Dana Container, Inc. v. Secretary of Labor
847 F.3d 495
| 7th Cir. | 2017Background
- Dana Container operates a truck-tank washing facility where employees sometimes must enter confined tanks to manually remove residue after mechanical cleaning fails.
- OSHA requires permit‑required confined-space (PRCS) procedures (29 C.F.R. § 1910.146): entry permits, harness/retrieval, continuous atmospheric testing, respirators, forced-air ventilation, and an attendant outside the tank; Dana’s rules mirrored these requirements and prohibited entry before mechanical cleaning.
- On Jan. 28, 2009, supervisor Bobby Fox entered an uncleaned tank without following permit procedures, became unconscious from toxic fumes, and was rescued; OSHA inspected and issued serious and willful citations under the PRCS standard.
- An ALJ vacated several citation items, finding Dana eligible for alternate entry procedures; the Occupational Safety and Health Review Commission reversed, concluding Dana was not eligible and reinstating the items; Dana petitioned for review in the Seventh Circuit.
- The Commission found (1) Fox’s knowledge and misconduct could be imputed to Dana, (2) Dana’s safety program was inadequately enforced (permit deficiencies, lack of follow‑up/discipline), and (3) Dana failed to meet the evidentiary requirements for alternate entry procedures.
Issues
| Issue | Plaintiff's Argument (Dana) | Defendant's Argument (OSHA/Secretary) | Held |
|---|---|---|---|
| Imputation of supervisor’s knowledge | Fox’s misconduct was isolated; Dana lacked requisite knowledge | Fox was a supervisor acting within scope of employment; his knowledge imputable to Dana | Imputation upheld; Fox’s actions served employer and his knowledge imputed to Dana |
| Foreseeability / adequacy of safety program standard | Third Circuit rule (PP&L) requires showing program inadequacy to impute supervisor knowledge; Dana argues that standard disfavors imputation here | Commission applied PP&L standard and found Dana’s program enforcement inadequate | Commission’s application of foreseeability/PP&L tested and affirmed; program enforcement failures supported imputation |
| "Unpreventable employee misconduct" / good‑faith defense to willfulness | Dana had written rules, training, ventilation, testing, some discipline, and prior OSHA acceptance — showing good faith compliance | Dana failed to enforce permit completeness or discipline for permit violations; systemic permit omissions and no follow‑up demonstrate lack of good faith | Good‑faith defense rejected; failure to enforce and follow up defeated good‑faith showing and justified willful findings for penalty purposes |
| Alternate entry procedures (§1910.146(c)(5)) | Dana argued forced‑air ventilation and wash process made hazardous atmospheres unlikely and satisfied alternate entry criteria | Records and testing data lacked contemporaneous, facility‑specific proof; expert report postdated incident and provided no supporting testing; meters used couldn’t detect all hazards | Commission properly found Dana failed to meet the evidentiary and monitoring requirements for alternate entry procedures |
Key Cases Cited
- Chao v. Gunite Corp., 442 F.3d 550 (7th Cir. 2006) (agency deference and review principles)
- Wisconsin v. EPA, 266 F.3d 741 (7th Cir. 2001) (satisfactory agency explanation standard)
- Howard Young Med. Ctr. Inc. v. Shalala, 207 F.3d 437 (7th Cir. 2000) (rational connection between facts and agency decision)
- Stark Excavating, Inc. v. Perez, 811 F.3d 922 (7th Cir. 2016) (employer’s failure to enforce safety rules defeats good‑faith defense)
- Burlington Indus., Inc. v. Ellerth, 524 U.S. 742 (1998) (scope‑of‑employment principles; imputation of employee conduct)
- Pennsylvania Power & Light Co. v. OSHRC, 737 F.2d 350 (3d Cir. 1984) (safety‑program adequacy standard for foreseeability/imputation)
- Zero Zone, Inc. v. United States Dep’t of Energy, 832 F.3d 654 (7th Cir. 2016) (substantial‑evidence standard)
- Consol. Edison Co. v. NLRB, 305 U.S. 197 (1938) (agency must produce more than a scintilla of evidence)
- Local 65‑B, Graphic Commc’ns Conference v. NLRB, 572 F.3d 342 (7th Cir. 2009) (definition of substantial evidence)
Decision: Seventh Circuit denied Dana’s petition for review and affirmed the Commission’s decision.