ARB Case No. 03-056
v.
Respondents.
STEVEN J. MANDEL
PAUL L. FRIEDEN
ROGER W.
WILKINSON
U.S. Department
of Labor
Fair Labor Standards Act of 1938, as amended; 29 U.S.C. 201 et
seq.
29 U.S.C. 203(l)
29 U.S.C. 203(d)
29 U.S.C. 212(c)
29 U.S.C. 212(d)
29 C.F.R. Part
516
29 C.F.R. Part
545
29 C.F.R.
516.2(a)(3)
29 C.F.R.
570.5(c)
29 C.F.R. 570.55
29 C.F.R. 570.65
29 C.F.R.
579.3(a)(5)
29 C.F.R.
580.12(b)
29 C.F.R.
580.12(c)
Miscellaneous
Congressional
Reports
H.R. Rep. No.
1452, 75th Cong., 1st Sess., 6 (1937)
S. Rep. No. 884,
75th Cong., 1st Sess., 2, 6 (1937)
ADMINISTRATIVE
REVIEW BOARD
UNITED STATES
DEPARTMENT OF LABOR
WASHINGTON,
D.C.
In the Matter of:
ADMINISTRATOR,
WAGE AND HOUR
DIVISION,
UNITED STATES
DEPARTMENT OF LABOR,
Petitioner,
ARB Case No. 03-056
v.
KEYSTONE FLOOR
REFINISHING
COMPANY, INC.,
d/b/a KEYSTONE
FLOOR
REFINISHING COMPANY; and
DANIEL LIEZ,
Individually and as
President of the
aforementioned
corporation,
Respondents.
BRIEF OF THE
ADMINISTRATOR
IN SUPPORT OF
PETITION FOR REVIEW
INTRODUCTION
In this Fair
Labor Standards Act ("FLSA") child labor case, a 17-year-old minor was
employed in violation of two Hazardous Occupation Orders ("HOs"). The
Administrative Law Judge ("ALJ") found a recordkeeping violation by the
employer for failing to keep a record of the employee's date of birth
because that employee was under 19 years of age, see 29 C.F.R.
516.2(a)(3), but then inexplicably reversed and vacated the violation
and related civil money penalty ("CMP") based on Wage-Hour's failure to
specify the precise regulation under which such violation was being
charged.
[1]
As explained below, such a reversal of the section 516.2(a)(3)
recordkeeping violation based on Wage-Hour's lack of specificity is
unjustified because Wage-Hour's CMP Computation Worksheet (based on
Wage-Hour Form 266), upon which the ALJ relied, clearly describes the
very recordkeeping violation reversed by the ALJ -- "CL Recordkeeping -
failure to have date of birth." Moreover, the decision is inconsistent
with this Board's caselaw stating that the proper inquiry for the ALJ in
his review of CMPs assessed by Wage-Hour does not end with Wage-Hour
Form 266 (correctly utilized as an initial tool for assessing the
penalties), but must instead entail an independent look at the
appropriateness of such penalties in light of the relevant statutory and
regulatory factors. The recordkeeping CMP is important because proper
recordkeeping is vital to protect young workers who are placed in
patently dangerous situations, as occurred here, as well as for
effective enforcement through the imposition of CMPs.
ISSUE PRESENTED
Whether the ALJ
in this child labor case involving two HO violations in connection with
a 17-year old erred by eliminating the CMP for a recordkeeping violation
under 29 C.F.R. 516.2(a)(3), based solely on the fact that Wage-Hour's
CMP Computation Worksheet failed to specify the precise regulation
supporting the violation.
STATEMENT OF THE
CASE
A. Course Of Proceedings And Statement Of Facts
Wage and Hour investigated Keystone Floor Refinishing Company of
Philadelphia, Pennsylvania early in 2000 for violations of the overtime
and child labor requirements of the FLSA. Keystone settled the overtime
claims but disputed the child labor claims (TR. 89, 99-100).
