2008 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

9-4-2008

Secretary Labor v. Beverly Healthcare

Precedential or Non-Precedential: Precedential

Docket No. 06-4810

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

 

No. 06-4810

 

SECRETARY OF LABOR,

 Petitioner

 v.

BEVERLY HEALTHCARE-HILLVIEW;

OCCUPATIONAL SAFETY & HEALTH REVIEW

COMMISSION,

 Respondents

 

On Petition for Review of a Decision and Order

of the Occupational Safety and Health Review Commission

(OSHRC Nos. 04-1091 and 04-1092)

 

Argued June 4, 2008

Before: FISHER, JORDAN

and VAN ANTWERPEN, Circuit Judges.

(Filed: September 4, 2008)
2

Ronald J. Gottlieb (Argued)

Charles F. James

Nathaniel I. Spiller

United States Department of Labor

Office of the Solicitor

Room S-4004

200 Constitution Avenue, N.W.

Washington, DC 20210

Attorneys for Petitioner

Michael S. Glassman (Argued)

Jennifer K. Swartz

Dinsmore & Shohl

255 East Fifth Street

1900 Chemed Center

Cincinnati, OH 45202

Sheldon N. Sandler

Young, Conaway, Stargatt & Taylor

1000 West Street

17th Floor, Brandywine Building

P.O. Box 391

Wilmington, DE 19899-0391

Attorneys for Respondent, Beverly

Healthcare-Hillview

 

OPINION OF THE COURT

 
3

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.

I.

A.

In 1970, Congress adopted the Occupational Safety and

Health Act (“OSH Act”) after finding that “personal injuries and

illnesses arising out of work situations impose a substantial

burden upon, and are a hindrance to, interstate commerce in

terms of lost production, wage loss, medical expenses, and

disability compensation payments.” 29 U.S.C. § 651(a). The

stated purpose for the adoption of the OSH Act was “to assure

so far as possible every working man and woman in the Nation
4

safe and healthful working conditions to preserve our human

resources.” Id. § 651(b). Under the OSH Act, the Secretary is

empowered to “set mandatory occupational safety and health

standards” for employers and to issue citations when employers

fail to comply with these standards. Id. §§ 651(b)(3), 655,

658(a). Violations of these standards are termed “willful,”

“repeated,” “serious,” or “not serious.” Id. § 666. “Not serious”

penalties may be subject to civil fines of up to $7,000. Id.

§ 666(c). If an employer wishes to contest a citation, it is

entitled to a hearing before an Administrative Law Judge

(“ALJ”). 29 U.S.C. § 661(j). A party that disputes the decision

of the ALJ may petition the Commission for discretionary

review. Id.; 29 C.F.R. § 2200.91. An aggrieved party may

petition the Court of Appeals for review of the Commission’s

final order. Id. § 661.

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

“where appropriate . . . prescribe the type and

frequency of medical examinations or other tests

which shall be made available, by the employer or

at his cost, to employees exposed to such hazards
5

in order to most effectively determine whether the

health of such employees is adversely affected by

such exposure.”

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),

[t]he employer shall ensure that all medical

evaluations and procedures including the hepatitis

B vaccine and vaccination series and

post-exposure evaluation and follow-up, including

prophylaxis, are:

(A) Made available at no cost to the

employee;

(B) Made available to the employee at a

reasonable time and place[.]
The 1999 directive, CPL 2-2.44D, cancelled the 1992 1

directive, CPL 2-2.44C. The 2001 directive, CPL 2-2.69,

cancelled the 1999 directive, and was in effect during all times

relevant to this case.

6

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:

“Numerous testimony and comment on the

proposed rule stated the necessity that Hepatitis B

vaccination and post-exposure evaluation and

follow-up be made available by the employer at

no cost to the employee . . . . This is consistent

with OSHA policy, as stated in the Occupational

Safety and Health Act of 1970 (OSH Act) . . . . In

addition, some commenters noted that an

important factor in successful vaccination

programs was providing the vaccination at no cost

to the employee.”

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. In addition, OSHA’s Director of 1

Compliance Programs issued an opinion letter on July 7, 1999

(“1999 OSHA opinion letter”), in which it addressed two
7

specific questions regarding application of the BPS: (1) “[m]ust

the employer either provide or pay for transportation to and from

the site where the Hepatitis B vaccination will be administered?”

and (2) “[a]re all activities associated with obtaining a Hepatitis

B vaccination, in fact, work functions and, consequently, is all

time associated with receipt of vaccination work time?” In

response to the first question, OSHA stated that “[w]hile

transportation may not need to be provided by the employer, its

cost must be covered by the employer.” The letter also

addressed the second question, explaining that “when receiving

the vaccine or commuting to have it administered, employees

must be considered ‘on-duty.’” It is undisputed that the

regulation, its preamble, the compliance directives, and the 1999

OSHA opinion letter were publicly available at all relevant

times during the course of this litigation.

B.

