Horst Construction dba Horst Group, Inc.

Plain-English summary

The Secretary withdrew a serious fall-protection citation against Horst Construction, making the company the prevailing party for Equal Access to Justice Act purposes. Horst then sought $484.10 in fees. The judge found OSHA was substantially justified because the superintendent was near subcontractor employees working without fall protection, acknowledged the condition, and was responsible for worksite safety. The fee application was denied.

Decision snapshot

• Cited standard(s): 29 C.F.R. § 1926.501(b)(13).
• Outcome: Horst Construction's application for $484.10 in fees and expenses was denied.
• Key point: A withdrawn citation does not support an EAJA award when OSHA had a reasonable factual and legal basis for citing the controlling employer.

Full text (OSHRC public release)

                                  United States of America
        OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
                             1120 20th Street, N.W., Ninth Floor
                                Washington, DC 20036-3419



SECRETARY OF LABOR,

              Complainant,

                   v.                          OSHRC DOCKET No. 15-1482

HORST CONSTRUCTION dba HORST
GROUP, INC.,
              Respondent.



    Appearances:

    Michael P. Doyle, Esq., Office of Regional Solicitor, U.S. Department of Labor,
    Philadelphia, PA.
            For the Complainant.

    James Sassaman, Non-attorney representative, Sassaman LLC, Conshohocken, PA.
           For the Respondent.


    Before: Administrative Law Judge Keith E. Bell

                              DECISION AND ORDER
    This proceeding is before the Occupational Safety and Health Review Commission (the

Commission) on Horst Construction, Inc.’s (Respondent or Horst) Application for Award Under
the Equal Access to Justice Act, 5 U.S.C. § 504 (EAJA), received on February 3, 2016. The
Secretary of Labor (Secretary) filed his Answer on February 22, 2016. 1 Both the Complaint and
Answer in this matter were timely filed. Respondent seeks attorney fees in the amount of
$484.10. Compl. ¶ 8. For the reasons that follow, Respondent’s Application for Award Under
the Equal Access to Justice Act is hereby DENIED.

1
Respondent filed its Reply to Complainant’s EAJA Answer on March 8, 2016. All filings
related to this matter were considered by the undersigned in reaching this decision.
 Background
On April 1, 2015, the Occupational Safety and Health Administration (OSHA) conducted
an inspection of Respondent’s worksite located at 101 Babb Drive, Luther Village III, Dover DE.
As a result of the inspection, one “serious” citation was issued for an alleged violation of 29
C.F.R. § 1926.501(b)(13) for employees working at 6 feet or above ground level without fall
protection on August 20, 2015. On August 26, 2015 2 , Respondent timely filed its Notice of
Contest. This case was docketed by the Commission on September 3, 2015. On or about
October 23, 2015, the Secretary notified the undersigned of his intent to withdraw the Citation
and Notification of Penalty (Citation) in this case. Thereafter, on December 3, 2015, the
undersigned issued a Decision and Order approving the Secretary’s withdrawal.
Equal Access to Justice Act
The EAJA applies to proceedings before the Commission in section 10(c) of the
Occupational Safety and Health Act of 1970, 29 U.S.C. § 651, et seq. It ensures that an eligible
applicant is not deterred from seeking review of, or defending against, unjustified Government
actions. Ewing v. Rodgers, 826 F.2d 967 (10th Cir. 1987). Under EAJA, an award is made to an
eligible applicant who is the prevailing party only if the government’s action is found to be
without substantial justification and there are no special circumstances that make the award
unjust. Asbestos Abatement Consultation & Eng’g, 15 BNA OSHC 1252 (No 87–1522, 1991).
The EAJA does not routinely award attorneys’ fees and expenses to a prevailing party. While the
applicant has the burden of proving eligibility, the government has the burden of demonstrating
that its action was substantially justified. Dole v. Phoenix Roofing, Inc. 922 F.2d 1202, 1209 (5th
Cir.1991), 29 C.F.R. § 2204.106(a).
Timeliness
An EAJA application must be filed within thirty days after the period for seeking appellate
review expires. 29 C.F.R. § 2204.302(a). The undersigned’s Decision and Order approving the
settlement in this case was docketed on December 7, 2015. Horst had sixty days from the
December 7, 2015, to file any appeal. Fed. R. App. P. Rule 4(a)(B). Respondent’s EAJA

2
Although Respondent’s Notice of Contest is dated August 26, 2015, it was marked received by
OSHA on August 28, 2015, and thereafter received by the Commission on September 3, 2015.

