SECRETARY OF LABOR v. BEVERLY HEALTHCARE-HILLVIEW No. 06-4810.
541 F.3d 193 (2008)
SECRETARY OF LABOR, Petitioner v. BEVERLY HEALTHCARE-HILLVIEW; Occupational Safety & Health Review Commission, Respondents.
United States Court of Appeals, Third Circuit.
Filed: September 4, 2008.
Ronald J. Gottlieb (Argued), Charles F. James, Nathaniel I. Spiller, United States Department of Labor, Office of the Solicitor, Washington, DC, Attorneys for Petitioner.
Michael S. Glassman (Argued), Jennifer K. Swartz, Dinsmore & Shohl, Cincinnati, OH, Sheldon N. Sandler, Young, Conaway, Stargatt & Taylor, Wilmington, DE, Attorneys for Respondent, Beverly Healthcare-Hillview.
Before: FISHER, JORDAN and VAN ANTWERPEN, Circuit Judges.
OPINION OF THE COURT
FISHER, Circuit Judge.
This case originates from the issuance of two citations by the Occupational Safety and Health Administration ("OSHA") to Beverly Healthcare-Hillview ("Beverly") for failure to compensate employees for travel expenses and non-work time spent receiving treatment pursuant to the Bloodborne Pathogens Standard, which requires employers to make treatment available "at no cost to employees" for occupational exposure to bloodborne pathogens. Beverly challenged these citations, arguing that the "at no cost" provision should be read narrowly and did not include such costs. The ALJ disagreed and upheld the citations. Beverly appealed to the Occupational Safety and Health Review Commission ("Commission"), which reversed, finding that Beverly did not have fair notice of the Secretary of Labor's ("Secretary") broad interpretation. The Secretary timely filed a petition for review. For the reasons that follow, we will grant the petition and vacate the decision of the Commission.
In 1970, Congress adopted the Occupational Safety and Health Act ("OSH Act")
In 1991, the Secretary promulgated the Bloodborne Pathogens Standard ("BPS"), 29 C.F.R. § 1910.1030, pursuant to a specific Congressional directive aimed at combating "occupational exposures to the hepatitis B virus, the human immunodeficiency virus and other bloodborne pathogens." Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, Pub.L. No. 102-170 § 100, 105 Stat. 1107, 1113 (1992). In drafting the BPS, the Secretary acted under the authority granted by the OSH Act to
29 U.S.C. § 655(b)(7). The BPS applies to all "occupational exposure" which might be "reasonably anticipated [to lead to employee] contact with blood or other potentially infectious materials." 29 C.F.R. § 1910.1030(a), (b). Such "exposure incidents" include "needlesticks," one of a number of events that involve "piercing mucous membranes or the skin barrier." Id. § 1910.1030(b). Pursuant to subsection (f)(1)(i) of the BPS, "[t]he employer shall make available the hepatitis B vaccine and vaccination series to all employees who have occupational exposure, and post-exposure evaluation and follow-up to all employees who have had an exposure incident." Additionally, under subsection (f)(1)(ii),
Id. § 1910.1030(f)(1)(ii). The preamble to the BPS explains the impetus for requiring employers to pay for the costs of their employees exposure incidents. It states:
56 Fed.Reg. 64, 153 (1991).
OSHA has subsequently issued a series of compliance directives, stating that "[t]he term `at no cost to the employee' means, among other things, no `out-of-pocket' expense to the employee." See OSHA Compliance Directive CPL 2-2.69; CPL 2-2.44C; CPL 2-2.44D.
Beverly owns and operates a nursing home in Altoona, Pennsylvania. Beverly employs approximately 110 people including Vicki Pacovsky and Darryl Kosanovich, both of whom work as nurses at the nursing home. On December 8, 2002, Pacovsky received a "needlestick" while at the workplace, and on January 4, 2004, Kosanovich also received a "needlestick" while at work. Each sought treatment at the end of his or her respective shift at a designated off-site medical facility, and each returned to the off-site facility for periodic follow-up treatment during non-work hours. Beverly paid for the cost of the medical evaluations and procedures, but did not reimburse the employees for the non-work hours they spent receiving either the initial or follow-up treatments. Beverly also did not compensate the employees for travel time or expenses with respect to these treatments.
After each incident, OSHA inspected the workplace and issued an "other-than-serious" citation for violation of 29 C.F.R. § 1910.1030(f)(1)(ii)(A), due to Beverly's failure to provide post-exposure evaluation and testing "at no cost to the employee."
