[House Report 108-487]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-487

======================================================================


 
 OCCUPATIONAL SAFETY AND HEALTH SMALL BUSINESS DAY IN COURT ACT OF 2004

                                _______
                                

  May 13, 2004.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Boehner, from the Committee on Education and the Workforce, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 2728]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 2728) to amend the Occupational Safety 
and Health Act of 1970 to provide for adjudicative flexibility 
with regard to an employer filing of a notice of contest 
following the issuance of a citation by the Occupational Safety 
and Health Administration, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.
    The amendment (stated in terms of the page and line numbers 
of the introduced bill) is as follows:
    Page 1, Line 5, strike ``2003'' and insert ``2004''.

                                Purpose

    H.R. 2728, the ``Occupational Safety and Health Small 
Business Day in Court Act of 2004,'' is intended to give to 
parties under the Occupational Safety and Health Act of 1970 
(the ``OSH Act'') the same basic right to seek relief from a 
default judgment as that possessed by nearly every other 
federal litigant in the nation. Specifically, H.R. 2728 
clarifies the authority of the Occupational Safety and Health 
Review Commission (``OSHRC'' or the ``Commission'') to grant 
relief to an employer that by reason of mistake, inadvertence, 
surprise, or excusable neglect fails to respond to a citation 
within the fifteen working days provided under law. H.R. 2728 
maintains Congress' desire to promote a necessary finality in 
disputes under the OSH Act while preventing the avoidable 
injustices that may result under current law. H.R. 2728 is a 
remedial measure intended to prevent injustice and assure 
fairness in the adjudicatory process, and is purposefully 
designed to cause no diminution in the substantive workforce 
protections already in place under the OSH Act.

                            Committee Action

    H.R. 2728, the ``Occupational Safety and Health Small 
Business Day in Court Act of 2003,'' was introduced by 
Congressman Charlie Norwood on July 15, 2003, and was referred 
to the Subcommittee on Workforce Protections of the Committee 
on Education and the Workforce. A hearing on the measure was 
conducted on June 17, 2003, as a part of a more comprehensive 
hearing on H.R. 1583, the ``Occupational Safety and Health 
Fairness Act of 2003.'' \1\
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    \1\ See Hearing on H.R. 1583, ``The Occupational Safety and Health 
Fairness Act of 2003,'' before the Subcommittee on Workforce 
Protections, Committee on Education and the Workforce, U.S. House of 
Representatives, 108th Congress, First Session, Serial No. 108-20 
(hereinafter ``Hearing on H.R. 1583'').
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    Comments and views from experts in the field of safety and 
health and other concerned citizens were taken on H.R. 1583 at 
the June 17, 2003 hearing of the Subcommittee. At this hearing, 
the Subcommittee heard testimony from Mr. Brian Landon of 
Canton, Pennsylvania, testifying on behalf of the National 
Federation of Independent Businesses; Mr. John Molovich, Health 
and Safety Specialist, United Steelworkers of America, of 
Pittsburgh, Pennsylvania; Mr. Ephraim Cohen, a small business 
owner from New York; and Arthur Sapper, Esq., an attorney of 
the law firm McDermott, Will & Emery in Washington, DC, 
testifying on behalf of the U.S. Chamber of Commerce. 
Legislation incorporating section 2 of H.R. 1583 was 
subsequently introduced as H.R. 2728 on July 15, 2003. The 
content of H.R. 2728, as introduced, is identical to section 5 
of H.R. 1583.
    On July 24, 2003, the Subcommittee on Workforce Protections 
favorably reported H.R. 2728, without amendment, by voice vote.
    On May 5, 2004, the Committee on Education and the 
Workforce considered H.R. 2728. An amendment by Chairman 
Boehner, changing the short title of the bill from the 
``Occupational Safety and Health Small Business Day in Court 
Act of 2003'' to the ``Occupational Safety and Health Small 
Business Day in Court Act of 2004'' was accepted by unanimous 
consent. The Committee ordered H.R. 2728, as thus amended, 
favorably reported to the House of Representatives by a roll 
call vote of 24 yeas and 20 nays.

