New River Electrical Corp. v. OSHC

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 20-2173
NEW RIVER ELECTRICAL CORPORATION,
Petitioner,
v.
OCCUPATIONAL SAFETY & HEALTH REVIEW COMMISSION,
Respondent.
On Petition for Review of an Order of the Occupational Safety and Health Review
Commission. (18-0523)
Argued: October 28, 2021 Decided: February 1, 2022
Before DIAZ and THACKER, Circuit Judges, and Thomas T. CULLEN, United States
District Judge for the Western District of Virginia, sitting by designation.
Reversed and remanded by published opinion. Judge Cullen wrote the opinion, in which
Judge Diaz and Judge Thacker joined.
ARGUED: Keith Louis Pryatel, HANELINE PRYATEL LAW, Hudson, Ohio, for
Petitioner. Jin Young Chong, UNITED STATES DEPARTMENT OF LABOR,
Washington, D.C., for Respondent. ON BRIEF: Elena S. Goldstein, Deputy Solicitor,
Edmund C. Baird, Associate Solicitor for Occupational Safety and Health, Heather R.
Phillips, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for
Respondent.
CULLEN, District Judge:
In November 2017, Eric Marsh, an employee of Petitioner New River Electrical
Corporation (“New River”), suffered severe burns when he picked up a live electrical wire
at a job site. The Occupational Safety and Health Administration (“OSHA”) investigated
the accident, determined that New River committed three serious violations of the
applicable safety regulations, and fined the company $38,802. New River appealed that
determination. An Administrative Law Judge (“ALJ”) affirmed OSHA’s decision,
although he decreased the penalty to $12,934. The Occupational Safety and Health Review
Commission (“the Commission”) declined to review the ALJ’s decision and it became a
final order. New River now seeks review of that final order.
Because we conclude that the ALJ improperly relieved the Secretary of his 1 burden
of proving that New River had constructive knowledge of these violations as part of his
prima facie case, we reverse the Commission’s order and remand for further proceedings.
I.
A.
New River is an electrical construction contractor headquartered in Cloverdale,
Virginia, with an office in Westerville, Ohio. On November 6, 2017, New River was
completing the final stages of an underground cable replacement project in Madison Mills,
a residential subdivision in Columbus, Ohio. The crews were scheduled to work under a
1
The Honorable Martin J. Walsh is the current Secretary of the Department of Labor
and, as such, this opinion uses masculine pronouns throughout to refer to “the Secretary.”
2
planned power outage from 9:00 a.m. to 3:00 p.m. and were planning to recable over 30
transformers. American Electric Power (“AEP”), who hired New River to complete this
project, deenergized the electrical lines in Madison Mills starting at 9:00 a.m. that day.
Three New River crews worked at the Madison Mills site that day: two Underground
Residential Division crews (“URD crews”) and one Overhead Riser crew (“Riser crew”).
Foremen Zack Howard and Mark Bail each led a URD crew, and Foreman Jim Castle led
the Riser crew. It was Foreman Bail’s first day working as a supervisor.
After AEP deenergized the lines, the three foremen met to discuss the work they
would perform that day. Then, together with their respective crews, they prepared a Job
Site Assessment and a Job Hazard Analysis. In creating those documents, New River
expects its foremen to “assess[] all the risks, assess[] what can be done to prevent those
risks, reduce[] those risks and assessments to writing, and review[] and sign[] the
[document].” J.A. 88–89. Those documents identified “flashes” and “electrical shock” as
risks presented by the Madison Mills project. See J.A. 765. New River’s standard
procedures required its employees to test, tag, 2 and ground all transformers before
replacing or recabling them. This safety precaution is specifically intended to prevent
accidental electrical shocks.
2
“Tags are essentially warning devices” that are “affixed” to parts of electrical
energy systems at a job site and signal to other crew members where employees are
working “to prevent . . . the unexpected or unplanned energizing of an electrical line or
device.” J.A. 483, 489.
3
Eric Marsh, a Groundman for New River, worked on the Riser crew on November
6. During the course of his work, Marsh picked up an electrical line that, unbeknownst to
him, was still energized. The line shocked Marsh with 7,650 volts of electricity, causing
second- and third-degree burns on his body.
