Standard Building Company, Inc., and Standard Systems, Inc.

Plain-English summary

Standard Building managed a restaurant renovation, and Standard Systems was identified as a related stucco contractor. The judge found that a subcontractor owner acted in part as Standard Building's site superintendent but lacked scaffold and powered-industrial-truck safety training. Standard Building was therefore responsible for inadequate competent-person inspections, leaving a powered industrial truck unattended while employees were elevated, and using an untrained operator. Those three serious items were affirmed with penalties of $2,000 each, while eight other items against Standard Building had been withdrawn. The Secretary failed to prove that Standard Systems performed work or employed anyone at the site, so all ten items against that company were vacated.

Decision snapshot

• Cited standard(s): 29 C.F.R. §§ 1910.178(l)(1)(i), 1910.178(m)(5)(i), 1926.20(b)(2), 1926.404(b)(1)(i), 1926.451(b)(1), 1926.451(c)(2), 1926.451(e)(1), 1926.451(f)(7), 1926.451(g)(1), 1926.501(b)(1), and 1926.503(a)(2)
• Outcome: Three serious items against Standard Building were affirmed with $6,000 in total penalties, eight were withdrawn, and all ten items against Standard Systems were vacated.
• Key point: Related ownership and a shared address do not establish that a company was an employer at a cited worksite, but a person acting in a partial supervisory role can create knowledge for the company directing the work.

Full text (OSHRC public release)

               UNITED STATES OF AMERICA
   OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

Secretary of Labor,
Complainant
v. OSHRC Docket Nos. 06-1736 & 06-1737
Standard Building Company, Inc., and Consolidated
Standard Systems, Inc.,
Respondent.

Appearances:

      Linda M . Hastings, Esq uire, O ffice of the S olicitor, U.S. Dep artment of Labor, Cleve land, O hio
               For Com plainant

      Glenn Croy, Se nior P roject M anager, Standard Systems, Inc., Atlanta, Georgia
              For Respond ent

Before: Administrative Law Judge Ken S. Welsch

                                        DECISION AND ORDER

      On June 24, 2006, Occupational Safety and Health Administration (OSHA) compliance

officer Robert Barbour was driving past a restaurant undergoing renovation at 5150 Mertin Drive
in Mason, Ohio. He observed what he considered to be violations of the Occupational Safety and
Health Act of 1970 (Act). Barbour stopped and conducted an inspection of the worksite. As a result
of his inspection, the Secretary issued one citation each to Standard Building Company, Inc. (SBC),
a construction management firm, and to Standard Systems, Inc. (SSI), a stucco contractor. These
two companies share an address in Atlanta, Georgia, and both are owned by Valentin Ciuperca.
The citation issued to SBC originally alleged 11 items citing violations of OSHA’s
construction standards. The Secretary subsequently withdrew items 4, 5, 6, 7, 8, 9, 10, and 11, based
upon the Review Commission’s recent decision reversing its multi-employer worksite precedent in
Summit Contractors, Inc., 2007 WL 2265137 (No. 03-1622, 2007) (a controlling employer can no

