Kettler Bros. v. Department of Licensing & Regulation

Wilner, J., delivered the opinion of the Court. By Laws of Md., 1973, ch. 59, the General Assembly enacted the Maryland Occupational Safety and Health Law, 1 patterned largely after the Federal Occupational Safety and Health Act of 1970. A thorough, but concise, history of the Maryland Act and the regulations promulgated under it, is set forth in J. I. Hass Co. v. Dep't. of Lic. and Reg., 275 Md. 321 (1975). The primary purpose of the Act, as stated in its title, was “to assure safe and healthful working conditions for the citizens of the State of Maryland by providing for the establishment of safety and health standards, procedures for enforcement of and compliance with such standards, and penalties for violation thereof____” This important and laudable purpose is to be carried out through a cooperative effort among the State government, represented by the Division of Labor and Industry of the State Department of Licensing and Regulation, 2 employers, and employees, each of whom are given certain correlative rights and responsibilities.

The State’s role in this partnership consists primarily of the adoption and enforcement of basic occupational safety and health standards. Section 31 of article 89 authorizes the Commissioner of Labor and Industry, with the advice of the Occupational Safety and Health Advisory Board, to adopt reasonable rules, regulations, and standards “for the prevention of conditions detrimental to safety and health in every employment or place of employment in the State----” Section 35 permits the Commissioner, or his representatives, to enter and inspect virtually every place of employment to ⁵⁹⁹ make certain that there is actual compliance with these regulations. 3 If he finds a violation of one or more of the regulations, he is authorized by § 36 to issue a written citation and by § 37 to propose a civil penalty. If the employer contests the citation, he is entitled to a hearing before a hearing examiner; and, if aggrieved by the decision of the hearing examiner, he is entitled to review by the Commissioner. From a final order of the Commissioner, § 38 provides for judicial review.

Section 32 sets forth the basic responsibilities of employers and employees. 4 Subsection (a) requires each employer to (1) “furnish to each of his employees employment and a place of employment which are safe and healthful as well as free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees,” and (2) comply with the regulations promulgated by the Commissioner. Subsection (b) obligates each employee to comply with all such regulations “which are applicable to his own actions and conduct in the course of his employment.” The heart of the enforcement mechanism to assure compliance with the Commissioner’s regulations is the imposition of civil penalties, provided for in § 40, although criminal penalties are also possible under § 41. Only employers are subject to these penalties; there are no direct sanctions in the law applicable to employees who fail to comply with their obligation under § 32 (b). Section 40 views violations as being of three possible types: (1) willful or repeated violations, for which an employer may receive a civil penalty not to exceed $10,000 for each violation; (2) serious violations, for which the employer shall be assessed a penalty not to exceed $1,000 for each such violation, and (3) other than serious violations, for which the employer may be assessed a penalty not to exceed $1,000 for each such violation. ⁶⁰⁰ We are concerned in this appeal with definitional aspects of “serious” and “other than serious” violations.

Section 40 (b) states that a “serious” violation shall be deemed to exist in a place of employment, “... if there is a substantial probability that death or serious physical harm could result from a condition which exists or from one or more practices, means, methods, operations, or processes which have been adopted or are in use in such place of employment unless the employer did not and could not with the exercise of reasonable diligence, know of the presence of the violation(Emphasis supplied.) No definition is provided in the law for an “other than serious” violation. Section 40 (c) simply provides that: “Any employer who has received a citation for a violation of any provision of this subtitle or any rule, regulation, standard, or order promulgated pursuant to this subtitle and such violation is specifically determined not to be of a serious nature, may be assessed a civil penalty not to exceed $1,000.00 for each such violation.” There is no language in the statute that, in the manner of § 40 (b), makes employer knowledge, actual or constructive, a pre-condition to or requisite element of a violation that is not found to be “serious”. The question before us is whether the law implies such a condition notwithstanding the statutory silence. Kettler Brothers, Inc. was in the process of constructing 96 townhouses in a development near Gaithersburg known as Montgomery Village, when, shortly after 10:00 on the morning of September 29, 1976, Mr. Henry McCoy made a surprise visit to the jobsite.

Mr. McCoy is an inspector for the Maryland Occupational Safety & Health Agency (MOSHA). He had with him a Federal Compliance and Health Officer, and was there to conduct a scheduled “target industry ⁶⁰¹ inspection” — i.e., to see if there were any unlawful safety violations. As they toured the jobsite, escorted by the project superintendent, Robert Franklin, their attention was drawn to two men working on a scaffold. 5 The manner in which that scaffold had been constructed led to the issuance of two citations. Citation No. 1 charged that the pump jack scaffold was not equipped with standard guardrails, midrail and end rails, in violation of 29 CFR 1926.451 (y) (ii), which was characterized as a “serious” violation. 6 Citation No. 2 charged six “other than serious” violations, five of which also pertained directly or indirectly to the scaffold, and one concerned an unrelated condition that was corrected while the inspector was still on the scene.

