WORKER DEATHS LEAD TO CRIMINAL INDICTMENTS, $1.4M OSHA FINE

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje, PLLC

On October 21, 2016, two employees of Atlantic Drain Service, Inc. died when the approximately 12-foot deep trench in which they were working in Boston collapsed, breaking an adjacent fire hydrant supply line and filling the trench with water. In February 2017, a Suffolk County grand jury indicted Atlantic Drain and its owner on two counts each of manslaughter and other charges in connection with the deaths.

On April 11, 2017, OSHA cited Atlantic Drain for a total of 18 willful, repeat, serious and other than serious violations.  The citations propose $1,475,813 in penalties. The citations are also the first publicly announced by the agency on its website since President Trump’s inauguration on January 20, 2017.  In this announcement, OSHA noted previous citations against Atlantic Drain for trench hazards in 2007 and 2012.

Although Massachusetts law forms the basis for the Suffolk County indictments, the Occupational Safety & Health Act (“OSH Act”) may also be implicated in the worker deaths.  The Act provides that “[a]ny employer who willfully violates any [OSHA] standard … , and that violation caused death to any employee, shall, upon conviction, be punished by a fine of not more than $10,000 or by imprisonment for not more than six months.”

On December 17, 2015, in fact, the U.S. Department of Justice announced a new Initiative to expand the prosecution of OSH Act crimes.  On January 20, 2017, a Missouri company was convicted of OSH Act violations in connection with the death of an ironworker.  On March 8, 2016, an Illinois company pleaded guilty to OSH Act violations in connection with the death of an employee resulting from an unguarded conveyor belt.  On March 29, 2016, a Pennsylvania roofing company owner was sentenced to prison for OSH Act violations which included failure to provide fall protection for an employee who fell to his death.  Accordingly, there likely exists a Justice Department file regarding the October 21, 2016 fatalities.

Historically, worker deaths have resulted in few criminal prosecutions, and even fewer criminal convictions.  The Department of Justice initiative and the Suffolk County prosecution show that this pattern has changed significantly.  High fines may be the least of an employer’s worry in the wake of an employee fatality; more than ever before, imprisonment is a possibility that must be considered.

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REPEAL AVOIDS NEED FOR LEGAL CHALLENGE TO DEFIANT OSHA RULE!

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje, PLLC.

On April 3, 2017, President Trump signed legislation nullifying a new OSHA rule, published on December 19, 2016, which sought to impose upon employers continuing obligations to create OSHA 300 Logs and OSHA 301 Incident Reports throughout the entire five-year period in which such records are required to be maintained.  As noted in a December 19, 2016 post on this blog, OSHA’s new rule sought to avoid the statute of limitations of the Occupational Safety & Health Act (“OSH Act”) which states that “no citation may be issued … after the expiration of six months following the occurrence of any violation.” 29 U.S.C. § 658(c).

As noted in the previous blog post, however, OSHA’s continuing obligation theory had previously been addressed and rejected by the U.S. Court of Appeals for the D.C. Circuit in 2012 in AKM, LLC v. Secretary of Labor.  There, the D.C. Circuit enforced the OSH Act’s 6-month statute of limitation as to a record-keeping violation spanning four years.  In the absence of repeal, therefore, the new rule was facing a certain legal challenge by employers.  With the repeal of the OSHA rule, employers have been spared what was sure to be costly and protracted litigation.

OSHA STILL QUIETLY ACTIVE UNDER TRUMP!