                                Summary

    It is a well-established legal principle in the United 
States that relief from a final judgment, order, or proceeding 
that is caused by mistake, inadvertence, surprise, or excusable 
neglect should be resolved in favor of setting aside that 
default judgment so that the case may be tried on the merits. 
While this legal maxim is the practice in almost every federal 
court in the United States, proceedings under the OSH Act have 
at times in the past departed from this rule. H.R. 2728 simply 
assures that this widely-held principle applies to proceedings 
under the OSH Act. Specifically, H.R. 2728 adds language to 
Section 10 of the OSH Act, 29 U.S.C. Sec. 659(a), clarifying 
that a litigant under the OSH Act may be relieved from a 
default judgment when its failure to contest a citation in a 
timely manner results from ``mistake, inadvertence, surprise, 
or excusable neglect.'' The language inserted is identical to 
language contained in Federal Rule of Civil Procedure 60(b),\2\ 
and is intended simply to authorize OSHRC to deem any notice of 
contest timely filed if it finds under the totality of the 
circumstances that an employer's failure to meet its deadline 
was the result of one of the aforementioned factors.
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    \2\ Federal Rule of Civil Procedure 60(b) states in relevant part: 
``Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; 
Fraud, Etc. On motion and upon such terms as are just, the court may 
relieve a party or a party's legal representative from a final 
judgment, order, or proceeding for the following reasons: (1) mistake, 
inadvertence, surprise, or excusable neglect. * * *'' 28 U.S.C. 
Sec. 60(b).
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                            Committee Views


Background

    Section 8(a) of the OSH Act specifically empowers the 
Secretary of Labor, subject to limitation, to enter places of 
work to ``inspect and investigate * * * all pertinent 
conditions, structures, machines, apparatus, devices, 
equipment, and materials therein.'' \3\ In cases where such 
inspection and investigation reveals the presence of what are 
perceived to be violations of the OSH Act, the Occupational 
Safety and Health Administration (``OSHA'') is authorized to 
issue a citation alleging with specificity the violation(s); 
identifying the type or classification of such violation(s) 
believed to be appropriate by OSHA; proposing a penalty to be 
assessed for such alleged violation(s); and establishing a 
required date by which the identified violation(s) must be 
abated.\4\
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    \3\ See 29 U.S.C. Sec. 657(a).
    \4\ See 29 U.S.C. Sec. 658(a).
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    Section 10(a) of the OSH Act specifies that upon the 
receipt of an OSHA citation, an employer has fifteen working 
days in which to notify OSHA of its intention to challenge or 
contest any or all of the elements contained therein.\5\ If the 
employer has properly contested any of the elements of the OSHA 
citation,\6\ the employer is entitled to a hearing, after which 
OSHRC may affirm, modify or vacate the Secretary's citation 
and/or the proposed penalty, or direct other appropriate 
relief.\7\
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    \5\ See 29 U.S.C. Sec. 659(a).
    \6\ Generally, an employer's notice of intent to contest must be in 
writing and must indicate a clear intent on the part of the employer to 
contest one or more of the elements of the citation. The fifteen day 
working period specified in the OSH Act generally begins to run when 
service of a type reasonably calculated to provide an employer with 
knowledge of the citation occurs. While the OSH Act does not 
specifically define what constitutes ``working days,'' this term is 
defined in OSHA's regulations and OSHRC's rules to mean ``Mondays 
through Fridays, exclusive of federal holidays.'' See 29 CFR 
1903.21(c); 29 CFR 2200.(1)(l).
    \7\ See 29 U.S.C. Sec. 659(c).
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    If an employer does not contest an OSHA citation within the 
specified statutory fifteen day period, under section 10 of the 
OSH Act the ``citation and the assessment, as proposed, shall 
be deemed a final order of the Commission and not subject to 
review by any court or agency.'' \8\ Put more simply, the 
failure to file a notice of contest within fifteen days, for 
any reason, means that a default judgment is entered against 
the employer, from which it has no appeal.\9\
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    \8\ 29 U.S.C. Sec. 659(a).
    \9\ In its consideration of this measure, the Subcommittee on 
Workforce Protections heard detailed testimony as to the possible 
consequences of an employer's failure to file a timely notice of 
contest, which may include: (1) an implied order to abate the cited 
condition by the date specified in the citation; (2) an obligation to 
pay the amount of the proposed penalty; and (3) an acceptance of OSHA's 
classification of the violation. Less obvious consequences may include: 
(1) inclusion of the citation in the employers history of previous 
violations (which will increase subsequent proposed penalties); (2) 
exposure to possible future citation classifications of ``repeat'' or 
``willful'' violations (increasing possible penalty levels and raising 
the possibility of criminal liability); (3) possible impact on an 
employer's reputation, potentially affecting consumer perception and 
damaging market position; (4) possible collateral use of the final 
order against the employer in related civil litigation; and (5) 
possible disqualification in some jurisdictions from bidding upon 
public construction contracts. See Testimony of Arthur G. Sapper, 
Hearing on H.R. 1583, at 59-60 (detailing consequences of employer's 
failure to file timely notice of contest of OSHA citation).
---------------------------------------------------------------------------
    By way of contrast, under the Federal Rules of Civil 
Procedure, litigants in federal court are entitled to relief 
from a default judgment based on the failure to file a timely 
response, where such failure is caused by reason of mistake, 
inadvertence, surprise, or excusable neglect, determined with 
reference to the totality of the circumstances. Despite this 
well-established principle of law, a series of court cases and 
differing interpretations of the OSH Act by OSHA and the 
Commission have made it highly uncertain whether the Commission 
has the same power to grant employers such relief in 
appropriate circumstances, or whether an employer who misses 
the fifteen-day deadline for any reason, no matter how 
meritorious, is simply ``guilty'' before OSHA. H.R. 2728 makes 
clear that OSHRC enjoys that authority, and is empowered to 
grant relief to an employer in the appropriate circumstances.