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application in this case was received by the Commission on February 3, 2016, and its timeliness
is undisputed. Accordingly, the undersigned finds that the application was timely filed. 3
Prevailing Party
A party need not have prevailed on all issues. It is sufficient that “... the party seeking
fees need not have prevailed as to the central issue in the case but only as to a discrete
substantive portion of the proceeding.” H.P. Fowler Contracting Corp., 11 BNA OSHC 1841,
1845 (No. 80–3699, 1984). Also, a party may be deemed prevailing if it obtains a favorable
settlement of the case; a concept that was grounded in an early committee report of EAJA. H.R.
Rep. No. 96-1418 at 11 (1980) (“A party may be deemed prevailing if he obtains a favorable
settlement of his case”). In the instant case, a resolution was reached based on the Secretary’s
withdrawal of his Citation involving one “serious” item with a proposed penalty in the amount of
$4,410.00. The Commission has held that a withdrawal by the Secretary is considered a
favorable outcome for Respondent thereby making it the “prevailing party.” See Valley Constr.
Co., No. 92-3644, 1995 WL 455809, at *1 (O.S.H.R.C.A.L.J. July 20, 1995 ) (finding that
Respondent was the “prevailing party” with respect to citations withdrawn by the Secretary as
part of a settlement agreement). Moreover, the Secretary does not dispute the fact that
Respondent was the “prevailing party” in this case.
Net Worth
An EAJA eligible corporation is one with a net worth not exceeding $7 million and no
more than 500 employees. 29 C.F.R. § 2204.105. In its application, Respondent submitted an
affidavit from its President, Harry Scheid, along with balance sheets of its assets and liabilities
showing the company’s net worth in the amount of $3,622,495. 4 RX-1 & 2. 5 Also, the
President certified that the company has 49 employees. In his Answer, the Secretary does not
dispute Respondent’s EAJA eligibility. Therefore, I find that Respondent has met EAJA
eligibility requirements.

3
The Secretary does not dispute the timeliness of Respondent’s EAJA application.
4
Such documentation is required by Rule 202(a) of the Commission Rules of Procedure. 29
C.F.R. § 2204.202(a).
5
Respondent’s EAJA Application exhibits are herein referenced by the letters “RX”.

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Substantial Justification
Having established that Horst met the EAJA eligibility criteria and that it was the
prevailing party as to the Secretary’s withdrawal of the Citation at issue, Horst is entitled to an
award of fees and expenses under the EAJA unless the Secretary establishes that his position was
substantially justified in pursuing litigation as to those violations, or the record shows special
circumstances which would make an award unjust. 29 C.F.R. § 2204.106. “The test of whether
the Secretary’s action is substantially justified is essentially one of reasonableness in law and
fact.” Mautz & Oren, Inc., 16 BNA OSHC 1006, 1991–93 (No. 89–1366, 1993). The test for
“reasonableness” is comprised of three parts. The Secretary must show: (1) that there is a
reasonable basis for the facts alleged; (2) that there exists a reasonable basis in law for the theory
it propounds; and (3) that the facts alleged will reasonably support the le gal theory advanced.
Gaston v. Bowen, 854 F.2d 379, 380 (10th Cir. 1988). A position is substantially justified if it
has a “reasonable basis in both law and fact” or is “justified in substance or in the main.” “[T]hat
is, justified to a degree that could satisfy a reasonable person.” Pierce v. Underwood, 487 U.S.
552, 563-66 (1988). The government’s position can be justified even though it is not correct.
Hackett v. Barnhart, 745 F.3d 1166, 1172 (10th Cir. 2007).
On April 1, 2015, OSHA Compliance Officer (CO) Dalia Nichols observed three
employees working on a roof top without fall protection for approximately 20 to 30 minutes.
Nichols Decl. ¶¶ 5&6. CO Nichols observed Mr. Alan Sloan, Horst Construction’s Field
Superintendent, standing nearby the area where the employees were working on the roof top.
When asked if he saw the employees working without fall p rotection, Mr. Sloan replied, “[y]es,
unfortunately I was standing in front of the working area and did not check to see if they were
tied off. I need to check that closely each day.” Further, Mr. Sloan indicated that he was the
person responsible for the worksite. Nichols Decl. ¶¶ 7-10. Based on her years of experience,
CO Nichols believed Mr. Sloan’s remarks constituted an admission that he was aware that the
employees working on the roof were doing so without adequate fall protection. Nichols Decl. ¶

