OAH Docket No. 7-1901-20455-2

 

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

 

FOR THE DEPARTMENT OF LABOR AND INDUSTRY

 

Steve Sviggum, Commissioner, Department of Labor and Industry,

State of Minnesota,

 

Complainant,

 

vs.

 

Northern Industrial Erectors,

 

Respondent

 

 

 

ORDER ON CROSS-MOTIONS FOR SUMMARY DISPOSITION

 

 

          This matter came before Administrative Law Judge Richard C. Luis on November 23, 2009, at the Office of Administrative Hearings in Saint Paul, Minnesota, pursuant to the parties’ cross motions for summary disposition.  Jackson Evans, Assistant Attorney General, appeared on behalf of the Department of Labor and Industry.  Stephen A. Melcher, Fabyanske, Westra, Hart & Thompson, P.A., appeared for Respondent, Northern Industrial Erectors, Inc.

ORDER

          Based upon all of the files, records, and proceedings herein, and for the reasons set forth in the accompanying Memorandum:

 

          IT IS ORDERED as follows:

 

1.               Complainant’s Motion for Summary Disposition is DENIED.

 

2.               Respondent’s Motion for Summary Disposition is DENIED.

 

3.               This matter has been scheduled for evidentiary hearing from January 12-14, 2010.  In the event that these Motions were denied, the parties have requested Mediation.  This office will issue a Mediation Order as soon as a mediator can be assigned and the mediation scheduled.  The evidentiary hearing dates will remain on the calendar of the undersigned Administrative Law Judge, pending the outcome of the Mediation session(s).

 

 

Dated:  December 7, 2009

 

 

/s/ Richard C. Luis

RICHARD C. LUIS

Administrative Law Judge

 

 

MEMORANDUM

Factual Background

Based upon the submissions of the parties, it is assumed for the purposes of consideration of these motions that the facts in this case are as follows. 

Northern Industrial Erectors, Inc. (hereinafter NIE or Respondent), and Plant Maintenance Inc. (PMI), are both Minnesota corporations with headquarters located at 2500 Glenwood Drive, Grand Rapids, MN.[1]  Both corporations are owned by Stan Bostyancic, who also serves as the president of both corporations.  Derek Bostyancic, Vice President of NIE, is Stan Bostyancic’s son.  NIE was incorporated in 1985. D. Bostyancic Depo. at 6.  PMI was formed in 2000.[2]

In early September, 2006, Derek Bostyancic met with Canadian National (CN)/Duluth, Missabe & Iron Range Railway (DM&IR)(collectively CN/DM&IR) officials to discuss how to complete repairs to Dock #2 at its Two Harbors facility.  Derek Bostyancic continued to communicate with DM&IR and other contractors using his NIE e-mail address.[3]

In a letter to the Minnesota Department of Labor and Industry, CN described the work to be performed at Dock #2.  CN identified NIE as the contractor that would be performing the work. [4]

NIE was hired by CN/DM&IR to make the repairs to Dock #2.[5]  As it had for previous projects, DM&IR contracted with NIE to perform the work and made payment to NIE.[6]  NIE billed DM&IR $67,536.55 for the project, and transferred $45,000 to PMI for the work performed at the worksite.[7]  There was no written subcontractor agreement between NIE and PMI, and NIE retained the profit from the project.[8]

PMI issued paychecks to the workers on the Dock #2 project.  PMI’s payroll reporting was done by NIE’s in-house accountant.[9]  DM&IR required subcontractors to complete site specific safety examinations prior to beginning work.  All the employees on the Dock #2 project identified themselves on their test forms as being employed by NIE, not PMI.[10]

When an NIE customer called for an emergency mine repair, the workers on the Dock #2 project were directed by Derek Bostyancic to stop work on that project and perform the needed repair at the mine.  When one employee on the Dock #2 project experienced difficulties, that employee was directed by Derek Bostyancic to work on an NIE job.[11]

