Dole v. East Penn Mfg. Co., Inc.

• Decision Date: 29 January 1990
• Docket Number: No. 89-3426,89-3426
• Citation: 894 F.2d 640
• Parties: , 14 O.S.H. Cas.(BNA) 1409, 1990 O.S.H.D. (CCH) P 28,809 Elizabeth DOLE, Secretary of Labor, United States Department of Labor, Petitioner, v. EAST PENN MANUFACTURING CO., INC. and Occupational Safety and Health Review Commission, Respondents.
• Court: U.S. Court of Appeals — Third Circuit

Page 640

894 F.2d 640

58 USLW 2492, 14 O.S.H. Cas.(BNA) 1409,

1990 O.S.H.D. (CCH) P 28,809

Elizabeth DOLE, Secretary of Labor, United States Department

of Labor, Petitioner, v. EAST PENN MANUFACTURING CO., INC. and Occupational Safety and Health Review Commission, Respondents.

No. 89-3426.

United States Court of Appeals, Third Circuit.

Argued Dec. 12, 1989.

Decided Jan. 29, 1990.

Robert P. Davis, Sol. of Labor, Cynthia L. Attwood, Associate Sol. for Occupational Safety and Health, Ann Rosenthal, Arlington, Va., for Appellate Litigation.

Barbara E. Kahl (argued), U.S. Dept. of Labor, Washington, D.C., for petitioner.

Dennis J. Morikawa, Morgan, Lewis & Bockius, Philadelphia, Pa., Vincent Candiello (argued), Harrisburg, Pa., for respondent East Penn Mfg., Inc.

Before HUTCHINSON, COWEN and ROSENN, Circuit Judges.

OPINION OF THE COURT

HUTCHINSON, Circuit Judge.

The Secretary of Labor (Secretary) petitions this Court for review of a decision of the Occupational Safety and Health Review Commission (Commission) vacating a citation against the East Penn Manufacturing Company (East Penn). The Secretary issued the citation against East Penn after the company discontinued paying overtime benefits to an employee removed for possible exposure to excessive lead levels, as required by the lead standard promulgated by the Secretary and the Occupational Safety and Health Administration (OSHA). The Secretary asserted that East Penn had to include overtime pay as part of the medical removal protection benefits given to the employee in connection with the transfer, because the employee had regularly received overtime pay before the transfer.

The Commission agreed with the Secretary that overtime pay is part of the medical removal protection benefits that must be given to employees transferred by employers pursuant to the lead standard. Nevertheless, it vacated the citation against East Penn because it concluded that East Penn had acted in reasonable reliance on its prior decision in Secretary of Labor v. Amax Lead Co., 12 O.S.H. Cas. (BNA) 1878, 1986 O.S.H. Dec. (CCH) p 27,629 (1986). In Amax Lead, the Commission had held that overtime pay benefits did not have to be given to employees transferred for possible exposure to excessive lead levels.

The Commission's decision not to apply its interpretation of the medical removal protection benefits that must be paid to employees transferred pursuant to the lead standard to the case at hand is contrary to the principles that govern retroactive application of the rationale of judicial and quasi-judicial decisions. It was not reasonable for East Penn to rely on the Commission's earlier Amax Lead decision in changing its policy on medical removal protection benefits in the face of the Secretary's consistent position that they are due, especially when Amax Lead remained on direct review to a court of appeal and there was a significant question about the decision's validity. Moreover, the Secretary's citation does not impose a fine or otherwise punish East Penn for relying on Amax Lead. It merely requires East Penn to give its employee what was due when the employee was transferred for possible exposure to excessive lead levels. Accordingly, we will reverse the Commission's decision and reinstate and affirm the Secretary's citation against East Penn. We also will order abatement of the citation by directing East Penn to pay the overtime benefits it owes the employee, plus interest.

I.

The facts in this case are essentially undisputed. The Secretary has authority under the Occupational Safety and Health Act of 1970 (Act), 29 U.S.C.A. Secs. 651-678 (West 1985), to promulgate and modify occupational safety or health standards and to issue citations to an employer she believes is in violation of any standard, rule, regulation, or order promulgated by her. See 29 U.S.C.A. Secs. 655(b), 658. OSHA, acting on behalf of the Secretary, ¹ promulgated a lead standard to protect employees at their workplace. See 29 C.F.R. Sec. 1910.1025 (1989); United Steelworkers v. Marshall, 647 F.2d 1189 (D.C.Cir.1980) (court upheld the lead standard in most respects, concluded that the rulemaking process was procedurally proper and that the provision on medical removal protection benefits was a reasonable exercise of OSHA's statutory power), cert. denied, 453 U.S. 913, 101 S.Ct. 3149, 69 L.Ed.2d 997 (1981).

