BEFORE THE WORKERS' COMPENSATION BOARD OF



                          THE STATE OF OREGON



                           HEARINGS DIVISION



Oregon Occupational Safety & 

     Health Division			)  Docket No:  SH-93298

	Plaintiff,			)

					)

	    vs.				)  Citation No:  B1765-124-93

					)

STANDARD  UTILITY  CONTRACTORS, INC.,	)

					)

	Defendant.			)  OPINION  AND  ORDER



	Pursuant to notice the hearing convened June 8, 1995 in Salem,
Oregon before Administrative Law Judge (ALJ) Michael V. Johnson
and was reported by Marlene Cromwell of Business Support
Services.  Plaintiff, Oregon Occupational Safety & Health
Division (OR-OSHA) was represented by Assistant Attorney General
J. Kevin Shuba. Defendant/employer, Standard Utility
Contractors, Inc. was represented by Attorney Gregory C. Hansen.
Also present was Jeffrey L. Gallagher, president of the
corporation.  No affected parties elected to appear as parties. 
OAR 438-85-411.  The record closed July 27, 1995, ten days
following receipt of the last written submission from the
defendant/employer.      



	This is a contested case under the Oregon Safe Employment Act,
ORS 654.001 through 654.991, hereinafter referred to as The Act.
ORS 656.451.  



                           ISSUES



Correctness of Citation Number B1762-124-93



Item Number 1-1



	Whether the employer should pay a penalty because two of its
employees, although wearing orange vests and hard-hats, were
flagging traffic without sign paddles or red flags at least 18
inches square.  OAR 437-05-01.  The employer concedes the
elements listed in the citation and concedes that if it had
violated the rule, the violation was correctly classified and
the penalty amount is correct.  However, the employer asserts
that the "isolated employee misconduct" defense absolves the
employer from responsibility for the misconduct.  



Item Number 2-2



	The employer concedes that employees used a non-safety plastic
fuel can to fuel a saw while on the job.  



                     EXHIBITS



	At hearing, Exhibits 1 through 11 submitted by OR-OSHA on March
15, 1995 were admitted into evidence.  





                        PRELIMINARY PROCEDURAL MATTERS



	On April 13, 1995, a Mandatory Pre-hearing Conference was
convened by Workers' Compensation Board Referee John P.
McCullough.  OR-OSHA was represented by Assistant Attorney
General J. Kevin Shuba and the employer was represented by
Attorney Gregory Hansen.  The parties stipulated to certain
factual matters, and the conference ended with an understanding
that additional factual matters might yet be raised.  The
employer desired to raise additional matters, and the reason
given was that the company president, Thomas Hill, had been
hospitalized in Seattle, Washington for extended medical
services and, not only was unable to attend the Pre-hearing
Conference, but was actually under medical advise not to be
disturbed.  The referee understood that the employer might also
subsequently clarify it's legal position, and the employer
intended to do so, but OR-OSHA did not realize that such was the
employer's intention.  On April 18, 1995 Referee McCullough
issued a Pre-hearing Conference Order.  



	Attorney Hansen soon submitted a letter proposing certain
factual and legal modifications in the employer's position at
the Mandatory Pre-hearing Conference as reflected in said
Pre-hearing Conference Order, and Attorney Shuba agreed with
part of the proposed factual changes but objected to any change
which would allow the employer to modify its legal defense.  By
Amended Pre-hearing Conference Order dated May 24, 1995 Referee
McCullough overruled OR-OSHA's objection and expressly allowed
the employer to assert the "isolated employee misconduct"
defense at hearing.  



	In the meantime, Governor Kitzhaber signed Bill 369, and
thereafter Referees were designated as Administrative Law Judges
(ALJ).  



