“_________________________________ :SECRETARY OF LABOR, : : Complainant, : :v. ::ERIC K. HO, : OSHRC Docket Nos. 98-1645 &: 98-1646HO HO HO EXPRESS, INC., : :HOUSTON FRUITLAND, INC., : Respondents. :_______________________________ : *\/DECISION\/*Before: RAILTON, Chairman; STEPHENS and ROGERS, Commissioners.BY THE COMMISSION: These cases arise out of the Secretary?s citations chargingthat Respondents Eric K. Ho (?Ho?) and two corporations controlled by Ho? Ho Ho Ho Express, Inc. (?Ho Ho Ho Express?) and Houston Fruitland,Inc. (?Houston Fruitland?) ? violated the Occupational Safety and HealthAct of 1970, 29 U.S.C. ?? 651-678 (?the Act?), at a worksite whereemployees were exposed to asbestos in the course of a project torenovate a building. The Secretary alleges that Respondents committedwillful and serious violations by failing to comply with theconstruction industry asbestos standard at 29 C.F.R. ? 1926.1101 andother construction safety standards in Part 1926. The Secretary alsoalleges an other than serious violation for failing to report anaccident, contrary to section 1904.8. In addition, the Secretaryalleges that Respondents willfully violated section 5(a)(1) of the Act,29 U.S.C. ? 654(a)(1), the ?general duty clause,? upon exposingemployees to a hazard when Respondents failed to recognize a natural gasline. Respondents do not dispute the existence of the violationsthemselves but raise legal issues regarding the application of the Act.For the reasons that follow, the Commission affirms the judge?sconclusion that Ho is engaged in a business affecting interstatecommerce and, therefore, subject to the Act. However, the Commissionreverses that portion of the judge?s decision in which he determinedthat the two corporate Respondents were properly cited for theviolations. We also conclude that the judge erred in affirmingviolations for failure to comply with certain provisions of the asbestosstandard as separate violations for each exposed employee. In addition,we affirm the judge?s decision that the violation pertaining to themisidentified gas line was not willful. BACKGROUND On October 27, 1997, Ho, acting as an individual,^1purchased a defunct hospital and adjoining medical officebuilding in Houston, Texas, for the purpose of developing the propertyas residential housing. There is no dispute that Ho was aware asbestoswas present at the site. Ho signed a property disclosure statement whichstated that the property contained asbestos, and the broker who handledthe transaction gave Ho a copy of a study by an environmental consultantidentifying asbestos fireproofing, floor tiles, and other asbestosmaterials. This report specifically cautioned that ?any disturbance oralterations made to asbestos-containing materials must be handled bytrained personnel who are licensed and registered with the TexasDepartment of Health (TDH) using proper procedures and respiratoryprotection.? Despite this explicit warning, Ho hired two individuals,Manuel Escobedo (?Escobedo?) and Corston Tate (?Tate?), who hadpreviously done construction work for him personally or for therespondent corporations, to conduct the renovation work, including theremoval of asbestos material from the building. Escobedo in turn hired11 Mexican nationals who were illegal immigrants to assist with thework, which commenced around January of 1998. There is no dispute thatat most, the workers were given dust masks not suitable for protectionagainst asbestos that they wore only occasionally. They were not issuedprotective clothing as required by the asbestos standard. Ho also didnot do any of the following: provide a respiratory protection program;conduct medical surveillance of the workers; conduct any asbestosmonitoring; or implement any of the work practices required by thestandard, such as adequate ventilation and debris removal. The workerswere not informed of the presence of asbestos, of the hazards associatedwith it, or of the appropriate work practices. In short, the workerswere given no training whatsoever. Conditions at the site also violatedother provisions of the standard pertaining to such matters asidentification of regulated areas, warning signs, decontamination areas,and pre-work assessments of the amount of asbestos-containing material.Ho visited the site almost every day, and there is no dispute that hewas aware of these conditions. On February 2, 1998, approximately a month after the workstarted, a city inspector visited the site in response to a complaint ofwork being performed without a permit. He observed at least tenindividuals scraping fireproofing material with visible dust in theirbreathing area. A few of these workers had dust masks, but none hadrespiratory protection or protective clothing. The city inspectorissued a stop work order citing the possibility of exposure to asbestos,and his order required that city approval be obtained before work couldcontinue. Ho then began negotiating for removal of the asbestosmaterial with Alamo Environmental, a contractor that specializes inasbestos abatement. These negotiations continued until March 27, 1998,when Ho notified Alamo by fax that he agreed to Alamo?s proposal. However, during the period of time that Ho was negotiatingwith Alamo, he had resumed work at the site under the same conditionswith the exception that, following the city inspection, Ho directed thatthe work be performed at night. Not only did the workers have theirmeals at the site, some in fact lived at the site. During the night,when they were working, the gate to the property was locked, and theworkers were kept inside. There was no portable water available to theworkers and only one portable toilet, which never was emptied during thetime the workers were using it. Due to the condition of the toilet, mostworkers wound up relieving themselves on the ground around the property,or if they wished, Tate would allow them to leave the premises to usethe restroom at a nearby commercial establishment. If the employeesneeded anything, Tate, who had a key to the gate, was given money by theemployees, and he would go off the site to make purchases for them.Again, there is no dispute that Ho visited the worksite during thisperiod of time and was aware of these conditions. The asbestos removal was conducted in this fashion until itscompletion on March 10, 1998. Having completed this portion of therenovation work, Ho directed that starting March 11, the remaining workwould continue during daylight hours. On March 11, an explosion and fireoccurred at the worksite, injuring Tate and two workers. The followingday, workers were summoned to Ho?s office where they were given arelease to sign. Under the terms of the release, each worker purportedto acknowledge ?that such work was performed by him as an independentcontractor, and not as an employee of Eric Ho?.? In addition toacknowledging receipt of $1000 ?as full payment for the work performedby the undersigned,? each worker also agreed to accept an additional$100 in exchange for releasing Ho from any claims arising or that mightarise as a result of the explosion and fire. These release forms werewritten in English, but an interpreter was present who read the documentin Spanish to the workers. After the explosion, the TDH conducted an investigation.Samples taken of both debris and the ambient air at the site showedlevels of asbestos in excess of limits prescribed by the United StatesEnvironmental Protection Agency as well as state standards. The stateauthorities also notified Ho that the site remained in an unsafecondition and that the building needed to be sealed by qualifiedpersonnel. Ho?s response was to direct several of the workers to installplywood over the windows. Again, the workers were not given anyprotective equipment when performing this work. Ho was subsequentlyconvicted of criminal violations of the Clean Air Act, 42 U.S.C.? 7413(c) (?CAA?). The Fifth Circuit recently upheld those convictions.\/United States v. Eric Kung-Shou Ho\/, 311 F.3d 589 (5th Cir. 2002)(?Ho?), \/cert. denied,\/ 123 S.Ct. 2274 (2003).*APPLICABILITY OF THE ACT* The first issue before us is whether the judge properlyconcluded that the Act applies to Ho?s activities. The Act applies to a?person engaged in a business affecting commerce who has employees.? 29U.S.C. ? 652(5). \/ See\/ \/Don Davis\/, 19 BNA OSHC 1477, 1479, 2001 CCHOSHD ? 32,402, p. 49,896 (No. 96-1378, 2001). Notwithstanding hisefforts during the course of the work to treat the workers asindependent contractors, Ho neither contends that he is not the employerof the eleven workers, nor does he dispute that he is the employer ofTate and Escobedo. Rather, Ho contends that the Secretary failed toestablish that his activities constitute a ?business affecting commerce.? We agree with the judge?s decision that Ho?s activities atthe worksite sufficiently affect interstate commerce so as to be subjectto the Act. In reaching this conclusion, we rely, as did the judge, onCommission precedent holding that construction work, such as thatperformed by Ho, necessarily is covered by the Act. \/See, e.g.,Clarence M. Jones d\/b\/a C. Jones Co.\/, 11 BNA OSHC 1529, 1983-84 CCHOSHD ? 26,516 (No. 77-3676, 1983) (construction work \/per se\/ affectsinterstate commerce because there is an interstate market inconstruction materials and services). We also note that thecircumstances here are analogous to those in \/Godwin v. OSHRC\/, 540 F.2d1013, 1016 (9th Cir. 1976), in which the employer was clearing land toplant a vineyard with the eventual objective of selling grapes towineries or producing and selling wine directly. In \/Godwin\/, the courtreasoned that because the clearing of land is an integral part of theprocess of manufacturing wine, the employer?s activities would have aneffect on interstate commerce when\/\/?\/taken together with land clearingby others\/? and, therefore, the court concluded that unsafe workingconditions at the employer?s worksite would thereby affect all othersimilarly situated businesses. \/Id. \/at 1016 (emphasis added). As thecourt stated, ?[t]he effect of permitting one business to use cheaper ?but more dangerous ? work methods will tend to force competitors to cuttheir land clearing costs similarly.? \/Id.\/ (footnote omitted). Thus,the effect on interstate commerce existed. Likewise, by conductingasbestos abatement without contracting for such services, Ho deprivedestablished asbestos abatement specialists of the opportunity to performthe necessary work at his worksite, thereby affecting the interstatemarket in asbestos control and removal. The Fifth Circuit reached the same conclusion when itrejected Ho?s claim that Congress lacked constitutional authority underthe Commerce Clause to regulate his work activities.^2 Thecourt explained that a regulation can reach intrastate commercialactivity that by itself is too trivial to have a substantial effect oninterstate commerce but which, when aggregated with similar and relatedactivity, can substantially affect interstate commerce. \/Ho\/, 311 F.3dat 599. As the court noted, this rule has come to be known as the?aggregation? principle. \/Id. \/at 598-99 (\/citing Wickard v. Filburn\/,317 U.S. 111 (1942)). The court expressly held that Ho?s failure to usethe services of licensed asbestos abatement providers had an effect notonly on the providers of such services but also on the commercial realestate market itself. \/Id.\/ at 603-04. Thus, the court determined thatHo ?deprived licensed abatement companies of a promising businessopportunity.? \/Id\/. at 603. Because ?these substantial effects on theasbestos removal market are direct, not attenuated,? the court foundthat the use of the aggregation principle was justified. \/Id.\/ Thecourt further concluded that:Ho?s illicit asbestos removal project likely would reduce the number ofcompanies providing asbestos removal services. Fewer companies meansthat conscientious property owners would have more trouble locatinglicensed abatement companies and likely would have to pay higher pricesfor the services of remaining companies. Furthermore, Ho would gain acommercial advantage over conscientious property owners who must paythese higher prices for asbestos removal.\/Id.\/at 604. \/See also Lacy\/, 628 F.2d at 1228 (court held that understatutes such as the Act that use the terminology ?affect commerce,?coverage exists ?so long as the business is in a class of activity thatas a whole affects commerce?). Based on these authorities, we therefore conclude that thejudge properly found Ho to be engaged in a business affectingcommerce.^3 LIABILITY OF THE CORPORATIONS The primary issue before us is whether the two corporationsas well as Ho as an individual can properly be cited for the violations.The judge concluded that the corporations are responsible for theviolative conditions under either of two theories that apply FifthCircuit law: (1) that the respondent corporations are merely the ?alterego? of their shareholder, Ho, and under the ?reverse-piercing?doctrine, they are liable for his obligations; or (2) that therespondent corporations constitute a ?sham to perpetrate a fraud? and,thus, their corporate fictions should be disregarded in order to hold Holiable. We conclude that the judge?s factual findings are notsupported by the evidence and that the judge misconstrued therelationship between Ho and the corporations. Ho owns 67 percent of the stock of Houston Fruitland and HoHo Ho Express. The remaining shares are held by various minorityshareholders. Ho is president of Houston Fruitland and his wife,Melissa, is secretary. Ho is both president and secretary of Ho Ho HoExpress. Houston Fruitland has about 20 employees and is a fruit andvegetable wholesaler. Ho Ho Ho Express is an ICC common carrier thatdoes 90 percent of its business providing transportation services forHouston Fruitland and has approximately 32 employees. Ho financed the $700,000 purchase price of the medical andhospital buildings subject to the cited renovation work in the followingmanner: Ho Ho Ho Express and two other corporations^4 advanced atotal of $440,000 to Houston Fruitland, which in turn put up $180,000 ofits own funds, $80,000 of which came from the proceeds of the sale of abuilding owned by Houston Fruitland. This aggregate of $620,000 wasrecorded on Houston Fruitland?s general ledger as a credit due toHouston Fruitland from Ho. An undisclosed ?outside source? provided theremaining $80,000. A similar arrangement existed for the payment ofwages to the workers and the purchase of supplies and equipment for therenovation work. Generally speaking, these expenses were paid based oninvoices submitted to Ho by Tate and Escobedo. As the principal shareholder, Ho would customarily initiatetransfers of funds among himself, Ho Ho Ho Express, and HoustonFruitland. Each such transfer was documented as a debit owed by onecorporation to the other or as a debit owed by Ho. There were no loandocuments, no interest due, no schedule for repayment, and norepresentation that Ho ever fully repaid any of his loans. On the otherhand, although the record is not completely explicit, there is evidenceof some amount of repayment by Ho. An employee of Ho Ho Ho Express, Melba Gomez, performedservices as Ho?s assistant, including what she described as Ho?s?personal agenda,? such as taking personal phone calls, handling certaininvestments for Ho, and doing some personal errands for Ho. Gomezassisted Ho in his dealings with the real estate broker for the hospitalpurchase and on occasions when Ho was out of town, she made severalvisits to the worksite to check whether Tate needed anything. She alsowrote in Spanish or translated some documents pertaining to the work atthe site. In holding that the corporations were alter egos of Ho and,therefore, the corporate veil could be ?reverse-pierced? so as to imposeliability on the corporations, the judge cited \/Permian Petroleum Co. v.Petroleos Mexicanos\/, 934 F.2d 635 (5th Cir. 1991), which recognizes theconcept of reverse-piercing where ?a party seeks to hold a corporationliable for the obligations of a shareholder.? \/Id.\/ at 643. \/Permian\/concerned a dispute as to the amount of natural gas that had beendelivered pursuant to a contract. The issue before the Fifth Circuit waswhether Permian?s corporate form should be disregarded for purposes ofthe contract. Relying on Texas state law, the court concluded that analter ego relationship exists ?where there is such unity betweencorporation and individual that the separateness of the corporation hasceased.? \/Id.\/ According to the \/Permian\/ court, ?[w]hether the alterego doctrine applies depends upon the following factors:?the total dealings of the corporation and the individual, including thedegree to which corporate formalities have been followed and corporateand individual property have been kept separately, the amount offinancial interest, ownership and control the individual maintains overthe corporation, and whether the corporation has been used for personalpurposes.\/Id. \/at 643 (\/citing\/ \/Castleberry v. Branscum\/, 721 S.W. 2d 270, 272(Tex. 1986)). Relying upon these factors, the judge found that Ho ?solelydirects the activities of both corporations,? and funds are movedbetween the corporations and disbursed at Ho?s direction without theobservance of corporate formalities. The judge concluded that Ho Ho HoExpress and Houston Fruitland are ?alter egos? of Ho because Ho and thetwo corporations are ?financially interconnected? and Ho would not havebeen able to conduct his attempted renovation project if he had not hadaccess to the corporate resources. Upon determining that Ho?s interestswere ?indistinguishable? from those of the corporations, the judge foundthat the Secretary properly treated the corporations as Ho?s alter egos. In addition to \/Permian\/, the Secretary contends on reviewthat the Fifth Circuit?s subsequent decision in \/Century Hotels v.United States\/, 952 F.2d 107 (5th Cir. 1992), provides additionalsupport for the judge?s conclusion that Ho Ho Ho Express and HoustonFruitland were properly treated as alter egos of Ho. In \/CenturyHotels\/, the court upheld a federal tax levy by the Internal RevenueService under the Internal Revenue Code, 26 U.S.C. ? 7426, againstfamily-held corporations for the tax liability of individual familymembers. In determining whether a corporation is an alter ego of astockholder, the court held that the ?totality of the circumstances?must be taken into consideration. \/Id. \/at 110. \/See also U.S. v. Jon-TChemicals, Inc.\/, 768 F.2d 686, 694 n.8 (5th Cir. 1985). While these Fifth Circuit cases establish that the doctrineof ?reverse-piercing? is recognized under Texas state law and may beapplied not only in disputes between private parties but also to actionsunder federal statutes where the federal government or a federal agencyis a party seeking to made whole,^5 these precedents do notaddress the application of the doctrine in the context of remedialsocial legislation such as the Act. In \/United States v. WRW Corp.\/,986 F.2d 138 (6th Cir. 1993), however, the court held that individualcorporate officers and shareholders could be held liable for civilpenalties assessed against a corporation for violations of the FederalMine Safety and Health Act of 1977, 30 U.S.C. ? 801 \/et. seq.\/ Thecourt concluded that it was appropriate to pierce the corporate veilafter considering such factors as whether corporate formalities wereobserved, whether the individuals diverted corporate funds, and whethercorporate and personal funds were commingled. \/See also United Statesv. Bestfoods\/, 524 U.S. 51, 64-65 (1998) (corporate veil may be piercedto hold parent corporation liable for actions of a subsidiary inviolation of the Comprehensive Environmental Response, Compensation, andLiability Act, 42 U.S.C. ? 9607(a)(2)).^6 Insofar as?reverse-piercing? is a corollary principle to piercing the corporateveil, we find that it may have application in the context of determiningliability under a remedial statute. Upon consideration of the relevant precedent and the variousfactors set forth in these cases, we see no basis to construe the recordevidence to impose liability upon the respondent corporations. Inreaching this conclusion, we are guided by the holding in the FifthCircuit that ?[t]he corporate form?is not lightly disregarded, sincelimited liability is one of the principal purposes for which the law hascreated the corporation.? \/Krivo Indus. Sup. Co. v. National Distillers& Chem. Corp.\/, 483 F.2d 1098, 1102 (5th Cir. 1973). As Respondentscorrectly point out in their brief on review, the limited record beforeus indicates that Ho Ho Ho Express and Houston Fruitland are existingcompanies that conduct operations and have employees engaged inactivities bearing no relationship to the property redevelopment projectinitiated by Ho. There is nothing in the record to suggest that thesefreight hauling and produce growing operations, respectively, are notlegitimate, ongoing enterprises from which the companies derive the bulkif not the entirety of their revenues. Nor is there anything to suggestthat the companies do not exist for the purpose of performing servicesrelated to these activities. Notwithstanding the judge?s contraryfactual finding, there is no evidence regarding the management of theseactivities or to show Ho?s role, if any, in directing the day-to-dayconduct of those corporate operations. Moreover, the Secretary has notestablished on this record that Ho personally has that responsibility.On these facts, we are unable to hold, as did the court in \/CenturyHotels\/, that the corporations in question are ?mere business conduit[s]for the purposes of the controlling entity,? 952 F.2d at 112. \/SeeVergona Crane Co.\/, 15 BNA OSHC 1782, 1783, 1991-93 CCH OSHD ? 