AND HEALTH APPEALS BOARD
DEPARTMENT OF INDUSTRIAL RELATIONS
STATE OF CALIFORNIA
|In the Matter
of the Appeal of:
|Docket Nos. 94-R5D2-2768
2770, 2771, 2774,
2775, 2777 & 2779
The Occupational Safety and Health Appeals Board (Board), acting pursuant to authority vested in it by the California Labor Code and having granted the petition for reconsideration filed in the above-entitled matter by Shea-Kiewit-Kenny (Employer), makes the following decision after reconsideration. The Board today announces in this case and three others its view of the jurisdiction of Cal OSHA in relation to that of other federal and state agencies.
Between July 18, 1994, and September 1, 1994, a representative of the Division of Occupational Safety and Health (Division) conducted an inspection at a place of employment maintained by Employer in Tunnel 4 near 606 South Vermont Avenue, Los Angeles, California (the site). On October 25, 1994, the Division issued to Employer the following citations, alleging violations of the occupational safety and health orders found in Title 8, California Cod of Regulations.
|2||3314(d)||Serious||$ 7,000||[Unsecured hose bracket]|
|3||1743(c)||Serious||$ 3,125||[General precautions for cylinders]|
|4||8446(j)||Serious||$ 3,125||[Fire extinguishers]|
|5||2540.3||Serious||$ 1,250||[Electrical equipment]|
|6||8425(g)||Serious||$ 3,125||[Ventilation bulkhead construction]|
|7||8430(e)||Serious||$ 7,000||[Self rescuers]|
|8||8426(c)||Serious||$ 7,000||[Emergency plan]|
|12||1740(g)||Willful/Serious||$70,000||[Separation of stored cylinders]|
|14||1740(h)||Willful/Serious||$70,000||[Cylinder storage near cutting operations]|
Employer filed a timely appeal from the citations contesting the existence and classification of the alleged violations and the reasonableness of the abatement requirements and proposed civil penalties. A hearing was held on the appeal before an administrative law judge of the board (ALJ). At the start of the hearing, the ALJ granted the Divisions motion to withdraw Citation Nos. 2, 4, and 13; to reduce the civil penalties for Citation Nos. 3, 5, 6, 9, 10, 11, and 12; and to amend the classification of Citation Nos. 7 and 8. Employers motion to withdraw its appeal to Citation Nos. 1, 7 and 8 as amended was also granted. Following the hearing, the ALJ issued a decision dated July 28, 1997, granting Employers appeal as to some citations in their entirety, reducing the classification and civil penalties as to other citations, and denying the appeal as to the remaining citations.
On August 29, 1997, Employer filed a timely petition for reconsideration of Citation Nos. 3, 5, 6, 9, 10, 12, and 14. The Division filed an answer to the petition on October 3, 1997, and on October 17, 1997, the Board granted the petition and stayed the ALJs decision pending a decision after reconsideration.
The Board invited the parties to participate in oral argument, which was held on June 23, 1998. The parties submitted supplemental briefs in preparation for the oral argument. The Board considered the arguments presented at oral argument and in those briefs in issuing this decision.
In making this decision, the Board relies upon its independent review of the entire evidentiary record in this case, including the transcripts of both the hearing and the oral argument before the Board, and each exhibit admitted into evidence. No additional evidence has been taken. The Board adopts and incorporates by this reference the summary of evidence set forth on pages 2 through 5 of the decision of the ALJ.
SUMMARY OF FACTS
Employer was a joint venture consisting of J.F. Shea Co. of Walnut, California, Kiewit Construction Co. of Omaha, Nebraska, and Kenny Construction Co. of Wheeling, Illinois. The joint venture was formed for the purpose of bidding on and performing a job for the Los Angeles County Metropolitan Transportation Authoritys Red Line Project. Employer specifically was to construct a shaft at Barnsdale Park through which all personnel and materials would enter the construction areas and from which all excavated material would be removed. From the shaft four 20-diameter tunnels were excavated, two went southerly (Tunnels 3 and 4) and two went westerly (Tunnels 1 and 2). The excavation process involved pushing a shield through the earth. The shield is followed by trailing gear that provides, among other things, the power for propulsion of the shield, the facility for moving muck trains up to the face to remove excavated earth, and the means for erection of concrete segments which provide initial support for the excavation after the shield advances.
On July 18, 1994, Employer was in the process of disassembling the shield in Tunnel 4 since the excavation of that tunnel was complete. To perform disassembly work, an employee used a welding torch which was attached by hoses to oxygen and acetylene cylinders for fuel. One employee, Michael S. Willis (Willis) was cutting a hose bracket located on an upper portion of the shield. At the time Willis was performing the cutting, his oxygen and acetylene bottles were ten feet below and ten feet behind where he was cutting. In cutting operations, before the last cut is made on the bracket, the employee secures the area below the cutting and ties and slowly lowers heavy pieces. Willis made a cut on the bracket believing it was the first cut� not the last cut� so he did not follow the "last cut" securing procedures. Willis made the cut, the bracket fell, and a fire ensued, seriously burning Willis.
Following the July 18, 1994, accident the Division conducted an investigation and cited Employer as referenced in the Jurisdiction section.
Employer petitioned for reconsideration from seven citations, Nos. 3, 5, 6, 9, 10, 12, and 14.
As to all seven citations, Employer contends that (1) the enforcement of California standards, found in Title 8 California Code of Regulations, is preempted by federal standards; (2) enforcement of California standards violates Employers due process rights to a fair warning as to the conduct that may result in a citation; and (3) the joint venture no longer exists so further penalty enforcement against the joint venture will not serve the purposes of the Cal OSHA Act.
The Board will address each one of these all-encompassing arguments first, and then, if necessary, proceed to each individual citation on reconsideration.
1. Is Cal OSHA preempted from enforcing its Tunnel Safety Orders because Fed OSHA issued Employer a citation for a violation of its Underground Construction Standards during a joint federal/state inspection of the site?
2. Does the exercise of concurrent federal/state jurisdiction over the site constitute a violation of Employers constitutional right of due process?
Is Cal OSHA preempted from enforcing its Tunnel Safety Orders because Fed OSHA issued Employer a citation for a violation of its Underground Construction Standards during a joint federal/state inspection of the site?
The California Division of Occupational Safety and Health (Division) and the Occupational Safety and Health Administration of the U. S. Department of Labor (Fed OSHA) jointly investigated an accident that occurred in Tunnel 4 on July 18, 1994. As a result, Fed OSHA issued Employer a citation alleging a willful violation of section 1926.800(n)(1) of its Underground Construction Standards (29 C.F.R. § 1926.800) for storing more cylinders of flammable gas in the tunnel than were needed for the 24 hour period following the accident. (Exhibit H.)
California does not have a safety order limiting the number of gas cylinders that may be stored in a tunnel. As a result of the inspection, the Division did, however, issue Employer seven citations as listed above for alleged violations of its Tunnel Safety Orders (Title 8, California Code of Regulations, §§ 8400-8568) along with seven other citations.
Employer contends that Fed OSHAs exercise of enforcement jurisdiction at the site preempted the Divisions jurisdiction. Its argument rests on its reading of the U.S. Supreme Courts decision in Gade v. National Solid Wastes Management Assn. (1992) 505 U.S. 92. According to Employer, Gade holds that where a federal standard is in effect, the State cannot enforce its own standards relating to the same issue. In other words, concurrent jurisdiction, with employers subject to inspection and citation by either authority, is forbidden. (Petition for Reconsideration, pp. 12-14.)
