Docket No. 2354

FLORIDA EAST COAST PROPERTIES, INC.

OSHRC Docket No. 2354

Occupational Safety and Health Review Commission

February 5, 1974

[*1]

Before MORAN, Chairman; VAN NAMEE AND CLEARY, Commissioners

OPINIONBY: CLEARY

OPINION:

CLEARY, COMMISSIONER: On July 16, 1973, Judge James D. Burroughs issued a decision and order in this case, affirming three citations issued respondent and modifying one penalty initially proposed by the Secretary.

On August 16, 1973, pursuant to section 12(j) of the Occupational Safety and Health Act of 1970 (29 U.S.C. 651 et seq., hereinafter referred to as "the Act"), I directed that the Commission review the Judge's decision and order.

Having reviewed the record the Commission affirms the Judge's decision and order so far as it is consistent with the following determination.

Respondent was issued three citations, two alleging serious violations of the Act, and the other alleging several non-serious violations. Respondent timely contested the Secretary's proposed penalties. A complaint and answer were thereafter filed. Before hearing, respondent filed a motion to withdraw its notice of contest, the basis of which was a stipulation agreement entered into by complainant and respondent. As part of this agreement complainant agreed to reduce one of the alleged serious violations to a non-serious [*2] violation and to reduce the penalty from $750 to $75. The complainant represented that it agreed to do so ". . . on the grounds that the Secretary cannot sustain a serious violation. . . ."

Judge Burroughs, in approving the settlement held, inter alia, that he was without authority to modify the nature of the alleged violation from serious to non-serious because respondent's notice of contest clearly took issue only with the penalties proposed by the Secretary.

The Judge reasoned that any item or part of a citation uncontested within the 15 working-day limit prescribed by section 10(a) becomes a final order of the Commission under section 10(a) and thus could not be reviewed by the Commission.

We agree and thus specifically reverse our holding to the contrary in Secretary of Labor v. Swan Lake Moulding Company, Brennan v. OSHRC and Bill Echols Trucking Co., No. 73-1670 (5th Cir. November 13, 1973); n1 [*3] Brennan v. OSHRC and Interstate Glass Co., No. 73-1029 (8th Cir. October 26, 1973). This result is more consistent with the purpose of the Act: to assure so far as possible every working man and woman in the Nation safe and healthful working conditions.

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n1 Under Bill Echols Trucking Co., it is, of course, proper to consider any notice that is filed by an employer in its most favorable light. Just as citations issued by non-legal personnel are entitled to liberal construction, Cf. National Realty and Construction Company v. OSHRC and Secretary of Labor, No. 72-1978 (D.C. Cir. December 13, 1973), so notices of contests that may be filed by non-legal employers or employees are also entitled to a sympathetic construction.

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If an employer elects to contest only the proposed penalties, this action should not be permitted to toll the abatement period as set out in the citation. To allow a notice of contest of the proposed penalties to toll the abatement period would be to permit continued [*4] employee exposure to a violation unchallenged by the employer, a result clearly inconsistent with the Congressional purpose. We thus conclude that even though a respondent properly contests the amount of a penalty proposed by the Secretary, the Commission does not thereby acquire jurisdiction to review the violation. n2

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n2 We note that while this issue arose in the context of a motion to withdraw and stipulated settlement the result would be the same had the case gone to hearing.

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This does not mean, however, that in considering the statutory factors necessary to assess an appropriate penalty, the nature of the violation may not be considered. Indeed, in fulfiling our duties under section 17(j) of the Act, we are required to consider the gravity of the violation. In sum, when a notice of contest runs only to the proposed penalty, the citation and abatement period becomes a final order of the Commission by operation of law. The characterization of the violation (such as whether it should be properly classified as [*5] willful, serious or other) cannot be reviewed by the Commission, but its nature must be considered for purposes of penalty assessment. n3

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n3 It should be noted that when an employer contests only a citation, it does not follow as a converse of this decision that the Commission is without jurisdiction to assess an appropriate penalty for any violation that is found. Secretary of Labor v. Thorleif Larsen & Son, Inc., Such jurisdiction is consistent with the express power of the Commission under section 17(j) of the Act to assess all civil penalties under that section. Also, the considerations of Congressional purpose that are determinative in this case offer no bar to the assertion of Commission jurisdiction with respect to the assessment of penalties when a citation is contested. Indeed, it makes good sense to assess any penalties on the basis of the full record made before the Commission rather than at an earlier stage and with less information.

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The Judge has considered [*6] the appropriateness of the penalty and we agree with his determination.

