In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 16‐1087
DANA CONTAINER, INC.,
Petitioner,
v.
SECRETARY OF LABOR,
Respondent.
____________________
On Petition for Review of Decision and Order of the
Occupational Safety and Health Review Commission
OSHRC No. 09‐1184
____________________
ARGUED SEPTEMBER 12, 2016 — DECIDED FEBRUARY 1, 2017
____________________
Before WOOD, Chief Judge, and EASTERBROOK and SYKES,
Circuit Judges.
WOOD, Chief Judge. It is not hard to find people who com‐
plain about government regulations, but the regulations often
exist because people do not take optimal precautions on a vol‐
untary basis. This case illustrates that problem. It arose after
toxic fumes in a large container knocked out a man who was
working inside it. Fortunately, he was rescued by the local fire
2 No. 16‐1087
department, but his employer, Dana Container, wound up
fighting citations from the Occupational Safety and Health
Administration (OSHA). After an administrative law judge
(ALJ) and the Occupational Safety and Health Review Com‐
mission upheld OSHA’s actions, Dana turned to this Court.
Because Dana has not provided a compelling reason to over‐
turn the Commission’s determinations, we deny its petition
for review.
I
Dana operates a truck‐tank washing facility near the Ste‐
venson Expressway in Summit, Illinois. The tanks cleaned at
Dana’s facility are long metallic cylinders used to transport
products such as ink and latex. After the tanks are emptied at
their destination, truckers bring them to Dana’s facility for a
cleaning so that they can haul different products without
adulteration. Before washing a tank, employees drain any re‐
sidual product from it. They then insert a mechanical spinner
that rotates scrubbers from one end of the tank to the other,
simultaneously dousing it with soap or solvents (or both).
They then give the tank a final rinse of water and blow it dry.
Most of the time, this process suffices to clean the tank thor‐
oughly. When it does not, however, employees enter the tank
and manually clean out the remaining sludge or residue. Be‐
cause the tank space is confined and may contain chemicals
that are hazardous to health, OSHA has promulgated regula‐
tions that require companies to enforce certain safety precau‐
tions when their employees enter these “permit‐required con‐
fined spaces (PRCSs).” 29 C.F.R. § 1910.146.
At Dana’s facility in Summit, employees enter tanks to
clean them approximately ten times per month. Before doing
No. 16‐1087 3
so, the employee must obtain an entry permit from a supervi‐
sor; the permit contains a checklist of required safety precau‐
tions. The employee then climbs onto a catwalk above the
tank and hooks a full‐body harness he is wearing to a mechan‐
ical retrieval device that can pull him out of the tank if he be‐
comes incapacitated for any reason. He must also test the tank
air for atmospheric hazards before going in. When he enters
the tank, he is required to wear a respirator and to conduct
continuous atmospheric testing. While an employee is in the
tank, automatic blowers force fresh air into it. A fellow em‐
ployee is required to be on standby outside the tank in order
to assist in case of an emergency. OSHA regulations and
Dana’s safety rules prohibit employees from entering a
“dirty” tank before it has been mechanically cleaned.
In the cold early morning hours of January 28, 2009, one of
Dana’s supervisors, Bobby Fox, was on the third shift along
with former employee Cesar Jaimes. Fox was working on a
trailer and encountered a problem with a clogged valve just
as he was about to begin the mechanical cleaning process. Dis‐
regarding the safety rules, he entered the tank prior to clean‐
ing it, without attaching himself to the retrieval device or fol‐
lowing the entry permit procedures. After a short while,
Jaimes looked inside, saw Fox unconscious in a pool of chem‐
ical sludge, and called the Summit Fire Department. The fire‐
fighters hoisted him out, rinsed off the chemical residue, and
transported him to the hospital. Fox was diagnosed with
“Syncope and Collapse, Toxic Effect of Unspecified Gas,
Fume, or Vapor” (i.e., fainting).