As it turns out, no one had tested, tagged, or grounded the transformer connected to
the cable that shocked Marsh. When Foremen Howard and Bail learned about Marsh’s
accident, they attempted to conceal these breaches of New River’s standard safety
protocols. To cover their tracks, the two foremen grounded and tagged both the transformer
connected to the cable that Marsh had worked on and the adjacent one so that electricity
would not transfer between the two. During the postaccident investigation, Foremen
Howard and Bail falsely reported to Nick Barnhart, New River’s Superintendent, that the
transformer had been tested, tagged, and grounded prior to Marsh beginning work. At the
time, neither Howard nor Bail admitted to altering the scene of the accident. Because it
suspected that Howard and Bail were not being truthful during that initial investigation,
New River fired both men two days later.
On November 14, Mike Stowell, an OSHA Compliance and Safety Officer, opened
a formal investigation into the incident. During that inquiry, Foreman Howard confessed
that he and Foreman Bail had manipulated key evidence at the scene of the accident. On
February 22, 2018, the Secretary issued a citation and notification of penalty to New River.
4
The citation alleged violations of three separate OSHA regulations 3 and deemed all three
“serious violations.” 4 J.A. 18–20. The Secretary assessed a proposed penalty of $38,802—
$12,934 per violation—and New River timely filed a notice of contest.
B.
On October 15, 2019, a Commission ALJ conducted a hearing on New River’s
notice of contest. The Secretary called Foreman Howard, Foreman Bail, and Compliance
Officer Stowell as witnesses. Dennis Dawsey, an expert in electrical engineering safety,
3
The first violation was of 29 C.F.R. § 1926.961(b)(4)(ii), which provides: “Each
crew shall independently comply with this section and, if there is no system operator in
charge of the lines or equipment, shall have separate tags and coordinate deenergizing and
reenergizing the lines and equipment with the other crews.” The second was of 29 C.F.R.
§ 1926.961(c)(2), which provides: “The employer shall ensure that all switches,
disconnectors, jumpers, taps, and other means through which known sources of electric
energy may be supplied to the particular lines and equipment to be deenergized are open.
The employer shall render such means inoperable, unless its design does not so permit, and
then ensure that such means are tagged to indicate that employees are at work.” The third
violation was of 29 C.F.R. § 1926.962(b), which provides “For any employee to work
transmission and distribution lines or equipment as deenergized, the employer shall ensure
that the lines or equipment are deenergized under the provisions of § 1926.961 and shall
ensure proper grounding of the lines or equipment as specified in paragraphs (c) through
(h) of this section.”
4
The Occupational Safety and Health Act ( the “Act”) states that “a serious violation
shall be deemed to exist in a place of employment if there is a substantial probability that
death or serious physical harm could result from a condition which exists, or from one or
more practices, means, methods, operations, or processes which have been adopted or are
in use, in such place of employment unless the employer did not, and could not with the
exercise of reasonable diligence know of the presence of the violation.” 29 U.S.C. § 666(k).
The Act requires the Secretary to assess a civil penalty against employers that are cited for
serious violations. See id. § 666(b) (“Any employer who has received a citation for a
serious violation . . . shall be assessed a civil penalty . . . .”); cf. id. § 666(c) (“Any employer
who has received a citation . . . and such violation is specifically determined not to be of a
serious nature, may be assessed a civil penalty . . . .”).
5
also testified for the Secretary. The Secretary introduced into evidence the citation and
notification of penalty, the OSHA investigation report, and New River’s incident report.
See J.A. 861–911. After the Secretary rested his case, New River called Superintendent
Barnhart and two other employees as witnesses. New River introduced into evidence a
variety of exhibits including its safety manual, disciplinary records from 2015–2018, the
Madison Mills risk assessment, and New River’s job site audit evaluations. See J.A. 463–
752, 765–66, 768–860.
In a written order dated September 11, 2020, the ALJ affirmed all three citations
against New River. The ALJ found that the Secretary had proven his prima facie case as to
each citation and that New River had not established the affirmative defense of
“unpreventable employee misconduct.” In affirming OSHA’s citations, the ALJ noted that
all three citation items “were related violations, contributed to the same hazard, and that
the abatement was no different for any of the violations.” J.A. 127–28. For those reasons
the ALJ grouped all three citations into one citation item and assessed a single penalty of
$12,934. The Commission did not direct the case for further review, and the ALJ’s order
became final on October 15, 2020. New River filed this petition for review on October 29,
2020.
