving Operations.   In his decision, Judge Stuller vacated one citation item and affirmed the remaining items.   In addition, he rejected various challenges by the Respondent to the validity of the citations and the inspection that led to their issuance.   Among the arguments rejected was the Respondent's contention that the Secretary of Labor ("the Secretary") had no authority to inspect the Respondent's operations [*2]   and issue citations to the Respondent because the Respondent was not an "employer" within the meaning of the Act.

The Respondent thereafter filed a petition for review of the judge's decision and order.   In response to this petition, Commissioner Barnako directed review on the following issue raised in the petition:

Whether the trial judge erred in concluding that Respondent is an employer within the meaning of section 3(5) of the Occupational Safety and Health Act of 1970, 29 U.S.C. §   651, et seq.?

In addition, Commissioner Barnako notified the parties that "[n]o other issues are directed for review." n1

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

n1 In its petition, the Respondent also raised the following issues: (A) whether the judge erred in concluding that the Act was applicable to a vessel on navigable waters and (B) whether the judge erred in denying the Respondent's motion to suppress the Secretary's evidence on the ground that his inspection was conducted without a search warrant.   However, review was not directed on these issues.   When an order for review directs that the Commission consider an issue raised in a petition for review but is silent as to other issues raised in the petition, the petition is deemed denied as to those other issues.   See Commission Rule of Procedure 91(d), 29 C.F.R. §   2200.91(d).   Accordingly, the issues raised in the Respondent's petition that were not directed for review are not before us.

Furthermore, any issue neither raised in a petition for review nor directed for review by an individual member upon his own motion, see Commission Rule of Procedure 92(c), 44 Fed. Reg. 70,106 at 70,111 (1979), to be codified in 29 C.F.R. §   2200.92 [formerly Rule 91a(c), 29 C.F.R. §   2200.91a(c)], is not before the Commission on review.

  [*3]  

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

I

Section 3(5) of the Act states that "[t]he term 'employer' means a person engaged in a business affecting commerce who has employees, but does not include the United States or any State or political subdivision of a State." In the proceedings below, the Respondent conceded that it was engaged in a business, specifically the "harvesting" of geoducks (pronounced as "goo-ey-ducks" and described as giant clams) and other food products from Puget Sound, an inlet of the Pacific Ocean located within the boundaries of the state of Washington.   However, it denied that its business had any employees, contending that the divers and "tenders" n2 used in its harvesting operations were independent contractors rather than employees.   In addition, the Respondent denied that its business affected commerce within the meaning of section 3(5) of the Act.   Judge Stuller ruled against the Respondent on both issues, concluding (A) that the persons working for the Respondent as divers and tenders were employees of the Respondent and (B) that the Respondent's business affected commerce because the geoducks harvested by the [*4]   Respondent "are sold and delivered to buyers in other states and Japan."

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

n2 The function of the tender was described in the testimony of Stanley G. Lupkes, president and co-owner (with his wife) of the Respondent.   The tender remained aboard the vessel while the diver or divers were underwater. The primary function of the tender was to protect the divers against conditions that could endanger them or interfere with their work and to assist the divers in the event they encountered difficulties.

Lupkes stated that his preference was to use only qualified divers and to have the divers alternate in tending for each other.   On occasion, persons were engaged solely to act as tenders.

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

In its petition for review and in its brief on review, the Respondent took exception to Judge Stuller's conclusion that the Respondent was the employer of the divers and tenders at issue.   However, it did not take exception in its petition either to the judge's conclusion that it was engaged in a business affecting commerce or to the judge's [*5]   underlying findings.   Moreover, although the issue is within the scope of the direction for review, supra, the Respondent, in its brief filed in response to the direction for review, did not renew its argument that its business did not affect commerce. Under these circumstances, we conclude that the Respondent has abandoned its contention and that the issue is not before us on review.   The judge's finding and conclusion that the Respondent was a "person engaged in a business affecting commerce" under section 3(5) is therefore affirmed.

Accordingly, we conclude that the only issue before us is whether the judge erred in finding and concluding that the Respondent was a "person . . . . who has employees" within the meaning of section 3(5) of the Act.

II

In Griffin & Brand of McAllen, Inc., 78 OSAHRC 48/C13, 6 BNA OSHC 1702, 1978 CCH OSHD P22,829 (No. 14801, 1978), the Commission reversed a judge's holding that the cited corporation was not the employer of migrant workers because their crew leader was an independent contractor. The Commission stated in that case that, while there is no single criterion for determining the existence of an employer-employee relationship, the [*6]   following factors should be considered in making this determination:

(1) whom do the workers consider their employer;

(2) who pays the workers' wages;

(3) who has the responsibility to control the workers;

(4) does the alleged employer have the power to control the workers;

(5) does the alleged employer have the power to fire, hire, or modify the employment condition of workers;

(6) does the workers' ability to increase their income depend on efficiency rather than initiative, judgment, and foresight; and

(7) how are the workers' wages established.

6 BNA OSHC at 1703, 1978 CCH OSHD at pp. 27,600-01. In addition, the Commission emphasized throughout its decision that the term "employer" under the Act is not limited to employment relationships as defined under common law principles but rather is to be broadly construed in light of the statutory purpose and the economic realities of the relationship at issue.

