IBP, Inc. v. Iowa Employment Appeal Bd.

• Decision Date: 22 December 1999
• Docket Number: No. 98-477.,98-477.
• Parties: IBP, INC., Appellee, v. IOWA EMPLOYMENT APPEAL BOARD, Appellant.
• Court: Iowa Supreme Court

604 N.W.2d 307

IBP, INC., Appellee, v. IOWA EMPLOYMENT APPEAL BOARD, Appellant.

No. 98-477.

Supreme Court of Iowa.

December 22, 1999.

Thomas J. Miller, Attorney General, Thomas D. McGrane, and Bruce Kempkes, Assistant Attorneys General, and Gail Sheridan-Lucht, Des Moines, for appellant.

David H. Goldman of David H. Goldman, P.C., Des Moines, for appellee.

Considered by McGIVERIN, C.J., and CARTER, LAVORATO, NEUMAN, and TERNUS, JJ.

McGIVERIN, Chief Justice.

Iowa Beef Processors, Inc. (IBP) was fined a total penalty of $125,500 by the Iowa labor commissioner for alleged violations of Iowa Code chapter 88 (1993), the Iowa Occupational Safety and Health Act (IOSHA), and its rules and regulations. The alleged violations were charged after an ammonia leak occurred at the IBP meat packing facility in Council Bluffs, Iowa. An employee of a subcontractor performing cleaning services at the IBP facility died of exposure to ammonia. The Iowa Employment Appeal Board (EAB or the agency) upheld the penalty.

Upon IBP's petition for judicial review, the district court reversed the decision of the EAB. The EAB now appeals the district court's ruling.

Upon our review, we affirm in part and reverse in part the decision of the district court and remand the case to the agency for calculation of reduced penalties consistent with this opinion.

I. Background facts and proceedings.

We briefly summarize the facts giving rise to this case. Additional relevant facts will be discussed in analyzing each specific workplace safety violation charged against IBP.

On June 30, 1993, an ammonia leak occurred at an IBP meat packing facility in Council Bluffs. The leak occurred when the ammonia line was opened by an employee who did not know that a valve in the line had been removed. When the ammonia line was opened, ammonia began leaking through the opening in the line into the cut room floor area of the plant.

Rather than evacuate the plant as instructed through their training procedures, several IBP employees, including supervisors, entered the plant after the plant evacuation signal had sounded to locate a worker performing cleaning services who was missing and presumed down. The cleaning services employee was employed by NSCI, a subcontractor, and not by IBP. The IBP employees eventually located the NSCI employee and pulled him from the plant. The NSCI employee later died of exposure to ammonia.

After the June 30 ammonia leak, an inspection of the IBP facility was conducted by IOSHA representatives. Thereafter, the IOSHA Administrator, acting under authority of the labor commissioner,¹ issued various citations against IBP, which alleged serious, willful and repeated violations of Iowa Occupational Safety and Health rules, with a proposed total penalty of $314,400.

IBP sent the Division of Labor a notice of intent to contest the alleged violations found by the IOSHA Administrator.

Thereafter, the labor commissioner issued a complaint against IBP. See Iowa Code § 88.8. IBP filed an answer and a statement of affirmative defenses.

After an evidentiary hearing, an administrative law judge (ALJ) issued an amended proposed decision upholding, as modified, the citations and penalties of the IOSHA Administrator. IBP appealed the ALJ's decision to the Iowa Employment Appeal Board. The board affirmed the ALJ's ruling, but reduced the penalty imposed against IBP to $125,500.

IBP filed a petition for judicial review in district court. See Iowa Code §§ 17A.19, 88.9(1).

After a hearing, the district court reversed the decision of the board and dismissed all charged violations against IBP.

The board appeals. See Iowa Code § 17A.20.

II. Standard of review.

We believe it helpful to first clarify the proceedings before the ALJ and the employment appeal board. Iowa Code section 88.8(3) provides that an employer who intends to contest a citation issued under Iowa Code section 88.7 shall be afforded an opportunity for an hearing. The parties agree here that the action before the ALJ and the appeal board was a contested case proceeding. See Iowa Code § 17A.2(5) (defining contested case proceeding as one where legal rights, duties or privileges of a party are required by the Constitution or statute to be determined by an agency after an opportunity for an evidentiary hearing).