Documenting existing legal uncertainty

    The current state of legal uncertainty over whether or not 
OSHRC is vested with statutory authority to exercise 
flexibility in relieving parties, in appropriate circumstances, 
from what would otherwise be deemed as final orders under 
section 10 is not new. These differing interpretations result 
from the conflicting language contained in section 12(g) and 
section 10(a) of the OSH Act. Specifically, in section 12(g), 
Congress stated that unless OSHRC ``adopted a different rule * 
* * its proceedings shall be in accordance with the Federal 
Rules of Civil Procedure.'' \10\ In section 10(a), however, 
Congress provided that if ``within fifteen working days from 
the receipt of the notice issued by the Secretary the employer 
fails to notify the Secretary that he intended to contest * * * 
the citation and the assessment, as proposed, shall be deemed a 
final order of the Commission and not subject to review by any 
court or agency.'' \11\ Historically, the conflict in these two 
provisions of the OSH Act has been the source of disagreement 
over whether OSHRC possesses the authority, pursuant to section 
12(g), to relieve employers from a final judgment entered 
against them in accordance with Rule 60(b) or whether section 
10(a) precludes such relief.
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    \10\ 29 U.S.C. Sec. 669(g). OSHRC itself has promulgated a rule 
specifying that unless an OSHRC rule governs a point the Federal Rules 
of Civil Procedure shall apply. See 29 CFR 2200.2(b).
    \11\ 29 U.S.C. Sec. 659(a).
---------------------------------------------------------------------------

Historic judicial uncertainty and the LeFrois case

    In one of OSHRC's earliest cases, the Commission exhibited 
its confusion over Congress' intended meaning of section 10 by 
holding that it could not apply Rule 60(b) of the Federal Rules 
of Civil Procedure because it lacked jurisdiction over an 
appeal of an OSHA citation if a notice of contest were not 
timely filed.\12\ In 1981, the Commission reversed its 
position, adopting instead the holding of the Third Circuit 
Court of Appeals, which held that OSHRC did, in fact, have the 
authority to apply Rule 60(b) to excuse some inadvertent late 
filings.\13\ The Commission has maintained this position since 
that time. OSHA, in contrast, has maintained its position that 
OSHRC lacks such authority, and that the fifteen-day rule set 
forth in section 10(a) of the OSH Act governs.
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    \12\ See Secretary v. Plessy Burton, Inc., 12 OSHRC 577, 1974 
OSAHRC LEXIS 145 (Oct. 18, 1974). Remarkably, in Plessy the Secretary 
of Labor had moved OSHRC to vacate an uncontested citation item because 
further investigation indicated that ``there was, in fact, no 
violation.''
    \13\ See Secretary v. Branciforte Builders Inc., OSHRC Docket No. 
80-1920, 1981 OSAHRC LEXIS 138 (July 13, 1981) (adopting holding of 
U.S. Circuit Court of Appeals for Third Circuit in J.I. Hass Co. v. 
OSHRC, 648 F.2d 190, 195 (3d Cir. 1981) (concluding that OSHRC has 
authority to excuse late filings through application of Rule 60(b)).
---------------------------------------------------------------------------
    In 2002, the decision of the United States Court of Appeals 
for the Second Circuit in Chao v. Russell P. LeFrois Builder, 
Inc.,\14\ renewed urgency in the need for Congress to reexamine 
this issue. As the LeFrois case was summarized before the 
Subcommittee on Workforce Protections:
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    \14\ 291 F.3d 219 (2d Cir. 2002).