PMI had no equipment of its own at the worksite, but relied on NIE to provide the equipment for project.  Workers on the Dock #2 project used NIE-owned equipment. This equipment included welding equipment, a trailer, personal protective equipment and other various tools. Id. NIE paid for the gasoline used by workers on the Dock #2 project.  The employees on the Dock #2 project used an NIE truck bearing NIE logos. The employees on the worksite wore hardhats bearing NIE logos.  NIE also rented and purchased equipment to be used specifically for the Dock #2 project, including a swing stage scaffold that was used by workers Rathjen and Calaman.  There is no evidence indicating that NIE charged PMI for any equipment used on the Dock #2 project.[12]

On December 6, 2006, while working on the Dock #2 project, Mike Rathjen fell 50 feet to his death.  Rathjen fell from the swing stage scaffold that had been rented by NIE.  The fatality was reported by CN/DM&IR’s safety director, who reported that an ironworker employed by NIE died from a fall.[13]  After the employee died, NIE, not PMI, sent his contact information to DM&IR.[14]

Later on December 6, the Minnesota Occupational Safety and Health Division (“MN OSHA”) the Department of Labor and Industry (Department) initiated a safety and health inspection of NIE’s worksite located at the CN/DM&IR Dock #2 in Two Harbors, Minnesota, in response to the report of a fatality.[15]  Department Occupational Safety and Health Investigator Niki Harriman inspected the Dock #2 facility.  The inspection began with an opening conference.  During the inspection, two employees on the work site, Calaman and Godbout, identified themselves as being employed by NIE in tape recorded statements.[16]  One employee, Godbout, indentified NIE as being the employer on for Dock #2 project on the forms for the weekly safety talks.[17]   Inspectors returned to the worksite on December 13, 2006, to examine the highest level of the dock.  No further visits to the worksite were conducted by inspectors after December 13, 2006.

In addition to the December 6 and 13 site vists, the investigator also conducted interviews of persons who witnessed the incident and persons with knowledge about the equipment used by the workers on December 6, 2006.  The investigator conducted these interviews at various locations between Duluth/Superior and Tofte, Minnesota.  These interviews took place between December 8, 2006 and January 12, 2007.  The investigator conducted a closing conference with Derek Bostyancic and Duane  Godbout on May 29, 2007.[18]

The investigator prepared an inspection report following the closing conference.  In the inspection report, the investigator recommended that the Department issue citations to NIE (d/b/a PMI) for numerous violations of 29 C.F.R. 1926.20, .21, .106, .451, .501, .502, and .1051 (2006) based on their determination that employees were not using adequate fall protection equipment when working on the swing scaffolding at the Dock #2 project.[19]

On June 22, 2007, the Department issued a Citation and Notice of Penalty to NIE arising out of the December 6, 2006 incident and subsequent inspection.  Two citations related to wilfull failure to provide fall protection at the swing scaffold were cited and a penalty assessed at $31,500 each.  Six citations related to serious failure to provide protective equipment and safety training were cited and penalties assessed at $4,500 each.  Three citations related to serious failure to provide protective equipment and assessed no penalty.  The company name listed on the citation was “Northern Industrial Erectors, Inc. dba Plant Maintenance, Inc.”  The citation identified the inspection date as “12/06/2006 – 05/29/2007.” [20]

On October 12, 2007, the Department issued a Citation and Notice of Penalty to DM&IR arising out of the December 6, 2006 incident and subsequent inspection.  Two citations related to wilfull failures to provide fall protection at the swing scaffold were cited and penalties were assessed at $35,000 each.  Six citations related to serious failures to provide protective equipment and safety training were cited and a penalty assessed at $5,000 each.  Two citations related to serious failures to provide protective equipment were assessed no penalty. [21]

On December 5, 2008, the Department issued a Citation and Notice of Penalty to PMI arising out of the December 6, 2006 incident and subsequent inspection.  Two citations related to serious failure to provide fall protection at the swing scaffold were cited and a penalties were assessed at $25,000 each.  Two citations related to willful failures to provide protective equipment and safety training were cited and penalties were assessed at $7,000 each.  Seven citations related to serious failures to provide protective equipment and safety training were cited and penalties were assessed at $1,000 each.  Three citations related to serious failures to provide protective equipment and training were assessed no penalty. [22]