Employers reliance on Gade is misplaced. It fails to take into account the gradual transfer of responsibility from the federal government to the States that Congress contemplated would occur during the period the States were developing and implementing their own occupational safety and health plansa transition period which was not before the Court in Gade.
Employers misplaced reliance on that decision is best understood by stepping back from the decision itself and examining the purpose and design of the federal Occupational Safety and Health Act of 1970 [referred to here as the "Federal Act"] (29 U.S.C. §§ 651 et seq.). In enacting that legislation Congress sought "to assure so far as possible every working man and woman in the Nation safe and healthful working conditions and to preserve our human resources." (29 U.S.C. § 651(b).) Having stated its underlying goal, Congress then went on to enumerate the policy considerations that shaped the legislative scheme for its realization. (§ 651(b)(1)-(13).) Of particular relevance here is the policy of:
"[E]ncouraging the States to assume the fullest responsibility for the administration and enforcement of their occupational safety and health laws by providing grants to the States to assist in identifying their needs and responsibilities in the area of occupational safety and health, to develop plans in accordance with the provisions of this chapter, to improve the administration and enforcement of State occupational safety and health laws, and to conduct experimental and demonstration projects in connection therewith." (§ 651(b)(11).)
Congress thus acknowledged the strong and traditional interest which the States have in the safety and health of their working men and women. (See Yellow Freight System, OSHAB 94-2565, Decision After Reconsideration, issued this same date, and cases cited therein.)
To integrate that policy into the structure of the Federal Act, Congress adopted a technique which the Supreme Court has aptly described as "a program of cooperative federalism that allows the States, within the limits established by federal minimum standards, to enact and administer their own regulatory programs, structured to meet their own particular needs." (Hodel v. Virginia Surface Mining and Reclamation Assn. (1981) 452 U.S. 264, 289; New York v. U.S. (1992) 505 U.S. 144, 167-168.) [Emphasis supplied.]
The policy of cooperative federalism finds its expression in section 667 of the Federal Act. That section establishes a framework for the States to develop their own occupational safety and health programs and provides for the withdrawal of federal jurisdiction once that has been accomplished.
The crucial transfer of jurisdiction from the federal government to willing state governments under section 667 is not a single regulatory event. It occurs in stages. Initially, exclusive jurisdiction is vested in Fed OSHA. (29 U.S.C. §§ 654(a)(2), 655 and 667(a).) When a State desires to assert jurisdiction over a safety issue covered by a federal standard, it submits its plan for the development and enforcement of such standards to the Secretary of Labor. (29 U.S.C. § 667(b); 29 C.F.R. § 1902.10.) If the Secretary finds that the plan meets or will meet the criteria set forth in section 667(c) and its implementing regulations, "initial approval" of the States "developmental plan" is granted. (29 U.S.C. § 667(e); 29 C.F.R. §§ 1902.20 & 1902.31.) Initial approval allows the State to receive federal matching funds and begins the process of federal withdrawal from enforcement operations. (29 U.S.C. §§ 667(e) and 672; 29 C.F.R. §§ 1902.1(c) & 1954.1(c).) There then ensues a periodlasting at least 3 yearsduring which the Secretary monitors the States developmental plan and sees to it that any gaps or inadequacies in safety coverage are rectified by Fed OSHA. (29 U.S.C. § 667(e); 29 C.F.R. §§ 1902.32(a)-(b) & 1954.3(a)-(b).) The last stage comes when the plan receives final approval from the Secretary. At that point, Fed OSHA withdraws and the State assumes full and exclusive jurisdiction. (29 U.S.C. § 667(e); 29 C.F.R. § 1902.42(c).) Thereafter, the Secretary can reassert jurisdiction only by establishing that the State has failed to comply with its approved plan. (29 U.S.C. §§ 667(f) and (g).)
The gradual and supervised transfer of responsibility for worker safety from the federal government to the States ensures that Congress underlying goal of assuring "every working man and woman in the Nation safe and healthful working conditions" is maintained while willing States are in the process of developing their own plans to effectuate the strong and traditional interest which they have in the safety and health of the men and women who work within their borders.
Enforcement authority varies from stage to stage. The basic duty of an employer, set forth in section 654(a)(2), to comply with all federal safety and health standards promulgated under section 655 does not terminate until a State receives final approval for its plan. (29 U.S.C. § 667(e), third sentence.) During the developmental stage, the mechanism for transfer of enforcement power from the federal government to the State is the negotiation of an "operational agreement" tailored to the circumstances unique to each State and its particular plan. (29 C.F.R. § 1954.3(f)(1); and see 29 C.F.R. § 1954.3(a)-(b).) The agreement delineates those areas that require further development and implementation, and it spells out the extent to which enforcement jurisdiction is ceded from Fed OSHA to the State. Once negotiated and executed, it is noticed in the Federal Register, and a description of the respective responsibilities of Federal and State OSHA is published in the Code of Federal Regulations. (29 C.F.R. § 1954.3(f)(2).)
The California plan is still in the developmental stage even though California started its OSHA program more than a quarter century ago. In 1973, under Governor Ronald Reagan, California opted to have its own OSHA program. Prior to Californias plan ever receiving final approval from the Secretary of Labor, California, under the direction of Governor George Deukemejian in 1987, defunded the Cal OSHA program for all but the public sector. This resulted in Fed OSHA assuming jurisdiction over private sector OSHA enforcement in California. In 1988, California voters passed an initiative to restore the state program which had been discontinued the previous year. Work on a phased restoration of the California plan began, and, on October 5, 1989, a new Operational Status Agreement was signed by the State of California and the Secretary of Labor setting forth "the scope of the exercise of Federal authority under section 18(e) of the Federal Act [29 U.S.C. § 667(e)] in the State of California with respect to occupational safety and health standards promulgated under section 6 [29 U.S.C. § 655] of the Federal Act, by specifying areas of State responsibility, and delineating continuing Federal responsibilities in the State." (55 FR 28612) The agreement was duly noticed in the Federal Register and published in the Code of Federal Regulations. (55 FR 28610-28613; 29 C.F.R. §1952.172.)
Section 4 of the agreement spells out a number of areas where federal enforcement jurisdiction is to be withdrawn in favor of state enforcement, and Section 6 provides that even so,
"(b) Federal OSHA retains the right to exercise full Federal enforcement authority of any safety and health standard which Federal OSHA has promulgated until such time as the State has adopted a comparable standard."
Those provisions make it clear that the Secretary views the developmental stage as one in which all authority not specifically ceded to the States is retained by federal authorities. Where there is a gap or an inadequacy in state coverage, Fed OSHA can step in to protect affected workers.
The same allocation of authority is found in the notice of the California Operational Status Agreement published in the Federal Register and in the resulting regulation in the Code of Federal Regulations. In the Federal Register, the Secretary explained:
"Federal enforcement authority will not be exercised with respect to issues covered under the State plan with the exception of: permanent and emergency temporary standards which the State has not adopted or amended in conformance with Federal standards actions and review findings . . . ." (55 FR 28612.)
And the published regulation reads:
"The U.S. Department of Labor will continue to exercise authority, among other things, with regard to: (1) Specific Federal standards which the State has not yet adopted or with respect to which the State has not amended its existing State standards when the Federal standard provides a significantly greater level of worker protection than the corresponding Cal/OSHA standard, enforcement of new permanent and temporary emergency Federal standards until such time as the State shall have adopted equivalent standards, and enforcement of unique and complex standards as determined by the Assistant Secretary." (29 C.F.R. § 1952.172(b)(1).)
