Sec'y of Labor v. United Parcel Serv., Inc.

Citation512 S.W.3d 739
Decision Date24 February 2017
Docket NumberNO. 2015–CA–001376–MR,2015–CA–001376–MR
Parties SECRETARY OF LABOR, COMMONWEALTH of Kentucky, Appellant v. UNITED PARCEL SERVICE, INC.; Kentucky Occupational Safety and Health Review Commission; and General Drivers, Warehousemen & Helpers, Local Union No. 89, Appellees
CourtCourt of Appeals of Kentucky

BRIEFS FOR APPELLANT: Susan L. Draper, Kentucky Labor Cabinet, Frankfort, Kentucky

BRIEF FOR APPELLEE, UNITED PARCEL SERVICE, INC.: Carla J. Gunnin, Atlanta, Georgia, Tony C. Coleman, Griffin Terry Sumner, Louisville, Kentucky

BRIEF FOR APPELLEE, KENTUCKY OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION: Frederick G. Huggins, Frankfort, Kentucky

BRIEF FOR APPELLEE, GENERAL DRIVERS, WAREHOUSEMEN & HELPERS, LOCAL UNION NO. 89: Devon N. R. Oser, Louisville, Kentucky

BEFORE: COMBS, J. LAMBERT, AND STUMBO, JUDGES.

OPINION

LAMBERT, J., JUDGE:

The Secretary of Labor, Commonwealth of Kentucky (the Secretary or the Labor Cabinet) has appealed from the opinion and order of the Franklin Circuit Court affirming the Kentucky Occupational Safety and Health Review Commission's (Review Commission) Decision and Order dismissing a citation against United Parcel Service, Inc. (UPS), imposed under the Kentucky Occupational Safety and Health Act (KOSHA), Kentucky Revised Statutes (KRS) 338.011 through 338.991, and holding that the Secretary failed to meet his burden of proof under KRS 338.031(1), the General Duty Clause. Finding no error, we affirm.

This action began with the filing of a citation and notification of penalty on December 2, 2011. As a result of an inspection of UPS at the airport hub on Grade Lane in Louisville from September 28 through October 31, 2011, the Labor Cabinet cited UPS for a serious violation of KRS 338.031(1)(a), the General Duty Clause, which requires an employer to "furnish to each of his employees 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 his employees." The language of the citation is as follows:

a. On or before 09/28/2011, approximately 800 employees were exposed to the hazard of being struck by runaway dollies while the employees were working on the ramp, in that the E-hitches periodically malfunctioned allowing the dollies to become unattached from the ramp tractor. One feasible and acceptable abatement method, among others, to correct this hazard, is to install a hitch capable of being locked/latched in the closed position on the ramp tractors.
b. On or before 9/28/2011, approximately 800 employees were exposed to the hazard of being struck by runaway dollies while the employees were working on the ramp, in that the dolly hitches periodically malfunctioned allowing the dollies to become unattached from the dolly train. One feasible and acceptable abatement, among others, to correct this hazard, is to install a hitch capable of being locked/latched in the closed position on the dollies.

A proposed penalty of $7,000.00 was set, and UPS was given until January 4, 2012, to abate the violation. UPS, through Health & Safety Manager Mike Werner, contested the citation by letter to the Labor Cabinet dated December 15, 2011.

On December 27, 2011, the Secretary filed a complaint with the Review Commission seeking a hearing and affirmation of the citation, penalty, and period of abatement. General Drivers, Warehousemen and Helpers Local Union 89 (Teamsters Local 89) requested party status and was subsequently designated as the authorized employee representative. Teamsters Local 89 later moved to intervene because the dispute addressed the safety of the E-hitches and dolly hitches. UPS filed an answer denying the allegations in the complaint. The matter was assigned to a hearing officer, and a hearing was scheduled. In its pre-hearing memorandum, UPS stated its position as being that the Secretary could not establish a prima facie violation of the General Duty Clause because there was no recognized hazard in using the hitches noted in the citation.

Following the hearing, the parties filed briefs detailing their respective positions. The Secretary argued that UPS failed to keep its workplace free of the hazard of the dollies breaking free, that UPS recognized this hazard because it maintained a database of runaway dollies, that the hazard was likely to cause death or serious physical harm, and that there were feasible means to reduce or eliminate the hazard, such as using locking hitches. UPS responded, first arguing that it was improperly cited under the General Duty Clause and should have been cited under the powered industrial truck (PIT) standard. UPS went on to argue that the Secretary failed to prove there was a hazard because no employee had ever been struck by a dolly and the chance of a runaway was very small, that UPS had actual knowledge of or the industry recognized a problem with malfunctioning hitches, and that a feasible abatement method existed. Teamsters Local 89 also filed a brief, disputing UPS's claim that it was subject to the PIT standard.