A local TV news crew broadcast the rescue that morning,
and OSHA inspector Jami Bachus happened to see it before
heading to work. She volunteered to inspect Dana’s facility
4 No. 16‐1087
and did so, arriving at the Summit station within three hours
of the accident. After her inspection, Bachus issued two cita‐
tions to Dana for serious and willful violations of the Occupa‐
tional Safety and Health Act. Most of the items listed in the
citations were for violations of the PRCS standards found at
29 C.F.R. § 1910.146. Dana contested the citations, and the Sec‐
retary of Labor and Dana settled some of the items. The rest
were the subject of a hearing before an ALJ. The ALJ vacated
a number of the citation items, for the most part because she
found that Dana qualified for the less stringent “alternate en‐
try procedures” described in § 1910.146(c)(5). She also upheld
the findings of several of the specific violations. Both parties
appealed the ALJ’s decision to the Commission. This did not
go well for Dana; the Commission decided, contrary to the
ALJ, that Dana was not eligible for the alternate entry proce‐
dures, and so it reinstated those items in the citation. It af‐
firmed the rest of the ALJ’s findings. Dana has filed a petition
for review in this court.
II
Dana attacks the Commission’s decision in several ways.
First, it asserts that it lacked the requisite knowledge to sup‐
port the order and that it should be exonerated because the
incident resulted from “unpreventable employee miscon‐
duct.” It next argues that the Secretary did not prove the
“willful” element of some of the items. Last, it contends that
the Commission should have found that it satisfied the stand‐
ard for alternate entry procedures.
We review the Commission’s conclusions in enforcement
actions under the Administrative Procedure Act, 5 U.S.C.
§ 701 et seq. We defer to the Commission’s interpretations of
No. 16‐1087 5
law unless they are “arbitrary or capricious” or contrary to
law. 5 U.S.C. § 706; Chao v. Gunite Corp., 442 F.3d 550, 556 (7th
Cir. 2006). We uphold an agency’s determination “as long as
[the agency] considered relevant data under the correct legal
standards and offered a satisfactory explanation for its ac‐
tion.” Wisconsin v. E.P.A., 266 F.3d 741, 746 (7th Cir. 2001). An
explanation is satisfactory if there is a rational connection be‐
tween the facts the agency found and the decision it made.
Howard Young Med. Ctr. Inc. v. Shalala, 207 F.3d 437, 441 (7th
Cir. 2000).
Where, as here, the Commission reverses an ALJ, we con‐
fine our review to the Commission’s order. Chao, 442 F.3d at
556. We must uphold the Commission’s factual findings if
they are supported by substantial evidence on the record as a
whole. 29 U.S.C. § 660(a); Stark Excavating, Inc. v. Perez, 811
F.3d 922, 926–27 (7th Cir. 2016). Substantial evidence is “‘such
relevant evidence as a reasonable mind might accept as ade‐
quate to support the conclusion’ reached by the agency.” Zero
Zone, Inc. v. United States Depʹt of Energy, 832 F.3d 654, 668 (7th
Cir. 2016) (quoting Local 65–B, Graphic Commcʹns Conference of
Intʹl Bhd. of Teamsters v. NLRB, 572 F.3d 342, 347 (7th Cir.
2009)); see also Consol. Edison Co. v. NLRB, 305 U.S. 197, 229
(1938) (explaining that the agency must produce “more than
a mere scintilla” of evidence). We defer to the Commission’s
credibility determinations in all but extraordinary circum‐
stances. Chao, 442 F.3d at 557.
A
The Occupational Safety and Health Act is not a strict lia‐
bility statute. This means that the Secretary was required to
prove that Dana knew about the problem in order to establish
6 No. 16‐1087
a “serious” violation. Kokosing Constr. Co., 21 BNA OSHC
1629, 1631 (No. 04‐1665, 2006), affʹd 232 F. App’x 510 (6th Cir.
2007). Under Commission precedent the Secretary can satisfy
his burden without demonstrating any inadequacy or defect
in the employer’s safety program, if a supervisory employee
has actual or constructive knowledge of the violation. In that
case, the supervisor’s knowledge can be imputed to the em‐
ployer. Secretary of Labor v. Dover Elevator, 16 BNA OSHC 1281
(No. 91‐862, 1993). Because Fox was a supervisor and had ac‐
tual knowledge of his own misconduct, the Commission im‐
puted his knowledge to Dana.
This path for imputing knowledge is common in employ‐
ment law. When an employee is acting within the scope of her
employment, her knowledge is typically imputed to the em‐
ployer. United States v. One Parcel of Land Located at 7326 High‐
way 45 North, Three Lakes, Oneida Cnty., Wis., 965 F.2d 311, 316
(7th Cir. 1992). Conduct is “within the scope of employment
when [it is] ‘actuated, at least in part, by a purpose to serve
the [employer],’ even if it is forbidden by the employer.” Bur‐
lington Indus., Inc. v. Ellerth, 524 U.S. 742, 756 (1998) (quoting
Restatement (Second) of Agency §§ 228(1)(c), 230 (1957)).
