By Ruder Ware Alumni
February 9, 2017
On February 1, 2017, the United States Court of Appeals for the Seventh Circuit affirmed the decision of the Occupational Safety and Health Review Commission (“Commission”) which imposed serious willful citations under the permit-required confined space entry standard. In doing so the Seventh Circuit discussed imputed knowledge to the employer, foreseeability of a supervisor’s misconduct, and willful violations. The case is Dana Container, Inc. v. Secretary of Labor, 2017 WL 430079.
Dana Container, Inc. (“Dana”) provides tank cleaning services and has its own permit-required confined space (“PRCS”) safety program. In 2009 a supervisor disregarded Dana’s safety program and entered a dirty tank in order to kick open a clogged valve so as to allow the tank to drain chemical residue. No entry permit was applied for or issued, no atmospheric testing of the tank was performed, no harness or respirator was worn, and no attendant stood ready to attempt rescue. The supervisor lost consciousness. Fortunately, a worker spotted the unconscious supervisor and called the fire department, which rescued the supervisor.
First, in order to impose a serious violation, the employer must know that the problem existed. The Seventh Circuit upheld the Commission’s determination that the supervisor’s actual knowledge of his own misconduct imputed his knowledge to Dana. “This path for imputing knowledge is common in employment law.” Whether Dana’s PRCS safety program was adequate is not material when knowledge of a violation is imputed to the employer.
Second, Dana argued that its PRCS safety program demonstrated that the supervisor’s misconduct was unforeseeable and unpreventable. The Commission, however, examined Dana’s PRCS records and took a different view. The Commission determined that nearly all of the tank entry permits contained errors and omissions. For example, some permits had exceeded the maximum duration of exposure by more than one hour. Some lacked air testing monitoring, and others failed to show how long the permits were valid. Some failed to state whether employees had reviewed material safety data sheets; some did not identify entrants and attendants. These might have been actual deficiencies, failures of documentation, or a combination of the two. In any event there was no documentation that Dana ever took action or followed up on the deficiencies. The Commission concluded Dana’s PRCS safety program was inadequate.
Finding that the Commission’s determination was supported by credible evidence, the Seventh Circuit ruled that the supervisor’s misconduct was both foreseeable and preventable. “Even in the face of a robust written program, lax disregard of the rules can send a message to employees that a company does not make safety a priority. In such an environment, conduct such as Fox’s is reasonably foreseeable.”
Finally, the Seventh Circuit reviewed its 2016 ruling in Stark Excavating, Inc. v. Perez, 811 F3d. 922, 928-29, where a good faith defense to a willful violation involving a trench collapse was not recognized where the employer had violated its own safety rules and policies. Likewise, in Dana Container, the Seventh Circuit ruled that Dana’s violation of its own PRCS safety program defeated a defense of good faith and supported the Commission’s determination that the serious violation was also willful.
The Dana Container case serves as a cautionary tale reminding employers that their safety policies and procedures must not merely meet OSHA standards. Rather, safety policies and procedures must be robustly and comprehensively written, painstakingly adhered to, and swiftly acted upon whenever noncompliance is detected.
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