Double "A" Industries, Inc.

Plain-English summary

Double "A" Industries is a small south Florida shell contractor that took a $38,000 contract to build a guardhouse and subcontracted the roofing labor out. An OSHA officer inspecting a nearby site watched roof workers for about 40 minutes without fall protection or hard hats and improperly using ladders, then cited Double "A" for eight serious violations covering safety programs, training, first aid, hard hats, fall protection, and ladder safety. Double "A" did not dispute the unsafe conditions but argued the workers belonged to an independent subcontractor and that it neither created nor controlled the hazards. The judge agreed the workers were the subcontractor's employees, but found Double "A" was still the culpable employer because its on-site project manager controlled the work, knew of the hazards, and directed the workers to stop and add guardrails. All eight items were affirmed as serious, and the judge assessed a total penalty of $10,000 rather than the $17,250 proposed, giving credit for the company's small size and clean history.

Decision snapshot

• Cited standard(s): 29 C.F.R. §§ 1926.20(b)(1), 1926.21(b)(2), 1926.50(c), 1926.100(a), 1926.501(b)(13), 1926.503(a)(1), 1926.1053(b)(1), 1926.1053(b)(22), 1926.1060(a)
• Outcome: All eight serious items affirmed; total penalty $10,000 (reduced from $17,250 proposed).
• Key point: A contractor that controls a jobsite hazard is a culpable employer under the multi-employer worksite rule even when the exposed workers are a subcontractor's employees.

Full text (OSHRC public release)

Double “A” Industries, Inc.
Docket No. 01-0534
APPEARANCES

                Sharon D. Calhoun, Esq.                              William J. Marrell, Esq.
                Office of the Solicitor                              Glickman, Witters, Marrell and Jamieson
                U. S. Department of Labor                            West Palm Beach, Florida
                Atlanta, Georgia                                             For Respondent
                         For Complainant

Before: Administrative Law Judge Ken S. Welsch

                                       DECISION AND ORDER
    Double “A” Industries, Inc. (Double “A”) provides labor and materials for slab, masonry,

sheathing, and roofing work on construction projects in south Florida. On March 7, 2001,
Occupational Safety and Health compliance officer (CO) William Cochran, while inspecting an
adjacent job site, observed employees working on the roof of a guardhouse building under
construction at a proposed residential community in Delray Beach, Florida. The employees were
working without fall protection, hard hats, and proper use of portable ladders. After completing
the other inspection, CO Cochran inspected the guardhouse project and recommended a serious
citation, which was issued to Double “A” on March 13, 2001. Double “A” timely contested the
citation.
The serious citation alleges that Double “A” violated 29 C.F.R. § 1926.20(b)(1) (item 1a)
for failing to have a safety program; 29 C.F.R. § 1926.21(b)(2) (item 1b) for failing to train
employees to recognize and avoid unsafe conditions; 29 C.F.R. § 1926.50(c) (item 2) for failing
to have an employee trained in first aid on site; 29 C.F.R.§ 1926.100(a) (item 3) for failing to
have employees wear hard hats; 29 C.F.R. § 1926.501(b)(13) (item 4) for failing to have
employees use fall protection; 29 C.F.R. § 1926.503(a)(1) (item 5) for failing to train employees
in fall protection; 29 C.F.R. § 1926.1053(b)(1) (item 6) for failing to extend portable ladders at
least 3 feet above the landing; 29 C.F.R. § 1926.1053(b)(22) (item 7) for allowing employees to
use ladders while carrying objects or loads; and 29 C.F.R. § 1926.1060(a)1 (item 8) for failing to
train employees in ladder safety. The serious citation proposes penalties totaling $17,250.

    1
        Originally cited as 29 C.F.R. § 1926.1053(b)(1). Citation was amended to correct error.
     A hearing was held in West Palm Beach, Florida, on November 15, 2001. Jurisdiction

and coverage were stipulated (Tr. 6-7). The parties filed post-hearing briefs.
Double “A” does not dispute the violative conditions (Tr. 25-26). Double “A” argues that
the employees were not its employees. It asserts that the employees were employed by an
independent contractor. Also, under multi-employer workplace defense, Double “A” argues that
it did not create or control the violative conditions and its employees were not exposed to an
unsafe condition.
For the reasons discussed, the multi-employer workplace defense is rejected and the
violations are affirmed against Double “A.” A total proposed penalty of $10,000 is assessed.

