Chao v. Occupational Safety & Health Review Commission

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT February 21, 2005

Charles R. Fulbruge III
Clerk
No. 03-60958

ELAINE CHAO, Secretary, Department of Labor,

Petitioner--Cross-Respondent,

versus

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION,

Respondent,

and

ERIK K. HO; HO HO HO EXPRESS, INC.; and HOUSTON FRUITLAND, INC.,

Respondents--Cross-Petitioners.

On Petition for Review of an Order of the
Occupational Safety and Health Review Commission

Before BARKSDALE, GARZA, and DeMOSS, Circuit Judges.

DeMOSS, Circuit Judge:

This appeal stems from a final order of Respondent

Occupational Safety and Health Review Commission (the

“Commission”), which vacated in part citations issued by

Petitioner--Cross-Respondent Elaine Chao, Secretary of Labor (the

“Secretary”), against Respondents--Cross-Petitioners Eric K. Ho
(“Ho”), et al. (together, “Ho Respondents”). For the following

reasons, we DENY the petitions for review and AFFIRM the decision

of the Commission.

BACKGROUND

The penalties assessed by the Secretary and mostly affirmed by

the Administrative Law Judge (“ALJ”) and the Commission against Ho

for various violations of the Occupational Safety and Health Act,

29 U.S.C. §§ 651-678 (“OSH Act”), and associated safety and health

regulations all concern his behavior as proprietor of a worksite

where workers were exposed to asbestos in the course of a project

to renovate a building. On October 27, 1997, Ho individually

purchased a defunct hospital and medical office building in Houston

to develop the property as residential housing. Ho knew there was

asbestos onsite. He was also aware that any alteration to

asbestos-containing materials was to be handled by personnel

licensed and registered with the Texas Department of Health

(“TDH”). Ho instead hired Manuel Escobedo (“Escobedo”) and Corston

Tate (“Tate”), whose work he had previously used, to do the

renovations. Escobedo hired 11 Mexican nationals, who were illegal

immigrants, to assist. Renovations, including the removal of

asbestos, started in January 1998.

At most, the workers were occasionally given dust masks not

suitable for protection against asbestos. They were not issued

protective clothing. Ho also did not provide a respiratory

2
protection program, conduct medical surveillance, conduct asbestos

monitoring, implement adequate ventilation or debris removal,

inform the workers of the presence and hazards of asbestos, or

provide any training whatsoever. There is no dispute that Ho was

aware of the worksite conditions; he visited almost every day.

On February 2, 1998, a city inspector visited the worksite.

After observing the conditions, he issued a stop-work order citing

the possibility of exposure to asbestos, requiring that city

approval be given before work could resume. Ho then began

negotiating with a licensed contractor, Alamo Environmental

(“Alamo”), to remove the asbestos. Alamo prepared an abatement

estimate in accordance with Occupational Safety and Health

Administration (“OSHA”), amongst other federal, guidelines. On

March 27, 1998, Ho notified Alamo by fax that he agreed to their

proposal.

However, during this period of negotiation, Ho had resumed

work at the site under the same conditions, except that he directed

all work be performed at night. The workers ate, and some lived,

at the site. The workers had no potable water and only one

portable toilet. Tate sometimes allowed workers to leave the

property to use the restroom at a nearby commercial establishment;

and Tate would purchase and bring back food for the workers when

they gave him money. Ho continued to visit the worksite and was

aware of these conditions.

Asbestos removal continued in this fashion until March 10,

3
1998. On March 11, 1998, as Ho had directed, daytime work resumed

at the site. Ho had been informed that either the sprinkler system

or fire hydrant valves had not been turned off and thus remained

available for use. To wash out the building, Ho directed Tate to

tap into an unmarked valve believed to be a water line. It turned

out to be a gas line. An explosion later occurred when Tate

started his truck; it injured Tate and two workers. On March 12,

1998, workers were summoned to Ho’s office where they were given

releases to sign, acknowledging receipt of $1000 as full payment

for their work, and acknowledging receipt of $100 to release Ho

from any claims that might arise from the explosion and fire. The

releases were written in English, but an interpreter translated

them for the workers.

After the explosion, TDH conducted an investigation. Samples

of debris and the ambient air at the worksite showed levels of

asbestos in excess of federal and state standards. The state

notified Ho that the site remained unsafe and needed to be sealed

by qualified personnel. Again, Ho used the same workers to install

plywood over the windows and did not give them any protective

equipment.

OSHA also conducted an investigation. As a result, the

Secretary issued a total of 10 serious and 29 willful violations

against Ho Respondents; these charges included 11 willful

violations of 29 C.F.R. § 1926.1101(h)(1)(i) for failing to provide

respirators to 11 employees removing asbestos and 11 willful

4
violations of 29 C.F.R. § 1926.1101(k)(9)(i) and (viii) for failing

to train the 11 employees on the hazards of asbestos and safety

precautions. The Secretary also charged Ho Respondents with

willfully violating the OSH Act’s general duty clause, 29 U.S.C. §

654(a)(1), by ordering Tate to tap into the unmarked pipeline. Ho

was also convicted of criminal violations of the Clean Air Act

(“CAA”). This Court upheld his conviction. United States v. Ho,

311 F.3d 589, 611 (5th Cir. 2002).

Ho conceded before the ALJ that he violated the asbestos

respirator and training standards. Ho argued that he was not

subject to the OSH Act’s requirements because he was not engaged in

a business affecting interstate commerce and that the corporate Ho

Respondents should be dismissed because they were not employers of

the employees engaged in asbestos removal. He also challenged the

per-employee citations of the respirator and training violations.

Finally, Ho contended he did not violate the general duty clause of

the OSH Act, or if he had violated it, that such violation was not

willful.

The ALJ ruled that Ho’s construction activities affected

interstate commerce and Ho was liable for the OSH Act violations.

He also found the corporate Ho Respondents liable as alter egos of

Ho and under the “sham to perpetuate a fraud” doctrine because Ho

exercised control over both corporations and used them to obtain

funds to purchase and renovate the property. The ALJ determined

5
the respirator and training violations were willful and upheld all

22 violations. The ALJ found also that Ho had violated the general

duty clause of the OSH Act but that it could not be characterized

as a willful violation because the Secretary failed to show that Ho

actually knew of the danger or had a heightened awareness of the

illegality of his conduct.

On review, the Commission affirmed that Ho was subject to the

OSH Act and that Ho’s violations of the respirator and training

standards were willful. A divided Commission ruled that such

violations were to be cited on a per-instance, not a per-employee,

basis because it felt that the regulations plainly imposed a duty

on employers to have a single training program and to provide

respirators to the employees as a group. It thus vacated all but

two of those citations. The Commission also concluded the record

did not support the ALJ’s finding that the corporate Ho Respondents

were liable because these entities’ primary business activities had

nothing to do with the hospital renovation and they did not exist

as mere business conduits for Ho’s own purposes.1 The Commission

affirmed the ALJ’s finding that the general duty violation

committed by Ho was not willful. The Commission also increased all

the citations affirmed to their maximum penalties because of Ho’s

lack of good faith. The Secretary timely filed her petition for

1
Although the Commission determined the corporate Ho Respondents
were not liable under both the “alter ego” and “sham to perpetuate
a fraud” theories, the Secretary did not brief any argument based
on the “sham” doctrine. Thus, we do not address it.

6
review, and the Ho Respondents timely filed their cross-petition.

DISCUSSION

Whether the Commission’s factual finding that Ho’s illegal asbestos
abatement activities at the hospital worksite affected interstate
commerce was supported by substantial evidence.

The OSH Act applies to employers, defined as “person[s]

engaged in a business affecting commerce who ha[ve] employees.” 29

U.S.C. § 652(5) (1970). By enacting the OSH Act, Congress intended

to exercise the full extent of the authority granted by the

Commerce Clause. Austin Road Co. v. OSHRC, 683 F.2d 905, 907 (5th

Cir. 1982). “Accordingly, an employer comes under the aegis of the

[OSH] Act by merely affecting commerce; it is not necessary that

the employer be engaged directly in interstate commerce.” Id.

(citations omitted).

The Secretary bears “the burden of showing that the employer’s

activities affect interstate commerce.” Id. at 907. This burden

is “modest, if indeed not light.” Id. On appeal, this Court only

reviews the Commission’s findings of fact to ensure they are

“supported by substantial evidence in the record considered as a

whole.” Id. at 908; see also 29 U.S.C. § 660(a). Substantial

evidence is “such relevant evidence as a reasonable mind might

accept as adequate to support a conclusion.” Consolo v. Fed. Mar.

Comm’n, 383 U.S. 607, 619-20 (1966) (citation omitted).

