                                                                                            Filed
                                                                                      Washington State
                                                                                      Court of Appeals
                                                                                       Division Two

                                                                                      February 19, 2020

      IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

                                        DIVISION II
    STAFFMARK INVESTMENT, LLC,                                     No. 52837-1-II

                        Respondent,

          v.

    WASHINGTON STATE DEPARTMENT                             UNPUBLISHED OPINION
    OF LABOR & INDUSTRIES,

                        Appellant.



         SUTTON, J. — Staffmark Investment, LLC appeals from the superior court’s judgment and

order affirming the Board of Industrial Insurance Appeals’ (Board) decision and order. Braden

Strumsky, a worker hired by Staffmark, crushed his foot working at a warehouse operated by

Expeditors International of Washington. The Department of Labor and Industries (Department)

cited Staffmark, as a joint employer, for safety violations under the Washington Industrial Safety

and Health Act of 1973 (WISHA).1 Staffmark argues that (1) substantial evidence does not support

the Board’s determination that Staffmark was an employer under the economic realities test, and

(2) substantial evidence does not support the Board’s determination that Staffmark had

constructive knowledge about the violations. We disagree and affirm.




1
    Ch. 49.17 RCW.
No. 52837-1-II


                                             FACTS

                                      I. JOB SITE CITATION

        Staffmark is an employment agency that provides employees to Expeditors2 under a service

providers’ agreement. Staffmark provided onsite general labor, such as forklift drivers, along with

leads and quality control management. Staffmark provided onsite supervision through a manager

and granted supervisory responsibilities to some of the leads. Both Staffmark and Expeditors

maintained onsite managers and both designated employees as leads for each team. Expeditors

directly employs a warehouse supervisor.

        As part of the contract with Expeditors, Staffmark charged Expeditors for the employees’

wages, plus a negotiated markup. Staffmark paid the employees’ wages including workers’

compensation insurance and health care benefits. Staffmark passed these costs to Expeditors

through the markup charge for each employee. Expeditors requested additional labor from

Staffmark according to the volume of business and Staffmark hired additional employees to fill

those needs.

        Staffmark employees filled two roles for Expeditors: (1) unloading containers, and (2)

putting away cargo at the warehouse. CP at 921. Under the service provider’s agreement,

Expeditors paid Staffmark a 39 percent markup for general workers, and a 42 percent markup for

forklift operators.

        Staffmark hired Strumsky and then leased him to Expeditors as a general worker. Andy

Johnson, Staffmark’s onsite manager, interviewed and hired Strumsky to fill the position at the



2
 Expeditors International of Washington is a shipping and receiving facility that employs workers
via Staffmark. Expeditors is not a party in this litigation.


                                                2
No. 52837-1-II


Expeditors warehouse where Strumsky was injured. Johnson oversaw Staffmark employees at

four of Expeditors’ facilities. He worked on a daily basis and also maintained a permanent

workstation at the facility where Strumsky was injured. Johnson conducted daily walkthroughs of

the facility.

        Johnson provided Strumsky’s new-hire orientation, which consisted of a tour of the

warehouse and an explanation of the types of freight that Strumsky would be handling. Johnson

also reviewed Staffmark employee timesheets and administered payroll.

        Johnson had the ultimate authority to discipline or terminate Staffmark employees,

including Strumsky, who were not meeting client standards.          Johnson could also reassign

employees who did not “fit in with [a] particular work group” to another client. Clerk’s Papers

(CP) at 1081. On occasion, Johnson would terminate a Staffmark employee for “no-call, no-

show,” or gross negligence. CP at 1073.

        Expeditors divided the work into teams that typically consisted of two general workers and

one forklift operator. The general workers worked with a forklift operator to unload goods from

the container onto pallets. The Staffmark leads were general workers or forklift operators who

Staffmark paid a higher wage to take on more responsibility. If Expeditors needed a Staffmark

employee to assume a lead position, Johnson–Staffmark’s onsite manager–arranged for Expeditors

to interview prospective leads. The Staffmark leads still reported to Staffmark even after being

promoted by Expeditors.

