Kenny Niles Construction Company

Plain-English summary

Kenny Niles Construction Company was investigated after a trench cave-in resulted in an employee's death. OSHA issued three willful citation items involving trenching hazards, but the sole proprietor had closed his businesses and no longer had employees before the citation was issued. An administrative law judge granted summary judgment and vacated the citation under then-controlling Commission precedent. In a companion ruling issued the same day, the Commission overruled that precedent and held that OSHA may cite a business that was an employer when the alleged violations occurred. The Commission therefore reversed the summary judgment, denied the dismissal motion, and remanded the case for further proceedings.

Decision snapshot

• Cited standard(s): 29 C.F.R. §§ 1926.21(b)(2)(ii), 1926.100(a), and 1926.652(a)(1).
• Outcome: Citation reinstated and case remanded for proceedings on the merits.
• Key point: Closing a business before OSHA issues a citation does not eliminate statutory jurisdiction when the respondent was an employer at the time of the alleged violations.

Full text (OSHRC public release)

SECRETARY OF LABOR,
Complainant,
v. OSHRC Docket No. 95-1539
KENNY NILES CONSTRUCTION
COMPANY,
Respondent.

                                    DECISION

Before: WEISBERG, Chairman; and ROGERS, Commissioner.
BY THE COMMISSION:
At issue is whether Administrative Law Judge Ken S. Welsch erred in granting the
motion for summary judgment filed by Kenny Niles Construction Company (“Niles
Company”). Judge Welsch vacated the contested citation in this case under the then
controlling precedent established by the decision of a divided Commission (Chairman
Weisberg dissenting) in Ralph Taynton d/b/a Service Specialty Co., 17 BNA OSHC 1205,
1993-95 CCH OSHD ¶ 30,766 (No. 92-0498, 1995), appeal withdrawn, No. 95-4788 (11th
Cir. Nov. 9, 1995) (“Taynton”). In Taynton, the Commission held that the Secretary of Labor
“had no jurisdiction to issue” a citation to an individual who was operating a sole
proprietorship engaged in a business affecting commerce at the time of the alleged violations
but was no longer engaged in business and no longer had any employees at the time the
citation was issued. 17 BNA OSHC at 1208, 1993-95 CCH OSHD at p. 42,760. On review
in the instant case, the Secretary concedes that Judge Welsch was correct in finding that this
case is factually “indistinguishable” from Taynton and in concluding that he was therefore
“bound to grant [Niles Company’s] motion for summary judgment based on the Taynton
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case.” The Secretary argues only that Taynton was wrongly decided. In Joel Yandell, d/b/a
Triple L Tower, OSHRC Docket No. 94-3080 (“Yandell”), which we also issue on this date,
we have agreed with the Secretary’s argument and overruled Taynton. Therefore, for the
reasons discussed more fully in Yandell, we reverse the judge’s decision in this case, deny
the motion for summary judgment, and remand the case for further proceedings.
At the time of the alleged violations, Kenny Niles operated the Kenny Niles
Construction Company as a single proprietorship with an office and principal place of
business in Columbia, Missouri.1 On or about March 27, 1995, a trench that was being
excavated at a Niles Company worksite caved in, resulting in the death of a Niles Company
employee. Based on an investigation of this fatality conducted by the Occupational Safety
and Health Administration (“OSHA”), the Secretary issued Niles Company a citation
alleging three willful violations of construction safety standards, each based on alleged
employee exposure to trenching hazards. The Secretary proposed a total penalty of $168,000.
Niles Company contested all of the citation items and proposed penalties.
Over the course of the lengthy period between the March 27 cave-in and the issuance
of the contested citation on September 20, Kenny Niles took a series of steps to close down
first his excavation business and then his trucking business. As of August 15, 1995, when
Niles closed his trucking business (a month before the citation now on review was issued),
he no longer operated any businesses and he had no employees. On May 13, 1996, Niles
averred, in the last of his five affidavits, see supra note 1, that he still had no employees, that
he had not resumed any type of business operation, and that he did not intend to resume any
business operations in the future. Based on these facts, which were not disputed by the
Secretary, Judge Welsch concluded that, under the Taynton decision, Niles Company was

1
The five affidavits executed and filed by Kenny Niles in support of his motion for summary
judgment (over a period of almost a year) indicate that he also did business under the names
“Kenny Niles Construction & Trucking Co.” and “Kenny Niles Excavation & Trucking
Company.” See Kenny Niles d/b/a Kenny Niles Constr. & Trucking Co., 17 BNA OSHC
1940, 1995-97 CCH OSHD ¶ 31,300 (No. 94-1406, 1997).
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not an “employer” as defined by the Act at the time the contested citation was issued and that
the Secretary therefore lacked jurisdiction to issue it.
In Yandell, we this day overrule the Commission’s decision in Taynton. We hold that
the Secretary has the authority under section 9(a) of the Act, 29 U.S.C. § 658(a), to issue
citations to employers that have ceased doing business if they were engaged in a business
affecting commerce and had employees at the time of the alleged violations. Yandell, slip op.
at p. 7. Under this holding, it is clear that the Secretary had statutory jurisdiction to issue the
citation that is now before us on review.

                                         Order
   For the reasons set forth above, we reverse Judge Welsch’s decision below and

remand this case to him for further proceedings consistent with this decision.

                                                        Stuart E. Weisberg
                                                        Chairman




                                                        Thomasina V. Rogers

Date: March 12, 1999 Commissioner
 United States of America
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
100 Alabama Street, S.W.
Building 1924, Room 2R90
Atlanta, GA 30303-3104

Phone (404) 562-1640 Fax (404) 562-1650

))))))))))))))))))))))))))))))))))))))))))))),
Secretary of Labor, *
Complainant, *
*
v. * OSHRC Docket No. 95-1539
*
KENNY NILES CONSTRUCTION CO. *
Respondent. *
)))))))))))))))))))))))))))))))))))))))))))))-

                                                          DECISION AND ORDER


                 This proceeding arises under the Occupational Safety and Health Act of 1970 (29 U.S.C.