Ho Respondents argue that the Secretary put forth no evidence

to support the Commission’s finding that the building renovation

7
was a business affecting interstate commerce. Because the

Secretary failed to provide jurisdictional evidence, Ho Respondents

contend none of them was subject to the OSH Act. Moreover, Ho

Respondents charge the Secretary cannot rely on the Commission’s

finding of fact because the Commission relied on an inapplicable

Ninth Circuit per se rule, see Usery v. Lacy, 628 F.2d 1226, 1229

(9th Cir. 1980) (extending OSH Act reach over employers in the

construction industry whose “whose activities in the aggregate

affect commerce”), and a nonpreclusive jurisdictional finding of

this Court in the criminal action against Ho based on the

“aggregate” effect on interstate commerce of asbestos removal

violations under the CAA, see Ho, 311 F.3d at 603-04.

The Secretary responds that she provided evidence that Ho was

engaged in a business affecting interstate commerce and was

therefore subject to the OSH Act. The Secretary points out Ho had

a majority interest in two interstate trucking firms (Ho Ho Ho

Express being one). Alternatively, the Secretary argues Ho’s

asbestos abatement activities at the hospital site constituted a

business affecting interstate commerce. The Secretary notes this

Court has previously held that Ho’s illicit asbestos operations at

the hospital site, when aggregated, affected the interstate markets

in asbestos removal services and commercial real estate in the

context of Ho’s CAA criminal case. Id. The Secretary maintains

Ho’s activities at the hospital were specifically found to affect

8
interstate commerce substantially enough to support federal

regulation; this issue cannot be relitigated. The Secretary also

argues Ho misreads Austin Road to impose an evidentiary hurdle to

defeat even normal application of collateral estoppel.

Even if this Court does not find jurisdiction based on

collateral estoppel, the Secretary stresses she presented evidence

showing that, by failing to comply with the OSH Act requirements,

Ho gained a competitive advantage over licensed asbestos firms,

including Alamo, and deprived them of a commercial business

opportunity in the national market for asbestos removal. Moreover,

the Secretary argues Ho’s illicit asbestos removal project also

would increase asbestos removal costs for law-abiding commercial

property owners.

This Court in Ho’s criminal appeal clearly indicated that his

specific illicit construction activities concerning asbestos

abatement, when considered in the aggregate, directly affected

interstate commerce in the national market of asbestos removal.

Ho, 311 F.3d at 603-04. In finding that the challenged provisions

of the CAA constitutionally reached Ho under the Commerce Clause,

we stated that “a national market exists for asbestos removal

services” and that “Ho’s activities would injure this market.” Id.

at 603. We also stated that Ho’s illegal asbestos abatement

activities in the aggregate “posed a threat to the interstate

commercial real estate market” because they “would reduce the

9
number of companies providing asbestos removal services” and

“conscientious property owners would have more trouble locating

licensed abatement companies and likely would have to pay higher

prices.” Id. at 604.

Here, though we are informed by the aggregation principle’s

application to asbestos removal activities outlined in Ho, as the

Commission was also so informed, we do not rest the instant

jurisdictional result based on collateral estoppel or issue

preclusion from Ho’s criminal CAA case.2 Nor do we have before us

the constitutionality of any provision of the OSH Act or

accompanying regulation. We also do not recognize the Ninth

Circuit per se construction rule Ho Respondents insist was adopted

by the Commission in its decision. Instead, pursuant to Austin

Road, we consider whether the Commission’s factual finding that

Ho’s illegal asbestos abatement activities at the hospital worksite

affected interstate commerce was supported by substantial evidence

in the record.

2
It would not be prudent to do so because even if Ho Respondents
had presented any constitutional challenge to the specific OSH Act
and implementing regulations at issue here, these provisions are
entirely different from the Clean Air Act (“CAA”) provisions
challenged in the prior criminal litigation. Thus, the issue at
stake here would not be “the precise constitutional claim” involved
in the prior litigation. See Montana v. United States, 440 U.S.
147, 156-57 (1979) (finding tax provision of Montana’s Revenue Code
was constitutional under the Supremacy Clause via collateral
estoppel where identical provision had previously been found to
pass muster). Moreover, we specifically stressed that the holding
in Ho was limited to that CAA criminal case. United States v. Ho,
311 F.3d 589, 594 (5th Cir. 2002).

10
 Despite Ho Respondents’ arguments, there is sufficient record

evidence that Ho specifically deprived the asbestos removal firm

Alamo of a legitimate commercial job to remove asbestos from the

hospital site in accordance with the OSH Act. Ho negotiated with,

but did not actually employ, Alamo to perform the licensed

abatement. Instead, Ho hired illegal immigrants to remove the

asbestos for $1000 each before he ever agreed to Alamo’s proposal.

This evidence indicates in the context of the OSH Act, similar to

what this Court has already analyzed in the context of the CAA,

that Ho’s asbestos removal activities affected interstate commerce

by depriving legitimate commercial asbestos abatement firms of the

opportunity to perform the work at the site. Ho’s deliberate

decision to have unlicensed workers perform the asbestos abatement

project sidestepped, and thus supplanted, a commercial firm that

operates within the legitimate national market for asbestos removal

services, a licensed firm which adheres to OSH Act provisions and

regulations. We find Ho’s illegal asbestos activities sufficiently

affected interstate commerce so as to be subject to the OSH Act.

Unlike in Austin Road, here the essential fact that Ho’s abatement

activities affected interstate commerce is not speculative and

conclusionary, but rather is established in the record. See 683

F.2d at 908.

The Secretary thus met her modest jurisdictional burden under

the OSH Act. See id. at 907. Therefore, on this record, we find

11
substantial evidence exists to support the Commission’s factual

finding that Ho’s activities sufficiently affected interstate

commerce to support the OSH Act’s jurisdictional reach over Ho as

an employer per § 652(5).

Whether the Commission’s factual findings that Ho Ho Ho Express,
Inc. and Houston Fruitland, Inc. were not alter egos of Ho to
support reverse corporate piercing were supported by substantial
evidence.

In the typical corporate veil piercing scenario, the corporate

veil is pierced such that individual shareholders can be held

liable for corporate acts. Maiz v. Virani, 311 F.3d 334, 346 n.11

(5th Cir. 2002). Here, the purpose of piercing the corporate veils

of Ho Ho Ho Express, Inc. and Houston Fruitland, Inc. would be to

hold the corporations liable for the acts of their individual

shareholder, Ho. See id. Therefore, this case presents a “reverse

corporate veil piercing” situation. Id. “This slight variation is

of no consequence, however, because the end result under both views

is the same – two separate entities merge into one for liability

purposes.” Id. If alter ego is shown, courts reverse pierce the

corporate veil to treat the individual and the corporation as “one

and the same.” Zahra Spiritual Trust v. United States, 910 F.2d

240, 244 (5th Cir. 1990) (citation omitted).

In Permian Petroleum Co. v. Petroleos Mexicanos, 934 F.2d 635

(5th Cir. 1991), this Court considered whether a corporate form

should be reverse pierced for purposes of a natural gas contract

12
dispute. Id. at 643. There, we determined that an alter ego

relationship for purposes of reverse veil piercing applies where

“there is such unity between corporation and individual that the

separateness of the corporation has ceased.” Id. (citation

omitted). Factors involved in this test for an alter ego

relationship include:

[T]he total dealings of the corporation and the
individual, including the degree to which corporate
formalities have been followed and corporate and
individual property have been kept separately, the amount
of financial interest, ownership and control the
individual maintains over the corporation, and whether
the corporation has been used for personal purposes.

Id. at 643 (citing Castleberry v. Branscrum, 721 S.W.2d 270, 272

(Tex. 1986)). In Century Hotels v. United States, 952 F.2d 107

(5th Cir. 1992), we considered whether a family-held corporate form

should be reverse pierced for the 26 U.S.C. § 7426 tax liability of

an individual family member. Id. at 110-112. There, we indicated

the reverse veil piercing alter ego analysis depends on the

factfinder’s weighing of the totality of the circumstances. Id. at

110; see also Bridas S.A.P.I.C. v. Gov’t of Turkmenistan, 345 F.3d

347, 359-60 (5th Cir. 2003) (finding legal error where district

court failed to consider totality in parent-subsidiary alter ego

case); United States v. Jon-T Chems., Inc., 768 F.2d 686, 694 n.8,

696 (5th Cir. 1985) (noting alter ego depends on totality in case

where subsidiary company was found to be alter ego of parent

company). As the Commission correctly noted, this Circuit has not

13
determined the extent of reverse veil piercing via the alter ego

theory in the context of remedial social legislation such as the

OSH Act. However, as a logical application of Permian and Century

Hotels, we agree with the Commission that reverse corporate veil

piercing may apply in this context.3

“The question of whether to pierce the corporate veil is

primarily one of fact and therefore a very deferential standard of

review applies.” Hollowell v. Orleans Regional Hosp. LLC, 217

F.3d 379, 385 (5th Cir. 2000) (discussing piercing the corporate

veil via alter ego theory) (citation omitted); see also Bridas, 345

F.3d at 359 (describing alter ego determination as “highly fact-

based”). “In reviewing a decision by an administrative agency, we

accept all factual findings supported by substantial evidence in

the record considered as a whole.” Austin Road, 683 F.2d at 908.

