Significant Decisions

SEE SAFETY AND HEALTH Penalties

SEE SCOPE OF REVIEW Safety and Health
The authority to assess penalties under WISHA lies exclusively with the Department of Labor and Industries.  The Board lacks authority to increase the penalty on its own motion.  ….Bergen Brunswig Drug Co. dba Amerisource Bergen Corp., 08 W1080 (2010)


IN RE: BERGEN BRUNSWIG DRUG CO.
DBA AMERISOURCE BERGEN
CORP.		 ) DOCKET NO. 08 W1080
  )  
 CORRECTIVE NOTICE OF
REDETERMINATION NO. 311850770 		) DECISION AND ORDER
  )  
APPEARANCES
Employer, Amerisource Bergen Corp., per
Mike Murphy, by
Perkins Coie, LLP, per
Michael L. Hall


Department of Labor and Industries, by
The Office of the Attorney General, per
Dustin J. Dailey, Assistant
             The employer, Amerisource Bergen, Corp., filed an appeal with the Board of Industrial Insurance Appeals on October 27, 2008, from a Corrective Notice of Redetermination of the Department of Labor and Industries dated October 15, 2008.  In Corrective Notice of Redetermination No. 311850770, the Department alleged a serious violation of WAC 296-800-11005 (Item 1-1); and a general violation of WAC 296-800-13020(1) (Item 2-1); and imposed a penalty of $2,100 for Item 1-1 and no penalty for Item 2-1.  The Department's Corrective Notice of Redetermination No. 311850770, is AFFIRMED. 

DECISION

             As provided by RCW 51.52.104 and RCW 51.52.106, this matter is before the Board for review and decision.  The employer filed a timely Petition for Review of a Proposed Decision and Order issued on October 21, 2009, in which the October 15, 2008.  The employer withdrew the appeal to Item 1-2 of the Corrective Notice of Redetermination No. 311850770 at hearing on July 29, 2009.  All contested issues are addressed in this order.

             The Board has reviewed the evidentiary rulings in the record of proceedings and finds that no prejudicial error was committed.  The rulings are affirmed.[2] 

             We have granted review because we disagree with the penalty assessment determined by our industrial appeals judge.  We otherwise agree with the Proposed Decision and Order.  We will set forth those facts necessary to explain our decision. 

             As noted by the industrial appeals judge in the Proposed Decision and Order, Bergen Brunswig Drug Co., DBA Amerisource Bergen Corp., (Amerisource Bergen) is a pharmaceutical distribution warehouse.  Its workers were required to take orders and "pick" products from metal shelving units to prepare for shipment to retail outlets.  The chief contention raised by the Department's citation of WAC 296-800-11005 is that workers were exposed to a hazard by climbing the metal shelving units to retrieve product.  WAC 296-800-11005 is a general duty standard requiring employers to maintain a workplace free from recognized hazards that are causing, or are likely to cause, serious injury or death.  The hazard in this case is a falling hazard from climbing shelves not intended for climbing.  Photographic Exhibits 1 through 5 and 12 depict the shelving units in question.

             The inspection on April 10, 2008, giving rise to the Corrective Notice of Redetermination in this appeal, resulted from an employee complaint.  The complaint was based on the assertion that employees were required to climb the metal shelving units to retrieve product from the higher shelves. We agree that the testimonial evidence demonstrates that employees did climb the shelving units as alleged by the Department and as visualized in Exhibit 12.

             The dispute giving rise to our review is the meaning and/or importance associated with the history of this practice as indicated by prior safety inspections conducted at the same workplace. The Department of Labor and Industries conducted two earlier inspections at Amerisource Bergen on March 13, 2006, (Exhibit 10) and on October 15, 2007, (Exhibit 11).  Both inspections resulted in no citations. Amerisource Bergen argued at hearing and in its Petition for Review that because no citations were issued the Department had determined that there was no recognized hazard putting employees at risk for serious injury or death.  The industrial appeals judge rejected that argument and so do we. However, the industrial appeals judge determined that these inspections provided the foundation to increase the penalty determined by the Department.

             We will address the employer's contention first.