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje, PLLC

As noted in a 2016 post on this blog, one strategy employed by OSHA under the Obama administration was to publicly shame cited businesses in news releases on the agency’s website.  With Donald Trump’s inauguration on January 20, 2017, this practice abruptly stopped, at least with respect to citations with lower dollar amounts.  Enforcement activity is nevertheless moving forward. Amongst the OSHA fines proposed since January 20th are the following (publicized citations are highlighted in bold):

  • 1/31/2017    $159,342
  • 2/2/2017      $152,099
  • 22/2017       $100,450
  • 2/6/2017      $382,605
  • 2/10/2017    $112,191
  • 2/14/2017    $159,342
  • 2/16/2017     $126,117
  • 2/22/2017    $148,297
  • 2/22/2017    $202,071
  • 2/22/2017    $197,187
  • 2/23/2017    $139,424
  • 2/24/2017    $150,000
  • 2/27/2017    $129,667
  • 3/03/2017    $156,625
  • 3/06/2017    $102,306
  • 3/08/2017    $103,576
  • 3/08/2017    $128,016
  • 3/10/2017    $182,000
  • 3/16/2017    $159,343
  • 3/16/2017    $117,335
  • 3/20/2017    $113,533
  • 3/22/2017    $128,746
  • 3/24/2017    $115,714
  • 3/31/2017    $149,385
  • 3/31/2017    $176,003
  • 4/06/2017    $124,709
  • 4/6/2017      $145,257
  • 4/11/2017    $1,475,813
  • 4/12/2017    $273,918
  • 4/12/2017    $186,506
  • 4/12/2017    $108,461
  • 4/13/2017    $139,424
  • 4/13/2017    $151,973
  • 4/13/2017    $126,749
  • 4/19/2017    $137,615
  • 4/21/2017    $200,628
  • 4/21/2017    $152,101
  • 4/20/2017    $101,400
  • 4/24/2017    $304,746
  • 4/24/2017    $134,445
  • 4/26/2017    $174,014
  • 4/28/2017    $249,564
  • 4/28/2017    $133,636
  • 5/04/2017   $569,463
  • 5/08/2017    $227,073
  • 5/11/2017    $103,000
  • 5/16/2017    $140,129
  • 5/18/2017    $279,578
  • 5/18/2017    $109,553
  • 5/19/2017    $164,775
  • 5/19/2017    $136,709
  • 5/19/2017    $226,431
  • 5/26/2017    $293,235
  • 5/30/2017    $107,385
  • 6/6/2017      $159,341
  • 6/7/2017      $126,751
  • 6/9/2017      $122,223
  • 6/13/2017     $714,412
  • 6/14/2017     $126,749
  • 6/15/2017     $145,703
  • 6/22/2017     $185,055
  • 6/26/2017     $220,012
  • 7/05/2017     $104,572
  • 7/06/2017     $262,121
  • 7/10/2017     $142,715
  • 7/12/2017     $166,225
  • 7/14/2017     $128,562
  • 8/1/2017       $1,523,710

Since the new Secretary of Labor was only sworn in on April 28, 2017, it may be some time before OSHA’s enforcement strategy under the Trump administration is developed.  In the meantime, employers should expect business as usual with the agency, albeit without the public shaming practiced by the previous administration.

OSHA DEFIES D.C. CIRCUIT WITH NEW RECORDKEEPING RULE!

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje, PLLC.

Today, OSHA published a new rule which seeks to impose on employers continuing obligations to create OSHA 300 Logs and OSHA 301 Incident Reports throughout the entire five-year period in which such records are required to be retained.  [See What Employers Need to Know About OSHA Injury/Illness Record Mandates]. In doing so, OSHA seeks to avoid the statute of limitations of the Occupational Safety & Health Act (“OSH Act”) which states that “no citation may be issued … after the expiration of six months following the occurrence of any violation.” 29 U.S.C. § 658(c).

OSHA’s continuing obligation theory, however, was previously addressed and rejected by the U.S. Court of Appeals for the District of Columbia Circuit in 2012 in AKM, LLC v. Secretary of Labor.  There, OSHA cited and fined Volks Constructors for failing to properly record certain workplace injuries and for failing to properly maintain its injury log between January 2002 and April 2006.  OSHA issued the citations in November 2006.  In vacating the citations, the D.C. Circuit opined: “[E]very single violation for which Volks was cited – failures to make and review records – and every workplace injury which gave rise to those unmet recording obligations, were ‘incidents’ and ‘events’ which occurred more than six months before the issuance of the citations.”

