Maryland Commissioner of Labor & Industry v. Cole Roofing Co.

WILNER, Judge. This appeal arises from a final order of the Commissioner of Labor and Industry entered under the Maryland Occupational Safety and Health Act (Maryland Code, §§ 5-101 through 5-901 of the Labor and Employment Article) (MOSHA). It presents two issues: (1) When an employer is charged with a MOSHA violation and claims that the violation was due to unforeseeable or unpreventable employee misconduct, who has the burden of proof on that issue: must the Commissioner prove that the employee misconduct was foreseeable or preventable, or must the employer prove that it was not; and (2) In order to establish a “repeated” violation under MOSHA, must the Commissioner show that the earlier violation involved precisely the same regulation or conduct or will it suffice to show that the earlier violation was of a similar regulation addressing a similar hazard or condition? The Court of Special Appeals concluded, with respect to the first issue, that the Commissioner bears the burden of proof, and, as to the second, that the two violations must be of the same regulation.

Commissioner of Labor v. Cole, 138 Md.App. 526 , 772 A.2d 1252 (2001). We agree with the second conclusion, but not the first. BACKGROUND The Labor and Employment Article (LE) § 5-104(a) requires employers to provide workplaces that are safe, health ⁴⁶² ful, and free from recognized hazards that are causing or are likely to cause death or serious physical harm to their employees. That is known as the general duty requirement.

Section 5 — 104(b) requires that both employers and employees comply with applicable regulations adopted under the Act. That is the special duty requirement. MOSHA places overall responsibility for enforcement of the Act with the Commissioner of Labor and Industry and, among other things, empowers the Commissioner, (1) to adopt regulations to prevent conditions in workplaces that are detrimental to safety and health, (2) to conduct inspections of workplaces, (3) to issue and enforce citations, (4) to provide a hearing if the employer contests a citation, and (5) to make final agency decisions and assess penalties upon the finding of violations. MOSHA is modeled on the Federal Occupational Safety and Health Act of 1970 (OSHA), 29 U.S.C.A. §§ 651-678 (2001), and tracks the Federal law in most respects.

Com’r of Labor v. Bethlehem Steel, 344 Md. 17, 30 , 684 A.2d 845, 851 (1996). 1 Pursuant to the authority set forth in LE §§ 5-309 to 5-312, the Commissioner has adopted, by incorporation, the Federal construction standards approved under OSHA by the U.S. Secretary of Labor. 29 C.F.R. pt.1926 (2001). Md. Regs.Code (COMAR) 09.12.31 (2001); J.I. Hass Co. v. Dep’t of Lic. and Reg., 275 Md. 321, 328 , 340 A.2d 255, 259 (1975). Among the Federal construction standards adopted by the Commissioner ⁴⁶³ are those codified in 29 C.F.R. § 1926.501 , which requires employers to provide fall protection systems for their employees, and those in § 1926.152, dealing with the storage of flammable and combustible liquids. The fall protection requirements set forth in § 1926.501 address a wide variety of situations, including employees constructing leading edges, working in hoist areas, near holes, on the face of formwork or reinforcing steel, on ramps or other walkways, at the edge of excavation sites, or near dangerous equipment, doing roofing work on low-slope roofs, being present on steep roofs, erecting precast concrete members, engaged in residential construction, or working near wall openings or on “walking/working” surfaces.

Each of these situations is addressed in a separate paragraph of that regulation. The fall protection standard at issue here is that dealing with working on low-slope roofs, defined in 29 C.F.R. § 1926.500 (b) as a roof having a slope less than 4 in 12 (vertical to horizontal). Section 1926.501(b)(10) requires, in relevant part, that: “each employee engaged in roofing activities on low-slope roofs with unprotected sides and edges 6 feet (1.8 m) or more above lower levels shall be protected from falling by guardrail systems, safety net systems, personal fall arrest systems, or a combination of warning line system and guardrail system, warning line system and safety net system, or warning line system and personal fall arrest system, or warning line system and safety monitoring system.” On July 29, 1997, respondent, Cole Roofing Company, Inc. (Cole), was engaged in installing or repairing a flat roof at Chesapeake High School in Pasadena. As the roof was more than six feet above ground, § 1926.501(b)(10) was applicable.