29,775,p. 40,496 (No. 88-1745, 1992) (two corporations can be ?regarded as asingle entity where?they share a common worksite, have interrelated andintegrated operations, and share a common president, management,supervision, or ownership?). Unquestionably, the casual manner in which funds wereroutinely transferred amongst Ho and the respondent corporationsindicates a somewhat lax attitude toward the corporate structure.However, we cannot find on this record that the corporate formalitieswere disregarded. Ho Ho Ho Express and Houston Fruitland maintainedseparate and distinct bank accounts as well as the appropriate corporateledgers. All disbursements for project expenses were recorded in thecorporate ledgers as accounts receivable, and disbursements madedirectly to Ho were shown as credits due from Ho in a specificshareholder account. There is no contention by the Secretary, nor anyevidence to show, that this recordkeeping was in any way inaccurate ormisleading. Moreover, while Respondents submitted copies of personalincome tax schedules filed by the corporate stockholders for the taxyears 1996, 1997, and 1998, the Secretary failed to put in the recordany financial statements, corporate tax returns, or any other evidencefrom which we could determine what proportion of corporate revenues werespent on Ho?s redevelopment project. We therefore cannot ascertainwhether the expenditures on the project represent a minor or significantamount of corporate resources. Indeed, the record fails to establisheven the source of the funds that the corporations disbursed to Ho.While corporate funds were clearly used for payment of expenses relatingto the project, including the purchase of the property, the most that wecan conclude from that evidence alone is that the corporations had afinancial interest in the project. However, as the Fifth Circuit notedin \/Krivo\/, 483 F.2d at 1104, the mere loan of money by a corporationdoes not in itself make the lender liable for the actions of the borrower. Similarly, there is no evidence from which we can determinewhat assets the companies actually owned, let alone any showing that Hoactually diverted those assets to his personal use. The fact thatcorporate employees may have performed some personal tasks for Ho,including some activities relating to the work at the site, is in ourview insufficient in the totality of the circumstances to establish thatthe corporate form should be disregarded. In concluding that acorporation was the alter ego of the taxpayer, the court in \/CenturyHotels\/ relied in part on facts showing that the taxpayer claimed to ownno property, all his personal expenses were paid by the corporation, helived in a house owned by this and other family corporations, and whenthe house was sold, he received a portion of the proceeds. Plainly,Ho?s relationship with the cited corporations does not rise to the levelthat the court found dispositive in that case. \/Cf.\/ \/Zahra SpiritualTrust v. United States\/, 910 F.2d 240 (5th Cir. 1990) (government filedtax liens against assets of corporations for tax liability of individualtaxpayers where corporate funds paid personal expenditures fortaxpayers, taxpayers lived in homes owned by corporations with no leaseagreement or obligation to pay rent, and one corporation was formed forthe sole purpose of holding title to real estate as a nominee of thetaxpayers). Accordingly, we find that the judge erred in concludingthat the respondent corporations are merely the alter egos of Ho. We now turn to the second basis for the judge?s decision tohold the respondent corporations liable ? the ?sham to perpetrate afraud? doctrine. The purpose of this doctrine is to prevent thecorporate structure from being used to disguise fraud or illegality orto otherwise create an injustice. \/Permian\/, 934 F.2d at 644. Thedoctrine is broader than that of ?alter ego,? as it is based onprinciples of equity, in which the court seeks to determine whether thecorporate form breaches ?some legal or equitable duty which?the lawdeclares fraudulent because of its tendency to deceive others, toviolate confidence, or to injure public interests.? \/Id.\/ (quoting\/Archer v. Griffith\/, 390 S.W.2d 735, 740 (Tex. 1964)). \/See alsoBestfoods\/, 524 U.S. at 62. However, the question of whether thecorporate form creates an injustice, while equitable in nature, like thealter ego doctrine, depends on the overall factual circumstances andrequires the court to find that on the facts of the case, adherence tothe corporate form would result in injustice or inequity. \/Permian\/, 934F.2d at 644; \/Castleberry\/, 721 S.W.2d at 273. In finding this test to have been met, the judge made afactual finding that Ho ?commingled? corporate assets with his own andthen concluded that Ho sought to invoke the ?fiction? of the corporationto ?protect? corporate assets. The judge held that Ho?s action wasfraudulent because it ?frustrates the Secretary?s ability to enforce theAct through the effective enforcement of civil penalties.? In her briefon review, the Secretary similarly argues that the ?sham to perpetrate afraud? doctrine is needed to prevent Ho from ?insulating? the corporateassets from liability for OSHA penalties. As we have already found, the two corporations here arefunctioning entities having employees and performing work activities ofa nature, and at locations, separate and distinct from Ho?sredevelopment project. There is no indication on this record that thecorporate structure is such as to have a propensity to be deceptive orinjurious. \/Cf.\/ \/Permian\/ (formation of another company performing thesame business as its predecessor created confusion as to the amount ofgas delivered pursuant to the contract and thereby injured thebeneficiary of that contract); \/Castleberry\/ (formation of a new companyconducting the same business, furniture moving, as an existing companyfor the purpose of coercing a major shareholder in the existing companyto liquidate his interest). The cases on which the judge and theSecretary rely are distinguishable as they involve either federalstatutes whose purpose is the recovery of monies owed to the governmentor, as in \/Permian\/, a private cause of action for money due under acontract. In those cases, whether assets were concealed or madeunavailable through the corporate structure is of substantive significance. The Act, on the other hand, is a regulatory statute whosepurpose is to prevent employers from exposing their employees tohazardous working conditions. With the exception of one occasion inwhich a truck belonging to Ho Ho Ho Express was observed at the project,the respondent corporations have no other apparent connection to theworksite, no employees at the site, and, so far as can be determined onthe record before us, no obligation to correct or abate the hazardousworking conditions in question. There is simply no evidence whatsoeverthat Ho Ho Ho Express or Houston Fruitland were created for the purposeof concealing, or that they operate to conceal, the identity of theemployer of the exposed employees in these cases, or that the corporatestructure otherwise hinders or obstructs the corrective purposes of theAct. Accordingly, no safety or health purpose under the Act exists towarrant holding the corporations as citable entities in these cases. Furthermore, the Secretary has not established thatmaintaining the corporate form here would work an injustice by renderingcorporate assets unavailable for the payment of civil penalties. In thefirst place, the Secretary?s position is fundamentally inconsistentinsofar as she asks us to conclude that the corporations and Ho aremerely alter egos in part because Ho uses corporate assets for hispersonal projects, while at the same time, asks us to assume that Howould not use corporate assets for the payment of any assessedpenalties. In any event, the Secretary?s position is totallyspeculative. There is not even a representation by the Secretary thatshe has any basis on which to conclude that assets would not be madeavailable for the payment of whatever penalties we might assess in ourdecision. Moreover, section 17(l) of the Act, 29 U.S.C. ? 666(l),affords the Secretary access to the federal district courts to pursuecivil actions for the recovery of penalties. Even assuming that Ho would not be forthcoming with respectto the payment of penalties, the Secretary has failed to show that thesepenalty collection procedures would not allow her access to thecorporate assets or that she would be unable to make to the districtcourt the same arguments she seeks to advance before us at this time.Indeed, the latter was precisely the situation before the Sixth Circuitin \/WRW\/, where the court upheld a judgment by a district court under 30U.S.C. ? 820(j), the Mine Safety Act?s counterpart to 29 U.S.C. ?666(l), which likewise authorizes civil actions in district court forrecovery of penalties. In its decision, the court made clear that in apenalty collection action the district court could properly disregardthe corporate structure under either an equity or alter ego theory.\/WRW\/, 986 F.2d at 143. \/See also\/ \/L.R. Willson & Sons, Inc.\/, 18 BNAOSHC 1641, 1999 CCH OSHD ? 31, 740 (No. 93-0785, 1999) (discussion ofproceedings in district court as exclusive forum for raising argumentsregarding penalty collection). We therefore conclude that in thecircumstances presented here, the Secretary has failed to establishgrounds for us to hold the respondent corporations liable under eitherthe ?alter ego? or the ?sham to perpetrate a fraud? doctrines.*I. PROPRIETY OF CITING VIOLATIONS ON A**PER EMPLOYEE BASIS* *A. Background to Secretary?s per employee citations*The Secretary charges Ho with multiple violations of the respirator andtraining provisions of the asbestos standard. Specifically, Items 5through 15 of Citation 2 allege eleven willful violations of therespirator standard, former 29 C.F.R. ? 1926.1101(h)(1)(i), on aper-employee basis, and Items 17 through 27 of Citation 2 allege elevenwillful violations of the asbestos training standard, 29 C.F.R. ??1926.1101(k)(9)(i) and (k)(9)(viii), also on a per-employee basis. Hodoes not challenge the judge?s decision affirming these items but arguesthat the respirator items should be grouped into one item and thetraining items likewise grouped into one item. The Secretary citesprior Commission decisions, including our decisions in \/Caterpillar\/,\/Inc.\/, 15 BNA OSHC 2153, 1991-93 CCH OSHD ? 29,962, p. 41,005 (No.87-922, 1993), and \/Hartford Roofing, Inc.\/, 17 BNA OSHC 1361, 1995-97CCH OSHD ? 30,857 (No. 92-3855, 1995), for the proposition that ourprecedents allow per-instance violations and penalties. She asks theCommission to affirm the per-employee citation items issued to Ho andthe separate penalties she proposes for those items because in her viewboth of the standards cited here implicate individual employeeprotection. While we agree that Ho is one of the worst employers theCommission has had come before it, we cannot allow harsh facts to resultin bad law ? a result which would clearly follow should we accept theSecretary?s proposed penalties.The law regarding how employers who are considered ?bad actors? shouldbe penalized for violations of the Act is still developing. This isevident both from the nature of the cases that have come before us since1986, as well as from the Secretary?s adoption in 1990 of a compliancedirective that she characterizes as her ?egregious\/willful penaltypolicy.? \/See\/ OSHA Instruction CPL 2.80, \/Handling of Cases to beProposed for Violation-by-Violation of Penalties\/, 1 BNA OSHR Ref. File21:9649, 9650, 1990 CCH ESHG New Developments, ? 10,662, pp. 13,589-90(Transfer Binder) (October 1, 1990).^[1] Against this backdrop,we consider the Secretary?s arguments in support of the per-employeeviolations alleged here and the separate penalties she has proposed. *B. The Commission?s decisions in \/Caterpillar\/ and \/Hartford Roofing\/ *The Commission has taken several steps on the road to assessingindividual penalties for per-instance violations of regulations andstandards, and we are not persuaded here to depart from thoseprecedents. We note that a review of our prior decisions indicates thatthe Commission has considered two different aspects of assessingpenalties on a violation-by-violation basis: in \/Caterpillar\/, theviolations at issue were cited per-instance and in \/Hartford Roofing\/,the violations at issue were cited per-employee. The Secretary relieson \/Caterpillar\/ and \/Hartford Roofing\/ as support for her allegedauthority to cite Ho on a per-employee basis. However, we fail to seehow these cases recognize the authority the Secretary claims here. In \/Caterpillar\/, where violations of the recordkeeping standard atsection 1904.2(a) were at issue, the Commission held that per-instanceviolations and penalties are appropriate when the cited regulation orstandard clearly prohibit individual acts rather than a single course ofaction. \/Caterpillar\/, 15 BNA OSHC at 2172-73, 1991-93 CCH OSHD at pp.41,005-06. Thus, in \/Caterpillar\/ we concluded it was permissible toassess individual penalties for each instance of violation based on anemployer?s failure to make a proper recordkeeping entry on its OSHAinjury and illness logs. \/Id.\/ We note, however, that our decision wasnot tied to egregious conduct on the part of the cited employer. Havingfound that the established violations were not willful, we assessedindividual penalties of other than serious violations. \/Id.\/ at 2177-78.\/See also Kaspar Wire Works, Inc.\/, 18 BNA OSHC 2178, 2000 CCH OSHD? 32,134 (No. 90-2775, 2000), \/aff?d\/, 268 F.3d 1123 (D.C. Cir. 2001)(separate penalties were assessed for individual recordkeepinginfractions characterized as both willful and other than serious).^[2]In \/Hartford Roofing\/, the Commission refused to find individualviolations cited on a per-employee basis for an employer?s failure toguard a roof perimeter. We concluded that the violations alleged inthat case concerned a single work practice or condition:Some standards implicate the protection, etc. of individual employees tosuch extent that the failure to have protection in place for eachemployee permits the Secretary to cite on a per-instance basis. However, where a single practice method or condition affects multipleemployees, there can be only one violation of the standard.\/Hartford Roofing\/, 17 BNA OSHC at 1365, 1995-97 CCH OSHD at p. 42,935(footnote omitted).In subsequent decisions, the Commission has applied the principle setout in \/Hartford Roofing\/ to assess one penalty for a single violationinvolving the exposure of multiple employees to a single recognizedhazard (\/Arcadian Corp.,\/ 17 BNA OSHC 1345, 1995-97 CCH OSHD ? 30,856,p. 42,918 (No. 93-3270, 1995), \/aff?d\/, 110 F.3d 1192 (5th Cir. 1997)),and to assess multiple penalties for multiple violations of a standardwhich prescribes conduct specific to individual employees (\/Sanders LeadCo.\/, 17 BNA OSHC 1197, 1993-95 CCH OSHD ? 30,740 (No. 87-260, 1995)). The key to all of these decisions was the language of the statute or thespecific standard or regulation cited.^[3] \/\/ We now turn to the issue of whether the language of the standards citedhere deal with a single work practice or prescribe conduct that isunique and specific to each employee. C. Analysis \/1. The per employee respirator charges\/ As noted above, Items 5 through 15 allege per-employeeviolations of the respiratory protection standard for asbestos set forthat former 29 C.F.R. ? 1926.1101(h)(1)(i).^[4] ^ This standardprovides:(h) \/Respiratory protection\/. (1) \/General\/. The employer shall providerespirators, and ensure that they are used, where required by thissection. Respirators shall be used in the following circumstances: (i) During all Class I asbestos jobs.?.Item 5 of the citation is typical of the eleven items cited under thisstandard:^[5] The employer did not provide respirators and ensure that they were usedduring all class 1 asbestos jobs:(a) at 11101 Bellaire Boulevard, Houston, Texas, during the removal ofasbestos contaminating materials (ACM) on or before March 11, 1998,appropriate respiratory protection was not provided to Martin Bernal.?. The judge affirmed these eleven items, relying on theCommission?s decisions in \/Caterpillar\/ and \/Hartford Roofing\/. We findthe judge?s reliance upon these decisions to be misplaced. The judgecited \/Caterpillar\/ for the proposition that separate penalties may beproposed and assessed for separate violations of a single standard.However, as previously noted, \/Caterpillar\/ did not address thepropriety of alleging discrete citation items on a per-employee basisbut rather on a per-instance basis. In addition, the judge relied uponthe Commission?s reference in \/Hartford Roofing\/ to the general industrystandard for respiratory protection, section 1910.134, which was not thestandard at issue in that case. Specifically, the Commission mentionedthe standard in a purely hypothetical context:For example, [section] 1910.134 sets forth the requirements for the useof respirators where effective engineering controls are not sufficientto control atmospheric contamination. As long as employees are workingin a contaminated environment, the failure to provide each of them withappropriate respirators could constitute separate and discreteviolations (sic). However, if the employer is able to reduce the levelof the air contaminants to acceptable levels, that single action wouldrender the standard inapplicable.17 BNA OSHC at 1366, 1995-97 CCH OSHD at p. 42,937. Because theCommission?s comments regarding the propriety of per-employee citationsunder the respiratory protection standard were not dispositive to itsinterpretation of the guardrail standard at issue there, we find thispassage to be nothing more than \/dicta\/. On review, as noted above, the Secretary relies on thewording of the cited respiratory protection standard to support herposition that it prescribes per-employee penalties. However, we findnothing in the plain language of the cited standard, its preamble whenpromulgated and when corrected, or the Secretary?s writteninterpretations of the cited standard, to support her claim thatviolations of this standard can be cited per-employee. Nor do we findsupport for the Secretary?s position in her compliance directive on theegregious\/willful penalty policy or her practice of issuing citationsunder the respirator provisions of the cited standard (other than thiscase) to support her argument. None of these sources serve to notify theregulated community that this particular standard may be used topenalize employers on a per-employee basis. While some standards mustof necessity be individualized ? such as recording an entry in an OSHAlog, fitting a respirator to an employee, and determining an employee?sblood lead level ? standards of general prescription, such as therespirator standard cited here, do not by their plain terms provide fairnotice that an employer may be penalized on a per-employee basis. As Ho argues, section 1926.1101(h)(1) imposes differentrequirements for the provision and use of respirators depending upon thenature of the asbestos work being conducted. To the extent the standarddifferentiates between employees, it does so based on the nature of the\/hazard\/ to which the employees are exposed and not on personalcharacteristics peculiar to the employees as individuals. Section1926.1101(h)(1)(i) does not require any special unique testing of theemployee ? it simply requires that employers provide respirators andensure their use during Class I asbestos work, addressing protection ofthe employees in the group performing the specified work as a whole. The language of this section requiring that employers ?ensure that theyare used,? merely goes to establishing noncompliance with the terms ofthe standard ? in this case, it is undisputed that there wasnoncompliance with the standard.^[6] However, the plainlanguage of the standard addresses employees in the aggregate, notindividually. To prove a violation of the standard, it makes nodifference whether one or all eleven of Ho?s employees were not providedor using respirators. Ho?s noncompliance with section 1926.1101(h)(1)(i) stemsdirectly from a single act ? his failure to provide the appropriaterespiratory protection for the type of work performed by this group ofemployees. \/See Hartford Roofing\/, 17 BNA OSHC at 1365, 1995-97 CCHOSHD at p. 42,935 (where a single practice method or condition affectsmultiple employees, there can be only one violation of the standard). Accordingly, we find that the cited respiratory protection standard forasbestos, section 1926.1101(h)(1)(i), is stated in general performanceterms which refer to a single course of conduct rather than anindividualized duty, and therefore does not provide fair notice to anemployer that it may be penalized on a per-employee basis for violationsof the standard. For these reasons, we see no basis for citingviolations of section 1926.1101(h)(1)(i) on a per-employee basis.\/2. The per employee training charges\/ Items 17 through 27 allege per-employee violations of theemployee training provisions of the asbestos standard set forth at 29C.F.R. ? 1926.1101(k)(9)(i) and (k)(9)(viii). These standards provide:(k) \/Communication of hazards\/?.