Monroe Drywall Construction, Inc.

Plain-English summary

Monroe Drywall employees worked near exposed energized wires at a Florida construction site where a worker died after contacting the electrical hazard. The affirmed violations involved failure to train employees to recognize and avoid unsafe conditions and failure to determine the status of exposed wiring or warn employees of the shock hazard. On this second review, only the penalties were at issue. The Commission agreed that the violations were high gravity and that the company's small size justified a reduction. It rejected additional reductions for good faith because Monroe Drywall provided no relevant safety training and had significant safety-program shortcomings, and it found the empty violation-history record supported neither a decrease nor an increase. The Commission raised the penalties from $200 and $400 to $2,100 and $4,200, for a total of $6,300.

Decision snapshot

• Cited standard(s): 29 C.F.R. § 1926.21(b)(2); 29 C.F.R. § 1926.416(a)(3)
• Outcome: Penalties for the two serious electrical-hazard items were increased from $600 total to $6,300.
• Key point: Good-faith penalty credit depends on concrete safety efforts, not an employer's mistaken belief that the workers were not its employees.

Full text (OSHRC public release)

Monroe drywall Constrution, Inc., Docket No. 12-0379

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EN-US
X-NONE
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SECRETARY
OF LABOR,

Complainant,

v.

OSHRC
Docket No. 12-0379

MONROE DRYWALL
CONSTRUCTION, INC.,

Respondent.

APPEARANCES:

Amy
S. Tryon, Attorney; Charles F. James, Counsel for Appellate Litigation; M.
Patricia Smith, Solicitor of Labor; U.S. Department of Labor, Washington, DC

For the Complainant

Nathalie Monroe, President, Monroe Drywall
Construction, Inc.; Panama City Beach, FL

For the Respondent

DECISION

Before: ROGERS, Chairman;
ATTWOOD, Commissioner.

BY THE COMMISSION:

Following an
accident that resulted in a worker fatality, the Occupational Safety and Health
Administration (“OSHA”) inspected a worksite in Panama City,
Florida. OSHA later issued one of the subcontractors working at the site,
Monroe Drywall Construction (“MDC”), two citations alleging
violations of the Occupational Safety and Health Act of 1970, 29 U.S.C.
§ 651, et seq . (“OSH Act”), and proposing a total
penalty of $6,600. Following a hearing, former Administrative Law Judge Stephen J. Simko,
Jr., had vacated both citations, finding that the Secretary failed to prove
that MDC was properly cited as the employer of the workers at issue. On review,
the Commission reversed the judge’s finding and remanded the case for him
to address whether the Secretary met the other elements of his burden as to the
alleged violations.

On remand,
Judge Simko affirmed both citations and assessed a total penalty of $600 ($200
for Citation 1, Item 1b and $400 for Citation 1, Item 2). Both parties sought
review of the judge’s decision and the case was directed for review a
second time solely on the penalty issue raised in the Secretary’s
Petition for Discretionary Review.

It is
well-settled that the Commission “is the final arbiter of
penalties….” Hern Iron Works, Inc. , 16 BNA OSHC 1619, 1624,
1993-95 CCH OSHD ¶ 30,363, p. 41,884 (No. 88-1962, 1994); Valdak Corp .,
17 BNA OSHC 1135, 1138, 1993-95 CCH OSHD ¶ 30,759, p. 42,742 (No.
93-0239, 1995) (“The [OSH Act] places limits for penalty amounts but
places no restrictions on the Commission’s authority to raise or lower
penalties within those limits”), aff’d , 73 F.3d 1466
(8th Cir. 1996). In assessing a penalty, we give due consideration to the
gravity of the violation, as well as the employer’s size, good faith, and
history of violations. OSH Act § 17(j), 29 U.S.C. § 666(j). Of
these four factors, gravity is typically the most significant. Orion Constr. ,
18 BNA OSHC 1867, 1868, 1999 CCH OSHD ¶ 31,396, p. 47,220 (No. 98-2401,
1999).

In proposing
the penalties for Items 1b and 2, the Secretary focused on the high gravity of
the violations, which the compliance officer stated included the possibility of
death. The Secretary gave MDC a penalty reduction for its small size, but did
not reduce the penalty for good faith or history. The judge agreed with the
Secretary that the gravity of the violations was high and that MDC’s
small size warranted a penalty reduction. But the judge further reduced the
penalties based on his finding of good faith and lack of history, which the
Secretary asserts was error.