We are thus bound by the Commission’s factual findings on alter ego

if they are supported by substantial evidence in the record. MICA

Corp. v. OSHRC, 295 F.3d 447, 449 (5th Cir. 2002); See also 29

U.S.C. § 660(a) (1970) (stating such findings are conclusive).

The Secretary challenges the Commission’s finding that the

corporate Ho Respondents were not suitable parties for liability

3
We provide no discussion of whether state or federal alter ego
law applies in this administrative case not arising under diversity
jurisdiction. See Century Hotels v. United States, 952 F.2d 107,
110 n.4 (5th Cir. 1992) (noting “state and federal alter ego tests
are essentially the same” and we “apply state and federal cases
interchangeably”).

14
under the OSH Act. The Secretary argues Ho used Ho Ho Ho Express

and Houston Fruitland as mere business conduits for his illegal

asbestos removal activities. The Secretary relies on the alter ego

doctrine – that because Ho had control over the corporate Ho

Respondents, the limited liability of the corporate form should be

“reverse pierced” to hold the corporations liable for the debts of

their controlling shareholder. See Century Hotels, 952 F.2d at

110-12; Permian, 934 F.2d at 643. The Secretary focuses on the

high ownership shares of Ho in the corporations, approximately 67

percent; the commingling of funds between the corporations and Ho;

and the fact that funding for the purchase of the hospital site and

payment for the renovation supplies and wages came from the

corporations.

Ho Respondents agree with the Commission’s findings that the

corporate Ho Respondents were not the alter egos of Ho to support

reverse piercing them for the purpose of imposing liability. Ho

Respondents argue that substantial evidence supports the

Commission’s factual findings that the corporate Ho Respondents did

not engage in the asbestos removal activities at issue and were not

the employers of the workers at the site. Also, Ho Respondents

stress the Commission was correct in finding Ho’s corporations were

legitimate operating entities on their own.

Ho Respondents concede that a Ho Ho Ho Express truck was

parked once at the worksite, and Ho did engage in corporate

15
borrowing between the entities. However, Ho Respondents stress

that all the respective corporate accounts and ledgers were

legitimately debited and credited for each borrowing transaction.

Moreover, the corporate Ho Respondents did not provide any

employees to the site. Ho Respondents thus contend the Commission

correctly reviewed the totality of the facts to determine that

there was no alter ego relationship here. See Jon-T Chems., 768

F.2d at 692. Ho Respondents maintain reverse piercing was not

warranted because it is clear here that Ho and the corporate Ho

Respondents could not be treated as “one and the same.” See Zahra,

910 F.2d at 243-44. Ho Respondents point out there is no evidence

that the corporate Ho Respondents were operated in a manner

indistinguishable from Ho’s personal affairs.

The Commission employed the proper legal standard for reverse

corporate piercing based on alter ego because it considered the

totality of the Permian factors in Ho’s case. See Bridas, 345 F.3d

at 359-60 (finding legal error because the district court’s

determination of no alter ego was based solely on corporate

formalities). Thus, we determine whether the Commission’s factual

findings that Houston Fruitland and Ho Ho Ho Express should not be

considered as alter egos of Ho under that totality were supported

by substantial evidence. After a thorough review of the record, we

conclude that they were. The Secretary’s contention that Ho Ho Ho

Express and Houston Fruitland were “nothing more than incorporated

16
pocketbooks for Ho’s personal use” is unfounded. Although Ho

clearly involved some of the corporate entities’ finances in his

hospital project, the record evidence indicates that Ho as the

individual in charge of this particular renovation project remained

distinct from the corporate Ho Respondents as ongoing, formalized

fruit sale and delivery entities.

While there is evidence that Ho played a role in the corporate

Ho Respondents’ day-to-day operations, and Ho’s personal assistant

employed by Ho Ho Ho Express ran some errands for Ho concerning the

renovation project, Houston Fruitland and Ho Ho Ho Express still

maintained entirely separate corporate identities, tax identities,

bank accounts, and legitimate business operations. This is not a

case such as Century Hotels where payment of a family shareholder’s

personal expenses, funding of his son’s checking account, and

ownership of the personal family residence could directly be traced

back to the family companies. 952 F.2d at 111-12. There, “the

patterns of dealing among the Smith family companies” distinctly

showed “[use of] the corporate form for illegitimate ends.” Id. at

112. In contrast, the record evidence here indicates that the

corporate Ho Respondents had a limited financial stake in Ho’s

renovation project, not that they functioned as his alter egos on

the renovation project.

Although Ho borrowed from the corporate Ho Respondents for

financing of the hospital project, an admittedly personal pursuit,

17
the record evidence indicates distinct debit ledger entries and

some repayment to the corporations by Ho. This fact also

distinguishes Ho’s case from Century Hotels. See 952 F.2d at 111

n.12 (noting the lack of evidence of “loan” repayment). Moreover,

there is no evidence that the corporate entities were ever treated

or confused as one and the same with the individual Ho or his

personal dealings. Admittedly, here, the alter ego question is not

as readily resolved as in Century Hotels. However, to affirm the

Commission’s findings on alter ego, this Court need only look for

“such relevant evidence as a reasonable mind might accept as

adequate to support a conclusion.” Consolo, 383 U.S. at 619-20

(citation omitted).

We find substantial evidence in the record adequately

supporting that the totality of the factors under the Permian alter

ego test did not indicate “such unity between corporation[s] and

individual that the separateness of the corporation[s] ha[d]

ceased.” 934 F.2d at 643 (citation omitted). Therefore, this

Court is bound by the Commission’s findings that Ho Ho Ho Express

and Houston Fruitland were not alter egos of Ho to support reverse

corporate piercing.

Whether the Commission’s legal conclusion that Ho did not willfully
violate the general duty clause, § 654(a)(1), of the OSH Act, was
arbitrary, capricious, an abuse of discretion, or not in accordance
with law.

Section 654(a)(1) of the OSH Act requires employers to free

their workplaces of “recognized hazards that are causing or are

18
likely to cause death or serious physical harm to . . . employees.”

29 U.S.C. § 654(a)(1) (1970).4 The specific general duty citation

here arose from the explosion of natural gas released by tapping an

unmarked valve. A willful violation is one committed voluntarily,

with either intentional disregard of, or plain indifference to, OSH

Act requirements. Georgia Elec. Co. v. Marshall, 595 F.2d 309, 318

(5th Cir. 1979). “‘Willful’ means action taken knowledgeably by

one subject to the statutory provisions in disregard of the

action's legality.” Id. at 317 (quoting Intercounty Constr. Co. v.

OSHRC, 522 F.2d 777, 779-80 (4th Cir. 1975)). In contrast, “[t]he

gravamen of a serious violation is the presence of a ‘substantial

probability’ that a particular violation could result in death or

serious physical harm.” Id. at 318. The employer’s intent to

violate an OSH Act standard is irrelevant to find a serious

violation. Id. The Commission’s legal conclusions can only be set

aside if they are arbitrary, capricious, an abuse of discretion, or

not in accordance with law. MICA Corp., 295 F.3d at 449 (citation

omitted).

The Secretary argues the Commission’s finding that Ho’s

4
The general duty clause of the OSH Act provides, in part:

(a) Each employer--
(1) shall 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 . . . .

29 U.S.C. § 654(a)(1) (1970).

19
violation of § 654(a)(1) was not willful was based on an erroneous

legal standard requiring direct evidence of Ho’s state of mind.

The Secretary contends Ho demonstrated plain indifference in

directing Tate to tap into the unmarked pipeline in an attempt to

procure water for washing the building. According to the

Secretary, this was a clear violation of the stop-work order Ho

received in February. Therefore, the Secretary maintains Ho knew

tapping into the pipeline without approval was illegal, even if he

may not have known of the specific explosion hazard or that it was

a violation of the general duty clause of the OSH Act. The

Secretary argues direct evidence of Ho’s state of mind was not

required because proof of Ho’s plain indifference to legal

requirements in general was clearly established.

Ho Respondents reply that the Commission was correct to find

that the Secretary had not met her burden of proof in showing Ho’s

violation as rising to the intent of willful. Ho Respondents

maintain the Commission applied the correct legal standard, and

substantial evidence on the record supports its decision that the

§ 654(a)(1) violation was not willful. Ho respondents argue the

Commission’s reference to direct evidence amounted to a recognition

that the Secretary had not put forth any evidence relevant to the

specific circumstances of the violation in question. Ho

Respondents emphasize that the Secretary did not put forth any

evidence of Ho’s state of mind to show that he had a heightened

awareness that instructing Tate to open the valve might be

20
hazardous or that Ho consciously disregarded a known safety hazard

related to the valve – that is, for this action to meet a showing

of either intentional disregard of the OSH Act or plain

indifference to employee safety. Ho Respondents stress there was

no evidence directed to the intent accompanying this particular

incident.

