SURVIVING THE FIRST MINUTES OF AN OSHA INSPECTION!

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

Early one morning, an OSHA Compliance Safety & Health Officer arrives unannounced at your place of business requesting an immediate inspection of your workplace, interviews of your employees and a review of safety-related documentation. In ideal circumstances, the OSHA inspection would proceed immediately, and in an orderly fashion, to an opening conference where a management representative would (1) inspect the search warrant or employee complaint,  if any, (2) decide whether to allow the inspection, and (3) discuss the scope of the inspection.

As many employers can attest, not all OSHA inspections begin under such ideal circumstances. The Compliance Officer may arrive at the workplace at a time when (1) no management representative is immediately available, or (2) other matters are demanding the employer’s immediate attention.  The Compliance Officer may be alone with an employee who is ill-prepared for such an encounter. Even worse, the Compliance Officer may be left alone to wander the workplace, and witness not only the employer’s operations, but also the urgent clean-up prompted by OSHA’s arrival.

The first minutes of an OSHA inspection, however, can be critical. Anything said by a management or non-management employee before the opening conference can become a part of the inspection file. Anything seen by the Compliance Officer before the opening conference can likewise become part of the inspection file.  These developments can form the basis not only for citations and fines, but also a broader scope of inspection than may have been authorized beforehand.

Just as any other part of an OSHA inspection, therefore, the short time-period between the arrival of the Compliance Officer and the opening conference should be managed.  So, what do you need to do or don’t do to survive these critical first minutes of an OSHA inspection?

DON’T enable communications with OSHA by non-management employees. As set forth in previous posts (here and here) on this blog, the opening conference provides the employer with an opportunity to safeguard its rights during an OSHA inspection. Communications by the Compliance Officer with non-management employees before the opening conference may hinder this opportunity. If the inspection moves forward, there will be a time for interviews of non-management employees. At least as to the time-period before the opening conference, non-management employees should be instructed that all communications with the Compliance Officer shall be through management representatives.

DON’T enable decisions by non-management employees. The open conference also provides the employer with the opportunity to make informed decisions about the future course of the OSHA inspection. This opportunity may be lost if a non-management employee allows the Compliance Officer to see the workplace before the opening conference. If the inspection moves forward, there will be a time for a physical inspection of the premises and a review of documents.  At least with respect to the time-period before the opening conference, non-management employees should be instructed that the only persons with authority to allow an OSHA inspection to proceed are management representatives.

DO review the Compliance Officer’s credentials. Typically, a Compliance Officer will voluntarily provide his/her credentials immediately upon arrival at the workplace. Take the time to review the credentials.

DO take the situation seriously. An OSHA inspection can be the beginning of a civil or even criminal legal process that can have significant adverse consequences for your business. Since January 20, 2017, over sixty citations have been issued by the agency proposing fines in excess of $100,000. On January 20, 2017, a Missouri company was convicted of OSH Act violations in connection with the death of an ironworker.

DON’T panic. A calm rational and informed response is the best strategy for managing the risks of an OSHA inspection.  As noted in a previous post on this blog, whether it is better for the employer to allow or deny access to the Compliance Officer may not be apparent in the opening minutes of the inspection.

DON’T assume there is nothing you can do. As set forth in multiple posts on this blog, there are rights and strategies which an employer can exercise before, during and after an OSHA inspection to minimize the risk or magnitude of adverse consequences for its business. Even if an employer does not own or control the worksite which is the subject of the inspection, there is always something it can do to protect its rights.

DON’T assume there is nothing you need to do. An employer is often its own worst enemy if it approaches an OSHA inspection with (1) complacency about the safety of its own workplace, or (2) the belief that it has nothing to hide. History is replete with OSHA citations issued against employers which operated under such false assumptions. The exercise of rights and strategies afforded by law can be instrumental in minimizing legal and financial exposure.

DO act quickly. Without immediate management of the situation, an employer exposes itself to citations for safety hazards even before the opening conference has begun. An employer may have several matters which require its attention on the day of an OSHA inspection. These matters should be balanced against the potential risk of OSHA citations and fines of six figures or more.

DO limit the Compliance Officer’s movements. If the employer does own or control the worksite of the inspection, it should endeavor to limit the movements of the Compliance Officer between the time of his/her arrival and the opening conference. Any view of previously unseen parts of the workplace should be specifically avoided. Even a request by the Compliance Officer to use the restroom should consider what may be seen along the path to and from the restroom.

DO keep the time-period before the opening conference short. The time between the arrival of the Compliance Officer and the opening conference must be kept short. Otherwise, the Compliance Officer will leave to (1) obtain a search warrant, or (2) seek enforcement of a search warrant. Such options may not always be in the employer’s interest.

