Ky. Occupational Safety & Health Review Comm'n v. Estill Cnty. Fiscal Court

• Decision Date: 15 December 2016
• Docket Number: 2015–SC–000256–DG
• Citation: 503 S.W.3d 924
• Parties: KENTUCKY OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION, Appellant v. ESTILL COUNTY FISCAL COURT, Appellees and Secretary of Labor, Commonwealth of Kentucky
• Court: United States State Supreme Court — District of Kentucky

503 S.W.3d 924

KENTUCKY OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION, Appellant

v.ESTILL COUNTY FISCAL COURT, AppelleesandSecretary of Labor, Commonwealth of Kentucky

2015–SC–000256–DG

Supreme Court of Kentucky.

DECEMBER 15, 2016

COUNSEL FOR APPELLANT: Frederick G. Huggins, Kentucky Occupational Safety & Health Review Commission

COUNSEL FOR APPELLEE ESTILL COUNTY FISCAL COURT: Daniel Barry Stilz, Lynn Sowards Zellen, Jonathan B. Fannin, Adrian M. Mendiondo, Kinkead & Stilz, PLLC, Rodney G. Davis, Estill County Attorney

COUNSEL FOR APPELLEE SECRETARY OF LABOR, COMMONWEALTH OF KENTUCKY: Michael Gary Swansburg, Jr., David Nelson Shattuck, Kentucky Labor Cabinet

REVERSING

OPINION OF THE COURT BY JUSTICE KELLER

Mary Smith (Smith), a former employee of the Estill County Fiscal Court (the Fiscal Court), sent a letter to the Fiscal Court complaining about working conditions and was subsequently discharged. The Kentucky Occupational Safety and Health Review Commission (the Commission) determined by Final Order that Smith's letter constituted an occupational health "complaint" under Kentucky Revised Statute (KRS) 338.121(3)(a), and found that the Fiscal Court's discharge of Smith following her letter was a violation of KRS 338.121(3)(a).

The Franklin Circuit Court affirmed the Commission's Final Order. On appeal, the Court of Appeals reversed, stating that the Commission had acted outside of its administrative role by interpreting what action constitutes a "complaint" under the Kentucky Occupational Safety and Health Act (KOSHA). The Court of Appeals held that only the Kentucky Occupational Safety and Health Board (the Board), the quasi-legislative body under KOSHA, could interpret the meaning of undefined terms. Having reviewed the record and the arguments of the parties, we reverse the Court of Appeals.

I. FACTS.

The facts in this case are well-established and undisputed. Smith began working as a part-time dispatcher at the Estill County 911 Center, which is administered by the Fiscal Court, on March 23, 2009. The Fiscal Court permitted smoking in the dispatch room of the 911 Center. Smith became allergic to cigarette smoke, and she underwent surgery to alleviate a sinus infection she developed as a result of exposure to that smoke in the workplace.

On July 19, 2010, Smith wrote a letter to Estill County Judge Executive Wallace Taylor describing her tobacco smoke allergy and requesting that the Fiscal Court prohibit smoking in the 911 dispatch room. After receiving Smith's letter, Judge Taylor removed her from the dispatcher call schedule beginning the week of August 11, 2010. Smith filed a complaint with the Commission on August 18, 2010, alleging that she was discriminated against because of her letter to Judge Taylor. The Secretary of the Labor Cabinet (the Secretary) issued citations pursuant to KRS 338.121 (3)(b), charging the Fiscal Court with improperly discharging and discriminating against Smith for filing a "complaint" under KRS 338.121(3)(a).¹

The Commission assigned a hearing officer who adjudicated the citations and found that Smith's letter to Judge Taylor qualified as a "complaint," a protected activity under KOSHA. In doing so, the hearing officer turned to persuasive authority from the federal Occupational Safety and Health Act (Fed. OSHA) regulation 29 Code of Federal Regulations (CFR) 1977.9(c), which states that the "filed any complaint" language of the Fed. OSHA discrimination statute includes employee-to-employer communications.

After finding that Smith was removed because of her letter, the hearing officer recommended that Smith be reinstated to her part-time position and awarded lost wages for the time she had been removed from the dispatch call schedule. The Commission's Final Order adopted the hearing officer's recommendation.

The Fiscal Court appealed to the Franklin Circuit Court. Because no statute or regulation specifically states such a letter from employee to employer qualifies as a "complaint" under KOSHA, the Fiscal Court claimed that the Secretary and hearing officer had impermissibly engaged in rulemaking by finding Smith's letter qualified as a "complaint" under KRS 338.121(3)(a). The Circuit Court affirmed the Commission, finding that the Secretary properly issued citations to the Fiscal Court under KRS 338.121(3)(b), and that the Commission's Final Order was not an arbitrary interpretation of what qualifies as a "complaint" under KRS 338.121(3)(a).

