2012 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

11-15-2012

Altor Inc v.;Secretary Labor

Precedential or Non-Precedential: Non-Precedential

Docket No. 11-2718

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1

NOT PRECEDENTIAL

AMENDED

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________ 

No. 11-2718

_____________

ALTOR, INC., and/or

AVCON, INC., and/or

VASILIOS SAITES, individually,

and NICHOLAS SAITES, individually,

 Petitioners,

v.

SECRETARY OF LABOR,

 Respondent

_____________

Appeal from the Occupational Safety and Health Review Commission

(Docket No. 99-0958)

Before: Thomasina V. Rogers, Chairman, and 

Horace A. Thompson III & Cynthia L. Atwood, Commissioners

_____________ 

Submitted Under Third Circuit LAR 34.1(a)

July 9, 2012

Before: FUENTES, HARDIMAN, and ROTH, Circuit Judges

(Opinion Filed: August 31, 2012) 

_____________

OPINION OF THE COURT 

_____________
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FUENTES, Circuit Judge.

Altor, Inc. (“Altor”) and Avcon, Inc. (“Avcon”) (collectively, “Appellants”) ask

this Court to reverse an Occupational Safety and Health Review Commission’s (the 

“Commission”) April 26, 2011 decision and order. Appellants argue that the 

Commission erred by (1) concluding that Altor and Avcon constituted a “single 

employer” under the Occupational Safety and Health Act (the “OSH Act”), (2) assessing 

separate penalties for six similar, willful fall protection violations; and (3) increasing an 

Administrative Law Judge’s penalty assessment to the amount the Secretary initially 

sought. For the reasons stated below, we will affirm.

1

I.

Because we write primarily for the parties, we set forth only the facts and history 

relevant to our conclusion.

Altor and Avcon were New Jersey corporations engaged in the business of pouredin-place concrete construction. Vasilios (“Bill”) Saites was the president and director of 

both companies. He was also a minority shareholder (49%) in Avcon, and his wife, 

Cornelia Saites, held a 51% majority in Avcon. The record does not indicate who owned 

Altor. Bill Saites’ son, Nicholas (“Nick”) Saites, was an attorney licensed in New Jersey 

 1

 The Occupational Safety and Health Review Commission had jurisdiction under 

sections 10(a) and 10(c) of the OSH Act. 29 U.S.C. § 659(a), (c). We have jurisdiction 

pursuant to 28 U.S.C. § 660(a).
3

who provided legal advice to both companies. Nick Saites was the director of Altor 

during its incorporation, but relinquished that role. During the period relevant to this case, 

Nick Saites was also a superintendent and worksite supervisor for Avcon. 

In 1998, Altor contracted with Daibes Brothers, a general contractor, to do the 

concrete work on a sixteen-story apartment building in Edgewater, New Jersey known as 

the Mariner High Rise (the “Edgewater Project”). As director of both Altor and Avcon, 

Bill Saites subcontracted a portion of Altor’s work to Avcon, signing the contract on 

behalf of each company. Pursuant to the contract, Altor provided materials and supplies, 

and Avcon, which had access to union labor, performed the labor at the Edgewater 

Project. Altor remained responsible to Daibes Brothers for the concrete work under their

initial contract. 

Shortly after Edgewater Project construction began, the Occupational Health and 

Safety Administration (“OSHA”) began an inspection of the site. The OSHA inspectors 

observed numerous fall protection, safety equipment, and administrative safety program 

violations. OSHA thus issued citations to Bill and Nick Saites—individually and doing

business as Altor and/or Avcon—alleging willful, serious, and other than serious 

violations of OSH Act standards, with proposed penalties totaling $424,000.2

 2

 OSH Act violations are characterized as “willful,” “repeated,” “serious,” or “not 

serious” (referred to by the Commission as “other than serious”). 29 U.S.C. § 666.

 However, 

a timely notice of contest was filed, and, by an amended complaint, Altor and Avcon 

were added as individual respondents.
4

Altor, Avcon, Bill Saites, and Nick Saites appealed the citations to an ALJ. Since 

the Secretary’s complaint did not allege that Altor was an employer of employees at the 

Edgewater Project, Altor and Avcon must have been a “single employer” under the OSH 

Act if they were to share liability for the violations. The ALJ found that evidence 

established that Altor and Avcon were a single employer because the “companies [had]

interrelated and integrated operations with a common president, management, 

supervision and ownership performing services at a common worksite.” App. 81. 

Additionally, the ALJ affirmed the six willful fall protection violations and did not group 

them together. However, the ALJ stated that the assessed penalty of $336,000 for the fall 

protection violations was excessive and issued a combined penalty of $150,000 ($25,000 

for each willful fall protection citation).

Appellants then appealed the ALJ’s decision to the Commission. The 

Commission agreed with the ALJ that Altor and Avcon constituted a single employer. In 

reaching this conclusion, the Commission found that the companies shared a common 

workspace (the Edgewater Project), were “plainly interrelated and integrated,” and 

“shared a common president, management, and supervision.” App. 13-14. The 

Commission also affirmed the ALJ’s refusal to group the six willful fall protection 

violations. However, the Commission set aside the ALJ’s penalty assessment and 

imposed the penalties originally proposed by the Secretary, $56,000 for each willful fall 

protection citation, or a total of $336,000. 

Appellants timely filed with this Court a petition for review of the Commission’s 

order.
5

II.

On appeal, Altor and Avcon challenge both the Commission’s determination that

Altor and Avcon constitute a single employer under the OSH Act and its decision to 

assess individual penalties for each of the six willful fall protection violations and to 

increase the ALJ’s penalty assessment for these citations.

A.

