DATE: January 13, 1993
CASE NO. 90-CLA-0034
IN THE MATTER OF
KAREN R. KEESLING, ACTING
ADMINISTRATOR, [1] WAGE AND
HOUR DIVISION, UNITED STATES
DEPARTMENT OF LABOR,
PLAINTIFF,
v.
SUPERMARKETS GENERAL CORP.,
D/B/A PATHMARK,
RESPONDENT.
BEFORE: THE SECRETARY OF LABOR
FINAL DECISION AND ORDER
This case arises under the child labor provisions of the
Fair Labor Standards Act of 1938, as amended (FLSA), 29 U.S.C.
203(l), 212(c), 215(a)(4), and 216(e) (1988), and their
implementing regulations, 29 C.F.R. Parts 570, and 579 (1990) and
Part 580 (1991). The Respondent, Pathmark, appealed the Decision
and Order (D. and O.) of the Administrative Law Judge (ALJ)
upholding Wage and Hour's determination that Pathmark be assessed
penalties of $12,975.00 for various time and hour violations and
violations pertaining to the operation by minors of an automated
scrap paper baler. See 29 C.F.R. 580.13.
BACKGROUND
The Respondent is a corporation with at least two divisions,
Pathmark and Rickel Home Center. Pathmark Supermarket Division
consists of 180 stores located in New York, New Jersey,
[PAGE 2]
Connecticut, Delaware and Pennsylvania at which approximately
31,000 persons are employed.
In March 1990, the Wage and Hour Division conducted a child
labor investigation of Pathmark's Wall, New Jersey, store. The
investigation identified twenty-three minors employed in
violation of one or more child labor standards. D. and O. at 3.
Eight minors were found to have operated a scrap paper baler in
violation of Hazardous Occupation Order No. 12 (HO 12), 29 C.F.R.
570.63, and seventeen were identified as working in violation
of applicable time and hour standards, 29 C.F.R. 570.35. D.
and O. at 3-4. Of the minors determined to have operated the
baler, two actually activated the machine to make bales and then
removed them, Transcript (T.) at 33-35, 44-45, whereas the
remaining six only loaded materials into the baler. T. at 50,
65, 72, 76, 84 and 222. D. and O. at 4-5. As a result of the
investigation, Wage and Hour assessed a civil money penalty of
$13,500.00, which was reduced at the hearing to $12,975.00.
D. and O. at 2, 18.
The ALJ initially found that the scrap paper baler in
question, a Philadelphia Tramrail High Density Hydraulic Baler,
Model No. 3400 HD, was within the scope of HO 12. D. and O. at
9-13. He next concluded that, in accordance with the definition
in 29 C.F.R. 570.63, which provides that operating includes
"placing materials into or removing them from the machine," all
eight minors operated the baler. D. and O. at 13-16. While
noting that Pathmark stipulated to the violations of the time and
hour standards, the ALJ implicitly rejected the contention that
the violations should be excused because they were de minimis.
Id. at 16-18. After noting that the penalty to be
assessed for child labor violations is to be based on the factors
specified in 29 C.F.R. 579.5, the ALJ concluded that Wage and
Hour took those factors into account. D. and O. at 18-21. The
ALJ held that the penalties of $12,975.00 were reasonable and
appropriate. Id. at 23.
DISCUSSION
Pathmark makes several contentions that the ALJ failed
to consider the mandatory criteria specified at 29 C.F.R.
579.5(d). Respondent's Brief (Resp. Br.) at 2; Respondent's
Reply Brief (Resp. Rep. Br.) at 2. Because some of these
contentions are not properly cognizable under Section 579.5(d)
and, the 579.5(d) criteria are not, in my view, strictly
mandatory, seeinfra at 4, a brief review of the
regulatory scheme for assessing civil money penalties is
appropriate.
Section 16(e) of the FLSA provides that any person who
violates the provisions of Section 212 (which prohibits the
employing of oppressive child labor) shall be subject to a civil
penalty of not to exceed ,000 [2] for each violation. 29
U.S.C.
[PAGE 3]
216(e). Section 579.5(a) of the regulations provides that the
determination concerning the amount of the penalty shall take
into consideration the size of the business and the gravity of
the violation. Subsections (b) and (c) state that with respect
to these two factors which "shall be considered" a number of
other elements will be taken into account. The mandatory
language in these subsections makes clear that all of the
specified elements must be considered in assessing the penalty.
