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law more palatable to others not exempted. I shall not go into that at

this time.

Now I will forgo further discussion, in the interest of time, in order that you may hear from others. Everybody is in favor of safety and health. No one is more in favor of safety and health than the businessmen who are affected by the law. It is the way they hold down their insurance cost of operation.

They are the best policemen on earth so far as their business is concerned. I am all for standards, for general supervision. But the States are peculiarly well equipped to take care of situations such as may revolve around the small business operator and the nonmanufacturing operator.

I am convinced, Mr. Chairman, that OSHA goes far beyond the realm of necessity and commonsense. It creates a monster which the Congress must do something about.

Mr. HUNGATE. Thank you very much, Mr. Fisher.

Do I understand Mr. Stokes would like to file a statement and be available for questions? Is that correct?

Mr. FISHER. Yes. I have to leave.

Mr. HUNGATE. Are there any questions of Mr. Fisher?

If not, we thank you very much. We certainly appreciate your problem of time.

Without objection, Mr. Stokes, your statement will be made a part of the record at this point, and, if you care to, you may summarize it briefly.

(The statement follows:)

STATEMENT OF MCNEILL STOKES, GENERAL COUNSEL, THE AMERICAN

SUBCONTRACTORS ASSOCIATION

Mr. Chairman and Members of this Subcommittee:

I am McNeill Stokes, General Counsel nationally of the American Subcontractors Association. I am also a graduate Chemical Engineer and the author of the book, "Legal Considerations of Performance of The Occupational Safety and Health Act of 1970", a copy of which accompanies this testimony. The American Subcontractors Association is a national association representing subcontractors in all subcontracting fields. Over 80% of the total construction in the United States is performed by subcontractors and the majority of these subcontractors are small businesses.

We are all for safety, but we are opposed to the onerous enforcement procedures of the Occupational Safety and Health Act of 1970, and the mission of the Department of Labor, which is calculated to penalize employers rather than aid them in promoting a safe and healthy environment for their employees.

The role of the Secretary of Labor and his inspectors under the Act are analogous to all powerful federal policemen who are given the authority to make the laws by regulations and enforce those laws without search warrants. The policemen are empowered to issue citations and self-executing penalties, and the burden is on the citizen to take the offense to appeal the citations and penalties in order to prove himself innocent through a series of long and burdensome appeals. The citizen's only recourse is to appeal to the Occupational Safety and Health Review Commission, which is essentially a police commission sitting in Washington, D.C. Only after a decision by the police commission is a citizen given the right of a limited appeal to an apellate court. There is a "chilling effect" on the employer's right to contest because the Occupational Safety and Health Review Commission has taken the position that it can increase an employer's penalty if he chooses to contest. An election to appeal to a court may be a substantial risk in that a $1.000 per day penalty may accrue for each day that he is appealing.

The entire enforcement procedure of the Act is penal to an employer without affording him the traditional requirements of procedural due process guaranteed by the Fifth Amendment, the right to trial by jury and the right to face his accusers guaranteed by the Sixth Amendment to the United States Constitution. The enforcement procedures have given inspectors unprecedented power, which has subjected employers to the whims and caprices of inspectors in the field who utilize "Big Stick" enforcement through a system of civil penalties which have the same penal effect as criminal fines. The inspectors in the field, armed with the Act's penal sanctions, enforce standards which are practically impossible to comply with. The vague and ambiguous "General Duty Clause" which employers also must comply with provides that "each employer shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or likely to cause death or serious physical harm to his employees." How can the employer tell what this Clause means? It forbids no specific act so an employer can only guess at what are “recognized hazards”. He never really knows the Clause's full scope or what conduct is required of him. What is clear is that employers are subjected to serious penal sanctions for violation of the General Duty Clause, which violations are determined by inspectors who are the ones who determine what recognized safety hazards are. They, and not the courts, will be the judges of how much the employers are penalized. Under the procedures of the Act the inspectors issue citations and penalties which establish an employer's guilt before he is afforded a hearing. The employer then has to undertake the burden of contesting the citation and proposed penalties in an effort to prove himself innocent.

If the "Due Process" clause of the Fifth Amendment and basic fairness mean anything, they mean that a citizen should not have his fine set without a prior hearing and that he should not be saddled with taking the affirmative burden to contest such citations and fines.

One of the cases which our firm is handling involves Beall Construction Company of Lincoln, Nebraska. The Company received a $244 penalty for an alleged violation. Mr. John Beall did not contest the fine because he felt that it was not economically practical for him to hire a lawyer to appeal the citation and proposed penalty through expensive and burdensome appeals. Because he did not contest the citation the basic fine and abatement order set by the inspector in the field became a final adjudication and was not subject to further review by any agency or court. Mr. John Beall then wrote a letter to Senator Carl T. Curtis (Nebraska) supporting his proposed amendments to the Occupational Safety and Health Act. Several months later the Area Director of the Occupational Safety and Health Administration in Omaha, Nebraska, spoke to Mr. Hugh Beall, also of Beall Construction Company and Mr. John Beall's brother, on the telephone accusing him of writing a letter criticizing the Act to Senator Curtis. Approximately 3 days later federal inspectors reinspected the work site and alleged that Beall had not abated the safety violations. Beall was fined $750 per day for each day that the safety violation had not been corrected, which amounted to $31,744, which is a high price to pay for exercising a citizen's constitutional right to communicate with his elected representatives. Mr. Beall must take the offensive to prove himself innocent and contest the daily penalties which as a small businessman he finds economically depressing since the fine is more than double his annual income.