We agree
with the judge that the gravity of these serious violations is high. Item 1b
was based on MDC’s failure under § 1926.21(b)(2) to instruct its
employees in the recognition and avoidance of unsafe conditions at the site and
Item 2 was based on MDC’s failure under § 1926.416(a)(3) to
inquire about the status of exposed wires or warn its employees of the electric
shock hazard. Indeed, the death that occurred underscores the potential for
these violations to cause serious harm. See Pressure Concrete Constr., Co., 15
BNA OSHC 2011, 2018, 1991-93 CCH OSHD ¶ 29,902, p. 40,813 (No. 90-2668,
1992) (characterizing failure to train violation under § 1926.21(b)(2) as
serious when a worker was killed because it was “abundantly clear that
the consequences of [the employer’s] failure to instruct its employees
could result in serious harm”); Capform, Inc ., 19 BNA OSHC 1374,
1378, 2001 CCH OSHD ¶ 32,320, p. 49,478 (No. 99-0322, 2001)
(characterizing failure to train violation under § 1926.21(b)(2) as
serious and noting that the failure to provide sufficient instructions directly
increased risks), aff’d , 34 F. App'x. 152 (5th Cir. 2002)
(unpublished); Sec’y of Labor v. CMC Elec., Inc ., 221 F.3d 861,
870 (6th Cir. 2000) (characterizing failure to inquire/warn violation under
§ 1926.416(a)(3) as serious). Similarly, we agree that MDC’s small
size warrants a penalty reduction.

We disagree,
however, with the judge’s determination that further reductions for good
faith and history were appropriate. As to good faith, the judge focused on what
he viewed as MDC’s “good faith belief” that it did not have
an employment relationship with the exposed workers. But we have never accorded
any credit for an employer’s subjective belief that the OSH Act did not apply
when evaluating good faith for penalty purposes. Rather, the Commission focuses
on a number of factors relating to the employer’s actions,
“including the employer’s safety and health program and its
commitment to assuring safe and healthful working conditions[,]” in
determining whether an employer’s overall efforts to comply with the OSH
Act and minimize any harm from the violations merit a penalty reduction. Capform ,
19 BNA OSHC at 1378, 2001 CCH OSHD at p. 49,478 ( citing Nacirema
Operating Co., Inc. , 1 BNA OSHC 1001, 1002, 1971-73 CCH OSHD ¶ 15,032,
p. 20,043 (No. 4, 1972)); Elliot Constr. Corp ., 23 BNA OSHC 2110,
2119, 2009-12 CCH OSHD ¶ 33,231 p. 56,073 (No. 07-1578, 2012).

Here, we
find MDC’s approach to safety does not show good faith. See Elliot ,
23 BNA OSHC at 2119, 2009-12 CCH OSHD at p. 56,073 (concluding that
“significant failings” with respect to employee safety negated a
penalty reduction for good faith). Although MDC’s President, Nathalie
Monroe, testified that the company had a safety program, the judge found that
it lacked the written hazard communication program required by §
1910.1200(e)(1). Moreover, Monroe admitted that MDC did not provide safety instructions
or training to the employees installing drywall at the worksite. See Capform ,
19 BNA OSHC at 1378, 2001 CCH OSHD at p. 49,478 (finding a reduction for good
faith inappropriate when instructions were insufficient). On the record before
us, it is apparent that any steps MDC may have taken with respect to workplace
safety offered little protection to these employees. See Jesco Inc. , 24
BNA OSHC 1076, 1080 (No. 10-0265, 2013) (finding that steps taken to lessen the
probability of harm were insufficient to warrant a credit for good faith). And
the judge erred in giving MDC good faith credit for the Secretary’s
withdrawal of Item 1a. A withdrawal reduces the number of violations and may,
as we find is the case here, merit a penalty reduction on that ground. See
So. Scrap Materials Co ., 23 BNA OSHC 1596, 1629, 2009-12 CCH OSHD ¶
33,177, p. 55,382 (No. 94-3393, 2011) (assessing reduced penalty for affirmed
item where Secretary withdrew the item with which it was grouped for penalty
purposes). However, a withdrawal is not a measure of good faith.

Finally, the
record contains no information about MDC’s prior violation history. Under
these circumstances, particularly when considered in conjunction with the high
gravity of the violations and MDC’s lack of good faith, we find that this
factor warrants neither a reduction nor an increase in the penalties . See
Acme Energy Servs. d/b/a Big Dog Drilling, 23 BNA OSHC 2121, 2130, 2009-12
CCH OSHD ¶ 33,236, p. 56,131 (No. 08-0088, 2012) (applying no penalty
reduction where good faith and evidence of prior history lacking), appeal
docketed , No. 12-60810 (5th Cir. Oct. 15, 2012); Orion , 18
BNA OSHC at 1868, 1999 CCH OSHD at p. 47,220 (giving history little weight
where evidence lacking). Accordingly, upon consideration of the statutory
factors in light of the record before us, we find that a penalty of $2,100 for
Citation 1 , Item 1b, and $4,200 for Citation 1, Item 2, is appropriate
here.