OSHA does not dispute the questionable legality of the new rule.  The Preamble acknowledges that, in AKM, LLC, “a majority held the [OSH Act] does not permit OSHA to impose a continuing recordkeeping obligation on employers” and that at least 14 commentators opined that OSHA did not have the legal authority to adopt the rule.  The Preamble also  admits the implementation of the new rule “will likely be the subject of future litigation in various federal courts, and potentially the Supreme Court.”  Much of the Preamble is thus devoted to setting forth the legal arguments which will be presented in such future litigation.

The timing of the new rule is also not coincidental. It is scheduled to become effective on January 18, 2017, two days before Donald Trump is inaugurated as President.  Accordingly, litigation or congressional action will be necessary to prevent its implementation.  In the absence of such action, however, employers should recognize that legal grounds exist to challenge any untimely citation issued by OSHA under the new rules after January 18th.

PRELIMINARY INJUNCTION DENIED AS TO OSHA ANTI-RETALIATION RULES!

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje, PLLC.

On May 12, 2016, new anti-retaliation rules published by OSHA were reviewed in this blog in an article entitled “What Employers Need to Know About OSHA’s New Anti-Retaliation Regulations!” The new rules were initially scheduled to become effective on August 10, 2016. On July 8, 2016, however, a lawsuit (Texo ABC/AGC, Inc. et al v. Perez, Civil Action No. 3:16-cv-01998-D) was filed by multiple industry plaintiffs in the U.S. District Court for the Northern District of Texas seeking to enjoin the implementation of the new rules. The suit alleges the new rules “are unlawful to the extent that they prohibit or otherwise limit incident-based employer safety programs and/or routine mandatory post-accident drug testing programs.” This suit prompted OSHA to push the effective date of the rules to December 1, 2016.

On November 28, 2016, Judge Sam Lindsay issued a decision denying preliminary injunctive relief as to the new rules. Accordingly, the new rules will now become fully enforceable on December 1, and remain enforceable barring any intervening action.

What Does the Decision Mean for Incident-Based Employer Safety Incentive Programs?

The lawsuit takes issue with the following language in the Preamble to the new rules:

“It is a violation …. for an employer to take adverse action against an employee for reporting a work-related injury or illness, whether or not such adverse action was part of an incentive program. Therefore, it is a violation for an employer to use an incentive program to take adverse action, including denying a benefit, because an employee reports a work-related injury or illness, such as disqualifying the employee for a monetary bonus or any other action that would discourage or deter a reasonable employee from reporting the work-related injury or illness.” 81 Fed. Reg. at 29,674.

The suit faults OSHA for not seeing the obvious – “incident-based employer safety incentive programs … are designed to promote safety through a procedure of offering rewards to employees who have avoided workplace accidents through use of safe work practices and behaviors.” By targeting such programs, the suit alleges, the new rules undermine a productive means by which employers reduce workplace illnesses and injuries.

OSHA’s myopia, however, did not persuade the federal court to issue even a limited preliminary injunction.  Effective December 1, therefore, incident-based employer safety incentive programs will be a target of retaliation investigations by OSHA.

What Does the Decision Mean for Routine Mandatory Post-Accident Drug Testing Programs?

The lawsuit specifically cites the following language in the Preamble:

“[D]rug testing policies should limit post-incident testing to situations in which employee drug use is likely to have contributed to the incident, and for which the drug test can accurately identify impairment caused by drug use. For example, it would likely not be reasonable to drug-test an employee who reports a bee sting, a repetitive strain injury, or an injury caused by a lack of machine guarding or a machine or tool malfunction. Such a policy is likely only to deter reporting without contributing to the employer’s understanding of why the injury occurred, or in any other way contributing to workplace safety. Employers need not specifically suspect drug use before testing, but there should be a reasonable possibility that drug use by the reporting employee was a contributing factor to the reported injury or illness in order for an employer to require drug testing.  In addition, drug testing that is designed in a way that may be perceived as punitive or embarrassing to the employee is likely to deter injury reporting.” 81 Fed. Reg. 29,673.