Congress must take steps to remove the yoke of this oppressive Act from the necks of small businessmen and provide that the Occupational Safety and Health Administration and the Occupational Safety and Health Review Commission will serve solely as regulatory agencies whose orders are enforceable in court. The emphasis of negatively penalizing employers should be changed to a positive system aiding employers in providing a safe and healthful working environment for their employees.

Seminars and training sessions are held throughout the country by the Department of Labor to inform employees and representatives of employees of their rights to report employers under the Act but, to my knowledge no seminars or training programs have been held to aid or inform employers on how to comply with the Occupational Safety and Health Act. Employers are penalized under the Act for safety violations committed by their employees regardless of whether the employee disregarded a safety rule of the employer or regardless of whether the employee failed to utilize safety equipment furnished by the employer.

Employers must comply with the safety and health standards which have been promulgated by the Secretary of Labor and have become the "law of the

land". These standards were hurriedly passed, some within a matter of weeks, without any consideration as to their practical, economic or safety effect on employers. The Secretary of Labor incorporated approximately 100,000 safety standards from over 300 "consensus" standards with no adequate investigation into their complexity. To make matters worse many of them have been out of print for years and copies of them are impossible to obtain. For example, the Occupational Safety and Health standards for construction have been out of print for eight months, thus making them unavailable for employers to even know the standards they must comply with. This, however has not impeded Department of Labor inspectors from continuing to issue citations based on these very standards. An unbelievably extensive library would be required of every employer in the United States in order to comply with even the standards applicable to individual employers. Many of the standards appear absurd from a safety or engineering viewpoint. Lance Roofing Company, one of our clients in Atlanta, Georgia, received a citation and proposed penalty for putting ice into direct contact with ice water. As silly as this example seems, it is very serious when you are on the receiving end of penalties assessed by the federal government and are forced to prove yourself innocent.

The cost to employers in the United States to come into compliance with the safety and health standards promulgated under the Act will be staggering. The Secretary of Labor has turned the Occupational Safety and Health Act into a national building code containing the most stringent and unnecessary building code requirements. The Secretary of Labor did not even see fit to include a “grandfather clause" which would exempt existing buildings and, consequently, every commercial building in the United States would have to be substantially modified, at a cost in the hundreds of billions of dollars. Under the present regulations the lighting of almost every building will have to be rewired to comply with the 1971 National Electric Code, even though the buildings complied with applicable local electric codes at the time they were constructed. Nearly every stairwell will have to be modified. All piping will have to be color coded and new heating and ventilating systems will have to be installed. New bathrooms will have to be constructed to comply with the Act's requirement to provide "Mens" and "Ladies" bathrooms, even though they are not needed by the "Moms" and "Pops" who are the only employees of an establishment and who get along just fine with one bathroom at home. Most importantly, existing structures will not comply with the standards for types of building construction and construction materials.

The Department of Transportation in enforcing the National Traffic and Motor Vehicle Safety Act of 1966, promulgated safety regulations and standards for automobiles only after extensive engineering and economic analysis. Each regulation or standard was considered carefully over a period of years before being adopted by the Department. Yet the Department of Labor in an astonishingly short time, passed wholesale safety and health standards affecting every business and practically every building in the United States with no consideration as their practical effects. The standards are so economically burdensome that four and a half million employers cannot comply with them. These employers are law abiding citizens, but many of them are forced to violate the law by not being in compliance with these complex standards. This ultimately has the effect of undermining voluntary conduct and respect for the law, creating an unhealthy

situation.

The Department of Labor should be required to repeal all Occupational Safety and Health standards and to pass new safety standards after a detailed economic evaluation of the impact of those standards upon employers, including the estimated maximum and average cost to each class of employers affected.

Public sentiment against this Act and its enforcement procedures seems to be at the boiling point. The citizens are mad at having to spend large sums of money to comply with ridiculous safety standards, hostile toward the enforcement procedures, which are balanced against an employer's opportunity to contest and frustrated by the unfair procedures allowing inspectors to assess penalties in the field.

I urge this committee to take action to alleviate the plight of employers faced with having to comply with harsh, irrelevant and burdensome safety and health standards promulgated by the Secretary of Labor and abolish the outrageous procedures for enforcement of the Act, which is more intent upon penalizing the employer than on promoting industrial safety.

Mr. STOKES. Thank you, Mr. Chairman. You and the members of the committee have a copy of my book on the Occupational Safety and Health Act which explains some of the onerous procedures as interpreted by the Department of Labor in a little more detail.

I would like to summarize some of the salient points of my prepared statement.