        Johnson and the Staffmark leads helped ensure that Staffmark employees followed safety

standards. Johnson attended monthly safety meetings along with Staffmark and Expeditors leads




                                                3
No. 52837-1-II


and Expeditors supervisors. In his daily walkthroughs of the facility, Johnson looked for safety

issues and ensured that Staffmark workers wore personal protective equipment.

       Both Staffmark and Expeditors leads were assigned to Strumsky’s shift. Staffmark leads

ensured that their team followed the client’s dress code and wore the appropriate protective

equipment. Both leads were responsible for immediate discipline of Staffmark workers. Both

leads referred more serious or on-going issues to Johnson because Staffmark leads could only

reassign a Staffmark worker with Johnson’s approval.

       Both Staffmark and Expeditors leads attended daily shift meetings with Expeditors

supervisors to discuss staffing and safety issues and to receive work orders. Johnson often

participated in these meetings. The Staffmark lead during Strumsky’s shift, Jeffrey Thysell, told

Strumsky when to report to work. Ricky Maghanoy was the Expeditors lead during Strumsky’s

shift. If Strumsky ever ran late, he would contact the Staffmark lead, Thysell. Maghanoy and

Thysell distributed the workload among the teams before the start of each shift.

       Staffmark and Expeditors shared responsibility for training and certifying forklift

operators. Staffmark assigned employees to the position of forklift operator if that employee had

experience operating powered industrial trucks. Staffmark verified each employee’s experience

by providing a written test to prospective forklift operators. After the employee passed the test,

Staffmark approved the employee for practical training.

       Staffmark’s onsite manager or lead traditionally administered and scored the test.

Staffmark’s staff gave Expeditors a blank copy of the test, and Johnson knew that Expeditors’

employees provided the test to forklift trainees while Strumsky worked there. After an employee

passed the test, Expeditors provided practical training on the site-specific equipment. Expeditors



                                                4
No. 52837-1-II


then certified the employee as a forklift operator and notified Staffmark of the change in position

so that the employee could receive higher pay.

       Neither Staffmark nor Expeditors gave Strumsky the written test or certified him before he

began operating a forklift. The only information Strumsky received regarding the operation of

forklifts before he operated one was (1) an employee handbook that mentioned that a worker

should not operate a forklift without Staffmark’s permission, and (2) a short video that described

general safety topics.

       Strumsky believed he was following the appropriate process for becoming a forklift

operator. He asked Maghanoy, the Expeditors’ lead during his shift, about becoming a forklift

operator. Maghanoy discussed the possibility of training Strumsky with Thysell, the Staffmark

lead assigned to Strumsky’s shift. Maghanoy asked for approval from the Expeditors supervisor

before training Strumsky to drive a forklift. Maghanoy knew that Strumsky was not “signed off

completely” because “Staffmark wasn’t really following up” when Expeditors asked to train

forklift operators. CP at 1044.

       Maghanoy allowed Strumsky to operate the Expeditors forklifts in five or six sessions over

a period of a month. Each session lasted about an hour. While most of the driving took place

away from the main work area, the activity was still visible to the other employees in the

warehouse. Other forklift operators often drove by the space where Strumsky was operating the

forklift. Strumsky twice drove in a circle around the other workers.

       On October 1, 2015, Strumsky suffered serious injuries when he lost control of the stand-

up forklift he was operating. Strumsky spent an hour unloading freight using a forklift. When he




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No. 52837-1-II


finished, he drove the forklift 100 feet across the warehouse, lost control of the forklift, and crushed

his left foot against a support beam.

        After conducting an investigation, the Department cited Staffmark for the following two

WISHA violations:

        1-1a. Serious. [WAC] 296-863-60005. Employer did not ensure employee
        successfully completed an operator training program before operating PITs
        (Powered Industrial Trucks).

        1-1b. Serious. [WAC] 296-863-40010. Employer did not ensure operator
        operated PITs (Powered Industrial Trucks) according to the manufacturer’s
        instructions and kept PITs under control at all times.

CP at 1329. Both violations were characterized as “serious.” CP at 1329, 865.