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longer be cited for hazardous conditions it did not create or to which its employees were not
exposed) (Tr. 12)1. Left for consideration are item 1, alleging a serious violation of 29 C. F. R. §
1926.20(b)(2) for failing to ensure a competent person made frequent and regular inspections of the
job site; item 2, alleging a serious violation of § 1910.178(m)(5)(i) for leaving a powered industrial
truck unattended without the operator within 25 feet of the controls; and item 3, alleging a serious
violation of § 1910.178(l)(1)(i) for failing to ensure the operator of the powered industrial truck was
properly trained. The total proposed penalty for these three items is $6,000.002.
The citation issued to SSI alleges violations of 10 OSHA standards. As with SBC, items 1
and 2 allege violations of § 1926.20(b)(2) (competent person) and of § 1910.178(m)(5)(i)
(unattended powered industrial truck) respectively. Item 3 alleges a serious violation of §
1926.404(b)(1)(i) for failing to use either a GFCI or an assured equipment grounding conductor
program. Item 4 alleges a serious violation of § 1926.451(c)(2) for failing to fully plank or deck the
working levels of scaffolds. Item 5 alleges a serious violation of § 1926.451(c)(2) for failing to
utilize base plates and mud sills or other adequate firm foundation to support scaffolds. Item 6
alleges a serious violation of § 1926.451(e)(1) for failing to provide acceptable means of access and
egress for workers on scaffold platforms. Item 7 alleges a serious violation of § 1926.451(f)(7) for
failing to erect, move, or dismantle scaffolds under the supervision of a competent person. Item 8
alleges a violation of § 1926.451(g)(1) for failing to protect employees on a scaffold from falling.
Item 9 alleges a violation of § 1926.451(g)(1) for failing to protect employees on a scaffold from
falling by use of guardrail systems, safety net systems, or personal fall arrest systems. Item 10
alleges a serious violation of § 1926.503(a)(2) for failing to assure that each employee was trained
by a competent person. The penalties proposed for these 10 items total $ 28,500.00.
The court consolidated the cases for hearing which was held on June 21, 2007, in Cincinnati,
Ohio. Glenn Croy, a senior project manager for SBC, represented both SBC and SSI pro se.

    1
      The Secretary cited SSI for violating the same eight standards for which she cited SBC in the withdrawn

items. The withdrawn items, numbered 4 through 11, correspond to items 3 through 10 issued to SSI.

    2
         The citation lists a proposed penalty for item 1in the amount of $ 3,000.00. At the hearing, Barbo ur

testified that amount was based on an incorrect calculation of the number of employees for SBC. The court granted
the Secretary’s motion to amend the proposed p enalty amount to $ 2,000.00 (Tr. 35).

                                                     2

SSI claims it performed no labor on the project and none of its employees were present on
the worksite. SBC claims any violations on the site were the responsibility of subcontractor Whaley
Construction.
The Secretary filed a post-hearing brief. SBC and SSI did not file briefs. Based upon the
record, the court vacates the citation issued to SSI in its entirety. The court affirms items 1, 2, and
3 of the citation issued to SBC, and assesses a total penalty of $6,000.00.
Facts
Valentin Ciuperca owns SBC and SSI, and both companies are located at 3786 DeKalb
Technology Parkway in Atlanta, Georgia. SSI also has an office in Florida, through which most of
its work is processed (Tr. 108). In May 2006, SBC began a small project in Mason, Ohio, renovating
the interior and exterior of a restaurant for Amore de Brazil Churrascaria. The project lasted
approximately 60 days (Tr. 110).
On Saturday, June 24, 2006, compliance officer Robert Barbour drove past the restaurant and
observed employees working on a scaffold without fall protection (Tr. 17, 20). The employees were
exposed to a fall of 15 to 20 feet (Exh. C-3; Tr. 31). Barbour stopped and held an opening
conference with Ron Whaley and Felycianio Gallardo (Tr. 18). Barbour understood Whaley to be
a superintendent for SBC, as well as a carpenter and owner of Whaley Construction, one of the
subcontractors on the project. Barbour understood Gallardo to be a foreman for SSI (Tr. 19).
Barbour conducted an inspection of the worksite. He videotaped the conditions, took
measurements, and interviewed several employees. Barbour returned to the worksite three more
times and attempted to contact SBC’s senior project manager Glenn Croy and a representative from
SSI named Mike Chaco (Tr. 17-18, 20-21). He held a closing conference with Whaley and Gallardo
(Tr. 20-21).
Based on Barbour’s inspection, the Secretary issued the two citations now before the court3.
Central to the disposition of both citations is the relationship of the purported supervisory employees,
Whaley and Gallardo, to SBC and SSI. SBC and SSI deny that either employee held a supervisory
position with either company, and therefore no knowledge of violative conditions can be imputed

   3
       A citation was also issued to Whaley Construction (Tr. 84).

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to SBC, as the construction management firm in charge of the project, or to SSI, who claims it
performed no work and had no employees on the project.
The Citation Issued to SBC (No. 06-1737)
The Secretary has the burden of proving each violation by a preponderance of the evidence.
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., 19 BNA OSHC 2131, 2138 (No. 90-1747, 1994).
Item 1: Alleged Serious Violation of § 1926.20(b)(2)
The citation alleges SBC’s accident prevention program failed to provide for frequent and
regular inspections by a competent person of the job site. Section 1926.20(b)(2) provides:
Such programs shall provide for frequent and regular inspections of the job sites,
materials, and equipment to be made by competent persons designated by the
employers.