II.
Generally, “judicial review of agency decisions is ‘narrow, and we must not
substitute our judgment for that of the agency.’” Putnam Ctr. v. U.S. Dep’t of Health &
Hum. Serv., 770 F. App’x 630, 638 (4th Cir. 2019) (citing West Virginia v. Thompson, 475
F.3d 204, 212 (4th Cir. 2007)). A court must give an “agency’s interpretation [of its own
6
ambiguous regulation] substantial deference.” Almy v. Sebelius, 679 F.3d 297, 307 (4th
Cir. 2012); see also Kisor v. Wilkie, 139 S. Ct. 2400, 2408 (2019) (describing this deference
as “potent”).
But Congress specifically designed the Commission as a distinct agency that is not
housed under OSHA or the Department of Labor to serve as a “neutral arbiter” of
regulatory violations. See Martin v. Occupational Safety & Health Rev. Comm’n, 499 U.S.
144, 152–55 (1991); ComTran Grp., Inc. v. U.S. Dep’t of Lab., 722 F.3d 1304, 1307 (11th
Cir. 2013) (“The Secretary has rulemaking power and establishes the safety standards;
investigates the employers to ensure compliance; and issues citations and assesses
monetary penalties for violations. The Commission, meanwhile, has adjudicative power
and serves as a ‘neutral arbiter’ between the Secretary and cited employers.” (citations
omitted)). In contrast to traditional, unitary administrative agencies, the Commission does
not “possess authoritative interpretive powers” because it does not interpret its own
regulations. Martin, 499 U.S. at 154. Rather, the Commission interprets regulations passed
by OSHA and the Department of Labor.
As a result, “we review the Commission’s legal conclusions de novo, affording
deference when appropriate to the Secretary’s interpretations [of agency regulations].”
Knox Creek Coal Corp. v. Sec’y of Lab., Mine Safety, & Health Admin., 811 F.3d 148, 157
(4th Cir. 2016). We review the Commission’s findings of fact under the substantial
evidence standard. See Northrop Grumman Sys. Corp. v. U.S. Dep’t of Lab., 927 F.3d 226,
232 (4th Cir. 2019); 5 U.S.C. § 706(2)(E). The substantial evidence standard asks the court
to determine whether the evidence in the record “could satisfy a reasonable factfinder.” See
7
Allentown Mack Sales & Serv., Inc. v. NLRB, 522 U.S. 359, 377 (1998) (emphasis in
original).
III.
A.
To establish an OSHA violation, “the Secretary must prove by a preponderance of
the evidence (1) the applicability of the standard, (2) the employer’s noncompliance with
the terms of the standard, (3) employee access to the violative condition, and (4) the
employer’s actual or constructive knowledge of the violation . . . .” N&N Contractors, Inc.
v. Occupational Safety & Health Rev. Comm’n, 255 F.3d 122, 125–26 (4th Cir. 2001). “If
(and only if) the Secretary makes out [a] prima facie case with respect to all four elements,
the employer may then come forward and assert the affirmative defense of unpreventable
or unforeseeable employee misconduct.” ComTran, 722 F.3d at 1308. To establish that
defense, an employer must show that it “(1) established a work rule to prevent the reckless
behavior and/or unsafe condition from occurring, (2) adequately communicated the rule to
its employees, (3) took steps to discover incidents of noncompliance, and (4) effectively
enforced the rule whenever employees transgressed it.” Frank Lill & Son, Inc. v. Sec’y of
Lab., 362 F.3d 840, 845 (D.C. Cir. 2004). Courts often refer to this test as requiring an
employer to prove the “adequacy of its safety program.” See ComTran, 722 F.3d at 1318.
New River raises numerous arguments in its petition for review. Many of these
arguments are novel—relating to the proper interpretation and application of the underlying
OSHA regulations mandating, among other things, intricate procedures for tagging,
reenergizing, and deenergizing lines and equipment—and previously undecided by the
8
Commission or any circuit. But New River also argues that the ALJ misapplied our existing
precedent related to the Secretary’s burden to prove an employer’s constructive knowledge
as part of his prima facie case. We agree and, because we cannot conclude that this error
was harmless, reverse solely on this basis.
B.