Here, Employer was cited for violating the federal safety and health standard found in section 1926.800(n)(1) of the standards for Underground Construction. That standard forbids storing more cylinders of flammable gas in a tunnel than are needed for the next 24-hour period. Although California had adopted a set of safety orders dealing with the issue of tunnel safety (Tunnel Safety Orders, Cal. Code of Regs., Title 8, §§ 8400-8568), it had no standard limiting the number of gas cylinders that may be stored in a tunnel. That being so, the exercise by Fed OSHA of concurrent enforcement authority over the conduct in question was consistent with the Operational Status Agreement negotiated between Fed OSHA and the California Department of Industrial Relations pursuant to section 667(e) and its implementing regulations, duly noticed in the Federal Register and published in the Code of Federal Regulations.
Employer, however, will have none of that. In its petition for reconsideration it contended that the decision of the U.S. Supreme Court in Gade v. National Solid Wastes Management Assn., supra, rules out any possibility of concurrent federal/state jurisdiction over any particular safety and health issue.
The contention is rather startling in view of the fact that nowhere in Justice OConnors plurality opinion, Justice Kennedys concurrence, or Justice Souters dissent is the crucial section permitting the exercise of concurrent jurisdiction during the developmental stage of a state plansection 667(e)cited, let alone discussed.
The reason it was neither cited nor discussed is that the Court was considering an entirely different issuethe status of state safety and health regulations which had not been submitted for approval to the Secretary of Labor. It therefore had no need to consider concurrent federal/state jurisdiction during the developmental stage of state plans which had.
In Gade, the State of Illinois enacted the Hazardous Waste Crane and Hoisting Equipment Operators Licensing Act and the Hazardous Waste Laborers Licensing Act. Neither act was submitted to the Secretary for approval under section 667(b). The National Solid Waste Management Association sued, claiming, among other things, that the legislation was preempted under the Federal Act because federal standards covering the same issue had been promulgated. Illinois, on the other hand, contended that the Federal Act should be read as allowing state regulation that supplements, but does not conflict, with existing federal standards. The inevitable consequence of adopting the Illinois position would have been two permanent, parallel programs within the State, both regulating occupational safety and health, one run by Fed OSHA and the other by the Illinois Environmental Protection Agency.
The Supreme Court rejected that outcome, holding that:
"The design of the statute persuades us that Congress intended to subject employers and employees to only one set of regulations, be it federal or state, and that the only way a State may regulate an OSHA-regulated occupational safety and health issue is pursuant to an approved state plan that displaces the federal standards." (505 U.S. at 99.)
In analyzing the statute, and particularly section 667, a majority of the justices found a clear congressional intent to avoid permanent concurrent jurisdiction. The Court was not called upon to address the wisdom and propriety of permitting temporary concurrent jurisdiction as a mechanism to ensure adequate occupational safety and health protection for those working men and women whose state plan has not yet emerged from the developmental stage. Hence, the court had no need to cite or discuss subsection (e), which, as we have pointed out (ante, pp. 5-7), expresses Congress clear intent to afford the Secretary of Labor discretion to exercise concurrent enforcement jurisdiction during that critical transitional stage.
In a subsequent submission to the Board and in oral argument, Employer modified its position and acknowledged the possibility of concurrent state/federal jurisdiction during the developmental stage, but argued that the Secretary was severely limited in the exercise of that jurisdiction. According to Employer, the provision found in the first sentence of section 667(e) providing that the Secretary "may, but shall not be required to, exercise his authority . . . with respect to comparable [federal] standards," forbids the exercise of federal jurisdiction in situations, such as the one presented here, where there is no comparable state standard. (See Letter to Board of June 1, 1998, p. 3, fn. 3.)
Employer has it backwards. The purpose of the "comparable standard" language is not to confine the Secretarys authority to situations where comparable standards are involved, but to make it clear that, even where the state plan has comparable standards, he mayif he so desirescontinue to exercise federal jurisdiction. Thus, he retains all of his "un-ceded" jurisdiction over "incomparable" standards and as much of his "ceded" jurisdiction over "comparable" standards as he may chose to exercise.
There are a number of reasons why our interpretation of the comparable standards language in section 667(e) is on firmer legal ground than that of Employer. First of all, section 667(e) does not terminate the obligation of an employer under section 654(a)(2) to comply with all federal standards until the developmental stage is completed and the state plan receives final approval. (Compare the first sentence of § 667(e), which makes no mention of § 654(a)(2), with the third sentence, which does.) Second, continuing jurisdiction over both comparable and incomparable standards is necessary to ensure that state standards are and continue to be at least as effective as existing or newly enacted federal standardsa requirement for any approved state plan. (See § 667(c), condition 2.) Third, by allowing Fed OSHA to remedy gaps and inadequacies in a state plan, it carries out Congress paramount goal of "assur[ing] so far as possible every working man and woman in the Nation safe and healthful working conditions" (§ 651(b)), while, at the same time, carrying out the ancillary goal of encouraging the States to assume the fullest responsibility for the administration and enforcement of their occupational safety and health laws . . . ." (§ 651(b)(11).) Employers reliance on the need to avoid duplicative jurisdiction, while laudable, must yield to those explicit goals.
Finally, Employers preemption argument runs counter to several of the precepts which the U.S. Supreme Court has utilized in resolving such interpretative issues (See Yellow Freight System, Inc., OSHAB 94-2565, Decision After Reconsideration, issued this same date.): (1) Where safety and health are involved there is a strong presumption against preemption, and (2) in resolving preemption issues, courts will accord considerable deference to pronouncements by the affected federal agency concerning the preemptive reach of the law it is administering. (Hillsborough County, Florida v. Automated Medical Laboratories, Inc. (1985) 471 U.S. 707, 717-719; California Coastal Commission v. Granite Rock Co. (1987) 480 U.S. 572, 582-583.) Here, the Secretary made clear in its Operational Status Agreement with the State, in the Notice published in the Federal Registrar, and in the Code of Federal Regulations that, except as specified, he retained jurisdiction during the developmental period to enforce both comparable and incomparable federal standards.
But even if Employers interpretation of section 667(e) were accepted, there is still no basis for preemption. To see why, it is necessary to examine the logic of Employers position. It goes this way: By giving initial approval to the state plan, the Secretary gave up all right to enforce anything but comparable standards. However, in section 6(b) the Operational Status Agreement, he wrongfully attempted to retain enforcement jurisdiction over incomparable standards. The agreement is therefore null and void. Because it is null and void, exclusive jurisdiction reverts to the federal government, and the State is therefore preempted.