   Section 1926.32(f) defines a competent person as “one who is capable of identifying existing

and predictable hazards in the surroundings or working conditions which are unsanitary, hazardous,
or dangerous to employees, and who has authorization to make prompt corrective measures to
eliminate them.”
The Secretary’s case is based on the assumption that Whaley was a supervisory employee of
SBC’s. SBC disputes this assumption. Whaley did not testify at the hearing. The only witnesses
were Barbour and Glenn Croy, acting pro se for SBC and SSI.
Croy stated he was on site every two to three weeks. The last two weeks of the project, he
was on site three or four days of the week (Tr. 111). Either he or Chaco checked on the work (Tr.
115-116). Whaley told Barbour he had made several inspections (Tr. 33). Barbour concluded
Whaley was not a competent person based upon Whaley’s “lack of knowledge of the fall protection
systems for the scaffolding and also his not being familiar with the requirements for the powered
industrial truck” (Tr. 33). Whaley’s written statement (written down by Barbour and signed by
Whaley on June 24, 2006) states in part, “No training on scaffold” (Exh. C-1; Tr. 34).

                                              4

Based on his inspection, Barbour believed Whaley “was acting as the superintendent for
general building. He was–my understanding, what he said to me was 25 percent of the time, he was
hired by Standard Building to run the job out there and act as a superintendent, and his company,
Whaley Construction, was doing the interior work” (Tr. 70).
At the top of the interview statement, a preprinted paragraph states “I am an employee of”
and the blank has been filled in with “Standard Building Co.” The preprinted section continues with
“My job classification:” which is filled in with “Carpenter/Superintendent/Contractor.” The
statement does not indicate whether Whaley means he is a superintendent for SBC or for Whaley
Construction (Exh. C-1). Barbour read Whaley’s statement at the hearing (Exh. C-1; Tr. 82-83):
I don’t know if Standard Company has safety and health program. They did
not go over any program with me; been on the job about six weeks; been on another
job for Standard since March. I am framing the interior, some concrete work. I
told EIFS workers to install guardrails on the other side. They had been here about
three weeks. I showed Francisco plans. Francisco was here Friday. . . . General
superintendent Mike Chaco . . .has been on site about five weeks ago. Owner has
been here about the same time.
Glen Croy, owner, Felyciano [Gallardo], set the scaffold on Saturday or
Friday. I came to work in the a. m. They weren’t here. I saw scaffold and then
they showed up and started working to finish EIFS. I told guys to get in the lift.
They had harnesses on. I operated the lift. I wasn’t 25 feet in distance from the
lift . Had no training on the lift, no discussion on the guardrail or fall protection of
the guardrail. No training on scaffolding. I told them on the other site to install
guardrail, Francisco and Felyciano [Gallardo]. I am willing to attend construction
site safety class, and I want a safe work site.

   Glenn Croy testified for SBC and SSI regarding Whaley’s status (Tr. 168-169):
          Croy: [T]his thing [project] was so small, we didn’t have a full-time
    superintendent on it, and we had three other jobs in the area so [SBC
    superintendent Mike Chaco] would just stop by.

          Q. But, that was the intent that Mr. Whaley was to act as the pseudo
    superintendent on the job?

           Croy: No. We didn’t get any–[restaurant owner] Al Copeland Investment
    doesn’t require–they’re, I wouldn’t say old school, but they’re just very lax. They
    don’t require that stuff.

          Q. Are you saying that Mr. Whaley did not act in the capacity as a
    superintendent?


                                               5

Croy: We didn’t have a full superintendent.

            Q. “Yes” or “no,” did he act in the capacity of a superintendent?

            Croy: He acted in portions of the capacity. He did not act as a full
      superintendent.