             The first inspection on March 13, 2006, resulted in no citation because of the representations by the employer that it was taking steps to "remove all stock from top the shelves."  There is an attachment to this inspection report in the form of an e‑mail from William Fenton dated February 27, 2006, that represents an intent to remove product from the top "shelf."  We note the singular form of [3]the word shelf here.  As we examine the photographic exhibits it does not appear to us that product was stored on the top most shelf of the metal storage units.  Clearly, there was product stored on the remaining higher placed shelves.

             The second inspection on October 15, 2007, resulted in a finding of no violations because the inspector did not observe the alleged climbing of the shelving units.

             Neither of these two inspections determined there was no safety hazard presented by employees climbing the stock shelves.  Implicit in the first inspection was the acknowledgment that the top shelves/shelf would not be used further.  The second inspection simply failed to document or to verify the activity giving rise to the hazard.  The employer cannot factually use these earlier inspections as a shield to the present citation. 

             We note that Amerisource Bergen did not present any evidence and, consequently, was unable to refute that the hazard existed and that employees actually did climb the metal stock shelves to retrieve product.  Amerisource Bergen, through cross examination of the witnesses presented by the Department, established that it did not instruct employees to climb the shelving units.  Although the practice of climbing shelves to retrieve product may not be specifically authorized by the employer, it is clear the practice occurred and that Amerisource Bergen was both aware of the practice and made little effort to address the hazard.  The Department's citation should be affirmed.

             Next we address the industrial appeals judge's decision to increase the penalties assessed to Amerisource Bergen.

             Here we depart from the result reached by the industrial appeals judge in the Proposed Decision and Order.  The industrial appeals judge believed that Amerisource Bergen somehow "reneged" on its representations to remove product from the top 'shelves' as a result of the first inspection and, presumably, resumed the stocking of the top shelves after the first inspection.  The industrial appeals judge, on his own motion, and without an amended citation pursuant to CR15(b), increased the penalty assessed by reducing Amerisource Bergen's good faith level from average good faith to poor good faith.  This raised the overall penalty from $2,100 to $2,700. 

             We do not view the limited record in front of us in so clear a light as did the industrial appeals judge.  Exhibit 10 does indicate that Amerisource Bergen was instituting "administrative controls" to remove stock from "the top shelves."  This is the inspector's summary of information related to him. Part of this information was the e‑mail we referred to above from William Fenton indicating that product would be removed from the top shelf (singular).  The record and exhibits are not clear what [4]was intended as a result of the inspection in March of 2006.  For example, there is no indication of what constitutes, "top shelves" (plural).  Also, as we examine the photographic exhibits we can see no stock or product on any of the actual top shelf surfaces.  Exhibit 12 is instructive as it clearly shows stock coming to the edge of every shelf except the top shelf.  We are not confident that Amerisource Bergen reneged on representations made in 2006.  In fact, the company may have done exactly what Mr. Fenton's e‑mail said.  In any event there is too little evidence to disturb the Department's calculation of the penalty as assessed and we would affirm the Corrective Notice of Redetermination No. 311850770.

             We also question our authority to sua sponte increase penalties on appeal in the absence of a properly noticed amendment to the Corrective Notice of Redetermination pursuant to CR 15(b).  The issue of increasing the penalties assessed to Amerisource Bergen was raised for the first time in the Proposed Decision and Order.  The Department of Labor and Industries did not request an amendment to its Corrective Notice of Redetermination and did not argue for an increase in the penalties at hearing.  The matter of the Board's authority involving the review of citations and penalties issued by the Department of Labor and Industries on appeal requires a review of the statutory scheme providing for such review.

             The Occupational Safety and Health Act (OSHA) of 1970, 29 USC § 651 et. seq., is designed to promote safety in the workplace.  The Federal act allows individual states and territories to promulgate their own workplace safety plans as long as they are at least as effective as Federal requirements.  29 USC § 667.  The Washington state Legislature has elected to develop and implement a state plan in RCW 49.17.010.  The purpose of both the Federal and the state plan is to create, maintain, and enhance the industrial and safety health program of the state as it affects working conditions for the people of the state of Washington.  The end purpose of both statutory schemes is to preserve the health and safety of every worker. 