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
The citation for the “Pacovsky” incident was issued on 2

September 19, 2003, and the citation for the “Kosanovich”

incident was issued on May 21, 2004.

8

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.” Beverly timely contested these citations. 2

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 spent undergoing the

evaluations and procedures. Her interpretation relied on the

dictionary definition of “cost” and the preamble to the BPS,

stating that the purpose of the regulation was to induce

compliance and thereby reduce the number of infections. She

therefore determined that the employees incurred “costs” by

expending time and effort securing post-exposure evaluation

and treatment outside of work hours and traveling to and from

the treatment facility. She opined that these costs operated as a

disincentive to employees’ voluntary participation in the

program, and would therefore defeat its purpose.
9

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.
10

II.

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 (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.

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).

III.

A.

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 is “free from doubt.” Martin, 499 U.S. at

150 (internal citation and quotation marks omitted). Beverly

contends that, as a threshold matter, the “plain language” of the

BPS unambiguously excludes compensation for non-work time

and travel expenses from Beverly’s obligations to its employees

under the “at no cost” provision, and therefore, no alternate
11

interpretation of the Secretary could possibly be reasonable. If

Beverly is correct, our inquiry would be at an end. See Dir.,

OWCP v. E. Associated Coal Corp., 54 F.3d 141, 147 (3d Cir.

1995) (“The responsibility to promulgate clear and unambiguous

standards is upon the Secretary. The test is not what he might

possibly have intended, but what he said.”). However, if we

determine that the language is not “free from doubt,” we will

defer to the Secretary’s interpretation if it “sensibly conforms to

the purpose and wording of the regulations.” Martin, 499 U.S.

at 151.

A regulation is ambiguous when it is “not free from

doubt,” Martin, 499 U.S. at 150, 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 (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 (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 (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
12

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 nonwork 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:

If in the future I continue to have occupational

exposure to blood or other potentially infectious

materials and I want to be vaccinated with

hepatitis B vaccine, I can receive the vaccination

series at no charge to me.

29 C.F.R. § 1910.1030, App. A. In addition, Beverly points out

that a number of other OSHA standards require that medical
13

surveillance be made available or provided at no cost to the

employee, but include the additional language, “without loss of

pay.” See, e.g., 29 C.F.R. § 1910.1018 (inorganic arsenic

standard) (stating that medical surveillance “shall be provided

without cost to the employee, without loss of pay and at a

reasonable time and place”).

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.
It may, however, affect whether Beverly received fair 3

notice of the Secretary’s interpretation. See Part III.C., infra.

14

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. As the Phelps Dodge 3

decisions illustrate, the “at no cost” portion of the regulation

may still be read broadly to include employees’ non-work time

and travel expenses, notwithstanding the existence of the

“without loss of pay” provision in that case. See Phelps Dodge

II, 725 F.2d at 1239.

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. It is that question to which we now turn.
15

B.

The Secretary maintains that her interpretation of the

BPS’s “at no cost” language to include compensation for nonwork time and travel expenses is reasonable. This conclusion is

also consistent with the unanimous view of the Commission,

which determined that the Secretary’s broad reading of the “at

no cost” provision conformed to the “purpose and wording” of

the BPS, and that without “such compensation, the likelihood

that an employee will obtain necessary medical treatment

declines.” The Commission also observed that the preamble to

the BPS reiterates the “at no cost” language, and restates its

importance in achieving the goals of the OSH Act, therefore

justifying a broad reading.

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
16

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 argumentspecifically 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.

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
Beverly does not argue that the very existence of the 4

“reasonable time and place” provision undermines the

reasonableness of the Secretary’s reading of the “at no cost”

provision to include compensation for travel expenses and nonwork time, as it is possible that the “reasonable time and place”

provision might itself conceivably be interpreted to require

employers to compensate employees for travel expenses and

non-work time. Nonetheless, the Secretary’s construction of the

regulatory framework is reasonable. A natural reading of

subsection (f)(1)(ii)(B) suggests that it is aimed at ensuring that

employers do not deny employees reasonable access to

evaluation if they have potentially been exposed to a bloodborne

pathogen. Notably, this subsection does not mention cost at all.

Under this framework, subsection (f)(1)(ii)(A) therefore

concerns all questions of cost. Since this view is reasonable, we

will defer to the Secretary’s interpretation.

17

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 violation of subsection

(f)(1)(ii)(B) is to no avail, as its compliance with that subsection

was never at issue.4

Consequently, the Commission did not err when it

determined that the Secretary’s interpretation of the “at no cost”
18

provision was reasonable and consistent with the language and

purpose of the regulation.

C.

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
In Corbesco, the Court of Appeals for the Fifth Circuit 5

determined that even where the language of a particular

regulation was “imprecise,” the fact that the Commission had

interpreted that language in a number of decisions created a duty

on the part of the employer “to at least inquire” with respect to

its obligations under the regulation. Corbesco v. Sec’y of Labor,

926 F.2d 422, 428 (5th Cir. 1991). Because we explain, infra,

that the Secretary provided sufficient notice to allay fair notice

concerns in this case, we need not address whether Beverly had

a duty to inquire.