We find the remainder of the settlement agreement consistent with the purposes of the Act.

Accordingly, it is ORDERED that:

1. Respondents' motion to withdraw its notice of contest is granted and;

2. The citation and notification of proposed penalty issued respondent February 2, 1973, are affirmed, with the following exception;

3. The penalty proposed for citation 2 for serious violation is reduced to $75.

CONCURBY: MORAN

CONCUR:

MORAN, CHAIRMAN, concurring: I concur. However footnote number 3 is unnecessary to the disposition of this case and should not be part of this decision.

DISSENTBY: VAN NAMEE (In Part)

DISSENT:

VAN NAMEE, COMMISSIONER, dissenting in part: The majority's decision to interpret section 10(a) n4 narrowly is predicated on the erroneous assumption that a contest of penalties only does not toll abatement periods prescribed by the citation. Moreover, the effect of their interpretation is easily avoided. Finally, it necessarily produces ludicrous results.

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n4 29 U.S.C. 659(a).

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As to abatement, the majority says "[t]o allow a notice of contest of the proposed penalties to toll the abatement period would be to permit continued employee exposure to a violation unchallenged by the employer, a result clearly inconsistent with Congressional purpose." The majority, therefore, will not allow the permission Congress expressly granted. According to the terms of section 10(b) n5 and 17(d) n6 the abatement "period shall not begin to run until the entry of a final order by the Commission in the case of any review proceedings under this section initiated by the employer in good faith and not solely for delay or avoidance of penalties." Congress did not limit the tolling provisions to proceedings for the review of the citations alone; it expressly provides for tolling in "any review proceeding" so long as the proceeding is initiated in good faith. No more need be said about the majority's erroneous assumption.

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n5 29 U.S.C. 659(b).

n6 29 U.S.C. 666(d).

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I turn [*8] now to the matter of easy avoidance. Commissioner Cleary has said "[a] notice of contest is not a pleading," n7 it is a notice of intent. It would seem to follow that a notice of contest should be construed more broadly than a pleading. n8 However, the majority holds otherwise. To avoid the limiting effect of their decision employers would be well advised to file notices of contest which state only "I (we) contest" or "I (we) contest everything."

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n7 Chicago Bridge & Iron Company,

n8 Commissioner Cleary would broadly construe Complainant's pleadings. See dissenting opinion in B. Heckerman Iron Works, Inc., BNA 1 O.S.H.R. 1352, 1353 et seq., CCH Employ. S. & H. Guide para. 16, 371 (1973).

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I now turn to the results of the majority decision. Clearly, they have placed this Commission in the ludicrous position of affirming citations for non-existing violations; Complainant has admitted on the record that he cannot prove the existence [*9] of a serious violation. Nevertheless, the majority affirms the citation and provides Respondent with a history of a serious violation.

Moreover, the majority interprets section 10(a) so as to produce a conflict. They conclude that the citation is final and unreviewable when the notice of contest runs only to the proposed penalties. On the other hand, they hold the opposite when the notice relates only to the existence of the alleged violations. n9 That is, when the notice of contest relates to the citation only, they hold that the proposed penalties are also in issue.

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n9 In this regard, Chairman Moran did not disavow footnote 3 of the majority opinion and I assume he agrees. However, in the interest of fairness, I will also discuss the results that flow from an opposite assumption.

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As indicated in note 6, I may be misconstruing the intent of Chairman Moran's concurrence. He might have intended a consistent interpretation and would find the proposed penalties final if a notice of contest goes only to [*10] the existence of violations. If that is his intent and if that interpretation should prevail in some future decision, then we would also assess penalties in cases where no violation exists. Surely, Congress did not intend a result of this kind; a result that penalizes an employer simply because he is a poor, inarticulate, negligent, or unwitting draftsmen.

I would also comment with respect to the cases relied upon by the majority. Interstate Glass n10 is, of course, no authority for their result. The issue there concerned our authority in the assessment of penalties as contrasted with Complainant's authority to propose penalties. On the other hand, Echols n11 is authority for their holding. As the Court noted (487 F.2d at 232), we did not appear nor did Respondent Echols. I would respectfully suggest that the Court might have arrived at a different conclusion had the views expressed herein been presented to it.

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n10 Brennan v. Occupational Safety and Health Review Com'n., 487 F.2d 438 (8th Cir. 1973).

n11 Brennan v. Occupational Safety and Health Review Com'n., 487 F.2d 230 (5th Cir. 1973).