On March 28, 2005, the ALJ issued a decision and order upholding the citations. She held that the "at no cost" language required Beverly to pay for travel time and expenses. She also held that Beverly was required to compensate Pacovsky and Kosanovich for the non-work time they
Based on this analysis, the ALJ determined that the term "at no cost to the employee" was clear and unambiguous, and that regardless, any ambiguity was resolved by the Secretary's reasonable interpretations as set forth in the current OSHA compliance directive, two predecessor directives, and the 1999 OSHA opinion letter. She also found that the Secretary had provided constitutionally adequate notice that the BPS required employers to compensate employees for the travel expenses and non-work time related to their evaluation and treatment. She therefore ordered Beverly to reimburse Pacovsky and Kosanovich for the time spent receiving evaluation and treatment during non-work hours and for travel expenses.
The Commission granted Beverly's petition for discretionary review. A two-member majority found that the "at no cost" provision of the BPS was ambiguous, but that the Secretary's interpretation — that "cost" included non-work time and travel expense — was reasonable. Despite this finding, the majority held that neither the BPS itself, nor any other materials available to Beverly, explained with "ascertainable certainty" that the BPS required employers to compensate employees for travel costs and non-work time, and thus, the Secretary had failed to provide "fair notice" of its interpretation. The lone dissenting member of the Commission agreed with the majority that the provision was ambiguous and that the Secretary's interpretation was reasonable, but stated that the 1999 OSHA opinion letter provided sufficient notice of the Secretary's interpretation to allay due process concerns. The Secretary timely filed a petition for review.
We exercise jurisdiction over the Secretary's petition for review pursuant to 29 U.S.C. 660(b). We accord "substantial deference" to the Secretary's interpretation of a regulation promulgated by her agency. Martin v. Occupational Safety and Health Review Comm'n, 499 U.S. 144, 150, 111 S.Ct. 1171, 113 L.Ed.2d 117 (1991). "[T]he Commission, and ultimately the court of appeals, review the Secretary's interpretation to assure that it is consistent with the regulatory language and is otherwise reasonable." Id. at 156, 111 S.Ct. 1171. We will decide all relevant questions of law, and interpret constitutional and statutory provisions. 5 U.S.C. § 706. In addition, we will "hold unlawful and set aside agency action, findings, and conclusions found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Id. § 706(2)(A). Issues of law are subject to plenary review. Dole v. E. Penn Mfg. Co., 894 F.2d 640, 643 (3d Cir.1990).
Before we assess whether the Secretary's interpretation of the BPS is reasonable or whether Beverly had fair notice of that interpretation, we must determine whether the meaning of regulatory language
A regulation is ambiguous when it is "not free from doubt," Martin, 499 U.S. at 150, 111 S.Ct. 1171, and where no particular interpretation of the regulation is "compelled by the regulation's plain language or by other indications of the [agency's] intent at the time of promulgation of the regulation." Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994). Because the term "cost," as utilized in the BPS, has a number of common definitions and can "comfortably bear" multiple interpretations, see Auer v. Robbins, 519 U.S. 452, 461, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997), the plain language of the BPS does not compel any one particular interpretation. Cf. Verizon Communications, Inc. v. F.C.C., 535 U.S. 467, 500, 122 S.Ct. 1646, 152 L.Ed.2d 701 (2002) ("The fact is that without any better indication of meaning than the unadorned term, the word `cost'... is `a chameleon,' ... a `virtually meaningless' term...."). Moreover, aside from the statement in the preamble to the BPS generally stressing the importance of the "at no cost" provision in achieving the goals of the OSH Act, neither party has pointed to any indication contemporaneous with promulgation unequivocally stating the agency's intent to interpret the provision in a particular way. Therefore, and for the reasons that follow, we conclude that the Commission did not err in determining that the language of the BPS is ambiguous.
Beverly argues that the regulation is not ambiguous and that it "fully complied with the plain language of the [BPS]." Beverly contends that the "at no cost" language unambiguously includes only the cost of post-exposure evaluation and follow-up and does not encompass compensation for non-work time or travel expenses. Beverly correctly observes that the BPS does not specifically direct employers to compensate employees for their time or travel expenses. While the Secretary interprets the term "cost" to encompass travel expenses and non-work time, Beverly alleges, without citation, that "[t]he ordinary meaning of `cost' is the amount charged to purchase goods or services." In Beverly's view, employees have not been "charged" for non-work time or travel expenses, and are therefore not entitled to be compensated for these sums.
