Two Salem businesses have yet to pay hefty fines for pandemic citations, pushing appeals

Courthouse Club Fitness in west Salem. (Saphara Harrell/Salem Reporter)

Over the last year, two Salem businesses were assessed hefty fines by Oregon’s workplace safety agency for openly flouting regulations intended to protect workers from Covid.

But neither business has paid any money, and it could be years before they pay – if they have to pay at all.

As Covid cases surged in November, the Oregon Occupational Safety and Health Administration imposed penalties totaling $90,000 against Courthouse Club Fitness for keeping its four Salem gyms open.

John Miller, the president of Courthouse Club, said his business couldn’t survive the closure. Despite the fine, Courthouse Club stayed open and was cited in January for an additional $126,749.

In May 2020, the agency fined Glamour Salon owner Lindsey Graham $14,000 after she reopened her downtown Salem salon in defiance of pandemic rules. Graham became a hero among those frustrated by pandemic regulations before she left for Arizona earlier this year.

The fines remain unpaid because both companies have appealed their citations.

“This could drag on for years,” Graham said in an email. She said she’s confident she’ll prevail on appeal and suspects the state is dragging out the appeals process to avoid embarrassment.  

During the pandemic, Oregon OSHA received a record number of complaints alleging employers were not adhering to workplace regulations intended to protect workers from the virus. Labor groups are concerned about the agency’s ability to adequately respond. The Oregon Legislature considered a bill (which is currently stalled) that would allow individuals or organizations to take legal action themselves to enforce workplace safety laws.

Lawyers representing Glamour Salon and Courthouse Club Fitness didn’t respond to phone calls requesting interviews.

Oregon OSHA officials said that regulations provide due process for companies facing penalties. Simply announcing the penalties served as a warning to other employers, they say.

“When we issue a (citation) to one employer, we don’t believe it’s a deterrent to that employer but we also think it’s a deterrent to others in that same industry,” said OSHA spokesman Aaron Corvin.

Numbers from the agency show that penalties tend to stick. 

Between April 2018 and March 2020, a total of 1,629 violations were appealed. Of those, 45% of penalties were kept in place after appeal, totaling $1.5 million. Another 43% were modified and 12% rescinded.

Overall, 89% of initial penalties were kept in place totaling $7.8 million.

Courthouse Club and Glamour Salon have followed similar paths. Before they were cited by OSHA, each announced publicly that they would be opening their doors for business despite pandemic restrictions requiring them to close to the public.

That triggered inspections from OSHA. Inspectors found each business had opened in violation of pandemic restrictions. Each business was assessed fines.

After an employer is cited for violating safety rules, they can appeal and request an informal conference, said Renee Stapleton, Oregon OSHA policy manager. She explained that the meeting gives employers the chance to discuss the facts, provide new information or offer reasons why they shouldn’t be considered in violation. Employers who chose not to file a formal appeal can still request an informal conference, she said.

“It’s really more of an open opportunity to kind of work through what happened on the inspection,” said Stapleton.

Sometimes after an informal conference, the employer better understands the requirements and accepts the penalty, she said. Sometimes OSHA withdraws the penalty, she said. Other times, an OSHA appeals specialist will negotiate a lower penalty, she said.

Regardless of whether employers facing OSHA penalties participate in an informal conference, they have 30 days after being cited to file an appeal. If OSHA can’t reach a settlement with the employer it moves to a court-like proceeding before an administrative law judge with the state Workers’ Compensation Board.

Glamour Salon and Courthouse Club have filed such appeals.

Glamour Salon is arguing in its appeal that OSHA doesn’t have authority to cite the salon because the hairstylists working there were independent contractors, not employees.

Graham said that she and her lawyer reiterated that argument during the informal conference. OSHA wouldn’t comment or provide records on the conference but Graham said the agency couldn’t prove during the conference that she had employees or the legal authority to cite her.

“I will continue to fight these ridiculous mandates and I will continue to be a voice for those who resist them,” said Graham. She said has no regrets over reopening her salon.

Miller said in an email that he also has legal and factual problems with OSHA’s actions. He said he feels that his business was singled out during increased state Covid restrictions over the winter that specifically closed gyms.

“Had every business been required to close, I would have too,” said Miller. “At least then I would have felt certain the shut down would be short and survivable.” 

Courthouse Club argued in its appeal that the emergency workplace safety rules it was cited under aren’t based on science and conflict with the state and federal constitutions.

While both companies have filed appeals, neither case is close to being resolved.

Corvin said Oregon OSHA transfers the appeal to the Workers’ Compensation Board when it is clear that a settlement will not be reached. Both Courthouse Club and Glamour Salon have completed informal conferences. Glamour Salon’s appeal has been transferred to the Workers’ Compensation Board while Courthouse Club remains with OSHA.

Stapleton said that appeals can be complex and preparing for them takes time. An appeal usually takes a year to nearly two years to resolve, said Stapleton. But the pandemic has further complicated the appeals process. While some administrative hearings are held virtually, she said others are so complex that the administrative law judge conducts them in person.

For instance, investigations of a worker death are detailed and it’s difficult to ensure that everyone is looking at the right exhibits over phone or Zoom, she said.

“I do think that has kind of taken a toll on our typical timeline,” she said.

As a result, cases that would have normally been heard and decided by now have been delayed, said Stapleton.

What happens while the penalty is under appeal depends on the severity of the violation, said Stapleton. Violations that could cause someone serious physical harm, including Covid, have to be remedied, she said.

The administrative law judge can issue an interim order while an appeal is being processed directing the business to comply, said Stapleton.

So far, that hasn’t happened and likely won’t happen in the two Salem cases. A judge can’t issue an order for a business to comply with regulations that have since been modified or rescinded, said Stapleton. Since Glamour Salon and Courthouse Club were cited, pandemic restrictions have been relaxed allowing both businesses to operate. Glamour Salon closed earlier this year.

Meanwhile, if the business continues to violate the regulations, they can face another inspection and more penalties

That’s what happened with Courthouse Club. After getting its initial penalty in November, Courthouse kept its Salem gyms open, which resulted in another inspection and the highest penalty in the state related to pandemic regulations.

Corvin said the employer is still on the hook for the citation as it goes through the appeals process.

“So it’s not like the original citation simply goes away,” he said.

If the employer doesn’t prevail, they will still have to pay the full amount, said Stapleton.

“There’s a significant amount of money that Courthouse will be responsible for,” said Stapleton.

She said in the past other employers attempted to appeal citations. But after they lost, she said they not only saw a loss of money but also their reputation.

In the meantime, Miller said he’s worried about the citations and more.

“It seems having the (Oregon Health Authority) spend a year saying that my business is a threat to your health is enough of a fine,” he said. 

Contact reporter Jake Thomas at 503-575-1251 or [email protected] or @jakethomas2009.

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