This year a company was issued three citation items that the company failed to have a “company executive” certify its annual summaries of workplace injuries and illnesses entered on its OSHA 300 Logs for 2007, 2008, and 2009, in violation of 29 C.F.R. § 1904.32(b)(4). OSHA proposed a penalty of $800 for each alleged violation. OSHA’s sole allegation in this case is that the company’s Safety and Risk Manager (“safety manager”) did not qualify as a “company executive” under § 1904.32(b)(4) when he certified the annual summaries for the years in question. The ALJ and the OSHRC upheld this citation. The company’s defense was that the phrase “highest ranking company official” was “vague”! Here are the details and results of the case…
The Secretary’s sole allegation in this case is that the company’s Safety and Risk Manager (“safety manager”) did not qualify as a “company executive” under § 1904.32(b)(4) when he certified the company’s annual summaries for the years in question. The judge agreed, rejecting the company’s contention that its safety manager fell within two of the categories of “company executive” listed under the cited regulation: (1) the highest ranking company official working at the establishment; and (2) an officer of the corporation. 29 C.F.R. § 1904.32(b)(4)(ii), (iii).
I. Highest ranking company official working at the establishment
Vagueness
The company argues that the phrase “highest ranking company official” in § 1904.32(b)(4)(iii) is unenforceably vague because the meaning of the words “highest ranking” may vary depending on the nature of the organization at issue. As an example, the company notes that in a “paramilitary” organization, such as a police force or fire department, a defined ranking system is in place, whereas a corporation may have no meaningful ranking system. With respect to its own operations, the company asserts that its safety manager’s word is “supreme on safety” matters, but its president “may be able to fire” the safety manager. the company seems to suggest that under these circumstances, it would be impossible to determine who qualifies as the highest ranking company official for purposes of compliance with § 1904.32(b)(4)(iii).
Reaching the merits of the company’s defense, we conclude that the phrase “highest ranking company official,” as applied in this case, is not unenforceably vague. “To determine whether a [regulation] is unenforceably vague, the Commission first examines the language of the [regulation] at issue, which is ‘viewed in context, not in isolation.’ ” If the Commission concludes that the language is vague, then it considers whether “a reasonable person, examining the generalized [regulation] in the light of a particular set of circumstances, can determine what is required.” We agree with the Secretary that the phrase “highest ranking company official” plainly means the official with the “greatest overall authority.” As appropriate to the context in which the words are being used here, the adjective “high” means “great, or greater than normal,” and the superlative of that word therefore means “greatest”; the adjective “ranking” means “having a specified position in a scale of achievement or status”; and the noun “official” means “a person . . . having official duties, esp. as a representative of an organization.” The “highest ranking company official” would thus be “a person” who has “official duties,” particularly as a representative of the company, whose “specified position” in the company is of the “greatest” degree “in a scale of achievement or status.” In any company, including the company, the president would likely occupy such a position. But regardless, the company owner or top level management would know how the company is organized and should be able to determine which person has the greatest overall authority and is, therefore, the highest ranking company official. We therefore reject the company’s argument that the phrase “highest ranking company official” is unenforceably vague.
Compliance
In the alternative, the company argues that the stipulated record shows its safety manager was the “highest ranking company official working at the establishment” for purposes of § 1904.32(b)(4)(iii). The judge rejected this argument, concluding that the company’s president rather than its safety manager was the highest ranking company official working at corporate headquarters, the establishment at issue. Based on our review of the stipulated record, we agree with the judge that the company’s president was a higher ranking company official than its safety manager. The parties stipulated that the president, also one of three shareholders of the company that owns the company, was “the highest ranking company official” at the company’s corporate headquarters with respect to all matters but safety. Although the parties also stipulated that the safety manager “outrank[ed]” the president with respect to safety matters, we find that the president’s position in the company and his status as shareholder in a closely held corporation shows that he possessed more authority in the company, and at the establishment at issue, than the safety manager. Indeed, the parties stipulated that the president hired the safety manager and, as a shareholder, the president could certainly take steps to fire him or even eliminate his position. Under these facts, we conclude that the company’s safety manager was not the “highest ranking company official working at the establishment” for purposes of § 1904.32(b)(4)(iii).
Officer of the corporation
The company, a North Carolina corporation, argues that its safety manager was an “officer of the corporation” under § 1904.32(b)(4)(ii), because the corporate shareholders’ agreement allowed the three shareholders to create officers “at will,” and the stipulated record shows that the company’s president and shareholders believed they were creating the position of “corporate safety officer” when the safety manager was hired. The Secretary maintains, however, that under North Carolina law, the safety manager was not an officer of the corporation when he certified the company’s annual summaries of its OSHA 300 Logs, because the stipulated record shows that the shareholders had taken no “affirmative action” to make him one. The judge agreed with the Secretary, noting that (1) the company’s corporate documents listed only the positions of president, vice-president, and secretary as corporate officers; and (2) the parties stipulated that “Respondent’s shareholders had not specifically voted or agreed to make [the safety manager] a corporate Officer of Respondent prior to [OSHA’s] investigation.”
Based on our review of the stipulated record and the Secretary’s arguments, we conclude that she has failed to demonstrate that the company’s safety manager was not an officer of the corporation under § 1904.32(b)(4)(ii). As the judge pointed out, the parties stipulated that the shareholders neither “specifically voted [n]or agreed” to make the safety manager a “corporate Officer of Respondent.” But the parties also stipulated that the company’s president “hired the [safety manager] and the unanimous shareholders of the Corporation approved his appointment as safety officer of the Corporation.” (Emphasis added.) Additionally, the parties stipulated that the shareholders “informally directed” the safety manager to act as the company’s “safety officer,” and that the company president—one of the three shareholders—believed that the safety manager possessed “the powers and authority of a corporate officer under North Carolina law.” Indeed, the parties stipulated that the “shareholders intended for [the safety manager] to have the full powers of the President and the Shareholders of the Corporation with respect to safety, including signing any reports or forms required by governmental organizations, such as OSHA.”
These stipulations, considered together with the shareholders’ agreement, rebut the Secretary’s claim that the company’s safety manager was not an officer of the corporation. Under the shareholders’ agreement, “[t]he unanimous shareholders may create additional corporate officers at will.” (Emphasis added.) This provision of the agreement mirrors the parties’ stipulation that “the unanimous shareholders . . . approved [the safety manager’s] appointment as safety officer of the Corporation,” which undermines the Secretary’s claim that the shareholders had taken no action. (Emphasis added.) And we find no basis in the record to conclude that under North Carolina law the shareholders were specifically required to do anything more. In these circumstances, we conclude that the Secretary has failed to establish that the company’s safety manager was not an officer of the corporation under § 1904.32(b)(4)(ii) at the time he certified the annual summaries for 2007, 2008, and 2009.
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