COURT OF APPEALS OF VIRGINIA 

Present: Judges Baker, Coleman and Elder 

Argued at Salem, Virginia 

ABATECO SERVICES, INC. 

 OPINION BY 

v. Record No. 0328-96-3 JUDGE SAM W. COLEMAN III 

 NOVEMBER 19, 1996 

THERON J. BELL, 

 COMMISSIONER OF LABOR AND INDUSTRY 

FROM THE CIRCUIT COURT OF THE CITY OF STAUNTON 

Rudolph Bumgardner, III, Judge 

 R. Leonard Vance for appellant. 

 John R. Butcher, Assistant Attorney General 

(James S. Gilmore, III, Attorney General, on 

brief), for appellee. 

 Abateco Services, Inc. (Abateco), a licensed asbestos 

removal contractor, appeals the trial court's order which upheld 

four citations issued by the Department of Labor and Industry 

(Department) and $9,665 in civil penalties assessed by the trial 

court against Abateco for refusing to provide the Department 

access to its records as required by Abateco's subcontract and by 

various provisions of the Virginia Occupational Safety and Health 

Standards. Abateco contends that the citations were not valid 

because it had revoked its contractual consent for the Department 

to access its records and, therefore, it had no legal obligation 

to produce the records without a warrant or court order. After 

revoking its consent, Abateco asserts that the Department, which 

had the statutory and regulatory right to access the records, 

would have been required to obtain a search warrant or subpoena 
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in order to lawfully access its records. Therefore, Abateco 

argues, because the Department was required to obtain a warrant 

or subpoena for the records, it could not cite Abateco for 

exercising its constitutional right to require the Department to 

obtain a warrant in order to gain access to Abateco's private 

records. Abateco also contends that the civil penalty of $9,665 

as assessed by the trial court was excessive. 

 Initially, we decide the extent of Abateco's protected 

privacy interest in its records, irrespective of the Department's 

contention that it contractually waived whatever privacy right it 

had. We must address this question because the Department 

contends that Abateco, as a highly regulated industry, has no 

expectation of privacy and regardless of the contractual waiver, 

no search warrant would have been required to lawfully access the 

records. 

 We hold that Abateco had a diminished expectation of privacy 

in the requested records, however, we further hold that it 

contractually waived whatever Fourth Amendment rights it 

possessed in the records. Because Abateco could not unilaterally 

revoke its contractual waiver of Fourth Amendment rights without 

breaching the terms of the contract, the Department had the right 

to inspect the records without a search warrant, provided it 

could reasonably do so without breaching the peace. Accordingly, 

because the Department was not required to obtain a warrant in 

order to obtain access to the records, the citations issued by 
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the Department were founded. Furthermore, the penalty of $9,665 

assessed by the trial court was reasonable and within the range 

provided for in Code § 40.1-49.4(A)(4)(a). Therefore, we hold 

that the trial court did not err in upholding the citations and 

the penalty imposed by the trial court was not excessive. 

I. FACTS

 Abateco is an asbestos abatement contractor licensed in 

Virginia pursuant to Code § 54.1-503. In November 1994, Abateco 

was working as a subcontractor removing insulation containing 

asbestos from the boiler and pipes at the Staunton Correctional 

Center, a facility owned and operated by the Virginia Department 

of Corrections. 

 The subcontract executed by Abateco incorporated several 

documents,1

 among them being the General Conditions, which 

provided: 

 Section 3(d). The provisions of all rules 

and regulations governing safety as adopted 

by the Safety Codes Commission . . . and as 

issued by the Department of Labor and 

Industry under Title 40.1 of the Code of 

Virginia shall apply to all work under this 

contract. Inspectors from the Department of 

 1 The subcontract stated: 

 The Contract Documents for this Subcontract 

consist of this Agreement and any Exhibits 

attached hereto, the Agreement between the 

Owner and Contractor dated as of August 22, 

1994, [and] the Conditions of the Contract 

between the Owner and Contractor (General, 

Supplementary and other Conditions) . . . . 

These form the Subcontract, and are as fully 

a part of the Subcontract as if attached to 

this Agreement or repeated herein. 
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Labor and Industry shall be granted access to 

the Work for inspection without first 

obtaining a search warrant from the court. 