(9) \/Employee Information and Training. \/(i) The employer shall at no cost to the employee, institute a trainingprogram for all employees who are likely to be exposed in excess of aPEL and for all employees who perform Class I through IV asbestosoperations, and shall insure their participation in the program.?. (viii) The training program shall be conducted in a manner that theemployee is able to understand. In addition to the content required byprovisions in paragraph (k)(9)(iii) through (vi) of this section theemployer shall insure that each such employee is informed of the following:?.Item 17 of the citation is typical of the eleven items cited under theseprovisions:^[7] _Citation 2 Item 17a_ Type of Violation: Willful29 C.F.R. 1926.1101(k)(9)(i): The employer did not institute a trainingprogram for all employees who performed Class I through Class IVasbestos operations:(a) at 11101 Bellaire Boulevard, Houston, Texas. During the removal ofasbestos-containing materials (ACM) on or before March 11, 1998, atraining program was not instituted for Martin Bernal.Date By Which Must be Abated: Corrected During InspectionProposed Penalty: $49,000.00 _Citation 2 Item 17b_ Type of Violation: Willful29 C.F.R. 1926.1101(k)(9)(viii): The employer did not ensure that eachemployee was informed of recognizing asbestos, including the requirementin paragraph (k)(1) of this section to presume that certain buildingmaterials contain asbestos; the health effects associated with asbestosexposure; the relationship between smoking and asbestos in producinglung cancer; the nature of operations that could result in exposure toasbestos, the importance of necessary protective controls to minimizeexposure including, as applicable, engineering controls, work practices,respirators, housekeeping procedures, hygiene facilities, protectiveclothing, decontamination procedures, emergency procedures, and anynecessary instruction in the use of these controls and procedures; thepurpose, the proper use, fitting instructions, and limitations ofrespirators as required by 29 C.F.R. 1910.134; the appropriate workpractices for performing the asbestos job; medical surveillance programrequirements; the content of this standard including appendices; thenames, addresses and phone numbers of public health organizations whichprovide information, materials and\/or conduct programs concerningsmoking cessation; and the requirements for posting signs and affixinglabels and the meaning of the required legends for such signs and labels:(a) at 11101 Bellaire Boulevard, Houston, Texas, during the removal ofasbestos-containing materials (ACM) on or before March 11, 1998, thisinformation was not provided to Martin Bernal.Date By Which Violation Must be Abated: Corrected During InspectionIn his decision, the judge concluded that a training program would notabate all eleven alleged violations. He acknowledged, however, that asingle training program would be sufficient if all eleven of the citedemployees attended. The Secretary, in her brief to us, argues: ?Theprovisions state that the instruction shall be directed to theindividual employee. The provisions also require that the employer makeindividualized determination of the class of work to be performed by theemployee.?^[8] ^ We discern no basis for citing on a per-employee basis under the citedstandard. The language of section 1926.1101(k)(9)(i) clearly refers tothe obligation to have ?a training program? ? one program ? for ?allemployees? who fall into the covered categories. Thus, the focus ofthe standard is on the employer?s duty to train and impart informationto employees generally, and the workplace condition to which thestandard is directed is the absence of the appropriate trainingprogram.^[9] Contrary to the Secretary?s contention, the mereuse of the terminology ?each such employee? under (k)(9)(viii) does notdemonstrate that these provisions define the relevant workplaceconditions in terms of exposure of individual employees. \/See Secretaryv. Arcadian Corp.\/, 110 F.3d 1192, 1198 (5th Cir. 1997) (the phrase?each of his employees? in the Act?s general duty clause is an inclusiveexpression which ?means that an employer?s duty extends to allemployees, regardless of their individual susceptibilities?).Like the general respiratory standard, the training standard is statedin performance terms. Indeed, that is precisely how the Secretarycharacterizes the standard in its preamble:By stating the training requirement in performance-oriented terms, thestandard gives each employer flexibility in designing a training coursesuited to its operation while assuring that each employee receivestraining that covers all of the asbestos-related tasks that employeeperforms.61 Fed. Reg. 43,454, 43,455 (August 23, 1996). The word ?each? as usedin the training provisions is used in the sense of \/inclusiveness \/andnot in the sense of ?per employee.? We note also that the 1994amendments to this standard essentially carried over the requirement ofthe 1986 standard. Indeed, the language used in section1926.1101(k)(9)(viii) is almost precisely the language used in section1926.58(k)(3)(iii)(1986).^[10] ^Our conclusion that the training standard is written in inclusive termsis supported by other statements made by the Secretary, including OSHAinstruction CPL 2-2.63, \/Inspection Procedures for Occupational Exposureto Asbestos\/ (1996). This instruction includes appendices that provideguidelines and clarifications relating to specific provisions of thestandard. For example, Appendix B refers to employees collectivelyrather than individually: Training is to be provided:?.(2) To all employees exposed at or above the PEL.(3) To all employees who perform Class I through Class VI asbestosoperations.?.\/See \/Appendix B to CPL 2-2.63\/. \/The appendix also states that Class Iasbestos operations training is to be equivalent in ?curriculum,training and length? to asbestos training requirements specified by theEnvironmental Protection Agency and should take place over the course offour days. \/Id.\/ (citing 40 C.F.R. part 763, subpart E, appendix C). All of these requirements are directed to the content of the program,not the individual employee. Appendix B also describes the requirements of paragraph(viii) in terms of content. Under the heading ?Unclassified AsbestosOperations,? ? operations where employees are exposed above the PEL ?the instruction states that training ?shall meet the requirements of(k)(9)(viii),? the provisions of which spell out the training coursecontent.^[11] \/Id.\/ Accordingly, we find that the trainingprovisions of the asbestos standard, sections 1926.1101(k)(9)(i) and(k)(9)(viii), are stated in general performance terms which refer toemployees collectively rather than individually, and therefore do notprovide fair notice to an employer that it may be penalized on aper-employee basis for violations of the standard. For these reasons,we see no basis for citing violations of sections 1926.1101(k)(9)(i) and(k)(9)(viii) on a per-employee basis.^[12] D. Deference ConsiderationsThough not expressly argued by the Secretary on review, we note that theSecretary has previously claimed that the Commission must defer to herinterpretation of standards, such as those cited here, as defining theunit of prosecution on a per-employee basis. \/See, e.g., HartfordRoofing\/, 17 BNA OSHC at 1366, 1995-97 CCH OSHD at p. 42,936. In\/Martin v. OSHRC (CF & I Steel Corp.)\/, 499 U.S. 144, 157-158 (1991)(?\/CF & I\/?), the Supreme Court held that the Commission and reviewingcourts must defer to the Secretary?s interpretation of an ambiguousregulation only if it is reasonable, taking into account ?whether theSecretary has consistently applied the interpretation embodied in thecitation,? ?the adequacy of notice to regulated parties,? and ?thequality of the Secretary?s elaboration of pertinent policyconsiderations.? \/See Ehlert v. United States\/, 402 U.S. 99, 105(1971); 5 U.S.C. ? 706(2)(A). To the extent that our conclusion in thiscase implicitly raises the issue of deference, we believe that thefollowing considerations would make it difficult, if not impossible, forus to find that the Secretary?s interpretation of these standards isreasonable. First, we note that the Secretary?s theory of what actuallyconstitutes an individual violation under the standards cited hereremains uncertain even on review. In her opening brief, the Secretaryinitially refers to the violations in question as ?per employee,? butlater claims with regard to the alleged training violations that ?[e]achtime a worker began working without being trained, there would have beena separate violation of the training provisions.?^[13] Thissame argument is repeated in her reply brief, but extended to includethe alleged respiratory protection violations, \/i.e.\/ that a separateviolation occurred ?each time an employee began work without respiratoryprotection.? The Commission is left to wonder whether the training andrespirator allegations are cited per employee, per-day, or on some otherbasis? For example, does the Secretary contend that a violationoccurred each time an employee returned to work after a break? TheSecretary provides no explanation for this inconsistent interpretation. \/See CF & I,\/ 499 U.S. at 157; \/Unarco Comm. Prods.\/, 16 BNA OSHC 1499,1502-3, 1993-95 CCH OSHD ? 30,294, p. 41,732 (No. 89-1555, 1993).As indicated in our analysis, we fail to see how an employer, much lessa conscientious one who attempts to comply with OSHA?s regulations, canbe said to have notice merely from the language of the cited standardsthat its failures to provide respirators and the requisite training canresult in per-day, per-employee violations. The Secretary has it withinher authority to draft standards in such a fashion so as to prescribeindividual units of prosecution or penalty units, placing the regulatedcommunity on notice that violations can be cited on an individualizedbasis. As the Fifth Circuit observed in \/Diamond Roofing v. OSHR\/C, 528F.2d 645 (5th Cir. 1976):An employer?is entitled to fair notice in dealing with his government. Like other statutes and regulations which allow monetary penaltiesagainst those who violate them, an occupational safety and healthstandard must give an employer fair warning of the conduct it prohibitsor requires, and it must provide a reasonably clear standard ofculpability to circumscribe the discretion of the enforcing authorityand its agents.\/Id.\/ at 649. Where a standard does not provide employers with fairnotice, the Secretary has the authority to amend it. As the EleventhCircuit stated in\/Georgia Pacific Corp. v. OSHRC\/, 25 F.3d 999 (11thCir. 1994):The Secretary, as enforcer of the Act, retains the responsibility tostate with ascertainable certainty what is meant by the standards shehas promulgated?.[A regulation must] give sufficient guidance to thosewho enforce OSHA penalties, to those who are subject to civil penalties,or to those courts who may be charged to interpret and apply thestandards. When a regulation fails [to do this]?, the Secretary shouldremedy the situation by promulgating a clearer regulation than forcingthe judiciary to press the limits of judicial construction.\/Id.\/ at 1005-06 (citations omitted). Our decisions subsequent to\/Caterpillar \/and \/Hartford Roofing\/, including \/Kasper Wire Works\/ and\/Sanders Lead\/, affirm this course of action.Moreover, the Secretary?s own policy set forth in her complianceinstruction for violation-by-violation penalties indicates that she willinterpret certain standards, such as those cited here, as permittingper-employee violations in cases involving ?bad actor? employers, but inall other cases, she will cite the same conduct under the same standardsas single violations that treat all exposed employees as a group. Inother words, the Secretary advances what she calls different butdiametrically opposed ?reasonable? interpretations of the same standard.This is wholly inconsistent with her contention that such standardsprescribe a per-employee duty. Finally, we note that the stated purpose of the Secretary?segregious\/willful penalty policy is to increase proposed penalties.Proposed penalties, however, are just that, proposals. Under section 10of the Act, 29 USC ? 659, the Secretary has only limited authorityconcerning imposition of civil penalties.^[14] The Commissionhas the express grant of the \/sole\/ authority to determine \/penalties\/. Section 17(j) of the Act, 29 U.S.C. ? 666(j). \/See alsoWheeling-Pittsburgh Steel Corp.\/, 16 BNA OSHC 1780, 1784, 1993-95 CCHOSHD ? 30,445, p. 42,040 (No. 91-2524, 1994). Congressional intent isthus plainly manifested that the Commission shall be the final arbiterof penalties when the Secretary?s proposals are contested. Thus, theCommission is mandated by section 10(c) of the Act to issue an order,based upon findings of facts, affirming, modifying, or vacating theSecretary?s proposed penalty.^[15] ^ The Secretary?s proposedpenalty is merely advisory, and it is the Secretary?s burden toestablish the facts supporting her proposed penalties. \/Hern IronWorks, Inc.\/, 16 BNA OSHC 1619, 1621-22, 1993-95 CCH OSHD ? 30,363, pp.41,881-82 (No. 88-1962, 1994) (\/quoting Brennan v. OSRHC (InterstateGlass Co.)\/, 487 F.2d 438, 442 (8th Cir. 1973)). Upon consideration ofthe proven facts, the Commission determines the appropriate penalties\/de novo\/.^[16] ^\/ See, e.g., California Stevedore & BallastCo. v. OSHRC\/, 517 F.2d 986 (9th Cir. 1975); \/Brennan v. OSHRC\/, 487F.2d 438, 441 (8th Cir. 1973). Accordingly,we do not give deference tothe Secretary?s penalty directives because we do not view them to be anexercise of the Secretary?s delegated lawmaking authority.^[17] *E. Conclusion*For all the reasons stated above, we affirm one violation of the Act forRespondent?s failure to comply with ? 1926.1101(h)(i) and one violationof the Act for Respondent?s failure to comply with ? 1926.1101(k)(9). Asset forth below in our penalty discussion, we assess the statutorymaximum penalty of $70,000 for each of these violations.^[18] ^ WILLFULNESS OF THE GENERAL DUTY CLAUSE VIOLATION After the workers completed the asbestos removal that theyhad been doing at night, Ho?s next work assignment was to have thebuilding washed. Although Ho declined to make fresh water available tothe workers, he had been informed that either the sprinkler system orfire hydrants had not been cut off and thus remained available for use.However, Ho evidently was not aware of where access to the water supplymight be obtained. On March 11, at Ho?s direction, Tate looked aroundthe building and came upon two valves that he thought might be waterlines. When Ho paged Tate to discuss the valves that Tate had located,Ho instructed Tate to open one of the lines to see what itcontained.^[19] ^When Tate loosened the valve, it popped openand began venting gas under pressure. Tate asked two of the workers tohelp him plug the line and then went to move his van that was nearby.When Tate started the engine on his van, the gas ignited causing a fireand explosion, which injured him and the two other workers.^[20] In docket no. 98-1646, the Secretary alleged a willfulviolation of section 5(a)(1) of the Act in that an employee was requiredto open a pipe of unknown content. Respondents stipulated at the hearingthat the failure to identify a gas line constituted a recognized hazardunder section 5(a)(1).^[21] ^ However, the judge declined tofind the violation willful on the ground that the Secretary had notintroduced evidence to show that Ho had a heightened awareness thatinstructing Tate to open the pipe might be hazardous, or that Hoconsciously disregarded a known safety hazard. We agree. In order to establish that a violation is willful, theSecretary must show that it was committed voluntarily with anintentional disregard of the Act or plain indifference to employeesafety.\/Sal Masonry Contrac., Inc.\/, 15 BNA OSHC 1609, 1611, 1991-93 CCHOSHD ? 29,673, p. 40,208 (No. 87-2007, 1992). The Secretary does notcontend that there is direct evidence to show Ho?s state of mindspecifically with respect to his instruction to Tate to open the pipe,but she contends that the violation nevertheless should be found willfulbecause Ho generally manifested a disregard of or indifference toemployee safety by the manner in which he had the asbestos removal workconducted. Notwithstanding the Secretary?s argument, the authoritiesshe cites to us are all cases in which there is a factual record as tothe employer?s state of mind \/with regard to the specific circumstancesof the violation in issue\/. \/See, e.g.\/, \/Central Soya de Puerto Rico v.Secretary of Labor\/, 653 F.2d 38, 39-40 (1st Cir. 1981) (repeatedwarnings of the defective floor in question). In determining anemployer?s subjective state of mind, the employer?s attitude towardcompliance can be evaluated only by the external objective evidence andtestimony. \/Brock v. Morello Bros. Construction\/, 809 F.2d 161, 165 (1stCir. 1987). The Commission has held that an employer can manifest ageneral good faith but nevertheless be found in willful violation basedon the particular circumstances relating to the violation in question. \/See\/ \/Aviation Constructors, Inc.\/, 18 BNA OSHC 1917, 1923-24, 1999 CCHOSHD ? 31,933, pp. 47,377-78 (No. 96-593, 1999), and cases citedtherein. However, we find no authority, and none is cited to us, holdingthe converse ? that violations committed by a ?bad actor,? which is afitting description of the Respondent in this case, can be presumedwillful absent evidence specifically addressing the employer?s state ofmind with \/respect to the cited conditions at issue\/.^[22] Furthermore, it is well-settled that the Secretary has amore stringent and more difficult burden of proof to show willfulnesswhere the employer is charged with a violation of section 5(a)(1) thanshe does where failure to comply with a specific standard is concerned.In section 5(a)(1) violations, ?a more concrete evidentiary showing isrequired.? \/Kus-Tum Builders, Inc.\/, 10 BNA OSHC 1128, 1131, 1981 CCHOSHD ? 25,738, p. 32,106 (No. 76-2644, 1981). The Secretary must notonly show that the employer had knowledge that a hazardous conditionexisted but must also adduce evidence that the employer intentionallydisregarded or was indifferent to employee safety with respect to thehazard in question. \/General Dynamics Land Sys. Div., Inc.\/, 15 BNA OSHC1275, 1287, 1991-93 CCH OSHD ? 29,467, p. 39,759 (No. 83-1293, 1991),\/aff?d without published opinion\/, 985 F.2d 560 (6th Cir. 1993). \/Seealso George Campbell Painting Corp.\/, 17 BNA OSHC 1979, 1982-83, 1995-97CCH OSHD ? 31,293, pp. 43,979-80 (No. 93-0984, 1997) (finding section5(a)(1) violation not willful where evidence failed to show eitheremployer?s actual knowledge of the hazard or intentional disregard of orindifference to safety). Plainly, the Secretary?s argument in thesecases runs counter to this well-settled precedent, and she presents nobasis for disregarding our established case law. Accordingly, weconclude that the judge properly found the Secretary failed to provethat the violation of section 5(a)(1) was willful in nature as alleged. PENALTIES We turn now to the assessment of appropriate penalties.Under section 17(j) of the Act, 29 U.S.C. ? 666(j), penalties aredetermined based on the size of the employer?s business, the gravity ofthe violations, the employer?s good faith, and the employer?s history ofprevious violations. \/S & G Packaging Co.\/, 19 BNA OSHC 1503, 1509, 2001CCH OSHD ? 32,401, p. 49,893 (No. 98-1107, 2001). The statutory maximumcivil penalty is $70,000 for a willful violation and $7,000 for bothserious and other than serious violations. 29 U.S.C. ? 666(a)-(c). In addition to the willful violations, the Secretary chargedRespondents with eight serious violations in docket no. 98-1645, andfour serious and one other than serious violation in docket no. 98-1646.Although the Secretary considered the violations, particularly thoseinvolving provisions of the asbestos standard, to be of high gravity,she also determined that Respondents had no prior history of violations,and she regarded them as small employers based on the aggregate numberof persons employed both by Ho and the cited corporations ?approximately 60 individuals. She therefore proposed penalties ? $4,900for each serious violation and $49,000 for each willful violation ?considerably below the statutory maximum for all the violations,including those of the asbestos standard. The judge in turn concludedthat the Secretary had overstated the gravity of the violations, andtherefore, assessed somewhat lower penalties ranging from $1,900 for theserious violations and $39,000 for each willful violation, except in thecase of the other than serious violation of the reporting provision atsection 1904.8, for which the judgeassessed the Secretary?s proposed penalty of $700. We conclude, forthose violations that we affirm, that both the judge?s assessments andthe Secretary?s proposals are inappropriately low. Under the Act, the Commission has the discretion to assessthe penalties it finds appropriate. Section 17(j), 29 U.S.C. ? 666(j). In doing so, the Commission may review the judge?s assessment \/de novo\/.\/Quality Stamping Prods. Co.\/, 16 BNA OSHC 1927, 1993-95 CCH OSHD? 30,516 (No. 91-414, 1994). The Commission, furthermore, may, whereappropriate, assess a penalty higher than that proposed by theSecretary. \/R.G. Friday Masonry, Inc.\/, 17 BNA OSHC 1070, 1075, 1993-95CCH OSHD ? 30,682, p. 42,581 (Nos. 91-1873, 1995 (consolidated)).Although gravity normally is the most significant consideration, eachfactor can be accorded the weight that is reasonable in thecircumstances. \/Merchant?s Masonry, Inc.\/, 17 BNA OSHC 1005, 1006,1993-95 CCH OSHD ? 30,635, p. 42,444 (No. 92-424, 1994). In these cases, we conclude that Ho?s extreme lack of goodfaith warrants assessment of the statutory maximum penalty. Ho?sappalling lack of concern for the health and safety of his employees iswell demonstrated by the facts of record. Ho?s lack of good faith goesbeyond the obvious ? he hired inexperienced and untrained employees andknowingly exposed them to a hazardous substance without providing any ofthe protective measures required by the standards, and he continued todo so even after he was informed that his activities were in violationof local codes and was instructed to stop work. Ho also took advantageof foreign workers who were in the country illegally and therefore werenot in a position to exercise their statutory right to a safe workplace.Equally, if not more, significant is the fact that Ho concealed hisasbestos removal operation by working at night, behind locked gates withthe work crew confined, and conducted and completed the work in thissecretive manner at the same time that he was purportedly negotiating acontract with a qualified asbestos abatement contractor as the cityinspector had directed. We simply cannot excuse the attitude of anemployer that treats matters of health and safety as a game with theapparent objective of circumventing the relevant regulatory authorities.For these reasons, we assess the statutory maximum penalty for eachviolation. \/See Hern Iron Works, Inc.\/, 16 BNA OSHC 1619, 1624-25,1993-95 CCH OSHD ? 30,363, pp. 41,884-85 (No. 88-1962, 1994) (based onthe employer?s lack of good faith, Commission increases the penaltyabove that assessed by the judge). ORDER For the reasons stated, the citations are vacated as toRespondents Ho Ho Ho Express and Houston Fruitland. As to Respondent Ho,we order the following disposition: in docket no. 98-1645, items 1, 2,3, 4, 16, and 28 of citation no. 2 are affirmed as willful violationsand each is assessed a penalty of $70,000. We affirm one willfulviolation of former section 1926.1101(h)(1)(i) for which a penalty of$70,000 is assessed. We also affirm one violation of section1926.1101(k)(9)(i) and (k)(9)(viii), for which a penalty of $70,000 isassessed. Items 1 through 8 of citation no. 1 are affirmed as seriousviolations, and a penalty of $7000 is assessed for each item. In docketno. 