             While a state occupational safety and health scheme must be at least as rigorous as the Federal system, the focus is on the maintenance of safety in the workplace.  The enforcement process culminates–in either setting–in a formal citation where violations are alleged against an offending employer.  The cited employer's recourse differs in important ways between the Federal system and the state of Washington.  29 USC § 658 gives authority in the secretary of the Occupational Safety and Health Administration to issue citations to employers not complying with properly promulgated safety standards.  The employer has fifteen days to formally "contest" the citation which is then forwarded by the OSHA area director to the Occupational Safety Health [5]Review Commission (OSHRC).  OSHRC is an independent agency created to hear and resolve disputes of OSHA citations.  29 USC § 659.  It is important to note that the OSHRC operates independently of the Occupational Safety and Health Administration.  In spite of being a separate and independent agency OSHRC is given statutory authority by Congress to assess, "all civil penalties provided in this section, giving due consideration to the appropriateness of the penalty with respect to the size of the business of the employer being charged, the gravity of the violation, the good faith of the employer, and the history of the previous violations."  Title 29 USC 666 (j).  In short, the appellate review agency has authority, statutorily granted, to independently assess an appropriate penalty based on the facts. 

             While our state industrial safety and health plan must be at least as rigorous as the Federal plan, that requirement does not appear to extend to the appellate scheme.  Clearly, Federal legislation gives authority to determine penalties to both OSHA and OSHRC.  In Washington State's Industrial Safety and Health Act, the only authority to issue or determine penalties is given to the director of the Department of Labor and Industries, or his or her authorized representatives.  RCW 49.17.180(7).  Appeals from citations and penalties issued by the Washington State Department of Labor and Industries are directed to the Board of Industrial Insurance Appeals.  RCW 49.17.140(3).  The Legislature directs that the Board shall make disposition of the issue(s) on appeal in accordance with the procedures relative to contested cases appealed to the Board of Industrial Insurance Appeals.  RCW 49.17.140(3).  In other words, we are to apply the procedures we would use in other types of appeals brought before this agency to the appeals brought from citations issued by the Department of Labor and Industries, Division of Occupational Safety and Health (DOSH).   

             The Board of Industrial Insurance Appeals, like OSHRC, is separate and independent from the agency responsible for the primary enforcement of WISHA standards.  However, unlike OSHRC, the Board of Industrial Insurance Appeals has not been separately granted authority to assess penalties.  Thus, in the absence of a clear statutory mandate, it appears that the Board's authority in regard to an assessment of penalties is appellate only in the sense that on appeal our review would be limited to the correctness of the Department's citations and penalties.  We would not undertake a separate determination as to either characterization of the violations or the penalties assessed except as provided under our rules.

             WAC 263-12-125 provides that the Board will follow rules applicable to the superior courts of our state.  Civil Rule 15(b) provides that, "(W)hen issues not raised by the pleadings are tried by [6]express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings."  The rule further provides if the objecting party can show prejudice as a result of amending the pleadings the court may grant such continuance to enable the objecting party to meet the evidence giving rise to the amended pleadings.  In the case of In Re Guy F. Atkinson, Dckt No.04 W0274, (October 16, 2006),we stated that the, "Board has broad power to amend a citation to conform to the evidence under.  In re Basin Paving Co. Inc., Dckt. No. 04 W0069 (April 25, 2005). This rule allows us to amend the citation to conform to the evidence during any stage in the proceedings, with or without a motion to amend."  Atkinson, at 3.  However, we also stated in Atkinson, "We will amend the citation under as long as the employer had a fair opportunity to address the issues raised in the amended citation and was not prejudiced in its defense.  In re ABB Power Generation Inc., BIIA Dec., 93 W469 (1994)."  Atkinson, at 3.