It is well established that separate corporate entities can constitute a single

employer under the OSH Act. The Act defines “employer” as “a person engaged in a 

business affecting commerce who has employees.” 29 U.S.C. § 652(5). It goes on to 

define “person” as “one or more individuals, partnerships, associations, corporations, 

business trusts, legal representatives, or any organized group of persons.” 29 U.S.C. § 

652(4). Whether multiple entities constitute a single employer under the OSH Act is a 

question of fact, and the Commission’s conclusion must be upheld if supported by 

substantial evidence. See 29 U.S.C. § 660(a); Bianchi Trison Corp. v. Secretary, 409 

F.3d 196, 204 (3d Cir. 2005); see also NLRB v. Al Bryant, Inc., 711 F.2d 543, 551 (3d Cir. 

1983) (“The single employer question is primarily factual, and the Board’s conclusion 

must be upheld if supported by substantial evidence.”).3

 3

 The Commission “essentially adopted” the single employer test that was 

developed by the National Labor Relations Board (NLRB). See C.T. Taylor Co. v. Esprit 

Constructors, Inc., 2003 OHSHRC LEXIS 43, at *9-*10 (Apr. 26, 2003). Thus, it is 

instructive to look to NLRB cases to elucidate the single employer concept. Indeed, we 
6

We look to four factors to determine whether multiple separate entities in fact 

constitute a single employer: (1) interrelated operations; (2) common management; (3) 

centralized control of labor relations; and (4) common ownership. Al Bryant, 711 F.2d at 

551. While no factor is dispositive, the first three are more significant. Id. 

Altor and Avcon argue that they were separate entities because each company was

engaged in different aspects of the construction business. Altor and Avcon’s relationship, 

however, exhibited a lack of arm’s length dealing, and the Commission properly

concluded that the companies were a single employer. First, the companies’ operations 

were substantially interrelated. Avcon only performed work pursuant to contracts with 

Altor, and Altor always remained responsible to the general contractors for Avcon’s work. 

Further, Bill Saites signed contracts for both corporations, and the companies shared a 

single-room office. Second, Bill Saites was the director and manager of both companies,

satisfying common management. Third, labor relations were centralized because Bill and 

Nick Saites, as representatives for both Altor and Avcon, were the onsite supervisors at 

the Edgewater Project and had authority to terminate employees and to enforce safety 

regulations. Fourth, the Saites family closely held control over Altor and Avcon, and this

constitutes common ownership. See NLRB v. Dane Cnty. Dairy, 795 F.2d 1313, 1322 

(7th Cir. 1986) (“Familial control constitutes common ownership and control.”); accord 

J.M. Tanaka Constr., Inc. v. NLRB, 675 F.2d 1029, 1035 (9th Cir. 1982).

 

have applied the NLRB’s test in a wide variety of employment and labor law contexts to 

determine whether separate entities constitute a single employer. See Pearson v. 

Component Tech. Corp., 247 F.3d 471, 486 (3d Cir. 2001) (citing cases applying this test 

in various employment contexts).
7

Accordingly, we find that the Commission’s holding that Altor and Avcon 

constituted a single employer is supported by substantial evidence. 

B.

The Commission has wide discretion to assess penalties for OSH Act violations 

within the Act’s statutory allowable range. See 29 U.S.C. § 666. Therefore, we will 

overturn the Commission’s penalty assessment only for an abuse of discretion. See 29 

U.S.C. § 666(j); Chao v. OSHRC, 401 F.3d 355, 376 (5th Cir. 2005) (“This Court reviews 

the Commission’s determination of the amount of an OSH Act penalty for abuse of 

discretion.”); Modern Cont’l Constr. Co. v. OSHRC, 305 F.3d 43, 53 (1st Cir. 2002).

The OSH Act permits the Commission to penalize willful violations with a fine of 

between $5,000 and $70,000 for each violation.

4

 4 The Secretary has the discretion to charge violations individually or to group 

them together in the first instance. But, the Commission is then obligated to assess the 

minimum penalty “for each willful violation” that is proved. 29 U.S.C. 666(a) (emphasis 

added). Insomuch as Altor and Avcon seek a reduction in their total penalty, the 

available relief is for the Commission to lower the penalty for each willful citation 

individually (rather than “grouping” the willful violations, as Appellants request).

 29 U.S.C. § 666(a). The Commission 

must “giv[e] due consideration to the appropriateness of the penalty with respect to the 

size of the business of the employer being charged, the gravity of the violation, the good 

faith of the employer, and the history of previous violations” when assessing a penalty 

within the broad statutory range. 29 U.S.C. § 666(j). “The gravity of a particular 

violation may warrant the assessment of a weighty penalty, even though the employer 
8

may rate perfect marks on the other three criteria.” See Modern Cont’l Constr. Co. 305 

F.3d at 53 (internal quotation marks omitted).

Altor and Avcon argue that the six willful fall protection violations should be 

grouped together and that a lower penalty should be assessed because the companies had 

less than 100 employees, their employees were only exposed to danger for three weeks, 

no actual injuries occurred, and the companies did take some level of precaution to 

prevent falls. 

However, the Commission did not abuse its discretion in giving substantial weight 

to the violations’ gravity and assessing a penalty at the upper end of the statutorily 

allowable range. The six separate fall protections violations were all willful violations. 

Though it focused its attention on the violations’ gravity, the Commission adequately 

considered all of the relevant factors in assessing the penalty. The record indicates that 

employees were regularly exposed to risks of falling over 79 feet, a fall that would likely 

result in death. Accordingly, the Commission did not abuse its discretion in assessing the 

penalty initially sought by the Secretary.

III.

For the foregoing reasons, we will affirm the Commission’s order.