                                                The Inspection
     Double “A” is a small construction contractor in Lake Worth, Florida, who provides

material and labor to perform slab, masonry, and roofing work. Double “A” refers to itself as a
“shell contractor.”2 Double “A” has been in business since 1988. It employs approximately 17
employees, including president and owner Frank Pantaleo, 9 superintendents/project managers,3
and an office staff (Exh. C-1; Tr. 13, 32, 173-174, 222).
Double “A” does not employ laborers, carpenters or other trades to perform its
construction work. Double “A” generally hires subcontractors to perform the specific work
under the contract (Tr. 187-188). President Pantaleo characterizes Double “A” as “strictly a
labor and material broker” (Tr. 175). Double “A” provides a superintendent/project manager to
hire and schedule subcontractor activities, order materials, and assure that the job is completed in
a timely manner (Tr. 32, 34, 182). If the work does not progress properly, the
superintendent/project manager has the authority to fire and replace the subcontractor (Tr. 42).
On January 5, 2001, Kenco Communities, a general contractor, contracted Double “A” to
prepare the slab, erect the masonry block, install the 1st and 2nd floor tie beams, and install the
roof trusses and sheathing for a guardhouse at the entrance to the proposed Stone Creek Ranch

    2
      Shell construction involves the entire exterior of a building from the foundation to the roof, excluding roof

shingles (Tr. 98-99).
3
A project manager is a superintendent with a pay raise. Both positions perform essentially the same job
(Tr. 175).
subdivision in Delray Beach, Florida. The proposed guardhouse was in excess of 2 stories high
with multiple roofs and archways. The contract price for the work was approximately $38,000,
which Double “A” considered a medium to small contract (Exhs. C-3, R-3; Tr. 183-184, 221).
Double “A” began its work on the guardhouse in February, 2001. Project manger Steve
Crews,4 who was assigned the project, visited the site approximately once a week (Tr. 42, 65-66,
223). Double “A” subcontracted the roof labor work to Carlos Alvizo.5 Alvizo provided Double
“A” a certificate of liability insurance, subcontractor information sheet, tax identification
number, a contract as an independent contractor, and a non-compete agreement (Exh. R-5; Tr.
201). In early March, Alvizo left the project prior to completing the roofing work. Crews, then,
verbally contracted the remaining roofing work to Nat Dela Cruz (Tr. 81-82, 215). Neither
Pantaleo nor Crews had ever met or spoken with Dela Cruz. Crews made the arrangements
through a foreman (Tr. 79-80, 224). Dela Cruz’s subcontractor information was not provided to
Double “A” until March 14, 2001, after OSHA’s inspection (Exh. R-5; Tr. 200).
On March 7, 2001, CO Cochran was inspecting a trench project in Delray Beach,
Florida. While making the inspection, he observed workers on another project approximately 50
yards away working on a guardhouse roof. He watched the work for approximately 40 minutes
and noted that the workers were not using fall protection or wearing hard hats (Tr. 92-95). He
observed [who he later identified as] Steve Crews on the ground, in and out of a pickup truck (Tr.
94). He determined that Crews was probably the superintendent.6
After completing the trench inspection, CO Cochran initiated an inspection of the
guardhouse at approximately 11:00 a.m. (Tr. 99). He presented his credentials to Steve Crews,
who identified himself as superintendent. Crews told Cochran that there were no subcontractors
on site. Dela Cruz was not at the site at the time of the OSHA inspection (Tr. 79). The 7

    4
       Steve Crews has been employed by Double “A” for 7 years and as a project manager for almost 4 years

(Tr. 32, 64). Pantaleo rated Crews as one of his better project managers (Tr. 223).
5
He is referred to as Alvarez at several locations in the transcript.
6
Crews’ testimony that he was not on site until after the OSHA inspection started is not given weight
(Tr. 43, 45). Crews was specifically identified by CO Cochran as the person observed during his trench inspection
(Tr. 94-95). Also, Crews seemed confused, as evident by his answers to OSHA’s employer information form (Exh. C-2).
When Crews wrote “supervisor” on the employer representative form regarding who conducts safety meetings, he
did not know what he meant and did not know if it referred to himself (Tr. 74-75). He also claimed he did not know
what he meant when he wrote “weekly safety meetings” (Tr. 75).
workers working on the guardhouse roof were identified by Crews as employees of Double “A”
(Exh. C-2; Tr. 94-96, 100, 102).
During the inspection, CO Cochran advised Crews that the workers on the roof were in
violation of the fall protection standard (Tr. 95). Crews stopped the work and the workers came
down and got into their vehicles (Tr. 99-100, 113). After completing the walkaround inspection,
Crews instructed the workers to resume their work. He instructed the workers to erect a guardrail
around the upper roof line where they were installing arches. After being advised that the
guardrails needed midrails, Crews instructed the workers to correct the guardrails (Tr. 113-114,
141).
As a result of the inspection, CO Cochran recommended violations for the lack of fall
protection, ladder safety and use, hard hats, and safety and health programs and training. The
serious citation to Double “A” was issued March 13, 2001.