          OSHA issued citations and $11,265 in proposed 
        penalties to that company by certified mail. A 
        secretary for the company got the envelope from the 
        post office, and put it with the day's other mail on 
        the front seat of her car. The envelope with the OSHA 
        citation apparently slipped behind the seat, where it 
        was found after the fifteen-working-day contest 
        deadline expired. The company had used the same mail 
        pickup system for 18 years and had not previously had a 
        problem with it. LeFrois promptly filed a notice of 
        contest, and asked the independent Occupational Safety 
        and Health Review Commission for ``a chance to tell our 
        side and to defend ourselves.'' \15\
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    \15\ Testimony of Arthur G. Sapper, Esq., Hearing on H.R. 1583, at 
58.
---------------------------------------------------------------------------
    In LeFrois, OSHRC excused the lateness of the employer's 
notice of contest, finding that its failure to respond in a 
timely fashion was a case of excusable neglect.\16\ 
Nevertheless, despite the Commission's willingness to excuse 
the employer's justified failure to file a timely notice, OSHA 
appealed the decision of OSHRC to the U.S. Court of Appeals for 
the Second Circuit. OSHA argued that under section 10(a), the 
Commission did not have authority to waive the fifteen-day 
requirement for any reason. OSHRC in turn argued that it had 
the authority under section 12(g) to apply Rule 60(b) to 
relieve the employer from the default judgment entered against 
it. The Second Circuit found in favor of OSHA, holding that 
OSHRC ``does not have this [60(b)] authority.''
---------------------------------------------------------------------------
    \16\ See 291 F.3d at 225.
---------------------------------------------------------------------------
    Arthur G. Sapper, Esq., an expert legal witness well-versed 
in the law of workplace safety and health, testified before the 
Subcommittee on Workforce Protections as to the effect of the 
LeFrois case:

          According to a recent decision by the U.S. Court of 
        Appeals for the Second Circuit [LeFrois] * * * an 
        employer flatly loses its opportunity to defend itself 
        before the Occupational Safety and Health Review 
        Commission, and will be deemed guilty, if it misses a 
        rigid fifteen working-day deadline to file a notice 
        contesting an OSHA citation, even if the employer had a 
        good excuse for missing that deadline. The employer is 
        out of luck and the government wins without even 
        proving its case.\17\
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    \17\ Testimony of Arthur G. Sapper, Hearing on H.R. 1583, at 58.
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Continued uncertainty: The Villa Marina Yacht case

    More recently this issue was addressed, and the continuing 
uncertainty of the law in this area recognized, in Secretary of 
Labor v. Villa Marina Yacht Harbor.\18\ In Villa Marina, OSHA 
maintained its position that ``Rule 60 is a procedural rule 
that cannot be used to avoid a limitation on OSHRC's 
authority.'' \19\ The facts of Villa Marina were largely not in 
dispute:
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    \18\ Secretary of Labor v. Villa Marina Yacht Harbor, OSHRC Docket 
No. 01-0830 (2003).
    \19\ Brief of Secretary of Labor, Secretary of Labor v. Villa 
Marina Yacht Harbor, at 11.