SO ORDERED.

/s/                                                        

Thomasina
V. Rogers

Chairman

/s/                                                        

Cynthia
L. Attwood

Dated: September 30,
2013                           Commissioner

Secretary of Labor,

Complainant,

v.

OSHRC Docket
No. 12-0379

Monroe Drywall Construction, Inc.

On Remand

Respondent.

Appearances:

Melanie
Paul, Esquire, U. S. Department of Labor, Office of the Solicitor

Atlanta,
Georgia

For
Complainant

Jeremy
Monroe and Nathalie Monroe, pro se, Monroe Drywall Construction, Inc.

Panama
City Beach, Florida

For
Respondent

Before: Administrative Law Judge Stephen J.
Simko, Jr.

DECISION AND ORDER

This case is
before me on remand from the Commission. A hearing was held in this matter in
Panama City, Florida, on June 1, 2012. The procedural background of this case
is contained in my initial decision dated November 20, 2012, and in the
Commission’s decision and remand dated April 19, 2013. In my decision, I
found the Respondent was not the employer of three workers on Monroe Drywall
Construction, Inc.’s (MDC) jobsite. Having determined MDC was not the
employer of the workers, the citations were vacated. On review, the Commission
held that these workers were employees of MDC. The case was remanded to
consider whether the Secretary established the alleged violations of 29 CFR
§§ 1926.21(b)(2), 1926.416(a)(3), and 1910.1200(e)(1). For the reasons
that follow, the alleged violations are affirmed and total penalties of $600.00
are assessed.

Discussion

The
Secretary has the burden of establishing the employer violated the cited
standard.

To prove a violation of an OSHA standard, the
Secretary must show by a preponderance of the evidence that (1) the cited
standard applies; (2) the employer failed to comply with the terms of the cited
standard; (3) employees had access to the violative condition; and (4) the
cited employer either knew or could have known with the exercise of reasonable
diligence of the violative condition.

JPC Group, Inc. , 22 BNA OSHC 1859, 1861
(No. 05-1907, 2009).

It is
undisputed that the standards are applicable. Respondent is engaged in the
installation and finishing of drywall, a construction activity. All employers
are required to develop, implement and maintain written hazard communication
programs. Uncontroverted evidence also establishes employee exposure in that
MDC employees worked in the vicinity of an electric shock hazard and used
drywall joint compound, a respiratory irritant.

Remaining at
issue are whether MDC failed to comply with the terms of the standards and
whether Respondent had actual or constructive knowledge of the violative
conditions.

Citation
No. 1, Item 1b, Alleged Serious Violation of 29 CFR § 1926.21(b)(2)

In Citation
No. 1, Item 1b, the Secretary alleges:

29 CFR § 1926.21(b)(2): The employer did
not instruct each employee in the recognition and avoidance of unsafe
conditions and the regulations applicable to his work environment to control or
eliminate any hazards or other exposure to illness or injury:

b.   On or about
September 27, 2011, employees installing drywall were not trained to recognize
hazards specific to the multi-trade construction site to include, but not
limited to electrical shock
hazards.          

The standard
at 29 CFR § 1926.21(b)(2) provides:

(2)       The
employer shall instruct each employee in the recognition and avoidance of
unsafe conditions and the regulations applicable to his work environment to
control or eliminate any hazards or other exposure to illness or injury.

In a
statement given to the Secretary’s compliance officer during the
investigation, one employee said Nathalie Monroe, MDC’s president,
provided a safety briefing for use of the scissor lift (Exh. C-3). Ms. Monroe
testified she did not instruct employees to watch out for the electrical
conduit because everyone told her it was safe. In fact, bare wires extending
from the bottom of the conduit were energized. Ms. Monroe, on
cross-examination, testified she did not provide any training to each of
Respondent’s employees on the jobsite, claiming they did not work for
MDC. The Secretary produced sufficient evidence to prove it is more likely than
not that MDC did not instruct each employee in the recognition and avoidance of
unsafe conditions including electrical shock hazards on the jobsite.