                                           Discussion
    The Secretary has the burden of proving a violation.
            In order to establish a violation of an occupational safety or health
            standard, the Secretary has the burden of proving: (a) the
            applicability of the cited standard, (b) the employer’s
            noncompliance with the standard’s terms, (c) employee access to
            the violative conditions, and (d) the employer’s actual or
            constructive knowledge of the violation (i.e., the employer either
            knew or, with the exercise of reasonable diligence could have
            known, of the violative conditions).

Atlantic Battery Co., 16 BNA OSHC 2131, 2138 (No. 90-1747, 1994).

                                      Alleged Violations
    The citation alleges violations of the requirements to have a safety program (item 1a);

training on the recognition and avoidance of unsafe conditions (item 1b); a person on site with a
certificate in first-aid (item 2); hard hats (item 3); fall protection (item 4); fall hazard training
(item 5); portable ladders extending 3 feet above landings (item 6); loads not carried on ladders
(item 7); and ladder training (item 8).
Double “A” does not dispute the application of the standards by OSHA and that the terms
of the cited standards were not complied with by the workers (Tr. 25-26). Double “A” also does
not dispute that the workers were exposed to unsafe conditions. The workers were working on
the roof without fall protection, improperly using ladders, and were not wearing hard hats (Tr.
92-93). The workers were working at heights of up to 24 feet and the roof’s pitch was 5 in 12
(Tr. 125). The photographs taken by CO Cochran show employees exposed to the unsafe
conditions (Exh. C-3, a-k). Also, OSHA’s inspection file documents the violations (Exh. R-1).
If a culpable employer, the record establishes that Double “A” had knowledge of the
unsafe conditions because of Crews’ presence on-site. When a supervisory employee has actual
or constructive knowledge of the violative conditions, knowledge is imputed to the employer and
the Secretary satisfies his burden of proving knowledge. Dover Elevator Co., 16 BNA OSHC
1281, 1286 (No. 91-862, 1993). An employer is chargeable with knowledge of conditions which
are plainly visible to its supervisory personnel. A. L. Baumgartner Construction, Inc., 16 BNA
OSHC 1995, 1998 (No 92-1022, 1994). As project manager, Crews’ knowledge is imputed to
Double “A.” “Because corporate employers can only obtain knowledge through their agents, the
actions and knowledge of supervisory personnel are generally imputed to their employers, and
the Secretary can make a prima facie showing of knowledge by proving that a supervisory
employee knew of or was responsible for the violation.” Todd Shipyards Corp., 11 BNA OSHC
2177, 2179 (No. 77-1598, 1984). Project manager Crews told CO Cochran that he was aware of
the fall hazards and other hazards on site (Tr. 95). He knew the workers were not using fall
protection and stated that fall protection was not used in residential construction (Tr. 129). Also,
Crews knew that the workers were not wearing hard hats. He stated that hard hats were not on
site (Tr. 122). Crews was on-site observing the work of the workers on the roof for
approximately 40 minutes prior to OSHA initiating its inspection (Tr. 92-93). Also, the
inspection file documents the lack of safety programs and training of the workers (Exhs. C-2, R-
1).
Therefore, the violations are substantiated if Double “A” is found to be a culpable
employer (Tr. 25-26). Double “A” argues that it was not the employer of the workers working on
the guardhouse project. Double “A” asserts that the workers were employed by an independent
contractor. It did not create or control the unsafe conditions observed by CO Cochran and its
employee on site (Steve Crews) was not exposed to the conditions. Crews did not control the
work. Double “A” asserts the multi-employer worksite defense.
The Secretary argues that Double “A” was the employer of the workers. If not the
employer of the workers, the Secretary asserts that Double “A” was the culpable employer on a
multi-employer worksite because of its control over the conditions.

