Tag Archives: OSHA

December 28, 2015

Workplace Safety Violations Could Lead to Felony Convictions and Stiffer Penalties Under New Initiative

Looking to send a strong message to employers who fail to provide a safe workplace, the Departments of Labor and Justice  (DOL and DOJ respectively) are teaming up to investigate and prosecute worker endangerment violations, namely, violations of the Occupational Safety and Health Act (OSH Act), the Migrant and Seasonal Agricultural Worker Protection Act (MSPA), and the Mine Safety and Health Act (MINE Act). Under a new Worker Endangerment Initiative announced on December 17, 2015, federal investigators and prosecutors will look to possible environmental crimes committed by companies in conjunction with workplace safety violations in order to seek felony convictions and enhanced penalties available under federal environmental laws. With the DOJ’s additional focus on holding individual corporate wrongdoers accountable, corporate executives could find themselves criminally and civilly liable for their role in such crimes.

It’s All About Imposing Bigger Penalties

The three federal worker safety statutes emphasized in the Endangerment Initiative generally only provide for misdemeanor penalties and monetary penalties that are significantly lower than various environmental statutes. By looking for environmental offenses to add to workplace safety violations, prosecutors will be able to seek felony convictions and enhanced penalties under Title 18 of the U.S. Code and the federal environmental laws. The stated intent is to “remove the profit from these crimes by vigorously prosecuting employers who break safety and environmental laws at the expense of American workers.”

In addition to prosecuting environmental crimes, the Environment and Natural Resources Division looks to strengthen its pursuit of civil cases that involve worker safety violations. The division believes that violations of the Clean Air Act, Resource Conservation and Recovery Act and the Toxic Substances Control Act can have a direct impact on workers who must handle dangerous chemicals and other materials as part of their work duties. 

Linking Safety Violations With Environmental Crimes

If an organization skimps on safety protections for its workers, will it also ignore environmental protections? The DOJ and DOL think so. The government points to statistics of workplace deaths and injuries, including 13 worker deaths on average in the U.S. each day, due in part to exposure to toxic and hazardous substances at work. According to John C. Cruden, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division, “employers who are willing to cut corners on worker safety laws to maximize production and profit, will also turn a blind eye to environmental laws.”

In essence, this initiative provides the government with a mechanism to turn a workplace safety investigation into an examination of a company’s environmental compliance. The plan is for the DOJ’s Environment and Natural Resources Division and the U.S. Attorneys’ Offices to work in conjunction with the DOL’s Occupational Safety and Health Administration, Mine Safety and Health Administration, and Wage and Hour Division to increase the frequency and effectiveness of criminal prosecutions of worker endangerment violations.

 Individual Accountability For Corporate Wrongdoers

The new Worker Endangerment Initiative will target companies who have committed workplace safety and environmental violations. However, due to a recent push by the DOJ to focus on holding individuals accountable for corporate wrongdoing, company executives and decision-makers could be the target of increased scrutiny during the government’s investigation.

In September 2015, Deputy Attorney General Sally Quillian Yates issued a memorandum outlining the steps that DOJ attorneys should take in investigating  corporate misconduct in order to hold more executives and managers accountable  for corporate wrongdoing. The steps, some of which represent policy shifts, are:

  1. Corporations must provide to the government all relevant facts relating to the individuals responsible for the misconduct in order to qualify for any cooperation credit;
  2. Criminal and civil corporate investigations should focus on individuals from the inception of the investigation;
  3. Criminal and civil attorneys handling corporate investigations should be in routine communication with one another;
  4. Absent extraordinary circumstances or approved departmental policy, the DOJ will not release culpable individuals from civil or criminal liability when resolving a matter with a corporation;
  5. DOJ attorneys should not resolve matters with a corporation without a clear plan to resolve related individual cases, and should memorialize any declinations as to individuals in such cases; and
  6. Civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual’s ability to pay.

The DOJ believes holding individuals accountable for corporate wrongdoing will be effective in reducing corporate misconduct because it will deter future illegal activity, incentivize changes in corporate behavior, hold the proper parties responsible for their actions, and promote the public’s confidence in our justice system.

What This Means For Employers 

Companies subject to a workplace safety investigation can expect that their environmental compliance will also be investigated. If federal prosecutors find that a company violated environmental laws, they will pursue the stiffer criminal and civil penalties provided by those environmental statutes. In addition, because the DOJ’s renewed focus on individual accountability, employers should expect that future safety and environmental investigations will focus on individual corporate actors who engaged in or authorized the wrongdoing in order to hold such individuals criminally and civilly liable.