          OSHA sent the citations and notification in two 
        separate packages to the Post Office Box designated by 
        Villa Marina during the OSHA inspection as its mailing 
        address. On January 18, 2001, the packages were picked-
        up and signed for by a messenger employed by Villa 
        Marina. Based on this date of receipt, Villa Marina's 
        fifteen-day contest period expired on February 8, 2001. 
        On January 19, 2001, the messenger brought the mail he 
        had picked up the day before, including the package 
        from OSHA, to the company. He gave the citations and 
        notification to a secretary, but did not inform her 
        that he had picked up the mail the previous day. The 
        secretary stamped both the citation and the 
        notification as received on January 19, 2001 leading 
        Villa Marina to believe it had one more day than it 
        actually had with which to file a timely notice of 
        contest. Later that day, a Villa Marina supervisor 
        discussed the OSHA matter with the employer's attorney. 
        Thereafter, a notice of contest was prepared and dated 
        February 9, 2001, one day after the period of contest 
        had expired.\20\
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    \20\ Decision, Secretary of Labor v. Villa Marina Yacht Harbor, 
OSHRC Docket No. 01-0830 (2003), at 2-3.

    An OSHRC Administrative Law Judge (``ALJ'') found that the 
company, ``did not have orderly procedures in place for the 
handling of important documents and/or that [the messenger] was 
not properly supervised'' and that, accordingly, the failure of 
the employer to file a timelynotice of contest was not 
excusable and thus would stand.\21\ In a unanimous decision, OSHRC 
adopted the ALJ's findings, agreeing that the company had failed to 
demonstrate the facts necessary to make a case for excusable neglect. 
More important, OSHRC again expressed its position that it has the 
authority to relieve employers from such judgments when the facts of 
the case made it appropriate to do so--they simply did not so warrant 
in this case.\22\
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    \21\ Id. at 10.
    \22\ Id. at 4; see also id. at 2 n. 3 & 4. n. 5 (discussing OSHRC 
position and precedent with respect to 60(b) authority).
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Resolution of legal uncertainty and judicial conflict

    The Committee finds no fault in OSHRC's application of Rule 
60(b) to the facts of the case presented in Villa Marina. 
Indeed, the Commission's close, fact-based scrutiny and 
judicious application of its authority suggests that, if given 
clear statutory authority to excuse a missed deadline in 
appropriate circumstances, OSHRC would use such authority 
sparingly and on the basis of sound precedent under which the 
totality of circumstances surrounding the actions of an 
employer would be examined before granting such relief.\23\
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    \23\ Indeed, one estimate made by OSHRC in 1996 is that Rule 60(b) 
motions are made before OSHRC only about thirty times per year, and 
that such motions would constitute only about two percent of its case 
activity.
---------------------------------------------------------------------------
    In contrast, the Committee is deeply concerned with the 
legal interpretation advanced by OSHA regarding the appropriate 
use of Rule 60(b) by OSHRC. Indeed, this position, and how it 
might affect OSHRC's ability to excuse missed deadlines in 
future cases concerning the application of Rule 60(b), was 
discussed in a prominent footnote in the Villa Marina 
decision.\24\ In light of the position maintained by OSHA that 
its interpretations are to be given deference over those of 
OSHRC, the Committee is concerned that in the future OSHRC may 
be faced with no choice but to accept OSHA's argument that it 
does not possess the authority to apply Rule 60(b) under the 
OSH Act.
---------------------------------------------------------------------------
    \24\ See Decision, Decision, Secretary of Labor v. Villa Marina 
Yacht Harbor at 4 n. 5 (noting that ``the Secretary's statutory 
limitation argument is a substantial one, particularly in light on the 
language in sections 10(a) and 12(g) of the Act'' and that ``the 
decision in to the Second Circuit in LeFrois further supports the 
Secretary's position in this matter'' but declining to overrule 
Commission 60(b) precedent on grounds of stare decisis).
---------------------------------------------------------------------------
    In light of these conflicting views of OSHRC's authority, 
the Committee concludes that legislative resolution of this 
matter is necessary. The Committee finds it appropriate that 
OSHRC have the ability to apply rule 60(b) principles to 
provide more just and fair results in the cases that it hears, 
and concludes that the legislative solution embodied in H.R. 
2728 is necessary to this end.