This is odd logic, for it asserts that the Secretary, by acting in excess of his jurisdiction, gains exclusive jurisdiction. But the real problem is with the notion that the state plan is null and void because it contains a provision which, for the purpose of argument, we assume the Secretary had no authority to include. The inclusion of such a provision is no reason to invalidate the entire agreement and, with it, the entire state plan. It is simply an affirmative defense to the federal citation. In General Motors Corporation, OSHRC Docket No. 78-2696 (Apr. 30, 1980) 1980 OSHD � 24,452, the Review Commission held that an employer "clearly has standing to raise the defense that the enforcement action brought against it is beyond the legal authority of the enforcing agency. NLRB v. Highland Park Manufacturing Co., 341 U.S. 322, 325-26 (1951); 3 K. Davis, Administrative Law Treatise, § 22.08 at 240 (1958) . . . ." (See also, General Motors Corp., Chevrolet Motor Div., OSHRC Docket No. 76-5344 (Jan. 25, 1982), 1982 OSHD � 25,872; and see Bokat & Thompson, Occupational Safety and Health Law (BNA 1988), p. 694, fn. 20, where the defense is characterized as being one of estoppel.) Moreover, in AFL and CIO v. Marshall (D.C. Cir. 1978) 570 F.2d 1030, 1042, the court, after finding serious problems with the criteria utilized by the Secretary in approving state plans, nevertheless declined to enjoin the implementation of those plans which had already been approved because "considerations of the public interest weigh heavily." Those same considerations apply here. Employer had an adequate remedy which, for its own reasons, it declined to assert. It now seeks to resort to the draconian remedy of invalidating the Operational Status Agreement between the State of California and the Secretary of Labor. Since that agreement is the sine qua non for the California Occupational Safety and Health Program, Employer, like it or not, is arguing for the destruction of the entire program, leaving California workers without protection during the months, if not years, it would take for Fed OSHA to fill the void. Frankly, we find it difficult to believe Employer is seriously advocating an outcome so much at odds with the public interest as expressed by the citizens of this State when, in 1988, they approved Proposition 97 requiring the restoration of the California Program.
We therefore reject Employers preemption argument.
II DUE PROCESS
Does the exercise of concurrent federal/state jurisdiction over the site constitute a violation of Employers constitutional right of due process?
Employer does not claim that California Safety Orders under which it was cited are vague or uncertain. Nor does it claim that the federal standard forbidding employers from storing more cylinders underground than they will need for the next 24-hour period is vague or uncertain. Rather, the focus of its due process claim is the Operational Status Agreement and the federal regulation that implemented it. According to Employer, that regulation29 C.F.R. section 1952.172does not provide adequate notice of what conduct is required and what conduct is proscribed and thus, does not provide due process.
The federal regulation per se is not as confusing as Employer claims. Anyone reading it could have no doubt that the California Tunnel Safety Orders set forth the minimum standards that every Employer must abide. Any confusion has to do with the situations where federal standards interject themselves and require something more than minimums established by the California Safety Orders.
Employers quarrel is not, therefore, with California, but with the circumstances under which Fed OSHA chose to cite and enforce its Underground Construction Standards. In particular, Employer points out that under the Operational Status Agreement, Fed OSHA retains enforcement authority for the same construction sites in California as the Division if there is a federal standard that California has not adopted that provides a significantly greater level of worker protection than the corresponding state standard or if there is a federal standard that is "unique and complex" as determined by the Assistant Secretary. Employer argues that this effectively requires employers to sort through more than 900 single-spaced, fine-print pages in the Code of Federal Regulations to determine which of thousands of regulations fall in either category. Moreover, Employer asks why if such a comparison is a reasonable undertaking was it not done by either of the governmental entities and the results published so that employers would know when federal regulations come in to play. Employer argues that the Operational Status Agreement and 29 CFR section 1952.172 violate due process requirements and should be stricken as void for vagueness, because employers and other ordinary persons must guess whether a federal standard meets either of these tests; in other words, the applicability of a federal standard is uncertain, lacking the definiteness necessary for understanding what is required.
Instead, Employer seeks to set aside, as null and void, the entire Operational Status Agreement between the Secretary of Labor and the State of California and, along with it, the regulation adopted to implement that agreement. We have already explored the implications of that position and explained our reasons for rejecting it. (ante, pp. 8-10.)
We sympathize with Employer and the other employers in California who must guess correctly whether the federal regulation applies. The lack of certainty and definiteness of which Employer complains is indeed a serious due process concern. Unfortunately for Employer, it is one which should have been raised before OSHRC. There, Employer could have asserted that it lacked adequate notice that section 1926.800(n)(1) would apply because the applicability of that section to the facts at hand was rendered so vague by the terms of section 1952.172 "that men of common intelligence must necessarily . . . differ as to its application." (Connally v. General Construction Co. (1926) 269 U.S. 385, 391; Cranston v. City of Richmond (1985) 40 Cal.3d 755, 763.) Because the grievance is against the applicability and enforceability of the federal standard, it is beyond the purview of this Board to redress.
In rejecting the method and the forum chosen by Employer, we in no way wish to minimize the reality of the problems raised. It is difficult for employers to familiarize themselves with the myriad of safety regulations that may apply to their operations. Nor is there any question that the burden increases when concurrent state/federal jurisdiction exists.
It is certainly possible that the burden on employers could be eased by a careful and thorough delineation of the federal standards that obtain where there is concurrent jurisdiction and by seeing to it that the final approval of a state plan is not withheld any longer than absolutely necessary beyond the three years contemplated by Congress. Those matters, however, are best addressed either in the legislative or regulatory arena, orunder the proper circumstancesin litigation.
III STATUS OF THE JOINT VENTURE
If the Shea-Kiewit-Kenny joint venture no longer has employees or a place of employment in California would the purpose of the Act be served by holding the joint venture financially liable for the penalties at issue?
SUMMARY OF EVIDENCE ON
THE STATUS OF THE JOINT VENTURE
The joint venture of Shea-Kiewit-Kenny (SKK) was formed on May 28, 1992, for the purpose of bidding on and performing the B-251 Metro Redline contract which involved the construction of a shaft and four underground tunnels as discussed more fully in the general summary of evidence. Each one of the three joint venture partners was a distinct and separate corporation doing business in the construction field. Shea was J.F. Shea Company of Walnut, California; Kiewit was The Kiewit Construction Company of Omaha, Nebraska; and Kenny was Kenny Construction Company of Wheeling, Illinois. The joint venture of SKK, separate and distinct from the three venture components, had its own contractors license, business license, insurance, accounting records, personnel records, personnel department, payroll administrator, workers compensation insurance, tax identification number, engineering staff, agreements with labor organizations, and paid business, federal, state, city, and payroll taxes. SKK had its own employment site at Barnsdale Park, where all 300 SKK employees reported to work and then disbursed to their respective work sites at various underground locations.
The accident which prompted the Division inspection and resulted in the issuance of the citations which are the subject of Employers petition occurred on July 18, 1994. On July 13, 1995, SKK received notice from the owner of the project, MTA, that SKKs contract was terminated. As a result of this termination notice SKK was immediately barred from the site; SKK promptly let go its workforce of approximately 300 workers; MTA relet the tunneling project to other contractors who completed the work; and SKK never did any further work on the B-251 Metro Redline project� the sole subject of the joint venture.
Although SKK let go all of its work force following the termination of its contract, SKK did not completely cease to exist. The joint venture became involved in litigation concerning the termination of the contract and retained its business and contractors licenses, continued to own real property at the Barnsdale Park location, continued to own equipment, and did not formally dissolve as a joint venture.
Each one of the three joint venture components, Shea, Kiewit, and Kenny, continue to exist, are engaged in construction projects on their own or in other joint venture relationships, and have employees at work sites in California. There is no issue as to the ability of the joint venture to pay any civil penalties� just to the liability.