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July 31, 2014

OSHA Rising – Forecasting the Impact of Chemical Facility Safety Executive Order On OSHA Enforcement

Overdyke_TBy Trey Overdyke

The Occupational Safety and Health Administration (OSHA) regulates highly hazardous chemicals, in part, through the Process Safety Management (PSM) standard, which states “This section contains requirements for preventing or minimizing the consequences of catastrophic releases of toxic, reactive, flammable, or explosive chemicals.  These releases may result in toxic, fire or explosion hazards.”  29 C.F.R. § 1910.119.  Recent discussions by a federal working group may result in expansion of the PSM standard to include additional industries and could lead to increased OSHA enforcement activities.  In addition, suggestions for strengthening the civil and criminal penalties for safety violations could affect all employers subject to the OSH Act, not just those covered by the PSM standard.

OSHA’s Efforts to Implement Executive Order

In an effort to improve the safety and security of chemical facilities and to reduce the risks associated with hazardous chemicals, President Obama issued Executive Order (EO) 13650—Improving Chemical Facility Safety and Security (EO 13650) last year. The EO 13650 established a working group co-chaired by the Secretary of Homeland Security, the Administrator of the Environmental Protection Agency, and the Secretary of Labor (the Working Group) to address and reduce hazards associated with the hazardous chemicals in the United States. 

Following the issuance of EO 13650, the Working Group published the “Solicitation of Public Input on Options for Policy, Regulation, and Standards Modernization.” That document served as a starting point to identify the preliminary options for stakeholder discussion regarding increased safety and security for hazardous chemicals.  In May 2014, the Working Group published a status report on their efforts to comply with the directives set forth in EO 13650 — Actions to Improve Chemical Facility Safety and Security – A shared Commitment (Status Report. 

OSHA’s Federal Plan of Action

Although it remains unclear what impact, if any, EO 13650 will have on OSHA’s enforcement regime, the Federal Action Plan’s section entitled “Modernizing Policies and Regulations,” strongly suggests that OSHA intends to expand the scope of the PSM standard as well as increase civil and criminal penalties. 

The Status Report states the following: “Using lessons learned from incident investigations, enforcement experience, and comparison with industry practices and regulatory requirements of other States, counties, and countries, OSHA determined that a stronger PSM standard can more effectively prevent incidents and protect workers.”  (Emphasis added).  Many of OSHA’s immediate provisions address ways to clarify the PSM standard.  Specifically, the Status Report states that in the year following the publication of this report, OSHA will clarify a number of elements of the PSM standard, including

  1.  interpretations of various definitional terms such as “retail facilities”;

  2.  revising jurisdictional concentration levels of chemicals covered by the PSM standard;

  3. whether Ammonium Nitrate as a covered chemical under PSM standard; and

  4. determining whether to include oil and gas drilling and servicing operations under PSM standard, which are currently exempt;

More Industries May Be Subject to PSM Standard

Though styled as a means to “modernize” OSHA’s PSM standard to improve safety, the Federal Action plan suggests a much broader OSHA enforcement regime.  Indeed, the Federal Action Plan does contain action items that suggest a concerted effort to clarify various ambiguities in the PSM standard, but the overall thrust of the plan appears to focus heavily on including more industries under the jurisdiction of the standard. 

Increased Penalties Sought for All OSHA Violations

The Status Report also provides a clear indication that OSHA will attempt to increase the civil and criminal penalties through legislation.  Currently, violations of the OSH Act can lead to civil penalties of up to $70,000 per violation.  Criminal penalties, however, are only imposed for willful violations that cause an employee death.  Criminal penalties can total up to $10,000 and not more than six months in jail for a first conviction, and up to $20,000 and not more than twelve months in jail for a second conviction.  The Working Group compared the OSHA civil and criminal penalty provisions to the same provisions under EPA and stated “OSHA’s PSM standard and EPA’s RMP regulation were created at about the same time pursuant to the Clean Air Act Amendments to address the same underlying general hazards.  Yet the OSH Act’s penalty provisions are much weaker than those under the CAA’s RMP program.  This imbalance in penalties should be corrected by strengthening the OSH Act’s civil monetary penalties and indexing them for inflation.”   

Regardless of whether employers are or will be covered by the PSM standard, it appears that OSHA’s stated intent to increase civil and criminal enforcement penalties could impact all employers. 

Stay Tuned and Stay Informed

Employers should continue to monitor the Working Group’s activities in order to stay involved and have a voice in any future rule making or policy changes.

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February 19, 2014

Utah Rejects Multi-Employer Worksite Doctrine: General Contractor Not Responsible for Occupational Safety of All Workers on Worksite

Construction siteBy Cole Wist (formerly of Holland & Hart) and Trey Overdyke 

In a significant break from federal rulings, the Utah Supreme Court recently rejected the multi-employer worksite doctrine as incompatible with the Utah Occupational Safety and Health Act (UOSH Act).  Hughes General Contractors, Inc. v. Utah Labor Comm., 2014 UT 3. Generally, the multi-employer worksite doctrine makes a general contractor responsible for the safety of all workers on a worksite, including the safety of employees of subcontractors and other third parties.  In rejecting the legal doctrine (which has developed under the federal Occupational Safety and Health Act (OSH Act)), the Utah Supreme Court held that Utah’s state occupational safety and health law regulates conduct between employers and employees and does not permit a general contractor to be held liable for the safety violations of a subcontractor. 

