I find this testimony irrelevant for the
purpose of contesting the sanctions issued in this case. The Respondent, through his new
attorney, had a chance to contest the Motion for Summary Decision and cannot now offer
evidence as to why he did not comply with the discovery at issue. On the other hand, the
testimony is relevant for purposes of the civil monetary penalties because part of the reason the
Respondent was assessed more money was falsification or concealment of child labor which is
addressed below.
The first time the Respondent saw Gage on January 1, 1995 was when his
mother marched him in by the back of the hair apparently for his stepfather to discipline him for
some unknown reason (TR at 220). Respondent chased Gage's mother away because he claims
she had been drinking and was mouthy (TR at 221). He claims that his mother was always
beating him up because she was always drunk (TR at 205). Gage did not remember this incident
(TR at 32). He remembered Gage was wearing his father's snowsuit which was too big (TR at
221). The second time he saw Gage was after the accident (TR at 221-222). According to
Respondent, Gage's mother was abusive and Gage came to the farm to get away from her (TR at
224). Gage's stepfather was on the farm visiting Andy or helping Andy (TR at 224).
Respondent testified that Frank Strohauer was financially indebted to him for back rent but did
not work for him on the farm until after Gage was hurt (TR at 236). Frank Strohauer rented a
trailer from the Respondent located on the farm premises (TR at 235).
Respondent testified that he never hired Gage to work on the farm and
never paid him any money for work (TR at 225). The Respondent recalled an incident when
Gage and another child threw stones and broke some windows in a building he owned (TR at
226-227). Respondent stated that he had nothing to do with Gage's penalty. Instead, Gage's
parents punished him for the incident by making him pick up junk from around their trailer and
carry it across the road to the dump. He stated that he loved Gage and tried to do the best he
could for him (TR at 226). Respondent gave Gage a calf and a pig which Gage kept where he
lived.
[Page 8]
The Respondent recalled meeting with two representatives from the
Department of Labor, Mr. O'Connor and Mr. Chenu, when they came to his home on January 17,
1995 (TR at 209, 231). Respondent did not understand what they were saying and referred them
to his attorney (TR at 209-210, 213, 240). He claims he instructed his attorney to provide the
requested documents but did not know if he did because both of them were sick (TR at 213). He
also remembered a time when the government wanted to tour his farm on March 31, 1995 and
Mr. O'Connor and Mr. Chenu asked to see certain things (TR at 217-218, 234). Respondent
testified that he directed his son to show Mr. O'Connor what he wanted to see and did not
prevent them from seeing anything on the farm but his attorney did (TR at 218, 234).
Injury and employment status
It is undisputed that Peter Gage was injured on the evening of January 1,
1995 when his arm was severed by a piece of farm equipment on Merle Elderkin's farm. What is
disputed is whether Gage was an employee at the time. Respondent claims that Gage was
injured while "fooling around" with some farm equipment and anyone could have
been caught on the moving parts because the guard for the PTO was broken. The Government
contends that Gage was an employee and was injured while performing work for the
Respondent's benefit. An employee is defined as "any individual employed by an
employer." 29 U.S.C. §203(e). An employer "includes any person acting
directly or indirectly in the interest of an employer in relation to an employee. . ." 29
U.S.C. §203(d); 29 C.F.R. §570.70(c)(2). The word "employ includes to
suffer or permit to work." 29 U.S.C. §203(g); 29 C.F.R. §570.70(c)(2)(iii).
Although Gage gave two different time periods for the length of his
employment, three years in his statement (PX 14), and four to five months at the hearing (TR at
21), his familiarity with and description of the farm and the machinery supports a finding that he
was an employee. Gage received compensation in the form of cash or credit towards the broken
windows and Respondent received a benefit in having Gage perform tasks necessary to the
maintenance of the farm which in turn helped produce a profit from the milk sales. There is no
requirement that an employee punch a time card or work set hours. Gage stated that he worked
every evening after school and on weekends. Even though the relationship between Gage and
the Respondent does not fit the conventional notion of an employer/employee relationship, it
does qualify as such a relationship.
