Secretary of Labor v. Cities Service Oil Co.and theOccupational Safety & Health Review Commission
Introduction
This appeals court case is about five individuals – four employed by Cities Service Oil Co. and one employed by an independent contractor – of whom four died as a result of inhalation of hydrogen sulfide, while cleaning so-called water knockout tanks belonging to the oil company and located on the Stoltenberg lease near Holyrood, Kansas.
The case came to the appeals court because the Secretary of Labor petitioned for review of the original decision by the Occupational Safety and Health Review Commission which had issued citations and penalties against both the oil company and the independent contractor, but had determined that the oil company had not acted improperly; i.e. by violating its general duty clause, and so had vacated the citation against them.
The water knockout tanks each contain magnesium sacrificial anodes which function to prevent the tank being corroded by neutralizing impurities in the crude oil passing through them while water is being separated from it. Periodically, the tanks require draining and cleaning and replacement of the sacrificial anodes. On this occasion (August 16 1973) the independent contractor involved, Fry’s Tank Service, Inc., instructed its employee Jim Thach to clean one of the tanks and replace its anodes. It was noted that Thach had worked for Fry’s for two years but had been in the same business (tank cleaning) for circa 20 years, so was very experienced. It was also noted that the oil company had a local policy against entering the tanks, but that whilst this policy had been repeated verbally to their employees, and Fry’s had issued the same cautionary instructions orally to their employees, it was admitted that the oil company were aware that the task of anode replacement did require entry into the tank.
Thach had not only cleaned this same tank five or six times previously (without ill effects), he had in fact been the only one ever to clean this particular tank. It was also noted that protective equipment had been utilized on those previous occasions. On the day in question Cities Oil had assigned four of their employees (Holmes, Hendricks, Rathbun and Wittich) to assist with the tank cleaning.
Following cleaning of the tank, Thach descended a ladder into it, pausing part way down to take an anode from one of the other four. He then continued to the bottom, put the anode down, started to climb the ladder again, but collapsed. Holmes descended into the tank, lifted Thach up to the other City Oil employees but then collapsed himself. Rathbun revived Thach while Hendricks and Wittich descended into the tank to rescue Holmes, but they also collapsed in the tank. Thach then entered the tank once again to rescue them but collapsed once more. By the time Rathbun had radioed for help and returned to the tank, the four men were dead, determined subsequently to have been caused by inhaling hydrogen sulfide.
Eight days afterwards, Cities Oil and Fry’s were both issued with serious violation citations for “failing to provide a place of employment free from recognized hazards.” As a consequence both firms were fined $1,000, although in each instance the fines were reduced for various reasons.
Issues
The citations issued to the two firms were reviewed by an administrative law judge who upheld the citations, citing as unacceptable the argument by Cities Oil that it “had no prior knowledge of hazardous concentrations of hydrogen sulfide at the Stoltenberg lease.” The judge also noted that the oil company’s health coordinator had never visited the site to check hydrogen sulfide levels, and that because crude oil is known to contain hydrogen sulfide that there was indeed a hazard to the personnel cleaning the tank. The judge also stated that oral instructions given to Cities’ employees to not go into the tanks “did not constitute reasonable diligence on its part.” He further stated that because the employees were not provided with appropriate warnings of the hazards – including hydrogen sulfide – they attempted to rescue Thach and their colleagues out of instinct. That behavior – according to the judge – was “entirely foreseeable”, contrary to Cities’ argument that it was not. He found that the only valid issue was whether Cities and Fry’s had “furnished a place of employment free from recognized hazards.” Further, he stated that Cities Oil should have provided safety equipment in the form of testing devices, masks and harnesses for their employees and that Fry’s should have prevented Thach working on an unfamiliar job.
Essentially, it was decided as a result of the appeal that Fry’s violation should be affirmed, since every employee, particularly those as experienced as Thach, should have received adequate training regarding hazards normally encountered in their employment. Cities Oil were aware that Thach was experienced and had previously used protective equipment in this work, and could therefore not have anticipated their employees would need rescue equipment because the contractor performed his work in an unsafe manner. It was therefore considered appropriate that Cities Oil be considered not in violation of the general duty clause and that their citation should be vacated.
Rules
The principal issue – as mentioned above – was whether the Commission had rightfully determined that Cities Oil had not violated the General Duty clause: 29 U.S.C.S. § 654(a)(1) of the Occupational Safety and Health Act of 1970 (OSHA), 29 U.S.C.S. § 651 et seq.
Other legal issues to be considered with reference to Clause 29 are as follows:
- It is stated that “employers are not to be held liable where a violation results from an employee's wilful misconduct in disobeying an employer's direct order.” This is especially pertinent in this instance when the only endangered employee is the one violating the order.
- The findings of the Commission should – on review – be considered as being conclusive. Unless the findings are “without substantial basis in fact” the court should defer to them.
- The Commission’s decisions should be upheld unless they are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” according to the standard set by 5 U.S.C.S. § 706(2)(A) of the Administrative Procedure Act.