The Secretary argues that Ho’s action here was part of a

consistent illegal and voluntary course of conduct; all his actions

were plainly indifferent to employee safety. However, although

there may be evidence of a conscious pattern of illegal work

practices by Ho with regard to the asbestos abatement, the

challenged violation of the general duty clause does not concern

Ho’s many asbestos transgressions covered specifically by OSH Act

regulations. See Reich v. Arcadian Corp., 110 F.3d 1192, 1196 (5th

Cir. 1997). In particular, it related to an employee being

required to open a pipe of unknown content. Here, the Secretary

presented no evidence relevant to Ho’s state of mind on, or

recognition of the hazards of, this particular action to direct

Tate to open the unmarked valve. We thus agree with the Commission

that plain indifference as to this specific hazardous action cannot

be inferred, even from Ho’s several OSH Act violations concerning

the asbestos removal project.

Though the evidence need not indicate “bad purpose” or “evil

motive” to commit a particular act, Georgia Elec. Co., 595 F.2d at

21
319 n.23, there must be evidence of that “extra ingredient needed

for willfulness, either the element of intentional disregard or

plain indifference.” Id. at 318 n.22 (internal quotation marks

omitted). None existed in this record. Though Ho’s pattern of

illegal work practices may have been conscious, and his asbestos-

related OSH Act violations found to be willful, this does not

compel a finding of willfulness as to his specific instruction to

open the unmarked valve. See id. Therefore, because the

Commission’s legal determination as to Ho’s lack of willfulness

under § 654(a)(1) was neither arbitrary, capricious, nor an abuse

of discretion, and accords with law, we accept its conclusion.

Whether the citations against Ho should have been assessed on a
per-employee or per-instance basis.

The Secretary’s discretion to cite multiple violations of an

OSH Act standard is restricted “to those standards which are

capable of such interpretation.” Sec. of Labor v. The Hartford

Roofing Co., Inc., 1995 WL 555498, at *6 (O.S.H.R.C.). “The test

of whether the [OSH] Act and the cited regulation permits multiple

or single units of prosecution is whether they prohibit individual

acts, or a single course of action.” Sec. of Labor v. Caterpillar,

Inc., 1993 WL 44416, at *22 (O.S.H.R.C.) (citation omitted). “With

few exceptions, the Commission has not affirmed multiple violations

for violations of the same standard, or affirmed separate

violations or penalties on a per employee exposed basis.” Id. at

22
*23. The Commission here determined that the plain language of the

training and respirator subsections of the asbestos standard at

issue prescribed a single work practice instead of conduct unique

and specific to each employee. It thus only affirmed one training

and one respirator citation against Ho.

The Secretary argues the per-employee citations for asbestos

training and respirator violations, with which she charged Ho

Respondents, should have been affirmed by the Commission. The

Secretary maintains that each time an employer commits a prohibited

act or allows a prohibited condition to exist, the employer

violates the OSH Act. The Secretary contends the Commission’s

analysis ignores the standards’ plain language and the established

test for determining which conditions or actions constitute

separate violations under the OSH Act, as enunciated in the

Commission’s own prior cases and in this Court’s caselaw. The

Secretary insists the Commission also ignored basic precepts of

prosecutorial discretion.

The Secretary argues that if a standard prohibits individual

acts or conditions, the standard is violated each time the

prohibited act or condition occurs. See Sec. of Labor v. Andrew

Catapano Enters., Inc., 1996 WL 559899, at *9-10 (finding each

location at site where shoring in trench to prevent cave-in was not

installed was violation of 29 C.F.R. § 1926.652(b)); Sec. of Labor

v. J.A. Jones Constr. Co., 1993 WL 61950, at *14 (O.S.H.R.C.)

23
(finding each location at site lacking fall protection was

violation of 19 C.F.R. § 1926.500); Caterpillar, 1993 WL 44416, at

*22-23 (finding each employer failure to record an employee’s

injury or illness on its OSHA log was violation of 29 C.F.R. §

1904.2(a)); Sec. of Labor v. Hoffman Constr. Co., 1978 WL 6990, at

*1 (O.S.H.R.C.) (finding each failure to erect a guardrail on

scaffolding was violation of 29 C.F.R. § 1926.451(a)(4)).

The general construction training standard, 29 C.F.R. §

1926.21(b)(2),5 which requires employers to “instruct each employee

in the recognition and avoidance of unsafe conditions,” has been

interpreted as being citable on a per-employee basis. Catapano,

1996 WL 559899, at *4-5. Portions of the lead standard have also

been interpreted as permitting per-employee citations because the

standard’s medical removal subsection, 29 C.F.R. §

1910.1025(k)(1)(i)(D),6 and respirator fit-test subsection, 29

5
Section 1926.21, Safety training and education, provides, in
part:

(b) Employer responsibility.
...
(2) The employer shall instruct each employee in the
recognition and avoidance of unsafe conditions and the
regulations applicable to his work environment to control or
eliminate any hazards or other exposure to illness or injury.

29 C.F.R. § 1926.21(b)(2) (1989).
6
Section 1910.1025, Lead, provides, in part:

(k) Medical Removal Protection.
(1) Temporary medical removal and return of an employee.
(i) Temporary removal due to elevated blood lead levels.

24
C.F.R. § 1910.1025(f)(3)(ii),7 required evaluation of individual

employees. Sec. of Labor v. Sanders Lead Co., 1995 WL 242606, at

*3, *6 (O.S.H.R.C.). But see Arcadian, 110 F.3d at 1196-99

(finding general duty clause of OSH Act directed at hazardous

conditions did not allow per-employee citations but noting that

worker training or removal standards could count each employee as

the unit of violation); Hartford Roofing, 1995 WL 555498, at *6-7

...
(D) Fifth year of the standard, and thereafter. Beginning with
the fifth year following the effective date of the standard,
the employer shall remove an employee from work having an
exposure to lead at or above the action level on each occasion
that the average of the last three blood sampling tests
conducted pursuant to this section (or the average of all
blood sampling tests conducted over the previous six (6)
months, whichever is longer) indicates that the employee's
blood lead level is at or above 50 micrograms per 100 g of
whole blood; provided, however, that an employee need not be
removed if the last blood sampling test indicates a blood lead
level at or below 40 micrograms per 100 g of whole blood.

29 C.F.R. § 1910.1925(k)(1)(i)(D) (1986).
7
Section 1910.1025, Lead, provides, in part:

(f) Respiratory protection.
...
(3) Respirator usage.
...
(ii) Employers shall perform either quantitative or
qualitative face fit tests at the time of initial fitting and
at least every six months thereafter for each employee wearing
negative pressure respirators. The qualitative fit tests may
be used only for testing the fit of half-mask respirators
where they are permitted to be worn, and shall be conducted in
accordance with Appendix D. The tests shall be used to select
facepieces that provide the required protection as prescribed
in table II.

29 C.F.R. § 1910.1025(f)(3)(ii) (1986).

25
(finding one unguarded roof edge requiring warning was single

violation of 29 C.F.R. § 1926.500(g)(1)(i) and § 1926.500(g)(4) no

matter how many employees were exposed to a fall but noting that

the respirator protection standard, 29 C.F.R. § 1910.134, could

count a separate violation as to each employee not provided a

respirator). Neither the Secretary nor Ho Respondents advance any

Fifth Circuit or Commission precedent interpreting the asbestos

standard.

As to training violations, the Secretary maintains that Ho

violated § 1926.1101(k)(9)(i) and (viii)8 of the asbestos

regulations each time he assigned a worker to remove asbestos

without providing the worker with individual training about the

hazards of asbestos removal and about the required safeguards

against those hazards. The Secretary bases this argument on the

8
Section 1926.1101, Asbestos, provides, in part:

(k) Communication of hazards.
...
(9) Employee Information and Training.
(i) The employer shall, at no cost to the employee, institute
a training program for all employees who are likely to be
exposed in excess of a PEL and for all employees who perform
Class I through IV asbestos operations, and shall ensure their
participation in the program.
...
(viii) The training program shall be conducted in a manner
that the employee is able to understand. In addition to the
content required by provisions in paragraphs (k)(9)(iii)
through (vi) of this section, the employer shall ensure that
each such employee is informed of the following:
....

29 C.F.R. § 1926.1101(k)(9)(i) and (viii) (1997).

26
plain language of the regulation: employers are to conduct the

training program “in a manner the employee is able to understand .