Even though the Respondent denies employing Gage, I find that the
Respondent permitted Gage to work on the farm and had knowledge of the work he performed.
The Respondent was aware of Gage's presence on the farm because he acknowledged that Gage
spent a lot of time there to escape from his abusive mother. I also believe that Gage's stepfather
worked at the farm before and after the accident and Gage accompanied him and assisted him. It
is hard to imagine how a man could operate such a large dairy farm of 700 acres with 300 heads
of cattle with only the help of his two sons, especially with the Respondent's health problems. It
is likely that the temporary workers brought their children onto the farm and it is apparent that
[Page 9]
the Respondent put them to work, as evidenced by the numerous violations found. For whatever
reason, the Respondent is extremely reluctant to admit that he has any "employees,"
including his son who testified that he worked at the farm full-time since 1982. I do not believe
the Respondent has been totally forthcoming regarding the help he received on the farm as far as
employees.
The law provides that "no employer shall employ any oppressive
child labor in commerce in the production of goods for commerce or in any enterprise engaged in
commerce or in any enterprise engaged in commerce or in the production of goods for
commerce." 29 U.S.C.A. §212. According to 29 C.F.R. §570.70(a), section 12
of the Act applies to an employee below the age of 16 employed in agriculture in an occupation
that the Secretary of Labor finds and declares to be particularly hazardous for the employment of
children below the age of 16. According to 29 C.F.R. §§570.71(a)(1) and (2)(ii),
operating a tractor of over 20 PTO horsepower and operating or assisting to operate (including
starting, stopping, adjusting, feeding, or any other activity involving physical contact associated
with the operation) a feed grinder . . . or the unloading mechanism of a nongravity-type self-unloading wagon or trailer are considered particularly hazardous for the employment of children
below the age of 16.
I find that Peter Gage had his right arm severed while operating the feed
mixer (non gravity type self-unloading wagon) on the night of January 1, 1995 and was an
employee as defined by section 3(e) of the Fair Labor Standards Act of 1938, as amended, 29
U.S.C. §201 et seq (the "Act"), when he suffered his injury, in
violation of 29 C.F.R. §570.71(2)(ii). He assisted in the operation of the feed mixer by
reading the scale on the mixer computer screen. I also find that he operated the tractor in
violation of §570.71(a) because of his testimony that he had turned the feed mixer on and
off before by stepping on one step of the tractor and pulling the lever (TR at 22).
Civil money penalties
The Respondent argues that no assessment should be upheld but certainly
agrees that an Order should be entered that he be admonished to insure no reoccurrence of the
violations, with an understanding of the propensity for punishment if there should be a
reoccurrence. The Government's position is quite the opposite in that it argues that this case
demands the imposition of the highest civil money penalties in order to achieve the enforcement
purposes of the child labor provisions of the Fair Labor Standards Act.
The Administrative Review Board (ARB) has held that a presiding ALJ
has the authority to review the case and to duly consider all of the factors delineated by the
pertinent regulations. Administrator v. Thirsty's, Inc. , 1997 WL 453588 (ARB, May
14, 1997). The ARB acknowledged that according to 29 C.F.R. §§580.12(b) and
(c), an ALJ's scope of authority to change the Administrator's assessments is untrammeled and
specifically includes a determination of the appropriateness of the assessed penalty.
Id. The ARB further found that the review and modification of an assessed CMP is not
an arrogation of the Administrator's authority, but a proper adjudicatory process. Id.
[Page 10]
The regulations at §580.12 (b) and (c) entitled "Decision and Order of
Administrative Law Judge" provide, in part, that the decision of the (ALJ) shall be limited
to a determination of whether the Respondent has committed a violation of section 12 . . . and
the appropriateness of the penalty assessed by the Administrator and the decision . . . may affirm,
deny, reverse, or modify, in whole or in part, the determination of the Administrator. What
follows is an explanation of how the penalties were computed and a determination of the
appropriateness of the assessed penalty.