98-1646, citation no. 2, item 1 is affirmed as a serious but notwillful violation, and a penalty of $7000 is assessed. Items 1 through 4of citation no. 1 are affirmed as serious violations, and a penalty of$7000 is assessed for each item. Citation no. 3 alleging an other thanserious violation is affirmed and a penalty of $7000 is assessed. Thetotal penalty assessed against Ho is $658,000. So ORDERED. _\/s\/ _W. Scott RailtonChairman _\/s\/ _ James M. StephensCommissionerDated: _September 29, 2003_ ————————————————————————ROGERS, Commissioner, concurring and dissenting:I concur with the majority in finding the Act applicable to the workperformed by Eric Ho, and in finding that the Secretary has not met herburden of proof to hold the respondent corporations, Ho Ho Ho Expressand Houston Fruitland, liable in this proceeding. I also agree that theSecretary has not established that the violation of Section 5(a)(1) waswillful. I must respectfully dissent, however, from the majority?sdecision today to overturn Judge Barkley?s well-reasoned opinion thatthe Secretary properly cited the violations of the respiratoryprotection standard, 1926.1101(h)(1)(i), and the employee trainingstandard, 1926.1101(k)(9)(i) and (viii), on a per employee basis.^[23]In my view, this disposition constitutes a radical departurefrom settled Commission and court precedent recognizing the Secretary?sauthority to issue multiple citations for violations of the samestandard where the standard can reasonably be read to permit multipleunits of violation.The conduct at issue here is among the worst I have seen in my tenure onthe Commission. Eric Ho knowingly and willfully directed elevenemployees hired for a building renovation project ? apparentlyundocumented workers from Mexico with little or no English proficiency ?to remove asbestos-containing materials without providing them effectiveprotective equipment. None of the eleven workers were providedappropriate respirators or received any training. Neither were theworkers informed of the presence of asbestos nor apprised of itsdangerous carcinogenic properties. Moreover, Ho persisted in exposingthese workers to the risk of fatal lung disease even after a citybuilding inspector shut down the worksite, at which time he begansecretly operating at night behind locked gates. In addition to the OSHAct citations here,^[24] Ho?s actions have led to a Federalcriminal conviction under the Clean Air Act and administrativeproceedings by the Texas Department of Health.The Review Commission and the Secretary have specific roles to playunder the ?split-enforcement? model of the Act. The Commission has theauthority to adjudicate various disputes under the Act, includingdisputes over the Secretary?s legal authority to take variousenforcement actions. The Secretary enforces the Act and, as such, ischarged with making prosecutorial decisions within the bounds of herlegal authority. By their decision in this case, however, my colleagueshave exceeded the scope of the Commission?s authority. In seeking todisallow the Secretary of Labor?s lawful exercise of her prosecutorialdiscretion to issue per employee citations for Eric Ho?s flagrant andegregious violations of federal law, the Commission runs afoul of thestatutory scheme.The Supreme Court has ruled that ?enforcement of the Act is the soleresponsibility of the Secretary? and that ?only the Secretary has theauthority to determine if a citation should be issued to an employer forunsafe working conditions. . . .? \/Cuyahoga Valley R. Co. v. UnitedTransp. Union\/, 474 U.S. 3, 6-7 (1985) (citations omitted). Incontrast, the Court found that ?[t]he Commission?s function is to act asa neutral arbiter? and noted that for ?the Commission to make bothprosecutorial decisions and to serve as the adjudicator of the dispute?would be ?a commingling of roles that Congress did not intend.? \/Id\/.at 7. The Court later explained that ?Congress intended to delegate tothe Commission the type of nonpolicymaking adjudicatory powers typicallyexercised by a court in the agency-review context.? \/Martin v. OSHRC(CF&I),\/ 499 U.S. 144, 154 (1991)(?\/CF&I?\/). Thus, while the Secretarypossesses the ?power to render authoritative interpretations of OSH Actregulations,? ?the Commission is authorized to review the Secretary?sinterpretations only for consistency with the regulatory language andfor reasonableness.? \/Id. \/at 152, 154-55.Heretofore, the Commission has addressed per instance and per employeecitation authority in numerous cases, evaluating the Secretary?sexercise of her discretion pursuant to the ?consistency with theregulatory language? and ?reasonableness? guidelines articulated inC\/F&I\/. In \/Caterpillar Inc.\/, 15 BNA OSHC 2153, 1991-93 CCH OSHD? 29,962 (No. 87-0922, 1993)(\/?Caterpillar?)\/, where the Secretaryissued per instance citations for violations of the recordkeepingstandard, the Commission held that the ?test of whether the Act and thecited regulation permits multiple or single units of prosecution iswhether they prohibit individual acts, or a single course of action.?\/Id.\/ at 2172, 1991-93 CCH OSHD at p. 41,005 (citation omitted).Affirming separate violations for each of Caterpillar?s 167 failures torecord, the Commission concluded that a regulation that requires anemployer to ?enter each recordable injury? ?can reasonably be read toinvolve as many violations as there were failures to record. . . .? \/Id.\/at 2173, 1991-93 CCH OSHD at p. 41,006\/. Accord Pepperidge Farm,Inc\/., 17 BNA OSHC 1993, 2001, 1995-97 CCH OSHD ? 31,301, p. 44,011(No.89-0265, 1997) (affirming 176 recordkeeping violations); \/Kaspar WireWorks, Inc.,\/ 18 BNA OSHC 2178, 2185, 2000 CCH OSHD ? 32,134, p. 48,410(No. 90-2775, 2000) (affirming 357 willful recordkeeping violations),\/enf?d\/, 268 F.3d 1123, 1130 (D.C. Cir. 2001) (?the availability of[section 17(a)] penalties is consistent with the general principle thateach violation of a statutory duty exposes the violator to a separatestatutory penalty?).Similarly, in \/Sanders Lead Co.\/, 17 BNA OSHC 1197, 1993-95 CCH OSHD? 30,740 (No. 87-260, 1995)(?\/Sanders Lead?\/), the Commission consideredwhether the Secretary properly cited the employer on a per employeebasis for its failure to comply with a respirator fit-test standard thatrequired employers to ?perform either quantitative or qualitative facefit tests at the time of initial fitting and at least every six monthsthereafter for each employee wearing negative pressure respirators.?\/Id. \/at 1203, 1993-95 CCH OSHD at p. 42,695. Upholding the Secretary?sper employee citations, the Commission found that the ?standard requiresthe evaluation of individual employees? respirators under certain uniquecircumstances peculiar to each employee,? and ?conclude[d] that thelanguage of the respirator fit-test standard permits a per-instanceassessment.? \/Id\/. In addition, in determining that violations of amedical removal protection standard could also be cited separately, theCommission emphasized that it ?is not the single decision by an employernot to remove employees, but the language of the standard that isdeterminative.? \/Id.\/ at 1200, 1993-95 CCH OSHD at p. 42,692.While a divided Commission later rejected the Secretary?s issuance ofper employee citations for a roofing contractor?s violation of aguardrail standard, stating that ?a single practice, method or condition[that] affects multiple employees . . . can be only one violation ofthe standard,? the majority noted that ?[s]ome standards implicate theprotection . . . of individual employees to such an extent that thefailure to have the protection in place for each employee permits theSecretary to cite on a per-instance basis.? \/Hartford Roofing Co\/., 17BNA OSHC 1361, 1365, 1995-97 CCH OSHD ? 30,857, p. 42,935 (No. 92-3855,1995)(?\/Hartford Roofing\/?). The majority cited as an example ofpermissible per instance citations the violation of a standard requiringrespirator use where engineering controls are insufficient, noting that ?[a]s long as employees are working in a contaminated environment, thefailure to provide each of them with appropriate respirators couldconstitute a separate and discrete violation.? \/Id. \/at 1366, 1995-97CCH OSHD at p. 42,937. The Commission explained that the ?condition orpractice at which the standard is directed, within the meaning ofsection 3(8) of the Act? is ?the individual and discrete failure toprovide an employee working within a contaminated environment with aproper respirator.?^[25] \/Id. \/at 1366-67, 1995-97 CCH OSHD atp. 42,937. The Commission also emphasized the Secretary?s discretion,under a standard which allows ?the Secretary to consider each failure tocomply with a standard as a discrete violation,? to either cite thefailures to comply separately or group them ?as if they were oneviolation? for penalty purposes. \/Id.\/ at 1367, 1995-97 CCH OSHD atpp. 42,937-38.In the only case yet to consider multiple citations issued under atraining standard, the Commission stated that the language of a trainingstandard providing that ??[t]he employer shall instruct each employee? ?clearly may be read to permit the Secretary to cite separate violationsbased on the failures to train individual employees.? \/Andrew CatapanoEnterp. Inc.,\/ 17 BNA OSHC 1776, 1780, 1995-97 CCH OSHD ? 31,180,p. 43,607 (No. 90-0050, 1996)(consolidated)(?\/Catapano\/?). TheCommission affirmed but a single citation in \/Catapano\/, however,because the number of citations was based on the number of inspectiondays the same group of untrained employees worked, rather than on thenumber of employees who Catapano failed to train. As the Commissionnoted, ?[o]nly the date changed[–] [a]s far as this record establishes,the employees did not change, and the working conditions and applicableregulations did not change.? \/Id.\/ The Fifth Circuit, in which the casebefore us arises, has also posited that an individual employee may be a?unit of violation? where the ?regulated condition or practice is uniqueto the employee (i.e., failure to train or remove a worker).? \/Reich v.Arcadian Corp.\/, 110 F.3d 1192, 1198-99 (5th Cir. 1997) (affirmingCommission decision rejecting per employee violations of general dutyclause for single hazardous condition) (?\/Arcadian\/?). Here, the Secretary cited Ho for violations of the asbestos standard, 29C.F.R. ? 1926.1101, for failing to provide and ensure the use ofrespirators and to provide required information to each of the elevenemployees. In my view, the numerous detailed and explicit provisions ofthis standard that prescribe individualized employee-specific actionsmake clear that the violations here are ?individual acts? that may beprosecuted on a per employee basis. Under the cited standards, theviolative conditions are the failures to provide respirators to eachemployee (and ensure their use by each employee) and the failures totrain each employee, with each failure constituting a discrete violativeinstance.^[26] The respirator provision that Eric Ho violated specifically requires theemployer to ?provide respirators, and ensure that they are used, whererequired by this section.? 29 C.F.R. ? 1926.1101(h)(1). The plainlanguage of this standard imposed a duty on the employer both to providea respirator to each of the eleven exposed employees and to ensure therespirator?s use by each of the eleven exposed employees. The employercould not comply by merely providing a few respirators or ensuring thatonly \/some\/ of the employees use respirators. Rather, the standardimposes on the employer an individualized duty that runs to eachemployee. \/See Kaspar Wire Works, Inc. v. Secretary of Labor\/, 268 F.3d1123, 1130 (D.C. Cir. 2001) (?the availability of [section 17(a)]penalties is consistent with the general principle that each violationof a statutory duty exposes the violator to a separate statutorypenalty?). These requirements, as noted by the Commission in \/HartfordRoofing, \/provide for the type of individualized protection that wouldauthorize per employee citations. \/Hartford Roofing\/, 17 BNA OSHC at1366, 1995-97 CCH OSHD at p. 42,937. Moreover, the requirements to ?provide respirators, and ensure that theyare used? do not exist in a vacuum. These requirements – and the natureof the duty they impose – must be viewed in the context of the asbestosrespiratory protection standard as a whole. For example, the standardgoes on to require, in section 1926.1101(h)(4), fit testing. The fittesting required under this standard is analogous to that found by theCommission in \/Sanders Lead \/to have been properly cited on a peremployee basis, as it ?requires the evaluation of individual employees?respirators under certain unique circumstances peculiar to eachemployee.? \/Sanders Lead\/, 17 BNA OSHC at 1203, 1993-95 CCH OSHD atp. 42,695. Furthermore, the standard prescribes a list of respirators from whichemployers must choose based on the concentration of asbestos exposure,but limits the employer?s options where an individual employee chooses apowered air-purifying respirator instead of a negative-pressurerespirator. Section 1926.1101(h)(2). The asbestos standard alsorequires institution of a respirator program and provides that ?[n]oemployee shall be assigned to tasks requiring the use of respirators if,based on his or her most recent examination, an examining physiciandetermines that the employee will be unable to function normally wearinga respirator, or that the safety or health of the employee or of otheremployees will be impaired by the use of a respirator.? Section1910.1101(h)(3)(iv). Under this scheme, respiratory protection isdependent on consideration of individual employee health conditions andchoices ? the antithesis of a ?one size fits all? approach. Accordingly, no single act of abatement could cure the deficiencieshere. Proper abatement would have required that Eric Ho evaluate thehealth condition and personal preferences of each of his elevenemployees in order to determine the proper respirator protection thatshould have been provided to each of them. In any event, one respiratorwould not suffice for compliance; eleven were required.In light of these detailed employee-specific provisions, it strainscredulity for the majority to claim ?no basis? to read the standard asimposing ?individualized dut[ies].?^[27] It is one thing forthe majority to disregard \/dicta\/ in \/Hartford Roofing\/; it is quiteanother to ignore binding Commission precedent in \/Sanders Lead \/and toeffectively overrule \/Caterpillar\/.Of course, even if the standard?s wording did not so clearly requireindividualized respiratory protection, we must defer to the Secretary?sinterpretation that individualized protection is required unless thatinterpretation is not reasonable.^[28] \/CF&I,\/ 499 U.S. at154-55. The Secretary here interprets her regulation as imposingindividualized duties running to each employee, an interpretation thatis at least \/consistent\/ with the standard?s wording and with theCommission?s analysis in \/Hartford Roofing \/(which predates both theviolative conduct and the citation in this case). In thesecircumstances the Secretary?s interpretation is plainly reasonable and,accordingly, one to which the Commission must defer.The majority also argues that Ho somehow lacked notice that therespirator standard could be cited on a per-employee basis, an argumentthat Ho himself does not make before us.^[29] However, in myview, there is no doubt that Ho was provided fair notice that therespirator standard was susceptible to per-employee or per-instancecitation through Commission decisions such as \/Caterpillar, SandersLead\/ and \/Hartford\/ \/Roofing\/. \/See\/ \/Corbesco Inc. v. Secretary ofLabor\/, 926 F.2d 422, 428 (5th Cir. 1991) (notice is provided throughCommission decisions). Additionally, contrary to the majority?s claim,the Secretary?s 1990 directive on the egregious willful policy\/specifically\/ discusses the asbestos in general industry respiratoryprotection standard, 29 C.F.R. ? 1910.1001(g)(1) ? whose operativelanguage, both at the time of the 1990 directive and at the time of theviolative conduct, was\/identical\/ to the cited asbestos in constructionrespiratory protection standard – in a context which makes clear thatthe Secretary views that standard (and thus the cited standard) assusceptible to per-employee citation. \/CPL 2.80\/, sectionH.3.d.(2)(b). Certainly, in light of these decisions and \/CPL 2.80\/, Hohad sufficient fair notice that the standard here could be so cited suchthat if he had any doubt, he ?had a duty to at least inquire. . . .? \/See\/ \/Corbesco\/, 926 F.2d at 428.Even if requisite notice were somehow found to be lacking for theSecretary?s reasonable interpretation in \/this\/ case, the interpretationwould apply prospectively, holding the current respondent harmless forthe lack of notice. \/See\/ \/Diebold v. Marshall\/, 585 F.2d 1327, 1338(6th Cir. 1978).^[30] Ho was also cited under 29 C.F.R. ? 1926.1101(k)(9)(i) and (viii), withthe two provisions grouped under one separate item, for his failure toprovide required information to each of the eleven employees. Theprovision at subsection (i) requires the employer to institute atraining program for all employees in certain categories and, ofparticular importance, to ?ensure their participation in the program.? It is not enough for the employer just to institute a training program.The employer has a discrete and affirmative obligation to determinewhich individual employees meet the criteria in the standard and thenensure that each individual receives the required training. Theemployer?s duty thus runs to each employee. Moreover, subsection (viii)further requires that the training program ?be conducted in a mannerthat the employee is able to understand? and requires the employer to?ensure that each such employee is informed? of a number of specifictopics. These duties are unequivocally directed separately to eachaffected employee.^[31] Despite these explicit mandates, the majority inexplicably fails toperceive the individualized nature of the duty. Contending that the dutyowed under the asbestos training standard is not focused on individualemployee protection, my colleagues refer to the August 23, 1996amendment to section 1926.1101(k)(9), where the Secretary explained that:By stating the training requirement in performance-oriented terms, thestandard gives each employer flexibility in designing a training coursesuited to its operation while assuring that each employee receivestraining that covers all of the asbestos-related tasks that employeeperforms.61 Fed. Reg. 43,454, 43,455 (August 23, 1996). Earlier in the preamble,the Secretary emphasized the individualized nature of the employer?sobligation:Proper training is vital to assure that workers who remove or disturbasbestos-containing materials are aware of the hazards of asbestosexposure and understand the requirements of the standard that, iffollowed, will minimize such exposure. The standard?s trainingprovisions are designed to assure that \/each employee\/ receives a degreeof training appropriate to the nature of the asbestos-related tasks\/thatemployee performs\/.\/Id.\/(emphasis added). My colleagues argue that the standard is ?statedin general performance terms which refer to employees collectivelyrather than individually. . . .? But without first analyzing the tasksof each employee, the employer simply cannot determine what training isappropriate \/for that employee\/.^[32] Moreover, the Secretaryreiterated that the training provisions were designed to ?assure? that?each employee? received appropriate training. Here again, theemployer?s duty is employee-specific.^[33] Furthermore, the Secretary goes on to explain that ?all training must beconducted in a manner that is comprehensible to the employee . . . [–][a] worker?s ability to obtain a timely response to questions he or shemay have about the content of the training is also a key to workercomprehension.? \/Id.\/ This focus on the individual employee and theneed to ensure that each worker has the opportunity to have his or herquestions answered underscores the recognition that without adequatetraining, an individual employee is unable to effectively protect him orherself from workplace hazards. This focus also underscores the clearmandate of this standard as one that prescribes ?individual acts.? For,as with the respirator violation, no single act of abatement could curethe full training deficiencies here. Proper abatement requires elevenseparate acts tailored to each employee ? at a minimum by ensuring eachemployee?s participation in any group training. In light of thesedetailed employee-specific provisions establishing duties that run fromthe employer to each individual employee, it is incredible that mycolleagues claim to find nothing in the language of the standard torequire consideration of any factors ?unique to individual employees.?Even if the wording of the training standard did not plainly lead to theconclusion that the Secretary could cite on a per employee basis, wemust defer to the Secretary?s contention that the standard supports thatinterpretation if it is reasonable. The Secretary here interprets hertraining standard as imposing individualized duties running to eachemployee. Her interpretation is consistent with both the FifthCircuit?s analysis in\/Arcadian\/ and the Commission?s analysis in\/Catapano\/ (which both predate both the violative conduct and thecitation in this case), where the court viewed a failure to train as acondition or practice ?unique to the employee? and the Commission vieweda training standard as subject to per employee citation.^[34] In these circumstances, it is difficult to imagine how the standardcould not ?reasonably be read to involve as many violations as therewere failures to? provide training.