19

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 OSHA.” For the reasons that follow, we hold that 5

Beverly had fair notice of the Secretary’s interpretation.
20

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

do[es] not stand for the proposition that any

ambiguity in a regulation bars punishment.

Rather, they are addressed only to situations in

which: (1) the agency had given conflicting

public interpretations of the regulation, or, (2) the

regulation is so vague that the ambiguity can only

be resolved by deferring to the agency’s own

interpretation of the regulation (i.e., a situation in

which the ambiguity is resolved by something

comparable to a step-two analysis under

Chevron), and the agency has failed to provide a
21

sufficient, publicly accessible statement of that

interpretation before the conduct in question.

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 the BPS required compensation

of employees for travel expenses and non-work time. Beverly

contends that these decisions are not analogous to the present
Beverly also takes issue with the fact that the inorganic 6

arsenic standard contained language in its preamble stating that

“the employer is obligated to pay for the time spent taking the

medical examination if it is taken outside normal working

hours. . . . It is necessary that exams be convenient and without

loss to the employee to assure that they are taken.” 43 Fed. Reg.

22

case, and in fact create additional confusion. It again points to

the existence of the “without loss of pay” provision included in

the regulation, asserting that it is this provision, notably absent

from the BPS, that requires employers to compensate employees

for non-work time. This argument fails to acknowledge that the

Court in Phelps Dodge II clearly construed the word “cost” and

the Secretary’s proffered interpretation of the “without cost”

provision, not the “without loss of pay” provision:

The word “cost” has many common meanings.

Here, the Secretary interpreted the phrase

“without cost” in a broad sense in accordance

with the preamble’s statement that the exams be

given “without loss to the employee to assure that

they are taken.” The dramatic drop in employee

participation after employees were required to

take examinations on their own time and to

provide their own transportation demonstrates the

reasonableness of the Secretary's interpretation.

We affirm the decision of the Commission.

725 F.2d at 1239. Thus, regardless of some variation in

language between the BPS and the inorganic arsenic standard,6
19621 (1978). The BPS contains no such language either in the

regulation itself or the preamble. However, as the Secretary

points out, the BPS was written seven years after the Ninth

Circuit upheld the Secretary’s interpretation of the word “cost”

in Phelps Dodge II. Thus, in terms of fair notice, there was no

express requirement that the Secretary repeat this statement in

the BPS, as the interpretation was already available to the

affected parties. Nonetheless, in the preamble to the BPS, the

Secretary explained that the “at no cost” provision is designed

to encourage post-exposure evaluation – the same purpose

enunciated in the inorganic arsenic standard. 29 C.F.R.

§ 1910.1030.

Moreover, Beverly had additional notice of the 7

Secretary’s interpretation prior to its failure to reimburse

Kosanovich for his travel expenses and non-work time. The

agency issued the Pacovsky citation on September 19, 2003, and

the Kosanovich needlestick did not take place until January 4,

2004. Therefore, the first citation provided Beverly with actual

notice of the Secretary’s interpretation of the “at no cost”

provision well before the second incident and citation.

Although “[t]he constitution does not demand that the employer

be actually aware that the regulation is applicable to his

conduct,” actual notice is sufficient. Faultless Div., Bliss &

Laughlin Indus, Inc. v. Sec’y of Labor, 674 F.2d 1177, 1185 (7th

23

these published opinions provided additional notice that the

Secretary had already interpreted the term “cost” broadly, and

that at least one Court of Appeals found this interpretation to be

reasonable.7
Cir. 1982). See also Martin v. Occupational Safety and Health

Review Comm’n, 499 U.S. 144, 157 (1991) (“when embodied in

a citation, the Secretary's interpretation assumes a form

expressly provided for by Congress”).

24

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.” See OSHA

Compliance Directives CPL 2-2.44C, CPL 2-2.44D, and CPL

2-2.69. Beverly argues that this definition does not provide

notice because it is vague and open to interpretation. However,

the question is not whether the directives provided fair notice,

but whether they so confused Beverly as to what was required

under the BPS, that the 1999 OSHA opinion letter and the

Phelps Dodge decisions failed to provide fair notice. While the

language used in the directives is not particularly helpful in

resolving the issue in the current instance, it does not contravene

the more applicable and specific language of the 1999 OSHA

opinion letter or the Phelps Dodge decisions, and thus the

directives are not conflicting public interpretations.

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)
Beverly also does not explain why the presence or 8

absence of the “without loss of pay” language should affect

whether it received fair notice that the BPS required the payment

of travel expenses.

25

(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.”8
26

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 fair notice, given the

existence of the subsequent 1999 OSHA opinion letter and the

Phelps Dodge decisions.

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
27

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.

IV.

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.