General Contractor Appealed Safety Violations by Subcontractor 

Hughes General Contractors oversaw a construction project at Parowan High School involving over 100 subcontractors.  One of the subcontractors, B.A. Robinson, performed masonry work on the project.  The Utah Occupational Safety and Health Division found that scaffolding used and erected in connection with the masonry work violated the UOSH Act.  The UOSH compliance officer determined that Hughes was responsible for the safety conditions for B.A. Robinson’s employees under the multi-employer worksite doctrine.  The Division cited and fined both Hughes and B.A. Robinson for the scaffolding violation. 

Hughes contested the citation, arguing against the legal viability of the multi-employer worksite doctrine under the UOSH Act.  An Administrative Law Judge upheld the citation under the doctrine and the Utah Labor Commission’s Appeals Board affirmed.  The Appeals Board looked at the governing Utah statute, section 34A-6-201, found that it “mirrored its federal counterpart” and applied federal case law that recognized the multi-employer worksite doctrine to hold Hughes liable for the safety violations of a subcontractor.  Hughes appealed to the Utah Court of Appeals which asked the Utah Supreme Court to decide the applicability of the multi-employer worksite doctrine under the UOSH Act. 

Workplace Safety Obligations Extend Only to Employers under the UOSHA 

Similar to its federal OSHA general duty clause counterpart, the UOSH Act requires each Utah employer to provide “a place of employment free from recognized hazards that are causing or are likely to cause death or physical harm to the employer’s employees and comply with the standards promulgated under this chapter.”  Utah Code § 34A-6-201(1).  At the trial level, the Utah Labor Commission read this provision broadly to extend the safety responsibilities to anyone with supervisory control over a particular worksite.  The Utah Supreme Court instead interpreted this provision as focused on the employment relationship.  The Court held that the duty to furnish a workplace free from recognized hazards and to comply with the UOSH Act standards is one that extends between employer and employee.  The Court stated “the relevant control is not over the premises of a worksite, but regarding the terms and conditions of employment.”  In determining whether an employment relationship exists, the relevant factors include the existence of covenants or agreements, the right to direct and control the employee, the right to hire and fire, the method of payment (i.e., wages versus payment for a completed job or project) and the furnishing of equipment.  

Applying its analysis, the Court found Hughes was not an “employer” in connection with the work done by B.A. Robinson’s workers.  B.A. Robinson was the sole employer involved in the masonry work and controlled the workers involved in the scaffolding problems that resulted in the citations.  Hughes did not have any of the rights of control that would deem it an employer in connection with the work done by B.A. Robinson’s employees (e.g., no right to hire or fire, no payment of wages, etc.). 

 

Utah Safety and Health Act Distinguished from Federal Law 

Numerous federal courts have recognized the multi-employer worksite doctrine under the federal OSH Act.  However, the Utah Supreme Court analyzed the structure of the federal OSH Act and found that it sets forth the duty to comply with certain safety standards in separate sub-sections of the statute.  By contrast, the Court held that Utah law requires “each employer” to provide a safe workplace and to comply with promulgated standards in a single provision of the statute.  

Second, the Utah Supreme Court distinguished its decision because of the lack of administrative deference that applied in interpreting Utah law.  The Court noted that when federal courts resolve ambiguity in a statute, the courts look to the interpretation of the statute provided by the relevant federal agency and defer to the agency’s viewpoint as long as it is based on a permissible construction of the statute.  The Court wrote that federal courts typically have not rendered an independent assessment of the meaning of the relevant OSH Act provision and instead have deferred to the federal agency’s regulation that construes the statute to allow for the multi-employer worksite doctrine.  However, Utah has not adopted a similar standard of judicial deference to an agency’s resolution of a statutory ambiguity so the Court conducted its own independent determination to find that the Utah law did not allow for the multi-employer worksite doctrine. 

Important Victory for General Contractors 

It is unclear what broader impact this decision may have.  For now it is a significant victory for general contractors overseeing projects in Utah.  Time will tell if state courts in other occupational safety and health state plan jurisdictions will follow Utah’s lead in rejecting the multi-employer worksite doctrine.  Should these courts flirt with the idea, they may find the Utah Supreme Court’s analysis to be a helpful road map.  Further, it will be interesting to watch the impact this may have on the multi-employer worksite doctrine in federal OSHA jurisdictions.  We will keep you posted on any new developments on this issue. 

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