[*11]

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For these reasons I would construe section 10(a) such that a notice of contest to any aspect of an alleged violation be it the existence thereof, the proposed penalty or the reasonableness of the abatement period, puts in contest all aspects of the alleged violation. This is the only way by which maximum fairness may be achieved. Moreover, it is the better logic. Facts relating to the existence of a violation also run to the gravity thereof for penalty purposes and to the reasonableness of the abatement period. Accordingly, in this case I would permit withdrawal as requested by the parties and in accordance with their stipulation.

[The Judge's decision referred to herein follows.]

BURROUGHS, JUDGE, OSAHRC: This case is properly before this Judge upon assignment for hearing by the Commission on May 16, 1973.

On February 2, 1973, a citation and two citations for serious violation were issued to respondent alleging that it violated Section 5(a)(2) of the Occupational Safety and Health Act of 1970 by committing two (2) serious violations and seven (7) non-serious violations of safety standards [*12] promulgated pursuant to Section 6(a) of the Act. On the same date, a notification of proposed penalty was issued proposing penalties aggregating $1,605.00 for the alleged serious violations and items 5, 6 and 7 of the citation. The sum of $750.00 was proposed for each of the two serious violations. A penalty of $35.00 was proposed for each of the three (3) non-serious violations.

A timely notice of contest was filed by respondent contesting the proposed penalties contained in the notification of proposed penalty issued on Februarry 2, 1973. The alleged violations and abatement dates were not contested.

The standards violated, the nature of the violation and the contested penalties are as follows:

Standard	Nature of	Proposed
Violated	Violation	Penalty
29 CFR 1926.104(a)	Serious	$750.00
29 CFR 1926.500(d)(1)	Serious	750.00
29 CFR 1926.552(b)(3)	Non-serious	35.00
29 CFR 1926.552(b)(5)(ii)	Non-serious	35.00
29 CFR 1926.552(b)(8)	Non-serious	35.00

Prior to the scheduled hearing date of June 13, 1973, both parties advised that the case was in the process of being amicably resolved. On July 5, 1973, a motion for withdrawal of Notice of Contest, which [*13] was executed on July 3, 1973, was received from respondent. On July 9, 1973, a stipulation, which had been executed by both parties on June 29, 1973, was filed in the case.

Under the terms of the stipulation, complainant agreed to redure the serious violation of 29 C.F.R. 1926.500(d)(1) to a non-serious violation for the reason that his proof was insufficient to establish a serious violation. The complainant also agreed to reduce the proposed penalty from $750.00 to $75.00 to reflect the non-serious nature of the violation. Respondent represented that the violations for which the penalties were proposed had been corrected and that it has paid or will pay the total penalties remaining after the reduction of $675.00 for the violation of 29 C.F.R. 1926.500(d)(1). The stipulation further stated that copies of the stipulation had been forwarded to the certified employee representative and that a copy of it would be posted at its workplace.

The stipulation referred to the fact that respondent had previously filed a notice of withdrawal of its notice of contest. It is obvious that the parties contemplated that the stipulation and notice of withdrawal be construed together to dispose [*14] of this matter. The notice of withdrawal also indicates that a copy was mailed to the certified employee representative.

The granting of a Motion to Withdraw would appear to be inappropriate since a concession has been made by complainant in the amount of penalty proposed for the violation of 29 C.F.R. 1926.500(d)(1). The granting of the Motion To Withdraw would affirm all items contested and not conceded in the complaint by complainant. The stipulation does not technically amend the complaint. The stipulation has been regarded as a settlement which is submitted to this Judge for approval.

The stipulation concerning the nature of the violation of 29 C.F.R. 1926.500(d)(1) is not in issue before the Commission since the violation was not contested by respondent. It contested only the penalty proposed for the violation. Under such circumstances, Section 10(a) of the Act clearly states that the citation [uncontested item or items], as proposed "shall be deemed a final order of the Commission." Thus this Judge is without authority to reduce the violation of 29 C.F.R. 1926.500(d)(1) from a serious to a non-serious violation. The amount of the penalty is in issue and the [*15] stipulation agreement will be considered as an indication of the gravity of the violation, which is the primary factor to be considered in assessing a penalty under Section 17(j) of the Act. See Secretary of Labor v. Nacirema Operating Company, Inc.,

The stipulation having been read and considered,

IT IS HEREBY ORDERED:

1. That the settlement is consistent with the objectives of the Occupational Safety and Health Act of 1970 and is approved; and

2. That the notification of proposed penalty issued February 2, 1973, is affirmed with the exception of Item 2 under serious violations which is modified to reflect a penalty of $75.00 in lieu of $750.00 as proposed.