                               CONCLUSION

    H.R. 2728 gives employers before OSHRC the same right to 
seek relief from a default judgment possessed by nearly every 
other litigant in federal court, maintaining Congress' desire 
to promote a necessary finality in disputes under the OSH Act 
while preventing the avoidable injustices that may result under 
current law. H.R. 2728 does so by simply amending the OSH Act 
to include language identical to that of Federal Rule of Civil 
Procedure 60(b), thereby extending to OSHRC the specific 
authority to excuse missed deadlines when the totality of the 
surrounding circumstances renders it appropriate to do so. In 
using language identical to that used in Federal Rule of Civil 
Procedure 60(b), Congress expresses its intent that the well-
developed area of the law that has grown around the use of this 
rule in federal practice will guide OSHRC in its application of 
this authority.

                      Section-by-Section Analysis


Section 1. Short title

    This act may be cited as the ``Occupational Safety and 
Health Business Day in Court Act of 2004.''

Section 2. Contesting citations under the Occupational Safety and 
        Health Act

    This section amends section 10(a) of the Occupational 
Safety and Health Act of 1970 to authorize relief from a 
default judgment resulting from an employer's failure to file a 
notice of contest with OSHA within 15 working days from 
receipt, if such failure results from ``mistake, inadvertence, 
surprise, or excusable neglect.''

                       Explanation of Amendments

    The bill was ordered reported with an amendment to the 
short title.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1, the Congressional 
Accountability Act (CAA), requires a description of the 
application of this bill to the legislative branch. H.R. 2728 
amends the Occupational Safety and Health Act (OSH Act) to 
grant relief to an employer that by reason of mistake, 
inadvertence, surprise, or excusable neglect fails to respond 
to a citation within the fifteen working days provided under 
law. Section 215 of the CAA applies certain requirements of the 
OSH Act, to the legislative branch. The Committee intends to 
make the provisions of this bill available to legislative 
branch employees and employers in the same way as it is made 
available to private sector employees and employers under this 
legislation.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget & Impoundment 
Control Act requires a statement of whether the provisions of 
the reported bill include unfunded mandates. The Committee 
received a letter regarding unfunded mandates from the Director 
of the Congressional Budget Office and as such the Committee 
agrees that the bill does not contain any unfunded mandates. 
See infra.


  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the body of this report.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974 and with respect to 
requirements of 3(c)(3) of rule XIII of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for H.R. 2728 from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 11, 2004.
Hon. John A. Boehner,
Chairman, Committee on Education and the Workforce, House of 
        Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2728, the 
Occupational Safety and Health Small Business Day in Court Act 
of 2004.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Shawn Bishop.
            Sincerely,
                                     Douglas Holtz-Eakin, Director.
    Enclosure.

H.R. 2728--Occupational Safety and Health Small Business Day in Court 
        Act of 2004

    H.R. 2728 would modify the Occupational Safety and Health 
Act to provide exceptions to the 15-day deadline for employers 
to file responses to citations made by the Occupational Safety 
and Health Agency (OSHA). Under current law, employers who 
receive a citation or proposed assessment of penalty from OSHA 
must file a notice of contest within 15 days from receipt of 
the citation. The citation and assessment are deemed a final 
order of the Occupational Safety and Health Review Commission 
(OSHRC) if the 15-day deadline is not met. Since the early 
1980s, however, OSHRC has applied Rule 60(b) of the Federal 
Rules of Civil Procedure and has granted relief from the final 
order in cases where an employer filed a late notice of contest 
because of ``mistake, inadvertence, surprise, or excusable 
neglect.''
    H.R. 2728 would codify the equitable standard contained in 
Rule 60(b) and ensure consistent application of that standard 
across all jurisdictions in cases involving an employer's 
failure to file a timely notice of contest. CBO estimates that 
implementing H.R. 2728 would not have any effect on the federal 
budget.
    H.R. 2728 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact is Shawn Bishop. This estimate was 
approved by Peter H. Fontaine, Deputy Assistant Director for 
Budget Analysis.

         Statement of General Performance Goals and Objectives

    In accordance with Clause (3)(c) of House Rule XIII, the 
goal of H.R. 2728 is to amend the Occupational Safety and 
Health Act (OSH Act) to grant relief to an employer that by 
reason of mistake, inadvertence, surprise, or excusable neglect 
fails to respond to a citation within the fifteen working days 
provided under law. The Committee expects the Department of 
Labor to implement the changes to the law in accordance with 
these stated goals.