^[35] \/See Caterpillar\/,15 BNA OSHC\/\/at 2173, 1991-93 CCH OSHD at p. 41,006.In light of established Commission and court precedent, I simply cannotfathom my colleagues? conclusion here that the Secretary lacks theauthority to issue per employee citations for Ho?s violations of thecited respirator and training standards. Each of the standards requiresthe employer to perform duties specifically for the benefit of eachemployee, the satisfaction of which for any one employee would donothing for the others. Surely, at a minimum, the language and intent ofthese standards \/reasonably\/ can be read to prohibit individual acts. By ignoring this truth, my colleagues are implicitly overruling\/Caterpillar\/ and \/Sanders Lead\/. In so doing, they upset the balancebetween the Secretary and the Commission so carefully drawn by the Courtin \/CF&I\/.^[36] Accordingly, because I believe we must abideby clear and well-developed precedent, and becauseI see no valid basis upon which to deprive the Secretary of herauthority to effectively enforce the Act, I vigorously dissent. _\/s\/ _Thomasina V. RogersCommissioner Date: _September 29, 2003__ __ __ __ __ __ __ __ ___ __— SECRETARY OF LABOR,\t Complainant,\t v.\t OSHRC DOCKET NO. 98-1645 and 98-1646 (CONSOLIDATED) ERIC K. HO individually, d\/b\/a HO HO HO EXPRESS, HOUSTON FRUITLAND, HOHO HO EXPRESS, INC. and HOUSTON FRUITLAND, INC. and its successors,\t Respondent.\t APPEARANCES: For the Complainant:Mary Schopmeyer, Esq., Suzanne Dunne, Esq., Office of the Solicitor,Department of Labor, Dallas, Texas For the Respondent: Tom M. Davis, Jr., Esq., Rhett Phares, Esq., Davis & Shank, Houston,Texas; Lee Hamel, Esq., Houston, Texas Before: Administrative Law Judge: James H. Barkley *_DECISIONAND ORDER_* This proceeding arises under the Occupational Safety and Health Act of1970 (29 U.S.C. Section 651 \/et seq.\/; hereafter called the AAct@).The Secretary maintains that Respondents, Eric K. Ho individually, d\/b\/aHo Ho Ho Express, Houston Fruitland, Ho Ho Ho Express, Inc. and HoustonFruitland, Inc. and its successors, at all times relevant to this actionmaintained a place of business at 11101 Bellaire, Houston, Texas, wherethey were engaged in construction.On March 12 through August 31, 1998, the Occupational Safety and HealthAdministration (OSHA) conducted an inspection of Ho=s 11101 Bellaire,Houston, Texas work site. As a result of that inspection, Respondentswere issued citations alleging violations of the Act together withproposed penalties. By filing a timely notice of contest Respondentsbrought this proceeding before the Occupational Safety and Health ReviewCommission (Commission).On April 27-29, 1999, a hearing was held in Houston, Texas. The partieshave submitted briefs on the issues and this matter is ready fordisposition. *_Jurisdiction_*Respondent Erik K. Ho admits he was the employer at the work site, butdenies he is an employer engaged in a business affecting commerce andsubject to the requirements of the Act. Respondent maintains that Ho HoHo Express, Inc., and Houston Fruitland, Inc. were not employers at thework site and asks that they be dismissed from the case.\/_Facts_\/Houston Fruitland, Inc. is a privately owned corporation established in1984 (Exh. C-47, p. 9). Eric K. Ho owns a 66.667% share of thecorporation. The remaining shares are owned by Ho=s family members(Exh. C-47, p. 9). Ho is the president and CEO of Houston Fruitland,and directs its day to day activities. Ho=s wife, Melissa Ho acts assecretary. Mr. and Mrs. Ho are the only officers of the corporation(Exh. C-47, p. 12).Ho Ho Ho Express, Inc., also a privately held corporation, wasestablished in 1991 (Exh. C-47, p. 10). Until January, 21, 1998 Eric Hoowned 100% of Ho Ho Ho Express; in January 1998 33.333% of thecorporation=s shares were transferred to a family member (Exh. C-47, p.10). Eric Ho acts as both president and secretary of the corporation,and directs its day to day activities; there are no other officers (Exh.C-47, p. 12). Debbie Chan testified that she worked for Eric Ho from November 1994 toMarch 31, 1998. For the first two years she was listed as an employeeof Norris Produce; after that she was formally employed by HoustonFruitland (Tr. 623-24). Chan stated that she was an account clerk incharge of payroll and month end financial reports (Tr. 624). Inaddition to Houston Fruitland, Inc., Chan also balanced checkbooks forHo Ho Ho Express, Cal-Sierra, Foothill and Norris (Tr. 624-25). Chan testified that Eric and Melissa Ho, Eric Ho=s wife, had soleauthority to sign checks for Houston Fruitland (Tr. 625). Chan statedthat when there was an insufficiency of funds to cover a check forHouston Fruitland, Mr. Ho would transfer money into the account from HoHo Ho Express (Tr. 626). Chan testified that monies transferred toHouston Fruitland were not repaid to Ho Ho Ho Express, however, if Ho HoHo Express later needed cash, Eric Ho would transfer funds into itsaccount from Houston Fruitland=s (Tr. 628). Eric Ho admits that he paid bills including wages, using the accounts ofhis different businesses interchangeably (Tr. 626). Chan testified thatCorston Tate, who worked for Eric Ho as a carpenter for approximately 5years, and worked at the Bellaire hospital site beginning in December1997 (Tr. 246-47, 252), was paid out of both Houston Fruitland=s or HoHo Ho Express= accounts (Tr. 629, Exh. C-38). Scaffolding for use onthe Bellaire project was rented by and paid for by Ho Ho Ho Express,Inc. (Tr. 241-42). Eric Ho authorized Manuel Escobedo to hire Mexicanlaborers to work at the Bellaire site, and issued Escobedo checks drawnon Ho Ho Ho Express Inc.=s account to pay their wages (Tr. 425-31; Exh.C-3). Bill Golding, the loss prevention manager for the rental company,Betco Scaffolding, testified that the company, Ho Ho Ho Express, Inc.,had to open an account, fill out a credit application and pass a creditcheck before it could rent equipment (Tr. 241-43; Exh. C-43). Ho Ho HoExpress had a contract with USA Waste Services (USA) to haul awaynon-hazardous wastes from the Bellaire site; Ho Ho Ho Express wasinvoiced, and paid for USA=s services by checks issued on their account(Exh. C-1).Chan testified that she recorded monies borrowed by Eric Ho from Ho HoHo Express and\/or Houston Fruitland under a ledger entry labeled Aduefrom shareholder@ (Tr. 629-31). Chan stated that Ho took out moneywhenever he wanted to, that no other approval was required, and that noloan documents were drawn up (Tr. 630). Chan stated that the debts werenot repaid by Ho (Tr. 630).Eric Ho contracted to buy the Bellaire hospital which is the subject ofthis action, and provided $10,000.00 earnest money in the form of acheck drawn on Houston Fruitland, Inc. (Tr. 39, Exh. C-21). Chan notedthat Ho Ho Ho Express= January 1999 ledger page contains an entryindicating that Eric Ho owed the company the sum of $619,620.00 whichwas paid to Stewart Title for the Bellaire property (Tr. 634; Exh. R-2,p. 10).\/_Discussion_\/Respondent argues that Eric Ho, individually owned the Bellaire hospitalproperty and was the employer of Manuel Escobedo and Corston Tate, whomhe hired to conduct clean up operations at the property. Ho=soperations, described fully in the record below, included Aalteration@of the cited property, an activity which falls under OSHA=s constructionstandards at 29 CFR ‘1926, \/See \/*’1926.1 Purpose and Scope*. TheCommission has held that construction is in a class of activity which asa whole affects interstate commerce. \/Clarence M. Jones d\/b\/a C. JonesCompany,\/ 11 BNA OSHC 1529, 1983 CCH OSHD &26,516 (No. 77-3676,1983). Respondent Eric Ho, therefore, is an employer engaged in abusiness affecting commerce and is subject to the requirements of the Act.Respondent admits that Eric Ho used Ho Ho Ho Express= checking accountto Afacilitate@ his payment of wages, worker expenses, vendors andsuppliers (Respondents= post-hearing brief at p.3). Respondentmaintains, however, that neither Ho Ho Ho Express, Inc., nor HoustonFruitland, Inc. were the employers of the exposed employees, and so arenot liable for any of the alleged OSHA violations. The Fifth Circuit, in which this case arises, has recognized that thecorporate form may be disregarded under the Aalter ego@ doctrine incases where Athere is such unity between corporation and individual thatthe separateness of the corporation has ceased@ \/Permian Petroleum Co.v. Petroleos Mexicanos (Permian), \/934 F.2d 635, 643 (5th Cir. 1991),citing\/Castleberry v. Branscum\/ 721 S.W.2d 270 (Tex. 1986). Whether thedoctrine applies depends on:. . .the total dealings of the corporation and the individual, includingthe degree to which corporate formalities have been followed andcorporate and individual property have been kept separately, the amountof financial interest, ownership and control the individual maintainsover the corporation, and whether the corporation has been used forpersonal purposes. \/Id\/. The court went on to state that the Aalter ego@ doctrine may beapplied in cases where a party seeks to hold a corporation liable forthe obligations of a shareholder.\/\/It is clear that the interests of Eric Ho, Houston Fruitland, Inc. andHo Ho Ho Express, Inc., are indistinguishable. Eric Ho is the primaryshareholder in both corporations, and was the sole shareholder in Ho HoHo Express until immediately before the OSHA inspection. Ho solelydirects the activities of both corporations. Funds are moved fromcorporation to corporation, and disbursed at Ho=s direction; nocorporate formalities are followed. Ho uses corporation employees toperform personal chores and corporation assets to finance his ownprojects, \/i.e. \/the Bellaire hospital. In this case the Complainant has properly included the corporationsnamed in the caption of this citation, in that those corporations aremerely the alter egos of Eric K. Ho.Furthermore, in \/Permian\/ the Fifth Circuit recognized a separatedoctrine under which a party may hold a corporation liable for ashareholder=s obligations, \/i.e. \/the Asham to perpetrate a frauddoctrine.@ \/Id.\/ The court held that the purpose of the doctrine is toprevent the use of the corporate entity as a cloak to work injustice;moreover, Athe sham to perpetrate fraud doctrine does not require proofof actual fraud, the party invoking the doctrine must only demonstrateconstructive fraud. \/Id.\/ at 644. The court noted that the state ofTexas has defined constructive fraud as Athe breach of some legal orequitable duty which, irrespective of moral guilt, the law declaresfraudulent because of its tendency to deceive others, to violateconfidence, or to injure public interests. \/Id. \/citing\/; Archer v.Griffith,\/ 390 S.W.2d 735, 740 (Tex.1964).In this case Ho contrives to injure the public=s interest in safe andhealthful working conditions assured under the Act. After cominglingcorporate assets with those of his own to fund the Bellaire project, Honow invokes the corporate fiction to protect corporate assets, the veryassets which were used in furtherance of the project giving rise to thecited violations. Ho=s attempt to shield the corporate assets constitutes constructivefraud, in that it frustrates the Secretary=s ability to enforce the Actthrough the effective assessment of civil penalties. This judge finds that Ho Ho Ho Express, Houston Fruitland, Ho Ho HoExpress, Inc. and Houston Fruitland, Inc. and its successors areproperly named as Respondents in this matter pursuant to the Asham toperpetrate a fraud doctrine@ set forth in \/Permian, supra.\/ *_Statement of Facts_*Roy Elledge, Jr., a commercial real estate broker, negotiated the saleof the Bellaire Boulevard hospital property to Eric Ho (Tr. 31-32, 51). Elledge testified that the prior owners, AMA Holding, USA, provided himwith a Phase One environmental report that had been completed on theproperty (Tr. 34, C-17). The report indicated that the Bellairehospital building was likely to contain asbestos, which was widely usedin fire resistant construction prior to 1978 (Tr. 36). Elledgetestified that he gave Eric Ho a copy of the site assessment in October,1997 (Tr. 36). The report states, \/inter alia\/, that a limited siteinspection was conducted by CON-TEST on May 6, 1994, and that:The following ACBMs were identified during the inspection of the subjectsite: * Friable Materials – Spray Applied Fireproofing* Potentially Friable Materials – Black Mastic* Non-Friable Materials – Floor Tiles The report refers the reader to Appendix F for recommended responseactions (Exh. C-17, Sec. V). At ”1.D.3. and 1.F., respectively,Appendix F notes that:Asbestos-containing spray applied fireproofing is friable and can causesignificant damage if accidentally disturbed. Extreme caution needs tobe used when working around non-friable asbestos-containing fireproofingmaterials. * * *Before renovation occurs thoroughly inspect for and test suspectmaterials that may not have been previously sampled. Any disturbance oralterations made to asbestos-containing materials must be handled bytrained personnel who are licensed and registered with the TexasDepartment of Health (TDH) using proper procedures and respiratoryprotection. Elledge testified that his discussion of the report with Mr. Ho wascursory, but that he did tell Ho that there was asbestos in thebuilding, and recommended that Ho obtain a Phase Two assessment toascertain the severity of the asbestos contamination (Tr. 37).Elledge testified that on October 27, 1997, Eric Ho contracted to buythe Bellaire hospital (Tr. 39, Exh. C-21). On that same date, Ho signeda Commercial Property Condition Statement, stating that he was aware ofthe presence of both friable and non-friable asbestos on the site (Tr.41-43; Exh. C-19). The sale of the hospital property was finalized onDecember 8, 1997; payment was in the form of a wire transfer fromHouston Fruitland (Tr. 40).Corston Tate testified that for approximately five years prior to therelevant period, he worked for Eric Ho as a carpenter, remodeling thefacilities at Ho Ho Ho Express, Houston Fruitland and Cal-Sierra Produce(Tr. 246-47, 250, 300). Tate testified that Ho assigned projects tohim, and would check his work, though he generally worked withoutsupervision (Tr. 248-49). Tate testified that he was paid by check; thechecks were drawn on Ho Ho Ho Express= account (Tr. 249). Tate statedthat he first began work at the Bellaire property in November orDecember of 1997 (Tr. 252). Tate initially worked days in theprofessional building, tearing out cabinets and carpet (Tr. 255-56,258). Tate testified that he put the debris into dumpsters (Tr. 257). Approximately twice a week, when the dumpsters were full, he would callHo Ho Ho Express, and they would send out a truck to empty the dumpster(Tr. 257-58). Tate testified that around January 1998, work began in the hospitalbuilding; Ho sent in workers to began tearing out sheetrock walls, andscraping the asbestos containing fireproofing they found behind it (Tr.259-63). Tate stated that he and Manuel Escobedo would pick up theworkers, all of whom were Mexican nationals, and bring them to the sitein Tate=s van (Tr. 275). Tate testified that Eric Ho came out to thesite every day to inspect the work (Tr. 262-63). Tim Stewart, a structural inspector for the City of Houston (Tr. 56),testified that on February 2, 1998, he received and investigated acomplaint that work was going on at the Bellaire Boulevard propertywithout a permit (Tr. 57). Stewart testified that when he arrived onthe site, approximately 10 workers were demolishing partition walls, andusing putty knives to scrape fireproofing off the beams, the columns andthe pin deck, \/i.e.\/ the bottom of the second floor decking above thedecorative ceiling (Tr. 58, 60, 73). Stewart stated that some workerswere on scaffolds scraping immediately over their heads, and that heobserved dust falling into their breathing zones, onto their shouldersand hair (Tr. 74). Stewart testified that a few of the workers had onwhite paper dust masks, \/see \/Exh. C-2, but that most were not wearingany kind of personal protective equipment [PPE](Tr. 59, 73).^[37] Rather they were dressed in dust covered street clothes (Tr.71-72). The building was not sealed or any of the scraping areascontained (Tr. 77). Stewart testified that he spoke to Ho=s representative, Corston Tate,about permits for the ongoing work (Tr. 62). Because no permits wereproduced, Stewart issued a stop work order, citing a possible asbestosabatement violation, and red tagged the property (Tr. 63, 75-76).Tate admitted that the inspector ordered them to stop work and to boardup the hospital building or face a $500.00 apiece fine (Tr. 264). Tatestated that he accepted the paperwork the inspector gave him and calledHo (Tr. 265). Tate testified Ho had him bring the paperwork to him;that Ho read the documents and laughed and joked about them (Tr. 266). Tate testified that work stopped at the hospital, and that some of themen who had been working there came over to the professional buildingand helped with the work there for a while (Tr. 268). Don Weist is the operations manager at Alamo Environmental (Alamo),which specializes in asbestos abatement (Tr. 78). Weist testified thatin February, 1998, Eric Ho asked Alamo to provide him with an estimatefor the removal of asbestos fireproofing at the Bellaire hospital site(Tr. 79-80, 85). Weist met Ho at the site on February 10, 1998, atwhich time he examined the building and took photographs (Tr. 80-81,271-72; Exh. C-28). Weist prepared a bid for $159,876.00 and onFebruary 13 faxed it to Ho at Houston Fruitland, the business addressprovided by Ho (Tr. 86-87; Exh. C-23).^[38] Ho did not hire Alamo, however, and work resumed in the hospitalbuilding shortly thereafter. Corston Tate testified that work started upagain approximately a week after the city inspection (Tr. 268). Tatetestified, however, that when work resumed, Ho wanted the men to work atnight (Tr. 268). Tate stated that a crew began scraping fireproofingoff the beams in the hospital building under the direction of a Jaime[Contreras] (Tr. 272).^[39] Tate testified that Ho inspectedthe work when he was in town, and that his Secretary, Melba, would comeout to the site when Ho was away (Tr. 274-75).^[40] Late inFebruary, Ho became dissatisfied with the progress of the work andentered into an agreement with Tate, under which Tate would receive$100.00 a day to stay on the site at night and supervise the progress ofthe removal of the fireproofing (Tr. 276-78; Exh. C-37). Tate spoke noSpanish, however, and so provided no supervision other than to tell Hohow many men showed up for work at night and to go into the buildingwith Melba, who was afraid to go into the dark hospital alone (Tr.280-81, 284). In addition, Tate would go to Home Depot to buyadditional tools, scrapers and dust masks (Tr. 283-84). Tate wasreimbursed for the supplies by Ho Ho Ho Express, Inc. (Tr. 284). Theremainder of the time Tate stated that he would sleep in his van (Tr.285). Saul Martinez Manzano, a 27 year old laborer from San Luis de la Paz,Guanajuato, started work at the Bellaire hospital site on December 23,1997 (Tr. 116-17). Manzano, who speaks only Spanish, was recruited by aManuel Escobedo, but understood that the Bellaire work was done for thebenefit of Mr. Ho, and considered Ho his employer (Tr. 117-19). Manzanotestified that he worked three or four days scraping asbestosfireproofing from a ladder at the Bellaire hospital site prior to thestate inspector visiting the site on February 2, 1999 (Tr. 118-21; Exh.28, #4). Manzano stated that he sometimes wore a white dust mask, butnot usually; no one told him he had to wear the mask (Tr. 120; Exh. C-2).Manzano testified that after the inspector closed the hospital sitedown, Manuel sent him to a different building, where he tore outcarpeting for about a week (Tr. 121-22). Manzano stated that afterabout a week, he was sent back to the hospital to resume asbestosremoval at night (Tr. 122-23). Manzano stated that he worked all night,all week (Tr. 123). The night work was supervised by Jaime Contreras,and Manuel Escobedo (Tr. 123, 125); Manzano was paid in cash from fundsContreras got from Eric Ho (Tr. 133-34). Manzano worked with otheryoung men in their 20’s, some of whom he grew up with, including ArmandoManzano, Able Manzano, Miguel Trejo, Frederico and Martin Contreras, anda worker named Carlos (Tr. 129-30). In all, Manzano stated there wereten men on the crew (Tr. 129). Mr. Ho occasionally came by the siteand, through an interpreter, directed the crew to be sure to thoroughlyclean the asbestos fireproofing off the beams (Tr. 125-26). Manzanostated that the crew was paid $50.00 per cleaned section (Tr. 132). As before, Manzano worked in his street clothes; he no longer botheredwith a mask, because he couldn=t stand it in the heat; there was noventilation on the site (Tr. 128, 134). After scraping the beamsManzano stated that the powder was swept up and placed in bags (Tr.124). The crew was directed not to place the bags in the dumpstersbecause of Athe hazard,@ though Manzano was not told what the hazard was(Tr. 124, 139). Manzano testified that he did not know that the powdercontained asbestos, or that breathing the powder was hazardous (Tr.131). There were no warning signs in the building; no medical examswere provided for the workers (Tr. 134). Manzano testified that theworkers ate and drank on the site (Tr. 134). There was no running, orpotable water provided by Ho, though some of the workers lived on site;Manzano stayed on site for about a week (Tr. 137). If the workerswanted something to drink, they gave money to Corston Tate, who wouldleave the site to buy water and\/or soft drinks (Tr. 134). There was oneportable bathroom on the site; Manzano testified that the toilet wasfull, and was not cleaned during the period he worked on the site (Tr.133-37). The site was fenced and the gate locked with the workersinside; Jaime Contreras had a key (Tr. 138).Miguel Trejo and Benjamin Mendez Contreras, called Minico, bothtestified, through an interpreter, that they are each 24 years old andcome from San Luis de la Paz, Guanajuato (Tr. 167, 196). Minico andTrejo confirmed Manzano=s testimony, stating that they worked under thedirection of Jaime Contreras or Corston Tate for a Chinese man (Tr.171-72, 206). Both Trejo and Minico identified Eric Ho, who was in thecourtroom, as their employer (Tr. 171, 176, 