R.C. Diving Company, Inc. (Commission decision, February 25, 1981)

Plain-English summary

OSHA cited commercial-diving conditions aboard a boat used to harvest geoducks in Puget Sound. The judge dismissed the citations after finding insufficient proof that R.C. Diving employed the workers. The Commission held that the compliance officer's testimony about statements identifying Rod Carew as the employer was admissible and probative even if treated as hearsay. Together with evidence that Carew owned the boat and the corporation, the evidence was sufficient to survive a dismissal motion before the defense presented its case. The Commission reversed the dismissal and remanded for further proceedings.

Decision snapshot

• Cited standard(s): 29 C.F.R. §§ 1910.420(a), 1910.421(b), 1910.422(c)(1)(i), 1910.423(d)(1)(i), and 1910.425(c)(1)
• Outcome: Dismissal of commercial-diving citations reversed; case remanded.
• Key point: Admissible hearsay and related ownership evidence may be enough to establish a preliminary employment relationship and require the defense to proceed.

Full text (OSHRC public release)

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UNITED STATES OF AMERICA

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

SECRETARY
OF LABOR,

Complainant,

v.

OSHRC DOCKET NO.
77�4487

R.C. DIVING
COMPANY, INC.,

Respondent.

February 25, 1981

DECISION

BEFORE: CLEARY, Chairman;
BARNAKO and COTTINE, Commissioners.

BY THE COMMISSION:

A decision of Administrative Law Judge Erwin L. Stuller is before the Commission for review pursuant to section 12(j), 29 U.S.C. 661(i), of the Occupational Safety and Health Act of 1970, 29 U.S.C. 651�678 (�the Act�). Citations were issued to �R.C. Diving� alleging violations of the Act for noncompliance with certain occupational safety and health standards regulating commercial diving operations. Respondent, R.C. Diving Co., Inc., timely contested the citations. At the hearing, Respondent moved to dismiss the citations on the ground that the Secretary of Labor (�Secretary�) failed to establish the necessary employment relationship between R.C. Diving Co., Inc. and the workers allegedly exposed to the cited conditions. Judge Stuller granted the motion to dismiss. The Secretary petitioned for review of that decision, and the petition was granted by Chairman Cleary. For the reasons that follow, we reverse the judge and remand the case for further proceedings.

I

In November of 1977, OSHA compliance officer Jack Mathews inspected the Sea Otter 75, a boat anchored in Puget Sound near Port Townsend, Washington. During the inspection he observed three men working on or from the boat. Their work involved the �harvesting� of geoducks�large edible clams found in the waters off the State of Washington. Mathews testified that the worker who was �in charge,� Mr. Davey, stated that the men aboard the boat �worked for� Rod Carew. [1] Asserting that Davey�s statement constituted inadmissible hearsay evidence, the Respondent objected to its admission. In response, the Secretary stated he was introducing the evidence only to show whether there was conversation or silence at a given time and not to establish the statement�s veracity. The judge admitted the evidence for that purpose.

At the conclusion of the Secretary�s case�which included Mathew�s testimony on the merits of the alleged violations�the Respondent submitted its motion to dismiss contending that the Secretary did not prove the Respondent was the workers� employer. The Secretary asserted that for the purpose of establishing that a conversation took place Davey�s statement constituted admissible hearsay but for the purpose of establishing an employment relationship the statement constituted an admission. The Secretary also asserted that Davey�s statement established the prima facie case of an employment relationship.

The judge put the compliance officer back on the stand for questioning from the bench. The compliance officer again testified that Mr. Davey said the men aboard the boat worked for Mr. Carew and that Mr. Carew owned the boat. The judge announced that he considered Mr. Davey�s statement that the men worked for Mr. Carew as record evidence although he was silent about the statement that Rod Carew owned the boat. The judge then suspended the hearing to allow the parties an opportunity to submit briefs on the Respondent�s motion to dismiss.

