Holscher v. Valley Queen Cheese Factory

• Decision Date: 05 April 2006
• Docket Number: No. 23657.,23657.
• Citation: 2006 SD 35,713 N.W.2d 555
• Parties: Chris HOLSCHER, Claimant and Appellant, v. VALLEY QUEEN CHEESE FACTORY, Employer and Appellee, and Acuity Insurance, Insurer and Appellee.
• Court: South Dakota Supreme Court

713 N.W.2d 555

2006 SD 35

Chris HOLSCHER, Claimant and Appellant, v. VALLEY QUEEN CHEESE FACTORY, Employer and Appellee, and Acuity Insurance, Insurer and Appellee.

No. 23657.

Supreme Court of South Dakota.

Argued January 11, 2006.

Decided April 5, 2006.

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Mark J. Freeman of Fitch, Johnson, Larson & Held, P.A., Minneapolis, Minnesota, Attorneys for appellant.

Susan Brunick Simons, Kristi Geisler Holm of Davenport, Evans, Hurwitz & Smith, L.L.P., Sioux Falls, South Dakota, Attorneys for appellees.

GILBERTSON, Chief Justice.

[¶ 1.] Christopher Holscher (Holscher), was injured on October 1, 2003, while working at Valley Queen Cheese Factory (Valley Queen). Valley Queen established willful misconduct on Holscher's part at a hearing before an administrative law judge (ALJ), and Holscher's workers' compensation claim was denied. Holscher appealed to the Secretary of the Department of Labor (Secretary), who affirmed the ALJ's ruling. Holscher's appeal of the Secretary's ruling in circuit court was affirmed. He appeals the circuit court's ruling. We affirm.

FACTS AND PROCEDURE

[¶ 2.] Valley Queen manufactures cheese and other related by-products at its plant in Milbank, South Dakota. Numerous chemicals are used in the manufacturing process, some of which are hazardous. Valley Queen houses several chemicals in a central location known as the sabre room, including both alkaline and acid-based chemicals. One of the hazardous chemicals housed in the sabre room is a strong acid known as AC-55-5 (red acid). It is a clear red liquid with a purple hue. Red acid causes chemical burns upon contact with skin. When mixed with chlorine or chlorinated chemicals, red acid forms a hazardous chlorine vapor or gas that smells of chlorine or mustard gas. Inhalation injuries include a burning taste, sneezing, coughing, and difficulty breathing. A chlorine-based chemical known as Ful-Bac is also used in the plant as a cleaning solvent.

[¶ 3.] Red acid is dispensed into a barrel in the sabre room from a holding tank located above the room via a chemical line using a gravity-fed system. Smaller hand held containers are filled from the barrel in the sabre room and then transported to other locations in the plant for use in various production processes. Valley Queen requires employees to use a spring-loaded valve installed on the chemical line leading to the barrel. The spring-loaded valve operates only if the handle is held open. When the handle of the spring-loaded valve is released, the chemical ceases to flow into the barrel. Employees attend mandatory training programs to learn and review how to use and dispense red acid and other chemicals used on-site in a safe manner.

[¶ 4.] In November 1995, Holscher began working for Valley Queen in a variety of capacities including that of a utility worker. As a utility worker, Holscher filled in for absent employees in a variety of positions. Holscher first filled in as a night supervisor sometime prior to 2003. He was eventually promoted to night supervisor in June 2003.

[¶ 5.] During his employment at Valley Queen, Holscher received safety training on chemical use and handling. Holscher received individual training from a prior night supervisor when he was moved to the position of utility worker, including how to properly fill red acid barrels in the sabre room. In February 1998, Holscher attended a chemical use and handling training session where it was stated that acid and chlorine should not be mixed, and that injury could result from the chlorine gas produced by the mixture. During the February 1998 training, he was asked to respond true or false to the following statement: "You should contact your plant safety coordinator any time you see a major chemical spill." Holscher responded that the statement was true.

[¶ 6.] Holscher attended two training sessions in 2003 on chemical handling. A session in January 2003 again reviewed the fact that chlorine and acid should not be mixed. At that training session, Material Safety Data Sheets (MSDS) for chemicals were reviewed, that included information on how to safely remove chemical spills. The MSDS for red acid stated that large spills should be dammed and removed with a pump. Small spills and residue could be flushed with water into a sewer containment system. The training instructed that if the odor of gas were present, the area should be immediately evacuated and a member of the management team should be contacted. Proper chemical handling was also reviewed at the training session.

