Sofidel America v. OSHRC: Chenery-Constrained Review Requires a Clearly Defined “Hazardous Condition” and Substantial-Evidence Proof of Employer Knowledge for LOTO Citations

1. Introduction

Parties. Petitioner Sofidel America operated a paper-products factory in Circleville, Ohio. The Respondent was the Secretary of Labor, defending citations issued by OSHA and affirmed by the Occupational Safety and Health Review Commission (via an Administrative Law Judge (ALJ) decision that became final when the Commission denied discretionary review).

Background. An employee, Christian Hill, suffered a severe hand injury while clearing a jam inside the “R88 Rewinder,” a large converting machine used to unwind and rewind jumbo paper rolls. When the interlock door was opened, the machine deenergized except for a “jog function.” Forward jogging provided an alarm; reverse jogging did not, and reverse movement began immediately. Hill was injured when the machine was jogged in reverse by another worker while Hill’s hand was in a pinch point.

Key issues on appeal. Sofidel challenged two alleged violations of the lockout/tagout (LOTO) standard, 29 C.F.R. §1910.147:

• Item 3: failure to ensure employees “utilized” LOTO procedures while unjamming the machine.
• Item 4: failure to ensure employees performing “covered tasks” received required LOTO training.

The central dispute became whether substantial evidence supported the ALJ’s implicit findings about (i) what the relevant “hazardous condition” was and (ii) whether Sofidel knew (actually or constructively) of the practice that triggered LOTO coverage.

2. Summary of the Opinion

The Sixth Circuit granted the petition for review, set aside the Commission’s order as to Items 3 and 4, and remanded for further proceedings. The court held it could not affirm these citations because the ALJ’s opinion, as written:

1. Did not clearly identify the “hazardous condition” Sofidel allegedly knew about for Item 3; and
2. Did not cite substantial evidence establishing that Sofidel knew or should have known employees performed the practice the ALJ effectively treated as hazardous (two-man jogging without LOTO), which also undermined the “authorized employee” finding for Item 4.

Critically, the court applied the principle that reviewing courts may uphold agency action only on the grounds the agency actually gave; where the ALJ’s stated rationale lacks necessary findings/evidentiary support, the order cannot be sustained on alternative theories not articulated in the decision.

3. Analysis

A. Precedents Cited

1) Lake Bldg. Prods., Inc. v. Sec'y of Lab., 958 F.3d 501, 504 (6th Cir. 2020)

The court invoked Lake Bldg. Prods. for the interpretive framework governing OSHA regulations: the court interprets the regulation “as we would a statute” and defers to the Secretary’s interpretation only if the meaning remains unclear after applying traditional tools of construction.

Role in this case. Although the dispute ultimately turned more on evidentiary support and the ALJ’s articulation than on resolving an ambiguous regulatory phrase, Lake Bldg. Prods. framed the court’s approach: the Sixth Circuit would not simply adopt the Secretary’s view by default, and it would independently assess the regulation’s application to the factual findings actually made by the ALJ.

2) Mountain States Contractors, LLC v. Perez, 825 F.3d 274, 279 (6th Cir. 2016)

Mountain States Contractors supplied the elements and evidentiary burden for OSHA violations, including the requirement that the Secretary prove employer knowledge—actual or constructive—of the “hazardous condition,” as well as the circumstances under which a supervisor’s knowledge may be imputed to the employer.

Role in this case. The Sixth Circuit used Mountain States Contractors to emphasize that the “knowledge” element is not a formality. The ALJ had to connect evidence to a specific “hazardous condition” and then show Sofidel knew or should have known that condition existed (here, the practice that triggered LOTO coverage). The decision turned on the absence of that linkage in the ALJ’s stated analysis.

3) SEC v. Chenery Corp., 318 U.S. 80, 88-89 (1943)

The court relied on SEC v. Chenery Corp. for the administrative-law principle that a reviewing court may uphold an agency decision only for the reasons the agency itself gave when it acted. If the agency’s stated rationale is inadequate, the court cannot affirm on a different theory that might have supported the outcome.

Role in this case. Chenery was decisive. The Sixth Circuit refused to reconstruct or supplement the ALJ’s reasoning to find a viable “hazardous condition” definition or to infer employer knowledge from evidence not evaluated as such in the ALJ’s opinion. Because the ALJ’s opinion did not clearly identify the hazardous condition and did not cite substantial evidence of Sofidel’s knowledge of the specific practice treated as hazardous, the court set aside Items 3 and 4.

B. Legal Reasoning

1) Item 3 (Failure to “utilize” LOTO): the ALJ’s reasoning did not establish the knowledge element tied to a defined hazardous condition

The court first identified a threshold problem: the ALJ “fail[ed] to expressly identify the ‘hazardous condition’” that Sofidel knew or should have known. The Sixth Circuit then interpreted the ALJ’s opinion as effectively treating two-man jogging as the hazardous condition (rather than unjamming generally), because the ALJ’s discussion of LOTO applicability centered on Hill’s injury scenario and did not describe alternative hazardous mechanisms.

Given that framing, the court held the citation could stand only if the ALJ cited substantial evidence that Sofidel knew (actually or constructively) employees performed two-man jogs without LOTO, despite Sofidel’s stated policy prohibiting them.