Just before 9:00 that morning, Amy Agro, an inspector from the Maryland Occupational Safety and Health Unit at the Division of Labor and Industry (MOSH), appeared at the job site for a planned inspection and saw at least five employees, including a foreman, Joseph Baldwin, working on the roof, ⁴⁶⁴ which was at least eleven feet above a concrete area. Some of the employees were observed working in close proximity to the roof edge. Roofing materials that likely would be needed by the employees were also seen near the edge of the roof. Ms. Agro saw no fall protection system in place — no warning lines, no guardrail, no safety net, no personal fall arrest system, no safety monitors.

Shortly after she arrived, a Cole Vice President, James Cañóles, appeared, and she conferred with him and Mr. Baldwin. She learned that as many as fifteen employees had been working on the roof that morning. The employees informed Ms. Agro that two safety monitors were on the site, but the persons they identified as the safety monitors did not qualify as such, at least for MOSHA purposes. 2 Mr. Cañóles and Mr. Baldwin told her that they were using a safety monitor system along with warning lines, but, apart from the lack of persons qualifying as safety monitors, she also saw no warning lines. They then asserted that the warning lines had been up the previous day and had been removed.

While she was there, warning lines were installed on the roof and a safety monitor was designated and instructed as to his duties. Because the employees were working eleven to twelve feet above concrete pads, Ms. Agro was concerned that, had any of them fallen, serious physical injury could have resulted. She therefore regarded the violation as a “serious” one. LE § 5-809(a)(1) states that a violation is considered to be a serious one “if there is a substantial probability that death or serious physical harm could result ... unless the employer did not and with the exercise of reasonable diligence could not know of the violation.” Because she learned that, in July, 1995, Cole had been cited for a violation of § 1926.501(b)(ll) — failure to ⁴⁶⁵ have in place fall protection on a steep-slope roof — she regarded the instant violation as a “repeated” one as well.

The citation for the fall protection violation therefore charged a serious and repeated violation. During her inspection, Ms. Agro also observed on the ground a five-gallon gasoline can that had no flash arresting mechanism or self-closing lid. Section 1926.152(a)(1) provides, in relevant part, that only approved “safety cans” or containers approved by the U.S. Department of Transportation may be used for storing and handling flammable and combustible liquids of five gallons or less. Section 1926.155(2) defines a “safety can” as an approved closed container having a flash arresting screen, spring closing lid and spout cover and so designed that it will safely relieve internal pressure when subjected to fire exposure.

After concluding that the can did not meet those requirements and that the violation also was a serious one, she issued a second citation with respect to the can. Acting pursuant to LE § 5-809(a)(2), the Commissioner assessed a civil penalty of $3,000 for Citation 1 and a $262 penalty for Citation 2. Cole filed a timely notice of contest, and a hearing was conducted before an Administrative Law Judge (ALJ). Although the substantive issues raised by Cole were whether there was sufficient evidence to support the two citations and whether the penalties were correctly calculated, Cole raised as well whether the violations were the product of unpreventable supervisor misconduct, and whether the 1995 violation sufficed to make the § 1926.501(b)(10) violation a repeated one.

Both of those issues arose during the testimony of Ms. Agro, in the presentation of the Commissioner’s case. When asked whether there were any facts indicating that Cole had knowledge of the condition, she responded that Cañóles and Baldwin, who were both management officials, were on-site while the employees were exposed. Baldwin had been working on the roof. Cañóles was not on the site when she arrived, but Agro was told that he had been there and was on his way back.

The conditions that led to the two citations were not abated until after his arrival. Baldwin’s actual involvement in ⁴⁶⁶ the violation for lack of fall protection formed part of her contention that the employer had knowledge of the violation. With respect to the gasoline can, she said that another roof foreman, Dennis Johnson, was exposed to the condition and had done nothing to correct it. At the conclusion of Ms. Agro’s testimony, which constituted the Commissioner’s case, Cole moved to dismiss the citations on the ground that it was the Commissioner’s burden, in its case-in-chief, to prove the absence of unpresentable employee misconduct.

The Commissioner contended that unpreventable employee misconduct and unforeseeable conditions were affirmative defenses that must be established by the employer. Although one decision, L.R. Willson & Sons, Inc. v. OSHRC, 134 F.3d 1235 (4th Cir.), cert. denied, 525 U.S. 962 , 119 S.Ct. 404 , 142 L.Ed.2d 328 (1998), was cited, neither that case nor other unnamed ones referred to by the Commissioner had previously been supplied to the ALJ, and, not having had the opportunity to read the cases, he denied Cole’s motion at that point. Cole’s case was presented by its president, William R. Cole, who identified the written safety handbook used by the company. He said that, pursuant to the company’s safety plan, safety monitors were appointed, but he acknowledged that those monitors performed other job duties as well.

