UNITED STATES OF AMERICA

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

May 12, 1975

Before MORAN, Chairman; and CLEARY, Commissioner

BY THE COMMISSION:

A decision of Review Commission Judge David J. Knight dated February 5, 1975, is before the Commission for review in accordance with the provisions of 29 U.S.C. § 661(i).

Review was directed on several issues all of them pertaining to whether or not proof of respondent’s activity affecting commerce is a necessary part of the prima facie case of the Secretary of Labor.

By stipulation signed by both parties and filed with the Commission on April 30, 1975, the Secretary of Labor has agreed to reduce the penalties from $915.00 to $400.00 and the respondent has agreed to withdraw its notice of contest.

All other requirements for favorable consideration having been met, the Commission, in accordance with the stipulated settlement, orders the following disposition: all citations are affirmed and a total penalty of $400.00 is assessed therefor.

UNITED STATES OF AMERICA

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

February 5, 1975

KNIGHT, JUDGE:

On October 23, 1973, a Compliance Officer of the Occupational Safety and Health Administration of the U.S. Department of Labor (Complainant) inspected three work sites of Donovan’s Blacktop, Inc., of Pittsfield, Massachusetts (Respondent); and, thereafter, citations alleging various violations of safety standards were issued under § 658(a) of the Occupational Safety and Health Act of 1970, 29 U.S.C. §§ 651, et seq.

In Docket No. 5249, the citation was issued on October 26, 1973, and alleged four nonserious violations1 at Respondent’s garage, 94 Merriam Street, Pittsfield. Two of these alleged violations carried proposed penalties as follows:

Item—Alleged Violation—Penalties Gross—Penalties Adjusted

1—29 C.F.R. § 1910.22(a)(1): Failure keep work site clean and orderly—$170—$65

4—29 C.F.R. § 1910.309(a): Improper grounding connection for metal noncurrent carrying equipment—$100—$35

In Docket No. 5250, a serious violation of 29 C.F.R. § 1926.652(b) is alleged in the citation issued October 25, 1973, in that Respondent failed to support the sides of a trench to protect employees on Holmes Road, Lenox, Massachusetts, dug to a depth of five feet or more in unstable or sort material. A gross penalty of $1,000 was assessed and adjusted to the proposed penalty of $700.

In Docket No. 5251, the citation issued October 31, 1973, for conditions existing at a schoolyard on Benedict Road in Pittsfield alleging seven nonserious violations of which the following carry proposed penalties:

Item—Alleged Violation—Penalties Gross—Penalties Adjusted

3—29 C.F.R. § 1926.102(a)(1): Failure to assure eye and face protection on employee operating a jack hammer—$100—$35

4—29 C.F.R. § 1926.152(a)(1): Failure to use only approved containers for transporting gasoline.—$230—$85

The Respondent, by letter dated November 2, 1973, contested all of the alleged violations in all three proceedings and all of the penalties proposed therefor, under 29 U.S.C. § 659(a). By certificate dated November 14, 1973, the Respondent states that its employees, none of whom are represented by a union, were advised of the pendency of these proceedings. Respondent’s answers to the three respective complaints filed herein deny each and every allegation.

The proceedings were consolidated by notice dated February 11, 1974, and were heard on March 15, 1974, at Albany, New York. Both parties were represented by counsel, but only the Complainant produced witnesses. No briefs or post-hearing requests were filed. No employee came forward to claim party status.

STIPULATIONS OF THE PARTIES AND THE ISSUES

At the outset of the hearing and following a prehearing conference, Respondent’s counsel admitted that all of the alleged violations took place. To the best of his knowledge, all of them have been abated.

The only issue then is the propriety of the proposed penalties.2 Here, the parties stipulated that Respondent is a small company with annual income of $10,000 and an average of 12 employees. Based on this, it received a 10 percent credit as to each of the gross or unadjusted penalties, and that credit is the maximum allowable by the Complainant. These inspections, all occurring on the same day, are the first experienced by the Respondent. The Complainant, then, allowed a 20 percent credit for this history, and again this is the maximum allowable.3 The gravity of the violation in Docket No. 5250 concerning the unprotected sides of the trench was stipulated to be high, but as to the remaining dockets, the gravity was considered and stipulated to be low. The latter were characterized as nonserious, and after the credits were applied, a 50 percent abatement discount completed the computation. It was agreed that Harry Donovan (apparently Respondent’s owner or major stockholder) is a very hard-working man; lives in a two-family home next to the garage; drives an old car; never wears a suit or necktie; and works along with his men.