Subsection (d) provides for further analysis concerning the
amount of the penalty and sets forth two alternatives,
subsections (d)(1) and (d)(2), wherein if either is satisfied a
lessening of the penalty would be appropriate. Each alternative
inquires whether the evidence shows that a number of criteria
have been satisfied. In each alternative, the individual
criteria are joined by the word "and," signifying that all
criteria must be satisfied before the penalty could be decreased.
SeeIn the Matter of Louisiana Department of Labor,
Case No.
82-CPA-32, Sec. Dec., Aug. 23, 1990, slip op. at 3-4. If,
therefore, the evidence shows that any one of the criteria is not
satisfied, it is unnecessary to consider the remaining criteria.
Initially, Pathmark contends that the ALJ failed to consider
the overwhelming evidence of its lack of willfulness [3] as it
established it was unaware the minors were working in excess of
the time and hour limitations or in violation of HO 12. Resp.
Br. at 2. As the ALJ noted, however, there were eighty-eight
violations of the time and hour standards. D. and O. at 17.
See Joint Exhibit (JX) 1; Plaintiff's Exhibits (PX) 1, 2;
Defendant's Exhibit (DX) 1; T. at 11. Although Pathmark
contended that, with two exceptions, no minor was scheduled to
work in violation of the standards, see Resp. Post Hearing
Brief (PHB) at 5; T. at 236, the ALJ observed properly that
Pathmark easily could have ascertained that minors were in fact
working in violation of the standards. D. and O. at 17. As the
Administrator argues, Administrator's Brief (Admin. Br.) at 23
n.20, Pathmark's manager could have checked the minors' actual
working hours on their time cards. I therefore reject the
contention that the ALJ failed to consider the evidence
pertaining to willfulness. In view of the large number of
violations and the ease with which they could have been
discovered, I conclude that Pathmark showed disregard for whether
the time and hour violations were taking place and, accordingly,
its conduct must be considered willful. SeeMcLaughlin
v. Richland Shoe Co., 486 U.S. 128, 133 (1988) (conduct
willful where employer knew or showed reckless disregard for
whether conduct prohibited by statute); Mitchell v.
Raines, 238 F.2d 186, 188 (5th Cir. 1956) (employer charged
with knowledge that sale and delivery of lumber to Georgia State
[PAGE 4]
Highway Department would be used on roadways comprising essential
arteries of interstate commerce thereby bringing activity within
jurisdiction of FLSA).
With respect to HO 12, the ALJ noted that, following a Wage
and Hour investigation of other Pathmark stores in 1987, Pathmark
was informed that loading and unloading a scrap paper baler by
minors was a violation. D. and O. at 20. He also acknowledged
that Pathmark's general store manager thought that one of the
minors who operated the baler to make bales was eighteen years of
age and therefore permitted by law to do so. Id. at 4.
Pathmark's regular practice was to place an "M" on the time cards
of minors and the manager admitted that he could have verified
the age of that minor by looking at his time card. T. at 251.
Pathmark therefore should have known about the HO 12 violations
and, given the large number and routine nature of these
violations, see T. at 33, 44, 50-51, 65, 72, 76, 84 and
222; JX 2, its conduct must be considered willful.
Pathmark next argues that the ALJ failed to give any
consideration to its lack of any prior history of time and hour
standards violations, [4] Resp. Br. at 2, and that he
erroneously considered other types of violations which had
occurred at five Rickel Home Center Stores. Resp. Rep. Br. at 3-
4. I reject this contention. Section 579.5 nowhere states or
suggests that the prior violations must be the same type of
violations. Nor has Pathmark cited any authority for its
contention that violations occurring at other subsidiaries of
Supermarkets General may not be considered.
Pathmark also alleges that the ALJ erred by not considering
the testimony of the Department of Labor's own expert witness
that it was not dangerous to throw waste materials into the baler
while it was non-operational. Resp. Br. at 2. It further argues
that the baler in its store is not as dangerous as the one
described in Report No. 12, Department of Labor Bulletin No. 181,
see Appendix to Admin. Br., Tab D, relied upon by the ALJ,
because it cannot be loaded and operated at the same time.
Resp. Rep. Br. at 3. The videotape describing the operation and
safety features of the Philadelphia Tramrail Baler, however,
cautions against putting hands or body into the baler and states
that if the baler continues to run when the safety gate is open,
it should not be operated. JX 8 at 1. I therefore conclude that
the ALJ determined properly that loading the baler could be a
hazardous activity. See D. and O. at 15-16.