Penalties were originally assessed as $141,000 but were reduced to
$71,100 because of a $10,000 per minor limit (TR at 129, 133; PX 4, 5). Investigator Chenu
explained the process of computing the monetary penalties (TR at 117-134). He prepared WH-103 (PX 4) to summarize the findings of the investigation (TR at 117). Since violations were
found, a final conference was held and he next prepared WH-266 (PX 5), which is the form used
to compute the penalties (TR at 118-119). He testified that the WH-266 form accounts for the
size of the business (part E), the gravity of the violation (parts A, B and D), history of prior
violations (part A), evidence of willfulness (aggravating factor), the number of minors illegally
employed (part A, item #6 and assessment for each minor), the age of the minors (parts B and
D), records of the required proof of age (item #13 and aggravating factors), occupations of the
minors (parts A, B and D) and exposure of minors to hazards that result in injury (parts A and
D).
As a preliminary matter, civil monetary penalties (CMPs) are to be
recommended if any of the factors in Part A of form WH-266 are present (PX 5). In this case,
four out of six factors were checked; 1) death or serious injury, 2) child labor compliance was not
assured, 5) any HO (hazardous orders) violation or employment under legal age occurred and 6)
more than one minor was involved.
Eight (8) minors, including Gage, were found to be illegally employed (TR
at 117; PX 4). Their dates of birth were verified from school records (TR at 117). Civil
monetary penalties were assessed for five and the other three fell under the hot goods action (TR
at 126-127). Mr. Chenu explained that section 12C of the Fair Labor Standards Act allows for
the imposition of civil monetary penalties if minors work for a covered enterprise or the minors
are individually or closely related and directly essential to the production of goods which cross
state lines. In this case, the goods which crossed state lines was milk and five minors were found
to have been closely related and directly essential to the production of that milk. The three other
minors fell under section 12A, the hot goods action, which included the minors even if they were
not closely related and directly essential to the production of milk because they simply worked in
and about an establishment that shipped goods in interstate commerce. Mr. Chenu stated that the
investigators received documents from Western Tier Milk Coop, the Agricultural Marketing
Program and Overland Dairy which indicated that the milk crossed state lines but could not
produce these documents (TR at 146). Mr. Chenu claims that on January 17, 1995, the
Respondent indicated that his milk was shipped to Ohio (TR at 152). He explained that a
penalty would be assessed if any shipment of goods produced through child labor employment
[Page 11]
goes across state lines (TR at 153) making the Respondent's testimony that some of the dairy
products he sells stay in the state of New York irrelevant (TR at 226).
In Part B, a set amount for the CMP is listed in column 1 and is multiplied
by the number of violations found in column 2 and any aggravating factors in column 3 to reach
the total in column 4. The penalties cannot exceed $10,000 per minor. 29 C.F.R.
§579.5(a). Part D penalties were only assessed for Peter Gage because he was the only
employee who sustained a serious injury (TR at 122). A separate violation was assessed for each
piece of equipment covered by the hazardous orders which in this case were the feed mixer and
the tractor (TR at 123). Each violation for a serious injury for each piece of machinery was
$8,500, or $17,000 total.
In this case, each violation was multiplied by a category 2.0 factor because
the investigators found falsification/concealment of child labor and failure to assure child labor
compliance (TR at 129-130). Mr. Chenu testified that the Respondent concealed child labor
because he told them he did not have any employees, much less minors, and the investigation
revealed otherwise, various records were requested but not supplied and he failed to keep records
for the minors (TR at 130). They also found failure to assure child labor compliance because the
Respondent and his attorney were given information regarding the child labor laws and
subsequently, Mr. O'Connor interviewed a minor who indicated that violations were ongoing.
Pursuant to the authority granted under §580.12, I do not find that
the category 2.0 multiplier was necessary in this case. The Respondent was already fined under
Part B of form WH-266, number 13, for child labor record keeping violations (PX 5; TR at 132).