            Q. And, did he provide communication back to Standard Building about
      what was going on and what was progressing at the work site?

            Croy: Not as a superintendent would with all the stuff. We definitely were
      in communication with him because a lot of stuff he was doing was winging it, but
      we also talked directly with the electrician directly with the plumber which if we
      had a full-time employee, then they would go to the superintendent. It’s the
      superintendent’s job to relay it into the office.

   The evidence supporting the Secretary’s claim that Whaley was a part-time supervisor for

SBC is:
• Whaley’s statement lists SBC as his employer;

      •     Whaley’s statement says he directed another subcontractor’s employees to install
            guardrails and to get in the lift basket to apply surface material to the building’s
            exterior;

      •     Croy’s statement that Whaley “acted in portions of the capacity” [of superintendent];

      •     SBC’s invoice records indicate it paid Whaley Construction $6,000.00 per week for
            “Framing labor” and “Supervision”; and

      •     Whaley used his powered industrial truck to elevate two of Gallardo’s employees to
            apply surface material to the restaurant’s exterior.

   Although this evidence does not provide a detailed account of Whaley’s supervisory duties

(SBC and Whaley had a verbal contract), it is sufficient to establish Whaley was a supervisor for
SBC. In his statement to Barbour, Whaley said Chaco had not been on the site for five weeks. If
Whaley was making inspections for SBC, the Secretary has established Whaley was not a competent
person within the meaning of the standard. Whaley had no training in safety for scaffolding or
powered industrial trucks. If Whaley was not making inspections, then no one was, which is also
a violation of the standard.

                                              6

The Secretary must prove the employer had actual or constructive knowledge of the violative
conduct. Whaley knew he had no training in scaffolding or powered industrial truck safety, yet he
conducted inspections of the worksite. The imputation of a supervisor’s knowledge to his or her
employer is unsettled in some circuits (see discussion in W. G. Yates Construction Co., Inc., 459
F.3d 604 (5th Cir. 2006)), but in the Sixth Circuit, where this case arises, the precedent is clear.
Violative conduct by a supervisor raises an inference of lax enforcement, and the supervisor’s
knowledge may be imputed to the employer. Danis-Shook Joint Venture XXV v. Secretary of Labor,
319 F.3d 805(6th Cir. 2003).
The Secretary has established that SBC committed a violation of § 1926.20(b)(2). The
citation alleges the violation is serious. Under § 17(k) of the Act, a violation is serious “if there is
a substantial probability that death or serious physical harm could result from” the violation.
[T]he Secretary need not establish that an accident is likely to occur in order to
prove that the violation is serious. Rather [s]he must show that “an accident is
possible and there is a substantial probability that death or serious physical harm
could result from the accident.” Consolidated Freightways Corp., 15 BNA OSHC
1317, 1324, 1991 CCH P29,500, p. 39,813 (No. 86-351, 1991)[.]

Flintco, Inc., 16 BNA OSHC 1404, 1405 (No. 92-1396, 1993).
Whaley’s inability to identify fall hazards exposed employees to fall hazards from the
scaffold and the lift basket. The violation is serious.
Item 2: Alleged Serious Violation of § 1910.178(m)(5)(i)
Section 1926.178(m)(5)(i) provides:
When a powered industrial truck is left unattended, load engaging means shall be
fully lowered, controls shall be neutralized, power shall be shut off, and brakes set.
Wheels shall be blocked if the truck is parked on an incline.

    Section 1926.178(m)(5)(ii) states a truck is unattended “when the operator is 25 ft. or more

away from the vehicle which remains in his view, or whenever the operator leaves the vehicle and
it is not in his view.”
Whaley Construction owned a powered industrial truck being used on the site. Barbour
observed the lift of the truck raised in the air, with two employees standing in the lift basket while
applying surface material to the restaurant’s exterior. The top of the lift basket was approximately

                                               7

24 feet above the ground. Whaley was the operator of the truck. He was not within 25 feet of the
truck (Tr. 37-38).
Whaley Construction was hired to perform interior carpentry on the project. The employees
in the lift basket did not work for Whaley Construction, and they were applying surface material to
the exterior. Therefore, Whaley was acting in his supervisory capacity for SBC when he elevated
the lift and then left the truck unattended. As a supervisor, Whaley’s knowledge of his violative
conduct is imputed to SBC.
The two employees were exposed to a fall of 24 feet. The violation is serious.
Item 3: Alleged Serious Violation of § 1910.178(l)(1)(i)
Section 1910.178(l)(1)(i) provides:
The employer shall ensure that each powered industrial truck operator is competent
to operate a powered industrial truck safely, as demonstrated by the successful
completion of the training and evaluation specified in this paragraph (l).