NIE filed its Notice of Contest to the Citation on July 12, 2007.  In that document, NIE listed Derek Bostyancic as the individual who would act as the “Employer Representative.”  Derek Bostyanic signed the Notice of Contest and gave his title as “P.M.”[23]  Derek Bostyanic also identified his role with PMI as “project manager/superintendent.”[24]

The Department served NIE with a Summons and Complaint relating to the citations at issue in this case on October 9, 2007.  Service was performed by U.S. Mail addressed to Derek Bostyancic, Northern Industrial Erectors d/b/a Plant Maintenance.  NIE served an Answer to the Complaint on November 1, 2007, in which it denied the allegations regarding the relevant citations and asserted a number of affirmative defenses.[25]   This contested case proceeding was initiated on April 10, 2009..

The parties subsequently filed cross motions for summary disposition, and presented written and oral argument on the motions.  The Department has moved for partial summary disposition on the issue of whether NIE is responsible under OSHA as the employer of the workers at the Dock #2 project.  NIE has moved for summary disposition contending it is not the employer as a matter of law, and that the matter should be dismissed for procedural defects in service of several pleadings.

Legal Standard for Summary Disposition

          Summary disposition is the administrative equivalent to summary judgment.[26]  Summary judgment is appropriate when there is no genuine issue of material fact and a party is entitled to judgment as a matter of law.[27]  A genuine issue is one that is not a sham or frivolous, and a material fact is one which will affect the outcome of the case.[28]  The Office of Administrative Hearings has generally followed the summary judgment standards developed in judicial courts in considering motions for summary disposition regarding contested case matters.[29] 

The moving party must demonstrate that no genuine issues of material fact exist.[30]  If the moving party is successful, the nonmoving party then has the burden of proof to show specific facts are in dispute that can affect the outcome of the case.[31]  It is not sufficient for the nonmoving party to rest on mere averments or denials; it must present specific facts demonstrating a genuine issue for trial.[32]  When considering a motion for summary judgment, the Judge must view the facts in the light most favorable to the non-moving party.[33]  All doubts and factual inferences must be resolved against the moving party.[34]  If reasonable minds could differ as to the import of the evidence, judgment as a matter of law should not be granted.[35]

NIE as Actual Employer or Controlling Employer

          Employers in Minnesota are required to comply with the occupational safety and health standards and rules promulgated under the Minnesota Occupational Safety and Health Act (MN OSHA).[36]  The Act defines “employer” as “a person who employs one or more employees [including] any person who has the power to hire, fire, transfer, or who acts in the interest of, or a representative of, an employer . . . .”[37]  “Employee” is defined as “any person suffered or permitted to work by an employer, including any person acting directly or indirectly in the interest of or as a representative of, an employer . . . .”[38]

NIE asserts as an affirmative defense that PMI was the employer of the workers at the Dock #2 worksite.  NIE’s factual support for this contention is the documentary evidence of PMI paying the workers and statements of the workers involved obtained after this litigation commenced.[39]  The Department notes that the workers’ statements are contradictory in that they often named NIE as their employer prior to the commencement of this litigation.  The Department maintains that, under Federal precedents, the undisputed factual situation supports a conclusion that NIE was the actual employer of the workers nominally employed by PMI at the Dock #2 worksite on December 6, 2006.  Guidance on how to address issues of this sort was provided in a recent federal case which held:

The Supreme Court has assisted with this kind of definition by holding that where a statute contains no other provision that either gives specific guidance to the meaning of the term ‘employee’ or suggests that the common law definition is inappropriate, we must presume that congress intended to incorporate traditional principles of agency law. Loomis Cabinet Company v. O.S.H.R.C., 20 F.3d 938, 941 (9th Cir. 1994) citing National Mutual Ins. Co. v. Darden, 503 U.S.318, 112 S. Ct. 1344 (l992).

The Department notes that traditional employment law concepts have been used in OSHA cases to determine whether an employment relationship exists.  As expressed in an OSHA decision:

A key consideration in determining whether Respondent was the actual employer of particular workers is whether it had the right to control the manner and means by which they carried out their work. The Commission considers a number of factors when making such a determination, including the following:

1) Whom do the workers consider their employer?