. . [so] that each such employee is informed.” 29 C.F.R. §

1926.1101(k)(9)(viii) (1997). According to the Secretary, this

language requires tailoring the training to each individual

employee’s characteristics and comprehension, not to mention

language skills and hire date. The Secretary argues Arcadian, 110

F.3d at 1199, supports this reading of the regulation. Also, the

Secretary notes Catapano reached a per-employee result with the

analogous general construction training standard. 1996 WL 559899,

at *4-5.

As to respirator violations, the Secretary points again to the

plain language of § 1926.1101(h)(1)(i): “[t]he employer shall

provide respirators, and ensure that they are used . . . [d]uring

all Class I asbestos jobs.” 29 C.F.R. § 1926.1101(h)(1)(i)

(1997).9 The Secretary notes that this standard goes on in later

subsections to explain that each employee is to be provided an

appropriate, approved, properly fitted respirator. See id. §

9
Section 1926.1101, Asbestos, provides, in part:

(h) Respiratory protection.
(1) General. The employer shall provide respirators, and
ensure that they are used, where required by this section.
Respirators shall be used in the following circumstances:
(i) During all Class I asbestos jobs.

29 C.F.R. § 1926.1101(h)(1)(i) (1997).

27
1926.1101(h)(2)(iii) (allowing employee to choose air-purifying

versus negative-pressure respirator); id. § 1926.1101(h)(4)(i) and

(ii) (mandating fit tests to ensure least possible faceplate

leakage). As with the individualized training sessions, the

Secretary argues each of Ho’s 11 employees required a personally

fitted respirator that the employee had chosen. Thus, Ho was

required to take employee-specific actions. Again, the Secretary

cites Arcadian, 110 F.3d at 1199. The Secretary also relies on

Sanders Lead, 1995 WL 242606, at *6, which discussed the lead

respirator fit-testing standard. See also Hartford Roofing, 1995

WL 555498, at *7 (noting that the respirator protection standard

could be counted as a separate violation for each employee not

provided a respirator).

In addition, the Secretary maintains the Commission used a

flawed analysis to interpret the training and respirator

regulations. The Secretary argues a training program is

meaningless unless implemented on an individual basis. Likewise,

Ho was required to give each worker an individual respirator. This

was not a single, discrete act, but rather required initial fitting

and then periodic refitting for each worker. The Secretary

suggests a nonsensical reading would ensue if an employer not

providing any respirators, like Ho, resulted in only one violation,

while an employer who provided them but did not fit-test them

received per-employee citations.

28
 Finally, the Secretary argues that even if the standards were

ambiguous, the Secretary’s per-employee construction was reasonable

and entitled to deference. That is, it sensibly conformed to the

purpose and wording of the regulations. See Martin v. OSHRC, 499

U.S. 144, 150-51 (1991). The Secretary contends the Commission

incorrectly failed to defer to the reasonableness of the

Secretary’s interpretation. The Commission claimed the Secretary

failed to raise it, but the Secretary responds she was not so

required because she was only defending Ho’s appeal of the ALJ’s

decision. And the Secretary notes Ho raised no deference

challenge. The Secretary argues the Commission could not choose

its own interpretation of the regulatory language where hers was

reasonable. See id. at 158. The Secretary maintains the

Commission also improperly concluded the Secretary’s decisions on

this issue had not been consistent and that in any event Ho did not

have fair notice that these standards could be assessed on a per-

employee basis. Moreover, the Secretary contends Ho had to

affirmatively plead and prove lack of fair notice, which claim he

did not even raise.

Ho Respondents agree with the Commission’s treatment of the

plain language of the respirator and training regulations. Ho

Respondents argue the Secretary’s position that she can choose to

issue citations on a per-employee basis as opposed to a per-

violation basis is not supported by the language of the standards.

29
Ho Respondents contend such plain language cannot be expanded under

the guise of interpretation. Ho Respondents stress the Commission

properly vacated the 20 citations that were entirely duplicative,

except as to the name of the worker involved. Ho Respondents rely

on Arcadian, 110 F.3d at 1193-94, 1196, as prohibiting the very

kind of per-employee citations and penalties the Secretary wants to

impose on them. Ho Respondents argue the language in the OSH Act

general duty clause at issue in Arcadian is substantially similar

to that in the respirator and training regulations at issue here.

Ho Respondents contend it is violative employer conduct or a

violative condition, as opposed to the number of employees, that is

the proper unit of prosecution. Ho Respondents also argue the

Secretary’s position is not to be accorded deference because the

regulations are unambiguous and thus applied not per employee, but

rather per violation. Even if the language were ambiguous, Ho

Respondents maintain the Secretary’s per-employee interpretation is

not reasonable because the Secretary used a punitive citation here

to publish her inconsistent interpretation of the standard. Ho

Respondents argue the Secretary’s per-employee citations are not in

accordance with law because they were beyond the scope of her

authority pursuant to the OSH Act and are not entitled to deference

because they were neither consistent with the language of the

standards nor consistently applied.

After reviewing the arguments advanced by the parties, we

30
agree with the Commission’s result that the training and respirator

citations cannot be imposed per employee here. As to the asbestos

respirator standard, we fully agree with the Commission’s

reasoning. However, as to the asbestos training standard, we

affirm the Commission’s result for different reasoning.

Asbestos training standard, 29 C.F.R. § 1926.1101(k)(9)(i) and
(viii).

To begin, we find this standard’s language ambiguous. Thus,

unlike the Commission, which found the standard to be stated solely

in inclusive terms, we agree with the Secretary that the language

of the asbestos training standard allows the Secretary, in her

discretion, to reasonably assess penalties on a per-employee basis.

Subpart (i) expressly refers to “a training program for all

employees” performing Class I asbestos work and also speaks to the

employer’s requirement to “ensure their participation in the

program,” which language tends to indicate that one training

program is to be provided for all employees as a unit and does not

appear to make allowance for a per-employee assessment. 29 C.F.R.

§ 1926.1101(k)(9)(i) (1997). However, although subpart (viii)

again refers to the singular “training program,” it also goes on to

state that the program “shall be conducted in a manner the employee

is able to understand” and that the employer “shall ensure that

each such employee is informed of the following.” Id. §

1926.1101(k)(9)(viii).

These express references to the ability of the employee to

31
understand and to “each such employee” being informed implicate the

possibility that on an individual basis, employees may need

distinct, discrete information not provided to “each such” other

employee, perhaps due to differences in experience, language, and

job skills. Although this Court has treated the reference to “each

of his employees” in the general duty clause of the OSH Act to be

entirely inclusive, this reading was made in the context of §

654(a)(1) being a “catchall provision” governing any recognized

hazards of the workplace not covered by a specific regulation.

Arcadian, 110 F.3d at 1196 (citation omitted). There is a

distinction when reading the specific asbestos training regulation,

which does not have a “principal focus on hazardous conditions”

such that “each” is only used to clarify that the employer’s duty

runs to all employees, “regardless of their individual

susceptibilities (i.e., age or pregnancy).” Id. at 1198.

In contrast, subpart (viii) of the asbestos training standard

instructs employers that the training program must be conducted in

such a way that the employees understand and are informed of

various asbestos-related hazards. See 29 C.F.R. §

1926.1101(k)(9)(viii) (1997). Whether an employee understands and

is informed by a training program, as the regulation requires, may

depend on his “individual susceptibilities.” See Arcadian, 110

F.3d at 1198. Thus, considering the interaction of the two

subparts (i) and (viii) of the asbestos training standard together,

32
we agree with the Secretary that § 1926.1101(k)(9) is ambiguous and

therefore can be interpreted to allow for citation on a per-

employee basis.

However, we find the Secretary’s discretionary decision to

cite Ho on a per-employee basis on these facts was unreasonable.

In Martin, the Supreme Court explained the division of powers

between the Secretary and the Commission under the OSH Act. 499

U.S. at 157-58. As a reviewing court, we “should defer to the

Secretary only if the Secretary’s interpretation is reasonable.”

Id. at 158 (emphasis in original). Thus, under Martin, after

determining that a standard is ambiguous, we must perform an

assessment of the reasonableness of the Secretary’s view to

determine whether we must defer to it over the Commission’s

competing interpretation in a particular case. Id. at 150, 159.

In this way, we are authorized by Congress to “protect regulated

parties from biased interpretations of the Secretary’s

regulations.” Id. at 156. “The Secretary’s interpretation of an

ambiguous standard is subject to the same standard of substantive

review as any other exercise of delegated lawmaking power.” Id. at

158 (citing 5 U.S.C. § 706(2)(A)). That is, the Secretary’s

interpretation is not reasonable, and this Court can hold it

unlawful and set it aside, if we find such interpretation to be

“arbitrary, capricious, an abuse of discretion, or otherwise not in

accordance with law.” 5 U.S.C. § 706(2)(A) (1996).