   Whaley admitted he had no training in operating the powered industrial truck and lift

(Exh. C-1). As discussed under the previous item, Ron Whaley was acting in his capacity as SBC
superintendent when he elevated the employees in the lift basket on the truck he was not qualified
to operate. The Secretary has established a serious violation of § 1910.178(l)(1)(i).
The Citation Issued to SSI (No. 06-1736)
The Secretary cited SSI for violating 10 standards. She bases the citation on her
understanding that Felyciano Gallardo was a foreman for SSI and he knew of the alleged violative
conditions at the site. While Whaley clearly had some sort of employment relationship with SBC,
Gallardo’s ties to SSI are more difficult to define, as is Gallardo’s actual identity.
Barbour testified he spoke with Gallardo, who told him, in an oddly worded way, that he was
SSI’s foreman (Tr. 76): “Mr. Gallardo was adamant. He was paid by the hour. ‘Call Valentin. I’m
employed by Standard Systems. I get paid by the hour. I get paid by the hour. I’m the foreman.’
Numerous times, that’s what he said to me.”
Gallardo’s interview statement lists SSI as his employer. His statement reads (Exh. C-2;
Tr. 83-84):
I don’t know if Standard Systems has a safety program; it didn’t go over any with
me. I had on-the-job training on scaffolds, on training on OSHA regulations. Here

                                               8

about two to three weeks; staying at Day’s Inn. Ron [Whaley] said to install
guardrails on the other side; not on the scaffold we erected yesterday. We don’t
have ladder. Guys climb the end frames. I didn’t think about guardrails; in a hurry
to get the job done. I work for hours.

   Gallardo signed the statement, spelling his name “Felyciano Gallardo.”
   SSI argues it was never on the site. Croy stated there were no contracts between SSI and

SBC or the owner’s businesses (Amore de Brazil and Al Copeland Investments) to perform any work
on the project (Tr. 120, 127). Gallardo owned the company responsible for the EIFS work on the
building’s exterior. Exhibit R-2 is a copy of a purchase order showing SBC paid “Feliciano
Gonzalez” $ 10,150.00 to install EIFS systems to the building’s exterior. Exhibit R-3 is a copy of
a W-9 form for a “Feliciano Gallardo Gonzalez.” According to Croy, Felyciano Gallardo and
Feliciano Gallardo Gonzalez are the same person, and this person owns a company called “Feliciano
Gallardo Gonzalez,” which subcontracted with SBC to install the EIFS (Tr. 117-118).
One reason Gallardo was so insistent to Barbour that he worked for SSI may have been to
avoid receiving a citation from OSHA in his own company’s name. Asked how Gallardo would
know to give the name of SSI as his employer, Croy responded that Gallardo is “out of Atlanta. He’s
in our office whenever–we pay most of our subcontractors, unless they’re under contract, every two
weeks, so a lot of subcontractors just stop by the office and pick up a check” (Tr. 121).
Neither SBC nor SSI was forthcoming with information or documentation during the course
of this proceeding. Barbour attempted to contact representatives from both companies repeatedly.
He returned to the worksite three more times after his initial visit in order to talk with management
personnel and obtain documentation (Tr. 65-69, 88-91). The day of the hearing, the companies sent
a project manager to represent both of them pro se. Barbour’s frustration with the companies’ lack
of cooperation was palpable. His testimony reflects the difficulty in sorting out the working
relationships of the employees on the site, who may have sought to mislead him (Tr. 95-96):
I mean, it’s not in evidence here, but my conversation with Ron Whaley also
indicated that “This is Standard Systems. I am Standard Building’s superintendent
and Ron Whaley Construction over here.” It was pretty confusing. I mean, I had
to take my time and talk to each of these guys separately just to kind of formulate
my idea as to who’s who on the job site, and that’s what he indicated to me. It was
known that these subs were in that conversation.