The lead standard includes a requirement that employers provide medical removal protection benefits to employees removed from their jobs because of excessive lead levels, even when the employer voluntarily initiates the removal and it takes place only because of a threat of exposure to excessive lead levels. 29 C.F.R. Secs. 1910.1025(k)(2)(i), (k)(2)(vii). ² Under the Secretary's lead standard, the employer must "maintain the earnings, seniority and other employment rights and benefits of an employee as though the employee had not been removed from normal exposure to lead or otherwise limited." Id. Sec. 1910.1025(k)(2)(ii). An appendix to the lead standard, published within a year after the standard had been promulgated, explained that the earnings protected by Sec. 1910.1025(k)(2) includes "more than just your base wage; it includes overtime, shift differentials, incentives, and other compensation [the employee] would have earned if [he] had not been removed." Id. Sec. 1910.1025 app. B, Sec. IX. Citations issued by the Secretary have been consistent with this interpretation of the medical removal protection benefits provision in Sec. 1910.1025(k)(2).

East Penn manufactures batteries in Pennsylvania. In July 1986, it placed an employee, Carol Reimert (Reimert), on medical removal and reassigned her to a job where she would be exposed to lower lead levels. Prior to her transfer, the employee had regularly earned overtime pay. Initially, East Penn included overtime pay as part of the medical removal protection benefits it gave to Reimert as part of her transfer, but it changed its policy after learning of the Commission's decision in Amax Lead. East Penn's revised policy stated that "employees [receiving medical removal protection benefits] need not be provided with incentive or overtime payments that were associated with their previous positions, but need only be given the base rate of the job from which the employee was removed." Appendix (App.) at A.21. As a result of this policy change, Reimert lost $1,150.85 in overtime earnings.

On March 18, 1987, the Secretary, through OSHA, issued a citation against East Penn. The citation claimed that East Penn was in violation of 29 C.F.R. Sec. 1910.1025(k)(2) by failing to provide appropriate medical removal protection benefits to the employee. Since the employee had been regularly paid overtime before East Penn transferred her pursuant to the lead standard, the citation asserted that she must be paid overtime benefits. East Penn promptly contested the citation, and the Secretary thereafter filed a complaint with the Commission. ³

East Penn argued that the complaint should be dismissed and the citation vacated since the exclusion of overtime pay from the benefits it gave to the employee was consistent with the Commission's interpretation of Sec. 1910.1025(k)(2) in Amax Lead. On September 9, 1987, the administrative law judge assigned to hear the complaint agreed with East Penn and granted its motion to dismiss. Secretary of Labor v. East Penn Mfg. Co., OSHRC No. 87-537 (ALJ Sept. 9, 1987), reprinted in App. at A.23. The Secretary petitioned the Commission for review.

On October 9, 1987, after the United States Court of Appeals for the Fifth Circuit had overruled the Commission's Amax Lead decision on the Secretary's petition for review in United Steelworkers v. Schuylkill Metals Corp., 828 F.2d 314 (5th Cir.1987), the Commission granted the Secretary's petition for discretionary review in East Penn's case. ⁴ Before the Commission decided the East Penn case, the United States Court of Appeals for the Ninth Circuit issued McLaughlin v. ASARCO, Inc., 841 F.2d 1006 (9th Cir.1988), a decision that also rejected the Commission's reasoning in Amax Lead.

On April 27, 1989, the Commission handed down its decision in this case. See Secretary of Labor v. East Penn Mfg. Co., OSHRC No. 87-537 (Apr. 27, 1989), reprinted in App. at A.31. The Commission overruled its prior decision in Amax Lead and held that overtime pay fell within the meaning of medical removal protection benefits provided by Sec. 1910.1025(k)(2) and had to be paid when an employee is transferred for possible exposure to excessive lead levels. However, since East Penn's alleged violation had occurred before the Schuylkill Metals case was announced and East Penn had "acted in reasonable reliance" on the Amax Lead decision in formulating its policy, the Commission also held that the pending citation against East Penn should be vacated. The Secretary then petitioned this Court for review.

II.

We have jurisdiction over the Secretary's petition for review of a final decision by the Commission pursuant to Sec. 11(b) of the Occupational Safety and Health Act of 1970, 29 U.S.C.A. Sec. 660(b) (West 1985). Venue is proper since the alleged violation occurred in Pennsylvania. Id.

We review the Commission's decision not to apply its own interpretation of the medical removal protection benefits provision to the case at hand according to the relevant standard in the Administrative Procedure Act, 5 U.S.C.A. Sec. 706(2)(A) (West 1977). Donovan v. Adams Steel Erection, Inc., 766 F.2d 804, 807 (3d Cir.1985); Budd Co. v. Occupational Safety & Health Rev. Comm'n, 513 F.2d 201, 204 (3d Cir.1975). That section provides that "[t]o the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, [and] interpret constitutional and statutory provisions.... The reviewing court shall--(2) hold unlawful and set aside agency action, findings, and conclusions found to...