33
 We note first that this case does not present any employee-

specific unique circumstances that could merit citation based on

each failure to train an individual employee. See, e.g, Catapano,

1996 WL 559899, at *5 (vacating duplicative training citations

because of a lack of different circumstances). Here, the training

citations merely tracked the language of subpart (i), referring to

Ho as employer not instituting “a training program for all

employees,” and of subpart (viii), referring to Ho as employer not

ensuring his employees were informed of the items listed in subpart

(viii). There was no indication as to how one citation may have

been distinct from the next. Moreover, as in Arcadian, all the

cited violations were identical to each other, except for the name

of the hospital site worker. See 110 F.3d at 1194; see also

Catapano, 1996 WL 559899, at *5 (noting the citations were

identical, except for the date). But see also Arcadian, 110 F.3d

at 1198-99 (indicating in dictum that although “generally

unavailable,” “[a]n employee could be a unit of violation” “if the

regulated condition or practice is unique to the employee”).

Nothing in this record indicates that one training program

regarding this Class I asbestos removal at the hospital site would

not have abated the violation of both subparts (i) and (viii), nor

that unique individual training sessions, or even more than one

session, would have been necessary to abate the violation. The ALJ

indicated that one training session, if all 11 workers had

34
attended, would have been sufficient to meet the training standard

here. The citations and evidence support that this was one Class

I asbestos removal job on a single site at one address, performed

by all the same 11 untrained workers, from the beginning to the

end. Thus, although we acknowledge that there may be cases where

per-employee citations of § 1926.1101(k)(9) based on unique

circumstances of the employees might be considered reasonable, here

we do not defer to the Secretary’s unreasonable interpretation of

the asbestos training regulation as applied to Ho. As the

Commission’s interpretation of the standard here was reasonable as

applied to Ho’s case, we affirm its assessment of one citation

instead of 11 individual citations.

Asbestos respirator standard, 29 C.F.R. § 1926.1101(h)(1)(i).

Unlike the asbestos training standard, we read the plain

language of the portion of the respirator standard for which Ho was

cited as not allowing the Secretary the discretion to charge

employers with per-employee citations. The regulation states:

“The employer shall provide respirators, and ensure that they are

used . . . [d]uring all Class I asbestos jobs.” 29 C.F.R. §

1926.1101(h)(1)(i) (1997). The Secretary makes the seemingly

logical argument that it makes little sense for a malicious

employer who provides no respirators at all to be eligible for

fewer violations than an employer who in good faith provides

respirators but fails to comply with other subparts of the asbestos

respirator standard governing the employee’s ability to choose his

35
type of respirator and periodic fit-testing requirements. However,

there is simply no language in the general respiratory protection

section that suggests the unit of prosecution could be based on

each individual employee not receiving a respirator versus the

employer’s course of action in failing to provide respirators to

his employees as a whole for the Class I asbestos job. Instead, we

read the unit of prosecution for violating this standard as

applying per Class I asbestos job. See Hartford Roofing, 1995 WL

555498, at *5 (“[W]here a single practice, method or condition

affects multiple employees, there can only be one violation of the

standard.”). Here, the evidence indicates that Ho engaged in one

Class I asbestos removal job at one hospital site for one sustained

period of time.

In contrast, language in other parts of the asbestos

respirator standard suggests citation on a per-employee basis might

be appropriate. Subsection (h)(2)(iii) of the asbestos respirator

standard contains language directing employers to provide an air-

purifying respirator instead of a negative-pressure respirator to

employees, but only when “[a]n employee chooses to use this type of

respirator.” 29 C.F.R. § 1926.1101(h)(2)(iii)(A)(1).10 A violation

10
Section 1926.1101, Asbestos, provides, in part:

(h) Respiratory protection.
. . .
(2) Respirator selection.
. . .
(iii)(A) The employer shall provide a tight fitting powered,

36
could be counted each time the employer did not provide the chosen

type of respirator to the individual employee who requested it.

Likewise, subsection (h)(4)(i) mandates the employer to “ensure

that the respirator issued to the employee exhibits the least

possible faceplate leakage and that the respirator is fitted

properly.” Id. § 1926.1101(h)(4)(i).11 This language properly

applies to the unique circumstances of an individual employee; a

violation could be counted as to each employee whose faceplate

exhibited more than the least possible leakage and was not properly

fitted at the time of issuance. Violations of subsection

(h)(4)(ii) mandating qualitative or quantitative fit-tests to be

performed at the initial fitting and every six months afterward

also could be appropriately assessed for each employee who did not

receive such periodic testing.12 Indeed, an employer potentially

air-purifying respirator in lieu of any negative-pressure
respirator specified in Table 1 whenever:
(1) An employee chooses to use this type of respirator . . .
.

29 C.F.R. § 1926.1101(h)(2)(iii)(A)(1) (1997).
11
Section 1926.1101, Asbestos, provides, in part:

(h) Respiratory protection.
. . .
(4) Respirator fit testing.
(i) The employer shall ensure that the respirator issued to
the employee exhibits the least possible facepiece leakage and
that the respirator is fitted properly.

29 C.F.R. § 1926.1101(h)(4)(i) (1997).
12
Section 1926.1101, Asbestos, provides, in part:

37
could be cited multiple times per employee under subpart (ii) if

multiple semiannual periods passed without the required fit-

testing. Thus, while the latter subsections of the asbestos

respirator standard require employee-specific action by the

employer, none of the above employee-specific language is

implicated in subsection (h)(1)(i) governing general provision of

respirators to Class I asbestos workers. This general subsection

plainly addresses employees in the aggregate.

While we agree with the Secretary that in dicta in Arcadian we

stated that per-employee citation may be appropriate in certain

cases “only if the regulated condition or practice was unique to

the individual,” 110 F.3d at 1198-99, again, the precise issue

there was neither the asbestos respirator standard nor any

respirator standard at all. As for the Secretary’s reliance on

(h) Respiratory protection.
. . .
(4) Respirator fit testing.
. . .
(ii) Employers shall perform either quantitative or
qualitative face fit tests at the time of initial fitting and
at least every 6 months thereafter for each employee wearing
a negative-pressure respirator. The qualitative fit tests may
be used only for testing the fit of half-mask respirators
where they are permitted to be worn, or of full-facepiece air
purifying respirators where they are worn at levels at which
half-facepiece air purifying respirators are permitted.
Qualitative and quantitative fit tests shall be conducted in
accordance with Appendix C to this section. The tests shall be
used to select facepieces that provide the required protection
as prescribed in Table 1 in paragraph (h)(2)(i) of this
section.

29 C.F.R. § 1926.1101(h)(4)(ii) (1997).

38
Sanders Lead, there the Commission interpreted not the section of

the lead respirator standard governing general provision of

respirators to employees, see 29 C.F.R. § 1910.1025(f)(1),13 but

rather the fit-testing subsection, 29 C.F.R. §

1926.1025(f)(3)(ii).14 1995 WL 242606, at *6. “[T]he respirator

fit-test standard requires the evaluation of individual employees’

respirators under certain unique circumstances peculiar to each

employee.” Id. As we indicated above, the fit-test portion of the

asbestos respirator standard similarly provides for per-employee

assessment of violations. See 29 C.F.R. § 1926.1101(h)(4)(ii).

Finally, in Hartford Roofing, although the Commission indicated

there may be per-employee assessment of violations of the

respiratory protection standard, 29 C.F.R. § 1910.134, such

statement was made in dicta, as the precise issue was whether the

Secretary could cite a separate violation of 29 C.F.R. §

1926.500(g)(1)(i)15 and § 1926.500(g)(4)16 for each employee exposed

13
Section 1910.1025, Lead, provides, in part:

(f) Respiratory protection.
(1) General. Where the use of respirators is required under
this section, the employer shall provide, at no cost to the
employee, and assure the use of respirators which comply with
the requirements of this paragraph. Respirators shall be used
in the following circumstances . . . .

29 C.F.R. § 1910.1025(f)(1) (1986).
14
See n.7.
15
Section 1926.500, Guardrails, handrails, and covers, provides,
in part:

39
to an unguarded roof edge. 1995 WL 555498, at *6-7, *10 (affirming

the ALJ’s assessment of one citation where the Secretary had issued

one for each of six employees). Moreover, the respiratory standard

mentioned in Hartford Roofing related not to asbestos or lead, but

rather to general industry, shipyards, marine terminals,

longshoring, and construction. See 29 C.F.R. § 1910.134 (1992).

In those work zones, widespread use of respirators is not required,

but rather depends on the precise atmospheric conditions, when it

becomes necessary to protect the employees’ health. See id.