2) Who pays the workers’ wages?

3) Who has the responsibility to control the workers?

4) Does the alleged employer have the power to control the workers?

5) Does the alleged employer have the power to fire, hire, or modify the employment condition of the workers?

6) Does the workers’ ability to increase their income depend on efficiency rather than initiative, judgment, and foresight?

7) How are the workers’ wages established?[40]

The details of the relationship are important to determining the actual employer of workers.  The U.S. Supreme Court set out some of the details to examine as follows:

Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party’s discretion over when and how long to work; the method of payment; the hired party’s role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party.[41]

These principles have been used by an ALJ to resolve the question of who is the actual employer in a matter brought by the Department.[42]  The Department asserts that applying these principles to the facts in this matter, NIE is clearly the employer of the workers at the Dock #2 worksite.

NIE disputed the applicability of the precedent cited by the Department and the factual basis for its argument.  NIE noted that the Department has the burden of proof to show that NIE was the “actual employer.”[43]  Regarding the Department’s showing demonstrated under those factors, NIE maintained that:

Even assuming for purposes of argument that at least some of the factors listed in the cases cited by the Commissioner would be pertinent to an inquiry into whether Northern was the “actual employer,” the Commissioner has failed to meet its burden of establishing that, as a matter of law, the answer to that question is that Northern was the workers’ “actual employer.”[44]

An alternative argument advanced by the Department is that NIE was the “controlling employer” and thereby subject to penalties under OSHA.  Under this approach:

In case law developed under the federal OSHA, the federal Occupational Safety and Health Review Commission and federal courts have recognized two situations in which an employer on a multi-employer construction site may be properly cited for occupational safety and health violations that do not result from the exposure of the employer’s own workers to a hazard. In the first situation, an employer may be responsible for a federal OSHA violation if the employer creates or controls the hazard. Red Lobster Inns, 1980 O.S.H. Dec. (CCH) 24,636, at 30,220 (Rev. Comm’n July 18, 1980). Under the second scenario, an employer may be responsible for violations of other employers when it could reasonably be expected to have prevented or abated the violations due to its supervisory authority and control over the worksite. Id.[45]

The Department noted that use of the controlling employer standard in OSHA liability cases occurs typically in cases involving interactions between a general contractor and subcontractors on the same construction site.[46]  Noting that general contractors have been held liable for federal OSHA violations under this approach, the Department attributed the basis for this liability on the general contractor’s ”responsibility and means to ensure that subcontractors on the same worksite comply with any occupational safety and health regulations that may apply to them.”[47]  The Department contends that NIE should be found responsible in this matter because “NIE exercised sufficient authority over the workers on the CN/DM&IR project that it could reasonably be expected to have prevented or abated the hazards.”[48]

NIE notes that PMI paid the workers’ wages, union dues, withholding taxes, employer payroll taxes (including federal and state unemployment taxes), social security and medicare taxes, union fringe benefits, and workers’ compensation insurance premiums.[49]  From these facts, NIE contends that PMI has been demonstrated to the workers’ employer, not NIE.

While NIE has disputed the applicability of the cases cited by the Department, there remains the very recent decision from the U.S. Court of Appeals for the Eighth Circuit, in which the court unequivocally held that an employer cannot avoid responsibility under OSHA by subcontracting work to another entity, stating:

Summit contends that the regulation requires the employer to protect only “his employees.” Because the creating employer, correcting employer and controlling employer citation policies permit OSHA to issue citations to employers when their own employees are not exposed to the hazard, Summit’s reading of § 1910.12(a) effectively precludes these policies and only permits the exposing employer citation policy.  Summit cannot provide and we cannot envision a situation where the protection of a “place of employment” will not be directly related to or encompassed by the protection of “employment.” To give some independent meaning to the term “place of employment” would require the employer to protect others who work at that place of employment so long as the employer also has employees at that place of employment.  Therefore, we reject Summit’s interpretation and conclude that § 1910.12(a) is unambiguous in that it does not preclude OSHA from issuing citations to employers for violations when their own employees are not exposed to any hazards related to the violations.[50]