New River raises two arguments that relate to the decisive issue—the proper
application of the burden of proof on the adequacy of an employer’s safety program—
though neither argument speaks precisely to the issue. First, New River argues that the ALJ
erred by explaining that, under the Commission’s precedent, a supervisor’s knowledge of
his own safety violations can be imputed to an employer. But the ALJ also considered and
applied our precedent, holding that only “foreseeable” bad acts can be imputed to the
employer and that, in this case, the supervisors’ actions were foreseeable.
The ALJ confronted the difficult task of addressing the competing laws of several
circuits in reaching this conclusion. Under the Act, New River could have appealed the
final order to one of three circuits: the Sixth Circuit, where the violation occurred; the
Fourth Circuit, where its principal office is located; or the District of Columbia Circuit. See
29 U.S.C. § 660(a). The Sixth Circuit has held that a supervisor’s own misconduct can be
imputed to the employer, whether or not the misconduct is foreseeable. See Danis-Shook
Joint Venture XXV v. Sec’y of Lab., 319 F.3d 805, 812 (6th Cir. 2003). Our precedent
requires that a supervisor’s misconduct be foreseeable for a violation to be imputed to the
employer. Ocean Elec. Corp. v. Sec’y of Lab., 594 F.2d 396, 401 (4th Cir. 1979). The D.C.
Circuit has not expressly addressed the issue of supervisory misconduct. The ALJ, to his
9
credit, addressed the tension of these approaches and analyzed the Secretary’s case under
each formulation. See J.A. 102–06.
Second, New River argues that the ALJ erred in placing the burden of proving the
adequacy of its safety program on it, rather than the Secretary. New River raises this
argument with respect to the affirmative defense of unpreventable employee misconduct,
but the cases New River cites in support of this proposition focus on the constructive
knowledge element of the Secretary’s prima facie case.
To satisfy the knowledge element of his prima facie case, the Secretary must prove
that the employer had actual or constructive knowledge of the violation. See N&N
Contractors, 255 F.3d at 126. Because “a corporate employer can only act and acquire
knowledge through [its] agents,” a finding of knowledge is often based on the imputed
knowledge of a supervisory employee. See ComTran, 722 F.3d at 1311–16 (surveying
decisions of the Second, Third, Fourth, Fifth, Sixth, and Tenth circuits). But when the
supervisory employee commits the violation, the employer loses its “eyes and ears” to
detect and prevent misconduct. See id. at 1317.
To avoid unfairly imposing liability on an employer for a rogue supervisor, our
circuit requires the Secretary to prove that a supervisor’s misconduct was “reasonably
foreseeable” to establish the employer had constructive knowledge. 5 See Ocean Elec. Corp.
5
Many of our sister circuits have also addressed the question and have reached the
same conclusion. See ComTran, 722 F.3d at 1316; W.G. Yates & Sons Constr. Co. v.
Occupational Safety & Health Rev. Comm’n, 459 F.3d 604, 609 (5th Cir. 2006); Pa. Power
& Light Co. v. Occupational Safety & Health Rev. Comm’n, 737 F.2d 350, 354 (3d Cir.
1984); Mountain States Tel. & Tel. Co. v. Occupational Safety & Health Rev. Comm’n,
(Continued)
10
v. Sec’y of Lab., 594 F.2d 396, 401 (4th Cir. 1979). (“But, if the employee’s act is an
isolated incident of unforeseeable or idiosyncratic behavior, then common sense and the
purposes behind the Act require that a citation be set aside.”).
The Secretary can prove reasonable foreseeability by showing that an “employer
fail[ed] to use reasonable diligence to discern the presence of the violative condition.” N&N
Contractors, 255 F.3d at 127. An employer fails to use reasonable diligence when it
violates “the duty to inspect the work area and anticipate hazards, the duty to adequately
supervise employees, [or] the duty to implement a proper training program and work rules.”
See id. And while the Secretary can prove foreseeability in a variety of ways, it is the
Secretary’s burden to prove it. See Ocean Elec., 594 F.2d at 401–03.
The Secretary generally may choose to prove that an employer failed to use
reasonable diligence—and therefore that the violations were reasonably foreseeable such
that the employer can be charged with constructive knowledge—in one of three ways. 6
First, the Secretary may prove a lack of reasonable diligence by demonstrating that the
employer failed to take specific risk-prevention measures on the job site where the accident
occurred. This is the approach the Secretary took with New River, arguing that the three
623 F.2d 155, 158 (10th Cir. 1980). But see Danis-Shook, 319 F.3d at 812 (holding that a
supervisor’s own misconduct can be imputed onto the employer regardless of whether such
conduct is foreseeable).