Therefore, upon review of a district court's ruling on a petition for judicial review in a contested case proceeding, we apply the standards in Iowa Code section 17A.19(8)(f) to the agency action to determine whether our conclusions are the same as those of the district court. Mortimer v. Fruehauf Corp., 502 N.W.2d 12, 14 (Iowa 1993). On such matters, our scope of review is for correction of errors at law. E.N.T. Associates v. Collentine, 525 N.W.2d 827, 829 (Iowa 1994). The agency's findings of fact are binding on us if they are supported by substantial evidence when the agency record is viewed as a whole. Iowa Code § 17A.19(8)(f); E.N.T. Associates, 525 N.W.2d at 829. Evidence is substantial if a reasonable person would find it adequate to reach a conclusion. Simonson v. Snap-On Tools Corp., 588 N.W.2d 430, 434 (Iowa 1999). We may affirm, reverse, modify or grant any other appropriate relief, equitable or legal. Iowa Code § 17A.19(8).

III. Background law regarding workplace safety standards.

IBP is subject to the requirements of Iowa's Occupational Safety and Health Act, Iowa Code chapter 88 (hereinafter IOSHA or the Act). Iowa Code chapter 88 is patterned after the federal Occupational Safety and Health Act, 29 U.S.C. § 651 (1994). The federal law imposes two duties on employers. "First, an employer has a general duty to `furnish ... employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to [its] employees.'" New York State Elec. & Gas Corp. v. Secretary of Labor, 88 F.3d 98, 104 (2d Cir. 1996) (quoting 29 U.S.C. § 654(a)(1)); see also Iowa Code § 88.4. Second, an employer has a duty to comply with the more specific safety and health standards promulgated under the federal law. Id.; 29 U.S.C. § 654(a)(2); see also Iowa Code § 88.4. In this case, the order imposing liability on IBP is apparently based on IBP's failure to comply with the "special duty" clause, see 29 U.S.C. § 654(a)(2), Iowa Code section 88.4, by failing to comply with specific workplace safety standards.

Under the federal law, the United States Secretary of Labor promulgates mandatory safety and health standards applicable to particular businesses.²P. Gioioso & Sons, Inc. v. Occupational Safety & Health Review Comm'n, 115 F.3d 100, 102 (1st Cir.1997) (citing 29 U.S.C. § 651(b)(3)). The Secretary of Labor, acting through the Occupational Health and Safety Administration (OSHA), enforces those standards by conducting investigations, issuing citations, and by assessing monetary penalties. See 29 U.S.C. §§ 657 59; P. Gioioso & Sons, Inc.,115 F.3d at 102; New York State Elec. & Gas Corp.,88 F.3d at 103. The Occupational Safety and Health Review Commission (Commission) adjudicates alleged violations and serves as the "neutral arbiter" between the government regulatory body and an employer. New York State Elec. & Gas Corp.,88 F.3d at 103; see 29 U.S.C. §§ 651(b)(3), 659, 661.

Iowa has adopted the federal safety standards and rules promulgated by the Secretary of Labor. See Iowa Code §§ 88.3(6), 88.5(1)(c); Iowa Admin. Code r. 875 10.20 (1998). The standards promulgated by the Secretary of Labor that are applicable to this case are codified at 29 C.F.R. part 1910. Thus, the relevant standards applicable in this case will be cited by reference to the Code of Federal Regulations citation.

IBP's alleged violations of workplace safety rules stemming from the ammonia leak can be grouped into three categories: (1) violation of emergency response/evacuation standards; (2) violation of respiratory/breathing protection standards; and (3) violation of energy control standards/lockout/tagout procedures. The majority of the items charged in the citations were for a serious violation of workplace safety standards as opposed to a willful violation. The distinction between a serious and willful violation will be explained later. For clarification, all alleged violations will be assumed to be a serious violation, unless otherwise indicated.

IV. Failure to have an emergency response plan—Citation 1, Items 1-7f.

A. The applicable workplace safety standards—29 C.F.R. § 1910.120(q).

IBP was charged in Citation 1, Item 1, by the IOSHA Administrator with failure to have an emergency response plan in place, as required by section 29 C.F.R. § 1910.120(q), for purposes of responding to the release of a hazardous substance such as an ammonia leak. 29 C.F.R. § 1910.120(q) provides in part:

(1) Emergency response plan. An emergency response plan shall be developed and implemented to handle anticipated emergencies prior to the commencement of emergency response operations. The plan shall be in writing and available for inspection and copying by employees, their representatives and OSHA personnel.

An emergency response plan must address certain topics related to emergency preparedness including pre-emergency planning, personnel roles, lines of authority, training, and communication, emergency recognition and prevention, site security and control, evacuation routes and procedures, emergency medical treatment and others. 29 C.F.R. § 1910.120(q)(2).

Pursuant to the following language of 29 C.F.R. § 1910.120(q)(1), an employer is exempt from the duty to develop an emergency response plan if the employer's disaster plan calls for evacuation and does not permit any employees to assist in handling the emergency:

Employers who will evacuate their employees from the danger area when an emergency occurs, and who do not permit any of their employees to assist in handling the emergency, are exempt from the requirements of this paragraph if the

...