Beverly proffers the mandatory declination form required by the BPS as evidence that "cost" is meant to encompass only "charges" for goods and services. The form reads, in relevant part:
However, as our sister circuit noted in construing a similar provision of the inorganic arsenic standard, "`cost' has many common meanings." Phelps Dodge v. Occupational Safety and Health Review Comm'n, 725 F.2d 1237, 1239 (9th Cir. 1984) (Phelps Dodge II). Some of these meanings include "`the amount or equivalent paid or given or charged ...,'`whatever must be given, sacrificed, suffered, or foregone to secure a benefit ...,' and `the expenditure or outlay of money, time or labor....'" See Sec'y of Labor v. Phelps Dodge Corp., 11 O.S.H. Cas. (BNA) 1441, 1444 (Rev. Comm'n 1983) (Phelps Dodge I) (citing Webster's Third New International Dictionary (1971)). In Phelps Dodge I, the Commission adopted the Secretary's broad interpretation of "cost," an interpretation virtually identical to the one proffered here, holding that "employees given examinations during non-working hours" have incurred a "cost" cognizable under the regulation and should "be paid for their time." Phelps Dodge I, 11 O.S.H. Cas. (BNA) at 1444. In addition, the Commission found that "[e]mployees who are not reimbursed for extra transportation expenses incur a `cost' in the plainest and most natural sense of the word." Id. The Court of Appeals for the Ninth Circuit affirmed. See Phelps Dodge II, 725 F.2d at 1240.
With respect to Beverly's other arguments, the term "at no charge" in the declination letter is nearly as susceptible to broad or narrow interpretations as the term "at no cost." The terms "charge" and "cost," as used in this context, are functionally more similar than they are different. A "charge" is an "expenditure or expense incurred," which might naturally include travel expenses and compensation for non-work time. Webster's Third New International Dictionary 377 (1971). Moreover, Beverly's reliance on the existence of the "without loss of pay" phrase in regulations other than the BPS is misplaced for purposes of determining whether the plain language of the BPS is itself ambiguous.
In light of this, we agree with the unanimous view of the Commission that the language of the "at no cost" provision of the BPS is ambiguous, and therefore, as "the regulatory language is not free from doubt," we will "give effect to the [Secretary's] interpretation so long as it is reasonable." Martin, 499 U.S. at 150, 111 S.Ct. 1171. It is that question to which we now turn.
The Secretary maintains that her interpretation of the BPS's "at no cost" language to include compensation for non-work
We agree with the Commission that the Secretary's broad interpretation of the "at no cost" provision is reasonable. The Secretary's interpretation is based on an accepted dictionary definition of the term "cost" and does not impermissibly strain the plain language of the regulation. Moreover, as explained by the Commission, the Secretary's broad interpretation comports with the BPS's purpose in encouraging employees to seek evaluation and treatment for occupational exposure. Plainly, compensating employees for their time and effort in undergoing testing and evaluation is an effective way to ensure that employees who have potentially been exposed to a bloodborne pathogen pursue testing.
Before us, Beverly argues that even if the Commission correctly determined that the "at no cost" provision is ambiguous, the Secretary's interpretation is nonetheless unreasonable. First, Beverly argues that the Secretary's interpretation "fails to comport with the purpose and wording in the [BPS]." Curiously, Beverly does not directly address the Secretary's contention that "cost" can reasonably be interpreted as "the expenditure or outlay of money, time or labor." Nor does it make any other argument specifically contending that the language of 29 C.F.R. § 1910.1030(f)(1)(ii)(A) cannot "comfortably bear[ ]" the meaning assigned by the Secretary. See Auer, 519 U.S. at 461, 117 S.Ct. 905.
Instead, Beverly asserts that it is the Secretary's position that the source for any requirement that an employer must compensate its employees for non-work time and travel expenses would be § 1910.1030(f)(1)(ii)(B), the "[m]ade available to the employee at a reasonable time and place" provision. Building on this premise, Beverly contends that because it was cited only for violation of subsection (f)(1)(ii)(A) — the "at no cost" provision — and not for violation of subsection (f)(1)(ii)(B), it would be improper to impose costs that could only arise, pursuant to its characterization of the Secretary's position, under (f)(1)(ii)(B).