Employer argues that following longstanding Board precedent, since the joint venture, as the Employer, no longer has an existing business establishment, the "[a]ssessment of a civil penalty against an employer whose establishment is no longer in existence does not serve the prospective civil penalty purpose of educating or inducing the cited party to provide a safer and more healthful place of employment for employees. Leftys Pizza Parlor, OSHAB-74-580, Decision After Reconsideration, (Feb. 25, 1975) and Arcade Meats and Deli, OSHAB 76-320, Decision After Reconsideration (Apr. 7, 1978)." (ALJ Dec. p.6) As of July 13, 1995, SKK no longer had a business establishment, place of employment, or any employees.
The Division, on the other hand, contends that SKK has not divested itself of its interest in the business; SKK still continues to exist; it possesses real and personal property; it is involved in ongoing litigation as a joint venture; and it is incurring and paying litigation costs and attorney fees.
More importantly, however, the Division argues that each one of the members of the joint venture, Shea, Kiewit, and Kenny, all continue to do business within California, have places of employment and employees, and are involved with tunneling and other related construction activities. Many of them are now, or have been in the past, involved in other joint venture arrangements for construction projects. Therefore, to absolve a joint venture from paying civil penalties would do nothing to motivate the joint venture as an employer to take a proactive stance in ensuring employee safety and health if the joint venture knew it could escape civil penalties by dissolving the arrangement. The Division stated in its answer to Employers petition that allowing the joint venture to escape liability upon its dissolution would "relegate the matter into one of gamesmanship where the Division and the Employer would race to the courthouse before the joint venture is completed."
In addition, the Division maintains that since a joint venture contract by its very nature is one which exists for a limited purpose and anticipates the final completion of the project and dissolution of the relationship, to allow a joint venture to skirt liability upon dissolution would not only work against employees who work for a joint venture, but would be unfair to other employers. There would be little motivation for the employer to ensure that violative conditions are corrected or that civil penalties for violations are paid. It would result in a windfall to the joint venture employer as compared to other business arrangements where an employer contemplates maintaining a business on an ongoing basis.
FINDINGS AND REASONS
DECISION AFTER RECONSIDERATION
Since the Shea-Kiewit-Kenny joint venture no longer has employees or a place of employment in California the purpose of the Act would not be served by holding the joint venture financially liable for the citations at issue.
The evidence is irrefutable; the joint venture of Shea-Kiewit-Kenny no longer is an employer; has no employees; and maintains no place of employment in California. Labor Code section 6300 establishes the California Occupational Safety and Health Act of 1973 (the Act) "for the purpose of assuring safe and healthful working conditions for all California working men and women . . . ." Section 6304 specifies that "Employer" is to have the same meaning as it is defined in section 3300, which is "every person including any public service corporation, which has any natural person in service." In July, 1994, when the accident occurred and the citations were issued, SKK was clearly an "employer" with over 300 "natural persons in service." However, one year later, by July 13, 1995, when the MTA terminated its contract with SKK, SKK ceased to be an employer and had no employees in service. The testimony and documentary evidence was clear that the joint venture of SKK never had any employees after that date. The payment of litigation costs and attorney fees by SKK does not make SKK an employer for purposes of the Act.
Labor Code section 6303 defines a "place of employment" as "any place, and the premises appurtenant thereto, where employment is carried on . . . ." "Employment includes the carrying on of any trade, enterprise, project, industry, business, occupation or work, including all excavation, demolition, and construction work . . . ." Again, SKK undeniably had a "place of employment" at the Metro Rail tunnels while the tunnel excavation was underway. SKK also had a "place of employment" above ground at the Barnsdale Park area, where SKK had its offices and the employees gathered before the start of each work shift. Once again, when the MTA ordered SKK to immediately cease all work and vacate the premises of the Metro Rail on July 13, 1995, SKK no longer had a "place of employment." Even though SKK continued to own the property at Barnsdale Park, since there were no longer any employees after July 13, 1995, even Barnsdale Park ceased to be a "place of employment."
Following longstanding Board precedent, when an employer is out of business, civil penalties are not assessed, as their imposition would no longer serve the purposes of the Act. Penalties which do not encourage an employer to maintain safe and healthful working conditions are punitive� which is contrary to the purposes of the Act. In Leftys Pizza Parlor, OSHAB 74-580, Decision After Reconsideration (Feb. 25, 1975), the Board stated:
Where, as here, the co-owners of a business enterprise have divested themselves of said ownership and they are no longer involved in maintaining the place of employment for which the citations were issued, the imposition of penalties would be purely punitive and not constructive as intended by the Act.
In a later case, Arcade Meats and Deli, OSHAB 76-320, Decision After Reconsideration (April 7, 1978), the Board repeated the holding from Leftys and held:
In the cases of Leftys Pizza, Docket No. 74-580; Flo-Crete Concrete Pumping, Docket No. 75-418; and Yerington Packers, Docket No. 75-623, it has been held that the assessment of a civil penalty against an employer whose establishment is no longer in existence does not promote the purpose of the California Occupational Safety and Health Act of 1973.
A consistent application of the Boards holdings from Leftys and Arcade Meats to the facts of this case clearly leads to a finding that since SKK is no longer in existence as an employer and no longer maintains the place of employment for which the citations were issued, civil penalties should not be imposed against SKK.
However, the Division argues that the Boards holdings in Leftys, Arcade Meats, and Tzeng Long USA, Inc., OSHAB 91-300, Decision After Reconsideration (April 30, 1992) compel the opposite result. In point of fact, the Division uses the holding from Leftys to support the imposition of civil penalties against SKK because the former owners of Leftys had completely divested themselves of the business and had no intention of engaging in a similar business in the future, whereas, SKK continues to exist (and in fact still exists as of the issuance date of this decision), possesses real and personal property, and each joint venturer continues to do business in California.
In Tzeng, the Board held that so long as the employer responsible for the violations cited continued to employ employees in California, the purposes of the Act would be promoted by the assessment of civil penalties. In Tzeng, the employer had two places of business in California. Although the employer was only cited for violations at one site, and that site was in the process of being wound down because of poor financial conditions, the other site was still in operation, with employees, and with no indication that its activities would be wound down. Therefore, the imposition of civil penalties promoted the purposes of the Act since the employer still had employees and a place of employment.
Tzeng is not applicable here, nor are the purported distinctions from Leftys relevant to the Boards decision. The employer in this case was SKK. The citations were issued to SKK. Although the constituent parts of SKK are still employers and have places of employment and employees in California, the distinct constituent parts are separate from the SKK joint venture. SKK, as a separate and distinct entity, one recognized in law, no longer is an employer, nor does it have a place of employment or any employees.
To continue with the analogy of this case with Leftys and Arcade Meats, in neither of those Board decisions was there any discussion of whether Leftys or Arcade Meats would ever again become employers in California. The fact that the place of employment for which the citations were issued no longer existed was sufficient to excuse the imposition of civil penalties. That is parallel to the facts of this case. The Barnsdale Park and tunnel locations no longer exist as places of employment for any employees of SKK. That is sufficient to justify the imposition of the holdings from Leftys and Arcade Meats and find that the imposition of civil penalties against SKK, the joint venture, would be contrary to the purposes of the Act.
Furthermore, the Board does not fear that this decision will beget a tidalwave of cases where the joint venture dissolves for the sole purpose of avoiding the imposition of civil penalties for Division citations. The facts of this case are unique in that when the MTA terminated the contract with SKK and barred them from the construction site, the very purpose of the SKK joint venture ceased to exist. The evidence indicates that SKK was ready, willing, and able to fulfill the terms of its $162,000,000 contract and remain in business. SKK did not voluntarily terminate its 300 employees and cease to do business on July 13, 1995, in an attempt to avoid liability for the civil penalties proposed against them. It is important to note that the hearing on Employers appeal did not take place until May 1997. The Board is convinced that SKKs dissolution was related to its contract being abruptly terminated and not engineered to avoid proposed civil penalties.