Here, Fox knew that he was violating the rules when he en‐
tered the dirty tank in order to kick loose a stuck valve so that
he could then drain the tank. His act was in furtherance of
Dana’s tank cleaning business. We thus see no problem with
the Commission’s decision to impute Fox’s knowledge to
Dana.
Dana urges that the Third Circuit requires more than this,
and that it has the better view. It requires the Secretary to
prove that a supervisor’s participation in misconduct was
foreseeable by showing that the employer’s safety program
No. 16‐1087 7
was inadequate. See Pennsylvania Power & Light Co. v. OSHRC,
737 F.2d 350, 354, 357–58 (3d Cir. 1984). In order to have an
adequate safety program, that court says, the employer must
have work rules designed to prevent the violation, adequately
communicate those rules to its employees, take steps to dis‐
cover violations, and effectively enforce the rules when it dis‐
covers violations. Id. at 358–59.
This argument would have more force if the Commission
had ignored the Third Circuit’s position. But it did not. At the
time of its decision, it knew that the Third Circuit might hear
this petition for review, because Dana’s principal office is lo‐
cated in New Jersey. See 29 U.S.C. § 660(a). It therefore tested
its conclusion under the standard of Pennsylvania Power &
Light and found that Dana’s safety program was indeed inad‐
equate. That assessment finds sufficient support in the record.
There was evidence showing that nearly all of the tank entry
permits at Dana’s Summit facility contained errors or omis‐
sions. Some indicated that the entries had exceeded the max‐
imum duration of 20 minutes by over an hour. Others had
other flaws: for example, they lacked the requisite air moni‐
toring results; they failed to show the duration for which the
permit was valid; they indicated that employees had not re‐
viewed material safety data sheets (or had no information
about review); and they failed to name either the entrant or
the entry attendant. Whether these errors and omissions oc‐
curred because the employees were violating entry proce‐
dures or if they reflected only recording problems, there is no
evidence that the Facility Manager followed up on the defi‐
ciencies. The Commission was therefore justified in conclud‐
ing that there was a failure to enforce Dana’s safety program.
8 No. 16‐1087
Dana argues that the particular problems the Commission
mentioned would not have allowed it to predict Fox’s entry
into a dirty tank. But this is asking for a higher degree of fore‐
seeability than any court requires. The Commission was enti‐
tled to find that the uncorrected permit violations exhibited a
pattern of disregard for the rules at Dana. Even in the face of
a robust written program, lax disregard of the rules can send
a message to employees that a company does not make safety
a priority. In such an environment, conduct such as Fox’s is
reasonably foreseeable.
Dana’s effort to persuade us that the Commission erred by
rejecting the “unpreventable employee misconduct” defense
also falls short. To use the defense an employer must show
that it took steps to discover violations of its safety rules and
that it effectively enforced the rules when violations were dis‐
covered. See Crowther Roofing & Sheet Metal of Florida v. Occu‐
pational Safety and Health Review Comm’n, 454 F. App’x 774, 776
(11th Cir. 2011). Here, the Commission agreed with the ALJ’s
conclusion that Dana failed to take these steps. It relied on the
evidence of permit deficiencies and lack of disciplinary or fol‐
low‐up action. We have no reason to set aside this conclusion.
See Howard Young, 207 F.3d at 441.
B
While serious violations of 29 C.F.R. § 1910.146 each carry
a maximum penalty of $7,000, willful violations are subject to
stiffer monetary penalties—up to $70,000 for each one. 29
U.S.C. § 666(a)–(b). Though neither party disputes that Fox’s
behavior was willful, Dana argues that it established a good
faith defense that should have precluded the Commission
from imputing Fox’s state of mind to the company. Dana cites
No. 16‐1087 9
a Commission case holding that an employer can demonstrate
that the willful conduct of its supervisory personnel should
not be imputed to the employer if the employer can demon‐
strate a good faith effort to comply with the standard. See, e.g.,
Anderson Excavating & Wrecking Co., 17 BNA OSHC 1890 (No.
92‐3684, 1997), aff’d, 131 F.3d 1254 (8th Cir. 1997).