In his brief to the judge, the Secretary contended that Mr. Davey�s statements were admissible as non-hearsay admissions under the Federal Rules of Evidence, Rule 801(d)(2). [2] The Secretary asserted that on the basis of those statements he satisfied the prima facie case of an employment relationship.

In its brief, the Respondent asserted that the Secretary did not prove that R.C. Diving Co., Inc. was the employer of the workers allegedly exposed to the cited conditions. It argued that because Davey�s statements were not initially offered for their content the Secretary could not later depend on them to establish the fact of an employment relationship. It also contended that its objection to the compliance officer�s testimony applied with equal force when the judge questioned the compliance officer towards the close of the hearing. Further, the Respondent asserted that before the judge could consider the statements as exceptions to the hearsay rule based on Mr. Davey�s status as an employee/agent the Secretary had to, but did not, independently establish the existence of an employment/agency relationship between Mr. Davey and the Respondent corporation.

In his decision, the judge summarily stated there was no evidence that R.C. Diving Co., Inc. was the employer that committed the alleged offenses. He did not note whether he considered the compliance officer�s testimony about Mr. Davey�s statements as record evidence. The judge vacated the citations and notifications of proposed penalty.

The Secretary argues on review that the judge erred both in finding that the Secretary did not satisfy his burden of proving that the Respondent company was responsible for the cited violations and in vacating the citations. The Secretary contends that because Mr. Davey stated that the persons aboard the boat worked for Mr. Carew and because the Respondent indicated that Mr. Carew did his business through the corporation R.C. Diving Co., Inc., Mr. Davey�s statement should be interpreted to mean that the men worked for the Respondent corporation. Finally, that the workers considered themselves employees of R.C. Diving Co., Inc., the Secretary asserts, established a prima facie case that the Respondent was the workers� employer.

The Respondent�s arguments on review essentially mirror those presented to the judge: the Commission does not have jurisdiction because the Act applies only to employer-employee relationships and the Secretary failed to prove an employment relationship in this case. Specifically, the Respondent argues that the Secretary did not offer any admissible evidence to establish an employment relationship, Mr. Davey�s statements constituted inadmissible hearsay evidence, and Mr. Davey�s statements could not be considered admissions by an agent because the Secretary failed independently establish an agency relationship.

II

We treat a motion to dismiss as a motion for involuntary dismissal under Rule 41(b) of the Federal Rules of Civil Procedure. [3] In Commission cases a Rule 41(b) motion should be granted only if the evidence preponderates against the Secretary. Williams Enterprises, Inc ., 79 OSAHRC 24/B5, 4 BNA OSHC 1663, 1976�77 CCH OSHD 21,071 (No. 4533, 1976); Harrington Construction Corp ., 77 OSAHRC 7/B3, 4 BNA OSHC 1471, 1976�77 CCH OSHD 20,913 (No. 9809, 1976). [4]

Reviewing the record compiled thus far, we conclude that the evidence does not preponderate against the Secretary on the employment issue. The compliance officer�s testimony with respect to Mr. Davey�s asserted statements, regardless of its hearsay nature, was admissible and constituted probative evidence. See Hurlock Roofing Co ., 79 OSAHRC 93/A2, 7 BNA OSHC 1867, 1979 CCH OHSD 24,006 (No. 14907, 1979). Because hearsay evidence is admissible in Commission proceedings, Metro-Mechanical, Inc ., 75 OSAHRC 72/A2, 3 BNA OSHC 1350, 1974�75 CCH OSHD 19,795 (No. 3518, 1975); see Richardson v. Perales , 402 U.S. 389 (1971), we look beyond the characterization of Davey�s statements as alleged admissions and determine whether they are sufficient to establish the existence of an employment relationship. Mr. Davey�s statement that the workers deemed
�Rod Carew� to be their employer is relevant in determining the existence of an employment relationship. [5] Griffin & Brand of McAllen, Inc ., 78 OSAHRC 48/C13, 6 BNA OSHC 1702, 1978 CCH OSHD 22, 829 (No. 14801, 1978). Moreover, that the workers were aboard a boat owned by �Rod Carew� is further support for a finding of an employment relationship.