203). Minico stated that Howould check the work from time to time to ensure that the job was beingcompleted satisfactorily (Tr. 173-74, 176). Trejo and Minico testifiedthat they worked at the hospital from about 6:00 p.m. to 6:00 a.m.,scraping dry Asheetrock@ from pipes and collecting the powder it createdinto garbage bags (Tr. 168-70, 180, 197-201; Exh. C-28, #4). Trejo andMinico testified that he and the other workers, who were identified onlyas Saul, Miguel, Able, Martin, Jaime, Martin, Carlos, Hugo and Armando,filled about a hundred bags at the site (Tr. 170, 178, 201). The work was not performed in a contained area (Tr. 179-80). No specialclothing was provided, and no shower facilities were available (Tr.178). Both Trejo and Minico stated that at the end of a working day hisface and street clothes were completely white, Minico testified that hehad trouble breathing through the powder that fell on his cheeks andupper lip (Tr. 174-75, 200). Minico testified that he was never askedto wear any type of monitoring device (Tr. 179). Minico stated that thedust masks available didn=t do any good and that he and the otherworkers took them off (Tr. 175; Exh. C-2). No one ever told Minico thathe was scraping asbestos, or that it was dangerous (Tr. 176).Minico testified that the work site was locked; only Tate or Jaime had akey (Tr. 183). Minico further stated that there was nothing to drink onthe site unless the workers brought it, or gave Tate money to buy it forthem (Tr. 183, 185, 192). Minico testified that the single bathroomfacility was unusable because it was so dirty, and that the workersrelieved themselves in the surrounding fields (Tr. 183).Corston Tate confirmed the dangerous and unsanitary conditions describedby the Mexican laborers, stating that the men worked twelve hour shifts,seven days a week, with no running water (Tr. 286, 288). Tate wouldtake the laborers money and buy them water and\/or soft drinks if theyasked him (Tr. 321); if the men did not want to relieve themselvesoutdoors, they had the option of using the bathroom of a filling stationor Jack-in-the-Box off the seven to eight acre site (Tr. 321-22, 331). Fireproofing was collected in unlabeled bags (Tr. 282). No means wereused to collect the dust created by scraping; the workers left coveredwith the dust (Tr. 282, 287). Dust masks were not used because theworkers could not breathe in them (Tr. 289). Tate testified that he andEscobedo had discussed masks, but because they had no training inasbestos, they did not know what kind the men needed (Tr. 291-92, 299).Tate testified that on March 11, 1998, Ho told him that there was awater line somewhere on the site that was still turned on (Tr. 293). Howanted to use the water to wash the building down inside, and directedTate to open up the first of two lines he had located and see whether itwas a water line (Tr. 294). Tate testified that he did not immediatelycomply, but that later Ho paged him, and Ajumped on my case and told me,you know, to get on it@ (Tr. 294). Tate testified that he tried tocrack the bolts on the pipe slightly, but that the line was pressurizedand the pipe popped open (Tr. 295). The line was in fact a natural gasline (Tr. 552). When the pipe opened, pressurized natural gas beganescaping (Tr. 295). Tate stated that he panicked at that point and with Jaime Contreras andMartin Bernal tried to plug the pipe (Tr. 295). Tate testified that hisvan was in the way, and that when he turned the ignition the gas fromthe pipe exploded (Tr. 296). Tate stated that all three men wereburned, Contreras had been hit and had blood running down his face(297). Tate testified that his hands, face, and ears were burned, allthe hair was burned off of his head; he spent three days in intensivecare, two or three more days in the hospital, and was still under adoctor=s care at the time of the hearing (Tr. 298).The testimony of Martin Bernal, who was burned in the March 11, 1998explosion corroborates, in material detail that of the other witnesses(Tr. 357-63). Bernal spent from three to five days in the hospital (Tr.364). Able Manzano Diaz testified that he worked in the hospital building, andslept on site beginning on December 23, 1998 (Tr. 333, 341-42). Diazworked days, and then switched to nights after the city inspector closeddown the work site (Tr. 342-43). Diaz= testimony of the workingconditions corroborates that of his fellow workers (Tr. 344-347, 350). In addition, Diaz testified that on the day following the explosion, heand his fellow laborers were called into Ho=s office, and were given apaper to sign (Tr. 348-49). Diaz testified that the paper was inEnglish, but that there was a translator present who read the documentto the men present (Tr. 349, 354-55). Diaz signed the paper, whichidentifies the signatory as an independent contractor, and in return fora one time payment of $1,000.00 purports to release Eric Ho from allfuture claims or causes of actions attributable to the March 11, 1998explosion and fire (Tr. 353-55; Exh. C-39). Nine employees, Saul Martinez, Carlos Manuel Ortiz, Armando ManzanoGonzales, Hugo Ledesma, Miguel Trejo, Martin C. M., Abel Manzano Diaz,Benjamin Mendez, and Jaime Contreras Mendez signed releases in bothSpanish and English (\/See, \/Tr. 182, 353-55; Exh. C-39). Don Weist testified that he received a response to his February 13asbestos removal bid in March, at which time Ho got in touch with him,indicating that he wanted to proceed with the project, with somemodifications (Tr. 89). Ho signed the modified proposal, and faxed theacceptance to Alamo on March 27, 1998 (Tr. 91-92; Exh. C-25). Weisttestified that approximately four to five days later he received a callfrom Catherine McLain from Professional Service Industries, anenvironmental consultant firm (Tr. 93, 500). McLain asked Weist to meether and the Texas Department of Health on the site on April 3, 1998 toinvestigate a possible disturbance of the asbestos on the site (Tr.93-94). Weist testified that when they arrived on the site they foundthat the bulk of the asbestos containing materials had been removed frominside the building, including fireproofing from beams (Tr. 94, 96; Exh.C-29, #2). Dust from the fireproofing lay on the floor and was anywherefrom a sixteenth to a quarter of an inch thick (Tr. 95; Exh. C-29, #1). Unlabeled black garbage bags contained dry asbestos fireproofing andsheetrock (Tr. 98-99; Exh. C-29, #6).Catherine McLain testified that she took tape samples of powder onwindow sills, counter tops, etc, and bulk samples from Asuspectmaterials@ inside the building on April 10, 1998 (Tr. 508; Exh. C-35, p.4). The majority of the samples contained chrysotile asbestos inamounts greater than 1%, the upper limit prescribed by the EnvironmentalProtection Agency (EPA) and the Texas Department of Health, forunprotected demolition work (Tr. 509-10; Exh. C-35, p. 9). Random airsampling results were: #1–1,275 S\/mm^2 [structures per millimetersquared]; #2–unanalyzable because particulate loading of the filtersexceeded 25% of the total; #3–3,400 S\/mm^2 (Tr. 515-16; Exh. C-35). Air samples exceed the EPA=s Asbestos Hazardous Emergency Response Act=sclearance criteria of 70.0 S\/mm^2 . James T. Hendrix is a former asbestos consultant, who now works for theTexas Department of Health (Tr. 464). Hendrix testified that on March13, 1998, he visited the Bellaire hospital site and took photographs ofthe site and samples of suspected friable asbestos fireproofing frominside the building, Hendrix sampled material from the numerous blackgarbage bags on the site (Tr. 466, 469; Exh. C-33), in addition toobtaining samples from the fire damaged area and the mechanical roomclose to the emergency room entrance (Tr. 474). Hendrix testified thatall the samples of fireproofing contained between 7 and 10% chrysotileasbestos (Tr. 475, 497; Exh. C-34). Samples of floor tile contained2-3% chrysotile asbestos (Exh. C-34). Vinyl flooring samples were foundto contain no asbestos (Exh. C-34).^[41] Upon receiving thesampling results, Hendrix called Ho Ho Ho Express and spoke with theirattorney (Tr. 479). The Texas Department of Health notified Eric Ho atHo Ho Ho Express of the sampling results, and advised him that thebuilding was unsafe and should be sealed by licensed asbestos personnel(Tr. 479-81; Exh. C-32). Hendrix testified that on March 25 he returnedto the site; at that time he observed a workman sitting in a secondfloor windowsill boarding windows without any PPE of any kind (Tr.482-83). Miguel Trejo and Saul Manzano admitted that after the explosion theyreturned to the site; both stated that they spent three or four daysboarding up the windows of the hospital without the benefit of PPE (Tr.154-55, 223-24). Don Nguyen, the OSHA Compliance Officer responsible for investigation ofthe fire and explosion on the Bellaire site, testified that Ho had nohazard communication program for the Bellaire work site (Tr. 553). Nguyen stated that Ho did not ascertain the contents of the pipe he hadTate open before having the exposed employees work on or in the area ofthe pipe (Tr. 552). Nguyen testified that there was no emergencycommunication system on the site; Corston Tate told Nguyen that he hadto go to a nearby service station to use their phone (Tr. 537, 539,544-45). Nguyen stated that there was no means of transporting injuredworkers from the site (Tr. 540). Nguyen admitted, however, that Tate=svan could have been used for that purpose, when the van was on site,before it was destroyed in the explosion (Tr. 542-43). Nguyen testifiedthat Ho never reported the explosion to OSHA as required under ‘1904.8(Tr. 576). *_DOCKETNO. 98-1645_**_The Violations_*Serious citation 1 of the citation docketed at OSHRC No. 98-1645,alleges that Respondents violated eight standards governing engineeringand work practice controls mandated under 1926.1101 \/et seq.\/ for theremoval of ACM. Willful citation 2 of that docket number alleges 28violations including violations of the monitoring, respiratory, andtraining requirements set forth at ‘1926.1101 \/et seq.\/ The Awillful@violations are cited on an employee by employee basis. Respondentsreceived 11 citations for failure to provide respirators, naming eachexposed employee separately; and 11 citations for training andnotification violations. Respondents do not contest the existence of the cited violations asestablished in the Secretary=s \/prima facie\/ case; at hearingRespondents stated that the bases of their defense^[42] werethe jurisdictional questions addressed above, and the appropriateness ofthe proposed penalties (Tr. 24-27). Respondents adduced no evidence tochallenge the Secretary=s case in Docket No. 98-1645 at the hearing, andRespondents do not challenge the existence of any of the violationsalleged in that matter in their post-hearing brief, which addressed onlythe jurisdictional and penalty issues.The violations have been established.*_Willfulness_*Respondents maintain that there is no evidence that any of theRespondents were aware of any OSHA asbestos standards or that theyexhibited an intentional disregard for employee safety. This judgedisagrees.This judge notes that an employer has a duty to inquire into therequirements of the law. \/Peterson Brothers Steel Erection Company\/, 16BNA OSHC 1196, 1991-93 CCH OSHD &30,052 (No. 90-2304, 1993), \/aff\/\/=d.\/26 F.3d 573 (5th Cir. 1994). Moreover, the record adequatelyestablishes that it is likely Eric Ho was aware of OSHA asbestosstandards. During his May 22, 1998 deposition, Ho admitted he is atrained chemical engineer with a masters in chemical engineering (Exh.C-46, p. 195). Ho stated that his company, Ho Ho Ho Express, Inc., waslicensed to haul hazardous waste materials, and that he personally wasaware of the need to comply with government regulations (Exh. C-46, p.20). Ho admitted that he knew that Texas regulated asbestos removalwork (Exh. C-46, p. 94-95). Finally, proof of Ho=s actual knowledge of the OSHA asbestos standardsis not necessary to a finding of willfulness where there is evidence ofsuch reckless disregard for employee safety or the requirements of thelaw that generally one can infer that if the employer had known of thestandard or provision, the employer would not have cared that theconduct or conditions violated it. \/Williams Enterprises, Inc.\/, 13 BNAOSHC 1249, 1986-87 CCH OSHD &27,893 (No. 85-355, 1987). \/See also Brockv. Morello Bros. Constr.,\/ 809 F.2d 161 (1st Cir. 1987). The record isreplete with evidence of Ho=s indifference to the safety of his employees. Ho knew that there was ACM in the Bellaire hospital building when hepurchased it. The previous owners= site assessment indicated, \/interalia, \/that the asbestos containing fireproofing was friable and couldcause significant damage if disturbed. The assessment provided Ho withnotice that such ACM must be removed by trained and licensed personnel,using proper procedures and respiratory protection. Ho signed aproperty disclosure form indicating that he had been made aware of thepresence of friable asbestos in the building. Nonetheless, with fullknowledge of the conditions and the need for professional removal of theACM, Ho began asbestos removal with untrained, unprotected Mexicannationals, none of whom spoke English or understood the hazardsassociated with asbestos. Ho=s disregard for the law is evidenced by his failure to obtain workpermits for the site, as required by the City of Houston and hissurreptitious removal of asbestos after the City attempted to close downthe site. When the ongoing work was discovered by an inspector for theCity of Houston the Bellaire site was red tagged for probable violationsof asbestos abatement requirements. Ho was ordered to cease itsdemolition operations. However, the City=s attempt to close down Ho=sworksite failed. After soliciting a bid for asbestos removal from acertified asbsestos abatement contractor, Ho chose to recommence removaloperations under cover of darkness with the same untrained, unprotectedlaborers, rather than engage the qualified contractor at the named bidprice of $172,266. Ho retained the qualified abatement contractor tocomplete the asbestos abatement only after the March 11, 1998 explosionbrought his nighttime activity to light and the Texas Department ofHealth onto the site.Not only does the evidence specifically demonstrate Ho=s disregard forhis employees= exposure to asbestos, the record contains ampleadditional evidence of Ho=s indifference to those same workers= generalhealth and welfare. Ho=s laborers worked 12 hour shifts 7 nights a weekunder substandard conditions: the workers were locked inside theBellaire site; they worked without electricity or ventilation; adequatesanitary facilities were not available; no potable water was provided.The record contains abundant evidence of Ho=s reckless disregard foremployee safety and for the requirements of the law generally. Thecitations were correctly classified as Awillful.@ *_Citation Per Employee_*As noted by the Secretary in her reply brief, the Commission has heldthat separate penalties may be proposed and assessed for sepa?rateviolations of a single standard.\/Cater?pillar, Inc.\/, 15 BNA OSHC 2153,1991-93 CCH OSHD &29,962 (No. 87-922, 1993). In \/Hartford Roofing Co.,Inc.\/, 17 BNA OSHC 1361, 1995 CCH OSHD &30,857 (No. 92-3855, 1995), theCommission went on to state that Asome standards implicate theprotection, etc. of individual employees to such an extent that thefailure to have the protection in place for each employee permits theSecretary to cite on a per instance basis.@ The Commission explainedthat the Secretary=s discretion is limited only by the language of thestandard itself. \/Id. \/at 1366.For example, 29 C.F.R. ‘1910.134 sets forth the requirements for the useof respirators where effective engineering controls are not sufficientto control atmospheric contamination. As long as employees are workingin a contaminated environment, the failure to provide each of them withappropriate respirators could constitute a separate and discreteviolations (sic).. . . \/Id.\/ at 1366. It is clear under the test set forth by the Commission in \/Hartford\/, aswell as in the example specifically used in their discussion in thatcase, that per employee citations for violation of the respiratorstandards are within the Secretary=s discretion. AccordinglyRespondents were correctly cited for each employee who was not providedwith a respirator.In regard to the training violations, the Commission in\/Hartford\/suggested that where the employer=s compliance with the Secretary=ssuggested abatement for any one of the cited violations would notnecessarily abate the others, citation on a per instance basis isproper. \/Id. \/at 1366-67. \/See also, Arcadian Corporation,\/ 17 BNA OSHC1345 (No. 93-3270, 1995); \/affd.\/ 5th Cir. 4\/28\/97. It is clear thatthe adoption of a training program, in itself, would not abate the 11cited violations of ‘1926.1101(k)(9)(i) and (viii)^[43] ,unless and until all 11 employees had been through any programinstituted. I find that it was within the Secretary=s discretion tocite the Respondent in this case on a per instance basis for violationsof the training standards for each employee not trained.*_Penalty_*\/__\/*Gravity. *In determining the gravity of a violation, the Commissionhas held that the judge must consider (1) the number of employeesexposed to the risk of injury; (2) the duration of exposure; (3) theprecautions taken against injury, if any; and (4) the degree ofprobability of occurrence of injury. \/Kus-Tum Builders, Inc. \/10 BNAOSHC 1049, 1981 CCH OSHD &25,738 (No. 76-2644, 1981).Eleven employees were exposed to the asbestos violations for betweenfour and six weeks. No precautions were taken against injury. Dr. George Delclos, a specialist in internal medicine, pulmonarymedicine and occupational medicine (Tr. 644-46; Exh. C-44), testifiedthat the employees engaged in the removal of asbestos containingmaterial (ACM) at the Bellaire site were subjected to intense asbestosexposures due to: 1) the employer=s use of dry methods for removal ofthe sprayed ACM; 2) the laborers= increased breathing patterns,resulting from the sustained physical demands of their work; 3) thefailure to promptly dispose of ACM after removal; 4) poor housekeepingpractices; 5) the absence of appropriate ventilation and air filtration,showering and washing facilities, and appropriate respiratory protection(Tr. 661-62, 674-76, 696-99; Exh. C-44, p. 3-4). Based on their highlevels of daily exposure to asbestos, Delclos concluded that thelaborer=s had a greatly increased risk of developing pleural thickening,pleural effusions and\/or mesothelioma (Tr. 663, 668-71; Exh. C-44, p. 4). Thickening of the lining of the lung, pleural thickening, can limit thelung=s ability to expand, resulting in shortness of breath (Tr. 668). Pleural effusions, accumulations of fluid around the lung, can result inchest pain and shortness of breath, and though they resolvespontaneously may result in scarring (Tr. 668). Mesothelioma is a rare,but invariablly fatal cancer of the lung pleura (Tr. 669, 674; Exh.C-44, p. 1). Delclos testified that because there is a 30-40 yearlatency period between asbestos exposure and the exposed workerdeveloping mesothelioma, the majority of the exposed workers, who werein their mid-20’s, were exponentially more likely to develop the fatalcancer in their mid fifties or thereafter, than the non-exposedpopulation (Tr. 673-74). Delclos admitted that it was true that the majority of asbestos-exposedworkers do not subsequently develop disease, and that he could not,therefore, testify that the workers exposed in this case would, moreprobably than not, develop an asbestos related disease (Tr. 672, 706). Delclos maintained, however, that compared to the non-exposedpopulation, the exposed workers= increased chance of contracting anasbestos related disease was statistically significant (Tr. 672,703-06). Delclos testified that of the approximately 1,500 cases ofmesothelioma reported every year, 80-100% are found in people with anoccupational exposure to asbestos (Tr. 702).*Conclusion.* The Secretary proposed a penalty of $4,900.00 for each ofthe Aserious@ violations and $49,000.00 for each of the Awillful@violations. The Secretary took into account Respondents= size,aggregating the employees of Ho at the Bellaire site and the employeesof Ho Ho Ho Express. Respondent is a small employer, with less than 100total employees (Tr. 558). None of the Respondents had a history ofprior serious OSHA violations, and CO Nguyen recommended a full 10%reduction for history (Tr. 558). Eric Ho, as an individual, claims thatthe proposed penalty is burdensome, but this issue is not raised by thecorporate Respondents.Clearly Eric Ho, a man of education and experience in toxic waste, madethe calculated decision to expose these employees to a known carcinogen,without protection, a carcinogen that can produce a lethal,non-treatable, non-operable cancer. Ho exposed these employees to savehimself $172,266, the cost to retain professionals to safely remove theasbestos. The final consequences of that decision will not be knownuntil the latency period runs its course. However, the gravity of theviolations, and the concommitant penalties must be established on thebasis of the best information available today.The gravity based penalties, prior to adjustment for size, good faith(or lack thereof) and history, were set at the statutory maximum,$7,000.00 for the serious violations, and $70,000.00 for the willfulviolations. The penalties were then adjusted for size, good faith andhistory. The resulting penalties were $4,900.00 and $49,000.00respectively.The statutory maximum penalty must be reserved for only the mostegregious of circumstances, circumstances that resulted in a death orpermanently disabling injury. The gravity of these violations isdifficult to establish, but was best described by the Secretary=s expertwitness, Dr. Delclos. It is clear that the risk of harm to theseworkers is grave; the disease they were at the greatest risk ofdeveloping, mesothelioma, is an invariably fatal cancer. Theseriousness of the possible consequences must be weighed, however,against the probability of harm. Delclos described the results of theexposure as significantly increasing the risk of contractingmesothelioma, but stated, nonetheless, that it was unlikely that theexposed employees would contract mesothelioma.Based on Dr. Delclos= testimony, I find that the Secretary overstatedthe gravity of the asbestos violations. I otherwise find theSecretary=s adjustments for size, good faith and history to beappropriate. Reducing the gravity based penalty for the asbestosviolations, and applying the Secretary=s other adjustments, I find that$3,900.00 for the serious violations and $39,000.00 for the willfulviolations constitue an appropriate penalty. *_DOCKET NO. 98-1646_ * Docket No. 98-1646 alleges four Aserious@ items relating to the: 1) lackof proper equipment to transport injured employees; 2) failure toprovide potable water; 3) absence of adequate toilet facilities; and 4)failure to inform employees of the hazards of unlabled pipes in theirwork areas. The citation alleges one Awillful@ violation based on theexplosion and fire which resulted from breaking into the unidentifiedgas line. Finally, the Secretary cites, as Aother than serious@Respondents= failure to report the accident on the Bellaire work site toOSHA.