                              II. STAFFMARK APPEALS TO THE BOARD

        Staffmark appealed to the Board, arguing that Staffmark was not an employer for the

purposes of WISHA. The Board rejected Staffmark’s argument, deciding that the Department

properly cited Staffmark for safety violations at a joint employer work site because both employers

exercised substantial control over the injured forklift driver and both were responsible for the

safety violations. The Board affirmed the citations.

        The Board found that “Staffmark at least had constructive knowledge that Mr. Strumsky

was operating the forklift in plain view on numerous occasions, and a Staffmark lead was aware

he was being trained as a forklift driver.” CP at 68. The Board made the following relevant

findings of fact:3




3
  Although Staffmark assigns error to findings of fact 2 through 8, Staffmark only provides
argument to challenge findings of fact 3 and 6.


                                                   6
No. 52837-1-II


       3. During at least the month of October 2015, Staffmark and Expeditors both
       exercised substantial control over the workforce and workplace conditions at the
       Expeditors’ 24th Street Sumner facility. Both companies had lead workers and
       managers/supervisors assigned to the jobsite. Both companies provided substantial
       control of the work at the Expeditors’ 24th Street Sumner facility, and both could
       discipline Staffmark employees. Staffmark employees’ wages were established
       based on the companies negotiated Service Providers’ Agreement.

       ....

       6. On October 1, 2015, Staffmark and Expeditors jointly controlled the worksite
       and Staffmark employees at the Expeditors’ 24th Street Sumner facility at the time
       of the forklift accident at issue.

CP at 69-70.

       The Board made the following relevant conclusions of law:4

       2. On October 1, 2015, Staffmark and Expeditors were joint employers at the time
       of the forklift accident and both had control of the worksite and Staffmark
       employees at the joint employer worksite at the Expeditors’ 24th Street Sumner
       facility; therefore, Staffmark was properly cited for safety violations on February
       17, 2016, pursuant to In Re Skills Resource Training Center, BIIA Dec., 95 253
       (1997).

CP at 70-71.

                      III. STAFFMARK APPEALS TO THE SUPERIOR COURT

       Staffmark appealed to the superior court, which also rejected its argument that it was not

an employer for WISHA purposes. The superior court affirmed the Board’s decision and order.

Staffmark now appeals to this court.




4
  Although Staffmark assigns error to conclusions of law 2 through 6, Staffmark only provides
argument to challenge conclusion of law 2.


                                               7
No. 52837-1-II


                                            ANALYSIS

       Staffmark argues that the Board erred by determining that Staffmark was an employer for

the purposes of WISHA because Staffmark lacked sufficient control over the workers and the

worksite and did not create or control the hazard. Staffmark further argues that the Board erred by

determining that Staffmark had constructive knowledge of Strumsky operating the forklift in plain

view because the forklift trainings were for short periods of time and away from where workers

customarily worked. The Department argues that substantial evidence supports the Board’s

determination that Staffmark was an employer under the economic realities test. The Department

further argues that substantial evidence shows that Staffmark knew or should have known that the

worker was operating a forklift without being trained because he operated the forklift in plain view.

We agree with the Department.

                                     I. STANDARD OF REVIEW

       The purpose of WISHA is to assure, insofar as may be reasonably possible, safe and

healthful workplace conditions for every person in the state of Washington. RCW 49.17.010. “As

a remedial statute, WISHA and its regulations are liberally construed to carry out its purpose.”

Elder Demolition, Inc. v. Dep’t of Labor & Indus., 149 Wn. App. 799, 806, 207 P.3d 453 (2009).

       “In a WISHA appeal, we review the Board’s decision directly based on the record before

the Board.” Potelco, Inc. v. Dep’t of Labor & Indus., 191 Wn. App. 9, 21, 361 P.3d 767 (2015).

“And we review the Board’s findings of fact to determine whether they are supported by

substantial evidence . . . as a whole and whether those findings support the conclusions of law.”