After considering the plain language of subsection (h)(1)(i)

(g) Guarding of low-pitched roof perimeters during the
performance of built-up roofing work.
(1) General provisions. During the performance of built-up
roofing work on low-pitched roofs with a ground to eave height
greater than 16 feet (4.9 meters), employees engaged in such
work shall be protected from falling from all unprotected
sides and edges of the roof as follows:
(i) By the use of a motion-stopping-safety system (MSS system)
. . . .

29 C.F.R. § 1926.500(g)(1)(i) (1992).
16
Section 1926.500, Guardrails, handrails, and covers, provides,
in part:

(g) Guarding of low-pitched roof perimeters during the
performance of built-up roofing work.
. . .
(4) Mechanical equipment. Mechanical equipment may be used or
stored only in areas where employees are being protected by
either a warning line or an MSS system. Mechanical equipment
may not be used or stored between the warning line and the
roof edge unless the employees are being protected by an MSS
system. Mechanical equipment may not be used or stored where
the only protection provided is by a safety monitoring system.

29 C.F.R. § 1926.500(g)(4) (1992).

40
of the asbestos respirator standard, we agree with the Commission

and find that the regulation does not provide for the assessment of

citations on a per-employee basis, but rather on the basis of an

employer’s course of conduct in failing to provide respirators to

his employees during a Class I asbestos job. Thus, Ho’s failure to

provide respirators to all 11 workers at the hospital site for the

single Class I asbestos removal project was a single violation of

the respirator regulation. Therefore, we affirm the Commission’s

assessment of one violation of § 1926.1101(h)(1)(i).17

Whether the Commission abused its discretion in imposing the
maximum penalties for Ho’s OSH Act violations.

The Commission has the exclusive authority to assess penalties

once a proposed penalty is contested. Arcadian, 110 F.3d at 1199.

Section 17(j) of the OSH Act, 29 U.S.C. § 666(j), guides the

Commission’s assessment of a penalty. Id.; J.A. Jones, 1993 WL

61950, at *15. The Commission is to “giv[e] due consideration to

the appropriateness of the penalty with respect to [1] the size of

the business of the employer being charged, [2] the gravity of the

violation, [3] the good faith of the employer, and [4] the history

of previous violations.” 29 U.S.C. § 666(j) (1990). “These

factors are not necessarily accorded equal weight . . . .” J.A.

17
We pause to note that the instant result does not foreclose the
possibility of a different result if an employer refuses to provide
respirators to his employees for multiple and distinct Class I
asbestos jobs; then each of those violations could be separately
cited by the Secretary.

41
Jones, 1993 WL 61950, at *15. Gravity of violation is the key

factor. See id. The Commission can, when appropriate, consider

the number of employees exposed to the condition when analyzing

gravity. Arcadian, 110 F.3d at 1199. This Court reviews the

Commission’s determination of the amount of an OSH Act penalty for

abuse of discretion. Shaw Constr., Inc. v. OSHRC, 534 F.2d 1183,

1185 (5th Cir. 1976).

Ho Respondents argue that the Commission abused its discretion

in failing to consider each of the four elements set forth in §

666(j) in its determination of the amounts of penalties to assess.

Ho Respondents maintain it was an abuse of discretion to consider

Ho’s bad faith alone because all four factors are equally

important.

The Secretary responds that the Commission did not err in

assessing the maximum penalty for the two violations of the

asbestos training and respirator standards it affirmed. The

Secretary argues the Commission gave proper consideration to the

statutory penalty criteria but concluded that Ho’s extreme and

appalling disregard for employee safety – his lack of good faith –

outweighed other considerations in the context of this case.

After vacating 20 of the 22 asbestos training and respirator

standard citations, the Commission increased the remaining willful

penalties to the maximum $70,000 each and the serious penalties to

the maximum $7000 each to make a strong statement about Ho’s

42
illegal behavior. To be sure, the Commission rested much of its

decision on Ho’s lack of good faith. The Commission also, however,

addressed the gravity of Ho’s violations; it considered the number

of employees he exposed to the cited conditions to be a significant

indication of gravity. While this inquiry is a factor-based

balancing test, there is no requirement of equal consideration of

all factors. See J.A. Jones, 1993 WL 61950, at *15. The

Commission expressly considered and weighed Ho’s lack of good faith

and the gravity of the violations. Based on the circumstances

present in Ho’s particular case, we find the Commission did not

abuse its discretion in assessing the maximum penalty amounts.

CONCLUSION

Having carefully considered the record of the case and the

parties’ respective briefing and arguments, for the reasons set

forth above, we AFFIRM the Commission’s decision.

AFFIRMED.

43
EMILIO M. GARZA, Circuit Judge, dissenting:

Because the majority opinion fails to defer to the Secretary

of Labor’s (“Secretary”) reasonable interpretations of the

ambiguous language of 29 C.F.R. § 1926.1101(h)(1) and 29 C.F.R. §

1926.1101(k)(9); incorrectly finds that the Ho Ho Ho Express and

Houston Fruitland (collectively, “Ho Entities”) are not Erik Ho’s

(“Ho”) alter egos; and holds that Ho’s instruction to tap an

unmarked pipe was a “serious” rather than “willful” violation of

the General Duty Clause, 29 U.S.C. § 654(a)(1), I respectfully

dissent.

I

The majority opinion holds that the language of 29 C.F.R. §

1926.1101(h)(1) unambiguously precludes per-employee citations and,

thus, affirmed the Commission’s ruling that the regulation does not

require an individualized duty but instead applies to a single

course of conduct. The majority opinion also finds that the

language of 29 C.F.R. § 1926.1101(k)(9)))which the Commission

determined addresses a single course of conduct, prohibiting per-

employee citations))is ambiguous; however, it holds that the

Secretary’s interpretation is unreasonable and, hence, that the

per-employee citations are prohibited. I disagree. The language

of both provisions is ambiguous, and the majority opinion fails to

defer to the Secretary’s reasonable interpretation allowing per-
employee citations.

The penalty provisions of the OSH Act permit penalties on a

per-violation basis. Kaspar Wire Works, Inc. v. Sec’y of Labor,

268 F.3d 1123, 1130 (D.C. Cir. 2001). The question, however, is

what constitutes a unit of violation. “The test of whether the Act

and the cited regulation permits multiple or single units of

prosecution is whether they prohibit individual acts, or a single

course of action.” Sec’y of Labor v. Caterpillar Inc., No.

87-0922, 1993 WL 44416, at *22 (O.S.H.R.C. Feb. 5, 1993). An

example of a single course of action is the failure to protect the

perimeter of a roof. Sec’y of Labor v. Hartford Roofing Co., No.

92-3855, 1995 WL 555498 (O.S.H.R.C. Sept. 15, 1995). The failure

to erect guardrails on multiple scaffolds, however, may be cited on

a per-instance basis. Sec’y of Labor v. Hoffman Constr. Co., No.

4182, 1978 WL 6990 (O.S.H.R.C. Jan. 4, 1978). Individual record-

keeping violations may be penalized on a per-instance basis.

Caterpillar, 1993 WL 44416, at *23. Failure to remove employees

from work who were exposed to lead at or above the action level may

be cited on a per-employee basis. Sec’y of Labor v. Sanders Lead

Co., No. 87-260, 1995 WL 242606, at *3 (O.S.H.R.C. Apr. 24, 1995).

“It is not the single decision by an employer . . ., but the

language of the standard that is determinative.” Id.

When the statutory language is not clear, “the Secretary’s

interpretation would be entitled to deference given her official

duty, specialized expertise, investigatory knowledge and other

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experience relevant to carrying out the purposes of the Act.”

Kaspar Wire Works, Inc., 268 F.3d at 1131. “In situations in which

the meaning of [regulatory] language is not free from doubt, the

reviewing court should give effect to the [Secretary’s]

interpretation so long as it is reasonable, that is, so long as the

interpretation sensibly conforms to the purpose and wording of the

regulations.” Martin v. OSHRC, 499 U.S. 144, 150 (1991) (internal

quotations and citations omitted). This deference is given to the

Secretary, not the Commission. Id. at 158 (“although we hold that

a reviewing court may not prefer the reasonable interpretation of

the Commission to the reasonable interpretations of the Secretary,

we emphasize that the reviewing court should defer to the Secretary

only if the Secretary’s interpretation is reasonable”) (emphasis in

original). Thus, the inquiry is in two parts: (1) whether the

language is ambiguous; and (2) whether the Secretary’s

interpretation is reasonable. If so, we must defer to that

interpretation.