He conceded that Baldwin, the company supervisor on the job, had violated his duties under the company’s safety plan and claimed that Baldwin was solely responsible for the MOSHA fall protection violation. Mr. Cole said that Baldwin had a good safety record and, as a result, was merely counseled and required to attend additional safety training. He was not given a written warning, although the company’s safety handbook provided for such a warning for the violation. None of the other employees who were on the job and who, under the company safety plan, had a duty to report violations, were disciplined for their failure to make such a report.

Mr. Cole said that, at the time of the infractions, the job was winding down. Although he had made safety inspections at the job site on earlier occasions and never saw a problem, he had not ⁴⁶⁷ been there in recent days. Cañóles, he said did not have direct safety responsibility and was not at the job site very often. In a Proposed Decision filed in August, 1998, the ALJ recommended that the two citations and penalties be sustained.

He found the facts to be essentially as testified by Ms. Agro, none of which were in substantial dispute. With respect to the fall protection violation, he concluded that (1) to establish a violation, the Commissioner was required to prove that the standard at issue applies, the employer failed to comply with the standard, employees were exposed to the violative condition, and the employer knew or, with the exercise of reasonable diligence, should have known of the condition, and (2) the evidence sufficed to establish each of those elements. Cole’s “unforeseeable or unpreventable employee misconduct” defense, the ALJ said, was an affirmative defense, to which the employer had the burden of proof. Citing several decisions, the ALJ stated that, to establish that defense, the employer was required to prove that, (1) it had an established work rule mandating the conduct required by the MOSHA standard at issue, (2) the work rule had been clearly communicated to employees, (3) the employer had taken steps to ensure that the work rule was obeyed and to discover violations of it, and (4) the employer administers some kind of discipline when it discovers violations of the rule.

He found that Cole did have written safety work rules and worker training programs but concluded, from the fact that no steps were taken to ensure that fall protection rules were followed on the day of the inspection, that Cole had not sufficiently communicated its work rules to the employees, and from the facts that none of the employees who were working in violation of the MOSHA standards reported the violation, as they were required to do under the company rules, or were disciplined for failure to make such a report, that Cole did not take its work rules seriously. Noting that Cole had focused its attention not on the misconduct of the several employees working on the roof but only on that of Baldwin, the ALJ observed that, although admitting that Baldwin had violated ⁴⁶⁸ the company’s work rules, he was issued only an oral reprimand and not the written warning required in- the safety handbook. For those reasons, the ALJ found that Cole had failed to establish the unpreventable employee misconduct defense as to the fall protection violation. He drew a similar conclusion, for similar reasons, with respect to the gasoline can violation.

Upon Cole’s request for further review, the Deputy Commissioner of Labor, in a final agency decision, adopted the ALJ’s reasoning and his proposed disposition. On the issue of unforeseeable or unpreventable employee misconduct, the Deputy Commissioner noted that, although the U.S. Court of Appeals for the Fourth Circuit, in Willson, supra, had held that the Government bears the burden of establishing that the conduct was foreseeable or preventable, a majority of the Federal courts and the Occupational Safety and Health Review Commission (OSHRC) itself took the contrary position— that unforeseeability or unpreventability was an affirmative defense, to which the employer had the burden of proof. She noted that, in previous Maryland cases, the Commissioner had also taken that approach. Drawing from some of the decisions she found persuasive, she opined that, in an employee misconduct case, the focus is on the effectiveness of the employer’s implementation of its safety program, that information regarding that implementation will be in the hands of the employer, and that it was not unduly burdensome to require the employer to come forward with that information.

That was especially true, she concluded, when the alleged misconduct is on the part of a supervisory employee; the employer must then show that it took all feasible steps to prevent the condition, including adequate instruction and supervision of the supervisory employee. Applying those concepts, she determined that, although Cole had written safety work rules, the record supported the ALJ’s finding that Cole had exhibited a pattern of ineffective communication and enforcement of those rules. With respect to the repeated nature of the violation, the Deputy Commissioner found that the characterization as repeated was not limited to subsequent violations of the same ⁴⁶⁹ standard. The purpose of the enhanced penalty for repeated violations, she said, was to ensure adequate employer response to an earlier citation, and she regarded the standards set forth in paragraphs (10) and (11) of 29 C.F.R. § 1926.501 (b) as sufficiently similar to warrant the extra penalty.

