Court of Appeals Reverses OSHRC in Important Case for Material Storage and Distribution Centers
At issue in the case, Secretary of Labor v. Walmart (2d Cir., Oct. 4, 2022) was the meaning and application of OSHA’s standard on Secured Storage, 29 C.F.R. § 1910.176(b). The standard requires that “[b]ags, containers, bundles, etc. stored in tiers shall be stacked, blocked, interlocked and limited in height so that they are stable and secure against sliding or collapse.”
The question was whether the standard applies when pallets are placed on racks or shelves, as is common in distribution centers (and large box stores), or only when containers or pallets sit directly on top of each other.
OSHA issued a citation for violation of the standard after a Walmart employee working at a distribution center in New York was injured by falling containers of crescent rolls. The accident resulted when a forklift operator retrieving a pallet on the adjoining aisle inadvertently pushed a pallet holding containers of crescent rolls, causing the pallet to tip and containers to fall. The pallets were on storage racks, with pallets placed back-to-back. The pallets were placed on the racks, and not directly upon each other, leaving a space of about 42 inches under each rack.
Walmart contested the citation, and before the Administrative Law Judge argued that the standard did not apply because the material that fell was in the process of being “placed in storage” rather than “stored,” as the standard requires. The ALJ rejected that argument, and held that the standard applied. The ALJ also found that OSHA proved the remaining elements for a violation and upheld the citation.
Walmart appealed, and before the Commission argued, among other things, that the standard did not apply in this case because the materials on the storage racks were not “stored in tiers” as the standard states. The Commission majority agreed with that argument. In the 2 to 1 decision, the Commission held that the standard did not apply because “tiers” require items to be in “layers,” which the majority said, meant that that the items must be directly on top of each other. In this case, the pallets were placed on racks (or shelves), with space under each rack. The Commission therefore found 1910.176(b) did not apply to where pallets are placed on shelves or racks, rather than stacked directly on top of each other.
Since the Commission majority found the standard did not apply, it did not reach the other factors that OSHA must prove to uphold a citation (the terms of the standard were violated, the employer knew or could have known of the violative condition, and one or more employees had access to the cited condition), nor the affirmative defense of employee misconduct that had been raised by Walmart. OSHA appealed the Commission decision to the Second Circuit Court of Appeals. The Court unanimously reversed the Commission on the applicability of the standard, and remanded the case to resolve the remaining factors.
First, the Court disagreed with the Commission’s “cramped definition” of the word “tiers.” In its decision, the Commission cited a definition of “tier” (“a row, rank or layer of articles”) found in Webster’s Third International Dictionary (1971). The Commission then said that the spaces between the racks on which the pallets were placed meant that the pallets were not in “layers.” The Court of Appeals cited definitions of “tier” found in other dictionaries of the same era (The American Heritage Dictionary of the English Language (1969), The Oxford English Dictionary (1971)) which defined “tiers” as items “one above another” but did not limit the word to situations in which “materials [were] stacked on top of each other directly.” The Court also noted that The Oxford English Dictionary explicitly included “shelves” within its definition of “tiers.”
Furthermore, the Court said, under the Supreme Court’s decision in Martin v. OSHRC, 499 U.S. 144 (1991), “[e]ven if we were to find that the Commission’s interpretation was reasonable, the Secretary’s interpretation would prevail, as it is entitled to substantial deference ‘so long as it is reasonable, that is, so long as it sensibly conforms to the purpose and wording of the regulations… We conclude that the Secretary’s competing interpretation of the language of the standard is reasonable.”
In its decision, the Commission majority offered as an illustration of “tiers” a wedding cake which “consists of individual layers that sit directly upon the layer below.” In a footnote, the Court of Appeals observed that the Commission’s example did not hold up: “we note, as the dissenting commissioner did, that even in the Commission’s examples, the tiers stacked on top of each other often include materials in between. For example, a well-made cake will include buttercream between the tiers, for added flavor and stability. And intricate cakes include dowels inside, as well as decorative pillars, for added support.”