OR-OSHA v. CBI Services, Inc.

To determine whether an employer is guilty of a "serious violation" under ORS 654.086(2) by means of constructive knowledge and its employee's action, the relevant inquiry is not whether an employer could have known, with reasonable diligence, of the violation, but rather should the employer have known of the violation.

The Oregon Occupational Safety and Health Division (“OR-OSHA”) issued a citation to CBI Services, Inc (“CBI”) alleging two “serious” safety violations. The first charge was for a violation of OAR 437-003-0073 and the second was for a violation of OAR 437-003-1501. Following an initial hearing, an administrative law judge (“ALJ”) vacated violation one and affirmed violation two. On appeal of violation two, CBI alleged that the ALJ erroneously interpreted and applied the knowledge element of OR-OSHA’s prima facie case that CBI had constructive knowledge of its employee’s violative action(s), and CBI requested that this Court reverse the ALJ’s decision. Additionally, OR-OSHA cross-petitioned the ALJ’s decision to vacate violation one. OR-OSHA argued that the ALJ had erroneously incorporated a height requirement into the language of OAR 437-003-0073 and that the ALJ’s reliance on this supposed height requirement in reaching its decision to vacate violation one was an error of law. In addressing violation two, and under ORS 654.086(2), the Court of Appeals held that a “serious violation” may be assessed on an employer, by means of constructive knowledge, unless “the employer did not, and could not with the exercise of reasonable diligence, know of the presence of the violation.” The Court determined the presence of the CBI employee’s violative action to be entirely unforeseeable by CBI and reversed and remanded the decision of the ALJ. In regards to violation one, the Court examined the text of OAR 437-003-0073 and agreed with OR-OSHA that the ALJ erroneously incorporated a height requirement into the language of the statute. Accordingly, the ALJ’s reliance on the height requirement for CBI’s first violation was an error as a matter of law. Reversed and remanded on petition and cross-petition.