DON’T be pressured by the Compliance Officer. If an OSHA inspection does not move forward with deliberate speed, the Compliance Officer may ask whether the inspection is being refused. Until the decision is finally made whether to proceed with the inspection, the answer must be no. An employer should never be pressured to abandon its rights during an inspection.

DO choose a strategic location for the opening conference. If the employer does own or control the worksite of the inspection, a long trip to the location of the opening conference may not be in its best interest. Everything viewed by the Compliance Officer along the way can be the basis for a citation. Long trips should thus be avoided.

DO Show Respect for the Inspection Process. OSHA views the inspection as an essential tool to police employee health and safety. An OSHA inspection is neither the time nor the place to attack the process by which the OSH Act is enforced.  A disrespectful attitude toward the inspection can be viewed as indifference toward employee health and safety.  An employer should avoid statements to the effect that:

This Inspection is an Annoyance.”  At no time during an inspection should an employer indicate to OSHA that the inspection is a waste of time or a mere annoyance.

How Quickly Can this Inspection be Wrapped Up?”  Although concluding an inspection within a reasonable time period is a worthwhile goal, the employer should not unreasonably rush the CSHO or indicate that it has more pressing matters to attend to.  The CSHO will likely not respond favorably to impatience.

DON’T hesitate to seek assistance.  Finally, the time period before the opening conference provides the opportunity to seek assistance from others more knowledgeable regarding OSHA inspections.   Such assistance can be from legal counsel, but also can be from occupational safety and health experts.

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OSHA UNDER TRUMP: WHAT DO WE KNOW AFTER FIVE MONTHS?

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

It has now been five months since Donald Trump’s January 20, 2017 inauguration. So, what insights have the first five months revealed about OSHA under Trump?

What Has Been Delayed?

Beryllium Rule: The effective date of this rule was delayed from March 1, 2017 to May 20, 2017.

Crystalline Silica Standard for Construction: Under the standard, certain obligations were to begin on June 23, 2017. An April 6, 2017 Memorandum announced that enforcement of the standard would be delayed until September 23, 2017.

Electronic Submission of Injury and Illness Logs: As noted in in a May 2016 post on this blog, certain employers are required to submit injury and illness logs to OSHA electronically beginning on July 1, 2017. The agency has announced that it is not accepting electronic submissions of injury and illness records at this time and has proposed extending the July 1 deadline to December 1, 2017.

What Has Changed?

Public Shaming: As noted in an August 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, this practice abruptly stopped, at least with respect to citations with lower dollar amounts. Since January 20th, only four citations have been the subject of news releases on OSHA’s website.

Fairfax Memorandum: The Occupational Safety & Health Act (“OSH Act”) recognizes the role of an “employee representative” who may represent employees’ interests in enforcement related matters. For instance, the Act authorizes participation in the walkaround portion of an OSHA inspection by “a representative authorized by [the employer’s] employees.”

On February 21, 2013, Deputy Assistant Director Richard E. Fairfax authored a Memorandum opining that, even in the absence of an applicable collective bargaining agreement, the role of employee representative can be a person affiliated with a union or community organization. This action prompted a lawsuit by the National Federation of Independent Business (“NFIB”) challenging the memorandum.

On April 25, 2017, OSHA issued a new Memorandum notifying all Regional Administrators that OSHA had rescinded the Fairfax memorandum. The memorandum explained only that the Fairfax memorandum was unnecessary. Two days later, the NFIB moved to dismiss its lawsuit.

New Standards: On January 31, 2017, President Trump issued an Executive Order regarding Fiscal Year 2017. The Executive Order mandates that “whenever an executive department or agency publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least two existing regulations to be repealed.” This action shows that, in contrast to the previous administration, new OSHA standards are unlikely under Trump.

What has Not Changed?

Big Fines: As noted in a February 2016 post on this blog, the Federal Civil Penalties Inflation Adjustment Act of 2015 allowed for increased OSHA penalties, beginning on July 1, 2016. In the closing months of the Obama administration, therefore, big fines became more commonplace.

As noted in an earlier post on this blog, more than 50 citations proposing penalties in excess of $100,000 have been issued by OSHA since January 20, 2017. Accordingly, big fines remain commonplace under Trump.

What is Still Uncertain?

OSHA Administrator: Dr. David Michaels left OSHA on January 10, 2017.  At the time of this writing, no new OSHA Administrator has been nominated, much less confirmed.  This delay is not unprecedented. Dr. Michaels was first nominated by President Obama on July 28, 2009; he was not confirmed by the U.S. Senate until December 3, 2009.

Long-Term Strategy: Under President Bush, OSHA Administrator Edwin G. Foulke, Jr. pursued a “voluntary compliance strategy.” Under President Obama, Dr. Michaels shelved this strategy in favor of one promoting deterrence through high OSHA penalties. This new strategy was exemplified in memoranda issued on September 10, 2010 and March 27, 2012.

