CROSS & BROWN COMPANY

OSHRC Docket No. 78-1803

Occupational Safety and Health Review Commission

February 27, 1981

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Before CLEARY, Chairman; BARNAKO and COTTINE, Commissioners.  

COUNSEL:

Baruch A. Fellner, Office of the Solicitor, USDOL

Mr. F. V. LaRuffa, U.S. Department of Labor

William F. Treanor, for the employer

OPINION:

DECISION

BY THE COMMISSION:

A decision of Administrative Law Judge Seymour Fier is before the Commission pursuant to a direction for review issued by Commissioner Barnako under section 12(j), 29 U.S.C. §   661(i), of the Occupational Safety and Health Act of 1970, 29 U.S.C. § §   651-678 ("the Act").   Respondent, Cross & Brown Company, was charged with allegedly failing to abate a violation of section 5(a)(1) of the Act, 29 U.S.C. §   654(a)(1).   The violation involved Respondent's failure to equip several elevators with certain safety features.   Judge Fier affirmed the notification of failure to abate but reduced the penalty to $5000 from the $9000 proposed by the Secretary of Labor ("Secretary").   The propriety of the penalty assessed by Judge Fier is the sole issue directed for review by Commissioner Barnako. n1 We conclude that the judge's penalty assessment is excessive and reduce the penalty to $1000.

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n1 Respondent's petition for review also raised the issue of whether Respondent failed to abate the violation as alleged.   That issue, however, was not directed for review and accordingly is not before us.   See Henry C. Beck Co., 80 OSAHRC    , 8 BNA OSHC 1734 n. 2, 1980 CCH OSHD P24,590 at p. 30,169-3 n. 2 (No. 77-963, 1980).

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I

Respondent, a licensed real estate broker, was appointed manager of a 12-story industrial complex by a receiver in bankruptcy in July of 1976.   At that time, the premises were in a state of disrepair and the tenants were disgruntled.   In January of 1977, the property was acquired by the Dime Savings Bank ("the Dime") at a receiver's sale.   The new owner threafter entered into a contractual relationship with the Respondent whereby Respondent would continue to manage the premises for the Dime.

On October 11, 1977, an accident involving Respondent's elevator number 15 resulted in the death of one of Respondent's employees.   Two Occupational Safety and Health Administration ("OSHA") compliance officers -- Scott and Signorile -- conducted an inspection of the premises on October 12.   They found Respondent's elevators numbered 2, 5, 6, 9, 14 and 15 in noncompliance with the Act.   Numbers 6 and 9 were freight elevators. Numbers 2 and 5 were "passenger freight" elevators. Numbers 14 and 15 were "truck elevators," engaged in moving 28-foot truck bodies among the several floors.

The compliance officers   [*3]   determined that the elevators were unsafe because they lacked gates and electronic interlocks. The former protect passengers from coming in contact with the shaft.   The latter prohibit cars from moving when the doors are open.   The record does not indicate whether these conditions had any causal link with the fatality which had occurred.

While in Respondent's building, the compliance officers spoke with the building manager, Mr. James Anthony, and Mr. Hubert Hayes of Flynn-Hill Elevator Company.   Anthony explained to the compliance officers that to repair all the elevators simultaneously would necessitate a temporary shutdown of operations.   Such a move, Anthony said, would put the Respondent out of business.   Thus, Scott and Signorile suggested temporary measures which would allow Respondent to continue doing business.

Anthony testified as follows on direct examination by Respondent's attorney, Mr. Treanor:

Mr. Anthony: I said to him [the compliance officer] . . . what could I do to get . . . back rolling right away.

Mr. Treanor: And what did he say?

Mr. Anthony: Well, we came up with [here, temporary measures enumerated].

Mr. Treanor: And what did he say would [*4]   happen if you did that?

Mr. Anthony: We could run temporarily, and this would show progress we wanted to comply.

The compliance officers informed Anthony that they would be returning to make certain that these temporary measures had been taken.   Immediately, Respondent enlisted Flynn-Hill elevator company to undertake the temporary repairs. Flynn-Hill worked around the clock for several days installing the precautionary devices.

