N Dallas Acrylic v. OSHC, et al

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________
m 02-60255
Summary Calendar
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NORTH DALLAS ACRYLIC & STUCCO, INC.,
Petitioner,
VERSUS
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION;
ELAINE CHAO,
SECRETARY, UNITED STATES DEPARTMENT OF LABOR,
Respondent.
_________________________
Petition for Review of an Order of
the Occupational Safety and Health Review Commission
(01-0727)
_________________________
October 16, 2002
Before HIGGINBOTHAM, SMITH, and
CLEMENT, Circuit Judges.
PER CURIAM:*
North Dallas Acrylic & Stucco, Inc.
* Pursuant to 5TH CIR. R. 47.5, the court has
(continued...)
(...continued)
determined that this opinion should not be
published and is not precedent except under the
limited circumstances set forth in 5TH CIR. R.
47.5.4.

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(“NDAS”), seeks review of an order of the
Occupational Safety and Health Review Com-
mission (“OSHRC”) upholding a citation un-
der the Occupational Safety and Health Act of
1970, 29 U.S.C. § 651 et seq., for violations of
29 C.F.R. § 1926.451(e)(1), (g)(1). Conclud-
ing that the order rests on an error of law, we
grant the petition for review and vacate and
remand.
I.
The facts are simple and undisputed.
NDAS is a small stucco contractor. Its em-
ployees were working on a stucco project at a
Wal-Mart store under construction. Foreman
Noel Juarez led a crew applying stucco to an
exterior wall. The crew had nearly completed
the wall and, as they began to put the final
touches on it, they erected a new segment of
scaffolding that had a platform at just over ten
feet and another platform at eighteen feet. The
higher platform had guardrails to prevent
workers from falling and a ladder to allow
them to climb onto the platform. The lower
platform had neither guardrails nor a ladder, a
violation of 29 U.S.C. § 1926.451(e)(1),
(g)(1). As it happened, Larry Moore, a
compliance officer for the Occupational Safety
& Health Administration (“OSHA”), was in-
specting the Keller site just as two employees
were working from the lower platform.
OSHA issued three citations to NDAS, which
contested each.1
An administrative law judge (“ALJ”) held a
hearing on the citations. Moore, Juarez,
NDAS president Gary Mayfield, and Jose Vas-
quez, who was NDAS’s field superintendent,
testified. Moore spoke primarily about his
inspection of the Keller site. Mayfield testified
about NDAS’s safety and enforcement poli-
cies.
Each newly hired employee receives a safe-
ty handbook in his language and watches safe-
ty videos, including information on the use of
scaffolding. Employees attend weekly job site
safety meetings with their foremen. Foremen
sometimes discuss scaffolding safety at these
meetings. Vasquez is responsible for inspect-
ing job sites for safe scaffolding and disciplin-
ing employees for safety infractions.
NDAS does not maintain written disciplin-
ary records or use a “progressive” discipline
policy of increased punishments for each in-
fraction, but repeated infractions result in ter-
mination. Mayfield recollected giving verbal
reprimands to at least three workers. He also
thought Juarez ran a safe site based on past
personal inspections, but he reprimanded Juar-
ez as a result of the OSHA citation.
Vasquez testified about his training in scaf-
folding safety, which is extensive; his safety
inspections, which he conducts at each job site
twice per week; and NDAS’s safety and disci-
plinary policies. His testimony about these
policies and Juarez’s safety record does not
differ from Mayfield’s. Vasquez added that
NDAS did not have a formal rule about the
number of infractions necessary for termina-
tion, though he did recall that at least two em-
ployees had been fired partly for safety infrac-
tions and partly for insubordination.
Juarez testified about his decision not to in-
stall guardrails or a ladder on the lower plat-
form. He took full responsibility for the safety
infraction, stating that he accepted the blame
1 In addition to the guardrail and ladder cita-
tions, OSHA cited NDAS for failing to secure the
scaffolding with base plates on the ground. 29
C.F.R. § 1926.451(c)(2). The ALJ vacated this
citation for lack of evidence.

