                           ___________

                           No. 95-2194
                           ___________

Valdak Corporation,             *
                                *
                 Petitioner,    *
                                *
     v.                         *   On Petition for Review of a
                                *   Decision by the Occupational
Occupational Safety and Health *    Safety and Health Review
Review Commission; The Secretary*   Commission.
of the United States Department *
of Labor,                       *
                                *
                Respondents.    *


                           ___________

                  Submitted:   November 13, 1995

                      Filed: January 22, 1996
                           ___________

Before HANSEN, JOHN R. GIBSON and MURPHY, Circuit Judges.

                           ___________


JOHN R. GIBSON, Circuit Judge.


     Valdak Corporation appeals from an Occupational Safety and
Health Review Commission decision finding Valdak in willful
violation of the Occupational Safety and Health Act, 29 U.S.C.
§§ 651-678 (1994). After a fifteen-year-old employee's arm was
amputated when he stuck his arm in a spinning industrial dryer, the
Secretary of Labor cited Valdak for a willful violation of an OSHA
machine guarding standard, and assessed a $28,000 penalty. Valdak
appeals, arguing that: (1) there is no substantial evidence to
support a finding that Valdak committed a willful violation of the
Act; and (2) the Commission abused its discretion in assessing the
penalty.   We affirm.


     Valdak operates a car wash in Grand Forks, North Dakota.
Valdak used a machine known as an industrial centrifuge extractor
to spin dry towels for use at the car wash. The extractor had a
warning:   "NEVER INSERT HANDS IN BASKET IF IT IS SPINNING EVEN
SLIGHTLY." The extractor was also equipped with an interlocking
device to prevent the lid from being opened while the container
inside was still spinning. The interlocking device did not work
all the time, and was not working on November 7, 1992. On that
day, fifteen-year-old Joshua Zimmerman, who was on his third day on
the job at the car wash, stuck his arm in the extractor while it
was spinning. His arm was severed above the elbow. Fortunately,
doctors were able to reattach his arm.


     Following an inspection by Occupational Safety and Health
Administration compliance officers, OSHA cited Valdak for three
violations of the Act.1 The Secretary concluded that the violation
of the machine guarding standard2 was willful and proposed a
$28,000 penalty. Valdak filed a notice contesting the finding of
a "willful" violation and the $28,000 penalty.


     After a hearing, the administrative law judge affirmed the
citation for a willful violation of the machine guarding standard.
The judge concluded, however, that the $28,000 penalty was
excessive, and assessed a $14,000 penalty.


     The   Review   Commission   granted   Valdak's   petition   for


    1
     Valdak has only appealed the citation for a willful violation
of the machine guarding standard.
    2
     29 C.F.R. section 1910.212(a)(4)(1995) provides: "Revolving
drums, barrels, and containers shall be guarded by an enclosure
which is interlocked with the drive mechanism, so that the barrel,
drum, or container cannot revolve unless the guard enclosure is in
place."

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discretionary review. The Commission affirmed the citation for a
willful violation of the machine guarding standard, and reinstated
the $28,000 penalty. Valdak appeals.

                                I.


     Valdak first argues that there is no substantial evidence to
sustain a citation for a willful violation of the Act.


     The Commission's finding of willfulness is conclusive if
supported by substantial evidence on the record as a whole. 29
U.S.C. § 660(a); Western Waterproofing Co. v. Marshall, 576 F.2d
139, 142 (8th Cir.), cert. denied, 439 U.S. 965 (1978). To support
a finding of willfulness, there must be substantial evidence that
Valdak intentionally disregarded or was plainly indifferent to the
requirements of the Act. Id. Valdak contends that this standard
requires a higher degree of intent, specifically proof that Valdak
"flaunted" or "obstinately refused to comply" with the requirements
of the Act.


     Valdak argues there is no substantial evidence to support a
willful violation because Valdak had no actual or constructive
knowledge of the Act's requirements. Valdak asserts that before
the Zimmerman accident, it had never received a citation for a
violation of the Act and had never experienced a similar accident.
Valdak also relies on the testimony of its employees and owners who
stated that they did not believe the machine was dangerous, and
that Joshua Zimmerman was injured because he recklessly stuck his
arm in the extractor.


     Valdak's claimed ignorance of the OSHA standard does not
negate a finding of willfulness.    Willfulness can be proved by
"plain indifference" to the Act's requirements.      See Western
Waterproofing, 576 F.2d at 142-43; Georgia Elec. Co. v. Marshall,
595 F.2d 309, 319 (5th Cir. 1979).     Plain indifference to the

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machine guarding requirement is amply demonstrated by the facts
that the dryer was equipped with an interlocking device, the
interlocking device did not work, and Valdak continued to use the
dryer with the broken interlock device.           An employer who
substitutes his own judgment for the requirement of a standard or
fails to correct a known hazard commits a willful violation even if
the employer does so in good faith. Western Waterproofing, 576
F.2d at 143; accord Reich v. Trinity Indus., Inc., 16 F.3d 1149,
1153-54 (11th Cir. 1994) (showing of bad purpose not required to
prove willfulness).