Superficially, it might be argued that a joint venture should be treated differently than other business entity forms, such as a corporation or partnership, since by its very nature it is designed for a limited purpose and time frame. However, on closer analysis, the Board finds it is consistent with the principles enunciated in Leftys and Arcade Meats, to treat a joint venture that is out of business as an employer equally as other business entity forms similarly situated. With respect to the fact that each of the members of the joint venture continue to be employers doing business in California, it should be noted that, each member, a separate corporation, is a distinct legal entity. If a general partnership, a limited partnership, or a corporation were to dissolve, the fact that the individual partners or shareholders might continue to be employers doing business in California would not preclude application of the out of business principle as to the partnership or corporation which sought penalty relief on that basis. We are not persuaded that a joint venture should be treated differently.
The Board therefore finds that the imposition of civil penalties against the SKK joint venture, since it no longer is an employer and has no place of employment or employees, would not serve the purposes of the Act which is to encourage an employer to comply with the safety and health safety orders. Although in this case the amount of civil penalties at stake is high, since the purpose of the Act has never been for revenue enhancement, the Board must still follow the rule of law and legal principles, and treat this employer fairly and equally.
The Board did however, pay particular attention to the Divisions arguments that allowing a joint venture to be absolved from an obligation to pay civil penalties will make a mockery of Cal OSHA law and will lead to "gamesmanship" by such employers. The Board is not convinced that the particular facts of this case point to any gamesmanship by SKK and will leave until another day consideration of whether the out of business principle for not assessing civil penalties applies to a joint venture that engages in the kind of gamesmanship the Division fears.
Although the Board finds that the imposition of civil penalties against SKK is not warranted under the Act, that finding does not dispose of the other issues on reconsideration. Employer contends that (1) the cited order is inappropriate for Citation No. 5; (2) the evidence and findings do not support a characterization of "serious" for Citation No. 10; (3) the evidence and findings do not support a characterization of "serious" for Citation No. 14; and (4) the evidence and findings do not support a characterization of "willful" for Citation No. 12.
Docket No. 94-R5D2-2770
On reconsideration Employer asks the Board to overturn the ALJs finding of a serious violation of section 2540.3 of the Electrical Safety Orders on the ground that the Division cited the wrong safety order. Instead of citing an Electrical Safety Order violation, Employer argues the Division should have cited Employer for a Tunnel Safety Order violation.
The factual background for this citation is that during the investigation following the July 18, 1994, explosion and fire, the Division observed electrical equipment on the tunnel side of the bulkhead which sealed off Tunnel 4 from the open air on the other side. This electrical equipment was not "intrinsically safe" as required by section 2540.3 since the tunnel was a "classified location."
Section 2540.3 provides as follows:
Equipment, wiring methods and installations of equipment in classified locations shall be one or more of the following:
(a) Intrinsically safe.
(b) Approved for the classified location.
(c) Of a type and design which provides protection from the hazards arising from the combustibility and flammability of vapors, liquids, gases, dusts or fibers. (Emphasis added.)
The unrefuted testimony was that the electrical equipment did not meet the safety requirements dictated for the tunnel side of the bulkhead. What is in dispute is whether or not the Division should have cited Employer under the more specific Tunnel Safety Orders instead of the general Electrical Safety Orders. After listening to the testimony and documentary evidence presented at the hearing and reading the arguments presented by both sides in the post-hearing briefs, the ALJ found that a violation of section 2540.3 was established.
The ALJ decision was based on an underlying finding that Tunnel 4 was a Class I, Division 2 location. This classification describes a location in which volatile flammable liquids or flammable gases are handled, processed, or used, but in which the hazardous liquids, vapors, or gases will normally be confined within closed containers or closed systems from which they can escape only in case of accidental rupture or breakdown of such containers or systems, or in case of abnormal operation of equipment.
The evidence was clear that employees were using oxygen and acetylene gases, which are volatile flammable gases, in Tunnel 4. The gases were contained in closed systems of cylinders, regulators, and hoses. The testimony, from both the Division and Employers witnesses was that gases would reasonably be expected to escape from a cylinder only in the event of accidental rupture or abnormal operation of the equipment.
The findings that (1) Tunnel 4 was a Class I, Division 2 location requiring electrical equipment appropriate for that classification and (2) the equipment on the tunnel side of the bulkhead was not approved for a Class I, Division 2 location compel the conclusion that the Division established a violation of section 2540.3.
The findings of the ALJ, when they are supported by solid, credible evidence, are entitled to deference unless they are opposed by evidence of considerable weight. (Lamb v. Workmens Compensation Appeals Bd. (1974) 11 Cal.3d 274, 280-281.) In the petition, Employer presents no evidence contradicting that relied on by the ALJ.
In this case, both the more specific Tunnel Safety Orders and the general Electrical Safety Orders required Employer to have electrical equipment which was explosion proof so that any failure in the electrical system would not ignite the flammable volatile gases in Tunnel 4. The Board does not find Employers argument that the Division was obligated to cite the more specific safety orders because they supersede the general orders compelling under the circumstances of this case. Employer was not prejudiced by the Divisions choice of safety orders. Employer produced no evidence that it was in compliance with Tunnel Safety Order section 8425(a) [as it existed in 1994] and that it was prejudiced by the Divisions choice of citing the Electrical Safety Order.
The finding by the ALJ that a serious violation of section 8425(a) was established with an assessed civil penalty of $940 is affirmed.
Docket No. 94-R5D2-2775
The ALJ found a serious violation of Tunnel Safety Order section 8425(c). Section 8425 requires that tests for gas and vapors must be made before the start [of any welding, cutting, or other hot work and/or spark producing operation] and continuously during such operation. On reconsideration Employer does not dispute the finding of a violation, but contends that the evidence and findings do not support the "serious" characterization of the violation. Specifically, Employer argues that it did not, and could not with the exercise of reasonable diligence, know of the violation.
The facts are not in dispute. Mr. Willis was performing his metal cutting operation on the shield using a welding torch at approximately 1:30 p.m. on July 18, 1994. No gas tester was present when he began the welding operation and the accident occurred just minutes later.
The testimony at the hearing was that it was Employers policy to have a gas tester present during welding operations in Tunnel 4 since the tunnel had been classified as "gassy." The gas tester assigned to Tunnel 4 for the day shift on July 18, 1994, was Ted Takai. Employer instructed the welders to call for a gas tester before they began welding and they were not to proceed until the gas tester was present.
Mr. Willis testified that it was his practice to call for a gas tester before beginning welding and it was his recollection that he did call for one in this instance. However, he also did not recall verifying that the tester was present before he began his cutting operation.
The ALJ determined that a violation of section 8425(c) was established since Willis performed a welding operation in Tunnel 4 when no gas tester was present. The ALJ further determined that the violation was serious because (1) an accident resulting from the violation could, to a substantial probability, result in serious physical harm or death to employees in the tunnel and (2) Employer could have known of the hazard with the exercise of reasonable diligence.