Potelco, 191 Wn. App. at 21. “The Board’s findings of fact are conclusive if substantial evidence

supports them.” Potelco, 191 Wn. App. at 21. “‘Substantial evidence is evidence in sufficient



                                                 8
No. 52837-1-II


quantum to persuade a fair-minded person of the truth of the declared premises.’” Potelco, 191

Wn. App. at 21-22 (internal quotation marks omitted) (quoting Pilchuck Contractors, Inc. v. Dep’t

of Labor & Indus., 170 Wn. App. 514, 517, 286 P.3d 383 (2012)). “Under the substantial evidence

standard of review, our review is limited to the examination of the record and we will not reweigh

the evidence.” Potelco, 191 Wn. App. at 22. “Unchallenged findings of fact are verities on

appeal.” Potelco, 191 Wn. App. at 22.

       “We give substantial weight to an agency’s interpretation within its area of expertise, and

we will uphold that interpretation if it is a plausible construction of the regulation and not contrary

to the legislative intent.” Potelco, 191 Wn. App. at 22.

                                    II. NON-DELEGABLE DUTY

       Staffmark argues that it did not create the hazard, control the hazard, or have any

responsibility to correct the hazard. The Department argues this this claim is not supported by the

facts. We hold that Staffmark, as an employer, owed Strumsky a non-delegable duty to comply

with WISHA regulations.

       RCW 49.17.020(4) defines an “employer” as any firm that “engages in any business,

industry, profession, or activity in this state and employs one or more employees . . . .” All

employers have a non-delegable duty to protect their employers under both WISHA. RCW

49.17.060; Afoa v. Port of Seattle, 176 Wn.2d 460, 470-71, 296 P.3d 800 (2013). “[I]t is settled

law that jobsite owners have a specific duty to comply with WISHA regulations if they retain

control over the manner and instrumentalities of work being done on the jobsite.” Afoa, 176 Wn.2d

at 472. “[T]his duty extends to all workers on the jobsite that may be harmed by WISHA

violations.” Afoa, 176 Wn.2d at 472.



                                                  9
No. 52837-1-II


       Here, Staffmark failed to protect Strumsky from the hazard of operating a forklift

improperly because it did not ensure that he understood and completed the process for forklift

operation certification before operating a forklift at the jobsite. Accordingly, Staffmark, as an

employer, owed Strumsky a non-delegable duty to comply with WISHA regulations.

                       III. STAFFMARK IS AN EMPLOYER UNDER WISHA

       Staffmark argues that it was not an “employer” for purposes of WISHA and thus, it cannot

be held liable as a joint employer under the economic realities test for violations committed by

Strumsky because it lacked sufficient control over the workers and the worksite and did not create

or control the hazard. Thus, Staffmark claims that the Board’s decision is not supported by

substantial evidence and must be reversed. The Department responds that Staffmark is not excused

from complying with safety requirements because they were the primary employer who leased its

employee to Expeditors. Br. of Resp. at 14-15. We hold that the Board properly determined that

under the economic realities test, Staffmark is liable as a joint employer under WISHA.

       Under WISHA, employers are responsible for the safety and health of their employees.

RCW 49.17.060. Courts interpret WISHA liberally to provide wide protection to workers. Frank

Coluccio Const. Co. v. Dep’t of Labor & Indus., 181 Wn. App. 25, 36, 329 P.3d 91 (2014). Under

multi-employee worksite liability, employers have a specific duty to comply with WISHA

regulations, which extends “to all employees” who may be harmed by an employer’s violation of

the WISHA regulations. Afoa, 176 Wn.2d at 471-72. Therefore, to advance WISHA’s safety

objectives, the Department may cite multiple employers for violating workplace safety standards.

Afoa, 176 Wn.2d at 472. “Washington courts look to federal cases interpreting the Occupational




                                               10
No. 52837-1-II


Safety and Health Act of 1970 (OSHA)5 as persuasive authority for how to apply the provisions

of WISHA because WISHA parallels OSHA.” Potelco, 191 Wn. App. at 30 (citing Lee Cook

Trucking & Logging v. Dep’t of Labor & Indus., 109 Wn. App. 471, 478, 36 P.3d 558 (2001)).

