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

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje, 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On April 25, 2017, OSHA issued a new Memorandum notifying all Regional Administrators that OSHA had rescinded the Fairfax memorandum.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.

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TEN REASONS TO CONTEST AN OSHA CITATION!

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