The ALJ relied on testimony from three managers, but the Sixth Circuit found it insufficient:

• Testimony that the jog function remains online when the interlock door is opened shows machine capability, not that employees in fact violated LOTO during two-man jogging.
• Testimony about what discipline might be appropriate for a two-person jog and that policy required LOTO for servicing (including unjamming) did not establish management knowledge that employees were actually not following LOTO while engaging in the specific hazardous practice.
• Testimony that “lockout-tagout does not apply” when clearing a jam did not address the two-man jog practice and did not amount to proof of knowledge of routine noncompliance.

Because the ALJ’s opinion did not supply substantial evidence of employer knowledge as to the specific hazardous condition it effectively adopted, Chenery prevented affirmance on any alternate or more generalized rationale. Item 3 was therefore set aside.

2) Item 4 (Failure to train “authorized employees”): depends on proof that operators were “authorized employees” for covered servicing

Item 4 turned on whether Hill and other operators were “authorized employees” under 29 C.F.R. § 1910.147(b). The ALJ found they were, but the Sixth Circuit emphasized that this designation requires substantial evidence that either:

• they actually used LOTO procedures when servicing/maintaining the machine; or
• their duties included performing “servicing or maintenance covered under this section.”

The Sixth Circuit reasoned that if, as the ALJ effectively implied, the only covered servicing was two-man jogging, then Sofidel’s official prohibition meant that (officially) operators’ “duties” did not include that covered activity. The “authorized employee” theory would therefore require proof of de facto tolerance/knowledge of two-man jogging—again requiring evidence that Sofidel knew of the practice.

Because the ALJ’s opinion did not “describe, evaluate, or even cite testimony amounting to substantial evidence” of Sofidel’s knowledge/tolerance of two-man jogging, Item 4 could not be affirmed either.

C. Impact

The opinion’s practical significance lies less in announcing a new interpretation of §1910.147 and more in tightening the procedural and evidentiary discipline required in contested LOTO cases:

• Pinpointing the “hazardous condition.” ALJs must clearly identify the precise hazardous condition at issue (e.g., a specific servicing method), not merely recite that a machine presents risk. Ambiguity about the hazard can defeat the knowledge analysis and, ultimately, the citation.
• Knowledge must match the hazard as defined. If the hazard is a specific practice (here, two-man jogging), the Secretary must prove employer knowledge of that practice—not merely that the machine can move or that managers understand the machine’s functions.
• Training obligations track “authorized employee” status. Where “authorized employee” status depends on whether employees perform (or are tasked with) covered servicing, the agency must show the employer knew or should have known employees were actually performing the covered activity (especially where the employer claims it prohibited that activity).
• Chenery as a constraint in OSHA appeals. The decision underscores that in judicial review of OSHRC outcomes, the government cannot salvage a citation by advancing a better theory on appeal if the ALJ’s written decision did not adopt it and support it with findings and evidence.

For future cases, this increases the premium on: (i) precise hazard identification in the citation theory and ALJ findings; (ii) robust proof of actual or constructive employer knowledge (e.g., prior incidents, observations by supervisors, documented coaching/discipline, consistent practice); and (iii) careful alignment between the “authorized employee” label and the tasks that are truly covered under §1910.147.

4. Complex Concepts Simplified

• LOTO (lockout/tagout). Safety procedures that prevent a machine from starting unexpectedly during servicing. “Lockout” physically prevents energization; “tagout” warns that the equipment must not be operated.
• “Unexpected energization or start up.” Movement or power returning when an employee does not anticipate it—precisely the risk when a machine can be “jogged” while someone is inside.
• “Servicing or maintenance.” Tasks like unjamming that can expose workers to hazardous energy; if covered by the standard, LOTO procedures must be used (unless an exception applies—none is resolved here because the citations were vacated for lack of support in the ALJ’s stated reasoning).
• Two-man jog. One employee is positioned near the hazard area inside the machine while another actuates the jog control. This can create a risk of movement occurring while the first employee’s hands are in a danger zone.
• Substantial evidence. Enough relevant evidence that a reasonable person could accept it as supporting the finding; it is more than speculation or inference untethered to the record.
• Constructive knowledge. Even if the employer did not actually know of the hazard, it can be treated as knowing if it would have known by using reasonable diligence (adequate supervision, inspections, enforcement of rules).
• Chenery doctrine. Courts cannot uphold an agency decision by inventing new rationales; the agency must have articulated the basis itself.
• “Authorized employee.” A worker who performs covered servicing/maintenance using LOTO (or whose duties include such covered servicing), requiring more extensive LOTO training than other employees.

5. Conclusion

The Sixth Circuit’s decision sets a clear expectation for OSHA adjudications involving §1910.147: the agency must (1) clearly identify the hazardous condition supporting LOTO applicability, (2) prove employer knowledge of that specific condition with substantial evidence, and (3) ground “authorized employee” training requirements in evidence that employees actually performed—or were tasked with—covered servicing that the employer knew about or should have known about. Where an ALJ’s written decision fails to make those connections, SEC v. Chenery Corp. prevents affirmance on alternative theories, requiring vacatur and remand.