Workers Not Employed by Double “A”
The Secretary argues that the workers observed working at the guardhouse project were
employees of Double “A.” During the inspection, CO Cochran believed that the workers were
employees (Tr. 101). Project manager Crews never advised CO Cochran of the use of
subcontractors by Double “A.” On a written employer profile form used by Cochran, Crews
answered “no” to a question asking if subcontractors were on the site (Exh. C-2; Tr. 100). Also,
the roofing work being performed at the time of OSHA’s inspection was part of the Double “A”
contract with Kenco (Tr. 45, 78).
The record, however, fails to establish that Double “A” was the employer of the workers.
In determining whether the workers were employees of Double “A,” the economic realities’ test
is applied. As discussed in Loomis Cabinet Co., 15 BNA OSHC 1635, 1637 (No. 88-2012,
1992), the following factors are considered: (1) who the workers consider their employer; (2)
does the alleged employer have the power or responsibility to control the worker; (3) does the
alleged employer have the power to fire, hire, or modify the employment conditions of the
worker; (4) does the worker’s ability to increase his wages depend on efficiency rather than
initiative, judgment, and foresight; and (5) how are the worker’s wages established. The key
factor in addressing an employment issue is the right to control the work. Abbonizio Contractors,
Inc., 16 BNA OSHC 2125, 2126 (No. 91-2929, 1994). Also, control over the performance of the
work, including the means and methods by which it is accomplished, is not dispositive of
establishing employment status. Don Davis, 19 BNA OSHC 1477, 1479 (No. 96-1378, 2001).
Although not dated until March 14, 2001, Dela Cruz furnished Double “A” a certificate
of liability insurance, subcontractor information sheet, tax identification number, a contract as an
independent contractor and a non-compete agreement (Exh. R-5; Tr. 200). The record shows that
Dela Cruz had an oral contract to complete the roofing work (Tr. 78-80, 215, 217). The workers
were employees of Nat Dela Cruz, an independent subcontractor, hired by Double “A” (Tr. 70-
71). Crews’ testimony as to the subcontractor’s relationship is supported by president Pantaleo
and copies of Double “A” payroll records and subcontractors’ file (Exhs R-2, R-5). There is no
showing that Double “A” directly paid the workers doing the roofing work, supervised their daily
work activities, or provided them with tools or equipment. Also, it was not shown that Double
“A” could hire or fire the workers, nor were the workers entitled to the same benefits received by
other employees of Double “A.” The workers were not shown on the Double “A” payroll (Exh.
R-2; Tr. 177-180, 182).
The workers were not employed by Double “A.”

Double “A” was the Culpable Employer on a Multi-Employer Worksite
Although not employees of Double “A,” Double “A” is nevertheless in violation of
OSHA standards as a culpable employer. An employer at a multi-employer construction
worksite is responsible for both those hazardous conditions to which its own employees at the
site are exposed and those hazardous conditions to which it either creates or controls and to
which employees of other contractors are exposed. Flint Engineering & Construction Co., 15
BNA OSHC 2052, 2055 (No. 90-2873, 1992). An employer who controls or creates a worksite
safety hazard is liable under OSHA even if the workers threatened by the hazard are solely
employees of another employer. Access Equipment Systems, 18 BNA OSHC 1718, 1722-1723
(No. 95-1449, 1999).
Double “A” argues that it was not the general contractor and therefore was not in control
of the guardhouse project. Its right to control an independent contractor was limited solely to an
agreement as to the result to be accomplished. Section 4 of the contract between Double “A” and
its independent subcontractor Nat Dela Cruz (Exh. R-5) provides that:
The undersigned and Double A Industries, Inc., acknowledge that
the undersigned shall not be subject to the provisions of any
personnel policy or rules and regulations applicable to employees
and the undersigned shall fulfill its responsibility independent of
and without supervisory control by Double A Industries, Inc.

Double “A” argues that its independent contractors are in business for themselves. They
maintain their own liability insurance, worker’s compensation insurance and have their own
employees (Tr. 194-195). Their business is separate, apart and distinct from Double “A.” The
contractors supply their own tools and equipment (Tr. 207). Double “A” argues that project
manager Crews was on the project solely to monitor the progress of the contractor’s work
(Double “A” Memorandum of Law).
Although the workers installing the roof may have worked for contractor Dela Cruz, the
record shows that Double “A” was the culpable employer because it controlled the unsafe
conditions at the worksite, including the abatement of conditions at the time of OSHA’s
inspection. Double “A” had considerable control and responsibility for the project. This was a
multi-employer worksite. Kenco had hired other subcontractors to perform the plumbing,
electrical, drywall and painting work on the guardhouse (Tr. 202). To perform its contract work
on the roof, Double “A” subcontracted with Dela Cruz. Although Double “A” was not the
general contractor, the record shows that an employer need not be labeled the “general
contractor” to have control over a hazard, particularly one it knew existed and could abate.
Double “A” was contractually responsible for the construction of the roof on the
guardhouse. Although the actual labor was contracted to a subcontractor, Double “A” remained
responsible for the completion of the work (Exh. R-3; Tr. 83, 184, 218-219). It provided all the
materials (Tr. 218). At least at the time of OSHA’s inspection, project manager Crews oversaw
the workers’ activities on the job to assure compliance with its contract. Dela Cruz was not on
the site (Tr. 79). Crews was observed overseeing the work for approximately 40 minutes prior to
the OSHA inspection. Crews’ job as project manager required that he work at the 3 jobsites he
oversaw (Tr. 212-213). The work on the guardhouse had been going on for a month (Tr. 213).
Also, after acknowledging the unsafe conditions to CO Cochran, Crews instructed the workers to
stop work, install guardrails, make corrections to the guardrails, and resume work (Tr. 94-95, 99-
100, 113-114, 141). He controlled their work.
Double “A” is the culpable employer and the violations are established.