         “When there is a WISHA violation involving leased or temporary employees, the Board

uses the ‘economic realities test’ to determine which employer should be issued the WISHA

citation.” Potelco, 191 Wn. App. at 30. The economic realities test requires the Board to analyze:

         1) who the workers consider their employer;

         2) who pays the workers’ wages;

         3) who has the responsibility to control the workers;

         4) whether the alleged employer has the power to control the workers;

         5) whether the alleged employer has the power to fire, hire, or modify the
         employment condition of the workers;

         6) whether the workers’ ability to increase their income depends on efficiency
         rather than initiative, judgment, and foresight; and

         7) how the workers’ wages are established.

Potelco, 191 Wn. App. at 31 (quoting In re Skills Res. Training Ctr., No. 95 W253, 1997 WL

593888, at *4 (Wash. Bd. of Indus. Ins. Appeals Aug. 5, 1997)). The key question is whether the

employer has the right to control the worker. Potelco, 191 Wn. App. at 31. That is the only

disputed portion of the economic realities test at issue in this case.

         Staffmark argues that the Board improperly concluded that Staffmark controlled the

workers. We disagree.




5
    29 U.S.C. § 651.


                                                  11
No. 52837-1-II


       As to whether Staffmark, as the alleged employer, has the power to control the workers,

Staffmark retained the authority to discipline or terminate an employee because Johnson had the

ultimate authority to discipline or terminate Staffmark employees who were not meeting client

standards. Johnson could also reassign employees who did not “fit in with [a] particular work

group” to another client. CP at 1081. Thus, because Staffmark had the power to control the

workers, Staffmark was the employer.

       The Board considered all of the factors of the economic realities test and properly

concluded that Staffmark was a joint employer. Accordingly, we agree with the Board and hold

that that Staffmark was a joint employer under the economic realities test because it had the power

to control the workers and we affirm the Board’s order.

                                  IV. EMPLOYER KNOWLEDGE

       Staffmark argues that the Board erred by determining that Staffmark had constructive

knowledge that Strumsky was operating the forklift in plain view because the forklift trainings

were for short periods of time and away from where other employees customarily worked. The

Department argues that substantial evidence shows that Staffmark knew or should have known

that Strumsky was operating a forklift without being trained because he operated the forklift in

plain view of other employees in the warehouse. We hold that substantial evidence supports the

Board’s finding that Staffmark had constructive knowledge of the violations.

       “Under WISHA, an employer has a general duty to employees to provide employees a

place of employment free from recognized hazards that are causing or likely to cause serious injury

or death and a specific duty to comply with the rules, regulations, and orders promulgated under

WISHA.” Pro-Active Home Builders, Inc. v. Dep’t of Labor & Indus., 7 Wn. App. 2d 10, 16-17,



                                                12
No. 52837-1-II


432 P.3d 404 (2019). “‘RCW 49.17.180(2) mandates the assessment of a penalty against an

employer when a proven violation is serious.” Pro-Active Home Builders, 7 Wn. App. 2d at 17

(internal quotation marks omitted) (quoting J.E. Dunn Northwest, Inc. v. Dep’t of Labor & Indus.,

139 Wn. App. 35, 44, 156 P.3d 250 (2007)).

       A “serious” violation of a WISHA regulation is defined as follows:

       [A] serious violation shall be deemed to exist in a workplace if there is a substantial
       probability that death or serious physical harm could result from a condition which
       exists, or from one or more practices, means, methods, operations, or processes
       which have been adopted or are in use in such workplace, unless the employer did
       not, and could not with the exercise of reasonable diligence, know of the presence
       of the violation.

RCW 49.17.180(6).6

       “When alleging a violation of WISHA regulations against an employers, the Department

bears the initial burden of proving the existence of that violation.” Pro-Active Home Builders, 7

Wn. App. 2d at 17. “When an alleged violation is designated as ‘serious,’ the Department bears

the burden of proving not only the existence of the elements of the violation itself, but also the

existence of those additional elements of a ‘serious’ violation enumerated in RCW 49.17.180(6).”

Pro-Active Home Builders, 7 Wn. App. 2d at 17 (citing J.E. Dunn, 139 Wn. App. at 44).