- The scope of review in respect of “arbitrary and capricious” is narrow. A court must determine whether the Commission’s decision was based on the facts and that there has been no error of judgment.
- In the event of a conflict between the Secretary of Labor (who has rule-making powers) and the Commission (which has the adjudicatory function), the court must take proper cognizance of the Commission’s fact-finding capabilities.
Application
The main issue is whether the Commission had rightfully determined that Cities Oil had not violated the General Duty clause: 29 U.S.C.S. § 654(a)(1) of the Occupational Safety and Health Act of 1970 (OSHA), 29 U.S.C.S. § 651 et seq.
In the matter of providing employees with a nature and location of employment free of recognized hazards, the court ruled that Fry’s should have ensured that their employee Thach was adequately trained and prepared for the tank-cleaning work and the known hydrogen sulfide hazard, but that Cities Oil could not have predicted that their employees might have to attempt to rescue Thach because of his failure to follow instructions and procedure. A reference was made to a previous case (Clarkson Construction v. Occupation Safety & Health Review Commission, 1975) as a precedent.
With regard to the statement by the judge regarding the narrowness of the “arbitrary and capricious” review, reference was made to the case of Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc. et al. (1974), in determining that the Commission’s decision was based on facts and that there had been no error of judgment made.
Especially pertinent to this case was the 1974 case of Peter J. Brennan, Secretary of Labor, Petitioner, v. Occupational Safety and Health Review Commission and Hanovia Lamp Division, Canred Precision Industries, Respondents. (1974). It was this case that was used as a precedent when it was stated that the court should take proper cognizance of the Commission’s fact-finding capabilities when there is a potential conflict between the Secretary of Labor and the Commission. Another case cited in respect of taking due account of fact-finding capabilities was that of Universal Camera Corp. v. National Labor Relations Board 340 U.S. 474 (71 S.Ct. 456, 95 L.Ed. 456) (1950). In that case it was stated that the weight of evidence supported by “experience, technical competence, specialized knowledge, and discretionary authority” should be given due credence.
Conclusions
In this case, the appeals court found after reviewing all the evidence and examining in detail the citations applied by the Commission that the Commission had acted properly and “within its powers and limitations” when it had vacated the citation and the penalty notification issued against Cities Oil. Additionally, the Secretary of Labor admitted that the request for review had been based only on the propriety of the legal conclusions reached by the Commission and not on any issues of undisputed fact, as found previously by the appointed administrative law judge and adopted accordingly.
The detailed comments of the appeals court stated that it was unable to set aside the Commission’s decision because of the following:
- Cities Oil’s local policy prohibited entry into the tanks.
- Thach had cleaned this same tank previously on five or six occasions; in fact he had been the only individual to clean that particular tank and replace the anodes since it was brought into service. He had previously experienced no adverse effects on any occasion but had in the past used protective equipment.
- Where Cities Oil employees were required to enter tanks, testing and safety equipment were mandatory.
- Cities Oil recognized the hazard presented by hydrogen sulfide, and had not recorded any such incident as this in 58 years working at this site.
Summarizing, vacating the citation against Cities Oil by the Commission was deemed “logical and proper.” Any other view would mean that Cities Oil employees would have been expected to provide equipment at its sites to rescue independent contractors’ employees.
It should also be noted that there was a dissenting view by one Judge Holloway, who believed that as the Fry’s employee (Thach) and the Cities Oil personnel were working closely as a team on this occasion, then Cities Oil were guilty of not ensuring that the particular workplace was free of hydrogen sulfide (a recognized hazard), which means that a general duty violation on their part did occur. He also quoted Commissioner Cleary who had commented that because the five individuals were working as a team, whatever their prior instructions had been with regard to not entering the tank, the normal human instinct to save the life of a fellow worker would have overridden such instruction.
References:
Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc. et al. (1974). Supreme Court Cases. Retrieved from http://supreme-court-cases.findthedata.org/l/3824/Bowman-Transportation-Inc-v-Arkansas-Best-Freight-System-Inc-Et-Al
“Clarkson Construction Company, Petitioner, v. Occupation Safety & Health Review Commission and Secretary of Labor, Respondents.” (1975). United States Court of Appeals, Tenth Circuit. - 531 F.2d 451. Retrieved from http://law.justia.com/cases/federal/appellate-courts/F2/531/451/203391/
“Peter J. Brennan, Secretary of Labor, Petitioner, v. Occupational Safety and Health Review Commission and Hanovia Lamp Division, Canred Precision Industries, Respondents.” (1974). Leagle.com. Retrieved from http://www.leagle.com/decision/19741448502F2d946_11308
“Cities Oil claim that they had no knowledge”. (1978). Retrieved from http://www.lexisnexis.com.ezproxy.libproxy.db.erau.edu/lnacui2ap96254%2Fformatted_doc&fromCart=false&jobHandle=1825%3A431396254
“Universal Camera Corp. v. National Labor Relations Board 340 U.S. 474 (71 S.Ct. 456, 95 L.Ed. 456).” (1950). Cornell University Law School. Retrieved from http://www.law.cornell.edu/supremecourt/text/340/474
