In the Matter of the Appeal of:


10422 Trask Avenue, #A

Garden Grove, California 92643

����������������������������� Employer



Docket No.

96-R3D1-2695 through 2699



The Occupational Safety and Health Appeals Board (Board), acting pursuant to authority vested in it by the California Labor Code, and having ordered reconsideration of this matter on its own motion, makes the following decision after reconsideration.


On May 7 and 8, 1996, a representative of the Division of Occupational Safety and Health (the Division) conducted a targeted industry inspection at a place of employment maintained by Linsey Fashion (Employer) at 10422 Trask Avenue, #A, Garden Grove, California (the site).

On June 28, 1996, the Division issued to Employer citations alleging violations of the occupational safety and health standards and orders found in Title 8, California Code of Regulations,1 and proposing civil penalties totaling $3,750. Employer filed timely appeals from all citations.

On September 10, 1997, Administrative Law Judge (ALJ) of the Board, Bref French granted the Division's motions to reduce the civil penalties resulting in a total penalty amount of $1,825. The ALJ also granted Employer's motion to amend its appeals to withdraw all grounds except the reasonableness of the penalties and to submit that issue for decision based upon evidence presented at the hearing that the owner of Linsey Fashion when the violations occurred had sold the business and ceased to be an employer in California.

On September 23, 1997, the ALJ issued a decision granting Employer's appeal and setting aside the proposed penalties.

On October 22, 1997, the Appeals Board ordered reconsideration of the ALJ's decision on its own motion. In an amendment issued November 25, 1997, the Appeals Board stated that the purpose of the order was to consider the issue of:

. . . whether penalties should be set aside on the basis of Lefty's Pizza Parlor, OSHAB 74-580, Decision (Feb. 25, 1975) and Arcade Meats and Deli, OSHAB 76-320, Decision After Reconsideration (April 7, 1975) where the new enterprise continues substantially the same business operations at the same address with the same manager, under the same or a very similar name.

On December 10, 1997, the Division filed an answer to the order of reconsideration. Employer did not file an answer.


Should civil penalties be set aside on the basis of Lefty's Pizza Parlor, supra, where a new enterprise continues substantially the same business operations at the same address with the same manager, under the same or a very similar name?


The Appeals Board has taken no new evidence and relies upon its independent review of the record, including the tape recording of the hearing and the exhibits in making this decision.

The evidence shows that on the date of the inspection, May 7, 1996, Dong Truong Bui, doing business as Linsey Fashion, was engaged in the sewing and manufacture of garments at the site through persons employed by him. Bui, the only witness who testified at the hearing, stated that he sold the business and its equipment to Quang Thanh Vu on July 9, 1996.

In support of his testimony, Bui introduced two documents into evidence. One of the documents is a "General Bill of Sale" dated July 9, 1996. The bill of sale states that on July 9, 1996, Bui sold to Vu "completely" the business he was conducting at the site as Linsey Fashion.

The other document is a copy of a Certificate of Registration issued by the California Labor Commissioner to "Quang Thanh Vu dba: Lucky Sewing" on August 13, 1996. The certificate states that Vu, dba Lucky Sewing at 10422 Trask Avenue, #A, Garden Grove, California (the address of the site), was registered under Labor Code section 2675 "to engage in the business of garment manufacturing" for a period of one year. Attached to the Certificate of Registration is an Internal Revenue Service change of address card, bearing Vu's name, business name, business address, and Employer Identification Number.

After the sale to Vu, at a date not disclosed in the record but before the hearing, Vu sold the business to Hai Huynh. Huynh continued to manufacture garments at the site under the name of "Linsey II Fashion" and employed Bui in the business as a manager.


The Division is authorized by Labor Code section 6317 to impose civil penalties against employers who violate safety and health standards "as specified in Chapter 4 (commencing with Section 6423)" of the Act.2 We have held since Liberty Vinyl Corporation, OSHAB 78-1276, Decision After Reconsideration (Sept. 24, 1980) that penalties are assessed so that "[e]mployers are encouraged to eliminate all foreseeable and preventable hazards by the imposition of monetary penalties that are regulatory or remedial in character . . ." Civil penalties serve the Act's purpose of "assuring safe and healthful working conditions for all California working men and women" both as a tool for "enforc[ing] effective standards" and a means of "encouraging employers to maintain safe and healthful working conditions."3

Although the Board has set aside civil penalties in prior decisions, e.g., Lefty's Pizza Parlor, supra, and Arcade Meats and Deli, supra, it is undisputed that those cases involved small businesses, including a sole proprietorship and a co-ownership that had terminated shortly after the inspections, and that the principals in the businesses had no intention or expectation of being in or managing the same or any similar business within the State.

In this case, the elements established under Lefty's Pizza Parlor, supra, that a small business that was no longer operating and would face financial hardship if the proposed penalties were assessed, are not established. In those cases, Lefty's Pizza Parlor, supra, and Arcade Meats and Deli, supra, the cited business ceased operations as places of employment. In this case, substantially the same work continued to be done using the same machinery at the same location without interruption.

The ALJ found that Bui established that he had ceased to be an employer based on his testimony that he sold the business to another individual and was never again involved in the ownership or control of the business.

Although the ALJ credited Bui's testimony that he was not involved in the ownership or control of the business after its sale to Vu, Bui also testified that he served as manager of Linsey II Fashion. The Board has the authority under Labor Code section 6620 to "alter, rescind or amend" the findings of an ALJ based on the evidence previously taken. Exercising that authority in this case, the Board finds that, unlike the owners in Lefty's Pizza Parlor and Arcade Meats and Deli, Bui failed to establish that he was no longer involved in the control of the continuing business.

This conclusion is fortified by the absence of evidence as to the period of time that Vu controlled the business and the absence of evidence of consideration for, or the terms of, Vu's transfer of the business to Hai Huyhn.

The Appeals Board has held that where the evidence shows that a small business has completely discontinued operation or management of the same or a similar business, relief from civil penalties may be appropriate in some cases.

This is not such a case. Unlike Lefty's Pizza, in this case, the same business operations have continued without interruption in the same location, under a similar name.

The Board finds that this is an inappropriate case for application of the Lefty's Pizza Parlor and Arcade Meats and Deli rationale. The Board therefore reverses the decision, and reinstates the civil penalties assessed against Employer.


The decision is reversed, and civil penalties totaling $1,825 are assessed.



1 Unless otherwise indicated, all section references are to Title 8, California Code of Regulations.
2 See, particularly, Labor Code sections 6427 through 6431.
3 See, e.g., Labor Code section 6300.