Dana contends that it demonstrated this good faith effort
in numerous ways: (1) it had rules prohibiting exactly what
Fox did; (2) Dana employees did not usually violate the rules;
(3) the record contained instances of discipline and a lack of
recidivism; (4) Dana’s wash process eliminated toxic atmos‐
pherics; (5) Dana had continuous testing and forced air venti‐
lation in clean trailer tanks; (6) Dana’s written program had
previously been examined by OSHA and found acceptable;
and (7) Dana had a good bilingual training program and no
recordable injuries from tank injuries for years before the Fox
incident. The Commission, however, was unpersuaded. It
found that although, on the one hand, Dana had work rules
that were communicated to its employees and had submitted
evidence of three instances of disciplinary action, on the other
hand the facility manager had never disciplined an employee
for improperly completing permits or for the violations ap‐
parent on the face of the permits. The Commission concluded
that Dana had therefore failed to take action when violations
of safety rules were plain, as would have been required in a
good faith effort.
In Stark Excavating, Inc. v. Perez, 811 F.3d 922, 928–29 (7th
Cir. 2016), we considered a similar problem. Stark had argued
that its efforts to comply with safety rules negated willfulness,
where the company was cited for a foreman’s failure to con‐
struct a proper slope at an excavation site. The Commission
10 No. 16‐1087
nevertheless found that Stark failed to enforce rules and poli‐
cies effectively when violations were discovered and thus
could not establish a good faith defense on those grounds,
and we upheld that result. Dana attempts to distinguish Stark
on the facts, urging that Dana demonstrated good faith efforts
to comply with the standard for confined spaces contained in
29 C.F.R. § 1910.146. But that loses sight of the fact that in Stark
we focused on the employer’s failure to enforce its own safety
rules and policies when it discovered violations, and that it
was this broader lack of enforcement that demonstrated a lack
of good faith. 811 F.3d at 929. Here, too, the Commission
found evidence of a failure to follow up on documented vio‐
lations of Dana’s safety‐permit protocol, and it reasonably
concluded that this defeated a finding of a good faith effort.
C
Dana last argues that the Commission should have af‐
firmed the ALJ’s finding that the Summit facility met the re‐
quirements for alternate entry. According to 29 C.F.R.
§ 1910.146(c)(5), employees would have been eligible to use
alternate entry procedures if Dana had demonstrated that it
met certain requirements. Chiefly, Dana needed to demon‐
strate that potentially hazardous substances were not ex‐
pected to approach the level at which they would create a haz‐
ardous atmosphere, and that continuous forced air ventilation
alone was sufficient to keep the washed tanks safe for entry.
§ 1910.146(c)(5)(i)(A)–(B). Dana also needed to develop moni‐
toring and inspection data to support such a finding before
any employee could use the alternate procedures. See
§ 1910.146(c)(5)(i)(C); Permit‐Required Confined Spaces, 58
Fed. Reg. 4462‐01, 4488 (Jan. 14, 1993).
No. 16‐1087 11
The Commission held that Dana did not meet its burden
because it could not identify relevant testing that established
that the process removed all potential hazards or that ana‐
lyzed the effectiveness of the forced air ventilation system.
Dana’s 2009 expert report was of little value, it thought, be‐
cause the report was finalized nearly six months after Fox’s
incident. Worse, it did not contain testing data, nor did it spec‐
ify what testing results supported the conclusion that the
wash process rendered the tanks free of a potentially hazard‐
ous atmosphere. Dana had also offered two reports from tests
of other washing facilities in Alabama and Ohio in 1996 and
1999, but the Commission spotted relevant differences be‐
tween the wash process in the 1996 report and the process
used at the Summit facility. The results of the 1999 report did
not show that the wash process removed the potential for a
hazardous atmosphere; to the contrary, in some cases the data
showed levels of hazardous vapors above the limits and levels
of oxygen below the acceptable range. The Commission also
found that Dana’s pre‐entry testing did not compensate for
the limitations of the wash process because the testing meter
it used was incapable of testing for all potential atmospheric
hazards.
Dana offers no reason why we should upset the Commis‐
sion’s determinations. The Commission considered and
weighed the data in the reports and expert testimony and pro‐
vided a reasonable explanation in support of its finding that
Dana had not met the alternate entry procedure standards in
§ 1910.146(c)(5). See Wisconsin v. E.P.A., 266 F.3d at 746.
Though Dana vigorously attacks the credibility of the Secre‐
tary’s expert witness, we defer to an agency’s credibility de‐
terminations in all but extraordinary circumstances. Chao, 442
12 No. 16‐1087
F.3d at 557. This case does not meet that standard, and so we
DENY Dana’s petition for review.