NIE argues that the holding in Summit Contractors only pemits a finding of controlling employer where that employer has at least one employee on the worksite.  NIE contends that it never had any employees on the Dock #2 project.  Assuming that the legal conclusion is corrrect, this contention requires that the ALJ infer that Derek Bostyancic, the self-described project manager for both NIE and PMI, was not actually an employee of NIE when he was present at the worksite.  NIE is not entitled to such an inference to support its motion for summary disposition.

NIE and the Department dispute whether NIE subcontracted the work to Plant Maintenance Inc. (“PMI”).  The Department notes that there was no written subcontractor agreement between NIE and PMI, and NIE earned the profit from the project.[51]  NIE billed DM&IR $67,536.55 for the project, but transferred only $45,000 to PMI for the work performed at the worksite.[52]

The foregoing arrangement raises genuine issues as to whether PMI was an actual subcontractor or merely NIE itself, doing business as PMI.  In the event that there is support for finding PMI to be a separate entity, the nature of the arrangement raises genuine issues as to whether NIE was a controlling entity that is not precluded from responsibility for the worksite under the holding in Summit Contractors.

While the Department has amassed a substantial weight of evidence in support of its motion for partial summary disposition as to whether NIE was the actual employer or sufficiently in control of the worksite to support the citations, the ALJ must take every inference in favor of NIE as the nonmoving party.  By this low standard, NIE has shown that genuine issues of material fact remain on this issue.  For this reason, the Department’s motion is denied.

Timing of Citation of NIE

NIE contends that the Department failed to issue the Citation in this matter within the time required by law.  The applicable provision states, “The commissioner shall, with reasonable promptness and in no event later than six months following the inspection, issue a written citation to the employer by certified mail.”[53]  To support this argument, NIE points out that the last visit to the worksite where the worker died was conducted on December 13, 2006.  The Citation was issued on June 22, 2007.

The Department disputes NIE’s contention, maintaining that the inspection is not limited to the worksite visit and that the Citation was issued in a timely fashion from the actual conclusion of the inspection.

NIE has cited no case to support its contention that the visit to the worksite constitutes the entirety of the “inspection” conducted by the Department.  Conducting interviews of witnesses and examining equipment that was involved in an incident are all activities that are part of the inspection process.

An OSHA inspection begins with an opening conference, which was conducted on December 6, 2006 in this matter.  The inspection ends with a closing conference.  In this matter, the closing conference was conducted on May 29, 2007.  These dates were listed on the Citation issued to NIE as the period over which the inspection occurred.[54]  The Citation was issued within the time period required under the statute. 

Exposure of Employees to Hazard

As part of its motion for summary disposition, NIE contends that the Department improperly issued the Citation since NIE did not employ anyone at the worksite, and had no employees exposed to any hazards that are alleged to have existed at the worksite.  NIE contends that:

Since Northern [NIE] had no employees at the Worksite, Northern clearly could not have created the hazard nor had sufficient control of the Worksite to abate or require others to abate the hazard. Thus, the Commissioner cannot even satisfy its own test for application of the “controlling employer” policy.[55]

NIE’s argument relies on inferences from the facts taken in NEI’s favor.  Those inferences must be taken in favor of the Department when analyzing NIE’s motion.  As more fully discussed above, genuine issues of material fact exist as to whether the employees at the worksite were employed by NIE and, if not, whether NIE is a controlling employer.  Summary disposition is inappropriate on this issue.

Effective Service of Complaint on NIE

NIE contends that the Department failed to timely serve the Complaint in this matter.  The applicable provision states, “The commissioner shall serve a complaint on all parties no later than 90 calendar days after receiving a notice of contest.”[56]  The Commissioner received the notice of contest on July 12, 2007 (see Complaint ¶9).  NIE calculates the 90-day deadline as requiring service of the Complaint by October 10, 2007.  NIE maintains that the mailing the Complaint on October 9, 2007, to Derek Bostyancic at NIE’s address was not valid service on NIE.