There is no question that the employees were exposed to a violative condition. The only issue is whether or not Employer knew, or could have known, of the hazard. The ALJ concluded that Employer could have known of the hazard since the absence of a gas tester would be easily observable. Employer had numerous managerial representatives working in Tunnel 4 who knew that only one gas tester was assigned to Tunnel 4 during the day shift on July 18, 1994. Mr. Takai, the assigned gas tester, testified by declaration that he was present in Tunnel 4 on July 18, 1994, and that he tested for gases in the shield area at about 10:30 a.m., but then he was called away to perform gas testing in another area during the removal of a switch. Mr. Takai did not return to the shield area until after the accident.
The testimony at the hearing was that Employers organizational structure for Tunnel 4 was as follows: Robert Gordon was Employers project manager and in charge of all aspects of the B-251 project; Mr. Leslie was the acting general; Tom Grogan was the safety engineer for the B-251 project and he was in charge of the certified safety representative assigned to the shift in Tunnel 4, who was Bob Hickocks, and the assigned gas tester, Mr. Takai.
Employer was aware of the crew assignments for Tunnel 4 and knew that there was only one gas tester assigned to the tunnel for the day shift. Through the supervisors on site, Employer could have seen that a gas tester was required at both the shield disassembly area and the switch removal since both activities involved welding and required gas monitoring. Employer, through its representatives, knew there was only one gas tester and knew there were two cutting operations in progress in Tunnel 4. Since Employer knew of this hazard and did nothing to correct it, the ALJ found that a serious violation had been established.
The only argument Employer presents in its petition to challenge this finding by the ALJ is the fact that Mr. Willis testified that he was aware that no gas tester was present when he began his welding and the accident occurred just minutes later. Therefore, it would have been impossible for Employer to discover the absence of the gas tester.
This argument is insufficient to overturn the findings of the ALJ. The findings of the ALJ, when they are supported by solid, credible evidence, are entitled to deference unless they are opposed by evidence of considerable weight. (Lamb v. Workmens Compensation Appeals Bd. (1974) 11 Cal.3d 274, 280-281.) In the petition, Employer presents no evidence contradicting that relied on by the ALJ. The finding by the ALJ that a serious violation of section 8425(c) was established with an assessed civil penalty of $940 is affirmed.
Docket No. 94-R5D2-2779
The decision of the ALJ found that the Division established a serious violation of section 1740(h) [storage of cylinders near cutting operations]. Following the accident the Division conducted an investigation and determined from both an inspection of the accident scene and from interviews with witnesses that while Mr. Willis was performing his welding operations the oxygen and acetylene cylinders were below him and within about 10 feet of horizontal distance.
Section 1740(h) states, in pertinent part, that "[c]ylinders shall be kept far enough away from the actual welding or cutting operation so that sparks, hot slag, or flame will not reach them . . . ." The ALJ found the evidence that when the hose bracket assembly fell down it hit an acetylene cylinder and the fact that the bracket was found among the oxygen and acetylene cylinders persuasive to establish a violation of section 1740(h).
Employer is challenging the classification of this violation as "serious." An accidental fire and explosion caused by the violation could, to a substantial probability, result in serious physical harm or death to exposed employees. The only issue on reconsideration is whether Employer had the requisite knowledge of the violative condition.
There was considerable evidence presented as to the location, placement, and movement of the oxygen and acetylene cylinders. Approximately 7 to 10 days before the accident, Mr. Gibson, the lead welder, and a member of the welding crew with Mr. Willis, was told by Mr. Leslie, the acting general superintendent, that the 30 to 40 cylinders on the shaft trailing gear had to be removed. In response to this direction, Mr. Gibson moved the cylinders off the trailing gear and into the segment and shield area.
Based on this evidence, the ALJ found that Employer, through its management representatives, knew the cylinders were in the segment and shield area. There was also testimony that cylinders were constantly being moved into and out of work areas� as cylinders emptied and new ones were needed� and cylinders were stored in different work areas. Employer also knew that welding operations were taking place in the same area where the cylinders were located.
The ALJ therefore found that since the cylinders were moved from the trailer gear into the shield and assembly area at Employers instruction, and the cylinders were clearly visible in the area where welding operations were conducted, Employer either had, or with reasonable diligence could have had, the requisite knowledge to establish a serious violation.
Employer argues that since Mr. Willis moved the cylinders under the location where he was welding, only Mr. Willis knew of their location, and he had been advised previously to keep the bottles at a distance, Employer had no knowledge of the location of the bottles. The Board is not persuaded that this argument is sufficient to overturn the findings of the ALJ. The fact that management advised Mr. Willis to keep the cylinders at a safe distance establishes an inference that Employer was on notice of the potential of a hazard and could have known of the violation with the exercise of reasonable diligence.
The findings of the ALJ, when they are supported by solid, credible evidence, are entitled to deference unless they are opposed by evidence of considerable weight. (Lamb v. Workmens Compensation Appeals Bd., supra.) There is nothing in Employers petition to disturb the findings of the ALJ. Therefore, the finding by the ALJ that a serious violation of section 1740(h) was established with an assessed civil penalty of $7,000 is affirmed.
Docket No. 94-R5D2-2777
4. Citation No. 12, Willful/Serious Violation of section 1740(g).
The ALJ found a willful/serious violation of section 1740(g). Section 1740(g) provides as follows:
Oxygen cylinders in storage shall be separated from fuel-gas cylinders or combustible materials (especially oil or grease), a minimum distance of 20 feet or by a noncombustible barrier at least 5 feet high having a fire-resistance rating of at least one-half hour.
The facts of the violation were clearly established and are not under reconsideration. Oxygen cylinders were not separated from acetylene cylinders by at least 20 feet nor were they separated by a noncombustible barrier. What is under reconsideration is whether the facts support a finding of a willful/serious violation.
The ALJ found that (1) it was substantially probable that if the violation caused an accident, serious physical harm or death could result and (2) that Employer knew, or by exercising reasonable diligence could have known of the hazard. The evidence was convincing that the unsegregated cylinders were lying together in open view and therefore, with reasonable diligence management could have known of the hazard. The Board finds that the facts compel a finding of a serious violation and affirms the finding of the ALJ as to that classification.
The ALJ also found that the Division established that the violation was willful. A willful violation is defined in California Code of Regulations, Title 8 section 334(e) as follows:
A violation where evidence shows that the employer committed an intentional and knowing, as contrasted with inadvertent, violation, and the employer is conscious of the fact that what he is doing constitutes a violation of a safety law; or, even though the employer was not consciously violating a safety law, he was aware that an unsafe or hazardous condition existed and made no reasonable effort to eliminate the condition.
Under section 334(e) the Division may establish the willfulness of the violation by showing by a preponderance of the evidence that (1) an employer intentionally violated a safety law, or (2) an employer had actual knowledge of an unsafe or hazardous condition, yet did nothing to correct it. (Ricks Electric, Inc., OSHAB 95-136, Decision After Reconsideration (Sept. 24, 1997).
The ALJ found Employers violation willful under the second test because Employer was aware of a hazardous condition but made no attempt to correct it. The ALJ made this finding based on the testimony of Mr. Gibson, a lead man for the shield disassembly crew who was not a foreman or supervisor, that he moved the cylinders from the trailing gear to the segment and shield area at the request of Mr. Leslie, the acting general superintendent. Mr. Gibson testified that about 7 to 10 days before the accident, Mr. Leslie told him that the trailing gear was to be removed; Mr. Gibson, anticipating that the move was imminent, immediately had his crew transfer the cylinders into the segment and shield area. When the cylinders were relocated into the segment and shield area, they were placed together and were not separated by either the required 20 feet or the noncombustible 5 feet high barrier.