*_The Violations_*Ho contests only the merits of Awillful@ citation 2, item 1, whichalleges a violation of ‘5(a)(1) of the Act, \/i.e. \/for failure tofurnish its employees a place of employment which was free fromrecognized hazards which were likely to cause death or serious physicalharm:Hazards of opening a pipe containing an unknown substance. On or aboutMarch 11, 1998, at the jobsite at 11101 and 11105 Bellaire Boulevardwhere an employee was required to open a pipe of unknown content. Afire and explosion occurred when the pipe that an employee wasinstructed to open released natural gas. Ho maintains only that there is no evidence in the record showing thatRespondent was aware of any recognized hazard. The Secretary, however, need not establish that the employer had actualknowledge that a condition was hazardous. The Secretary=s burden is metif she shows that a practice, procedure or condition under theemployer=s control is known to be hazardous constructively, i.e. by theindustry in general. \/Pelron Corporation\/, 12 BNA OSHC 1833, 1986 CCHOSHD &27,605 (No. 82-388, 1986). The evidence must show only that theemployer knew, or with the exercise of reasonable diligence could haveknown, of the violative conditions= existence. \/Tampa Shipyards, Inc.\/,15 BNA OSHC 1533, 1991-93 CCH OSHD &29,617 (Nos. 86-360, 86-469, 1992).Respondent admitted at the hearing that tapping into an unmarked line ona demolition site is a recognized hazard (Tr. 567). It is undisputedthat the employees suffered serious physical harm as a result of thehazard, and that a feasible means existed to eliminate or materiallyreduce the hazard, \/i.e. \/ascertaining the contents of the line. Theevidence shows that Ho knew of the physical condition cited. TheSecretary has, therefore, made out a violation of ‘5(a)(1). \/ TampaShipyards, Inc.\/, 15 BNA OSHC 1533, 1991-93 CCH OSHD &29,617 (Nos.86-360, 86-469, 1992).*_Willfulness_*Don Nguyen testified, without contradiction, that Ho instructed CorstonTate to open the unmarked line (Tr. 570). Nguyen stated that Tate hadno experience in procedures for ascertaining the contents of an unmarkedline (Tr. 570). Though Tate was reluctant to open the line, Ho insisted(Tr. 571).In a recent case, \/Propellex Corporation (Propellex)\/, No. 96-0265, slipop. at 14 (March 30, 1999), the Commission found that neither negligencenor the exercise of poor judgment demonstrates the heightened awarenessof illegality required to establish willfulness. \/Id.\/ at pp. 14-15. While Eric Ho=s directions to Tate to open the unknown pipedemonstrated poor judgment and\/or negligence, the Secretary has notproved by a preponderance of the evidence that Ho possessed a heightenedawareness of the illegality of his conduct, or that he consciouslydisregarded a known safety hazard. \/Id.\/ The Secretary has not shownthat Ho=s conduct here was Awillful,@ as contemplated by the Act. Accordingly this item is not a willful violation.*_Penalty_* As above, for the Aserious@ and Awillful@ citaitons, the Secretaryproposed the statutory maximum gravity based penalties, \/i.e.\/ $7,000.00for the Aserious@ items and $70,000.00 for the Awillful.@ Afterreductions for Respondent=s size and history, penalties of $4,900.00were proposed for each of the four Aserious@ violations at citation 1. A penalty of $49,000.00 was proposed for citation 2. CO Don Nguyen testified that the failure to provide potable water on theBellaire work site could lead to dehydration, hospitalization and\/ordeath (Tr. 548-49). Nguyen testified that Ho=s failure to provide asanitary portable toilet could result in the employee=s contacting humanwaste, and contracting diseases, specifically Hepatitis A, which mayrequire hospitalization and can lead to serious liver problems (Tr.551). Three employees were burned in the explosion and fire resultingfrom tapping into an unmarked line (Tr. 574).^[44] Nguyentestified that Respondents= employees were exposed to a number ofdangerous conditions that could result in serious injuries, and that theabsence of a communication system, and readily available transportationcould hinder any attempt to get medical attention for laborers (Tr. 557). The Secretary has established that the violations cited at citation 1were Aserious,@ as defined by the Act. Nonetheles the Secretary did notshow that the gravity of these violations was as great as the employeeexposure to a known carcinogen cited at Docket No. 98-1645, for whichidentical penalties were proposed. The gravity of the cited violationsis overstated, therefore, though the other adjustment factors areappropriate. I find an appropriate penalty for items 1 through 3 to be $1,900.00. Apenalty of $2,900.00 is appropriate for item 4, which relates indirectlyto the fire and explosion. Citation 2, item 1, though not found to beAwillful@ is affirmed as a Aserious@ violation. The serious injuriescaused by the cited violation resulted in the hospitalization of threeemployees, as described above. A penalty of $4,400.00 is deemedappropriate, and will be assessed for this item.A $700.00 penalty was proposed for Aother than serious@ citation 3. Thepenalty was not contested, and is deemed appropriate. *_ORDER_**Docket No. 98-1645* 1. Serious citation 1, item 1, alleging violation of’1926.1101(e)(1) is AFFIRMED, and a penalty of $3,900.00 is ASSESSED. 2. Serious citation 1, items 2a through 2f, alleging violationsof ‘1926.1101(g)(1), (3)(iii), (4)(ii), (4)(iv), (4)(vi), and (5) areAFFIRMED, and a combined penalty of $3,900.00 is ASSESSED. 3. Serious citation 1, item 3, alleging violation of’1926.1101(h)(3)(i) is AFFIRMED, and a penalty of $3,900.00 is ASSESSED. 4. Serious citation 1, item 4, alleging violation of’1926.1101(i)(1) is AFFIRMED, and a penalty of $3,900.00 is ASSESSED. 5. Serious citation 1, item 5, alleging violation of’1926.1101(j)(1)(i) is AFFIRMED, and a penalty of $3,900.00 is ASSESSED. 6. Serious citation 1, item 6, alleging violation of’1926.1101(k)(3)(i) is AFFIRMED, and a penalty of $3,900.00 is ASSESSED. 7. Serious citation 1, item 7, alleging violation of’1926.1101(k)(7)(i) is AFFIRMED, and a penalty of $3,900.00 is ASSESSED. 8. Serious citation 1, item 8, alleging violation of’1926.1101(m)(1)(i)(A) is AFFIRMED, and a penalty of $3,900.00 is ASSESSED. 9. Willful citation 2, item 1, alleging violation of’1926.1101(f)(1)(i) is AFFIRMED, and a penalty of $39,000.00 is ASSESSED. 10. Willful citation 2, item 2, alleging violation of’1926.1101(f)(1)(ii) is AFFIRMED, and a penalty of $39,000.00 is ASSESSED. 11. Willful citation 2, item 3, alleging violation of’1926.1101(f)(2)(i) is AFFIRMED, and a penalty of $39,000.00 is ASSESSED. 12. Willful citation 2, item 4, alleging violation of’1926.1101(g)(4)(i) is AFFIRMED, and a penalty of $39,000.00 is ASSESSED. 13. Willful citation 2, items 5 through 15, alleging 11 violationsof ‘1926.1101(h)(1)(i) are AFFIRMED, and a penalty of $39,000.00 foreach of the violations is ASSESSED. 14. Willful citation 2, item 16, alleging violation of’1926.1101(k)(3)(ii)(B) is AFFIRMED, and a penalty of $39,000.00 isASSESSED. 15. Willful citation 2, items 17a through 27(b), alleging 11violations of ‘1926.1101(k)(9)(i) and (k)(9)(viii) are AFFIRMED, and 11combined penalties of $39,000.00 each are ASSESSED. 16. Willful citation 2, items 28(a) and 28(b), alleging violationsof ‘1926.1101(k)(8)(i) and (l)(2) are AFFIRMED, a combined penalty of$39,000.00 is ASSESSED. *Docket No. 98-1646* 17. Serious citation 1, item 1, alleging violation of ‘1926.50(e)is AFFIRMED, and a penalty of $1,900.00 is ASSESSED. 18. Serious citation 1, item 2, alleging violation of’1926.51(a)(1) is AFFIRMED, and a penalty of $1,900.00 is ASSESSED. 19. Serious citation 1, item 3, alleging violation of’1926.51(c)(1) is AFFIRMED, and a penalty of $1,900.00 is ASSESSED. 20. Serious citation 1, item 4, alleging violation of’1926.59(e)(1)(ii) is AFFIRMED, and a penalty of $2,900.00 is ASSESSED. 21. Willful citation 2, item 1, alleging violation of ‘5(a)(1) ofthe Act, is AFFIRMED as a Aserious@ violation, and a penalty of$4,400.00 is ASSESSED. 22. Other than serious citation 3, item 1, alleging violation of’1904.8 is AFFIRMED, and a penalty of $700.00 is ASSESSED. \/s\/ James H. BarkleyJudge, OSHRC Dated: September 2, 1999 ————————————————————————^1 When these cases were originally docketed, they werecaptioned as ?Eric K. Ho, individually and d\/b\/a Ho Ho Ho Express andHouston Fruitland, and Ho Ho Ho Express, Inc.? There is no evidence thatas an individual, Ho ever represented himself as doing business underthe names Ho Ho Ho Express or Houston Fruitland. Accordingly, we herebyamend the caption to reflect the correct legal designation of theRespondents. \/Boise Cascade Corp.\/, 14 BNA OSHC 1993 n.2, 1991-93 CCHOSHD ? 29,222, p. 39,119 n.2 (Nos. 89-3087 & 89-3088, 1991).^2 The issue before the Fifth Circuit was whether theapplication of the CAA to Ho?s activities exceeded Congress? authorityunder the Commerce Clause, whereas the issue before us is whether Ho?sactivities come within the coverage of the Act. As several federalcourts have previously explained, the language ?business affectingcommerce,? as used in the Act, indicates that Congress intended thecoverage of the Act to be as broad as constitutionally permissible. Inother words, coverage of working conditions of employees is coterminouswith the scope of the Commerce Clause. \/See, e.g., Usery\/ v. \/Lacy (AquaView Apartments)\/, 628 F.2d 1226, 1229 (9th Cir. 1980); \/Godwin\/, 540F.2d at 1015; \/United States v. Dye Constr. Co.\/, 510 F.2d 78, 83 (10thCir. 1975); \/Brennan v. OSHRC (John J. Gordon Co.)\/, 492 F.2d 1027, 1030(2d Cir. 1974). We therefore conclude that the Fifth Circuit?sdiscussion regarding the constitutional scope of the Commerce Clause isapplicable to the issue before us here.^3 Ho relies on \/Austin Road Co. v. OSHRC\/, 683 F.2d 905,907-08 (5th Cir. 1982), in which the cited employer performedconstruction work solely within Texas but was a subsidiary of aninterstate holding company that included other subsidiaries thatperformed work both within and outside Texas. In \/Austin Road\/, theFifth Circuit held that the evidence the cited employer used equipmentor vehicles that may have been manufactured in another state wasinsufficient to establish that the employer?s activities affectedcommerce. The court also dismissed as ?speculative and conclusionary?the administrative law judge?s finding that while the cited employer didnot perform any work in another state, its profits and losses wouldnecessarily affect both its parent company and its sister companies whowere engaged directly in interstate commerce. \/Id\/. at 908.Although the court in \/Austin Road\/ acknowledged that Congress intendedthe Act to apply to ?the full extent of the authority granted by thecommerce clause,? and cited many of the same authorities noted above,including \/Wickard v. Filburn\/, it did not address the aggregationdoctrine ? though it is not apparent that the parties in that casepresented the aggregation principle to the court. \/Id\/. at 907. In ourconsideration of the Fifth Circuit?s recent criminal case decisionconcerning Ho, we do not regard \/Austin Road\/ as dispositive of theissue of coverage presented here.^4 Funds were received from Foothill Transportation, Inc.,which is also owned by Ho, and from Cal-Sierra Produce, Inc. There isconflicting evidence in the record as to whether Ho has any ownership ofthe latter company. Neither of these two companies were cited, and theyare not in issue.^5 The \/Jon-T-Chemicals\/ case, for instance, involvedprosecution under the False Claims Act for the recovery of funds owed bythe individual defendants for the disbursement of agricultural subsidiesto which they were not entitled.^6 While it is clear that the alter ego doctrine can beapplied to determine liability under federal statutes, including theAct, the courts acknowledge some question as to whether state or federalcommon law should be used to determine when the corporate veil may bepierced. \/See\/ discussion in \/Bestfoods\/, 524 U.S. at 63 n.9. \/See alsoMoore v. OSHRC\/, 591 F.2d 991 (4th Cir. 1979) (applying state law todetermine the liability of individual corporate officers for violationsof the Act occurring during the ongoing operations of a dissolvedcorporation that was subsequently reinstated). The Fifth Circuit,however, has held that in cases that do not arise under diversityjurisdiction, as a matter of practice it does not distinguish betweenstate and federal law for purposes of veil piercing. \/Century Hotels\/,952 F.2d at 110 n.4 (\/citing\/ \/Jon-T Chemicals, \/768 F.2d at 690 n.6(?federal and state alter ego tests are essentially the same?)). Inthese cases, the parties disagree on whether the judge properly appliedthe criteria on which he relies but do not contend that the judge shouldhave used different factors in reaching his decision. Therefore, forpurposes of these cases, we will apply the criteria as set forth in therelevant Fifth Circuit decisions.^[1] This compliance directive modified an earlier version ofOSHA?s internal instructions as set out in the Field Operations Manual(?FOM?). In pertinent part, those instructions indicated, ?in egregiouscases [?] i.e., willful, repeated and high gravity serious citations andfailures to abate [?] an additional factor of up to the number ofviolation instances may…be applied.? See FOM, Chapter VI, ? A.2.i(4),p. VI-8 (September 21, 1987, amended December 31, 1990). The specificapproval of OSHA?s Assistant Secretary was required in order to proposepenalties of this kind.^[2] In \/Caterpillar\/, the Commission noted that it hadassessed per-instance penalties for separate and distinct instances ofviolative conduct in only one previous case. \/Caterpillar\/, 15 BNA OSHCat 2173, 1991-93 CCH OSHD at p. 41,005-06 citing \/Hoffman Constr. Co.\/,6 BNA OSHC 1274, 1275-76, 1977-78 CCH OSHD ? 22,489 (No. 4182, 1978)(separate penalties assessed where the violative condition occurred ondistinct and separate scaffolds). In cases subsequent to \/Caterpillar\/,the Commission has assessed separate penalties for violations involvingseparate unguarded floors on a single building (\/J.A. Jones Constr.Co.\/, 15 BNA OSHC 2201, 1991-93 CCH OSHD ? 29,964 (No. 87-2059, 1993))and separate trenches dug on different days (\/Andrew\/ \/CatapanoEnterprises, Inc.\/, 17 BNA OSHC 1776, 1778, 1995-97 CCH OSHD ? 31,180,p. 43,605 (No. 90-0050, 1996) (consolidated)). ^[3] As we indicated in \/Hartford Roofing\/, there is noauthority for the Secretary?s implicit argument that resolution of theissue regarding whether citing on a per-employee basis is appropriatedepends upon the particular facts of the case as opposed to how thestandard in question defines the unit of prosecution. Both the majorityand dissenting opinions in \/Hartford Roofing\/ made this point abundantlyclear. As the majority opinion stated:[T]he Secretary has no discretion to decide on a case by case basis,whether to cite violations on a per employee basis or to combine allexposed employees into a single citation. If a work place condition asdefined by a standard constitutes a single violation for all exposedemployees, the Secretary, under Section 9(a) of the Act would berequired to issue a citation for each of the violations?.17 BNA OSHC at 1367. Similarly, Commissioner Weisberg?s dissentingopinion observed that ?[t]he key to each of the [Commissioner?sdecisions upholding per-instance citations] is the language of thestandard or regulation that has been cited.? \/Id\/. at 1374, 1995-97 CCHOSHD at p. 42,945. ^[4] This is the version of section 1926.1101(h)(1)(i) thatwas in effect at the time the violation was alleged to have occurred,?on or about March 11, 1998.? The Secretary mistakenly quotes theamended version of the standard in her brief to the Commission, but itdid not become effective until April 8, 1998. 63 Fed. Reg. 1152, 1298(January 8, 1998). ^[5] Items 6 through 15 differ from Item 5 only as to thename of the employee not provided with a respirator.^[6] Despite our dissenting colleague?s assertion to thecontrary, there is no precedent for her position that the language?ensure that they are used? imposes an individualized duty that runs toeach employee and, thus, evinces an intent to allow for citingviolations of that provision on a per-employee basis. The fundamentalflaw in the dissent?s analysis is its conflation of the separateprovisions of section 1926.1101(h). The dissent?s reliance on ?numerousdetailed and explicit provisions of this standard that prescribeindividualized employee-specific actions? are set forth in variousparagraphs ? (2), (3), and (4) ? for which Ho was either not cited on aper-employee basis or not cited at all. The Secretary only cited Ho ona per-employee basis under paragraph (h)(1)(i), which specifies whenrespirators must be provided depending upon the nature of the asbestoswork involved. It is clear from other prosecutions under section1926.1101 that the Secretary has interpreted the subsections of thisregulation as setting forth a series of discrete obligations for whichan employer may be separately cited. \/See, e.g.,\/ \/TierdaelConstruction Co. v. OSHRC\/, 340 F.3d 1110 (10th Cir. 2003)(separateviolations alleged under (e)(1), (f)(1)(i), (g)(1), (g)(7)(i), (g)(8),(h)(1), (i)(1), (j)(2)(i), (k)(8)(i), (k)(9)(iv)(C) of section1926.1101, none of which were cited on a per-employee basis).\/ Seealso\/ \/Yellow Freight Systems, Inc.\/, 17 BNA OSHC 1699, 1995-97 CCH OSHD? 31,105 (No. 93-3292, 1996)(violations under various subsections ofsection 1910.134). Insofar as the Secretary may advance interpretationsof her regulations through adjudications, there is simply no basis herefor concluding that an alleged violation of section 1926.1101(h)(1)(i)necessarily implicated the other provisions of section 1926.1101(h). Insum, the Secretary did not advance the dissent?s theory of prosecution,it is inconsistent with her other prosecutions, and it is one for whichadequate notice was not given. \/Martin v. OSHRC (CF&I)\/, 499 U.S. 144,154-55, 157 (1991)(reasonableness of Secretary?s interpretation measuredin part by consistency with the regulatory language and by consistencyof application).It necessarily follows that the dissent?s attempt to invoke \/SandersLead\/ as binding fails insofar as the respiratory fit-test standard(section 1910.1025(f)(3)(ii), which draws upon the general industryrespiratory protection standard set forth in section 1910.134) was atissue. Ho was not cited here for noncompliance with a comparablefit-test requirement made applicable under section 1926.1101(h)(3). ^[7] Items 18 through 27 differ from item 17 only as to thename of the employee not trained.^[8] We note that such an ?individualized determination?would not be necessary here since itis undisputed that all eleven of thecited employees were engaged in Class I asbestos operations. ^[9] We find our dissenting colleague?s claim that ?[p]roperabatement requires eleven separate acts tailored to each employee ? at aminimum by ensuring each employee?s participation in any group training?to be not only inconsistent, but an unreasonably stringent reading ofwhat constitutes compliance under this particular training standard. The first part of the dissent?s statement is plainly at odds with thelatter part ? if abatement under this standard consists of elevenseparate acts, then an employer would not be able to comply with thestandard?s requirements by conducting any sort of group training. Thelatter part of the dissent?s statement suggests that group training\/does\/ in fact remain an option for employers, but compliance with thestandard hinges upon the employer?s ability to obtain 100% participationfrom his workforce. ^[10] That standard provided as follows:(iii) The training program shall be conducted in a manner that theemployee is able to understand. The employer shall ensure that each suchemployee is informed of the following:?.This language was followed by eight subparagraphs, each of which setforth the components of the training program. The 1994 amendments onlyadded two additional subparagraphs that similarly state the content ofthe training program. ^[11] The Secretary?s interpretation of the standard asstated in compliance letters is to the same effect. \/See, e.g., \/OSHAletter dated April 21, 1998, addressed to Ms. Sally Hagomarisino. \/Seegenerally http:\/\/www.osha.gov\/SLTC\/constructionasbestos\/compliance.html.\/ ^[12] Our dissenting colleague contends that \/AndrewCatapano Enterprises, Inc.\/, 17 BNA OSHC 1776, 1995-97 CCH OSHD ? 31,180 (No. 90-50, 1996) (consolidated), provides support for interpretingthis standard to allow per-employee violations based on the failure totrain individual employees. However, our colleague is relying upon\/dicta\/ that we find to be irrelevant to the holding of the case. Asthe dissent concedes, the employer in \/Catapano\/ was \/not\/ cited forfailing to train each employee.^Rather, the Secretary, after inspectingseven worksites on different dates, issued seven citations, on a\/per-instance\/ basis, for failing to train a group of employees at eachof the cited worksites. Interestingly, the violations were cited in thisfashion despite the fact that the standard at issue in \/Catapano\/,section 1926.21(b)(2), provided that ?