6
This is not to say, however, that the Secretary must employ one of these three
strategies to satisfy his burden of proof, only that these are strategies commonly analyzed
by this court or the Commission applying our precedent.
11
violations at issue were foreseeable because New River did not create a “grounding plan” 7
or conduct a proper risk assessment before beginning work that day. J.A. 67–69. Second,
the Secretary might point to evidence of prior similar violations by employees. See N&N
Contractors, 255 F.3d at 127–28 (upholding a constructive knowledge finding based on
substantial evidence that the employer had previously received two safety violations for
similar conduct).
But in a third scenario, the Secretary might prove that an employer failed to use
reasonable diligence to discover violations by demonstrating that it has an inadequate
safety program or a history of lax enforcement of its work rules. When the Secretary seeks
to prove his case this way, “the Secretary’s prima facie case and the employer’s
unpreventable[-mis]conduct defense both involve an identical issue: whether the employer
had an adequate safety policy.” N.Y. State Elec. & Gas Corp. v. Sec’y of Lab., 88 F.3d 98,
106 (2d Cir. 1996). And the resolution of these separate, but related, issues will often
involve the same body of evidence.
Unfortunately, this third scenario—where the Secretary’s effort to prove
constructive knowledge by proving the inadequacy of the employer’s safety program and
the employer’s unpreventable-employee-misconduct defense overlap—has created a
“confusing patchwork of conflicting approaches” as to who bears the burden of proving
the inadequacy of an employer’s safety program. See L.E. Myers Co. v. Sec’y of Lab., 484
7
A “grounding plan” indicates “the nominal voltage, personal protective equipment
needed, circuits to be worked, grounding points and number of grounds needed” for a
particular project. J.A. 475–76.
12
U.S. 989, 989 (1987) (White, J., dissenting from denial of certiorari). Thus, before
addressing New River’s argument that the ALJ erred in concluding that the Secretary had
established constructive knowledge of the violation, we examine our existing precedents,
which are largely in accord with most circuits that have addressed this issue. See N.Y. State
Elec., 88 F.3d at 107–11.
C.
Our history with the often-overlapping doctrines of constructive knowledge and
unpreventable employee misconduct begins with Ocean Electric, 594 F.2d 396. That case
addressed whether and under what circumstances employers can be held liable for their
supervisors’ actions. See id. at 398. We rejected the Secretary’s position that all supervisory
misconduct can be imputed to the employer, holding instead that the misconduct of
supervisory employees can only be imputed to the employer when “a violation by an
employee is reasonably foreseeable.” Id. at 401. Because the Commission improperly
shifted the burden of showing the adequacy of its safety program to the employer, we
reversed the Commission, explaining that “the Commission placed the burden on the
company to show unforeseeability and unpreventability [of a safety violation],” even
though “the burden of proof should be on the Secretary.” 8 Id. Moreover, we found that
8
Ocean Electric cited a since-rescinded Commission procedural rule that provided,
“In all proceedings commenced by the filing of a notice of contest, the burden of proof
shall rest with the Secretary.” 594 F.2d at 401–02 (quoting 29 C.F.R. § 2200.73(a)). This
rule’s recission does not call for reconsideration of Ocean Electric’s holding. It “was not
rescinded because the Secretary no longer has the burden to prove [his] prima facie case—
[he] obviously does.” ComTran, 722 F.3d at 1314. This rule was rescinded to clarify for
(Continued)
13
neither party actually raised the adequacy of the employer’s safety program at trial before
the ALJ; instead that issue was “first brought into the case in the Commission’s opinion
when it found against the employer for failure to bear the burden of proof.” Id. at 402.
We faced similar facts in L.R. Willson & Sons, Inc. v. Occupational Safety & Health
Rev. Comm’n, 134 F.3d 1235 (4th Cir. 1998). There, after establishing that a supervisory
employee committed a violation, the Commission shifted the burden to the employer to
“establish that it made good[-]faith efforts to comply with the [safety standards].” Id. at
1240. Relying on Ocean Electric, we reversed, explaining that the Secretary—not the
employer—bears the burden of proving the inadequacy of an employer’s safety program
to satisfy his burden of proof on the constructive knowledge element of a violation. Id. at
1240 (“In the present case, however, the Commission ignored this precedent, and having
imputed knowledge of the violation because of [the employee’s supervisory] position,
placed the burden of showing ‘good[-]faith efforts to comply with the fall protection
standards’ squarely on Willson.”).