             In the present case, the industrial appeals judge did not invoke CR15(b) as a basis for increasing the penalty.  We decline to do so because we disagree with the factual analysis as described above.  But additionally we do not believe that the use of the earlier inspections as a basis for calculating the penalties in the present Corrective Notice of Redetermination was expressly or impliedly litigated by the parties.  Exhibits 10 and 11 give us only a partial record of those earlier events.  Amerisource Bergen did not present any responsive evidence because it argued that the earlier inspections constituted a bar of sorts to the present Corrective Notice of Redetermination as the Department issued no citations as a result of those inspections.  Because no citations were issued we do not believe that Amerisource Bergen had notice that those inspections could or would be used as a basis to reduce the good faith portion of the penalty assessment resulting in an increasein the penalty assessed on appeal.  No party argued that the penalties should be increased.  Amerisource Bergen did not have a fair opportunity to address the issue raised by the industrial appeals judge in his Proposed Decision and Order.

             We affirm the Corrective Notice of Redetermination No. 311850770 as issued by the Department without modification.

FINDINGS OF FACT

  1. On July 31, 2008, the Department issued Corrective Notice of Redetermination No. 311850770, in which it alleged the following violations:  Item No. 1-1, a serious violation of WAC 296-800-11005, with a penalty of $2,100; and Item No. 2-1, a general violation of WAC 296-800-13020(1) with no penalty.  The total proposed penalty was $2,100.[7]

    On August 13, 2008, the Safety Division of the Department of Labor and Industries received a Notice of Appeal filed on behalf of the employer.  On September 12, 2008, the Department extended the reassumption period for an additional 15 working days.  On October 3, 2008, the Department issued a Notice of Reassumption of Jurisdiction.  On October 15, 2008, the Department issued a Corrective Notice of Redetermination No. 311850770 in which all the allegations cited above remained the same, except the abatement date in Item No. 1-1 was amended from August 8, 2008 to October 30, 2008.  On October 27, 2008, the employer filed a Notice of Appeal with the Board of Industrial Insurance Appeals.  On October 28, 2008, the Board issued a Notice of Filing of Appeal, and assigned the matter Docket No. 08 W1080.
  2. On or about April 10, 2008, Amerisource Bergen employees were exposed to the hazard of having to climb metal storage shelves to retrieve product that had been placed beyond their reach by the employer.  These shelves were not designed for climbing, but the employer provided no other reasonable access to the remote storage locations.  The employer was aware of this hazard.  There was a substantial probability that employees would be injured and that if harm resulted from the violation, it would be serious physical harm.  This workplace condition constituted a serious violation of WAC 296-800-11005.
  3. On July 29, 2009, the employer withdrew its appeal of Citation Item    No. 2-1, Corrective Notice of Redetermination No. 311850770, a general violation of WAC 296-800-13020(1). 
  4. The severity of the hazard in Item 1-1 was 4 on a scale of 1 to 6, with 6 being the most severe.
  5. The probability of an injury occurring due to the hazard in Item 1-1 was 3 on a scale of 1 to 6, with 6 being the most likely to occur.
  6. Severity times probability equals gravity.  The base penalty for a violation with a gravity of 12 in Item 1-1 is $3,000.
  7. The employer’s good faith rating is average resulting in no adjustment to the base penalty in Item 1-1.
  8. The employer has between 101 and 250 employees, causing a 20 percent reduction in the base penalty in Item 1-1, or a $600 decrease.
  9. The employer has a good history, causing a 10 percent reduction in the base penalty in Item 1-1, or a $300 decrease.
  10. The proper assessed penalty for Item No. 1-1, Corrective Notice of Redetermination No. 311850770 is $2,100.[8]

CONCLUSIONS OF LAW


  1. The Board of Industrial Insurance Appeals has jurisdiction over the parties to and the subject matter of this appeal.
  2. On or about April 10, 2008, Amerisource Bergen committed a serious violation of WAC 296-800-11005.  A $2,100 penalty was assessed for Item 1-1, Corrective Notice of Redetermination No. 311850770. 
  3. Corrective Notice of Redetermination No. 311850770, is correct and is affirmed.

Dated: February 1, 2010.

BOARD OF INDUSTRIAL INSURANCE APPEALS

/s/

THOMAS E.EGAN Chairperson

/s/

FRANK E. FENNERTY, JR. Member

/s/

LARRY DITTMAN Member


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