WHEATON INJECTION MOLDING COMPANY

OSHRC Docket No. 81-1412

Occupational Safety and Health Review Commission

April 30, 1982

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Before: ROWLAND, Chairman; CLEARY and COTTINE, Commissioners.  

COUNSEL:

Office of the Solicitor, USDOL

Francis V. LaRuffa, Regional Solicitor, U.S. Department of Labor

J. Edward Goff, Vice-President, Legal Department, Wheaton Industries, for the employer

OPINION:

DECISION

BY THE COMMISSION:

The parties in this case purported to enter into a joint stipulation disposing of all issues, including the issue of the penalties to be assessed.   In the joint stipulation, the employer, Wheaton Injection Molding Company, admitted the allegations of the complaint that serious violations had occurred, that "due consideration" had been given by the Secretary of Labor to the statutory penalty factors, and that "several" employees had been affected by the violations.   The stipulation stated that it was "subject to the contents" of a letter attached to and made a part of the joint stipulation.   The letter, written by the company president, contained "qualifications" to the stipulation.   The letter stated that the employer did not agree with the joint stipulation's statement that the Secretary properly assessed a proposed penalty because "I have no knowledge whether the correct figure was used or not as I believe [*2]   the inspector uses his own discretion when it comes to the penalty." With respect to the statement in the joint stipulation that it "should be final and binding upon the parties," the employer's letter states that "I do not feel bound by signing this agreement as I do not expect to pay a fine . . . ."

Administrative Law Judge Tannenbaum found that all issues had been resolved except the appropriateness of the penalty.   Judge Tannenbaum considered the "evidence in this record" with respect to the penalty factors and found that the proposed penalties "are appropriate and will serve the purposes of the Act." The employer then filed a petition for discretionary review of the judge's decision, claiming that it was contrary to the law and to the evidence.   Review of the judge's decision was directed.

Our first inquiry is whether the joint stipulation filed with the judge represents an agreement by the parties as to the appropriateness of the proposed penalties. When the stipulation is considered in light of the attached letter which conditions its terms it cannot be concluded that the documents reflect an agreement by both parties that the penalties were to be assessed as proposed.    [*3]   Accordingly, the penalty assessment cannot be affirmed on the basis of the stipulation alone.   Indeed, the judge recognized the lack of assent to the proposed penalties, for he expressly stated in his decision that the joint stipulation did not resolve the penalty issue.   Instead, the judge's de novo assessment of the proposed penalties was said to be based on the "evidence in this record." However, in view of the ambiguity in the stipulation and the apparent absence of a meeting of the minds by the parties, the parties should be afforded the opportunity to present evidence relevant to the penalty assessment criteria of section 17(j) of the Act before a de novo assessment is entered. n1 Accordingly, the judge's decision is vacated and the case remanded for further proceedings.

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n1 It may be that the judge's inquiry went no further than to determine whether any stipulated penalty was "not clearly repugnant to the purposes and policies of the Act" under Thorlief Larsen & Son, Inc., 74 OSAHRC 74/C8, 2 BNA OSHC 1256, 1974-75 CCH OSHD P18,826 (No. 370, 1974), pet. for review dismissed, No. 73-1232 (7th Cir. Jan. 22, 1974) or was "consistent with the . . . objectives of the Act" under Commission Rule 100(a), 29 C.F.R. §   2200.100(a).   If so, we would nevertheless vacate the judge's decision for the reason we discuss above -- that the record does not convince us that assessment of the proposed penalties reflects the agreement of the employer.

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SO ORDERED.  

DISSENTBY: CLEARY

DISSENT:

CLEARY, Commissioner, dissenting:

Judge Tannenbaum correctly decided this case and his decision should be affirmed.   The record is clearing Wheaton Injection Molding signed the joint stipulation and agreed to the assessment of the proposed penalties to, as the president of the company explained, "try to save time and money for the U.S. government, rather than meet the federal judge in Philadelphia . . . ." Wheaton, like the Secretary, agreed before the judge that, with respect to the amount of the penalties, this litigation should come to an end.   My colleagues find, however, that the record does not reflect an agreement by both parties that the penalties were to be assessed as proposed.   This finding is contrary to the record.