One week later, on October 20, 1977, Scott and Signorile returned.   Respondent had installed temporary gates and mechanical interlocks on all the offending cars except number 15, which even up until the day of the hearing remained shut down. Mr. Anthony and Mr. Milton Lampert, management supervisor of Respondent's company, together with Mr. Hayes, spoke with the compliance officers on this occasion.   All three testified that the compliance officers examined the work that had been done and showed approval.   In fact, Mr. Signorile purportedly complimented Mr. Anthony on his swift action in installing these stopgap measures.   During this visit, Mr. Lampert explained to the compliance officers that under the terms of Respondent's contract with the Dime,   [*5]   Respondent would be required to seek bids for the installation of permanent measures because of the substantial sum of money involved.   Mr. Lampert and Mr. Hayes testified that the compliance officers did not make any protest nor did they object in any way to this procedure.   Also during this inspection, the compliance officers spoke at some length with Mr. Hayes.   He informed them that permanent repairs could take up to ten weeks per car, with an aggregate estimate of six to eight months. n2 Once again, the compliance officers did not take exception to Hayes' estimates.

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n2 During his testimony, Hayes was questioned as to why such an extended period of time was required to install the automatic gates and electronic interlocks:

Mr. Treanor: Why would it take six to eight months?

Mr. Hayes: Prefabrication of parts, to fabricate the parts and get the material, include the repairs to each door, you are talking about a door that is 12-foot by 10-foot and weighs about 800 pounds that has to be taken out and new guiderails put in for these large doors. It's all a matter of time.

Mr. Treanor: Well, is the work done on the premises or does it have to be sent somewhere?

Mr. Hayes: No, it is sent out. . . .

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On October 26, 1977, a citation was issued alleging that Respondent violated section 5(a)(1) of the Act. n3 This citation was not contested. n4 An abatement date of November 28, 1977, was listed on the citation.   Lampert freely admitted both receiving the citation and having knowledge of the abatement date noted thereon.   However, he testified that it was his belief that his meeting with Scott and Signorile obviated the need for permanent repairs by November 28, as he had already taken what he believed to be the necessary steps to satisfy the standards set forth by the compliance officer.   Lampert testified on cross-examination by the Secretary's attorney Mr. Brunner:

Mr. Brunner: . . .   What is the date . . . by which the violations must be corrected?

Mr. Lampert: November 28, 1977.

Mr. Brunner: You didn't file any request for the extension of the abatement date?

Mr. Lampert: Not after I had the meeting with Mr. Scott when I was told you can operate until permanent repairs are made.

Judge Fier questioned Mr. Lampert as follows:

Judge Fier: Did [the compliance officers] at any [*7]   time say that you don't have to worry about the abatement date?

Mr. Lampert: No, it never came up. . . .   All they said was you may run these cars on a temporary basis until permanent repairs are effected, if the city allows you to run it.

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n3 Section 5(a)(1) provides as follows:

Sec. 5.(a) Each employer-

(1) shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical ham to his employees;

n4 Uncontested citations become final orders of the Commission pursuant to §   10(a) of the Act, 29 U.S.C. §   659(a).

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As noted above, Respondent was cited on October 26, 1977.   Notice of bids was sent by Respondent during that same month.   Bids were submitted in November.   In conformity with the Dime's procedures, the selection of Flynn-Hill to do the permanent repairs was made in December.   Flynn-Hill notified Respondent that it would begin full-scale work under the bid on January 28, 1978.   However, Flynn-Hill [*8]   had been in the building continuously since undertaking the temporary work.   Their purpose in the interim, as Mr. Hayes testified, was in "trying to update some of the equipment to ease off on the proposal . . . for $99,361." That figure represents the amount of the bid awarded to Flynn-Hill.

Flynn-Hill began a comprehensive work program on the permanent repairs as scheduled on January 28, 1978.   This work continued through February, March and April in accordance with Flynn-Hill's original projection of 8 months total repair time.

On April 14, 1978, Compliance Officer Henry Lauten appeared at the Respondent's premises for the purpose of reinspection. At that time, elevators 2 and 5 were repaired and number 15 was shut down. Lauten concluded after examining the elevators that numbers 6, 9 and 14 were still not in compliance.   Number 6 had been shut down for the 2 - 1/2 weeks prior to Lauten's inspection in order to make the permanent repairs. Numbers 9 and 14 were operating with the temporary measures Scott and Signorile had approved earlier.   Respondent explained its repair schedule to Lauten.   Respondent further told Lauten that Scott and Signorile had approved these temporary [*9]   steps until more permanent ones were accomplished.   Lauten expressed some surprise at this.   Nonetheless, a notification of failure to abate issued on April 18, 1978, and a penalty of $9000 was proposed.   After affirming the failure to abate notice, Judge Fier found Respondent's good faith to be a mitigating factor. Accordingly, he reduced the penalty from $9,000 to $5,000.

