EXECUTIVE SUMMARY
OCCUPATIONAL SAFETY AND HEALTH
APPEALS BOARD

SUMMARY OF SHEA-KIEWIT-KENNY - DAR


Is Cal OSHA preempted from enforcing its Tunnel Safety Orders because Fed OSHA issued Employer a citation during a joint federal/state inspection?

There was a joint investigation of an accident that occurred in an excavated tunnel which was part of the Los Angeles Metro-Rail project. As a result, Fed OSHA issued a citation to Employer for storing more cylinders of flammable gas in the tunnel than were needed for the 24 hour period following the accident. California does not have a safety order which limits the number of gas cylinders that may be stored in a tunnel. As a result of its inspection, Cal OSHA issued 14 citations to Employer.

Employer contends that Fed OSHA’s exercise of enforcement jurisdiction at the site preempted the Division’s jurisdiction, since a federal standard is in effect, the State cannot enforce its own standards, ie. that concurrent jurisdiction is forbidden. Employer’s position fails to take into account the gradual transfer of responsibility from the federal government to the States while States are developing and implementing their own occupational safety and health plans. This is understood by examining the purpose and design of the federal Occupational Safety and Health Act of 1970 (Federal Act) which 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."

California’s OSHA plan is still in the development stage so concurrent jurisdiction is a mechanism to ensure adequate occupational safety and health protection for workers until California emerges from the development stage. Under the Federal Act, 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. Although California has adopted a set of safety orders dealing with the issue of tunnel safety, it had no standard limiting the number of gas cylinders that may be stored in a tunnel. Therefore, the exercise by Fed OSHA of concurrent enforcement authority does not preempt Cal OSHA from exercising its enforcement authority.

Does the exercise of concurrent federal/state jurisdiction over the site constitute a violation of Employer’s right of due process?

Employer argues that the federal regulations do not provide adequate notice of what conduct is required of Employer, and thus does not provide due process. Although the Board is sympathetic with California employers who must not only follow the Cal OSHA regulations but must also guess correctly when and whether a federal regulation applies, the Board determined that this is not the proper forum for this complaint. Employer should have raised it before Fed OSHA during the appeal of the Fed OSHA citation. The Board noted that the burden on employers could be eased by a careful and thorough delineation of the federal standards that apply where there is concurrent jurisdiction and seeing to it that the final approval of the state plan is not withheld any longer than absolutely necessary. Those are matters for Congress or the regulatory bodies to address.

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 civil penalties at issue?

The joint venture of Shea-Kiewit-Kenny (SKK) was formed for the purpose of bidding on and performing the Metro Redline contract. Each of the three joint venture partners was a distinct and separate corporation doing business in the construction field. The joint venture of SKK, separate and distinct from the three venture components, had its own contractor’s license, business license, insurance, accounting and personnel departments and records, workers’ compensation insurance, tax identification number, engineering staff, agreements with labor organizations, and paid taxes. SKK had its own place of employment and employed over 300 workers.

The accident which prompted the Cal OSHA inspection and resulted in the issuance of the citations occurred on July 18, 1994. Just one year later, on July 13, 1995, SKK received notice from the owner of the project that SKK’s contract was terminated immediately. SKK promptly let go its work force and never did any more work on the Metro Redline project¾ the sole subject of the joint venture.

The Board had to determine whether a joint venture which, for all intent and purpose no longer existed, and had no employees or place of employment, should be treated the same as other employers who no longer had an existing business. Longstanding Board precedent states that "the assessment 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."

SKK no longer had a business establishment, place of employment, or any employees. Since SKK is no longer an employer, has no place of employment, and has no employees, it would not serve the purposes of the Act, which is to encourage an employer to comply with the safety and health orders, to assess civil penalties.

SHEA-KIEWIT-KENNY, 94-2768   (for full decision click here)