The Respondent testified that he was cooperative with the investigation, referring any requests
for documents or further information to his attorney (See TR at 213-219). I do not find that the
Respondent was uncooperative and the penalties already assessed are sufficient to punish the
record keeping violations. As for failure to assure child labor compliance, the information relied
upon to establish this was the interview with Brian Chadwick.4 One activity described by Brian, operating
a chain saw to cut firewood, was performed at the Respondent's home and not on the farm. He
did not specify where the other activity, operating a tractor to plow snow, was performed and
whether he was paid to perform either of these tasks. They did not corroborate Brian's
allegations nor question the Respondent to verify his story. The Respondent did assure future
child labor compliance at the hearing and because of the traumatic nature of this experience, I
believe that Respondent will keep this promise. Therefore, the 2.0 multiplier is unnecessary.
Taking away the 2.0 multiplier and using the $10,00 maximum penalty per minor reduces the
penalties to $58,100. Using PX 13 and taking away the 2.0 multiplier, the fine for Greg Carlson
is $7,275, for Carolyn Carson, $5,275, for Brian Chadwick, $9,075, for Elizabeth Gage, $8,375,
for Peter Gage, $10,000 under Part B and $17,000 under Part D. These amounts total $57,000,
which when added to ,100 for the hot goods violation equal $58,100.
[Page 12]
Twenty nine C.F.R. §579.5 lists the factors to be considered when
determining the amount of the civil penalty as follows:
(b) In determining the amount of such penalty there shall be
considered the appropriateness of such penalty to the size of the
business of the person charged with the violation . . . taking into
account the number of employees employed by that person, dollar
volume of sales, amount of capital investment and financial
resources and such other information as may be available relative
to the size of the business of such person. (c) In determining the
amount of such penalty there shall be considered . . . the gravity of
the violation taking into account . . . any history of prior violations,
any evidence of willfulness or failure to take reasonable
precautions to avoid violations; the number of minors illegally
employed, the age of the minors . . . ; the occupation in which the
minors were so employed . . . ; exposure of such minors to hazards
and any resultant injury to such minors; the duration of such
illegal employment; and as appropriate, the hours of the day in
which it occurred and whether such employment was during or
outside school hours. 29 C.F.R. §§579.5(b) and (c).
The mandatory language in subsections (b) and (c) makes clear that all of the specified
elements must be considered in assessing the penalty.
I find that the factors specified in 29 C.F.R. §§579.5(a)-(c)
were properly considered except for the financial resources of the business. On the WH-266
form, part E allows for a reduction based on the size of the Respondent's business where only
child labor record keeping and/or nonhazardous violations (Reg 3 hours) occurred and
where no death or serious injury occurred during any illegal employment and where
none of the "aggravating factors" on page 3 were applied (See PX 5). Part E nor any
other part of WH-266 addressed the financial resources element specified in §579.5(b).
Evidence was presented at the hearing which revealed that the
Respondent's farming business is in serious financial trouble and he has filed for Chapter 13
bankruptcy. He has only been able to make minor capital investments in the farm over the past
few years because of the lack of income and he and his son testified that the farm needed
improvements that they were not able to make. The purpose of the child labor provisions is to
protect the safety, health, well-being and opportunities for schooling of youthful workers. 29
C.F.R. §570.101. Presumably, the penalties imposed for violations of the child labor
provisions serve to punish past violations and deter future violations. It is doubtful that the
penalties are designed to drive violators out of business. In this case, considering the
Respondent's financial condition, another large judgment against him could force him out of
business entirely. Therefore, a reduction of the penalties is justified in order to serve as a
punishment and a deterrent while at the same time not driving the Respondent out of business.
[Page 13]
Of course, a reduction does not lessen the seriousness of Peter Gage's injury nor excuse or justify
the Respondent's employment practices in any way. To the contrary, I believe the Respondent is
truly sorry for the events which happened and will suffer from the fact that he has violated the
child labor laws and a serious injury was sustained as a result. In consideration of the above, I
hereby find that a 50% reduction is appropriate. Therefore, the penalties are reduced to $29,050.