And in a third case, N&N Contractors, we upheld the Commission’s decision that
the Secretary met his burden of establishing constructive knowledge. 255 F.3d at 127. In
that case, the Commission did not rely on the adequacy of the employer’s safety program
to find constructive knowledge. See id. Instead, the Commission found that N&N received
two safety violations for similar conduct from its general contractor just four months before
pro se employers and attorneys that “the employer bears the burden of proof on affirmative
defenses.” Id. (quoting 51 Fed. Reg. 32,002, 32,012 (Sept. 8, 1986)).
14
this incident. Id. A supervisor also acknowledged that, a few months prior to the relevant
incident, he discovered that N&N employees frequently violated the relevant safety
standard. Id. We held that the Secretary had met his burden to establish that N&N had
constructive knowledge of this violation, and “even if the Commission had impermissibly
shifted the burden[,] the error would be harmless” because the “opinion indicates that the
constructive knowledge inquiry did not turn on burden of proof rules . . . .” Id. at 127–28.
We affirmed the Commission’s denial of N&N’s unpreventable-employee-misconduct
defense in that case on similar grounds. Id. at 128 n.3.
Read together, these cases establish that the Secretary may rely on the inadequacy
of an employer’s safety program to prove that a violation was reasonably foreseeable and
therefore that the employer had constructive knowledge of a violation. When the Secretary
relies on the inadequacy of a safety program to prove this element of his case-in-chief, the
Secretary must carry the burden of proof.
But as noted above, the Secretary may establish constructive knowledge without
addressing the employer’s safety program at all. In those cases, an employer may still
invoke the affirmative defense of unpreventable employee misconduct. Under those
circumstances—when the Secretary does not raise the issue of the adequacy of the safety
program but an employer invokes it as an affirmative defense—it is the employer who bears
the burden of proving all four elements of the defense: specifically, that it “(1) established
a work rule to prevent the reckless behavior and/or unsafe condition from occurring, (2)
adequately communicated the rule to its employees, (3) took steps to discover incidents of
15
noncompliance, and (4) effectively enforced the rule whenever employees transgressed it.”
Frank Lill & Son, 362 F.3d at 845.
We recognize, however, that some have read our precedents as abrogating the
affirmative defense of unpreventable employee misconduct and requiring the Secretary, in
every case, to disprove it as part of his case-in-chief. See, e.g., Md. Comm’r Lab. & Indus.
v. Cole Roofing Co., 796 A.2d 63, 73–74 (Md. 2002) (mischaracterizing L.R. Willson as
eliminating unpreventable employee misconduct as an affirmative defense altogether and
noting that this position would be a minority view); Magco of Md., Inc. v. Barr, 531 S.E.2d
614, 618–19 (Va. App. 2000) (asserting that L.R. Willson held that unpreventable employee
misconduct was not an affirmative defense but declining to apply the same rule to
Virginia’s OSHA analog).
In L.R. Willson, we stated, “Although some sister circuits have held that
unpreventable employee misconduct ‘is an affirmative defense that an employer must plead
and prove,’ this circuit and others clearly agree that such must be disproved by the
Secretary in his case-in-chief.” 134 F.3d at 1240–41. But that rule is narrow in scope. It
only applies when the Secretary relies on the inadequacy of the employer’s safety program
to prove its constructive knowledge of the violation. 9 If the Secretary elects to impute
knowledge to the employer by some other method—for instance, by establishing that an
9
Indeed, in L.R. Willson the Commission never charged the Secretary with proving
that the foreman’s misconduct was foreseeable in his case-in-chief. See id. at 1240. After
automatically imputing the foremen’s knowledge of his own misconduct onto the
employer, the Commission prematurely shifted the burden on the adequacy of the safety
program to the employer. See id. at 1240–41.
16
employer failed to inspect the work area and anticipate hazards or by a history of similar
past violations—he is not required to prove the inadequacy of the employer’s safety
program. 10 See N&N Contractors, 255 F.3d at 127–28. And although in N&N Contractors,
we referred to the Commission possibly placing the burden to prove unpreventable
employee misconduct on the employer as “an error,” the court did not address the scenario
we now confront in the instant case. Id. at 128 n.3.