     We also reject Valdak's argument that the Secretary must prove
that Valdak knew of the Act's requirements, and "flaunted" or
"obstinately" refused to comply.    It is well settled that this
circuit has defined willfulness as an act done voluntarily with
either an intentional disregard of, or plain indifference to, the
Act's requirements. See, e.g., Donovan v. Mica Constr. Co., 699
F.2d 431, 432 (8th Cir. 1983); St. Joe Minerals Corp. v.
Occupational Safety & Health Review Comm'n, 647 F.2d 840, 846 (8th
Cir. 1981); Western Waterproofing, 576 F.2d at 142-43. We rejected
the Third Circuit's definition of willfulness, requiring an
"element of obstinate refusal to comply," in Western Waterproofing
Co., 576 F.2d at 143.


     Similarly, Valdak's argument that there can be no willfulness
because the accident was caused by a reckless act is fully answered
by the Commission's findings that Valdak did not have a work rule
that effectively implemented the requirements of the standard. To
establish the defense of unforeseeable employee misconduct, Valdak
must prove that it had a work rule in place which implemented the
standard, and that it communicated and enforced the rule. "[T]he
proper focus in employee misconduct cases is on the effectiveness
of the employer's implementation of its safety program . . . ."
Brock v. L.E. Meyers Co., 818 F.2d 1270, 1277 (6th Cir.), cert.
denied, 484 U.S. 989 (1987). See Danco Constr. Co. v. Occupational

                               -4-
Safety & Health Review Comm'n, 586 F.2d 1243, 1246-47 (8th Cir.
1978). Valdak did not have a rule prohibiting employees from using
the extractor if the interlocking device was inoperative. Indeed,
there is evidence not only that employees opened the extractor
while it was still spinning, the car wash manager knew about this
practice.


     In light of this evidence, Valdak's claim of concern for
employee safety cannot negate a finding of willfulness.       If an
employer knowingly permits a serious hazard to exist, it has acted
willfully even if the workplace is otherwise safe.      See, e.g.,
Western Waterproofing, 576 F.2d at 143-45. Moreover, the record
does not support Valdak's claim that it exhibited a high regard for
employee safety. In addition to the problems detailed above with
the extractor, Valdak had no formal safety programs or written
safety manuals. See Danco Constr. Co., 586 F.2d at 1247 (employer
cannot fail to properly train and supervise its employees and then
hide behind its lack of knowledge concerning their dangerous
working practices).     This lack of training is particularly
troubling because Valdak's workforce consisted primarily of young
and inexperienced employees. Although receipt of a prior warning
from OSHA may be a factor in determining if willfulness exists, a
prior warning is not a necessary condition to finding willfulness.
National Steel and Shipbuilding Co. v. Occupational Safety and
Health Review Comm'n, 607 F.2d 311, 317 (9th Cir. 1979).       Cf.
Donovan, 699 F.2d at 433 (prior accident would be strong and
perhaps conclusive evidence of willfulness).


     There is substantial evidence to support the finding that
Valdak's violation of the machine guarding standard was willful.

                               II.


     Valdak next argues that the Commission abused its discretion
in increasing the penalty to $28,000.

                               -5-
     In assessing civil penalties, the Commission considers: the
size of the employer's business; the gravity of the violation; the
good faith of the employer; and the history of previous violations.
29 U.S.C. § 666(j).


     The Commission based its assessment on findings that: Valdak
has 125 employees and is "a relatively small company;" the gravity
of the violation is high; and Valdak lacked good faith because of
its failure to adequately supervise its employees and to maintain
the interlock system.


     Valdak disputes each of these findings. It argues that since
the citation only involved Valdak's car wash business, the
Commission should assess the penalty based only on the thirty to
fifty car wash employees. It also argues that the gravity of the
violation is low because it was Joshua Zimmerman's deliberate and
reckless act which caused his injury, not Valdak's indifference to
safety. Valdak also contends that it is entitled to credit for
good faith because it took immediate corrective measures even
before the OSHA inspection, and had made plans to replace the
extractor well before the accident. Finally, Valdak contends that
the Commission failed to reduce the penalty based on Valdak's prior
clean record with OSHA.


     We will not disturb an agency's sanction unless it is
unwarranted in law or without justification in fact. Valkering,
U.S.A., Inc. v. United States Dep't of Agriculture, 48 F.3d 305,
309 (8th Cir. 1995) (citing Butz v. Glover Livestock Comm'n Co.,
411 U.S. 182, 185-86 (1973)).


     None of Valdak's arguments demonstrate that the penalty is
unwarranted in law or without justification in fact. Under the
effective penalty structure, the Commission could have assessed a
penalty ranging from $5,000 to $70,000. 29 U.S.C. § 666(a). An
employer's size, for the purpose of a civil penalty assessment, may

                               -6-
encompass the employer's "total corporate structure."       Hudson
Stations, Inc. v. United States Envtl. Protection Agency, 642 F.2d
261, 264 (8th Cir. 1981). Moreover, the OSHA compliance officer
testified that the violation was of high gravity because a number
of employees were exposed to the hazard, the duration of exposure
was lengthy, and the consequences of an accident could be severe.
Thus, there is substantial evidence to support the penalty
assessment.


     We affirm the Commission's decision.


     A true copy.


          Attest:


               CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.




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