This argument is a straw man and a mischaracterization of the Secretary's position. The Secretary does not actually argue that the "at a reasonable time and place" provision is the source of the requirement that employers must compensate employees for non-work time and travel expenses. Throughout her brief, the Secretary repeatedly argues that the "at no cost" provision is the source of the requirement. The Secretary cites subsection (f)(1)(ii)(B) only for the proposition that while "it may be reasonable for an employer to require an employee to seek post-exposure evaluations and procedures during non-work time," under subsection (f)(1)(ii)(B), "[i]t is not reasonable, however, to shift the cost of that choice onto an employee" under subsection (f)(1)(ii)(A). Since it is the cost, and not the reasonable availability of evaluation and treatment that is at issue here, it is plainly the Secretary's interpretation of subsection (f)(1)(ii)(A) that matters. Therefore, Beverly's argument that it was not cited for a
Consequently, the Commission did not err when it determined that the Secretary's interpretation of the "at no cost" provision was reasonable and consistent with the language and purpose of the regulation.
As explained previously, a two-member majority of the Commission determined that Beverly did not have fair notice of the Secretary's broad interpretation of the BPS, despite finding that it was a reasonable interpretation. Specifically, the majority concluded that neither the regulation itself, its preamble, nor any other documentation issued by the Secretary explained with "ascertainable certainty" what the BPS requires, relying on the standard laid out in Gates & Fox Co. v. Occupational Safety and Health Review Comm'n, 790 F.2d 154, 156 (D.C.Cir.1986) (citing Diamond Roofing Co. v. Occupational Safety and Health Review Comm'n, 528 F.2d 645, 649 (5th Cir.1976)). The majority considered, but discounted, the premise that the 1999 OSHA opinion letter, which stated that travel expenses are compensable and that an employee is considered "on-duty" when receiving evaluation or treatment, provided sufficient notice of the Secretary's interpretation of the BPS. It discounted the 1999 letter in part because it was, in its eyes, "at odds" with a 1987 Department of Labor letter interpreting the Fair Labor Standards Act ("FLSA letter"), which stated that "[i]n order for time spent waiting for or receiving medical attention or treatment to be compensable, the visit to the doctor must be at the direction of the employer and it must occur during the employees's normal work hours on days when the employee is working." The majority stated that regardless, the Secretary had ample opportunity to "formalize" her opinion on the matter, and that even without the "conflicting" FLSA letter, the most recent compliance directives were "studiously vague" in interpreting the provision.
The dissenting member of the Commission disagreed, concluding that the 1999 OSHA opinion letter militated for a finding of fair notice. The dissent observed that the letter predated the cited conduct, and directly addressed both travel expenses and non-work time compensation. The dissent questioned the majority's reliance on the FLSA letter, noting that it was promulgated by a different agency under a different statute, likely mitigating much of the possible confusion it might have caused. The dissent, relying on Corbesco v. Sec'y of Labor, 926 F.2d 422, 428 (5th Cir.1991), suggested that, moreover, even if the two letters created some confusion, they at least provided "enough notice such that Beverly should have inquired of
Beverly argues that the Commission correctly determined that Beverly lacked constitutionally adequate notice because neither the regulation nor any other documents explained, with "ascertainable certainty," that compensation of non-work time and travel expenses was required by the BPS. Beverly asserts that "if the term `cost' is ambiguous, the [BPS] is unconstitutional because it fails to give notice of what is required of employers." Although we have indeed determined that the "at no cost" provision is ambiguous in this context, this alone is not sufficient to deprive Beverly of fair notice.
We have previously cited with approval the line of cases enunciating "ascertainable certainty" as the applicable standard for fair notice. See Dravo Corp. v. Occupational Safety and Health Review Comm'n, 613 F.2d 1227, 1232 (3d Cir.1980) (citing Diamond Roofing, 528 F.2d at 649). But, as the Court of Appeals for the First Circuit explained in United States v. Lachman, that line of cases
387 F.3d 42, 57 (1st Cir.2004). Here, because the Secretary has not given "conflicting interpretations" of the BPS and has provided "a sufficient, publicly accessible statement of her interpretation" prior to the issuance of the two citations in question, Beverly's fair notice argument fails.