Along with the two citations, MOSHA sent Kettler a notification that it intended to seek a civil penalty of $340 for the serious violation charged in Citation No. 1, and a penalty of $280 for two of the six “other than serious” violations charged in Citation No. 2 7 In accordance with § 37, a hearing on these citations was held before a hearing officer. There was little dispute that the conditions specified in the Citations were, in fact, present, or that they violated the standards mentioned in the Citations. This was established through the testimony and exhibits offered by Mr. McCoy, and, to some extent was corroborated by the testimony of Mr. Franklin, on behalf of Kettler. The “whole substance” of Kettler’s defense, as stated in its subsequent appeal to the Commissioner was “whether the ⁶⁰² violation was caused by the employer or caused by the very employees involved in the construction of the scaffolding.” Kettler’s sole contention before MOSHA (the hearing examiner and the Commissioner), the Circuit Court for Montgomery County, and this Court is that the scaffold was erected, and used, without the knowledge of the Kettler supervisory personnel and in violation of clear, published company safety rules, and that, under those circumstances, Kettler may not be deemed to have violated the MOSHA standards, and certainly not penalized for such violations.

The relevant facts pertaining to this issue, as developed at the administrative hearing, were these: (1) The scaffold had been erected earlier that morning by the two employees found working on it (assisted by a third employee). According to McCoy, “They told me they just put it up that morning and started working on it just before we got there.” The record does not indicate when the three employees began to build the scaffold or how long it took to erect the structure. (2) Mr. Franklin, the project superintendent, was not present when the scaffold was erected; but, as noted (footnote 5, supra), he observed it prior to its use when he and Mr. McCoy toured the site. He agreed that it was not proper, and claimed that “had we seen the scaffold built in that manner [we] would never have let them get up on the scaffold in the first place.” In Mr. Franklin’s absence, there is' a “trim foreman” and a “frame foreman” in charge.

The “frame foreman” was not at the jobsite on the day in question, but the “trim foreman” was present. According to Franklin, this “trim foreman”, David Hill, was trimming when the scaffold was built. The record does not reflect whether Mr. Hill, or anyone else, observed or supervised the erection of the scaffold. (3) According to Richard Hines, the construction superintendent for Kettler, the employer does not allow unqualified persons to erect scaffolding.

However, he did not state, or even suggest, that the three employees who built this scaffold were unqualified. No one has to “authorize” the building of scaffolding — the employees “normally build the ⁶⁰³ scaffold on their own.” Hines further stated that it is not a normal practice for the job supervisor to watch the scaffold being built; rather, he said, the procedure is for the job supervisor to inspect the scaffold after it is built, and the employees are not supposed to work on it until such inspection has taken place. (4) Kettler has prepared a series of “safety work rules”, one of which provides: “If you work on scaffolding, be sure that guardrails are in place. Report unsafe scaffolding to your supervisor.” Mr. Franklin stated that each employee of Kettler is made aware of these rules, and is subject to discipline for violating them.

No one made a report to Franklin, or apparently any other supervisory employee, of the unsafe condition of the scaffold. (5) The procedure mentioned by Mr. Hines — that employees are not to begin using a scaffold until it has been inspected — is not formalized in the safety work rules. In this instance, no such inspection was made; and, to the extent that the procedure represents company policy, it was apparently violated by the two employees involved. (6) Kettler has an extensive general safety program for its employees, which includes financial incentives for maintaining safe conditions and discipline for violating safety rules.

Mr. McCoy gave Kettler high marks for its general safety program, but stated that, at this particular site, the implementation of that program was only “average”. He testified that this site appeared to be “in a much less safe condition” than other Kettler construction sites he had visited. Upon this evidence, the hearing examiner agreed with Mr. McCoy that a “serious” violation occurred, as charged in Citation No. 1, and that five of the six “other than serious” violations charged in Citation No. 2 also existed. He found, in addition, that the penalties recommended by Mr. McCoy, aggregating $620, were appropriate. 8 Aggrieved by these determinations, Kettler sought review by the Commissioner ⁶⁰⁴ of Labor and Industry who summarily affirmed the conclusions reached by the hearing examiner.

Kettler then appealed to the Circuit Court for Montgomery County, which found that the record clearly supported the administrative determinations as to the “other than serious” violations, and those determinations (and the penalties entered with respect to them) were affirmed. With regard to the “serious” violation charged in Citation No. 1, however, the court found that Kettler had neither actual nor constructive knowledge, which, it concluded § 40 (b) made a prerequisite for a “serious” violation. Accordingly, the court reversed that determination and remanded the matter to the Commissioner “for the proper imposition of a penalty as other than a serious violation.” 9 No appeal was taken by the Commissioner from that part of the judgment. Kettler points to the decision of the Court of Appeals in J. I. Hass Co. v. Dep’t of Lic. and Reg., supra, 275 Md. 321 , and a number of federal cases arising under the Federal Act as authority for the proposition that “knowledge [i.e., foreknowledge] is an essential element in both ‘serious’ and ‘non-serious’ violations”, and that, consequently, absent proof of such knowledge, an employer may not be found culpable of and penalized for a “non-serious” violation.

As clarified by counsel at oral argument, appellant’s contention, more precisely, is that the statutory condition set forth in § 40 (b) with