The Hearing Officer served her findings of fact, conclusions of law, and recommended order on March 29, 2013. Based upon the evidence and testimony presented, the Hearing Officer concluded that "E-hitch malfunctions do occur and that UPS has no reliable, consistent means of preventing them. Once a tongue has popped out of a hitch there is no good way of knowing whether the breakaway was caused by an [sic] hitch malfunction or by human error unless the latch is visibly impaired." Testimony also addressed abatement methods, including the use of lockable hitches, which UPS was in the process of testing. Rejecting UPS's argument that the PIT standard applied because that provision does not deal with hitches, the Hearing Officer went on to conclude that the Secretary had established a violation of the General Duty Clause based upon testimony "that the E-hitches malfunctioned periodically causing the dollies to become unhitched." However, she reduced the proposed penalty to $4,250.00. The Hearing Officer recommended UPS abate the violation and pay the fine within thirty days from the entry of the final order.

UPS filed a petition with the Review Commission for discretionary review of the Hearing Officer's recommended order. UPS argued that the PIT standard applied to it rather than the General Duty Clause, that the Hearing Officer erred in finding that the E-hitches malfunctioned because there was no evidence to support this conclusion, and that the Hearing Officer failed to properly analyze whether there existed a hazard of malfunctioning hitches, whether this malfunction was a recognized hazard, and whether there was a feasible abatement method to address it. Over the Secretary's objection, the Review Commission accepted the case for discretionary review and ordered the parties to file briefs. TUG Technologies, the company that manufactured the E-hitches, moved to intervene in the action based on the allegation of a product defect that could impact its interests in future litigation. While the Review Commission did not permit TUG to intervene, it opted to treat its petition as an amicus brief. The Hearing Officer also directed the parties to file supplemental briefs related to the evidence to support or refute a finding that the E-hitch was defective. In his supplemental brief, the Secretary admitted that there was no direct evidence, but asserted that this may be inferred from the evidence. In contrast, UPS argued that there was no evidence to support a finding that the E-hitches were defective or malfunctioned and that the Secretary's choice of words in the citation meant that he had to prove that the breakaways occurred as a result of malfunctioning E-hitches.

The Review Commission entered its decision on April 7, 2014, rejecting the Hearing Officer's recommendation and holding that the Secretary failed to meet his burden of proving a violation of the General Duty Clause. While it found that the Secretary had established employee exposure to the hazard of being struck by a runaway dolly, the Review Commission found there was no evidence that the E-hitches malfunctioned or that this hazard was recognized by UPS or by the industry. Therefore, the Review Commission reversed the Hearing Officer's findings of an E-hitch malfunction and that UPS or the industry had knowledge of such. It went on to observe:

While we agree UPS has no reliable ability to prevent hitch separation, runaways, at its Louisville facility, that is not the issue in this case. Labor in its citation charged the company with permitting its employees to be exposed to the hazard of malfunctioning hitches. Labor, however, has failed to prove UPS's hitches malfunctioned. As the enforcer of the act, the Cabinet has the duty to write citations it is prepared to support.

The Review Commission determined that UPS's workplace was free from the hazard of employees being struck by a runaway dolly because of an E-hitch malfunction. Regarding the abatement, the Review Commission pointed to UPS's unrebutted proof that it was in the process of evaluating methods of abatement but had not found a workable one. Therefore, it concluded that the Secretary failed to prove a feasible method existed to abate the hazard. One commissioner dissented from the majority opinion.

The Secretary filed a petition for judicial appeal in Franklin Circuit Court pursuant to KRS 338.091, arguing that the Review Commission's final order was arbitrary and contrary to substantial evidence. It requested reinstatement of the Hearing Officer's recommended order and of the original $7,000.00 penalty. Following briefing by the parties, the circuit court entered an opinion and order on May 28, 2015, affirming the Review Commission's decision. The Secretary moved the court to reconsider its opinion, arguing that it had considered the appeal under the elements of a specific standard violation rather than under the General Duty Clause. In an...

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