First, the 1999 OSHA opinion letter adequately and publicly stated the Secretary's position that "[transportation cost[s] must be covered by the employer" and that "employees must be considered `on-duty'" when receiving post-exposure treatment. Beverly argues that this letter is insufficient to provide fair notice because the letter "fails to comport with the wording in the [BPS]." In effect, Beverly contends that because the "at no cost" provision is open to interpretation, it does not clearly require compensation for travel expenses or non-work time, and therefore, the 1999 interpretation letter incorrectly interpreted the BPS. This argument is circular. It is precisely because the regulation is ambiguous that it must be interpreted, and the Secretary here has provided such an interpretation. As such, the agency has not "failed to provide a sufficient, publicly accessible statement" that the BPS required Beverly to compensate its employees for travel expenses and non-work time. Lachman, 387 F.3d at 57.
The decisions in Phelps Dodge I and II provided additional notice to Beverly that
725 F.2d at 1239. Thus, regardless of some variation in language between the BPS and the inorganic arsenic standard,
Finally, Beverly argues that certain other statements of the Secretary either did not themselves provide fair notice, or in fact deprived it of fair notice by creating confusion with respect to its authoritative interpretation of the BPS, in effect creating "conflicting public interpretations of the regulation." See Lachman, 387 F.3d at 57. First, Beverly points to the compliance directives issued by the Secretary which state that "[t]he term `at no cost to the employee' means, among other things, no `out-of-pocket' expense to the employee."
Covering now familiar ground, Beverly also contends that the "without loss of pay" provisions present in a number of other OSHA standards, see, e.g., 29 C.F.R. § 1910.1052(j)(2) (OSHA's methylene chloride standard provides that "[t]he employer shall provide all required medical surveillance at no cost to affected employees, without loss of pay and at a reasonable time and place"), themselves created confusion sufficient to deprive it of fair notice of the Secretary's interpretation. Beverly argues it relied on the absence of this provision in the BPS in assuming that the BPS did not require compensation for travel expenses and non-work time. However, while the meaning of this provision and the reasons for its absence from the BPS are debatable, the question before us is not whether Beverly properly interpreted the "without loss of pay" provision or the meaning of its absence from the BPS. The question is whether the absence of a "without loss of pay" provision would be so confusing as to deprive Beverly of notice, given the availability of the 1999 OSHA opinion letter and the Phelps Dodge decisions. We do not believe that Beverly was deprived of fair notice. The 1999 OSHA opinion letter specifically addressed the issues in this case, and moreover, the Phelps Dodge II decision expressly relied on the interpretation of the "at no cost" provision, despite the presence of a "without loss of pay" provision in the inorganic arsenic standard. Thus, it was clear that presence or absence of the "without loss of pay" provision did not affect the Secretary's interpretation of "cost."
Beverly finally points to the FLSA letter, cited by the Commission in its decision, in asserting that it was deprived of fair notice due to substantial confusion among the Secretary's pronouncements. Beverly goes so far as to contend that the FLSA letter is in "direct conflict" with the Secretary's interpretation here. However, this letter, which does not address compensation for travel expenses at all, was issued by a different agency and concerned a different regulation, which was promulgated under a different statute. Moreover, it predates the 1999 OSHA opinion letter. Therefore, because the FLSA letter does not truly conflict with the 1999 OSHA opinion letter, we disagree with the Commission's majority opinion that it deprived Beverly of fair notice. The FLSA letter interprets a regulation only tenuously related to the issue here, and at any rate, the 1999 OSHA opinion letter, which directly addresses the BPS and the "at no cost" provision, occurred later in time and would have superceded any contravening effect of the FLSA letter interpretation. Beverly could not have been so confused by the FLSA letter that it was deprived of
In sum, the combination of the 1999 OSHA opinion letter and the decisions in the Phelps Dodge case provided sufficient notice of the Secretary's interpretation of the "at no cost" provision of the BPS to alleviate due process concerns. While the directives, analogous regulations, and the FLSA letter may not have themselves provided sufficient notice, they did not so confuse the situation or conflict with the Secretary's other public pronouncements so as to deprive Beverly of fair notice, given the existence of the 1999 OSHA opinion letter and the decisions in the Phelps Dodge case. See Lachman, 387 F.3d at 57. Therefore, we conclude that Beverly had fair notice of the Secretary's reasonable interpretation of the "at no cost" provision of the BPS.
For the foregoing reasons, we will grant the petition for review, vacate the order of the Commission, and remand for further proceedings consistent with this opinion.
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