When the Respondent moved to dismiss the case it had neither offered any rebuttal evidence nor attacked the compliance officer�s credibility. Further, in his decision the judge did not suggest he had reason to doubt that witness� veracity. The record thus far indicates that the Secretary established an employment relationship sufficient to survive a motion for involuntary dismissal under Rule 41(b).

We conclude that the judge erred in granting the Respondent�s motion to dismiss. [6] Accordingly, we remand the case for further proceedings consistent with this decision.

SO ORDERED

FOR THE COMMISSION:

RAY H. DARLING, JR.,

EXECUTIVE SECRETARY

DATED: FEB 25, 1981

UNITED STATES OF AMERICA

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

SECRETARY
OF LABOR,

Complainant,

v.

OSHRC DOCKET NO.
77�4487

R.C. DIVING
COMPANY, INC.,

Respondent.

FINAL ORDER DATE: March
19, 1982

DECISION
AND ORDER ON REMAND

APPEARANCES:

WILLIAM W. KATES,
Esquire Office of the Solicitor U.S. Department of Labor

8003 Federal
Office Building Seattle, Washington 98174

Attorney for
Complainant

MARK E. FORTIER,
Esquire Kargianis & Austin

2120 Pacific
Building Seattle, Washington 98104

Attorney for
Respondent

DECISION

The Decision in this case was filed on June 15, 1978. On February 25, 1981, the Commission entered its decision remanding the case for further proceedings �consistent with this decision�. A second hearing in this case was held on May 5, 1981.

The Commission Decision held in part that an employment relationship existed and that Rod Carew was the employer. However, the Commission appeared to condition this conclusion on my finding concerning the compliance officer�s credibility. After hearing his testimony and witnessing his demeanor while testifying, I find that the compliance officer�s testimony was highly credible. Therefore, I must conclude that an employment relationship existed and that Rod Carew was the employer and the Respondent in this case.

The only evidence received in this case was the testimony of the compliance officer. This has already been held to be credible. Therefore, all facts stated in this testimony are found to be facts in this case.

On November 3, 1977, the compliance officer and Mr. Earl Lawrence, a diving consultant, inspected the Respondent�s vessel �Sea Otter 75� which was anchored near Indian Head Point near Port Townsend, Washington. At the time the Respondent�s employees were engaged in harvesting Geoducks, which are large clams. As a result of the inspection, on November 15, 1977 the Secretary issued two citations charging the Respondent with five violations of the commercial diving operation�s safety standards of the Occupational Safety and Health Act. [7] The Respondent has denied the charges.

The Respondent has denied jurisdiction. However, the evidence establishes that the Respondent was an employer with employees engaged in a business that affects commerce within the meaning of the Act. Therefore, jurisdiction has been established.

At the time of the inspection [8] , three of the Respondent�s employees were aboard the vessel; two divers and a tender. The vessel operated as a platform from which surface supplied air was pumped down to the divers through two hundred feet of air line. The divers searched the bottom of Puget Sound seeking Geoducks buried in the sand. The divers did not have a two-way voice communication system. Nor was each diver continuously tended while in the water.

During the course of the trial, the Respondent admitted the violative conditions concerned in Citation 1, Item 1 and all of the items in Citation 2. In addition it was admitted that the Respondent has knowledge of these violative conditions and that employees had access to the hazards. [9]

OPINION

The inspection was fair. The Respondent�s employee in charge did not object to the inspection and therefore waived any right to require a search warrant. The evidence established each of the violations as alleged. In each instance the employer had knowledge of these conditions and that employees were exposed to the areas of danger. There was a substantial probability that the violative conditions alleged in Citation No. 1 could result in serious physical harm or the death of one or more of the employees. Therefore, these citations will be affirmed as alleged.