                                    Serious Classification
    OSHA classified the violations as serious. A violation is serious under § 17(k) of the Act

(29 U.S.C. § 666(k)), if it creates a substantial probability of death or serious physical harm and
the employer knew or should have known of the violative condition. In determining whether a
violation is serious, the issue is not whether an accident is likely to occur, it is whether the result
would likely be death or serious harm if an accident should occur. Whiting-Turner Contracting
Co., 13 BNA OSHC 2155, 2157 (No. 87-1238, 1989).
The cited violations were serious. Double “A” knew or should have known of the
violations and there was a substantial probability that death or serious physical harm could result
from the cited unsafe conditions. Project manager Crews was present on site. His knowledge is
imputed to Double “A.” Also, the failure to have safety programs, training, first aid, hard hats,
fall protection, and portable ladder safety could cause serious injury or possibly death if not
complied with. The employees were working at heights of up to 24 feet (Tr. 125). The
employees were exposed to items falling from overhead without hard hats (Tr. 121-122). The
employees were also improperly using ladders (Tr. 135-138). CO Cochran observed employees
carrying large loads up ladders and ladders not extending at least 3 feet above the landing.

                                   Penalty Consideration
   The Commission is the final arbiter of penalties in all contested cases. In determining an

appropriate penalty, the Commission is required to consider the size of the employer’s business,
history of previous violations, the employer’s good faith, and the gravity of the violation.
Gravity is the principal factor to be considered.
Double “A” is a small employer with approximately 15 employees. Double “A” is
entitled to additional credit for size because OSHA mistakenly believed that Double “A” had 50
employees (Exh. C-2; Tr. 13, 110-111, 222). Double “A” is also entitled to credit for history
because it had not received previous citations within the preceding 3 years (Tr. 111). Good faith
credit is not warranted because Double “A” admittedly has no safety programs, safety training, or
safety equipment (Tr. 111-112).
The gravity of each cited violation was high due to the probability of death or serious
injury (Tr. 110). There were 7 workers exposed to fall hazards, inadequate ladder protection, and
overhead hazards.
Based on the gravity of each violation and allowing credit for size and history, a total
penalty of $10,000 is reasonable for the cited violations. The penalty for each violation
involving the lack of safety programs, first aid and training is $1,000. The penalty for each
violation involving the lack of fall protection, hard hats, and ladder safety is $1,500.
FINDINGS OF FACT AND
CONCLUSIONS OF LAW

   The foregoing decision constitutes the findings of fact and conclusions of law in

accordance with Rule 52(a) of the Federal Rules of Civil Procedure.

                                         ORDER
   Based upon the foregoing decision, it is ORDERED that serious Citation:
   1.      Item 1a, serious violation of § 1926.20(b)(1) and item 1b, serious violation of

§ 1926.21(b)(2), are affirmed and a grouped penalty of $1,000 is assessed.
2. Item 2, serious violation of § 1926.50(c), is affirmed and a penalty of $1,000 is
assessed.
3. Item 3, serious violation of § 1926.100(a), is affirmed and a penalty of $1,000 is
assessed.
4. Item 4, serious violation of § 1926.501(b)(13), is affirmed and a penalty of $1,500
is assessed.
5. Item 5, serious violation of § 1926.503(a)(1), is affirmed and a penalty of $1,500
is assessed.
6. Item 6, serious violation of § 1926.1053(b)(1), is affirmed and a penalty of $1,000
is assessed.
7. Item 7, serious violation of § 1926.1053(b)(22), is affirmed and a penalty of
$1,500 is assessed.
8. Item 8, serious violation of § 1926.1060(a), is affirmed and a penalty of $1,500 is
assessed.

                                /s/
                          KEN S. WELSCH
                                Judge

Date: February 11, 2002