                   Constitutional Authority Statement

    H.R. 2728 amends the Occupational Safety and Health Act, 
and thus falls within the scope of Congressional powers under 
Article I, section 8, clause 3 of the Constitution of the 
United States to the same extent as does the OSH Act.

                           Committee Estimate

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 2728. However, clause 3(d)(3)(B) of that rule provides 
that this requirement does not apply when the Committee has 
included in its report a timely submitted cost estimate of the 
bill prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

      SECTION 10 OF THE OCCUPATIONAL SAFETY AND HEALTH ACT OF 1970


                       PROCEDURE FOR ENFORCEMENT

    Sec. 10. (a) If, after an inspection or investigation, the 
Secretary issues a citation under section 9(a), he shall, 
within a reasonable time after the termination of such 
inspection or investigation, notify the employer by certified 
mail of the penalty, if any, proposed to be assessed under 
section 17 and that the employer has fifteen working days 
within which to notify the Secretary that he wishes to contest 
the citation or proposed assessment of penalty. If, within 
fifteen working days from the receipt of the notice issued by 
the Secretary the employer fails to notify the Secretary that 
he intends to contest the citation or proposed assessment of 
penalty (unless such failure results from mistake, 
inadvertence, surprise, or excusable neglect), and no notice is 
filed by any employee or representative of employees under 
subsection (c) within such time, the citation and the 
assessment, as proposed, shall be deemed a final order of the 
Commission and not subject to review by any court or agency.
    (b) If the Secretary has reason to believe that an employer 
has failed to correct a violation for which a citation has been 
issued within the period permitted for its correction (which 
period shall not begin to run until the entry of a final order 
by the Commission in the case of any review proceedings under 
this section initiated by the employer in good faith and not 
solely for delay or avoidance of penalties), the Secretary 
shall notify the employer by certified mail of such failure and 
of the penalty proposed to be assessed under section 17 by 
reason of such failure, and that the employer has fifteen 
working days within which to notify the Secretary that he 
wishes to contest the Secretary's notification or the proposed 
assessment of penalty. If, within fifteen working days from the 
receipt of notification issued by the Secretary, the employer 
fails to notify the Secretary that he intends to contest the 
notification or proposed assessment of penalty (unless such 
failure results from mistake, inadvertence, surprise, or 
excusable neglect), the notification and assessment, as 
proposed, shall be deemed a final order of the Commission and 
not subject to review by any court or agency.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