12. At some point during the inspection, CO Nichols determined that the employees she
    observed working without fall protection were employed by Frame Masters, a subcontractor of
    Horst Construction. When asked how long they had been working without fall protection, the
    employees said only since they returned from lunch. Further, the employees indicated that they
    had been properly tied off before lunch. Nichols Decl. ¶¶ 13 & 14. Based on the employee’s

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    statements and the fact that she first observed them around 2:00 p.m., CO Nichols concluded that
    they had probably been working for approximately two and a half hours without fall protection.
    The Citation issued to Horst was based on its status as a controlling employer under the multi-
    employer citation policy. Nichols Decl. ¶¶ 16-17.
    If this case had proceeded to a hearing on the merits, the Secretary would have had to
    prove: (a) the applicability of the cited standard; (b) the employer’s noncompliance with the
    standard’s terms; (c) employee access to the violative conditions; and (d) the employer’s actual
    or constructive knowledge of the violation (i.e. the employer knew or, with reasonable diligence
    could have known, of the violative conditions). Atl. Battery Co., 19 BNA OSHC 2131, 2138
    (No. 90-1747, 1994). In view of the fact that there was no hearing on the merits, the Secretary’s
    burden of proof serves as the lens through which to evaluate whether the Secretary was
    “substantially justified,” in law and in fact, in issuing the “serious” C itation to Respondent,
    Horst, for a violation of 29 C.F.R. § 1926.501(b)(13).
    29 C.F.R. § 1926.501(b)(13) applies to “residential construction” and provides:
    Each employee engaged in residential construction activities 6 feet (1.8 m) or
    more above lower levels shall be protected by guardrail systems, safety net
    systems, or personal fall arrest system unless another provision in para graph (b)
    of this section provides for an alternative fall protection measure. Exception:
    When the employer can demonstrate that it is infeasible or creates a greater
    hazard to use these systems, the employer shall develop and implement a fall
    protection plan which meets the requirements of paragraph (k) of § 1926.502.

    The facts asserted by the CO in her affidavit are not disputed and reveal that the
    employees were engaged in residential construction. 6 Nichols Decl. ¶ 5. Further, they reveal
    that the CO observed the employees working on a roof top without fall protection. Id. Mr. Sloan
    stated that the height of the roof was about 45 feet above ground at its peak. GX-A. Therefore,
    the applicability of the cited standard, the fact that the standard was violated, and the employee
    access/exposure to the violative condition are not at issue. Here, Respondent challenges
    employer knowledge of the violative condition which is based on Mr. Sloan’s response to the
    Secretary’s inquiry about his awareness. When asked if he was aware that the workers were

6
The facts asserted in CO Nichol’s affidavit are based on her own observations, witness
interviews, and supported by her notes in the Violation Worksheet GX-A. Hereafter,
government exhibits will be referenced with the letters “GX”.