A

At the time of the violations, 29 C.F.R. § 1926.1101(h)(1)

stated, “[t]he employer shall provide respirators, and ensure that

they are used . . . .” The majority opinion finds that this

language unambiguously precludes per-employee citations. The

majority finds that, “there is simply no language in the general

respirator protection section that suggests the unit of prosecution

could be based on each individual employee not receiving a

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respirator versus the employer’s course of action in failing to

provide respirators to his employees as a whole for the Class I

asbestos job.” (emphasis added). However, there is also no

language in the general respirator section that suggests the

section is violated only when the employer does not provide

respirators to “employees as a whole.”18 The majority’s reading

also does not comport with the explicit purpose of OSH Act, which

is “to assure so far as possible every working man and woman in the

Nation safe and healthful working conditions. . .” 29 § U.S.C.

651(b) (emphasis added); Chao v. Mallard Bay Drilling, 534 U.S.

235, 245 n.9 (2002). The use of the singular “man” and “woman”

suggests a focus on the individual employee. Since the plain

language does not specify whether per-employee citations are

permitted, the language is ambiguous.

The next step in the inquiry is whether the Secretary’s

interpretation is reasonable. It is irrelevant whether the

Commission’s interpretation is also reasonable as the discretion is

in the Secretary’s hands. Martin, 499 U.S. at 158.

It is a reasonable interpretation of 29 C.F.R. §

1926.1101(h)(1) to issue per-employee citations. “As long as

employees are working in a contaminated environment, the failure to

provide each of them with appropriate respirators could constitute

a separate and discrete violations [sic].” Hartford Roofing Co.,

18
Such an aggregate reading of 29 C.F.R. § 1926.1101(h)(1) could
be read to mean that when an employer provides most))but not all))of
its employees with respirators, it is still not in violation of the
general respirator protection section.

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1995 WL 555498, at *7. Thus, Hartford makes the distinction

between the individual act of removing contaminates from the air

and the multiple acts of providing respirators. Id. The former is

subject to a single citation while the latter is subject to

multiple citations. Providing one employee with a respirator does

not abate the violation for other employees. Id. The requirement

also states that the employer shall “ensure that [the respirators]

are used.” 29 C.F.R. § 1926.1101(h)(1). Obviously, ensuring

individual usage requires action on a per-employee basis.

The subsections of 29 C.F.R. § 1926.1101(h)(1) also suggest

the potential for per-employee citations (or, at the very least,

suggest the absurdity of precluding per-employee citations for the

general respirator protection section). For instance, employers

are required to perform periodic individual face fittings for the

respirators. 29 C.F.R. § 1926.1101(h)(4). In addition, employers

are required to provide specific types of respirators depending on

employee requests. 29 C.F.R. § 1926.1101(h)(4). These

requirements are clearly employee specific. The employer cannot

provide any respirator; it must conform to the subsections of 29

C.F.R. § 1926.1101(h)(1) in providing employee specific

respirators. Thus, the Secretary reasonably interpreted the

ambiguous language of 29 C.F.R. § 1926.1101(h)(1) and we must defer

to her interpretation.

B

Section 1926.1101(k)(9)(i) states, “[t]he employer shall, at

no cost to the employee, institute a training program for all

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employees . . ., and shall ensure their participation in the

program.” Section 1926.1101(k)(9)(viii) states, “[t]he training

program shall be conducted in a manner that the employee is able to

understand.” The majority opinion finds that, while the language

is ambiguous, the Secretary’s interpretation))allowing per-employee

citations))is unreasonable. The majority opinion reasons that one

training program could have abated the violation if all eleven

employees had attended and understood. Ho, of course, did not

conduct a training program for any of his employees. While the

majority provides a reasonable interpretation of the training

requirement, it fails to show how the Secretary’s interpretation is

unreasonable.

The majority opinion relies on Sec’y of Labor v. Andrew

Catapano Enters., Inc., Nos. 90-0050, 90-0189, 90-0190, 90-0191,

90-0192, 90-0193, 90-0771, 90-0772, 91-0026, 1996 WL 559899

(O.S.H.R.C. Sept. 30, 1996) for the proposition that only

“employee-specific unique circumstances” merit citations “based on

each failure to train an individual employee.” This reading

misstates the holding in Catapano. The Commission in Catapano

found “[t]he language of the standard))‘[t]he employer shall

instruct each employee’))clearly may be read to permit the

Secretary to cite separate violations based on the failures to

train individual employees.” Id. at *5. The Commission did not

vacate the multiple citations on a per-employee basis but on a per-

inspection basis. The Commission reasoned that each new inspection

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could not result in a separate citation when “the employees did not

change, and the working conditions and applicable regulations did

not change.” Id.

Even the majority’s “employee-specific unique circumstances”

standard is met by the failure to train employees and ensure that

the employees understand the training. Reich v. Arcadian Corp.,

110 F.3d 1192, 1198-99 (5th Cir. 1997) (“An employee could be a

unit of violation, however, only if the regulated condition or

practice is unique to the employee (i.e., failure to train or

remove a worker).”). While the single action of a group training

session could have instructed the eleven workers at once, ensuring

that each employee understood the training is employee specific.

Thus, the majority has failed to show how the Secretary’s

interpretation is unreasonable. Accordingly, I would reverse the

Commission’s determination that per-employee citations are

prohibited.

II

The majority opinion affirms the Commission’s finding that the

Ho Entities are not alter egos of Ho because they “maintained

separate corporate identities, tax identities, bank accounts, and

legitimate business operations.” In determining whether a

corporation is an alter ego of an individual for reverse corporate

piercing purposes, courts consider the totality of the

circumstances, including “the total dealings of the corporation and

the individual, the amount of financial interest the individual has

in the corporation, the ownership and the control that the

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individual maintains over the corporation, and whether the

corporation has been used for personal purposes.” Estate of Lisle

v. Comm’r of Internal Revenue, 341 F.3d 364, 375-76 (5th Cir.

2003).

Courts need to look beyond formalities and records to

determine the true economic relationship between the entities.

United States v. Jon-T Chems., Inc. 768 F.2d 686, 693 (5th Cir.

1985) (finding that “the courts are concerned with reality and not

form, with how the corporation operated and the individual

defendant’s relationship to that operation”). In Jon-T Chemicals,

the court dismissed the formality of recording paid expenses as

loans because “whenever [one company] could not pay its bills, [the

other company] did so by writing a check.” Id. at 695. The

companies shared an accounting department and “funds were

transferred between the different [companies’] accounts in order to

cover deficiencies.” Id. That is precisely what happened here.

The Ho Entities shared one bookkeeper who notified Ho when one

account was deficient; Ho would then transfer the funds to cover

the deficiency of the other company.

The evidence shows that Ho has complete control over the Ho

Entities. Ho owns two-thirds of the stock and is president of both

companies. The Ho Entities advanced the vast majority of Ho’s

personal investment of the property.19 In addition, the Ho Entities

19
An undisclosed “outside source” and two other corporations,
one of which Ho owns, contributed the rest. These sources are not
involved in the OSHA proceedings.

-51-
provided funds for the workers’ wages and for supplies and

equipment. Converting a hospital into residential units has

nothing to do with the Ho Entities’ business purposes of

transportation and fruit sales. While the frequent transfers among

the Ho Entities and Ho were documented as debts, there were no loan

documents, no interest due, no schedule for repayment and no

representation of debt repayment. Accordingly, I believe that

substantial evidence supports a finding that the Ho Entities were

Ho’s alter egos and, thus, would vacate the Commission’s order

vacating the citations against the Ho Entities.

III

The majority opinion affirmed the Commission’s finding that

the violation of the General Duty Clause was “serious” instead of

“willful,” reasoning that there was no evidence compelling a

willful finding for the specific instruction to tap the unmarked

valve. The Commission’s legal conclusions may be set aside if they

are arbitrary, capricious, an abuse of discretion, or otherwise not

in accordance with law. Mica Corp. v. OSHRC, 295 F.3d 442, 447

(5th Cir. 2002). The General Duty Clause of the OSH Act requires

an employer to provide “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.” 29 U.S.C. § 654(a)(1).

“A violation is willful if it is committed with intentional,

knowing or voluntary disregard for the requirements of the

Occupational Safety and Health Act.” Hartford Roofing Co., 1995 WL

-52-
555498, at *2. See also AJP Constr., Inc. v. Sec’y of Labor, 357

F.3d 70, 74 (D.C. Cir. 2004) (finding that “a willful violation of

the Act constitutes an act done voluntarily with either an

intentional disregard of, or plain indifference to, the Act’s

requirements”). Ho conceded that tapping into an unmarked pipe at

a demolition site was a “recognized hazard.” Instructing his

employees to tap an unmarked pipe))a “recognized hazard”)) evidences

a plain indifference to the General Duty Clause. Even without the

benefit of hindsight, it is self-evident that tapping an unmarked

pipe is “likely to cause death or serious physical harm.”

Therefore, the Commission abused its discretion by finding Ho’s

violation of the General Duty Clause “serious” instead of

“willful.” Accordingly, I would vacate the Commission’s order

reducing the General Duty Clause violation to serious from willful.

For the above stated reasons, I respectfully dissent.

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