6
 The legislature amended RCW 49.17.180 in 2018. LAWS OF 2018, ch. 128 § 1. Because these
amendments are not relevant here, we cite to the current version of this statute.


                                                 13
No. 52837-1-II


       Accordingly, to establish its prima facie case in regard to a serious violation of a WISHA

regulation, the Department must prove each of the following elements:

       (1) the cited standard applies; (2) the requirements of the standard were not met;
       (3) employees were exposed to, or had access to, the violative condition; (4) the
       employer knew or, through the exercise of reasonable diligence, could have known
       of the violative condition; and (5) there is a substantial probability that death or
       serious physical harm could result from the violative condition.

Pro-Active Home Builders, 7 Wn. App. 2d at 17-18 (internal quotation marks omitted) (quoting,

Washington Cedar & Supply Co. v. Dep’t of Labor & Indus., 119 Wn. App. 906, 914, 83 P.3d

1012 (2003)). Staffmark challenges the knowledge element. Br. of App. at 9, 22.

       “An employer’s knowledge can be actual or constructive, and common knowledge can be

used to establish that a hazard is recognized.” Pro-Active Home Builders, 7 Wn. App. 2d at 18.

       Here, the Board found that “Staffmark at least had constructive knowledge that Mr.

Strumsky was operating the forklift in plain view on numerous occasions, and a Staffmark lead

was aware he was being trained as a forklift driver.” CP at 68. We, therefore, examine whether

substantial evidence shows constructive knowledge. Potelco, 191 Wn. App. at 21

       “In general, constructive knowledge is established where the employer in the ‘exercise of

reasonable diligence’ could have become aware of the condition.” Pro-Active Home Builders, 7

Wn. App. 2d at 18 (quoting RCW 49.17.180(6)). “‘Reasonable diligence involves several factors,

including an employer’s obligation to inspect the work area, to anticipate hazards to which

employees may be exposed, and to take measures to prevent the occurrence.’” Pro-Active Home

Builders, 7 Wn. App. 2d at 18 (internal quotation marks omitted) (quoting Erection Co., Inc. v.

Dep’t of Labor & Indus., 160 Wn. App. 194, 206-07, 248 P.3d 1085 (2011)). “Constructive

knowledge may be demonstrated by the Department in a number of ways, including evidence



                                               14
No. 52837-1-II


showing that the violative condition was readily observable or in a conspicuous location in the

area of the employer’s crews.” Pro-Active Home Builders, 7 Wn. App. 2d at 18.

       The record shows that Strumsky was trained in an open warehouse where it was possible

for other employees and supervisors to see him operate the forklift without proper training. CP at

1150-51. In the month leading up to the accident, Strumsky operated the forklift “five or six

times.” CP at 1150. Each session was “[a]bout an hour.” CP at 1151. The Staffmark lead during

Strumsky’s shift, Thysell, discussed the possibility of training Strumsky with Maghanoy. CP at

1119. When Strumsky was asked if he believed Thysell saw him, he said, “Yeah. Yeah. He was

on the forklift pretty much the whole day. I mean, it would be kind of shocking if he didn’t see

me.” CP at 1147.

       Based on these facts, the violative conditions as set forth in the Department’s WISHA

violations 1-1a and 1-1b were readily observable to Staffmark. Staffmark could have become

aware of the conditions with the “exercise of reasonable diligence.” RCW 49.17.180(6). Thus,

substantial evidence supports the Board’s finding that Staffmark had constructive knowledge of

both violations.

       Given the legislature’s expansive definitions of “employer” and “employee,” holding

Staffmark liable as a joint employer on this record supports the legislature’s directive to establish

“safe and healthful working conditions.” RCW 49.17.010, .020.




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No. 52837-1-II


                                        CONCLUSION

        We affirm the superior court’s judgment and order affirming the Board’s order.

        A majority of the panel having determined that this opinion will not be printed in the

Washington Appellate Reports, but will be filed for public record in accordance with RCW 2.06.040,

it is so ordered.



                                                    SUTTON, J.
 We concur:



 MAXA, C.J.




 MELNICK, J.




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