Until the new OSHA Administrator is confirmed, it is uncertain what strategy will be pursued by the agency going forward. Given President Trump’s repeated public statements and tweets regarding government regulation, such strategy will likely be more akin to that employed by Mr. Foulke than Dr. Michaels. In the meantime, however, Dr. Michaels’ strategy remains intact, as demonstrated by the fines proposed this year. If any relief is forthcoming for employers, it is likely months away. Accordingly, it is recommended that employers continue to exercise the cautionary approach to OSHA inspections outlined in previous posts on this blog.

TEN REASONS TO CONTEST AN OSHA CITATION!

Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje & Ladik, PLLC.

Following receipt of an OSHA citation, an employer has only a short period – 15 workings days – to contest the citation.  If not timely contested, the citation and proposed penalties become a final order of the Occupational Safety & Health Review Commission (“OSHRC”) and may not be reviewed by any court or agency.

There can be valid reasons for not timely contesting a citation.  For example, it may be determined that the time and expense of a contest outweighs any potential benefit.

There also can be valid reasons for contesting a citation.  Under certain circumstances, litigating before the OSHRC may be preferable to acceptance of a citation or settlement at the informal settlement conference. Only by reviewing these reasons with legal counsel can a truly informed decision be made as to how to respond.

No Violation Occurred

OSHA generally has the burden of proving that a violation of the Occupational Safety & Health Act occurred. If this burden likely cannot be met, or the evidence shows that no violation occurred, a notice of contest may be worthy of consideration.

Wrong Category of Violation Cited

For a willful violation, OSHA has a higher burden of proof than for a serious or other-than-serious violation.  For a serious violation, OSHA has a higher burden than for another-than-serious violation.  If the applicable burden likely cannot be met for the category cited, a notice of contest may be worth exploration.

Availability of Affirmative Defense

Just as with other civil litigation, there are certain procedural and substantive affirmative defenses to OSHA violations.  The burden of proving an affirmative defense lies with the employer.  If this burden can likely be met as to a violation, a notice of contest may be worth evaluating.

Proposed Penalty Amount is Significant

Where the citation proposes a significant or egregious violation penalty, the financial stakes may be sufficiently high to warrant an analysis of the risks and benefits of a notice of contest.

Costly Abatement

Where the citation mandates a costly abatement, or an abatement which requires business disruption, the financial stakes may again be sufficiently high to assess the options of a notice of contest.

Settlement Options

Settlement of a citation is generally an option both before a notice of contest is filed and after a notice of contest is filed.  If informal settlement is not a viable option before the applicable deadline, a notice of contest may be necessary to preserve settlement as an option.  In other circumstances, it may be worthwhile to compare the settlement opportunities before a notice of contest with the settlement opportunities after a notice of contest.

Risk of Repeat OSHA Citations

Previous citations can be cited by OSHA as a basis for later willful or repeat violations. Previous citations may also form the basis for later egregious violations, or inclusion in OSHA’s Severe Violator Enforcement Program.  A citation which places an employer in OSHA’s Severe Violator Program increases the frequency of inspections, and thus the likelihood of future citations.  Under certain circumstances, therefore, the risk of future OSHA inspections and citations can be a consideration favoring a notice of contest.

Future Potential Civil Liability

State laws vary significantly as to the admissibility and relevance of OSHA citations in personal injury litigation.  If such litigation is possible, the admissibility and relevance of the OSHA citation may in certain states weigh in favor of a notice of contest.

Reputation in the Industry

For many businesses, a reputation for safety in the workplace is an asset worth fighting to protect.  An OSHA citation may be the basis for the loss of ongoing business relationships or the loss of future business relationships. Inclusion in OSHA’s Severe Violator Enforcement Program can be especially damaging. Depending upon the circumstances, a notice of contest may be worthwhile to protect the business’ reputation.

Increased Worker’s Compensation Insurance Premiums

Several states have statutes which authorize an increase in workers’ compensation insurance premiums based on safety and health violations.  An increase in worker’s compensation insurance premiums may be a reason to contest an OSHA citation.

Not all OSHA citations are worth contesting.  In consultation with legal counsel, the prudent decision may be to accept the citation or reach a settlement with OSHA at the informal settlement conference.  Unless the reasons for contesting an OSHA citation are fully considered, however, the employer risks an uninformed decision which may later come back to haunt it.

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

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje & Ladik, 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.

REPEAL AVOIDS NEED FOR LEGAL CHALLENGE TO DEFIANT OSHA RULE!

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje & Ladik, 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 & Ladik, 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 & Ladik, 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.