Respondent
claims it did not have actual knowledge of an unsafe electrical shock condition
of the conduit and wires in the area where its employees were working. Ms.
Monroe was working on an elevated scissor lift next to the conduit one day
before the incident in which an MDC employee touched an energized wire in the
conduit. While Ms. Monroe may have thought the conduit was safe, she did not
take steps to determine whether the bare wires extending from the bottom of the
conduit were energized. On September 27, 2011, her employees worked on the
floor stacking drywall next to the bare wires. MDC, through Ms. Monroe, its
president, had constructive knowledge of the electrical hazard. Ms. Monroe
worked adjacent to the conduit on September 26, 2011, and knew her employees
worked in the immediate area of the electrical shock hazard.

The
Secretary has established a violation of 29 CFR § 1926.21(b)(2). The
violation was serious. Where employees are not instructed in the recognition
and avoidance of unsafe conditions including electrical shock hazards, contact
with such hazards could result in death or serious physical harm.

Citation No. 1,
Item 2,

Alleged Serious Violation of 29
CFR § 1926.416(a)(3)

In Citation No. 1, Item 2, the Secretary alleges:

29 CFR § 1926.416(a)(3): Before work was begun,
the employer did not ascertain by inquiry or direct observation, or by
instruments, whether any part of an energized electric power circuit, exposed
or concealed, was so located that performance of the work could bring any
person, tool, or machine into physical or electrical contact with the electric
power circuit:

d.     On
or about September 27, 2011, the employer did not inquire about the status of
the exposed parking lot lighting circuit wires or warn employees installing
drywall material of the electric shock hazard.

The standard at 29 CFR §
1926.416(a)(3) provides:

(3) Before work is begun the
employer shall ascertain by inquiry or direct observation, or by instruments
whether any part of an energized electric power circuit, exposed or concealed,
is so located that the performance of the work may bring any person, tool, or
machine into physical or electrical contact with the electric power circuit.
The employer shall post and maintain proper warning signs where such a circuit
exists. The employer shall advise employees of the location of such lines, the
hazards involved, and the protective measures.

The
Secretary’s compliance officer testified only as to the nature of the
charge as set forth in Citation No. 1, Item 2. He gave no factual testimony to
support the alleged violation of the standard.

Nathalie
Monroe, MDC’s president, however, in her statement to the compliance
officer, stated that the metal conduit ran down the wall, and she was on the
scissor lift near the top of the wall and the conduit. She did not see the wire
extending from the bottom of the conduit (Exh. C-15). She testified at trial
she was told the conduit was safe. Ms. Monroe did not say who told her it was
safe. There is no other evidence relating to whether MDC made any inquiry or
observations before beginning work or during work concerning the location of
the energized wires in the area where its employees worked. From the totality
of the testimony and other evidence, the logical inference is that MDC made no
inquiry, observation, or other test to determine whether an exposed energized
electric power circuit was so located that an employee of MDC might physically
contact it. Contact with shock energized lines can result in death or serious
physical harm from electrical shock.

Respondent
had constructive knowledge of the violative conditions. Ms. Monroe worked at
the top of the electrical conduit on September 26, 2011, and her employees
worked on the floor near the bottom of the conduit with exposed wires on
September 27, 2011. MDC made no independent inquiry to determine if the power
circuit was energized, creating a hazard of electrical shock to MDC employees.

The
Secretary has established a serious violation of 29 CFR § 1926.416(a)(3).

Citation No. 2,
Item 1,

Alleged Other-than-Serious
Violation of 29 CFR § 1910.1200(e)(1)

In Citation No. 2, Item 1, the Secretary alleges:

29 CFR 1910.1200(e)(1): The employer did not
develop, implement, and/or maintain at the workplace a written hazard
communication program which describes how the criteria specified in 29 CFR
1910.1200(f), (g), and (h) will be met: (Construction Reference: 1926.59)

f.   On or about
September 27, 2011, the employer did not develop, implement, or maintain a
written Hazard Communication Program that included Material Safety Date Sheets
and training for employees working with hazardous chemicals such as, but not
limited to the following: 

Drywall joint compound - a respiratory irritant

The standard
at 29 CFR § 1910.1200(e)(1) provides:

(e) Written hazard communication program . (1)
Employers shall develop, implement, and maintain at each work place, a written
hazard communication program which at least describes how the criteria
specified in paragraphs (f), (g), and (h) of this section for labels and other
forms of warning, material safety data sheets, and employee information and
training will be met, and which also includes the following:

(i) A list of the hazardous
chemicals known to be present using an identity that is referenced on the appropriate
material safety data sheet (the list may be compiled for the workplace as a
whole or for individual work areas)

The
Secretary’s compliance officer, Jeffrey Lincoln, testified that
MDC’s employees were performing drywall finishing which includes the use
of drywall joint compound. Mr. Lincoln testified that, when sanded, the
compound particles become airborne. These particles are a respiratory irritant.