[t]he employer shall instruct\/each employee\/ in the recognition and avoidance of unsafe conditionsand the regulations applicable to his work environment to control oreliminate any hazards or other exposure to illness or injury.? (Emphasis added)The Commission found that neither the cited group of employees nor theworking conditions had changed from worksite to worksite; all thatdistinguished the citations were the dates of the inspections. \/Id.\/ at1780, 1995-97 CCH OSHD at p. 43, 607. Thus, the Commission concludedthat only a single citation and penalty were permitted under thelanguage of the training standard and vacated all but one of thecitations. \/Id. \/The result in \/Catapano\/ is consistent with ourdetermination here. ^[13] We note that such an approach exceeds the trainingstandard?s own requirements. Under section 1910.1101(k)(9)(ii), anemployer must only provide training ?prior to the time of initialassignment and at least annually thereafter.?^[14] The Secretary may propose such penalties, but she hasno authority to convert her proposals into a final order of theCommission. Such finality may be achieved only when: (1) the employerconsents to the proposed penalties by not filing a notice of contest, inwhich event the proposed penalties become a final order of theCommission by operation of law in accordance with section 10(a) or 10(b)of the Act; or (2) the employer files a notice of contest to submit theissue of the appropriateness of the proposed penalties for determinationby the Commission, in which event the Commission, by virtue of section10 of the Act, has the exclusive authority to assess the appropriatepenalties. ^[15] The Commission is granted the power to review eitherthe citation or the proposed penalty or both under section 10(c) of the Act:The Commission shall thereafter issue an order, based on findings offact, affirming, modifying, or vacating the Secretary?s citation orproposed penalty, or directing other appropriate relief, and such ordershall become final thirty days after its issuance.? 10(c), 29 U.S.C. ? 659(c). ^[16] The Secretary?s proposed penalties are not accordedthe same deference that her reasonable interpretations of an ambiguousstandard must be accorded. \/See Martin v. OSHRC (CF & I)\/, 499 U.S. 144(1991). \/See also Hern Iron\/ \/Works\/, 16 BNA OSHC at 1621, 1993-95 CCHOSHD at p. 41,881 (rejecting Secretary?s contention that his penaltyproposals are entitled to ?substantial weight?). Rather, it is theCommission?s penalty determinations that must be accorded deference. \/See generally Reich v. Arcadian Corp.\/, 110 F.3d 1192, 1199 (5th Cir.1997) (?[I]f we were to agree with the Secretary?s construction of theGeneral Duty Clause and hold that?penalties for violations of the Clauseshould be fixed on a per employee basis, we would be usurping theCommission?s statutorily ordained power to assess ?all? penalties.?). ^[17] The Commission has long held that OSHA?s FOM and FieldInspection Reference Manual (?FIRM?) contain only guidelines forinternal application that do not have the force and effect of law andcreate no substantive or procedural rights to employers. \/FMC Corp.\/, 5BNA OSHC 1707, 1710, 1977-78 CCH OSHD ? 22,060, p. 26,573 (No. 13155,1977), a view with which the courts have agreed. \/Secretary v. ManganasPainting Co.\/, 70 F.3d 434, 437 (6th Cir. 1995) (citing \/Schweiker v.Hansen\/, 450 U.S. 785, 789 (1981)); \/In re Establishment Inspection ofCaterpillar, Inc.\/, 55 F.3d 334, 339 (7th Cir. 1995) (guidelines not lawbut show policy determination). In fact, OSHA has included language tothis effect on the title page of the FIRM. \/Field Inspection ReferenceManual\/, 4 CCH ESHG ? 7960 (OSHA \/Instruction\/ CPL 2.103, Sept. 26,1994). Similarly, like the FOM and the FIRM, CPLs do not have the forceand effect of law. \/American Cyanamid Co.\/, 15 BNA OSHC 1497, 1503-04,1991-93 CCH OSHD ? 29,598, pp. 40,066-67 (No. 86-681, 1992), \/rev?d onother grounds\/, 5 F.3d 140 (6th Cir. 1993). ^[18] We note that the Commission has considered the gravityof a violation to be the most significant factor in determining anappropriate penalty and the number of employees exposed is one of theelements used to determine gravity. See ? 17(j) of the Act; \/HartfordRoofing\/, 17 BNA OSHC at 1366. Thus, while we find no basis on which toassess per-employee penalties under the standards cited here, the factthat eleven employees were exposed to the cited conditions nonethelessplays a role in our decision to assess the maximum penalty allowed bythe Act for each willful violation. ^[19] In their brief on review, Respondents argue that thejudge erred in finding a ? 5(a)(1) violation because Ho had noknowledge either of the decision to open the valve or that the valve wasa gas line. The judge specifically concluded that Ho ?knew of thephysical conditions cited? based on his counsel?s admission at thehearing that tapping into an unmarked line was a recognized hazard.Although Respondents did not petition for review of this issue and theCommission did not include it in the briefing notice, we agree with thejudge that knowledge has been established here. \/See Trinity Indus. v.OSHRC\/, 206 F.3d 539 (5th Cir. 2000). According to the unrebuttedtestimony of the compliance officer, Ho instructed Tate to open the linein question and insisted that he do so despite Tate?s expressedreluctance. Moreover, as the employee assigned by Ho to supervise partof the renovation project including the asbestos removal operationconducted at night, Tate?s knowledge with regard to opening the line isproperly imputed to Ho. \/Pride Oil Well Serv\/., 15 BNA OSHC 1809, 1814,1991-93 CCH OSHD ? 29,807 at p. 40,585 (No. 87-692, 1992). ^[20] One worker testified that the fire started as Tate andthe other workers were trying to use the van to push a cover over oronto the pipe. The judge did not credit this testimony. ^[21] 29 U.S.C. 654(a)(1) requires an employer to provide?employment and a place of employment which are free from recognizedhazards which are causing or are likely to cause death or seriousphysical harm.?^[22] We reject the Secretary?s reliance on Ho?s failure totestify. Adverse inferences may be drawn \/with respect to factualmatters addressed in the record \/where a party does not testify.\/Woolston Constr.Co.\/, 15 BNA OSHC 1114, 1122 n.9, 1991-93 CCH OSHD? 29,394, p. 39,573 n.9 (No. 88-1877, 1991), \/aff?d without publishedopinion\/, No. 91-1413, 1992 U.S. App. LEXIS 15687 (D.C. Cir. May 22,1992). In the absence of any affirmative evidence as to Ho?s state ofmind, we cannot merely infer, as the Secretary contends, that Ho wasactually aware that opening the unlabeled valve would be hazardous. ^[23] The standards require as follows:*’** 1926.1101 Asbestos.*. . . .(h) \/Respiratory protection\/. (1) \/General\/. The employer shall providerespirators, and ensure that they are used, where required by thissection. Respirators shall be used in the following circumstances:(i) During all Class I asbestos jobs.. . . .(k) \/Communication of hazards\/. . . . .(9) \/Employee Information and Training.\/ (i) The employer shall, at nocost to the employee, institute a training program for all employees whoare likely to be exposed in excess of a PEL [permissible exposure limit]and for all employees who perform Class I through IV asbestosoperations, and shall ensure their participation in the program.. . . .(viii) The training program shall be conducted in a manner that theemployee is able to understand. In addition to the content required byprovisions in paragraphs (k)(9)(iii) through (vi) of this section, theemployer shall ensure that each such employee is informed of the following:(A) Methods of recognizing asbestos, including the requirement inparagraph (k)(1) of this section to presume that certain buildingmaterials contain asbestos;(B) The health effects associated with asbestos exposure;(C) The relationship between smoking and asbestos in producing lung cancer;(D) The nature of operations that could result in exposure to asbestos,the importance of necessary protective controls to minimize exposureincluding, as applicable, engineering controls, work practices,respirators, housekeeping procedures, hygiene facilities, protectiveclothing, decontamination procedures, emergency procedures, and wastedisposal procedures, and any necessary instruction in the use of thesecontrols and procedures. . . .(E) The purpose, proper use, fitting instructions, and limitations ofrespirators. . . .(F) The appropriate work practices for performing the asbestos job;(G) Medical surveillance program requirements;(H) The content of this standard. . . .(I) The names, addresses and phone numbers of public healthorganizations which provide information, materials and\/or conductprograms regarding smoking cessation. . . .(J) The requirements for posting signs and affixing labels and themeaning of the required legends for such signs and labels. ^[24] The Secretary cited Ho for a number of violations,including eleven separate violations of both the employee respiratorstandard and the employee training standard at issue here, one violationfor each of the eleven employees involved.^[25] While my colleagues here correctly note that thediscussion of respirator standards in \/Hartford\/ \/Roofing\/ is \/dicta\/,the discussion was central to the Commission?s efforts to compare andcontrast standards which allow per instance citation (a respiratorstandard) with those that do not (a guardrail standard). By sweepingthis discussion ? and distinction ? away, the majority is implicitlyreversing \/Caterpillar\/ and its doctrinal foundation.^[26] The majority?s strained and artificial attempt todistinguish \/Caterpillar\/ because it dealt with ?per-instance?violations while this case deals with ?per-employee? violations thusfalls flat on its face. Here, because of the language of the respectivestandards, each failure to provide respirators to each employee and eachfailure to train each employee is a separate violative instance. In\/Caterpillar\/, each failure to record a recordable employee injury was aseparate violative instance.^[27] The majority makes much of the fact that all eleven ofthe employees here were engaged in Class I asbestos work. Yet themajority itself acknowledges, citing \/Hartford Roofing\/, that ?there isno authority? for the argument that the propriety of per-employeecitation ?depends upon the particular facts of the case as opposed tohow the standard in question defines the unit of prosecution.? Similarly, the majority argues that Ho=s noncompliance with therespiratory protection standard ?stems directly from a single act – hisfailure to provide the appropriate respiratory protection for the typeof work performed by this group of employees.? Yet the fact that Ho=sviolations happened to result from a single act or decision isirrelevant under \/Sanders Lead\/. \/Sanders Lead\/, 17 BNA OSHC at 1200,1993-95 CCH OSHD at p. 42,692.Two other points bear noting. The majority argues that the language ofthe standard requiring employers to ?ensure that they are used? ?merelygoes to establishing noncompliance with the terms of the standard.? Butthose words are there for a purpose – to ensure that the respirators areactually used, in this case, by eleven separate individuals. \/See\/\/Borton, Inc. v. OSHRC\/, 734 F.2d 508, 510 (10th Cir. 1984)(the term?provided? means make available, and could not be read as requiringuse). \/See also\/ \/Stahl Roofing Inc.\/, 19 BNA OSHC 2179, 2183-84 n.5,2002 CCH OSHD &32,646, p. 51,220 n.5 (No. 00-1268, 2003)(consolidated).The majority also argues that to ?prove a violation of the standard, itmakes no difference whether one or all eleven of Ho?s employees were notprovided or using respirators.? But that is equally true of a standardsuch as the recordkeeping standard, which the Commission has determinedis susceptible to per-instance citations and where a violation can beproven if the employer fails to record even one injury. \/See\/\/Caterpillar\/, 15 BNA OSHC at 2172-73, 1991 CCH OSHD at p. 41,005. Here, the employer?s duty extends to ensuring use of a respirator by\/each\/ employee just as in the recordkeeping context, it extends torecording \/each\/ recordable injury. ^[28] By citing violations of a standard on a per-instancebasis and litigating the issue before the Commission, the Secretary isinterpreting the standard as imposing individualized duties and thusexercising her ?delegated lawmaking powers? described in \/CF&I\/. \/CF&I\/, 499 U.S. at 157. As a result, the majority?s argument that theCommission does not give deference to the Secretary?s penaltydirectives, such as CPL 2.80, misses the mark because it is herinterpretation reflected in the citation that we must consider fordeference, not a penalty directive. \/See\/ OSHA Instruction CPL 2.80,\/Handling of Cases To Be Proposed for Violation-By-Violation Penalties\/(October 21, 1990)(?\/CPL 2.80?\/). As the majority concedes, CPL 2.80 ismerely internal guidance that helps guide the Secretary=s use of herprosecutorial discretion.^[29] There is no dispute that Ho had fair notice and ?fairwarning of the conduct [the standard] . . . require[d]? ? to provideindividual respirators to each of the eleven employees. \/See\/ \/DiamondRoofing v. OSHRC\/, 528 F.2d 645, 649 (5th Cir. 1976).^[30] The majority really seems to be taking issue with theSecretary?s exercise of prosecutorial discretion. \/See\/ \/infra\/ note13. But Ho cannot complain about the fact that the Secretary exercisedher discretion here by citing him on a per-employee basis or his lack ofnotice as to how the Secretary intended to exercise that discretionhere. As Judge Posner pointed out in the criminal context, ?The risk ofsuch variance [in severity of enforcement] is inherent in the decisionto commit a crime. . . .? \/Prater v. U.S. Parole Commn.\/, 802 F.2d 948,952 (7th Cir. 1986)(en banc). \/Accord\/ \/Lawrence v. U.S.\/, 179 F.3d343, 348 (5th Cir. 1999), \/cert. denied\/, 528 U.S. 1096 (2000)(?We allowthe government discretion to decide which individuals to prosecute,which offenses to charge, and what measure of punishment to seek.?). And Ho does not allege that the exercise of discretion here was somehowbased on impermissible grounds. \/See\/ \/id.\/ at 349.^[31] The majority patently misreads the nature of anemployer?s obligation under the cited training standard by suggesting,in footnote 15, that an employer could comply with the standard, whichrequires the employer to ?ensure their [all employees who performcertain asbestos operations] participation in the program,? even whennot all such employees have participated. While group training would bepermissible, the standard still requires that the employer ensure eachsuch employee participates ?prior to or at the time of initialassignment.? Section 1926.1101(k)(9)(ii).^[32] As with the respiratory protection standard, themajority makes much of the fact that all of the eleven employees herewere engaged in Class I asbestos operations. That particular fact is ofno moment, however, for the reasons explained in note 5, \/supra\/.^[33] As further support, the majority quotes from AppendixB to OSHA Instruction CPL 2-2.63, \/Inspection Procedures forOccupational Exposure to Asbestos\/ (1996), claiming the appendix refersto employees collectively rather than individually. The quote from themajority is as follows:Training is to be provided:….(2) To all employees exposed at or above the PEL.(3) To all employees who perform Class I through Class IV asbestosoperations…..However, the majority=s selective quote has left out the next item, asfollows:(4) Prior to or at the time of initial assignment and at least annuallythereafter.This can only refer to the initial assignment of \/an individualemployee\/. \/See also\/ section 1926.1101(k)(9)(ii). ^[34] As with the respiratory protection standard, themajority argues that Ho somehow lacked notice that the training standardcould be cited on a per-employee basis, an argument that Ho himself doesnot make before us. The notice argument is unavailing for the reasonsdiscussed \/supra\/. And there is no dispute that Ho had fair notice and?fair warning of the conduct [the standard] . . . require[d]? ? toprovide training to each of the eleven employees. \/See\/ \/DiamondRoofing v. OSHRC\/, 528 F.2d 645, 649 (5th Cir. 1976). Furthermore, asnoted above, the Fifth Circuit has previously suggested that anindividual employee may be a unit of violation in the case of a failureto train. \/Arcadian\/, 110 F.3d at 1198-99. While that suggestion wasin the nature of \/dicta\/, it certainly provided notice that a trainingstandard could be so interpreted. \/Accord\/ \/Catapano\/, 17 BNA OSHC at1780, 1995-97 CCH OSHD at p. 43,607.^[35] The majority argues that the Secretary ?advances whatshe calls different but diametrically opposed ?reasonable?interpretations of the same standard.? They point out that sometimesthe Secretary will cite ?single violations that treat all exposedemployees as a group.? But, as the Commission acknowledged in \/HartfordRoofing\/, where the standard allows the Secretary to cite on aper-instance basis, she ?also has the discretion to group them forpenalty purposes as if they were one violation.? \/Hartford\/ \/Roofing\/,17 BNA OSHC at 1367, 1995-97 CCH OSHD at pp. 42,937-38. The majority?sseeming insistence that the Secretary must always exercise herprosecutorial discretion in exactly the same manner regardless of thefacts – or else be accused of inconsistency ? would effectively stripher of her discretion and either punish well-meaning but negligentemployers or eliminate an important tool to deal with ?bad actor?employers. In any event, the Secretary?s discretion to cite on a ?peremployee? basis here is strictly cabined by the number of employees whomHo failed to train or provide respirators for. The majority also claims that the Secretary suggests that per-daycitation would also be appropriate. It is not even clear that is whatthe Secretary is suggesting, since the discussion cited by the majorityarose in the context of the Secretary?s argument in her briefs that theemployees worked on different dates. In any event, any such suggestionwas implicitly rejected by the Commission in \/Catapano\/ and is notreflected in the citations before us here. The majority assiduouslyavoids, however, the real question under our precedent ? can thestandards here ?reasonably be read? to allow per-employee citation wherethe standards impose employee-specific duties? Any fair reader mustanswer yes.^[36] The Review Commission, as an administrative agency, isgenerally entitled to reconsider its precedent as long as the rationalefor the change is well-explained and not precluded by the Act orcontrolling court precedent. \/See\/ \/Brock v. Dun-Par Engd. Form Co.\/,843 F.2d 1135, 1137-38 (8th Cir. 1988)(?While the Commission may changeits position, it must give adequate reasons for doing so.?).The majority?s decision here, by \/sub silentio\/ reversing Commissionprecedent, reminds me of the comment of the Court of Appeals for theSeventh Circuit in \/Butler Lime & Cement Co. v. OSHRC\/, 658 F.2d 544(7th Cir. 1981), ?[t]he change of personnel which obviously precipitateda change in decision calls to mind a frequent theme of Law Dayobservances ? one applicable not only to courts but to administrativebodies ? that decisions should result from a rule of law and not ofmen.? \/Id.\/ at 550 n.2.^[37] The white dust masks are clearly labeled A*Not arespirator, *Not government approved, *Not to be used when dustconcentrations exceed appropriate government exposure limits. !WARNINGUsing this mask against asbestos, silica, grain dust, spray paints orother harmful substances may result in sickness or death. If you arearound harmful substances, use the proper government approved respirator.@^[38] The business card Ho gave to Weist lists not onlyHouston Fruitland Inc., but Ho Ho Ho Express Inc., and Cal-Sierra at thesame address, phone and fax location (Exh. C-31). ^[39] Tate testified that Manuel Escobedo did notsupervise the laborers after they started working nights, as he hadbecome ill and had been in and out of the hospital (Tr. 273).^[40] Melba Gomez testified that she worked for Ho Ho HoExpress as Eric Ho=s assistant from September 1997 until May 1998 (Tr.403, 407). Gomez would handle the inventory, and take care of Ho=spersonal agenda, answering his phone, buying his fish food (Tr. 404).^[41] Of three additional samples of debris taken from thesecond floor of the building on May 5, 1998, one contained 20%chrysotile asbestos, one contained 2% and one contained no asbestos (Tr.488-95; Exh. C-34). ^[42] At hearing Respondents=counsel stated that theviolations were not at issue with Asome exceptions,@but declined toidentify which citations were contested until after seeing theSecretary=s \/prima facie\/ case. In their brief, Respondents address themerits of Docket No. 98-1646, Willful citation 2, item 1, allegingviolation of ‘5(a)(1). This judge concludes, therefore, that that itemis the exception to which Respondent referred at hearing.^[43] ‘1926.1101(k)(9)(i) The employer shall, at no cost tothe employee, institute a training program for all employees who arelikely to be exposed in excess of a PEL and for all employees whoperform Class I through IV asbestos operations, \/and shall ensure theirparticipation in the program.\/ ‘1926.1101(k)(9)(viii) The training program shall be conducted in amanner that the employee is able to understand. In addition to thecontent required by provisions in paragraphs (k)(9)(iii) through (vi) ofthis section, \/the employer shall ensure that each such employee isinformed of the following:\/. . .^[44] Where the Secretary alleges that a violation iswillful but fails to prove willfulness, a serious violation may be foundwhere the parties have expressly or impliedly consented to try the issueof whether the violation was serious. \/Atlas Industrial Painters\/, 15BNA OSHC 1215, 1991-93 CCH OSHD &29,439 (No. 87-619, 1991). Respondent=s neither objected to, nor rebutted the Secretary=s evidenceshowing the serious injuries resulting from this violation.”