She also concluded that there was sufficient evidence to sustain the , citation regarding the gasoline can. Cole sought judicial review in the Circuit Court for Anne Arundel County, where it got partial relief. The court adopted the approach in Willson and concluded that the Commissioner bore the burden of proving foreseeability and preventability. It agreed with the Deputy Commissioner’s conclusion that the violation was a repeated one, however, as well as her determination regarding the gasoline can citation.

The ultimate judgment was a reversal of the agency order and a remand for further proceedings. On cross-appeals, the Court of Special Appeals agreed with the Circuit Court that the Commissioner bore the burden of proof as to foreseeability and preventability, but disagreed with its determination that the violation was a repeated one. Relying on our decision in Com’r of Labor v. Bethlehem Steel, supra, 344 Md. 17 , 684 A.2d 845 , the intermediate appellate court concluded that, for a violation to be repeated, the “same standard” must be violated more than once and that there must be a substantial similarity of elements in the two violations and held that the two standards at issue here were not substantially similar. It affirmed the judgment with respect to the gasoline can citation but reversed the judgment entered as to the fall protection and directed a remand to the Commissioner for a new hearing as to that violation.

It is the Commissioner who now feels aggrieved and who petitioned for certiorari on the two issues first noted. Cole has apparently acquiesced in the decision regarding the gasoline can, as there was no cross-petition. DISCUSSION Burden of Proof The precise issue of who has the burden of proof with respect to whether a condition created by employee or super ⁴⁷⁰ visor misconduct was foreseeable and preventable is one of first impression in Maryland. 3 Because, as noted, MOSHA is modeled closely after OSHA, we have often turned to Federal decisions for guidance in interpreting MOSHA. Com’r of Labor v. Bethlehem Steel, supra, 344 Md. at 30-31 , 684 A.2d at 851 .

The Federal courts that have addressed the issue under OSHA are not in agreement. The majority of them hold that non-preventability of employee or supervisor misconduct is an affirmative defense on which the employer bears the burden of pleading and proof; some, including the Court of Appeals for the Fourth Circuit, have concluded otherwise. We shall side with the majority, because we think it is the more modern and better-reasoned view. 4 The preventability issue sometimes becomes entwined with the very different but overlapping issue of whether and to what extent the employer must have knowledge about the hazard in order to be subject to penalty, and the burden of proof question is often considered in that light. 5 The knowl ⁴⁷¹ edge requirement arises from a provision that, on its face, is limited to serious violations. 29 U.S.C. § 666 and LE § 5-809 provide penalties for various kinds of violations, including “serious” violations. Section 666(k), and, with mere style differences, LE § 5-809(a), define “serious violation” for that purpose as one in which there is a substantial probability that death or serious physical harm could result from the condition “unless the employer did not, and could not with the exercise of reasonable diligence, know of the presence of the violation.” That conditional language does not appear elsewhere in the statute.

By case law, however, that statutory condition of actual or constructive knowledge has been extended to all violations — serious and non-serious — whether under the general duty clause or of a specific standard. See Brennan v. Occupational Safety & Health Rev. Com’n, 511 F.2d 1139, 1143 (9th Cir.1975); J.I. Hass Co., supra, 275 Md. 321 , 340 A.2d 255 . Once so extended, it tended to drive the courts’ consideration of the preventability issue and, with it, the burden of proof issue. The initial coupling of knowledge/pre-ventability and burden of proof came in the context of general duty violations and an OSHRC regulation, 29 C.F.R. § 2200.73 (a), that was in force between 1972 and 1986.

In the earlier cases, which mostly involved the general duty clause, concern was expressed about whether, given the breadth of that duty, the absence of some obligation on the part of the Secretary to establish what the employer could have done differently could, in effect, make the employer’s duty one of strict liability. The cases need to be read with those considerations in mind. In National Realty & C. Co., Inc. v. Occupational S. & H.R. Com’n, 489 F.2d 1257, 1266 (D.C.Cir.1973), the court, dealing with an alleged violation under the general duty clause, held ⁴⁷² that the duty “was to be an achievable one” and that a “hazard consisting of conduct by employees” could not be totally eliminated. Accordingly, it held that Congress intended to require the elimination “only of preventable hazards.” Id. at 1266 .

Although recognizing that willfully reckless employees “may on occasion circumvent the best conceived and most vigorously enforced safety regime,” the court nonetheless made clear that the employer’s responsibility for a hazard is not diminished because the hazard was caused by employee misconduct, because the employer has a duty to prevent and suppress hazardous conduct by employees. Id. In that regard, the court looked at