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“because it was my violation.” He had been
trained on safe scaffolding practices and had a
clean safety record, which documentary evi-
dence supported. He therefore knew not to al-
low workers on scaffolding without guardrails
and ladders, but the two workers needed to
use the lower platform for only a few minutes,
much less time than it would have taken to in-
stall the guardrails and the ladder.
Juarez knew Vasquez would reprimand him
for the safety infraction if Vasquez observed it.
He did not think anyone would notice, though,
because the job would be quick. Juarez stated,
however, that he did not think Mayfield or
Vasquez reprimanded him because of the
OSHA citation; rather, he said “they called it
to my attention so that it [would] not happen
again.”
The ALJ upheld the citations for failure to
install guardrails and a ladder on the lower
platform. The order concentrated exclusively
on NDAS’s defense of unpreventable employ-
ee misconduct. The ALJ concluded that
NDAS had not established an essential element
of the defense, namely, adequate enforcement
of its safety policies. Yet, the ALJ imposed
relatively meager penalties of $250 for each
citation because of the short duration of the
infractions, the low risk of injury, NDAS’s
small size, its good history with OSHA, and its
extant, “albeit imperfect,” safety policy.
NDAS filed a petition for discretionary re-
view with OSHRC. Because no commissioner
directed the petition to OSHRC for review, the
ALJ’s decision became the final order of
OSHRC. 29 U.S.C. § 661(j). NDAS now pe-
titions this court for review of that order. 29
U.S.C. § 660(a).
II.
A.
This case boils down to one simple dispute,
namely, whether NDAS adequately enforced
its safety policy. NDAS and the Secretary
agree that “[k]nowledge is a fundamental ele-
ment of the Secretary of Labor’s burden of
proof for establishing a violation of OSHA
regulations.” Trinity Indus., Inc. v. OSHRC,
206 F.3d 539, 542 (5th Cir. 2000). They also
agree that the Secretary may prove (construc-
tive) knowledge by showing that an employ-
ee’s misconduct was foreseeable because the
employer’s safety and disciplinary policy is in-
adequate. Horne Plumbing & Heating Co. v.
OSHRC, 528 F.2d 564, 569 (5th Cir. 1976).
The parties simply disagree on whether
NDAS adequately enforced its safety policy.
Likewise, they dispute only one element of the
affirmative defense of unpreventable employee
misconduct, i.e., whether NDAS adequately
enforced its safety policy when it discovered
violations. Sec’y of Labor v. Precast Servs.,
Inc., No 93-2971, 1995 WL 693954, at *1
(Rev. Comm’n 1995) (stating elements).2
Thus, whether for the Secretary’s prima facie
showing of constructive knowledge or
NDAS’s affirmative defense of unpreventable
employee misconduct, they dispute only
whether NDAS adequately enforced its safety
policy. The evidence on this question is the
same at either stage.
B.
The parties contest the proper standard of
review for this question. The Secretary insists
that we should review the ALJ’s decision that
2 The other three elements are (1) established
work rules, (2) adequate communication of these
rules, and (3) steps taken to discover violations.
Precast Servs., 1995 WL 693954, at *1.

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NDAS did not adequately enforce its safety
policy only for substantial evidence. 29 U.S.C.
§ 660(a); Cleveland Consol., Inc. v. OSHRC,
649 F.2d 1160, 1167 (5th Cir. Unit B July
1981). NDAS, on the other hand, insists that
we should review the ALJ’s decision de novo,
because he applied the wrong legal standard.
Horne Plumbing, 528 F.2d at 567. We agree
with NDAS and apply the de novo standard,
because the ALJ’s decision is “not in accor-
dance with law.” 5 U.S.C. § 706(2)(A).
C.
The ALJ committed an error of law when
he purported merely to apply Precast Services
to NDAS’s affirmative defense.3 The ALJ cit-
ed Precast Services for the proposition that
“[t]hough an employer may rebut that evi-
dence by showing that it had a progressive
disciplinary plan with increasingly harsh pun-
ishment for infractions of work rules, the
Commission has found that programs consist-
ing only of pre-inspection verbal warnings are
insufficient to establish the defense.” (Em-
phasis added.) Using this standard to review
the evidence, the ALJ concluded that NDAS
did not have an adequate progressive disciplin-
ary policy.
Precast Services, however, does not require
an employer to rebut the Secretary’s prima fa-
cie case with evidence of a progressive disci-
plinary policy; rather, Precast Services simply
requires evidence of an “[a]dequate” disciplin-
ary policy. Precast Servs., 1995 WL 693954,
at *1. “The conventional way to prove the en-
forcement element is for the employer to in-
troduce evidence of a disciplinary program by
which the company reasonably expects to in-
fluence the behavior of employees.” Id. Pre-
cast Services then noted that an employer may
provide this evidence by using a progressive
disciplinary policy, but it never held that an
employer must use such a policy. Indeed, it
offered the example of a progressive disciplin-
ary policy only “[f]or instance.” Id. Moreov-
er, Precast Services expressly stated, contrary
to what the ALJ stated, that “[i]n rare instanc-
es, the employer may be able to establish that
its work rules were enforced with evidence of
only verbal reprimands.”
These errors of law fatally infected the
ALJ’s decision. The ALJ reviewed the evi-
dence looking for an adequate progressive dis-
ciplinary policy, when he should have reviewed
it looking for an adequate disciplinary policy,
given all the circumstances. Perhaps the
evidence still would support the citations
under this standard, but perhaps not. The evi-
dence against NDAS seems picayune, but it is
the responsibility of the ALJ, not this court, to
weigh the evidence. Our responsibility is only
to ensure that the ALJ applies the proper legal
standard when evaluating the evidence, which
he did not in this case.
The petition for review is GRANTED, the
citations against NDAS are VACATED, and
the case is REMANDED to OSHRC for fur-
ther proceedings consistent with this opinion. 3 The ALJ never discussed how the Secretary
made a prima facie showing of NDAS’s know-
ledge as required by Horne Plumbing, 528 F.2d at
569, and Trinity Indus., 206 F.3d at 542. He ap-
parently presumed the prima facie showing be-
cause Juarez was a supervisor: “It is well settled
that misconduct by [a] supervisor constitutes
strong evidence that [the] safety program is lax.”

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