NIE maintains that service must comply with Minn. Stat. § 302A.901, Subd. 1, which states:

Who may be served. A process, notice, or demand required or permitted by law  to be served upon a corporation may be served either upon the registered agent, if  any, of the corporation named in the articles, or upon an officer of the corporation, or upon the secretary of state as provided in section 5.25.

At the time of service, NIE lacked a registered agent.  Until mid-February 2008, NIE’s only officer was its president, Stanley Bostyancic.[57]  For this reason, NIE contends that service of the Complaint on Derek Bostyancic was not effective service on NIE.

The Complaint was served by U.S. Mail.  NIE maintains that service of the Summons and Complaint in this contested case is not authorized to be made by mail.  NIE argues that this contested case proceeding is equivalent to a civil action, where the proceeding must be commenced by personal service of the Summons and Complaint.  Only after the Complaint has been filed with proof of that personal service can subsequent pleadings and other documents that are filed in the case be served by mail upon the party or its legal representative.[58]

In the event that service of the Complaint is found to be proper by U.S. Mail, NIE argued that the service was not timely, stating:

When mail is used for the purpose of accomplishing service of document in litigation, the presumption is that the document is received no sooner than three days after depositing the document in the mail, see, e.g., Minn. R. 1400.6100, Subp. 2, and when a state agency chooses to utilize the Department of Administration’s Central Mailing Section the presumption is that the document is received four days after depositing the document in the mail, id. The Commissioner made no effort (such as using certified mail and requesting a return receipt) to ensure that the Summons and Complaint was timely received. The Commissioner merely placed the Summons and Complaint in the Commissioner’s normal office mail. As a result, the Summons and Complaint was not received until October 11, 2007 (see Affid. of Derek Bostyancic, ¶ 2), which is after the October 10 deadline for effective service. Thus, the attempted service was also defective because it was untimely.[59]
 

The Department asserts in response the citation was timely, and the service of process was properly performed.[60]  In addition, the Department maintained that NIE had waived these arguments by failing to make them sooner.[61]

Service of process in these matters is governed by Minn. Rule 5210.0551 which states:

Subpart 1.  Parties and intervenors.  At the time of filing pleadings or other documents, a copy must be served by the filing party on every other party.

Subp. 2.  Representatives.  Service on a party who has appeared through a representative need only be made on the representative.

Subp. 3.  Methods of service.  Unless otherwise ordered, service may be made by postage prepaid first class mail or personal delivery according to part 5210.0007, subpart 1.

Subp. 4.  Proof of service; filing.  Service must be certified by a written statement that states the date and manner of service. The statement must be signed by the person accomplishing service, and it must be filed with the pleading or document.

The terms of Minn. Rule 5210.0551, subp. 2, dispose of NIE’s assertion that service was not made on the appropriate person.  NIE appeared in the earlier portions of the OSHA enforcement process through Derek Bostyancic.  NIE’s designated representative on its Notice of Contest is Derek Bostyancic.[62]  By virtue of that appearance, he is the appropriate person to receive service of the Summons and Complaint.

NIE’s contention that the Summons and Complaint cannot be served by U.S. Mail is contradicted by Minn. Rule 5210.0551, subp. 3, which expressly permits service by “postage prepaid first class mail or personal delivery according to part 5210.0007, subpart 1.”  While NIE argues that the Summons and Complaint are somehow different from other pleadings, there is no basis for going beyond the plain language of the rule.  Service by U.S. Mail is expressly permitted for all pleadings, absent a specific provision to the contrary.

As to timely service, NIE calculated the deadline for service as October 10, 2007.  Minn. Rule 5210.0551, subp. 3, requires that service be accomplished in accordance with the standards set by Minn. Rule  5210.0007.  According to that rule:

Subpart 1. Filing by mail and personal delivery.  Filing of documents required by this chapter or Minnesota Statutes, chapter 182, may be accomplished by postage prepaid first class mail or personal delivery. Filing is timely if the document is deposited in the United States mail and postmarked within the time fixed for filing. Filing is effective on the postmark date or the date of personal delivery.