The ALJ also failed to consider, Pathmark alleges, the
testimony of eight minors that they were instructed specifically
to not operate the baler. Additionally, two minors testified
that they made bales in defiance of the prohibition and despite
conspicuous warning labels affixed to the baler. Resp. Br.
[PAGE 5]
at 2. Although the ALJ did not recount specifically the
testimony of the minors on this issue, he noted Pathmark's
contention that it instructs all minor employees not to operate
the baler, D. and O. at 15, and made no finding to the contrary.
Simply telling the minors not to operate the machinery would not,
however, constitute taking reasonable precautions to avoid
violations, seeDonovan v. ELCA of New Hampshire,
Inc. 615 F. Supp. 106, 108 (D.N.H. 1984) (not sufficient for
central management to tell branch managers to not violate labor
laws), particularly where, as here, both the operating and
loading violations were of a persistent nature.
Pathmark alleges that the ALJ failed to take into account
the de minimis nature of the time and hour violations. Resp.
Rep. Br. at 2. The ALJ, however, acknowledged specifically
Pathmark's argument and, after finding that there were eighty-
eight time and hour violations, implicitly rejected the
contention that the violations were de minimis. See D.
and O. at 6-8, 17, 19. Given the high number of violations
and the percentage of minors involved (seventeen of forty-six
minors employed, see Resp. PHB at 3), I conclude that the
violations are not de minimis. Cf. Department of Labor
v. ARA Services, Inc., 128 Lab. L. Rep. ¶ 31,691
(CCH) (ALJ Dec., 1985) (In this ALJ decision, which is not
binding on the Secretary, the ALJ found a de minimis violation
where, of two minors alleged to have used a meat slicing machine,
an affidavit from one stated she never used it and the deposition
testimony of the other was that she may have used it on a handful
of occasions).
Finally, Pathmark contends that the ALJ failed to consider
the overwhelming evidence of its credible assurances of future
compliance. Resp. Br. at 3. This contention relates to both
Subsections 579.(d)(1) and (2). In view of my conclusions that
the time and hour violations are not de minimis and that
Pathmark has a previous history of child labor violations, it is
not necessary to consider this contention. Nevertheless, I
reject this argument. After noting the previous violations in
1985, 1986 and 1987, D. and O. at 20, the ALJ concluded that
Pathmark's failure, until April 1990, to take steps to
correct violations despite warnings raises doubts as to its
commitment to comply with the regulations. Id. at 21,
citingGulf King Shrimp Co. v. Wirtz, 407 F.2d 508,
516 (5th Cir. 1969). As the Administrator argues, see
Admin. Br. at 29, previous noncompliance is significant in
determining if assurances of future compliance are credible.
SeeMarshall v. Lane Processing, Inc., 606
F.2d 518, 519 (8th Cir. 1979); Wirtz v. Atlas Roofing Mfg.
Co., 377 F.2d 112, 116 (5th Cir. 1977). I therefore conclude
that the ALJ properly considered the evidence as to assurances of
future compliance and found it not credible.
[PAGE 6]
CONCLUSION
For all of the foregoing reasons, I find that the ALJ
considered all of the relevant factors set forth in 29 C.F.R.
§ 579.5, and the evidence relating thereto, and acted
properly
in upholding the assessed penalty of $12,975.00. Accordingly,
the Decision and Order is affirmed and Respondent is ordered to
pay the assessed penalty of $12,975.00 pursuant to 29 C.F.R.
§ 580.18(a).
SO ORDERED.
Secretary of Labor
Washington, D.C.
[ENDNOTES]
[1] The caption in this case is changed to reflect the
Administrator, rather than the Secretary, as the party
referring the matter for a hearing upon receipt of exceptions
to a determination imposing civil money penalties. See 29
C.F.R. § 580.10.
[2] Section 16(e) was amended by the Omnibus Reconciliation Act
of 1990 to raise the maximum civil money penalty from ,000 to
$10,000, effective November 5, 1990. Pub. L. No. 101-508, 104
Stat. 1388-29 (1990). The instant case, wherein the penalties
were assessed on April 5, 1990, is governed by the former Section
16(e).
[3] Willfulness is one of the elements listed in Section
579.5(c) and, therefore, must be considered in arriving at the
penalty.