	OR-OSHA subsequently moved for reconsideration of (former)
Referee McCullough's Amended Pre-hearing Conference Order.  At
the June 8, 1995 hearing the parties presented their arguments
to Michael V. Johnson, the ALJ assigned to try the case.  ALJ
Johnson refused to amend ALJ McCullough's Amended Order.  ALJ
Johnson stated several reasons why the employer  would continue
to  be allowed  to modify  its legal  defense  from  the 
position  it  had asserted at the Mandatory Pre-hearing
Conference before  ALJ McCullough.   Among those reasons stated 
were  he  had directly communicated with ALJ McCullough and
learned that at the end of the Pre-hearing Conference, ALJ
McCullough; (1) had anticipated that perhaps, there would be a
change in the employer's legal position once Attorney Hansen had
an opportunity to speak to employer president, Thomas Hill, (2)
understood that said employer's attorney had always planned to
modify its legal stance and believed he had made arrangements
during said Pre-hearing Conference to do exactly that, and (3)
understood that OR-OSHA was not aware that was what was planned.
ALJ McCullough concluded, inasmuch as OR-OSHA did expect there
would be a change in the employer's position in regards to the
facts of the case, it was not unreasonable to also allow the
employer to make a fact in its legal position after discussion
with Mr. Hill.  



	After the conclusion of the hearing, the parties exchanged
motions and arguments in relation to whether the
defendant/employer should be allowed to raise the "isolated
misconduct" defense.  The matters contained in said responsive
arguments were carefully considered.  It is still the opinion of
ALJ Johnson that the defendant/employer should be allowed to
raise the legal defense of "isolated misconduct" regardless of
the understanding of the parties at the conclusion of the
Mandatory Pre-hearing Conference.  



	Finally, though this rationale was not articulated by ALJ
Johnson at hearing, it is his opinion that it would be unfair to
strictly enforce a pre-hearing order against either party, when
the entire Mandatory Pre-hearing Conference was a new process
and no one should be held to fully understand the finality of
the position stated by the parties at said Mandatory Pre-hearing
Conference.  Now that the parties have had an opportunity to
fully participate in one Pre-hearing Conference, it is
appropriate that future Pre-hearing Conference Orders be more
rigorously enforced.



	Midway through the hearing, subsequent to the offering of
evidence and prior to closing argument, the employer moved that
Item 1-1 be dismissed based upon the "isolated employee
misconduct" defense.  OR-OSHA objected and the motion was
denied.  However, said defense is still before me and is dealt
with hereafter.    



                     FINDINGS OF FACT



Stipulation of the Parties



	At all times pertinent herein:  (1) the defendant was an
employer subject to the Oregon Safe Employment Act; (2) the
defendent/employer had employees within the State of Oregon; and
(3) on September 23, 1993, the workers at Clackamas County, on
Sunnyside Road near its junction of 117th, were not using red
flags or 18 inch square paddles or sign paddles.    



Findings Based Upon the Record



	It is the employer's primary business to install underground
utilities.  All Standard Utility Contractors, Inc. employees
received safety training and there is an on-going safety
committee.  There is an employee safety incentive program, and
the company has a good safety record.  (Exs. 5-3, 7).  Employees
attend approximately eight formal safety meetings during the
year and safety meetings are frequently conducted on a
"tailgate" basis out in the field.  Each employee is provided a
copy of a safety manual entitled Standard Utility Contractors,
Inc. Safety Policies.  (Ex. 7).  The employer tried to detect
violations of every safety rule.  Current company president,
Jeffery Gallagher made it a point to frequently visit each job
site, and safety was his focus at that time.  Donald Robertson
also conducted regular random safety inspections at work sites. 
There was also an actively functioning safety committee which
performed quarterly safety inspections.  



	On September 23, 1993, the employer was working on a contract
to install an underground conduit system including a large
utility vault.  The project was on Sunnyside Road, Clackamas,
Oregon, near the junction of 117th.  Traffic near the job site
was moderately heavy.  The project also included cutting into
the surface of Sunnyside Road and a gasoline powered cut-off saw
was used for that operation.  To provide safety for the
employees while the road was being cut, the employer hired two
"contract flaggers" from  K. & N. Company, which specializes in
traffic control.  The highway cutting project was located
approximately 1000 feet from the site where the concrete utility
vault was to be buried.  The expected arrival of the concrete
utility vault was timed so that the highway cutting project
would be completed and the contract flaggers would then be
available to flag traffic while the work was proceeding on the
underground vault.  