The suit again faults OSHA for ignoring one of the obvious benefits of mandatory post-accident testing – the prospect of testing deters alcohol and drug abuse at work. By limiting such testing, the suit alleges, the new rules undermine such deterrence.

Again, OSHA’s short-sightedness did not compel the federal court to issue even a limited preliminary injunction. Effective December 1, therefore, employers should expect OSHA scrutiny as to any mandated drug testing after a workplace injury or illness.

Can the November 28th Decision be Appealed?

Yes. If the Fifth Circuit overrules Judge Lindsay’s decision, this blog will be updated accordingly.

Will the New Rules be Changed When Donald Trump Becomes President?  

Possibly.  Donald Trump will be inaugurated on January 20, 2017.  Unlike executive orders, no action can be taken on the new rules by President Trump immediately upon his inauguration.  The new rules can be abrogated only by (1) legislation approved by Congress and President Trump, or (2) new rule-making by OSHA, after a notice and comment period.  Accordingly, any change to the new rules will occur, if at all, sometime after the inauguration.

Abrogation of the new rules in the Trump administration, however, is not a certainty.  Employers with incident-based employer safety incentive programs and/or mandatory post-accident drug testing programs must thus take immediate action in anticipation of the forthcoming OSHA scrutiny under the new rules.

OSHA CITATIONS AGAINST STAFFING AGENCIES ON THE RISE!

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje, PLLC.

In March 2016, OSHA conducted an inspection of the Thomson, Georgia facility of HP Pelzer Automotive Systems, Inc., an automobile parts manufacturer.  Among the employees working at the facility were 300 temporary employees supplied by Sizemore, Inc., a staffing agency.  On September 7, 2016, OSHA issued citations proposing penalties of $654,726 against HP Pelzer for various machine hazards.  The same date, OSHA issued citations proposing penalties of $49,884.00 against Sizemore.

The dual citations against HP Pelzer and Sizemore are not unusual. Just this year, the following dual citations have also been issued by OSHA against both the host employer and the staffing agency supplying temporary employees:

July 15, 2016: Citations proposing penalties of $87,120 against Pyongsan America, Inc., an automobile parts manufacturer, and citations proposing penalties of $18,900 against Surge Staffing, LLC, a staffing agency, were issued for various machine hazards.

June 29, 2016: Citations proposing penalties of $3,426,900 against Sunfield, Inc., an automobile parts manufacturer, and penalties of $7,000 against each of three staffing agencies, Atrium Personnel, iforce and Employers Overload, were issued for various machine hazards.

June 24, 2016: Citations proposing penalties of $58,800 against Terrell Manufacturing Company, a woodworking manufacturer, and Citations proposing penalties of $4,800 against A.L. Staffing, a staffing agency, were issued for various machinery hazards.

February 2, 2016: Citations proposing penalties of $37,600 against Kinsey Corp., a construction contractor, and $7,000 against Gillmann Services, a staffing agency, were issued for trenching and excavation hazards.

Why Does a Safety Violation Affecting Temporary Workers Subject Both the Host Employer and Staffing Agency to a Citation?

The answer is that the OSH Act imposes a responsibility on each employer to protect the safety and health of employees subject to its direction and control, even if the employees are jointly employed by another employer.  For host employers, this responsibility extends to temporary employees supplied by staffing agencies.  For staffing agencies, this responsibility extends to temporary employees supplied to host employers.

What Violations are the Subject of Dual Citations by OSHA?