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performing work without adequate fall protection, Mr. Sloan stated, “[y]es, unfortunately I was
standing in front of the working area and did not check to see if they were tied off. I need to
check that closely each day. Nichols Decl. ¶ 9. Respondent takes the position that the
Secretary’s interpretation of Mr. Sloan’s response as an admission of his “knowledge” of the
condition was not reasonable. Resp’t. Reply at 1. However, Respondent’s Reply fails to include
an important part of Mr. Sloan’s statement…his affirmative response to the question “[y]es.” In
addition to Mr. Sloan’s answer in the affirmative, the CO states that she observed Mr. Sloan
standing in an area directly below where the workers were performing work without adequate
protection. Nichols Decl. ¶ 7. So, his answer to the question of whether he was aware of the
condition seemed to be supported by the CO’s own observations. In Regina Construction
Company, 15 BNA OSHC 1044 (No. 87-1309, 1991), the Commission held that the Secretary
established employer knowledge of the violative condition based on the rebutted statement of an
employee who claimed that his supervisor was aware. In Regina, the employee whose statement
was used to establish employer knowledge was not even called to testify despite the fact that the
employer disputed his statement. Nevertheless, the Commission found that the Secretary had
established employer knowledge while acknowledging that it was “obviously at the outer limits
of sufficiency.” Regina, 15 BNA OSHC at 1049 (citations omitted). In the instant case, the
Secretary relied on her own observations of Mr. Sloan standing in the area where the employees
were working in plain view to determine that he had knowledge of the hazardous condition along
with his affirmative answer to the question of whether he was aware. The facts upon which the
Secretary relied to determine actual employer knowledge in this case are not only reasonable but
far less attenuated that those in the Regina case.
Even assuming, for the sake of argument, that Mr. Sloan’s statement is not reasonably
construed as an admission of actual knowledge, his statement that “[he] was standing in front of
the working area and did not check to see if they were tied off” reflects a lack of “reasonable
diligence” on his part to lean of the violative condition. The Commission has held that a
statement such as the one given by Mr. Sloan is also indicative of a lack of “reasonable
diligence” to discover the violative condition. See Prestressed Sys., Inc., 9 BNA OSHC 1864,
1869-70 (No. 16147, 1981) (Commission finding that company Vice President’s statement to CO
that hazardous condition “should have been caught in [Respondent’s] inspection” was an

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admission that the company could have discovered the condition with the exercise of reasonable
diligence.).
Despite the fact that none of Respondent’s own employees were exposed to the alleged
hazard, OSHA cited it under its multi-employer worksite citation policy. Though much disputed,
OSHA’s multi-employer worksite citation policy stands as an enforcement tool to be used by the
agency on construction sites where the controlling employer’s own employees aren’t the ones
exposed to the hazard if the controlling employer could have, with the exercise of reasonable
diligence, prevented or eliminated the exposure. Summit Contractors, Inc., 23 BNA OSHC
1196, 1206 (No. 05-0839, 2010) (affirming the legal principle that the Secretary may cite a non-
exposing, controlling employer under the multi-employer worksite citation policy). Here, Mr.
Sloan stated that he was responsible for safety and health at the worksite. Nichols Decl. ¶ 10. In
Summit, the Commission held that the actual or constructive knowledge of a supervisor may be
imputed to the employer. Summit, 23 BNA OSHC at 1207. Accordingly, the Secretary’s theory
for citing Horst Construction based on the knowledge of its Field Superintendent, Mr. Sloan, was
reasonable. Altogether, the record supports a finding that the Secretary was “substantially
justified” in citing Respondent, Horst Construction, for a “serious” violation of the cited
standard. Finally, Respondent does not allege and the record does not reveal any special
circumstance that would warrant an award under EAJA.
Findings of Fact and Conclusions of Law
The foregoing decision constitutes the findings of fact and conclusions of law in
accordance with Rule 52(a) of the Federal Rules of Civil Procedure and Rule 308 of the
Commission Rules of Procedure. 29 C.F.R. § 2204.308.
ORDER
Based on the foregoing, Respondent’s Application for Award Under the Equal Access to
Justice Act is hereby DENIED.

                                                 SO ORDERED by:

Dated: June 14, 2016 /s/
Keith E. Bell
OSHRC Judge

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