The second paragraph of the stipulation states that "[t]he parties agree that a proposed penalty was properly assessed pursuant to the Occupational Safety and Health Act as it is presently constructed." (Emphasis added.) The third paragraph explains that Wheaton "contends that penalties should not be assessed by [OSHA] after first time violations are uncovered."   [*5]   The fourth paragraph further explains that Wheaton "contends that no penalties should be assessed by OSHA until an employer has been given a reasonable time to abate a first time violation and fails to do so.   [Wheaton] hereby attaches a position paper [to] further elaborate on contentions 3 and 4 above." (Emphasis added.) The last paragraph states that the parties agree that the joint stipulation "dispose[s] of all issues remaining before the . . . Commission, that this Joint Stipulation and [Wheaton's] position paper, shall control the future course of this action, and that any Order entered pursuant to this Joint Stipulation shall be final and binding upon the parties." Thus, the central concern of the employer has not been the amount of the penalties; it has been the conviction that penalties ought not to be assessed at all for first-instance violations.   The president of Wheaton Injection Molding holds this conviction so firmly that most of his letter was devoted to his presentation of it, and, I note, he has made the identical argument before two Commission judges in cases involving Wheaton's affiliated companies.   See Wheaton Plastics Co., 79 OSAHRC   [*6]   100/C7, 1979 CCH OSHD P24,059 (No. 78-5992, 1979) (ALJ); Dorchester Industries, Inc., 77 OSAHRC 195/C11, 1977-78 CCH OSHD P22,373 (No. 76-4930, 1977) (ALJ).   Viewed in this light, I can conclude only that the employer's letter and his petition for review raise no more than an argument -- they do not evince a desire that the case go to trial on the amount of the penalties.   I would therefore hold that Wheaton agreed that the proposed penalties were to be assessed if any penalties were appropriate for first-instance violations.

The majority finds significance in the employer's disclaimer of knowledge of the correctness of the proposed penalty. All that the employer meant by this is that he had no knowledge of how the proposed penalties were calculated by the Secretary.   Nothing in that statement is inconsistent with an agreement to have the proposed penalties assessed anyway.   The majority also believes that the employer repudiated the joint stipulation by stating that "I do not feel bound by signing this agreement as I do not expect to pay a fine and you can put me in jail if that would serve your purpose." This is not a repudiation of the stipulation, for as I have said, the   [*7]   employer did not want to litigate the facts of the penalty issue.   This statement was simply a defiant prediction that the penalties will not be paid; it stems from the employer's sense of outrage that penalties are assessed under the Act for first-instance violations.

Since I would affirm the judge's decision, I would simply note that I agree with the decisions of the judges in Wheaton Plastics and Dorchester Industries that, inasmuch as the violations here were alleged to be "serious," the Commission has no choice but to assess penalties, even for first-instance violations.   Section 17(b) of the Occupational Safety and Health Act of 1970, 29 U.S.C. § §   651-678, states that "[a]ny employer" who has committed a serious violation "shall be assessed a civil penalty . . . ." By contrast, section 17(c), which speaks of penalties for non-serious violations, uses the term "may." The brief legislative history of these provisions indicates that Congress deliberately chose to require penalties for serious violations; n2 the Commission's consistent holdings have been that same effect. n3 In short, the Commission has no power to adopt Wheaton's arguments, no matter how much merit [*8]   they may have.   Wheaton's remedy is with Congress.

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n2 Representative Steiger, a principal drafter of the Act, stated as he described the conference bill to the House of Representatives that "there is no requirement that a penalty be assessed when the violation is not a serious one, but a penalty must be assessed where the violation is serious in nature." Senate Committee on Labor and Public Welfare, 92d Cong., 1st Sess., Legislative History of the Occupational Safety and Health Act of 1970, at 1219 (1971) ("Leg. Hist."); see H. Conf. Rep. No. 91-1765, 91st Cong., 2d Sess., at 41 (1970); reprinted in Leg. Hist. at 1194; Leg. Hist. at 306 (comparative analysis of competing bills); Leg. Hist. at 425 (Sen. Dominick, explaining a substitute bill to the Senate, stated that "it is mandatory in the case of a servious violation that the citation include a proposed civil penalty of up to $1,000 per violation").

n3 Hermitage Concrete Pipe Co., 82 OSAHRC    , 10 BNA OSHC 1517, 1520, 1982 CCH OSHD P25,975, p. 32,575 (No. 4678, 1982); Logan County Farm Enterprises, Inc., 79 OSAHRC 18/G9, 7 BNA OSHC 1275, 1979 CCH OSHD P23,425, p. 28,349 (No. 78-4535, 1979); Continental Steel Corp., 75 OSAHRC 73/D6, 3 BNA OSHC 1410, 1411, 1974-75 CCH OSHD P19,838, p. 23,625 (No. 3162, 1975), rev'd on other grounds sub nom. Penn-Dixie Steel Corp. v. OSHRC, 553 F.2d 1078 (7th Cir. 1977); Thorlief Larsen & Son, Inc., 74 OSAHRC 74/C8, 2 BNA OSHC 1256, 1257, 1974-75 CCH OSHD P18,826, p. 22,664 (No. 370, 1974) pet. for review dismissed, No. 73-1232 (7th Cir. Jan. 22, 1974); Hogdon Shingle & Shake Co., 74 OSAHRC 70/B3, 2 BNA OSHC 1215, 1216, 1974-75 CCH OSHD P18,722, p. 22,615 (No. 1315, 1974).

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