Daniel Liez, Keystone's President, managed the daily operations of the
company, making all employment and termination decisions, and determined
company policy (Dec. 2, 3). Keystone employed Robert Martin, then
17-years old, from July 9, 1999 to November 17, 1999, to work in its
sanding and hardwood floor refinishing business (Dec. 2). Keystone
owned, and its employees used, both a Stanley Bostitch nail gun and a
Delta Compound Miter Saw to install molding during the time period in
question (Dec. 3). Although Keystone disputed that Robert used the nail
gun and the miter saw during his employment (TR. 24-26, 71-73, 76, 78,
84, 220-23, 226), on February 8, 2001, Wage and Hour (the District
Director having approved the investigator's recommendation) assessed a
$2,675 CMP against Keystone and Liez for the employment of a 17-year-old
minor in violation of the child labor HOs and the recordkeeping
provisions of the implementing regulations. Specifically, a $1,200.00
penalty was issued for a violation of HO No. 5 (29 C.F.R. 570.55), which
precludes a minor under 18 years of age from operating a power-driven
wood-working machine. A second $1,200.00 penalty was issued for a
violation of HO No. 14 (29 C.F.R. 570.65), which precludes a minor under
18 years of age from operating a circular saw. A $275.00 penalty was
also issued for Keystone's failure to obtain a certificate of age and a
record of date of birth for Robert, pursuant to 29 C.F.R. 570.5(c) and
516.2(a)(3), respectively (Dec. 1, 4; TR. 104).
Keystone filed a timely exception to the notice of penalty and the case
was assigned to an administrative law judge for a hearing that took
place on August 28 and 29, 2002 (Dec. 1, 2). The ALJ identified two
issues: Whether Robert Martin used certain power tools in violation of
the FLSA, and whether Keystone failed to maintain a certificate of age
for Robert Martin in violation of the FLSA and the corresponding
regulations (Dec. 3, 4).
[2]
The Administrator called five witnesses at the hearing and Keystone called
six (Dec. 4).
[3]
Testifying for
the Administrator, three former Keystone employees stated that they saw
Robert use one or both of the prohibited power tools while working for
the company, and that his age was common knowledge among co-workers
there (TR. 23-26, 47-50, 70-75). One of the employees testified that, on
various occasions, he assigned Robert to work with the nail gun and
circular saw (TR. 26). The Wage and Hour investigator testified that
Robert told him that he had operated a nail gun and circular saw while
working for Keystone. The investigator later confirmed this through
other employee interviews (TR. 90-93, 98-99). He also described how he
used the child labor assessment grid Form WH-266 to compute the CMPs
(TR. 100-04)
[4]
.
Robert Martin testified that he gave Keystone a copy of his birth
certificate and social security card, and that he and Liez had several
conversations regarding Robert's inability to buy cigarettes (TR.
225-26, 228). He also stated that he told his age to Keystone’s office
manager, Felicia Saunders, during the telephone call in which she hired
him (TR. 231). On the stand, Robert was able to identify the miter saw
and the nail gun, and explain how each tool functioned, from looking at
exhibits (TR. 220-21).
Testifying for Keystone, three different employees stated that they had
never seen Robert use the prohibited power tools on the job (TR. 160-61,
204-05, 265). Liez testified that he never told anyone to let Robert use
the power tools, and added that Keystone did molding work requiring use
of the tools on only five of the days when Robert worked for him (TR.
147-48). Felicia Saunders testified that when Robert called her to apply
for work he told her that he was 18-years old (TR. 190).
B. Decision Of The ALJ
The ALJ upheld both HO violations and the related CMP assessments --
$1,200 for each violation (Dec. 12). The ALJ reversed that part of
Wage-Hour's assessment of a recordkeeping CMP that was based on the
employer's failure to obtain a certificate of age under 29 C.F.R.
570.5(c), because the language of the regulation (specifically, the use
of the language "should") was deemed to be precatory rather than
mandatory (Dec. 14). The violation for a failure to maintain and
preserve a record of date of birth for those employees under 19 pursuant
to 29 C.F.R. 516.2(a)(3) (which formed a part of Wage-Hour's $275
recordkeeping CMP) was upheld, but the ALJ then eliminated the related
CMP because the "assessment document" the inspector used "fails entirely
to specify either/both of the sections under which the assessment is
made. The violation noted is simply 'CL Recordkeeping - failure to have
date of birth.' I am thus constrained to find that Plaintiff has failed,
in this respect, to advance the basis for this assessment, and
accordingly cannot find Respondents responsible therefore" (Dec. 14,
15). The ALJ thus ordered that "[t]he record-keeping violations are
REVERSED AND VACATED" (Dec. 15).
STANDARD OF REVIEW
It is clearly within the province of the Board to review the ALJ's
decision de novo and to substitute its judgment for that of the ALJ.
See, e.g., Administrator v. Chrislin, Inc. d/b/a Big
Wally's, ARB Case No. 00-22 (Nov. 27, 2002).