The evidence indicates that the Respondent had a small business and no previous history of violations. There was no indication of bad faith on its part. Therefore, after considering this and the gravity of the violation it is concluded that the proposed penalties are appropriate.

ORDER

The citations, as amended, and the proposed penalties are AFFIRMED. Total penalties of $240 are ASSESSED.

ERWIN L. STULLER

Judge

Dated: February 17, 1982

[1]
According to
a statement of Respondent�s counsel, R.C. Diving Co. Inc., is a corporation �owned by Rod Carew and his wife.�

[2] ARTICLE VIII.
HEARSAY

Rule 801
Definitions

(d) Statements
which are not hearsay.�A statement is not hearsay if�

(2) Admission by
party-opponent.�The statement is offered against a party and is

(D) a statement by
his agent or servant concerning a matter within the scope of his agency or employment, made during the existence of the relationship.

[3]
Unless the
Commission adopts a different rule, the Federal Rules of Civil Procedure apply to Commission proceedings. Section 12(g) of the Act, 29 U.S.C. 661(f); Commission Rule 2(b), 29 C.F.R. 2200.2(b). There is no Commission Rule governing motions to dismiss. Thus, we apply Rule 41(b) of the Federal Rules of Civil Procedure which states:

Rule 41. Dismissal
of Actions

(b) Involuntary
Dismissal: Effect Thereof. . . . After the plaintiff, in an action tried by the court without a jury, has completed the presentation of his evidence, the defendant, without waiving his right to offer evidence in the event the motion is not granted, may move for a dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. The court as trier of the facts may then determine them and render judgment against the plaintiff or may decline to render any judgment until the close of all the evidence. . . .

[4]
The
Commission has consistently cautioned against granting a motion to dismiss before both parties have rested. In our view the possibility of a remand and unnecessary delay is greatly enhanced by a dismissal ordered at the close of the Secretary�s case. Compare Texland Drilling Corp ., 80 OSAHRC , 9 BNA OSHC 1023, 1980 CCH OSHD �24,954 (No. 76�5307, 1980) with P & Z Co ., 77 OSAHRC 211/F5, 6 BNA OSHC 1189, 1977�78 CCH OSHD �22, 413 (No. 76�431, 1977).

[5]
The judge�s
decision suggests that the judge may have discounted the evidence because he viewed it as pertaining to Rod Carew and not to the Respondent corporation, R.C. Diving Co., Inc. In its opening statement at the hearing, the Respondent asserted that Rod Carew and his wife were the owners of the corporation �R.C. Diving Co., Inc.�. As the Secretary argues, inasmuch as the Respondent stated that the corporation was owned by Rod Carew and his wife, a sufficient nexus was established between Rod Carew and the Respondent corporation to permit us to relate Mr. Davey�s statement about �Mr. Carew� to the Respondent corporation. Logically, when a corporation is owned by one or a very few persons an employee might readily refer to the individual(s), rather than the corporation, as the employer. Thus, the judge should have related Mr. Davey�s statements to the Respondent.

[6]
Commissioner
Barnako concludes that the Secretary failed to establish an employment relationship sufficient to survive a motion for involuntary dismissal under Rule 41(b). He agrees with Respondent that Mr. Davey�s statement does not constitute an admission, see United States v. Pacelli , 491 F.2d 1108, 1117 (2nd Cir. 1974), cert. denied , 419 U.S. 826; Gallo v. Crocker , 321 F.2d 876, 877 (5th Cir. 1963), and concludes instead that the compliance officer�s testimony with respect to Mr. Davey�s asserted statement is hearsay.

Commissioner
Barnako would not make a finding based solely on uncorroborated hearsay. Hurlock Roofing Co. , OSAHRC 93/A2, 7 BNA OSHC 1867, 1874, 1979 CCH OSHD �24,006 at 29,150 (No. 14907, 1979) (concurrence). Because the hearsay testimony of the compliance officer is the only evidence relating to the employment status of the workers, Commissioner Barnako concludes that the Secretary did not satisfy his burden of proof on that issue. Furthermore, Commissioner Barnako would not rely, as do his colleagues, on the evidence that the workers were aboard a boat owned by Rod Carew to establish an employment relationship since this does not support a conclusion that the workers were employees within the meaning of the Act.

