The commission voted 2-1 Sept. 29 to reduce from $1.14 million to $658,000 the penalties levied against Ho, holding that the Labor Department cannot use the respiratory protection and training standards to increase fines by citing for every employee who is untrained, or has improper respiratory protection.
Commissioner Thomasina Rogers "vigorously" dissented, writing that she "simply cannot fathom" her colleagues' position, since both standards require the employer to perform duties for the benefit of each employee. Rogers labeled the decision "a radical departure from settled Commission and court precedent recognizing the Secretary's authority to issue multiple citations for violations of the same standard."
One of the most significant aspects of the ruling may be that "it casts some doubt on the whole egregious penalty compliance directive," according to Melissa Bailey, an attorney in the OSHA practice group at Arent, Fox, Kintner, Plotkin, & Kahn.
Issued in 1990, and used in all subsequent administrations, OSHA's egregious penalty instruction establishes criteria that allow for violation-by-violation proposed penalties in certain cases, in order to increase penalties when the agency believes there has been "a flagrant violation" of the OSHA standards.
The majority decision concedes that Ho "is one of the worst employers the Commission has had come before it." Ho not only exposed workers to asbestos, without training them, protecting them, or even informing them of the hazard. He also persisted in exposing these workers to asbestos by secretly operating at night, even after a city building inspector shut down the worksite.
In rejecting the per-employee penalties, however, the Commission ruled, "we cannot allow harsh facts to result in bad law."
The Commission observes that the policy allows for interpreting certain standards as permitting per-employee violations in cases involving "bad actor" employers, but in all other cases, the Labor Secretary will cite the same conduct under the same standards as single violations. Bailey said that one way the decision questions OSHA's egregious penalty policy is the majority ruled that this is a "wholly inconsistent" way to interpret standards.
A second way the Ho decision casts doubt on OSHA's penalty policy, according to Bailey, is the majority's affirmation that it is the Commission that has the "sole authority to determine penalties."
"The Commission is saying, 'it's all well and good you have this compliance directive on egregious penalties, but we really are the ones who ultimately decide what penalties are,'" commented Bailey.
Peg Seminario, director of safety and health at the AFL-CIO, was more blunt. "I don't think you could have a case where there is more egregious behavior than this one," she said. "If the commission doesn't apply the egregious policy against Ho, it means they don't think it should ever be applied."
One legal source demurred, arguing that the Ho case is not a path-breaking decision at all. "The court is merely applying a legal principle established in previous cases, e.g. some standards allow for per-employee citations while others do not," reasoned the source. By this reading, the Ho case is nothing more than a legal quibble over which standards permit per-employee citations.
Employers who want to know whether they can be cited on a per-employee basis will have to look carefully at the standard, and at the Ho decision, according to Bailey. "The standard must require you to do something in particular to and for employees," Bailey commented. But, noting the vigorous Rogers dissent, she added, "reasonable people may differ, and it's far from crystal clear for most employers."
Moreover, the commission's decision on Ho may not be the final word on the matter: Bailey expects the Department of Labor will appeal the commission's decision.