    H.R. 2728 weakens enforcement of OSHA by allowing employers 
to drag out the imposition of penalties and the date for taking 
corrective action ordered by safety officials. The principal 
purpose of the Occupational Safety and Health Act (OSH Act) is 
``to assure so far as possible every working man and woman in 
the Nation safe and healthful working conditions'' and to 
encourage the prompt abatement of safety and health hazards. 
The timeframes in the Act are intended to reduce the occurrence 
of occupational injury by ensuring that hazards are redressed 
in a timely manner. H.R. 2728 creates an exception to those 
timeframes where an employer fails to contest an OSHA citation, 
pursuant to section 10(a) of the OSH Act, or fails to abate a 
hazard in a timely manner, pursuant to section 10(b) of the OSH 
Act.
    H.R. 2728 amends the section 10(a) and (b) of the OSH Act 
to provide that an employer who has failed to contest a 
citation and proposed penalty (section 10(a)) or has failed to 
contest a notification of failure to correct a violation 
(section 10(b)) in a timely manner (within 15 working days of 
receiving the notice) may still contest the citation (or 
failure to correct notice) if the failure to contest in a 
timely manner was due to a ``mistake, inadvertence, surprise, 
or excusable neglect.'' Notwithstanding the bill's title, the 
``Occupational Safety and Health Small Business Day in Court 
Act,'' this bill has nothing to do with small businesses, per 
se, but applies to all OSHA regulated businesses regardless of 
size.
    The intent of the bill is to overturn a single case in a 
single circuit, Chao v. Russell P. Le Frois Builder, Inc. 
(United States Court of Appeals for the Second Circuit, May 10, 
2002). As the Majority Views state, Le Frois Builders is 
directly contradicted by an earlier Third Circuit decision, 
J.I. Hass Co. v. OSHRC, 648 F.2d 190 (3d Cir. 1981). As clearly 
stated in Secretary of Labor v. Villa Marina Yacht Harbor, and 
to quote from the Majority Views, ``the [Occupational Safety 
and Health Review Commission] has the authority to relieve 
employers from judgments.'' (See Majority Views, discussion of 
the Villa Marina Yacht Case.) In fact, though the Majority 
neglects to mention it, no other circuit court has ruled 
similarly to Le Frois Builders. Even assuming that H.R. 2728 
was appropriately drafted, an assumption we do not concede, the 
need for this legislation has not been established.
    The bill's proponents state that their intent is to enable 
OSHRC to waive a statute of limitations in the same way that a 
federal court may pursuant to Rule 60(b) of the Federal Rules 
of Civil Procedure. But the bill provides no reference to Rule 
60, it simply says that the Review Commission may allow an 
employer to challenge an OSHA citation, even though it has been 
properly served by the agency and even though the employer has 
failed to challenge the citation, so long as the employer's 
failure is due to ``mistake, inadvertence, surprise, or 
excusable neglect.'' The best that can be said is that this 
language is similar to part of Rule 60.
    Rule 60 also requires that the motion for relief must be 
made within a reasonable time and not more than one year after 
the judgment, order, or proceeding was entered or taken. Given 
the fact that hazards may not be abated and there may well be 
continuing risks to safety and health, allowing a citation to 
be litigated a year after it has been issued is a troubling 
prospect. But H.R. 2728 does not incorporate a requirement that 
the motion be filed in a timely manner nor does it impose the 
one-year limitation. Without specific reference to Rule 60, 
there is no assurance that the court decisions that have 
otherwise circumscribed the application of that rule would be 
applicable to this legislation.
    The bill also waives the time limits as they apply to 
employers, but not as they apply to workers. While the bill 
amends subsections 10(a) and 10(b) of the OSH Act, H.R. 2728 
does not amend subsection 10(c) which affords workers the right 
to challenge the abatement period. If an employer fails to 
respond to a complaint, this bill provides a second bite at the 
apple. If an employer fails to respond to a citation for a 
failure to correct a hazard, this bill provides a second bite 
at the apple. But one bite is enough for workers. If they fail 
to challenge the abatement period established by the Secretary 
in a timely manner, well that is their tough luck.
    H.R. 2728 also encourages employers to litigate citations 
rather than to promptly correct health and safety hazards. 
Allowing an employer to belatedly challenge a complaint also 
allows an employer to delay when he or she must correct a 
health or safety hazard. Under this legislation, the 
responsibility to correct a health hazard may be indefinitely 
delayed. Even though the employer has failed to challenge a 
citation or a failure to abate notice in a timely manner, if 
that failure is due to ``mistake, inadvertence, surprise, or 
excusable neglect'' the employer can nevertheless challenge the 
citation, does not have to abate the hazard during the 
challenge period, and is not liable for having failed to abate 
in the interim period. The Majority appears to equate an OSH 
Act proceeding with any other typical proceeding. In fact, 
however, much more is at stake. What is at stake is not merely 
whether an employer will pay a monetary fine, but whether 
workers will have a safe and healthy workplace or be subject to 
injury, illness, and death. This legislation should be 
rejected.
                                   George Miller.
                                   Carolyn McCarthy.
                                   Dennis J. Kucinich.
                                   Danny K. Davis.
                                   Betty McCollum.
                                   Ron Kind.
                                   Dale E. Kildee.
                                   Major R. Owens.
                                   Rubin Hinojosa.
                                   Ed Case.
                                   Susan A. Davis.
                                   John F. Tierney.
                                   Tim Ryan.
                                   Raul M. Grijalva.
                                   Timothy Bishop.
                                   Rush Holt.
                                   Chris Van Hollen.
                                   Lynn Woolsey.
                                   Robert Andrews.
                                   Donald M. Payne.
                                   Denise L. Majette.
                                   David Wu.

                                
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