* * * * * * * 

 Section 21. The Architect/Engineer, the 

Owner, the Owner's inspectors and other 

testing personnel, and inspectors from the 

Department of Labor and Industry shall have 

access to the Work at all times. 

(Emphasis added). 

 Upon receiving notification pursuant to Code § 40.1-51.20 

that Abateco was working at the Staunton Correctional Center, the 

commissioner assigned an industrial hygienist to conduct an 

unannounced inspection at the site under the authority of Code 

§ 40.1-51.21. On November 10, 1994, the inspector visited the 

site and attempted to conduct an inspection. Abateco's site 

supervisor refused to allow an inspection without a search 

warrant despite the fact that the subcontract expressly stated 

that the Department, under the General Conditions of the 

Contract, would be granted access to the work without a warrant. 

 On November 16, 1994, the inspector returned to the site to 

attend a construction progress meeting with representatives of 

Abateco, the Department of Corrections, and the architects. 

During this meeting, Abateco's contract with the Commonwealth was 

discussed. At that time, Abateco's president acknowledged that 

the contract provided for warrantless access to the records, but 

he stated that Abateco would not voluntarily allow the inspector 

to conduct a search. 

 On November 22, 1994, a complaint from an employee working 
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at the Staunton Correctional Center prompted the commissioner to 

send the inspector back to the site under authority of Code 

§ 40.1-51.2, which requires the commissioner to inspect employee 

complaints of hazardous conditions. Abateco's site supervisor 

again refused to allow the Department to conduct an inspection 

without a search warrant. At that time, the inspector asked to 

see certain records that Abateco was required to keep by the 

Department's regulations pertaining to asbestos removal. The 

requested records included those showing employee exposure to 

asbestos,2

 records of employee asbestos training,3 employee 

medical records,4 and written hazard communication program 

documents.5 

 Abateco's supervisor refused to make these records available 

without a search warrant. The inspector then called Abateco's 

president, who also refused to consent to an inspection of the 

records and of the workplace. The inspector advised Abateco that 

a refusal to provide the records would be considered a willful 

violation of the regulations, but Abateco continued to refuse to 

provide access to the records. 

 2 Required by Virginia Occupational Safety and Health 

Standard § 1926.58(n)(5)(ii). 

 3 Required by Virginia Occupational Safety and Health 

Standards § 1926.58(k)(4)(ii). 

 4 Required by Virginia Occupational Safety and Health 

Standards §§ 1926.58(m) and (n). 

 5 Required by Virginia Occupational Safety and Health 

Standards § 1926.59(e)(4). 
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 As a result of Abateco's refusal, the commissioner issued 

four citations for willful failure to produce the records. In 

accordance with Code § 40.1-49.4(4)(A)(a), the commissioner 

proposed a civil penalty of $20,000. After a bench trial on the 

merits, the trial judge found Abateco guilty of four willful 

violations and assessed a penalty of $9,665, which consisted of 

$5,665 for the commissioner's costs and $1,000 for each citation. 

 Abateco appeals the trial court's decision and argues that, 

despite its contractual consent to warrantless searches by the 

Department of Labor and Industry, it had the right to withdraw 

its consent and to demand a warrant under the Fourth Amendment 

before allowing inspection of the requested records. Abateco 

contends that because it had an expectation of privacy in its 

records, those records were not subject to being searched except 

upon a showing of justifiable cause and with a warrant, subpoena, 

or injunction. Abateco also asserts that the contract did not 

create an irrevocable waiver of Fourth Amendment rights and that 

Abateco properly revoked the contractual waiver when the 

inspector asked to see the records. 

II. EXPECTATION OF PRIVACY IN RECORDS

 The Department contends, as the trial court held, that 

Abateco has no reasonable expectation of privacy in those records 

that it is required to maintain because it is involved in the 

removal and disposal of asbestos, an industry that is heavily 

regulated by statute and by regulation. Abateco's claim that the 
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citations were not valid because a warrant was required to 

lawfully search the records is predicated upon the premise that 

it has a reasonable expectation of privacy in those records as 

far as the Department is concerned. 