On appeal, the Court of Appeals reversed the Circuit Court, finding that the Commission's reliance on Fed. OSHA interpretations was improper. The Court of Appeals noted that, although a federal regulation interprets Fed. OSHA as protecting employees from being discharged or discriminated against because of complaints filed with their employers, Kentucky had no such regulation at that time.² The Court of Appeals held that a Kentucky regulation must specify that employee communications to employers are complaints protected under KOSHA before the Commission may find employer discrimination.

The Court of Appeals stated that KOSHA has two separate administrative bodies with distinct roles: the Board, which serves a policy-making role, and the Commission, which adjudicates claims filed under KOSHA. The Court of Appeals stated that the Board is the only body with the power to define terms in KOSHA and its interpretive regulations. Because the Board had not adopted 29 CFR 1977.9 or promulgated a rule defining "complaint," the Court of Appeals held that when the Commission defined complaint it acted outside of its adjudicatory role and crossed over into the Board's policy-making role. Thus, the Court of Appeals found the Commission had arbitrarily exceeded its statutory authority under KOSHA. The Commission sought discretionary review, which we granted to clarify the issue of deference to agency determinations of law.

II. STANDARD OF REVIEW.

Administrative agencies may make determinations of law through adopted regulations and formal adjudication. We review agency determinations of law de novo and the standard of review is set forth in Chevron , U.S.A., Inc. v. Natural Res. Def. Council, Inc. , 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), as adopted by this Court:

So long as it is in "the form of an adopted regulation or formal adjudication," we review an agency's interpretation of a statute it is charged with implementing pursuant to the doctrine enunciated in Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc. , 467 U.S. 837 [104 S.Ct. 2778, 81 L.Ed.2d 694] (1984).

Metzinger v. Ky. Ret. Sys. , 299 S.W.3d 541, 545 (Ky. 2009) (internal citations omitted).

Under the Chevron doctrine, the Supreme Court outlined a two-step analysis of judicial deference to agency determinations of law. First, if the statutory language is clear, then we will offer no deference to agency action outside the statute's clear language. Chevron , 467 U.S. at 842–43, 104 S.Ct. 2778. However, if the statutory language is ambiguous, then we defer to an agency's reasonable interpretation of the agency's enabling statute. Id. at 843, 104 S.Ct. 2778. Where the General Assembly does not use language that addresses the specific question at issue, the standard of review for an agency's interpretation of unclear, ambiguous language in a statute is whether the agency used "a permissible construction of the statute" to reach its adjudicative decision. Metzinger , 299 S.W.3d at 546 (quoting Chevron , 467 U.S. at 843, 104 S.Ct. 2778 ).

III. ANALYSIS.

The Commission asserts four arguments in its appeal; however, this case revolves around one issue: whether the Commission's Final Order permissibly determined that Smith's letter to her employer was a "complaint" under KOSHA, and thereby a protected activity under KRS 338.121.

The General Assembly clearly stated the purpose of KOSHA in KRS 338.011 :

[T]he General Assembly declares that it is the purpose and policy of the Commonwealth of Kentucky to promote the safety, health and general welfare of its people by preventing any detriment to the safety and health of all employees, both public and private, covered by this chapter, arising out of exposure to harmful conditions ....

The General Assembly also provided protection to employees who bring to light violations of KOSHA:

No person shall discharge or in any manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter .... (emphasis added).

KRS 338.121(3)(a). Thus, if Smith's letter was a "complaint ... related to" an occupational safety and health concern, it constitutes protected activity within the statute. The issue herein arose because the General Assembly did not define the term "complaint" under KOSHA, and, at the time the Fiscal Court's citations were before the Commission, 803 KAR 2:250, the regulation promulgated by the Board setting forth how to handle KRS 338.121 citations, did not define "complaint" either.

We agree with the Court of Appeals that agencies do not make law, which is a duty entrusted to the General Assembly. Rather, the General Assembly delegates to agencies the power to interpret the law through regulations and administrative adjudications. As such, KOSHA constitutes an implicit delegation of interpretive authority to the agencies within the Kentucky Occupational Safety and Health Program.

We also agree with the Court of Appeals's analysis of the history of Fed. OSHA and the KOSHA "split-authority" model. However, the Court of Appeals went astray with its analysis of the "split-authority" model, mistakenly holding that statutes can only be interpreted or enforced through an interpretive regulation. Such a holding is contrary to the Chevron doctrine, which states that the power to interpret an agency's enabling statute resides not only in the regulatory body, but also in the adjudicative body through formal adjudication. United States v. Mead Corp. , 533...