The cylinders were moved� but the trailing gear remained. The segment and shield area was a fairly small area. Mr. Gibson testified that he became concerned when the trailing gear remained and voiced his displeasure to others. The ALJ credited this testimony of Gibson as support for finding that Employer was aware of the hazardous condition of the improper storage of the oxygen and acetylene cylinders.
On reconsideration, Employer asks the Board to determine whether Mr. Gibson recognized the hazard in keeping the oxygen and acetylene cylinders together, whether he imparted this knowledge to management, whether any safety representative or member of management observed this condition, and if they observed it, recognized it as a hazard.
The Board has reviewed the transcript from the hearing and agrees with Employer that the evidence is insufficient to support a finding of willful. To begin, there is absolutely no evidence that Mr. Gibson recognized the combined storage of oxygen and acetylene as a safety hazard other than as a possible tripping threat in the cramped area. Mr. Gibson was distressed about the failure to move the trailing gear and testified that he discussed this with several people. However, Mr. Gibson did not testify that any of those discussions included any mention of the stored cylinders� only the trailing gear. The evidence does not support a finding that Mr. Gibson told anyone from management about the hazard of keeping the oxygen and acetylene cylinders together.
Did management observe the improper storage of the cylinders, and if they did, did they recognize it as a hazard? The testimony of Mr. Gibson as to the instructions he received from Mr. Leslie to move the cylinders from the trailing gear is uncontroverted. This is the only connection between the relocation of the cylinders and a member of management. However, there is no evidence that Mr. Leslie intended that the cylinders be removed at that time or, more importantly, that Mr. Leslie actually observed where the cylinders were relocated or how they were stored. The testimony from other management representatives confirms that none of them were told, nor did they observe, the safety hazard of keeping the oxygen and acetylene cylinders together.
Although there is sufficient evidence to find that Employer could have or should have known of the cylinder storage issue because of Employers tunnel safety supervision and inspection system and the fact that the condition existed for some period of time before the accident, that finding only supports a serious� not a willful� violation, which requires proof that Employer actually knew of this condition.
In addition, the record reflects that there were three safety inspectors from Parsons-Dillingham, the construction manager, who viewed the site on the day of the accident. Although these inspectors were not employees of Employer, they had the authority to issue safety warnings and to actually stop any work on the project if they saw an imminent safety hazard. The testimony of all three inspectors, either by direct testimony or by transcribed interviews treated as direct testimony under oath, is part of the hearing record. All three witnesses testified that they visited the work site, observed the cylinders together, and not one of them recognized it as a safety hazard or brought it to the attention of Employer. Employer asserts that the failure of these inspectors to recognize the storage issue as a hazardous situation is further support for Employers position that it also did not recognize the storage of the cylinders as a safety hazard.
The Parsons-Dillingham inspectors were Mr. Dayton, Mr. Graber, and Mr. Toney. Mr. Dayton visited the area, observed the location of the cylinders, and did not mention any safety hazard with their storage. He did see a potential hazard with the proximity of acetylene bottles below where Mr. Willis was welding, and cautioned Mr. Willis to move the cylinders. Mr. Graber observed the location of the bottles and stated that he made a note to have the bottles put in brackets so as to create a walkway through the area. Mr. Toney observed the bottles being moved by the crew and did not observe any imminent hazard in their storage together. Not one of these three safety inspectors observed an imminent hazard or reported it to Employer or any management representative of Employer.
It is important to note, however, that Mr. Dayton did prepare a CS-50 safety survey on July 11, 1999, [4 days before the accident] which addressed the storage of oxygen and acetylene cylinders together. In fact, this CS-50 was an important element in the Divisions decision to charge Employer with a willful violation. Mr. Dixon, the lead investigator for the Division in this matter, testified at the hearing that his responsibilities included the preparation and issuance of the citations. He, along with other investigators, proposed that Citation No. 12 be classified as a willful/serious violation because Employer had knowledge of the condition. He based this determination on two key factors: (1) the CS-50 safety survey prepared by Mr. Dayton; and (2) Mr. Gibsons status as a "lead" welder. The CS-50 survey prepared by Mr. Dayton would normally have been transmitted to Employer� putting Employer on notice of the violative condition. However, Mr. Dixon also testified that at the time he relied on this CS-50 he had not verified that the CS-50 had been transmitted to any representative of Employer and he agreed at the hearing that it had not been so transmitted.
As to Mr. Gibsons status as a "lead" welder, Mr. Dixon testified that he initially thought Mr. Gibson was a member of management. Therefore, when Mr. Gibson directed the movement of the cylinders from the trailing gear into the segment and shield area that constituted management knowledge of the violation. At the hearing, Mr. Dixon conceded that Mr. Gibson was not a member of management. In order for an Employer to be deemed to have knowledge of a violation by imputation from an employee, the employee with the knowledge must be a supervisor or foreman. (City of Sacramento, OSHAB 93-1947, Decision After Reconsideration (Feb. 5, 1998).
The evidence fails to establish that either Employer or any of its management members was aware that the storage of oxygen and acetylene cylinders less than 20 feet apart or divided by a non-combustible barrier created a dangerous situation for its employees. While Employer should have been aware that the storage of oxygen and acetylene cylinders together amounted to a violation of section 1740(g), this establishes only a serious classification. The evidence fails to establish that Employer was conscious of the danger this situation presented for its employees. The Board therefore finds that the evidence does not support the classification of Citation No. 12 as willful. (Floyd Johnston Construction Co., Inc., OSHAB 78-1506, Decision After Reconsideration (Dec. 30, 1983); Kaiser Foundation Hospitals, OSHAB 81-665, Decision After Reconsideration (July 25, 1985).)
In both Floyd Johnston and Kaiser the Board discussed the burden of proving employer knowledge of a dangerous condition. The record in this case is replete with evidence that Employer knew the work environment in Tunnel 4 presented numerous safety hazards. What the record does not show is that any management member of Employer actually knew the oxygen and acetylene cylinders were stored too close together or that this situation presented a safety hazard.
The Board therefore overturns the finding of the ALJ that this was a serious/willful violation but affirms the finding that a serious violation of section 1740(g) with an assessed civil penalty of $7,000 was established.
DECISION AFTER RECONSIDERATION
The ALJs decision that Employers preemption and due process arguments are denied is affirmed. Accordingly, Citation Nos. 3, 5, 6, 9, 10, 12, and 14 are affirmed on preemption and due process grounds. The ALJs decision that Employer failed to demonstrate a basis for preventing the Division from seeking enforcement of the proposed penalties is overturned. The Board finds that the imposition of civil penalties against the SKK joint venture would not serve the purposes of the Act, so accordingly, no civil penalties are assessed.
The Board further finds that the decision of the ALJ is affirmed and overruled as follows: Citation No 5: a serious violation of section 2540.3 is affirmed; Citation No. 10: a serious violation of section 8425(c) is affirmed; Citation No. 14: a serious violation of section 1740(h) is reduced to a general violation but is otherwise affirmed; Citation No. 12: a willful/serious violation of section 1740(g) is affirmed.
JAMES P. GAZDECKI,
BILL DUPLISSEA, Member
OCCUPATIONAL SAFETY AND HEALTH APPEALS BOARD
SIGNED AND DATED AT SACRAMENTO, CALIFORNIA