[¶ 7.] At a May 2003 training session attended by Holscher, a revised evacuation plan was reviewed that required evacuation and immediate contact with management in the event the odor of gas was detected in the building. MSDSs were reviewed as well at their location in the plant. The session also included a review of the fact that acid and chlorine should not be mixed due to the creation of dangerous chlorine gas, that employees should not attempt to identify chemicals simply by color, and that all written procedures should be followed.

[¶ 8.] In addition to training employees with the MSDSs, Valley Queen placed laminated tags on all containers that identified the chemicals contained. Posters were placed on the walls in the sabre room that identified the chemicals present in the room and their properties. According to the MSDSs provided by Valley Queen to its employees for Ful-Bac and red acid, neither chemical required a respirator as personal protective equipment. The MSDS for Ful-Bac also stated that spills and vapors should not be breathed, that a spill area should be evacuated and that personnel should not return until the vapors dissipated.

[¶ 9.] After Holscher began working at Valley Queen, but before the incident on October 1, 2003, chemical spills had occurred in the sabre room due to an employee propping open the spring-loaded valve by using a barrel cap or other object to override the mechanism, which allowed chemicals to flow unattended. As a result, Valley Queen adopted a safety rule that prohibited using caps or other objects to prop open the spring-loaded safety valve. Valley Queen also posted signs immediately adjacent to the spring-loaded valve on the red acid barrel that read: "DO NOT PROP OPEN VALVE."

[¶ 10.] Valley Queen had occasion to enforce the rule and took steps to do so against another employee, Dave Cardwell (Cardwell). Sometime in 2002, Cardwell violated the safety rule and a chemical spill occurred. As a result of the violation of the safety rule, Cardwell was suspended from work for five days. Cardwell violated the rule on a second occasion that resulted in a second chemical spill, and Cardwell's employment was terminated as a consequence.

[¶ 11.] As a result of the chemical spills that resulted in Cardwell's discharge, Valley Queen instituted yet another safety policy in 2002. The policy limited the number of individuals who were permitted to access the red acid barrel and placed the duty for dispensing the chemicals in the sabre room with supervisors. A sign was posted on the acid barrel that articulated the new policy: "Chemical To Be Dispensed By Supervisor Only!"

[¶ 12.] Sometime prior to the incident on October 1, 2003, Holscher was working as the night supervisor. When his immediate supervisor, Lance Johnson, passed through and noticed that a cap had been used to prop open the spring-loaded valve on a red acid barrel located in another room in the plant known as the DOH room. Holscher was present in the room at the time, and therefore, Johnson did not consider the open valve to be unattended and no chemical spill resulted from the incident. However, Johnson told Holscher that his action of propping open the spring-loaded valve was a violation of Valley Queen's policies. Holscher admitted to Johnson that he knew he violated the policy. Johnson told Holscher that since he was a supervisor he had to set an example for other employees and that Holscher would not be able to do so if he himself violated the safety rules and policies. Johnson then reminded Holscher of the incidents that led to Cardwell's termination. Johnson ultimately reprimanded Holscher orally for his violation of the safety rules and policies, and concluded that an oral reprimand was appropriate based on the fact that Holscher had been present in the room, had not left the valve unattended, and that no chemical spill had resulted. No written warning was issued and no further disciplinary action was taken at the time, as Johnson believed Holscher would not violate the policy again.

[¶ 13.] Approximately two weeks later, Don Rieger (Rieger), an employee under the supervision of Holscher while on the night shift, observed Holscher violate the do-not-lock-open rule in the sabre room. Rieger observed Holscher standing with his arms crossed and leaning against another barrel with the spring-loaded valve propped open, waiting for the acid barrel to fill. Rieger warned Holscher that his actions were a violation of the safety policy, and Holscher conceded in response that he was aware of the safety policy. Holscher related to Rieger that Johnson had caught him propping open the valve with a cap in the DOH room. Holscher told Rieger that he had understood from Johnson that he could prop open the spring-loaded valve as long as he remained in the room. Johnson would later testify that he did not recall telling Holscher that he could prop open the spring-loaded valve as long as he remained in the room.

[¶ 14.] In 2003, the South Dakota Department of Environment and Natural Resources (SDDENR) required Valley Queen to install a plug in the drain in the sabre room floor in order to contain any major chemical spills that might occur when employees were not on site, or if a chemical barrel were to fail when it was unattended or the plant was closed. On August 20, 2003, Valley Queen notified SDDENR that the...