The rule expressly establishes “postmark filing” as the standard for determining timeliness.  There is no dispute that the Summons and Complaint was placed in the U.S. Mail, postage prepaid, on October 9, 2007.  By the standard set by the applicable rule, service of the Summons and Complaint on NIE was timely.

The issue of timeliness of complaints has arisen before in OSHA matters.  Absent a showing of prejudice by the employer or a showing of contumacious conduct by the agency, dismissal is inappropriate for demonstrated failure to meet procedural deadlines.[63]  There has been no showing by NIE of prejudice arising from any perceived procedural error.  The is no evidence that the Department has in any way failed to diligently pursue this matter.  Even if any of the procedural arguments advanced by NIE had any factual basis (and they do not), dismissal of the Complaint would not be appropriate.

Summary

There is significant evidence that the Dock #2 project was contracted for and directed by NIE.  There is significant evidence that the employees working on the Dock #2 project were actually employed by NIE.  There is some evidence that PMI employed the workers.  Due to this conflict in the evidence, the Administrative Law Judge concludes that genuine issues of material fact remain for hearing regarding whether these employees were, in fact, employed by NIE or if NIE controlled the worksite.  For these reasons, both the Department’s and NIE’s motions for summary disposition on this issue must be denied.  NIE’s motions to dismiss for claimed procedural errors are not supported by the facts and are denied.  With the denial of these motions, it is appropriate that this matter proceed to hearing, unless resolution is accomplished by mediation.

R.C.L.



[1] See Affidavit of Jackson Evans, Exs. Q and R.

[2] Evans Affidavit, Ex. S, D. Bostyancic Deposition. at 6 and 21.

[3] Evans Affidavit, ¶ 13, Exs. L.and S, D. Bostyancic Deposition. at 21 and 40;

[4] Evans Affidavit, Exhibit J.

[5] Harriman Affidavit, Ex. 2 at 4.

[6] Evans Affidavit,  5, 12; Ex. D, K, Purchase Order.

[7] See Evans Affidavit, ¶¶ 4, 5; Ex. C, PMI bank records; Ex. D, NIE invoices.

[8] See Evans Affidavit, ¶ 3, Ex. B, Doc. Req. No. 16.

[9] Evans Affidavit, Ex. S, D. Bostyancic Depo., at 52-53.

[10] Evans Affidavit, ¶ 6, Ex. E, Course Exercises.

[11] Evans Affidavit, Ex. S, D. Bostyancic Depo. at 78.

[12] Evans Affidavit, ¶¶ 16-17, Ex. P, Invoices, Ex. O, Answer to Interrog. Nos. 15 and 17, Ex. T, Godbout Depo. at 89-90.

[13] Harriman Affidavit., Ex. 2 at 3, 6.

[14] See Evans Affidavit, ¶ 15, Ex. N.

[15] Harriman Affidavit, ¶ 3, Ex. 2. 

[16] See Evans Affidavit, ¶¶  7-8, Exs. E and F. 

[17] Evans Affidavit, ¶ 9, Ex. H. 

[18] Melcher Affidavit, Attachment 1.

[19] Melcher Affidavit, Attachment 1.

[20] Evans Affidavit, Exhibit 1.

[21] Melcher Affidavit, Attachment 1.

[22] Melcher Affidavit, Attachment 1.

[23] Evans Second Affidavit, Ex. A.

[24] D. Bostyancic Affidavit, ¶ 1.

[25] The Summons, Complaint, and Answer are attached to the Notice and Order for Prehearing Conference that was filed in this matter.

[26] Minn. R. 5500 (K) (2002).

[27] Minn. R. Civ. P. 56.03 and Minn. R. 5500 (K) (2002).

[28] Highland Chateau v. Minnesota Dep’t of Pub. Welfare, 356 N.W.2d 804, 808 (Minn. App. 1984), rev. denied (Minn. February 6, 1985).

[29] Minn. R. 1400.6600.

[30] Theile v. Stich, 425 N.W.2d 580, 582 (Minn. 1988).