ARGUMENT
THE ALJ ERRED BY REVERSING AND
VACATING A RECORDKEEPING VIOLATION AND CONSEQUENT CMP FOR THE EMPLOYER'S
FAILURE TO KEEP A RECORD OF THE MINOR'S DATE OF BIRTH, BASED ON
WAGE-HOUR'S FAILURE TO CITE THE APPLICABLE REGULATION, BECAUSE THE
WAGE-HOUR ASSESSMENT DID IN FACT IDENTIFY THE REGULATION BY SPELLING OUT
PRECISELY WHAT IT REQUIRED, AND BECAUSE, IN ANY EVENT, THE ALJ SHOULD
INDEPENDENTLY REVIEW WAGE-HOUR'S CHILD LABOR CMP ASSESSMENTS
A. Statutory And Regulatory Background
The child labor
provisions of the FLSA "seek to protect the safety, health, well-being,
and opportunities for schooling of youthful workers." H.R. Rep. No.
1452, 75th Cong., 1st Sess., 6 (1937); S. Rep. No.
884, 75th Cong., 1st Sess., 2, 6 (1937). Indeed,
the courts have held that there is a particularly compelling public
interest in protecting the health and well-being of working children.
See
Lenroot v. Kemp, 153 F.2d 153, 156-57 (5th Cir. 1946);
Lenroot v. Interstate Bakeries Corp., 146 F.2d 325, 327-28
(8th Cir. 1945); McLaughlin v. McGee Brothers, Inc.,
681 F. Supp. 1117, 1137-38 (W.D.N.C.), aff'd sub nom.
Brock v. Wendell's Woodwork, Inc., 867 F.2d 196 (4th Cir.
1989).
Section 12(c) of the FLSA, 29 U.S.C. 212(c), prohibits the employment
of oppressive child labor in commerce, in the production of goods for
commerce, or in any enterprise engaged in commerce or the production of
goods for commerce. The FLSA defines "oppressive child labor," in
relevant part, as:
a condition of employment under which . . . any
employee under the age of sixteen years is employed by an employer . . .
in any occupation, or [under which] any employee between the ages of
sixteen and eighteen years is employed by an employer in any occupation
which the Secretary of Labor shall find and by order declare to be
particularly hazardous for the employment of children between such ages
or detrimental to their health or well being; but oppressive child labor
shall not be deemed to exist by virtue of the employment in any
occupation of any person with respect to whom the employer shall have on
file an unexpired certificate issued and held pursuant to regulations of
the Secretary of Labor certifying that such person is above the
oppressive child-labor age.
29 U.S.C. 203(l). Congress specified in 29 U.S.C. 212(d) that "[i]n
order to carry out the objectives of this section ["Child labor
provisions"], the Secretary may by regulation require employers to
obtain from any employee proof of age." Thus, Congress made clear when
enacting the child labor provisions of the FLSA that children under the
age of 18 may not be employed in any occupation which the Secretary has
declared hazardous, and further made clear the important part that
recordkeeping plays in the enforcement scheme.
The Secretary's regulation at 29 C.F.R. 579.3(a)(5) specifically lists,
under "violations for which [child labor civil money] penalty may be
imposed," "[t]he failure by an employer employing any minor for whom
records must be kept under any provision of part 516 or part 545 of this
title to maintain and preserve, as required by such provision, such
records concerning the date of the minor's birth and concerning the
proof of the minor's age as are specified therein." The regulation at 29
C.F.R. 516.2(a)(3) requires an employer to maintain and preserve a
record of the date of birth for each employee under the age of 19
subject to the minimum wage and overtime provisions of the FLSA.
B. The ALJ Improperly Reversed And Vacated The
Recordkeeping Violation, And Attendant CMP, Under 29 C.F.R. 516.2(a)(3).
1. The ALJ erred
in ruling that Wage-Hour's "CMP Computation Worksheet" (based on
Wage-Hour Form 266) was deficient because it didn't specify the
regulation at 29 C.F.R. 516.2(a)(3), requiring an employer to maintain
and preserve a record of date of birth for employees under the age of
19. The worksheet assessed a $275 CMP for "CL [child labor]
Recordkeeping - failure to have date of birth." It is not clear why this
is not sufficient to indicate a violation of 29 C.F.R. 516.2(a)(3),
which prohibits the very thing described in the worksheet. Nowhere is
there a requirement that the specific regulation in question be cited in
the Wage-Hour assessment form. In addition, as the ALJ himself noted,
the Wage-Hour investigator testified to a violation of 29 C.F.R. 516
(Tr. 102).
2. The ALJ also misunderstood that Wage-Hour's "CMP Computation
Worksheet," based on Wage-Hour Form 266 (the grid), while a proper and
valuable tool for the initial assessment of CMPs (subject to review by
the Wage and Hour District Director), should not serve as a substitute
for an administrative law judge's, and ultimately this Board's,
independent review of the appropriate CMP based on the statute and
relevant regulations.