	A temporary problem arose because the saw being used to cut
into the road surface broke and there was a considerable delay
in resuming the work on the road surface.  Therefore, the
contract flaggers were not available at the vault location when
the vault arrived by truck, because they were still required to
flag the heavier traffic out at the highway surface cutting
project.  Foreman Darrel L. Williams instructed two employees,
Michael Wargnier and Terry Lee Rogers, to flag traffic around
the vault installation site.  Each was wearing a hard-hat and an
orange vest.  Because Wargnier generally drives truck, traffic
flagging is not a part of his normal duties.  However, he has
often flagged traffic and is a certified flagger since 1992.  He
had received all safety training and knew that it was improper
to direct traffic without using either a paddle or a flag. 
Rogers is primarily a truck driver who had earlier received
training in traffic control and had been issued a flagger card
but had allowed the card to expire.  Rogers had formerly worked
for the Oregon State Highway Department.  Foreman Williams told
the two to try to locate either flags  or  paddles  in some  of 
the company  vehicles,  but  when  they  were unable to  do so, 
he instructed them to flag without the safety devices.  Neither
of the employees was threatened by Williams nor even expressly
ordered to control traffic in the absence of either flags or
paddles.  It was while the two were flagging traffic that the
Safety Compliance Officer, Robert Bramhall, arrived at the
scene.  The two employees had been thus directing traffic for
approximately ten minutes.  At that same time the company also
was using a plastic fuel can to fuel the gasoline-powered
cut-off saw.



	  There is no evidence that the employer ever disciplined or
otherwise sanctioned Darrel L. Williams for directing employees
to flag traffic without safety paddles or flags, or Michael
Wargnier and/or Terry Lee Rogers for doing that task without
safety paddles of flags.  Former foreman Williams has since been
promoted to the job of superintendent.

 



                      ULTIMATE FINDINGS OF FACT



	On September 23, 1993, at a job site in Clackamas, Oregon, the
employer allowed two employees to flag traffic without sign
paddles or red flags at least 18 inches square.  On said date
and at the same job site, the employer also allowed employees to
use a non-safety plastic fuel can to fuel equipment.    



                     OPINION



Item 2-2 (Fuel Can)



	The employer has stipulated that it entirely withdraws its
appeal of Item 2-2, therefore said Item must be affirmed and the
employer must pay the penalty assessed therewith.  



Item 1-1 (Flaggers) 

	

"Isolated Employee Misconduct" Defense



	"The legislative history of the act [Federal Occupational
Safety and Health Law] indicates an intent not to relieve the
employer of the general responsibility of assuring compliance by
his employees.  Nothing in the act, however, makes an employer
an insurer or guarantor of employee compliance herewith at all
times.  The employer's duty, even that under the general duty
clause, must be one which is achievable * * * ."  Brennan v.
Occupational Safety and Health Com-n, 511 F2d  1139 (9th Cir.
1975).  In order for the employer to successfully assert the
"isolated employee misconduct" defense, the employer must
affirmatively show (1) that it had a well-established rule
prohibiting the specific conduct which OR-OSHA has questioned,
(2) that said rule was clearly communicated to its employees,
(3) that it had taken steps to discover violations, and (4) that
the specific rule was adequately enforced.  The parties in this
case have attempted to bifurcate the law and the facts
pertaining to the supervisor's conduct from the law and the
facts pertaining to the conduct of the other two employees. 
However, for purposes of my analysis that bifurcation is not
necessary and I basically view all three employees as being
similarly situated.  



	Established Work Rule.  In the instant case I am satisfied that
the employer is a "safety minded" business, and that it
maintains an extensive safety and training program with an aim
to ensure worker safety.  However, there was little persuasive
evidence that the employer had a well-established rule that all
flaggers must either have proper paddles or flags when directing
traffic.  The employer's safety policy manual (Ex. 7) does
appear to incorporate "signing and flagging standards for
short-term work zones" prepared by the Oregon State Highway
Division in 1990, and in the definition section thereof is the
following:  "Flagger:  A person wearing an orange
reflectorized vest and hard-hat using a STOP/SLOW paddle
to assist with traffic control."  (Ex. 7-94).  That appears to
be the only reference in the entire manual to the specific
conduct herein at issue.  There is mention of the wearing of
vests when flagging (Ex. 7-48), and the employees are instructed
to protect themselves when working in the street by using
"cones, barricades, protective ribbon and appropriate signs."
(Ex. 7-49), but there appears to be no other specific reference
to the using of flags or paddles while directing traffic.  The
employer has not proven the existence of a well-established work
rule designed to prevent violation with which the employer has
been charged.  