§651, et seq.; hereafter called the “Act”) pursuant to respondent’s motion for summary judgment
which was filed on April 16, 1996. Respondent asserts that, because it has not been in business since
August 15, 1995, the Review Commission lacks subject matter jurisdiction or, in the alternative, the
matter is moot. The Secretary’s response which was file on May 16, 1996, agrees that there is no
genuine issue of material fact.
The court, having reviewed the pleading, finds there is no genuine issue of material fact and
the case is resolved as a matter of law on the basis of summary judgment.
Background
Based on the pleadings, the following constitute the undisputed facts.
1. Respondent, Kenny Niles Construction Co. (Niles), a sole proprietorship with a principal
place of business at 4501 I-70 Drive, S.E., Columbia, Missouri, was engaged primarily in sewer and
waterline excavation and installation.
 2. On or about March 27, 1995, at Niles’ worksite located at 4101 Brown Station Road,
Columbia, Missouri, there was an accident and one employee died.
3. OSHA investigated the accident and issued a willful citation on September 20, 1995,
alleging violations of §§1926.21(b)(2)(ii), 1926.100(a) and 1926.652(a)(1), and proposing penalties
totaling $168,000.
4. On or about September 25, 1995, Niles filed a timely notice of contest to the willful
citation.
5. Prior to issuance of the citation on June 6, 1995, Niles closed his excavation business,
permanently laying off all employees and selling the majority of equipment to a competitor. On
August 15, 1995, Niles closed another business known as Kenny Niles Trucking Company. Niles no
longer operated any businesses or had any employees. By an affidavit dated May 13, 1996, Niles
affirmed the since August 15, 1995, he no longer has any employees nor has resumed any type of
business operation. Also, he states that he does not intend to resume any business operation in the
future.
Discussion
Niles moves for summary judgment on the basis that the Review Commission lacks subject
matter jurisdiction pursuant to Ralph Taynton d/b/a Service Specialty Co., 17 BNA OSHC 1205,
1995 CCH OSHD ¶ 30,179 (No. 92-498, 1995), because at the time the willful citation was issued,
he was no longer in business and thus not an “employer” under the Act. In the alternative, if it is
deemed subject matter jurisdiction exists, Niles argues that the matter is moot2 pursuant to
Jacksonville Shipyards, 16 BNA OSHC 2053, 1994 CCH OSHD ¶30,539 (No. 92-888, 1994),
appealed, No. 95-2807 (11th Cir. 1995).

2
On October 27, 1995, Judge Loye granted a similar motion for summary judgment and
dismissed April 12, 1994, citations against Kenny Niles Construction & Trucking Company,
OSHRC Docket No. 94-1406, on the basis of mootness in accordance with the Commission’s
holding in Jacksonville Shipyards.

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Summary judgment pursuant to Rule 56, Fed. R. Civil P., is properly granted only where there
is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Rule
56 is incorporated by Review Commission Rule 61, 29 C.F.R. §2200.61. The moving party
has the burden of showing the absence of a genuine issue of material fact as to an essential element
of the non-movant’s case. Celotex Corp. V. Catrett, 477 U.S. 327 (1986), remanded,826 F.2d 33
(D.C. Cir. 1987), cert denied, 484 U.S. 1066 (1988). All justifiable inferences are to be drawn in
favor of the non-movant party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
In this case, there is no genuine issue of material fact as to the Commission’s jurisdiction. The
Secretary does not dispute that as of August 15, 1995, Niles ceased business operations and
terminated all employees and sold most of his equipment. OSHA’s willful citation was not issued
until September 20, 1995. Niles states that he permanently out of business and does not intend to re-
enter business in the future. Niles’ motion is supported by affidavits attesting to the dismissal of
employees, sale of the business and equipment, and his intention not to re-enter the business. The
Secretary submitted no rebuttal evidence disputing these facts. The Secretary argues that both
Commission decisions were wrongly decided and should be overruled (Complainant’s Opposition,
pg.2).
The facts in this case are indistinguishable from the facts in the Taynton case. In Taynton, the
Review Commission held that an employer an employer who went out of business and had no
employees prior to the issuance of the citations was not an “employer” as defined by the Act. An
“employer” is defined by § 3(5) as “a person engaged in a business affecting commerce who has
employees.”
Accordingly, based on the Taynton case, “no employer was ever properly issued a citation
under section 9(a) of the Act, and no employer ever filed a notice of contest.” OSHC at 1206.
Despite having an opinion to the contrary, this judge is bound to grant Niles’ motion for summary
judgment based on the Taynton case. The Review Commission has long recognized that its judges
must follow precedent established by the Commission. Gindy Manufacturing Company, 1 BNA
OSHC 1717, 1973-74 CCH OSHD ¶ 17,790 (No. 5708, 1974); All state Trailer Sales, Inc., 3 BNA
OSHC 1183, 1184, 1974-75 CCH OSHD ¶ 19,627, p. 23,429 (No. 2446, 1975); and United States
Steel Corp., 9 BNA OSHC 1527, 1981 CCH OSHD ¶ 25, 283 ( No. 78-5940, 1981).

                                                6

ORDER
Accordingly, Niles’motion for summary judgment is GRANTED. The willful citation
issued to Niles on September 20, 1995, is vacated.
Dated this 24th day of May, 1996

                                                 /S/
                                                    KEN S. WELSCH
                                                    Judge




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