Mr. Lincoln
testified regarding the requirements of the standard as follows:

The products
they’re using have to be labeled properly. They have to have the company
MSDS sheets for each proper chemical that’s hazardous on the job site.
They have to have a written hazard communication program that specifies how
their overall program is run, who is responsible for it, and there has to be
training for the materials that are being used so that they’re trained to
the MSDS sheets and the hazards that are listed on them.

(Tr. 72).

When
questioned by the Court, Mr. Lincoln expanded his testimony relating what he
found during his inspection:

THE
JUDGE:             Let
me ask you, what - - you said what the requirements of that standard are. What
was done here?

THE
WITNESS:        My indication at the
job site, I asked Nathalie Monroe for her programs, to include safety program,
hazard communication programs, and she said that she did not have programs,
because it was just her and her husband in the company and they talked to each
other about safety.

(Tr. 73).

Ms. Monroe
testified that MDC had Material Safety Data Sheets (MSDS) for the drywall
compound. While MDC may have maintained an MSDS for drywall compound at the
jobsites, it did not provide it to OSHA when requested.

The
Secretary’s evidence establishes a violation of 29 CFR §
1910.1200(e)(1). Respondent did not develop or maintain a written hazard
communication program for drywall compound, an eye irritant. This violation was
properly classified as an ot in irritation of the eyes, but would not likely
result in death or serious physical harm.

Penalty
Determination

The
Commission is the final arbiter of penalties in all contested cases. “In
assessing penalties, section 17(j) of the OSH Act, 29 U.S.C. § 666(j),
requires the Commission to give due consideration to the gravity of the
violation and the employer’s size, history of violation, and good
faith.” Burkes Mechanical, Inc. , 21 BNA OSHC 2136, 2142 (No.
04-0475, 2007).

MDC employed
five employees including the two owners. On the date of the incident that gave
rise to the OSHA inspection, MDC had two employees on site stacking drywall. In
proposing penalties for the violations alleged in Citation No. 1, Item 1b, the
Secretary considered Respondent’s size but gave no consideration to its
good faith and history. No evidence was presented as to any previous inspections
of this company. MDC has no prior OSHA citation history. While the Commission
has rejected MDC’s defense of no employment relationship with these
workers, the company’s owners exhibited good faith in this matter. Their
actions were consistent with a good faith belief MDC had no employees other
than Nathalie and Jeffrey Monroe.

The
Secretary’s compliance officer considered the severity of the hazard for
Citation No. 1, Item 1, to be high including death, but probability as lesser
due to the small amount of work performed compared to the total job. The
Secretary withdrew Item 1a at the hearing. That Item alleged that MDC did not
initiate or maintain a safety and health program. The proposed penalty for
Items 1a and 1b was $2,400.00.

Here the
Secretary dropped a major portion of Item 1 and did not consider good faith and
history of MDC. After considering all these factors, a penalty of $200.00 is
assessed for the remaining Item 1b.

With regard
to Citation No. 1, Item 2, the Secretary also considered Respondent’s
size but no consideration was given to MDC’s history. Regarding good
faith, the Secretary’s proposed penalty was based in large part on the
allegation in Item 1a that MDC did not initiate or maintain an adequate safety
and health program. That item was withdrawn by the Secretary at the hearing.
That withdrawn allegation cannot now serve as a basis for the Secretary’s
claim of lack of good faith. The failure to make sufficient inquiry as to
whether an electric power circuit is energized can result in death or serious
inquiry. This can cause a higher level of gravity of the violation.

After
considering all factors including gravity, size, good faith, and history, a
penalty of $400.00 is assessed for Citation No. 1, Item 2.

The
Secretary proposed no penalty for Citation No. 2, Item 1, and none is assessed.

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:

2.   Item
1a of Citation No. 1, alleging a serious violation of 29 CFR §
1926.20(b)(1), was withdrawn by the Secretary at the hearing. It is therefore
vacated, and no penalty is assessed;         

4.   Item
1b of Citation No. 1, alleging a serious violation of 29 CFR §
1926.21(b)(2), is affirmed, and a penalty of $200.00 is
assessed;         

6.   Item
2 of Citation No. 1, alleging a serious violation of 29 CFR §
1926.416(a)(3), is affirmed, and a penalty of $400.00 is assessed;
and  

8.   Item
1 of Citation No. 2, alleging an other-than-serious violation of 29 CFR §
1910.1200(e)(1), is affirmed, and no penalty is
assessed.      

/s/                                            

Stephen J.
Simko, Jr.

Judge

Date:
   May 28, 2013

Atlanta,
Georgia

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