 In 1967, the United States Supreme Court ruled that the 

Fourth Amendment protects businesses from unreasonable 

warrantless searches and seizures by administrative agencies. 

See v. City of Seattle, 387 U.S. 541 (1967). 

 As we explained in Camara [v. Municipal 

Court, 387 U.S. 523 (1967)], a search of 

private houses is presumptively unreasonable 

if conducted without a warrant. The 

businessman, like the occupant of a 

residence, has a constitutional right to go 

about his business free from unreasonable 

official entries upon his private commercial 

property. The businessman, too, has that 

right placed in jeopardy if the decision to 

enter and inspect for violation of regulatory 

laws can be made and enforced by the 

inspector in the field without official 

authority evidenced by a warrant. 

Id. at 543. However, the Supreme Court also cautioned that 

business premises could be inspected in many more situations than 

private homes and that a case-by-case determination of 

reasonableness is necessary. Id. at 456. 

 Following the See decision, the Supreme Court recognized an 

exception to the warrant requirement for administrative searches 

of closely regulated businesses and industries. See Colonnade 

Catering Corp. v. United States, 397 U.S. 72 (1970) (liquor 

licensees); United States v. Biswell, 406 U.S. 311 (1972) (gun 

dealers); Donovan v. Dewey, 452 U.S. 594 (1981) (underground and 
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surface mine owners); New York v. Burger, 482 U.S. 691 (1986) 

(junkyard owners). Warrantless searches in these situations are 

reasonable because "[c]ertain industries have such a history of 

government oversight that no reasonable expectation of privacy 

could exist . . . . The clear import of our cases is that the 

closely regulated industry of the type involved in Colonnade

[liquor industry] and Biswell [gun dealers] is the exception." 

Marshall v. Barlow's, Inc., 436 U.S. 307, 312 (1978) (citation 

omitted). "When a dealer chooses to engage in [a] pervasively 

regulated business and to accept a federal license, he does so 

with the knowledge that his business records . . . will be 

subject to effective inspection." Biswell, 406 U.S. at 316. 

 Abateco claims that it had a reasonable expectation of 

privacy in the records requested by the commissioner's inspector 

and that a warrant was required based upon the rationale of 

Marshall. In Marshall, the Supreme Court struck down a provision 

of the Occupational Safety and Health Act which permitted 

inspectors to enter and inspect businesses without a warrant. 

The Court held that Barlow's electrical and plumbing installation 

business did not fall under the "closely regulated business" 

exception to the warrant requirement. Id. at 314-15. However, 

the Court also stated that "[t]he reasonableness of a warrantless 

search . . . will depend upon the specific enforcement needs and 

privacy guarantees of each statute." Id. at 321. It is that 

standard which controls our determination of whether the 
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Department's regulatory requirements that asbestos contractors 

provide access to certain records encroaches upon the 

contractor's protected privacy interests. 

 Asbestos removal is a highly regulated industry in Virginia. 

 Code §§ 54.1-500 through -517 provide a rigid scheme of 

licensure for asbestos removal contractors. In addition to being 

governed by the general provisions of Title 40.1, which apply to 

all businesses regulated by the Department of Labor and Industry, 

asbestos removal contractors are bound by Chapters 3.2 and 3.3 of 

Title 40.1 which provide for notification requirements and 

adherence to the National Emissions Standards for Hazardous Air 

Pollutants. Asbestos removal and asbestos disposal present 

health and safety hazards to the public and in the workplace. 

Pursuant to the authority granted to the commissioner under Code 

§§ 40.1-6(3) and (7), regulations governing occupational exposure 

to asbestos and record-keeping requirements have been 

promulgated. Because asbestos removal is so highly regulated in 

Virginia, asbestos removal contractors have a diminished 

expectation of privacy in work areas and in the records they are 

required to maintain relating to asbestos removal and disposal. 

 Abateco urges us to find that it had a reasonable 

expectation of privacy in its records even though the 

Department's regulations required Abateco to prepare and maintain 

the records. Abateco relies on McLaughlin v. Kings Island, 849 

F.2d 990 (6th Cir. 1988), and Brock v. Emerson Electric Co., 834 
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F.2d 994 (11th Cir. 1987), to support its position. In both 

Kings Island and Brock, the courts found that OSHA could not 

inspect without a warrant certain logs or records of employees' 

injuries and illnesses which the statutes at issue required to be 

maintained. The court in Kings Island stated, "[w]e conclude 

that even though the records in question are required by law to 

be kept, this does not remove any privacy expectation that the 

employer may have in the information." Kings Island, 849 F.2d at 

996. 