A reduction in the penalty may also be appropriate if either of the two
alternatives under §579.5(d) are satisfied. The criteria in subsection (d)(1) and (d)(2) are
joined by "and",signifying that all criteria must be satisfied before the
penalty can be decreased. Keesling v. Supermarkets General Corp., d/b/a Pathmark ,
90-CLA-34, Final Decision & Order (Sec'y Jan. 13, 1993). According to §579.5 (d):
based on all the evidence available, including the investigation
history of the person charged and the degree of wilfulness
involved, it shall further be determined, where appropriate: (1)
Whether the evidence shows that the violation is "de
minimis" and that the person so charged has given
credible assurance of future compliance and whether a civil penalty
in the circumstances is necessary to achieve the objectives of the
Act; or (2) Whether the evidence shows no previous
history of child labor violations, that the violations themselves
involved no intentional or heedless exposure of any minor to any
obvious hazard or detriment to health or well-being and were
inadvertent and there has been credible assurance of
future compliance and whether a civil penalty in the
circumstances is necessary to achieve the objectives of the Act.
§§579.5(d)(1) and (2).
The Secretary of Labor noted that "de minimis" is shorthand
for the maxim "the law does not care for, or take notice of, very small or trifling
matters." Echaveste v. Horizon Publishers and Distributors , 90-CLA-29, Sec'y
Decision (May 11, 1994), aff'd on recon. (July 21, 1994) (quoting BLACK'S LAW
DICTIONARY, at 388 (5th ed. 1979).
Of course, the injury sustained by Peter Gage is not small or trifling. The
fact that a serious injury was involved precludes a further reduction. Even though I believe the
Respondent has given credible assurance of future compliance, I find that the injury and
violations as to Peter Gage were not de minimis. As for the other minors, the amount of the
violations and the fact that children as young as seven (7) years old were employed, also
precludes any further reduction.
As for §579.5(d)(2), again, I feel that the Respondent has given
credible assurance of future compliance and the evidence shows no previous history of child
labor violations. However, I cannot find that the violations involved no intentional or heedless
exposure of any minor to any obvious hazard or detriment to health or well-being or were
inadvertent. An examination of the violations (See PX 4) reveals that these children were
exposed to dangerous farm equipment with motors and sharp moving blades and worked in
[Page 14]
manure pits and pens with bulls, boars, calves and sows. The feed mixer was especially
dangerous, for children and adults, because of the missing safety device.
Therefore, I find that no further reduction in penalties is warranted under
§§579.5(d)(1) or (2). There is certainly no justification for not imposing any fees as
the Respondent has requested nor do I wish to impose the highest penalties as the Government
has requested. The penalties have been reduced to $29,050 as discussed above.
ORDER
IT IS ORDERED that pursuant to 29 C.F.R. §580.12, the imposition
by the Administrator, Employment Standards Administration, Wage and Hour Division, United
States Department of Labor, of a civil money penalty in the amount of $71,100 against the
Respondent is hereby reduced to $29,050.
GERALD M. TIERNEY
Administrative Law Judge
GMT/TLR/ir
NOTICE OF APPEAL RIGHTS
Pursuant to 29 C.F.R. § 580.13, any party dissatisfied with this Decision and Order
may appeal it to the Secretary of Labor within 30 days of the date of this Decision, by filing
notice of appeal with the Secretary of Labor, United States Department of Labor, Washington,
D.C. 20210. A copy of the notice of appeal must be served on all parties to this Decision
and Order and on the Chief Administrative Law Judge, United States Department of Labor, 800
K Street, N.W., Suite 400, Washington, D.C. 2001-8002. If no timely appeal is made, this
Decision and Order shall be deemed the final agency action.
[ENDNOTES]
1 References to the record are as follows:
RX = Respondent's Exhibits
PX = Complainant's (Plaintiff's) Exhibits
TR = Transcript of the April 28, 1998 Hearing
2 Mr. Capuchinski was also offered as
rebuttal to Mr. O'Connor and testified that to the best of his knowledge, the handwriting beside the pictures in PX 7
was his brother's, Ted Capuchinski (TR at 163).
3 The Respondent testified that Sam
Hoard is an older gentleman who retired from his father's farm and just does odds and ends for the Respondent (TR
at 238).
4 Respondent's attorney tried to
question Brian Chadwick's competence but did not produce any evidence or elicit any testimony indicating that he
was retarded, contrary to the Respondent's closing brief, next to last page.