The Respondent was allowed no credit for good faith but the Complainant is assessing the proposed penalties. This is disputed by the Respondent and creates the first issue; namely, whether the Respondent’s good faith, if any, was adequately considered by the Complainant. Secondly, the Respondent also questions whether the proposed penalties adequately took into account the Respondent’s ability to pay.4

This formulation of the issues amends the Respondent’s answers and focuses its general denials on the complaint only as it alleges that the penalties are reasonable. Paragraph I of each complaint alleges the necessary jurisdictional facts to support the Commission’s disposition of these cases, and these are now taken as admitted by Respondent. See, Rules of Procedure, 29 C.F.R. § 2200.33(b)(2) and 29 U.S.C. § 652(3) and (5).

THE EVIDENCE

The Complainant’s Compliance Officer who conducted the three inspections on October 23, 1973, would not recommend any credit for good faith because it was his impression that the Respondent had made no attempt to comply with the requirements of the Act. The Respondent, he found, had no safety program either formal or informal. It had no safety equipment at its Pittsfield work site where the trenching operation was in progress, and there was no shoring material or trenching boxes there.

Respondent’s garage which was one work site inspected (Docket No. 5249) is not large and could accommodate two or three cars. There was truckers’ waste material on the floor as well as the fire extinguisher. He described the conditions as being one of general disorder. It was more than one day’s accumulation based on his experience. He had to step over and walk around the articles on the floor.

At the playground work site (Docket No. 5251), he saw one employee operating a jack hammer without safety glasses or hearing protection. Gas was carried in an unapproved container. The fire extinguisher was empty, and there was no first-aid kit at the site.

In his opinion, the company’s attitude toward safety was reflected in the zero credit for good faith.

On cross-examination, the Compliance Officer testified that his inspection of the garage lasted about an hour and a half and that he did not inspect it thoroughly nor did he inspect the office trailer. The fire extinguisher was there but not properly mounted. However, he admitted he was a stranger, and the implication is that an employee could readily find the extinguisher.

He did not know whether the Respondent’s office manager had to pass a first-aid course nor did he see any first-aid kits. He didn’t inspect the trailer as noted above nor did he see a sign on the trailer indicating the presence of a first-aid station. But he knew the first-aid was available at the garage. He did inspect the shop thoroughly and noted that safety glasses were available for employees operating welding torches.

While the existence of the fire extinguisher in the garage and the availability of first air and some safety glasses there does indicate some concern for safety, it would cover only two of the Respondent’s 12 employees—the other 10 being out in the field without proper protection. Therefore, his refusal to allow credit for good faith is not charged by the existence of some safety factors at the garage.

He was not aware that the Respondent’s 15 years in the business had resulted in only one lost-time accident. What he was looking for was evidence of the Respondent’s voluntary compliance with the safety regulations. He looked for a number of representative items. The purpose of the monetary penalty is to try to impress on Respondent the seriousness of some of the violations.

The Respondent’s ability to pay a penalty is not taken into account since the accidents must be prevented. The same penalty as assessed here would have been proposed even to a wealthy Respondent under the same circumstances. The formula prescribed by the Compliance Manual would have been followed, and he has no choice to vary any of the elements,5 but he does try to keep it at a minimum to prevent hardships. However, as a result of these particular inspections, the penalties would not have been reduced beyond what was proposed. As a matter of fact, there could well have been additional money penalties or greater ones to begin with, but they were kept as low as they were because of the size of Respondent. Proposed penalties are kept to a minimum by the estimate of the probability and severity of any injury which might result from an unsafe condition. But he is bound by the formula contained in the Compliance Manual6

The Respondent could obtain financial assistance from the Small Business Administration in order to bring his company into compliance with the safety regulations, and this is possible either before or after an inspection.

The Complainant’s final witness was an employee of Respondent. While working in the trench which is the subject of Docket No. 5250, he had been buried to the shoulders as the result of a cave-in just after a rainfall on October 5, 1973. He spent three days in the hospital and lost two weeks out of work. The trench was between seven and eight feet deep; there was no shoring material or trenching boxes; no instructions were given by the Respondent to its employees on safety; there had been no safety meetings; and there was no safety director. He had worked in seven or eight trenches on that street, all without any protection, and the Respondent knew the trenches would be more than five feet deep. This employee knows of two lost-time accidents in Respondent’s 14-year experience, having worked for him that long. Prior to the inspection, there had been no back-up alarms on Respondent’s big trucks, but they have since been installed.

CONTENTIONS OF THE PARTIES

In his closing statement, Complainant’s counsel argued that Respondent has shown a minimal, if any, effort to comply with the safety regulations; and he pointed out that an employee can be killed working for a small company as easily as he could working for a large one.

Respondent’s counsel argued that the Respondent is not a wealthy employer, and that while it appears to be sloppy in its compliance, the area around Pittsfield in Berkshire County has been forgotten. As a result, employers have become lax in their efforts regarding safety. However, now the Respondent is in compliance, and the Complainant will have no more problems with it. He agreed that a fine is in order in this case, but it must be in proportion to what the Respondent can pay. He suggested that $200 would be sufficient.