Thus, neither L.R. Willson nor N&N Contractors contradicts the well-established
proposition that the employer bears the burden to plead and prove an affirmative defense
of unpreventable employee misconduct. See ComTran, 722 F.3d at 1318; N.Y. State Elec.,
88 F.3d at 107–08; Gen. Dynamics Corp. v. Occupational Safety & Health Rev. Comm’n,
599 F.2d 453, 462–63, 463 n.6 (1st Cir. 1979); H.B. Zachry Co. v. Occupational Safety &
Health Rev. Comm’n, 638 F.2d 812, 818 (5th Cir. 1981); Brock v. L.E. Myers Co., 818 F.2d
1270, 1276 (6th Cir. 1987). And if the adequacy of the employer’s safety program is not at
issue to prove constructive knowledge, the employer still may raise the affirmative defense
of unpreventable employee misconduct and submit evidence of its safety program. In that
10
Moreover, in cases where the malfeasant employee is not a supervisor, the
Secretary can impute knowledge to the employer by showing that a supervisor had actual
or constructive knowledge of the subordinate’s violation, without requiring a foreseeability
analysis. See Ocean Elec., 594 F.2d at 398 (“The basic issue in this case is the extent of a
company’s responsibility for its foreman’s actions under OSHA.” (emphasis added)). In
those cases, the adequacy of an employer’s safety program would not be used to support
the Secretary’s prima facie case, though an employer could still raise the affirmative
defense of unpreventable employee misconduct.
17
instance, the employer, not the Secretary, bears the burden of proving this affirmative
defense.
We further recognize that the Secretary may seek to prove constructive knowledge
by the inadequacy of a safety program, and the employer may assert an unpreventable-
employee-misconduct defense. See, e.g., N.Y. State Elec., 88 F.3d at 106–07. In those cases,
the affirmative defense is effectively subsumed by the knowledge element of the
Secretary’s case-in-chief. But as Ocean Electric and L.R. Willson instruct, this does not
relieve the Secretary of his burden of proving the knowledge element as part of its prima
facie case. See Ocean Elec., 594 F.2d at 401–03; L.R. Willson, 134 F.3d at 1240. Indeed,
the Secretary must first meet his burden of proof, because “the fact that the employer might
litigate a similar or even identical issue as an affirmative defense does not logically remove
an element from the complainant’s case.” N.Y. State Elec., 88 F.3d at 107. The Secretary
carries the burden of proof on the adequacy of the employer’s safety program to establish
constructive knowledge and “must first make out a prima facie case before the affirmative
defense comes into play.” Id. at 108. In these cases, an ALJ may very well find that the
Secretary’s success in proving constructive knowledge in his case-in-chief effectively
forecloses the employer’s unpreventable-employee-misconduct defense. But in reaching
that conclusion, the ALJ must still analyze these doctrines separately, under the correct
burdens of proof.
D.
In this case, the Secretary did not allege that New River’s safety program was
inadequate to prove constructive knowledge. Instead, in his post-trial brief, the Secretary
18
made two primary arguments in favor of finding that New River had constructive
knowledge of the violations: (1) that New River did not create a grounding plan for the
Madison Mills project; and (2) that New River did not create a proper risk assessment
before beginning its work. 11 J.A. 67–68. The Secretary, therefore, did not put New River’s
safety program at issue during the trial or in his post-trial brief. Rather, New River raised
the unpreventable-employee-misconduct defense and proffered evidence of its safety
policies and disciplinary records to bolster that defense. See J.A. 463–752, 768–860. The
Secretary’s post-trial brief only mentioned the safety program in response to New River’s
affirmative defense. See J.A. 76–81.
In his written decision, however, the ALJ relied heavily on the inadequacy of New
River’s safety program in holding that the foremen’s violations of OSHA safety regulations
were foreseeable and therefore that New River had constructive knowledge of the
violations. J.A. 104–06. The ALJ found that New River’s “safety program was lacking”
for a few reasons. J.A. 105. First, New River’s “primary method for supervising foremen
was through safety audits[,]” which it only conducted “once per month.” J.A. 104. Second,
the record was devoid of evidence that employees had ever been disciplined for violating
similar safety rules; in fact, Superintendent Barnhart testified that he “was unaware of any
incident in which employees or foremen did not test or ground,” and “that he had never
disciplined an employee for failing to test, tag, or ground equipment.” J.A. 105. The ALJ
11
Specifically, the Secretary alleges that Foreman Howard submitted a “xerox
copy” of an old risk assessment that “he admittedly used at previous job sites.” J.A. 67.