So, why are staffing agencies being cited for safety violations located at host employer work sites over which they may have no control?  The answer is that the OSH Act imposes a responsibility on employers to protect their employees, regardless of where the employees work. As indicated in the Temporary Worker Initiative  launched by OSHA on April 29, 2013, it is the responsibility of a temporary staffing agency to follow the OSH Act with respect to workers supplied to host employers.

So what violations are staffing agencies being cited for by OSHA?  After all, it is the host employer, not the staffing agency, which generally controls the working conditions at its work site.  For dual citations, one common violation is a failure of temporary employees to be trained for the tasks performed for the host employer. According to the Temporary Worker Initiative, it is typically the responsibility of a staffing agency to provide general safety training to its employees before sending them out on job assignments.  For more specific safety training, the staffing agency must either (1) provide such safety training itself, or (2) ensure that such training is being provided by the host employer. If these responsibilities are not undertaken by the staffing agency, a citation may issue.

Where hazardous conditions exist at a host employer, a staffing agency may also be cited for the hazardous conditions themselves.  According to the Temporary Worker Initiative, a staffing agency has duties of inquiry and verification with respect to the workplaces to which temporary workers are assigned.  Specifically, the staffing agency has the duty to inquire and verify that the host employer has fulfilled its duties to provide a safe workplace.  If these duties ae not fulfilled by a staffing agency, a citation may issue.

What Steps Should be Undertaken by Staffing Agencies In Response to OSHA’s Enforcement Efforts?

As a first step, no employee should be assigned by any staffing agency to any worksite without documented general safety training.  General training may be different for office worksites, but should still be required and documented.

Secondly, before assigning any workers to a host employer, a staffing agency must become generally familiar with the OSHA standards applicable to the host employer’s industry.  Only by becoming familiar with such OSHA standards can the staffing agency adequately fulfill its independent duties of inquiry and verification as to such standards with the host employer.

Finally, before assigning any workers to a host employer, a staffing agency must communicate with the host employer regarding (1) the working conditions which exist at the host employer’s worksite, (2) the duties which will be undertaken by temporary workers, (3) the hazards which may be encountered by the temporary workers, and (4) the procedures, including specific training, to be undertaken by both the staffing agency and/or the host employer to ensure compliance with applicable OSHA standards.  As with all OSHA compliance efforts, communications with the host employer should be thoroughly documented.

BAD PRESS: YET ANOTHER RISK OF AN OSHA INSPECTION!

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje, PLLC.

On August 16, 2016, OSHA issued a news release on its website announcing that citations had been issued by the agency against Tyson Foods, Inc. for alleged violations at its chicken processing facility in Center, Texas.  The citations proposed penalties of $263,000 for 15 alleged serious and 2 alleged repeated workplace safety violations.  Rather than merely announcing the citations against Tyson Foods however, the news release described  a “gruesome” amputation injury that led the agency to investigate the facility.  The news release also included a statement from Dr. David Michaels, Assistant Secretary of Labor for Occupational Safety and Health, scolding Tyson Foods for not doing “much more to prevent disfiguring injuries like this one from happening.” Predictably, the news release and Dr. Michael’s remarks were quoted in media outlets nationwide.

Public shaming of businesses which receive citations is not a new strategy for OSHA.  In 2016 alone, more than 500 news releases similar to the one announcing the citations against Tyson Foods have been issued by the agency on its website.  At a 2010 conference, Dr. Michaels even boasted of the strategy of “regulation by shaming”, and said OSHA would undertake to issue news releases that “name employers, expose their failings, and detail the serious hazards uncovered in our inspections.” Potential legal exposure is not a deterrent to such news releases since the agency generally enjoys sovereign immunity from claims of defamation and disparagement.

OSHA citations may later be amended, reduced or even dismissed, but the damage to a business’ reputation from an unfavorable news release can be more difficult to mitigate. Bad press is thus yet another reason why the risks of an OSHA inspection must be addressed during the inspection itself, rather than after citations have already been issued.