	Training/Communication.  I am not persuaded that the employees,
though often presented with safety training, were specifically
and repeatedly trained in the use of the correct paddles/flags.  



	Violation Detection.  I am convinced that the company had an
on-going program aimed at detecting any safety violations. 
Donald Robertson and Jeffery Gallagher personally visited the
sites on a random basis to check for safety violations.



	Enforcement.  The final question is whether there was
appropriate discipline of employees to discourage violation of
safety rules requiring the use of a flag or paddle.  The company
safety policy manual states that there is an understanding that
"safe working habits and following company policy will play a
large role in determining increases in pay scales and
advancement within the company." (Ex. 7-48), but in the
"disciplinary program" section of the manual, there is merely a
hand-written note from some person named Steve to some person
named Jeff [probably Jeffery Gallagher] as follows, "In this
area we need to fold  in some elements of  your personnel policy
regarding breaking of company rules and regs.  What does
violation result in?  Accidental violation?  Is there a
grievance process?  How many events result in discipline?  etc."
(Ex. 7-52).  Any specifics regarding any disciplinary program
were not provided, either in the manual, or through testimony. 
It is those very specifics which were noted as being necessary
to be added at that part in the manual which were glaringly
omitted.  And to be even more specific in relation to the
failure to use a flag or paddle when controlling traffic, there
is absolutely no evidence as to whether employees had been
disciplined/sanctioned/"retrained" in the event of any
violations of that particular rule (assuming employees clearly
knew the rule).  There was no evidence that employees Wargnier
and/or Rogers were sanctioned for their deliberate safety
violation.  There was no evidence that the foreman  who 
instructed the employees to control  traffic without the use of
a flag  or paddle was ever reprimanded or otherwise disciplined
for his deliberate error--let alone for his conduct which led to
the company receiving a safety citation.  In fact, since the
incident, the foreman has been promoted.  



	Based upon the foregoing, I am not persuaded that the employer
had well-established work rules relating to traffic control or
specifically trained employees in the details of using
flags/paddles while directing traffic.  It does appear that the
employer took steps to discover violations, but there is no
evidence that it disciplined employees or made employees
understand they would be disciplined, if they failed to comply.  



	Not Isolated.  OR-OSHA argues that the defense of "isolated act
of employee misconduct" is not applicable because three
employees deliberately violated rules which they knew to exist
and went ahead to flag traffic without use of paddles or flags. 
I agree with OR-OSHA that when three individuals act in concert
to conduct their work without use of proper safety appliances,
the defense of "isolated employee misconduct", or even "employee
misconduct" is appropriate.  When that many workers fail to
comply, the most reasonable conclusion is that those workers
simply did not know they were supposed to be using flags or
paddles or did not realize the consequences of deliberately
failing to use paddles or flags.  



Conclusion



	The employer's use of the employee misconduct defense is of no
avail.  The employer has violated OAR 437-03-010, which is a
serious violation, and generates an appropriate penalty of
$120.00, which the employer must now pay.  

 



                         ORDER



	NOW, THEREFORE, IT IS HEREBY ORDERED as follows:



	(1)  Item 1-1 of Citation Optional Report number B1762-124-93
is affirmed.  



	(2)  Item 2-2 of Citation Optional Report number B1762-124-93
is affirmed.



	Notice to all parties:  You are entitled to judicial
review of this Order.  Proceedings for review are to be
instituted by filing a petition in the Court of Appeals, Supreme
Court Building, Salem, Oregon 97310, within 60 days following
the date this Order is entered and served as shown hereon.  The
procedure for such judicial review is prescribed by ORS 183.480
and ORS 183.482.





Entered at Salem, Oregon,  July 28, 1995



				Workers' Compensation Board

				Michael V. Johnson

				Administrative Law Judge