                                             9

Nevertheless, it is the Secretary’s burden to establish the cited employer was, in fact, an
employer present at the worksite. Barbour’s testimony regarding the statements of Whaley and
Gallardo is insufficient to overcome Croy’s assertion that SSI performed no work on the project.
Croy was the project manager for the restaurant renovation. The documentation he presented
succeeds in raising questions regarding Gallardo/Gonzalez’s legitimacy as a business entity, but it
suggests no link between Gallardo and SSI. Gallardo’s statement he worked for SSI was
self-serving.
The Secretary has failed to establish SSI was an employer present at the cited worksite. The
citation issued to SSI is vacated in its entirety.
Penalty Determination
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.
SBC employs approximately 25 employees (Tr. 107). OSHA had cited SBC within the three
years prior to Barbour’s inspection (Tr. 36). SBC deserves no credit for good faith. From the start
of this proceeding, SBC failed to cooperate with Secretary’s representatives, refusing to return phone
calls or respond to requests for documentation. The companies were represented at the hearing by
a project manager who had no involvement with SSI, and who lacked relevant knowledge of SBC’s
business practices.
The gravity of the violations is high. Employees were exposed to falls from scaffolding and
the lift basket, ranging from 15 to 24 feet. Falls from these distances could result in death or serious
physical injury. Whaley, the person on site with the most authority, had no training in either scaffold
or powered industrial truck safety, and was not aware of any safety plan in effect for SBC.
The court determines the appropriate penalty for each of the affirmed items is $ 2,000.00,
resulting in a total penalty of $ 6,000.00.

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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:
SBC - Citation (Docket No. 06-1737)
Item 1, alleged serious violation of § 1926.20(b)(2), is affirmed and a penalty
of $2,000.00 is assessed;
Item 2, alleged serious violation of § 1910.178(m)(5)(i), is affirmed and a
penalty of $2,000.00 is assessed;
Item 3, alleged serious violation of § 1910.178(l)(1)(i), is affirmed and a
penalty of $2,000.00 is assessed;
Item 4, alleged serious violation of § 1926.404(b)(1)(i), is withdrawn by the
Secretary;
Item 5, alleged serious violation of § 1926.451(b)(1), is withdrawn by the
Secretary;
Item 6, alleged serious violation of § 1926.451(c)(2), is withdrawn by the
Secretary;
Item 7, alleged serious violation of § 1926.451(e)(1), is withdrawn by the
Secretary;
Item 8, alleged serious violation of § 1926.451(f)(7), is withdrawn by the
Secretary;
Item 9, alleged serious violation of § 1926.451(g)(1), is withdrawn by the
Secretary; and
Item 10, alleged serious violation of § 1926.501(b)(1), is withdrawn by the
Secretary.
Item 11, alleged serious violation of § 1926.503(a)(2), is withdrawn by the
Secretary;

                                            11

SSI - Citation (Docket No. 06-1736)
Item 1, alleged serious violation of § 1926.20(b)(2), is vacated;
Item 2, alleged serious violation of § 1910.178(m)(5)(i), is vacated;
Item 3, alleged serious violation of § 1926.404(b)(1)(i), is vacated;
Item 4, alleged serious violation of § 1926.451(b)(1), is vacated;
Item 5, alleged serious violation of § 1926.451(c)(2), is vacated;
Item 6, alleged serious violation of § 1926.451(e)(1), is vacated;
Item 7, alleged serious violation of § 1926.451(f)(7), is vacated;
Item 8, alleged serious violation of § 1926.451(g)(1), is vacated;
Item 9, alleged serious violation of § 1926.501(b)(1), is vacated; and
Item 10, alleged serious violation of § 1926.503(a)(2), is vacated.

                                          /s/
                                          KEN S. WELSCH
                                          Judge

Date: November 13, 2007

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