[5]
This Board has repeatedly stated this principle.
Thus, in Administrator v. Thirsty's Inc., ARB No. 96-143 (May
14, 1997), aff'd sub nom. Thirsty's, Inc. v.
U.S. Department of Labor, 57 F. Supp.2d 431 (S.D. Tex. 1999)
(district court granted summary judgment to the Department on APA
review), the Board, referring to 29 C.F.R. 580.12(c),
[6]
stated that "the regulations provide for a review of assessed CMPs by an
ALJ, whose regulatory authority is broadly drawn consistent with the
factors to be considered . . . ." The Board went on to state that "the
review and modification of an assessed CMP is not an arrogation of the
Administrator's authority, but a proper adjudicatory process."
[7]
The Board reiterated this principle in Administrator v. Merle Elderkin,
d/b/a Elderkin Farm, ARB Case Nos. 99-033, 99-048 (June 30, 2000),
aff'd sub nom. Elderkin v. U.S. Department of
Labor, No. 00-CV-776C (W.D.N.Y. Aug. 30, 2002), where it stated that
"the proper inquiry for an ALJ when reviewing a child labor CMP is
whether the penalty assessed by the Administrator is appropriate in
light of the statutory and regulatory factors, and not whether the
penalty comports with the Form WH-266 schedule."
Similarly, in
Fraser v. Ahn's Market, Inc., ARB Case No. 99-024 (July 28, 2000),
the Board stated as follows:
The Form WH-266 schedule, the ARB has held, is an
appropriate tool to be used by a field Compliance Officer to recommend
penalties through the enumeration and determination of the gravity of
factual violations. However, . . . WH-266 is merely the starting point.
The ALJ does not determine whether the CMP assessed by the Administrator
comports with the Form WH-266 schedule, but instead whether the penalty
to be assessed is appropriate in light of the foregoing statutory and
regulatory factors. Similarly, upon appeal from the decision of an
ALJ, the ARB is free to substitute its judgment for that of the ALJ in
determining de novo the appropriateness of the CMPs assessed.
(Internal quotation marks and citations omitted.) Finally, in a recent
Board decision, Chrislin, supra, the Board stated that Wage-Hour
Form 266 was to be used "to recommend penalties, subject to
review. It did not absolve reviewing officials or the ALJ of the
responsibility to ensure that the statutory and regulatory requirements
are met." See also
Administrator v. Lynnville Transport, Inc., ARB Case No. 01-011
(Nov. 27, 2002).
In this case, by
vacating the recordkeeping CMP under 29 C.F.R. 516.2(a)(3) based on what
he considered a deficient (because nonspecific) Wage-Hour "assessment
document," the ALJ, who had found a violation of that very regulation,
failed to follow Board precedent and independently determine the
appropriate CMP attendant upon a violation in accordance with the
statute and pertinent regulations. While we do not question an ALJ's
authority, in appropriate cases, to reduce or eliminate the CMPs
assessed by Wage-Hour by independently relying on relevant statutory and
regulatory factors, in this case no such independent statutory or
regulatory reasoning was provided.
The recordkeeping penalty at issue in this case is particularly
important because, in a case such as this, i.e., one with serious
violations, the strict enforcement of the "record of date of birth"
requirement plays an important role in preventing HO violations with
their attendant, extreme risks to the safety of children.
CONCLUSION
For the foregoing reasons, that part of the ALJ's decision reversing
the recordkeeping violation found, and the attendant CMP assessed, by
the Administrator for Keystone's failure to maintain and preserve a
record of the date of birth of the minor employee pursuant to 29 C.F.R.
516.2(a)(3) should itself be reversed, and the full recordkeeping
penalty restored.
Respectfully submitted,
STEVEN J. MANDEL
Associate
Solicitor
PAUL L. FRIEDEN
Counsel for
Appellate Litigation
______________________________
ROGER W.
WILKINSON
Attorney
U.S. Department
of Labor
Office of the
Solicitor
200 Constitution
Ave, N.W.
Suite N-2716
Washington, DC
20210
(202) 693-5555
CERTIFICATE OF SERVICE
I certify that on this ______ day of August, 2003, a copy of the
forgoing Brief of the Administrator in Support of Petition for Review
was sent by first class United States mail to:
Mervin M. Wilf,
Esq.
One South Broad
Street
Suite 1630
Philadelphia, PA
19107
Daniel Liez,
President
Keystone Floor
Refinishing Co., Inc.
d/b/a/ Keystone
Floor Refinishing Co.
1530 Locust
Street
Suite 265
Philadelphia, PA
19102
________________________
ROGER W.
WILKINSON
Attorney