 The Department argues that the Fourth Circuit case of 

McLaughlin v. A.B. Chance Co., 842 F.2d 724 (4th Cir. 1988), 

addressed the identical issue and should control this case. The 

controlling rationale in A.B. Chance recognized that the employer 

had a diminished expectation of privacy in the employee's injury 

and illness records that were required to be kept, but that the 

right to inspect those records involved a minimal intrusion. Id.

at 727. Because of the statutory duty to keep the records, there 

was no additional burden imposed on the employer to compile 

information or to "dig out supporting information, this work has 

already been done." Id. The court limited its holding by saying 

"under our ruling, the compliance officer must be on the 

employer's premises as a result of an employee's health or safety 

complaint before he may require production of the [logs] without 

a warrant." Id. at 728. 

 We find the Fourth Circuit's reasoning in A.B. Chance
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persuasive. Because Abateco is required by law to maintain the 

records to which the inspector requested access, Abateco had a 

diminished expectation of privacy in the records. Both the Code 

and the regulations promulgated by the Department place asbestos 

removal contractors on notice that they are required to maintain 

these records and to provide the Department access to them. 

Therefore, Abateco had a diminished right to privacy in the 

records. Moreover, when the inspector requested access to the 

records he was on the site investigating an employee complaint. 

 Code § 40.1-6(7) empowers the commissioner to "require that 

accident, injury and occupational illness records and reports be 

kept at any place of employment and that such records and reports 

be made available to the commissioner or his duly authorized 

representatives upon request." The regulations pertaining to 

this type of record provide that they shall be made available to 

the commissioner upon request. See Va. Occupational Safety and 

Health Standards §§ 1926.58(n)(5)(ii), 1926.58(k)(4)(ii), 

1926.59(e)(4). 

 We find that Abateco had a diminished expectation of privacy 

in those records that the inspector requested, for two reasons: 

first, Abateco is a licensee in a closely regulated business in 

the Commonwealth, which reduces its expectation of privacy; and 

second, Abateco was required by law to create and maintain the 

records. Having determined that Abateco has a diminished 

expectation of privacy in these records, the question remains 
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whether, absent a waiver of Fourth Amendment rights, a warrant is 

required. We do not have to decide that question because Abateco 

contracted with the commissioner to provide access to the records 

upon request without requiring a warrant and Abateco cannot 

unilaterally withdraw that consent, which was a condition of its 

bargain to perform the asbestos removal. 
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III. CONTRACTUAL WAIVER OF RIGHT TO PRIVACY

 Code § 40.1-49.8 gives the commissioner authority to inspect 

the workplace of employers "with the consent of the owner, 

operator or agent in charge of such workplace . . . or with an 

appropriate order or warrant . . . ." Moreover, Abateco's 

contract expressly provides that the Department shall have access 

to Abateco's records without obtaining a warrant. Abateco agrees 

that it initially voluntarily consented to warrantless 

inspections or searches. But, Abateco argues that its consent to 

search was revocable at any time and was, in fact, revoked by the 

site supervisor and the president's refusal to allow the 

inspector to see the records. Abateco contends that because its 

consent was withdrawn, the Department's attempted search of its 

records violated Code § 40.1-49.8. 

 It is well-settled that a knowing and voluntary consent to 

search obviates the need for a search warrant under the Fourth 

Amendment. See Schneckloth v. Bustamonte, 412 U.S. 218, 222 

(1973); Crosby v. Commonwealth, 6 Va. App. 193, 197, 367 S.E.2d 

730, 733 (1988) (quoting Hairston v. Commonwealth, 216 Va. 387, 

387, 219 S.E.2d 668, 669 (1975), cert. denied, 425 U.S. 937 

(1976)). More specifically, the right to require a search 

warrant may be waived by written contract. See Zap v. United 

States, 328 U.S. 624 (1946) rev'd on other grounds, 330 U.S. 800 

(1947). 