FINDINGS OF FACTS, DISCUSSION AND CONCLUSIONS

Based on this evidence and the record as a whole, I find:

1) Respondent has demonstrated rudimentary concern for safety with the more obvious hazards at his garage work site as exemplified by its providing first aid, fire extinguisher, and goggles for its welders;

2) Respondent does not expend itself to any measurable length to protect its employees away from its garage and shop as demonstrated by the undisputed results of the inspection of the playground construction in the trenching site. There its employees are exposed to various hazards;

3) Respondent is a small concern, and Complainant’s formula for assessing penalties is too rigid and does not fully account for Respondent’s size. Its total proposed penalty of $915 is too high and equals almost 10 percent of Respondent’s income.

The Commission noted in Secretary v. Colonial Craft, 1 OSAHRC 933 at 936 that:

. . . Adjustment of the penalty for the employer’s size is primarily an attempt to avoid destructive penalties, and must be of major consideration here. The primary objective of the Act is to secure a safe and healthful work place, and we are convinced that in the circumstances of this case the objective would be better served by the nonassessment of penalties.

In that case, the Commission was concerned only with nonserious violations, and a company which had operated at a deficit. But the main thought of the decision concerning destructive penalties and the purpose of the Act is relevant here.

Based on Respondent’s counsel’s statement that all of the alleged violations have been abated, the fact that these inspections were the first in Respondent’s experience, and its small size in terms of employees and income, I conclude that no penalty is warranted concerning the nonserious violations in Docket Nos. 5249 and 5251.

However, the gravity of the violation in Docket 5250 concerning the trenching operation merits some penalty because of the complete absence of any safety precaution taken by Respondent when common sense would dictate otherwise. This element in this proceeding is controlling, cf., Secretary v. Broadview Construction Co., 2 OSAHRC 210. But this penalty must be measured in terms of its ability to assure compliance with the Act and can in no way be deemed as a punishment. The civil penalty is a goad applied to assure the ends designed by the Act. See, Beall Construction Co. v. Occupational Safety and Health Review Commission, No. 74–1297 (USCA, 8th Circuit, December 18, 1974) and the report of the Administrative Conference of the United States, 2 Administrative Conference 68 which finds:

. . . In many areas of increased concern (e.g., health and safety, the environment, consumer protection) availability of civil money penalties might significantly enhance an agency’s ability to achieve its statutory goals.

Because of the gravity of the violation in Docket No. 5250, Respondent’s counsel’s statement that there will be no further problems with this Respondent is not enough. In this single proceeding, I conclude that a penalty in the amount of $400 adequately reflects the severe gravity of the violation and takes into account the Respondent’s minimal good faith efforts, its size which includes its dollar income, and the fact that this is its first exposure to the Occupational Safety and Health Administration.

ORDER

Based on the foregoing, it is ordered that, as to Donovan’s Blacktop, Inc.:

1) In Docket No. 5248, based on a citation issued October 26, 1973, no penalty be assessed for Item 1 thereof [a violation of 29 C.F.R. § 1910.22(a)(1)] nor shall any penalty be assessed for Item 4 thereof [a violation of 29 C.F.R. § 1910.309(a)];

2) In Docket No. 5250, based on a citation issued October 25, 1973, a penalty of $400 is assessed for a serious violation of 29 C.F.R. § 1926.652(b); and

3) In Docket No. 5251, based on a citation issued October 31, 1973, no penalty shall be assessed for Item 3 thereof [a violation of 29 C.F.R. § 1926.102(a)(1)] nor should a penalty be assessed for Item 4 thereof [a violation of 29 C.F.R. § 1926.152(a)(1)].

1 As detailed below, the contest herein is directed only at the proposed penalties attached to any citation. The citations for nonpenalty items are not in issue. Since there is no indication that Respondent even intended to contest the allegations of violations, these became final as a matter of law. 29 U.S.C. § 659(a) and cf., Brennan v. Occupational Safety & Health Review Commission (Echols case), 487 F. 2d 230 (1973) at 235–236. No order need be entered affirming these violations.

2 Penalties are initially proposed by the Complainant but finally assessed by this Commission with due consideration for (1) the size of Respondent, (2) the gravity of the violation, (3) Respondent’s good faith, and (4) its history of previous violations. 29 U.S.C. § 666(i).

3 Complainant’s Compliance Operations Manual, Chapter XI, § B3g sets these maximum adjustments, and a maximum of 20 percent could have been allowed for good faith. See also the penalty worksheets, Exhibits C–1A, 1B and 1C.

4 Ibid. The manual measures size only in terms of the number of employees.

5 See, Footnote #4.

6 Probability and severity are two of three elements comprising gravity, and some discretion is built into the formula. See, Compliance Operations Manual, Chapter XI, § B3d and e. This only applies to nonserious violations. Serious violations begin at $1,000, and no abatement credit (50 percent) is allowed, § B4.