II

Respondent argues on review that the penalty should be reduced even further because of its good faith efforts at compliance and an honest misunderstanding as to what was required of it.   Respondent maintains that elevator number 15 -- where the fatality occurred -- was shut down immediately after the accident and had not run even up until the date of the hearing.   The Respondent asserts that compliance officers Scott and Signorile recommended temporary measures, which measures were completed within 36 hours of the original inspection. Respondent states that its understanding of the compliance officers' recommendation was that these temporary measures would lessen the immediate danger enough to eliminate the urgency for the installation of permanent safeguards. When told of the bid procedure, Respondent   [*10]   states, the compliance officers did not object.   It is Respondent's position that it believed that it was in compliance and was satisfying the requirements of the Act as set out by Scott and Signorile by installing the temporary safeguards and continuing a program of permanent repairs.

To further bolster this contention, Respondent raises the fact of its interim compliance with the New York City code.   Contemporaneous with the compliance officers' visit was an inspection by the New York City inspectors. This latter group cited the Respondent for substantially similar violations as appear in the Secretary's citations.   The City inspectors returned to the site every month from the date of the violation until the date of the hearing.   On each occasion, they issued 30-day temporary elevator certificates. Respondent alleges that this is further proof of its continued efforts toward compliance in that the city inspectors would not have issued even temporary certificates if the condition that existed was unsafe.

The gravamen of the Secretary's argument is that there was no "informal extension" of the abatement period granted by the Secretary's representatives.   Rather, the Secretary argues,   [*11]   the compliance officers were only making suggestions of stopgap measures to prevent a total shutdown of Respondent's operations.   The Secretary points out that the Act provides certain procedures for an employer to obtain an extension of its abatement period.   Respondent did not obtain such an extension and, according to the Secretary, the interim measures and gradual permanent repairs Respondent undertook cannot be regarded as complete abatement. The Secretary also states, however, that he "would raise no serious opposition" to a further adjustment of the penalty by the Commission.

III

In assessing penalties, we must consider the gravity of the violation, the size of the employer, the employer's prior history, and the employer's good faith.   Section 17(j) of the Act, 29 U.S.C. §   661(i).   Respondent employed 15 people at the location where the violation occurred.   The record is silent as to its aggregate number of employees.   Respondent had no prior history of violations except those for which the original citation was issued.   The gravity of the violation at the time of the original citation was high, as the condition of the elevators exposed their operators and other employees [*12]   to death or serious injury.   See generally Ford Motor Co., 77 OSAHRC 167/A2, 5 BNA OSHC 1765, 1977-78 CCH OSHD P22,106 (No. 13682, 1977).   However, this gravity was considerably lessened by the temporary safeguards taken by Respondent prior to the time of the reinspection. We turn then to the issue of Respondent's good faith.

In the past, we have considered a showing of good faith on the part of an employer as a significant mitigating factor in penalty assessments.   See generally Del-Cook Lumber Co., 78 OSAHRC 14/A2, 6 BNA OSHC 1362, 1978 CCH OSHD P22,544 (No. 16093, 1978); Nacirema Operating Co., 72 OSAHRC 1/B10, 1 BNA OSHC 1001, 1971-73 CCH OSHD P15,032 (No. 4, 1972).   We conclude that Respondent here has made a substantial display of good faith.   The elevator in which the fatality occurred was shut down at once and remained out of service even up until the date of the hearing.   After receiving the initial citation, Respondent immediately installed the temporary safeguards prescribed by the compliance officers.   Respondent honestly but erroneously believed that an extension of time had been granted during conversations with Scott and Signorile.   Moreover,   [*13]   Respondent expended substantial sums of money to improve the condition of the elevators. However, Respondent's noncompliance with the Act cannot be excused, given the potential gravity of harm that existed.   A penalty is appropriate, but not of the magnitude assessed by Judge Fier.   We believe that, under the circumstances, a penalty of $1000 is appropriate.

Accordingly, the judge's decision is modified to assess a penalty of $1000 and, as so modified, is affirmed.   SO ORDERED.