[31] Highland Chateau, 356 N.W.2d at 808.

[32] Minn. R. Civ. P. 56.05.

[33] Ostendorf v. Kenyon, 347 N.W.2d 834 (Minn. App. 1984).

[34] Thiele v. Stich, 425 N.W.2d 580, 583 (Minn. 1988).

[35] Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-51 (1986).

[36] Minn. Stat. § 182.653, subd. 3. 

[37] Minn. Stat. § 182.651, subd. 7.

[38] Minn. Stat. § 182.651, subd. 9.

[39] Affidavit of Traci Cramer.

[40] Slingluff v. O.S.H.R. C., 425 F.3d 861 (10th Cir. 2005) citing Secretary of Labor v. Vergona Crane Co., 15 O.S.H. Cas. (BNA) 1782, 1992 WL 184539 at *2 (O.S.H.R.C.).

[41] Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 322-23 (1992).

[42] Gary W. Bastian, Commissioner, Department of Labor and Industry, State of Minnesota, v. Mike Jensen, OAH Docket No. 11-1900-11328-2 (ALJ Order Granting Summary Disposition issued January 6, 1998)(http://www.oah.state.mn.us/aljBase/19011328.sd.htm).

[43] Sec’y of Labor v. Don Davis, 19 O.S.H. Cas. (BNA) 1477, 2001 WL 856241 (O.S.H.R.C.) (Secretary has burden of establishing the employment relationship) citing Sec’y of Labor v. Timothy Victory, 18 O.S.H. (BNA) 1023, 1997 WL 603003 (O.S.H.R.C.).

[44] NIE Memorandum in Opposition, at 4.

[45] Bastian v. Carlton County Highway Dept., 555 N.W.2d 312, 316 (Minn. Ct. App. 1996).

[46] Department Memorandum in Support at 11-12.

[47] Bastian v. Carlton County Highway Dept., 555 N.W.2d 312, 316 (Minn. Ct. App. 1996) citing Marshall v. Knutson, 566 F.2d 596, 599 (8th Cir.l977); Gil Haugan, 1979 O.S.H. Dec. (CCH) ¶ 24,105, at 29,290 (Rev. Comm’n Dec. 20, 1979). 

[48] Department Memorandum in Support at 12.

[49] Affidavit of Traci Cramer, ¶ 2-3 and Exhibits 4 and 5.

[50] Solis v. Summit Contractors, Inc., 558 F.3d 815 (8th Cir. 2009).

[51] See Evans Affidavit., ¶ 2, Ex. A, Response to Int. No. 2, ¶ 3, Ex. B, Doc. Req. No. 16.

[52] See Evans Aff., ¶ 4,5; Ex. C, PMI bank records; Ex. D, NIB invoices.

[53] Minn. Stat. § 182.66, subd. 1.

[54] Evans Affidavit, Exhibit 1.

[55] NIE Memorandum in Support, at 5.

[56] Minn. Stat. § 182.661, subd. 6; see also Minn. R. 5210.0570, subps. 1 and 3.

[57] S. Bostyancic Affidavit, at 1.

[58] NIE Memorandum in Support, at 6.

[59] NIE Memorandum in Support, at 7-8.

[60] Department Memorandum in Opposition, at 4-6.

[61] Id. at 7.

[62] Second Evans Affidavit, Exhbiit A.

[63] Gary W. Bastian, Commissioner, Department of Labor and Industry, State of Minnesota, v. J & L Schwieters, Construction, Inc., OAH Docket No. 8-1901-11335-2 (ALJ Order Denying Motion to Dismiss issued November 3, 1997)(http://www.oah.state.mn.us/aljBase/190111335.or.htm )(citing Asarco, Inc., Hughes Tool Co., 1980 OSHD 24,838 (Rev. Comm. 1980) and Secretary v. Piping of Ohio, Inc., 16 OSH Cas. (BNA) 1236, 1993-1995 OSHD ¶ 30,028 (Rev. Comm. 1993), aff’d, 25 F.3d 1049 (6th Cir.), cert. den. 513 U.S. 1016 (1994).