19
also reviewed New River’s disciplinary records dating back three years and noted that there
was “a dearth of formal disciplinary records for work rule violations pertaining to electrical
hazards.” J.A. 105. At the end of his two-page constructive-knowledge analysis, the ALJ
briefly and summarily mentioned the arguments advanced by the Secretary in a single
sentence and concluded that “no grounding plan existed for the job on the site and the [risk
assessment] did not mention grounding or tagging to eliminate hazards.” J.A. 106.
By relying almost exclusively on the inadequacy of New River’s safety program—
an issue not raised by the Secretary—to establish constructive knowledge, the ALJ
essentially relieved the Secretary of his burden to prove his prima facie case. New River
put forth evidence about its monthly safety audits and submitted its disciplinary records as
evidence. J.A. 463–752, 768–860. These arguments were meant to bolster its affirmative
defense. But the ALJ credited New River’s evidence to the Secretary’s case-in-chief—
effectively relieving the Secretary of his burden of proof.
Further, the ALJ only briefly addressed the Secretary’s actual argument: that the
lack of a grounding plan and the lack of a proper risk assessment, combined, established
constructive knowledge. The ALJ’s heavy reliance on the inadequacy of New River’s
safety program to support constructive knowledge casts doubt on whether the ALJ would
have found the arguments proffered by the Secretary sufficient, standing alone, to prove
constructive knowledge. 12 The ALJ should instead have only considered the evidence and
12
This creates a situation where New River might have been better off not raising
the unpreventable-employee-misconduct defense at all.
20
arguments actually advanced by the Secretary to ensure that he established his prima facie
case, before analyzing the affirmative defense. See N. Y. Elec., 88 F.3d at 108 (holding that
the Secretary “must first make out a prima facie case before the affirmative defense comes
into play”). It is axiomatic that, if the plaintiff fails to carry his initial burden of proving an
element of his prima facie case, no affirmative defense need be proven by the defendant
(or considered by the adjudicator) because there is nothing to defend against. See, e.g.,
ComTran, 722 F. 3d at 1318.
This improper allocation of the burden of proof cannot be deemed harmless error.
“In the absence of the Secretary making [his] prima facie case, [the employer] was not
obligated to present any evidence on the adequacy of its safety program.” Id. If the
Secretary opted not to argue the inadequacy of New River’s safety program, the ALJ should
not have relied on that evidence in analyzing the Secretary’s case-in-chief. That evidence
should have been reserved for consideration of the affirmative defense, only if the ALJ
determined that the Secretary had met his burden. If the Secretary had chosen to argue the
inadequacy of New River’s safety program, he had an obligation to put on evidence and
advance those arguments initially. Then, New River would have been afforded the
opportunity to respond directly to the arguments and evidence raised by the Secretary. See
id. (holding that the burden-shifting error was not harmless because, “[h]ad the Secretary
been required to carry [his] prima facie burden by attempting to show employer knowledge
. . . , then [the employer] might have been able to more effectively rebut the Secretary’s
offer of proof with specific evidence in direct response to the alleged inadequacies. As it
21
was, [the employer] had to guess what particular evidence might have been sufficient to
rebut the Secretary and establish the adequacy of its safety program”).
IV.
In sum, the ALJ erred 13 by relieving the Secretary of his burden to prove New River
had constructive knowledge. This error cannot be deemed harmless because it is not
apparent, based on the record before us, that the ALJ would have reached the same result
based solely on the arguments and evidence presented by the Secretary. We therefore
reverse the Commission’s final order, and remand to the Commission for further
proceedings that properly allocate the burdens of proof between the parties.
REVERSED AND REMANDED
We use “erred” delicately here, recognizing that the ALJ navigated a “confusing
13
patchwork of conflicting approaches” among the circuits and the Commission’s own
precedent. See L.E. Myers, 484 U.S. at 989 (White, J., dissenting from denial of certiorari).
22