 In Zap, the petitioner contracted with the Navy Department 
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to conduct experimental work on airplane wings. Id. at 626. The 

petitioner's contract with the Navy provided that "the accounts 

and records of the contractor shall be open at all times to the 

Government and its representatives . . . ." Id. at 627. The 

Court stated: 

 And when petitioner, in order to obtain the 

government's business, specifically agreed to 

permit inspection of his accounts and 

records, he voluntarily waived such claim to 

privacy which he otherwise might have had as 

respects business documents related to those 

contracts. 

Id. at 628. Where businesses or entities have contractually 

consented to inspections or searches of documents and worksites, 

courts have uniformly held such provisions to be valid waivers of 

the requirement for a warrant or subpoena under the Fourth 

Amendment. See United States v. Brown, 763 F.2d 984 (8th Cir.), 

cert. denied, 474 U.S. 905 (1985) ("The government has a 

substantial interest in establishing methods by which it can 

effectively monitor compliance with the regulations . . . . We 

see no constitutional infirmity in the government requiring a 

provider to agree to maintain records . . . and to permit 

periodic audits of those records as a condition for [contracting 

with the government]. . . ."); United States v. Jennings, 724 

F.2d 436 (5th Cir.), cert. denied, 467 U.S. 1227 (1984); First 

Alabama Bank v. Donovan, 692 F.2d 714 (11th Cir. 1982); United 

States v. Griffin, 555 F.2d 1232 (5th Cir. 1977); Lanchester v. 

Pennsylvania State Horse Racing Comm'n, 325 A.2d 648 (Pa. 1974). 
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 Although as a general proposition, consent to search granted 

at the scene may be revoked, withdrawn, or partially limited by 

the person who gives the consent, see Lawrence v. Commonwealth, 

17 Va. App. 140, 435 S.E.2d 591 (1993); Grinton v. Commonwealth, 

14 Va. App. 846, 419 S.E.2d 860 (1992); 79 C.J.S. Searches and 

Seizures § 126 (1995), we hold that such is not the case when the 

consent is given in a valid and binding bilateral contract. 

 Abateco contends, however, that contractual consent cannot 

create an irrevocable waiver of Fourth Amendment rights. In 

support of this argument, Abateco cites Tri-State Steel Constr., 

Inc. v. OSHRC, 26 F.3d 173 (D.C. Cir. 1994), and National Eng'g & 

Contracting Co. v. OSHRC, 45 F.3d 476 (D.C. Cir. 1995). However, 

neither case is sufficiently similar to the instant case to be 

persuasive. In Tri-State Steel, although the general contractor 

had contractually consented to searches, 26 F.3d at 176-77, the 

subcontractor had not, which is different from the situation in 

the instant case. Moreover, the subcontractors objected to 

searches made by OSHA of the common areas, which led OSHA to 

obtain warrants in order to search the areas that were under the 

exclusive control of the subcontractors. Id. In National Eng'g, 

the search was also conducted pursuant to a warrant. National 

Eng'g, 45 F.3d at 478. The holdings in these cases are not 

applicable to this case and do not support Abateco's argument 

that it could revoke its contractual waiver. 

 A party "cannot accept the benefits of the contract and then 
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assert he is entitled to be relieved of its obligations." Link 

Assoc. v. Jefferson Standard Life Ins. Co., 223 Va. 479, 489, 291 

S.E.2d 212, 218 (1982) (quoting United States v. Idlewild 

Pharmacy, Inc., 308 F. Supp. 19, 23 (E.D. Va. 1969)); see also

Manassas Park Dev. Co. v. Offutt, 203 Va. 382, 385, 124 S.E.2d 

29, 31 (1962) ("Where one enters into a contract to perform 

certain acts, without any exceptions or qualifications, and 

receives from the party with whom he contracts a valuable 

consideration for his engagement, he must abide by the contract 

 . . . ."). Revoking only part of a written contract places a 

party in breach of the contract unless the other party consents 

to the revocation. See Spence v. Northern Va. Doctors Hosp. 

Corp., 202 Va. 478, 483, 117 S.E.2d 657, 660 (1961). In this 

case, Abateco attempted to unilaterally rescind the terms of its 

contract with the Commonwealth by withdrawing its consent. 