In the decision now under review, Judge Stuller cited to and applied the principles set forth in Griffin & Brand of McAllen, Inc., supra. Thus, he entered the following findings relating to the factors deemed relevant by the Commission:

(1) Workers' view of    [*7]   their status. The divers considered themselves to be independent contractors.

(2) Payment of wages. The divers received all payment for their work from the Respondent.   Although the tender was theoretically paid by the divers, all payments were made directly by the Respondent and the "economic reality" was that the tender did not receive payment from the divers.

(3) Responsibility to control. The Respondent leased the boat used in its operations from Stanley G. Lupkes, its president and co-owner. Lupkes interviewed and contracted with the persons hired to work in the Respondent's operations.   Lupkes also managed the operation of the vessel for the corporation.   The Respondent provided all equipment used in the operation except for the divers' personal gear.

The state of Washington leased portions of the sea floor of Puget Sound for the purpose of harvesting geoducks. The Respondent contracted with leaseholders to perform the actual harvesting work and to deliver the product to the leaseholders. The Respondent obtained validations from the State Department of Fisheries to harvest within the confines of the leasehold.   By state law, divers could only harvest in areas   [*8]   covered by such validations. The Respondent supplied the specialized water hose nozzles used in geoduck operations.   These nozzles were also licensed by the State Department of Fisheries and the Respondent obtained these licenses.

The disposition of the catch was in accordance with the Respondent's contractual obligations to the leaseholders. The divers and tenders did not share in the Respondent's economic risks.   Nor did they share in the Respondent's expenses.

(4) Power to control. The divers could only work from the boat designated and leased by the Respondent.   By controlling the boat, the Respondent had the power to designate when the work could be done.   The divers could only harvest in the areas designated by the Respondent in accordance with its rights under contract and state validation. The divers were required to use the nozzles that the Respondent had obtained validations for and the equipment on the Respondent's vessel. However, once underwater, the divers were in sole control of their activities.   Nevertheless, the Respondent had "sufficient control" to comply with the cited safety standards.

(5) Power to modify employment. The Respondent had the power [*9]   to hire, fire and modify the employment of the divers.

(6) Worker's ability to increase income. The ability of the divers to increase their income was based primarily on their efficiency rather than initiative, judgment and foresight.

(7) Determination of wages. "In reality", the divers and tenders were "paid on a piece work basis", that is, a fixed amount per pound of geoducks harvested. Their pay was not dependent on and did not vary according to the payment received by the Respondent for the total catch.

In addition, Judge Stuller considered the economic realities of the relationship.   He stated the following:

The corporation is a fictitious person.   Without the employment of real people, it cannot harvest . . . .   Its long term employment of . . . . [divers and tenders] is, therefore, an economic necessity.

He continued and concluded as follows:

The circumstances of the whole activity establishes that the tender and the divers were employees of S & S.   These employees and S & S constituted an integrated economic unit devoted primarily to harvesting, the principal business of S & S . . . .   The underlying economic realities confirm the employer-employee relationship.   [*10]  

Based on his consideration of these and other factors, Judge Stuller concluded that the Respondent was an employer under section 3(5) of the Act.

III

On review, the Respondent renews its contention that the divers and tenders at issue were independent contractors rather than its employees.   It also argues that some of the findings underlying the judge's contrary conclusion are not supported by the preponderance of the evidence.   We conclude that the Respondent's exceptions are without merit and that Judge Stuller properly resolved the issue before him for the reasons he assigned. n3 The judge's findings are supported by a preponderance of the evidence and his analysis and conclusions are consistent with Commission precedent.   We therefore adopt the findings and conclusions of the judge.   See Gulf Oil Co., 77 OSAHRC 216/B10, 6 BNA OSHC 1240, 1978 CCH OSHD P22,737 (No. 14281, 1977).

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

n3 In his decision, Judge Stuller, like both of the parties during the proceeding below, focused on the circumstances surrounding the Respondent's principal business activity, which was the harvesting of geoducks. In particular, many of the judge's findings set forth above are based on testimony relating to typical geoduck harvesting operations.   Not all of these findings are applicable to other activities engaged in by the Respondent, e.g., the harvesting of sea cucumbers.

In its brief on review, the Respondent notes "that on the day of the incident occasioning the citations in this case, an unusual venture was undertaken to harvest sea-cucumbers." Because this operation involved the harvesting of sea cucumbers rather than geoducks, it was different in several respects from the customary goeduck harvesting operation described in the judge's decision.   Moreover, the particular "venture" at the time of the alleged violations was even more "unusual" because there was no advanced agreement either as to the price to be paid by the leaseholder to the Respondent for the product delivered or as to the rates to be paid by the Respondent to the diver and to the tender for their labor.

We conclude that the judge did not err in focusing on the circumstances surrounding the Respondent's customary geoduck harvesting operations rather than those surrounding the "unusual venture" at the time of the alleged violations.   The issue before him was whether the Respondent was an employer within the meaning of the Act.   In resolving this issue, the judge properly looked at the totality of the Respondent's activities to determine whether it used employees in carrying out its business.   The issue of whether the particular diver and tender involved in the specific harvesting operation at the time of the alleged violations were acting as employees of the Respondent at that time is an issue that need not be resolved.

  [*11]  

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

Accordingly, the judge's decision is affirmed.   SO ORDERED.