[7]
After the
original citations were issued, an amendment to the Complaint and Citation 1, Item 1 was allowed. A description of the alleged violations, the proposed penalties, and the safety standards concerned, as amended, are as follows:

Citation 1, Item 1
(Serious)

An operating
two-way voice communication system was not used between dive team member on board �Sea Otter 75� (dive location) and diver at bottom in approximately 20 feet salt water off Indian Head Point, opposite Port Townsend. Surface supplied air diving operation harvesting geoducks.

in violation of 29
CFR 1910.422(c)(1)(i)

Penalty Proposed:
$140

29 CFR
1910.422(c)(1)(i) provides:

An operational
two-way voice communication system shall be used between each surface-supplied air or mixed-gas diver and a dive team member at the dive location or bell (when provided or required).

Citation 1, Item 2
(Serious)

A surface supplied
air diver was not being continuously tended in that the tender aboard dive location �Sea Otter 75� off Indian Head Point, Port Townsend, was not keeping the slack out of the lines in order to feel the pull signals on the air hose/lifeline from the diver. The tender was not maintaining a proper tension by hand at all times on the air hose/airline.

in violation of 29
CFR 1910.425(c)(1)

Penalty Proposed:
$100

29 CFR
1910.425(c)(1) provides:

Each diver shall
be continuously tended while in the water.

Citation 2, Item 1
(Other)

An emergency aid
list was not kept at the dive location, �Sea Otter 75� with the telephone on-call numbers of the following: (a) an operational compression chamber, (b) accessible hospitals, (c) available physicians, (d) available means of transportation or (e) U.S. Coast Guard Reserve Coordination Center.

in violation of 29
CFR 1910.421(b)

Penalty Proposed:
none

29 CFR 1910.421(b)
provides:

A list shall be
kept at the dive location of the telephone or call numbers of the following: (1) an operational decompression chamber (if not at the dive location); (2) accessible hospitals; (3) available physicians; (4) available means of transportation; and (5) the nearest U.S. Coast Guard Rescue Coordination Center.

Citation 2, Item 2
(Other)

The employer did
not maintain a Safe Practices Manual and the Manual was not available at the dive location to each dive team member.

in violation of 29
CFR 1910.420(a)

Penalty Proposed:
none

29 CFR 1910.420(a)
provides:

The employer shall
develop and maintain a safe practices manual which shall be made available at the dive location to each dive team member.

Citation 2, Item 3
(Other)

The records of
dive information including: date, time, location, dive team members/person in charge, diving modes, general nature of work performed, approximate underwater and surface conditions and a maximum depth bottom for each diver was not available and properly maintained aboard �Sea Otter 75� on date of inspection.

in violation of 29
CFR 1910.423(d)(1)(i)

Penalty Proposed:
none

29 CFR
1910.423(d)(1) provides:

The following
information shall be recorded and maintained for each diving operation: Names of dive team members including designated person-in-charge; date, time, and location; diving modes used; general nature of work performed; approximate underwater and surface conditions (visibility, water temperature and current); and maximum depth and bottom time for each diver.

[8]
The
violations were alleged to have taken place at the time of the inspection on November 3, 1977. The citations charge that the Respondent failed to comply with commercial diving operation�s safety regulations in violation of Section 654(a)(2) of the Occupational Safety and Health Act (29 U.S.C. 651 et seq.). Citation No. 1 charges two serious violations of the Act. Citation No. 2 charges three nonserious violations of the Act. The Respondent filed a timely notice of contest. At that point the Commission acquired jurisdiction over the subject matter under Section 659 of the Act.

[9]
Tr. 16 and
17