I am general counsel nationally of the American Subcontractors Association. I am a graduate chemical engineer.

We are all for safety but we are opposed to the onerous procedures and the assumed mission of the Department of Labor, both of which have assumed a position calculated to penalize employers, and I think rather than promote industrial safety and health.

The act and its enforcement procedures can be analgized to the role of a Federal policeman, with the chief of police being the Department of Labor, the Secretary of Labor, and the inspectors being Federal policemen, enforcement officers. The chief of police is given authority to pass any law he wants by regulation. These laws that are enforced by penal sanctions are enforced without search warrants. They put a self-executing citation on an employer in the field and forces him to take the burden to prove himself innocent.

Mr. HUNGATE. You say penal sanctions. Can you put somebody in jail for violating the regulations?

Mr. STOKES. Yes, sir, for a willful violation involving death you can. The civil penalties are nothing really more than criminal fines. It makes no difference whether it is a $10,000 civil penalty to the employer who is fined or a $10,000 criminal fine.

Mr. HUNGATE. Is this subject to appeal to the courts?

Mr. STOKES. Yes, sir; it is. You have a tortuous way to get there and during this procedure you may risk certain bankruptcy going that route, because you face a chilling effect of a $1,000-a-day mandatory penalty put on by the Secretary of Labor while you are appealing unless you affirmatively get a stay of the court of appeals.

There has been a case that our firm has been handling in which the three-judge Federal panel in Atlanta, Ga., discussing the constitutionality of this act, specifically treated this and found in their opinion that an employer had a chilling effect that he could risk during a 1-year appeal, $335,000 in fines in electing to appeal to a court of appeals under the act procedures.

Incidentally, the Occupational Safety and Health Review Commission has taken the position that if you choose to appeal they have the authority to increase your penalty which also has a chilling effect on administrative procedures and have done so in several cases.

As you go the court of appeals route, you must comply with the final order of the Commission unless you get a stay from the court of appeals. These stays are not issued routinely. From that point, the Secretary of Labor's operational manual says you shall accrue a mandatory $1,000-a-day penalty while the appeal is pending. An employer should not have to risk bankruptcy in his right to appeal.

Mr. HUNGATE. Does the $1,000 apply whether it is willful or not? Mr. STOKES. Yes, sir. It will not be less than $100 a day for any violation. One of our clients, the Lance Roofing Co., was fined for having ice in ice water. As ludicrous as this example seems, this is very serious

when he is faced with a penalty for this particular thing. I am not talking in the abstract. He has been penalized for it. He must take the offense to get this penalty off by the Federal enforcing procedures. Mr. HUNGATE. Give the facts of that case, briefly.

Mr. STOKES. Lance Roofing Co. is a small roofing contractor in Atlanta, Ga. He was fined. An inspection was made of his premises, the roof where he works, the University in Georgia, and among other things he was involved in a fine for $600. He was also fined for certain petty things such as having ice in ice water. We have done some research and the regulation dates back to approximately the early 1900's where it was in some consensus standards-we are not completely sure-where they were cutting ice out of rivers in the northern part of the country. They passed a health regulation saying don't put ice in contact with it. This is what the Secretary of Labor picked up, wholesale, passing all of the standards affecting literally 100.000 standards that were incorporated into these regulations. Many of them, and I am talking substantial numbers, have been out of print for years. You can't even get copies of these incorporated standards. Mr. CONTE. That sure has a chilling effect.

Mr. STOKES. Yes, sir, Mr. Conte, I would say it did.

Mr. BERGLAND. Are we out of compliance, Mr. Chairman? We have ice in our water.

Mr. HUNGATE. We are not businessmen.

Mr. STOKES. The Federal Government and State agencies are the only ones exempt from this act.

Mr. SMITH. Is this an industry rule that was incorporated?

Mr. STOKES. Apparently it was dating back years ago from some industry rules. The Secretary of Labor just took wholesale any standards without any consideration for their practical effect. They had to do it. The regulations are absurd from a safety engineering or economic point of view. That is one of them.

You have to have split toilet seats rather than round toilet seats. Everybody who still has a round toilet seat is not in compliance with the law. As soon as he passes one of these regulations, it becames the law of the land. How serious are these daily penalties? One example I have is of a client in Omaha, Nebr.

Mr. HUNGATE. Before we leave the roofing company, have you copies of the complaint they filed?

Mr. STOKES. Yes, sir. I furnished it to your counsel already, sir, the briefs. I have with me today the complaint also.

Mr. HUNGATE. I would like for you to file with us a copy of this complaint. I want to be clear.

You said he was fined $600 for something else. Was he fined for the ice in the ice water?

Mr. STOKES. Yes, sir. $8. And he was fined $8 or $25 for other miscellaneous items.

Mr. HUNGATE. We have referred to the time problem, but it would help the committee if you would file with us an original copy of this complaint, including the ice water bit, let's say by July 17. Is that plenty of time?

Mr. STOKES. Yes, sir.

Mr. HUNGATE. I wonder if we ought to have anything further regarding that case. You have the complaint and you say there was

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