 To accept Abateco's position would be to allow the company 

to accept the benefit of its bargain with the Commonwealth 

without having to abide by its obligation to the commissioner. 

Therefore, we hold that the trial court did not err in ruling 

that Abateco's attempt to withdraw its contractual consent was 

ineffective. Thus, because Abateco had contractually consented 

to access its records without requiring a warrant, the trial 

court did not err in upholding the Department's citations. 

IV. EXCESSIVE CIVIL PENALTY

 Abateco argues that the civil penalty of $9,665 imposed by 
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the trial court was excessive because Abateco had reason to 

believe it was justified in requiring the Department to obtain a 

warrant before allowing its records to be inspected; therefore, 

its refusal was not willful. We disagree. The evidence before 

the trial court was sufficient to support its finding that 

Abateco willfully violated the terms of the contract and Code 

§ 40.1-51.21. 

 In assessing penalties, Code § 40.1-49.4(A)(4)(a) requires 

consideration of the size of the employer's business, the gravity 

of the violation, the good faith of the employer, and the 

employer's history of previous violations. The contract that 

Abateco entered into provided that it agree to submit to searches 

by the Department of Labor and Industry without the need for a 

search warrant. Abateco acknowledged the contractual provision, 

but refused to comply with its contractual obligation and stated 

that it had no intention of complying. Although the inspector 

acknowledged at trial that he told Abateco that he thought 

Abateco had the right to require a search warrant before being 

searched, he also testified that the commissioner's position was 

that a warrant was unnecessary under the contract. On these 

facts, we hold that the trial court did not err in finding that 

Abateco's refusal to voluntarily provide the documents to the 

commission as required by the contract was a willful violation of 

the contract and Code § 40.1-51.21. 

 Code § 40.1-49.4(J) provides that an "employer who willfully 
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or repeatedly violates any safety or health provision of this 

title or any standard, rule or regulation promulgated pursuant 

thereto may be assessed a civil penalty of not more than $70,000 

for each such violation." In this case, the trial court assessed 

a penalty of $5,665 for the commissioner's costs in enforcing the 

contract and the statutes and $1,000 for each of the four willful 

violations. The maximum allowable penalty for a willful 

violation is $70,000. The assessment of the commissioner's costs 

and $1,000 penalty for each of the four willful violations is not 

excessive. 

V. CODE § 40.1-51.21

 Abateco contends that, because it had already been inspected 

by the Department earlier in 1994, the attempted inspection of 

the records and worksite at the Staunton Correctional Center in 

November 1994 was in violation of Code § 40.1-51.21. This 

section states: 

 At least once a year, during an actual 

asbestos project, the Department of Labor and 

Industry shall conduct an on-site unannounced 

inspection of each licensed asbestos 

contractor's and RFS contractor's procedures 

in regard to installing, removing and 

encapsulating asbestos. The Commissioner or 

an authorized representative shall have the 

power and authority to enter at reasonable 

times upon any property for this purpose. 

Abateco urges this Court to interpret the language of the statute 

to mean that each licensed asbestos contractor should be 

inspected only once per year. The argument is not persuasive. 

 When a statute is plain and unambiguous on its face, a court 
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may look only to the words of the statute to determine its 

meaning. Brown v. Lukhard, 229 Va. 316, 321, 330 S.E.2d 84, 87 

(1985). "An ambiguity exists when the language is difficult to 

comprehend, is of doubtful import, or lacks clearness and 

definiteness." Id. The language of Code § 40.1-51.21 contains 

no ambiguity. It states that inspections of licensed asbestos 

contractors must take place "[a]t least once a year." The 

statute contains no words of limitation indicating that only one 

inspection per year is allowed. The plain meaning of the statute 

is that the Department of Labor and Industry must inspect once 

per year, but can inspect more than once per year. 

 Because the subcontract allowed the commissioner to make a 

warrantless search of the workplace and records, and because that 

consent was not effectively revoked, the trial court did not err 

in assessing penalty fines against Abateco for the four willful 

violation citations issued by the commissioner. The penalty 

assessed was not excessive. Accordingly, we affirm the decision 

of the trial court. 

Affirmed.