At a construction worksite, a supervisor and his subordinate from Quinlan Enterprises were found working on a 15 foot wall without fall protection or a secure ladder. The company was held responsible for the OSHA violation, because, in most cases, a supervisor’s knowledge of a violation is imputed to the employer. Quinlan appealed citing the Eleventh Circuit’s Comtran decision. Comtran held that when a supervisor participates in the violation independently, that supervisor’s knowledge of the act is not sufficient to establish that the employer is aware. The Quinlan court disagreed, noting that the Comtran exception does not apply because the supervisor was not the sole participant in the violation.
The Department of Justice and the Department of Labor have teamed up to encourage federal prosecutors to pursue OSHA and other worker safety violations as environmental crimes. These crimes can be charged as felonies, while OSHA violations are considered misdemeanors. The initiative will facilitate the sharing of information and files between the DOJ and DOL to pursue criminal actions.
To establish that an OSHA regulation has been violated, the Secretary must prove that: (1) the regulation applied; (2) it was violated; (3) an employee was exposed to the hazard that was created; and (4) the employer knowingly disregarded the OSH Act’s requirements. The general rule has been that the knowledge of a supervisor is imputed to the employer – so if the supervisor knew or should have known of the violation, his knowledge is imputed to the employer and the Secretary can use this fact to show that the employer had knowledge of the violation.
The Court of Appeals for the Eleventh Circuit in Comtran Group, Inc. v. U.S. Dept. of Labor, 722 F.3d 1304 (11th Cir. 2013) held that there is an exception to the general rule: when a supervisor is acting independently and knows that he himself has violated an OSHA regulation, his knowledge of his own violation is not necessarily imputed to his employer. The Comtran court found that in such instances the Secretary must prove something more than the supervisor’s own knowledge of his own wrongful conduct to establish the employer knowledge element of a violation. Specifically, the Secretary must show that the employer had reason to foresee the unsafe conduct of the supervisor.
On January 8, 2016, in Quinlan v. Secretary, U.S. Department of Labor, No. 14-12347 (11th Cir. January 8, 2016), the Court of Appeals for the Eleventh Circuit faced a slightly different issue – is supervisor knowledge imputed to the employer when a supervisor acts in concert with a subordinate employee and both supervisor and employee violate an OSHA standard? The Eleventh Circuit refused to apply the reasoning of Comtran and held that it is — a supervisor’s knowledge of a subordinate employee’s OSHA violation is imputed to an employer when a supervisor working for the employer is aware of the subordinate employee’s OSHA violation and the supervisor is simultaneously involved in the violation.
The takeaway for employers is that the supervisory misconduct defense applies only when a supervisor violates an OSHA standard independently, and even then, it is not always a successful defense. Accordingly, employers should take steps to ensure that safety programs are applied effectively to supervisors and subordinate employees such as:
Provide supervisors and subordinate employees with training on every safety standard and company policy related to their work. Ensure all employees comprehend the training to effectively reduce the possibility of a violation taking place.
Remind supervisors to lead by example by following all safety rules and refusing to cut any corners.
Remind supervisors that if they observe a subordinate employee committing a safety violation, they must put an end to it immediately, and where appropriate, initiate disciplinary action. Otherwise, that supervisor’s knowledge will be imputed to the employer.
Remind supervisors that they too are subject to disciplinary action should they fail to follow safety rules and company policies.
After a year of OSHA’s promises that an online form for reporting work-related fatalities and severe workplace injuries was “coming soon,” the agency finally unveiled the form on its website on December 24, 2015. The online form is one of three options that employers can use to fulfill updated fatality and severe injury reporting requirements, which went into effect on January 1, 2015 (see related story). Employers also have the options of calling the OSHA office nearest to their worksite or calling the OSHA 24-hour hotline at 1-800-321-6742 (OSHA) to make a report.
The updated reporting rule requires all employers to notify OSHA when an employee is killed on the job or suffers a work-related hospitalization, amputation, or loss of an eye. A fatality must be reported within 8 hours. An in-patient hospitalization, amputation, or eye loss must be reported within 24 hours.
No matter the option an employer chooses to use in making a fatality or severe injury report, the employer must be prepared to inform OSHA of the following information:
names of employees affected;
location and time of the incident;
brief description of the incident;
additional information relevant to the incident;
the number of fatalities and/or injuries;
the object or substance that have caused the harm (if known);
whether the harm was a fatality, hospitalization, amputation, loss of an eye or some combination of these; and
the identity of a contact person and their phone number.
Since OSHA’s revised fatality and severe injury reporting rule went into effect on January 1, 2015 (see related story), employers have been deeply concerned that the agency would use information contained in Rapid Response Investigation Reports (RRIs) — required by OSHA in response to approximately 50% of the reports made this year — as the basis for issuing citations and fines. This concern stems from the fact that when OSHA finds an employer’s RRI unsatisfactory, such as where the employer merely blames the victim or fails to provide what the agency determines is an adequate plan to address identified hazards, OSHA may determine that an inspection is in order.
Late last week, in an interview with Business Insurance Magazine, Assistant Secretary of Labor for OSHA, Dr. David Michaels, clarified that OSHA has never used information contained in a RRI to justify a citation or fine and it never will. Dr. Michaels emphasized OSHA’s goal that employers feel confident that they can communicate openly with OSHA without repercussions, and that the agency is developing an official policy providing assurance that RRI information will not be used in issuing citations. Rather, OSHA explained, if the agency chooses to inspect an employer’s workplace in relation to a RRI that the employer submitted, OSHA will use information gathered during the inspection, rather than information included in the RRI, to determine whether citations should be issued.
This move may have been motivated in part by OSHA’s concern that employers are underreporting injuries that should have been reported under the new rule. The rule requires all employers to notify OSHA when an employee is killed on the job or suffers a work-related hospitalization, amputation, or loss of an eye. A fatality must be reported within 8 hours. An in-patient hospitalization, amputation, or eye loss must be reported within 24 hours. OSHA anticipates receiving approximately 12,000 reports under the new rule by the end of the year, far less than agency officials believe should have been filed. Issuing an official policy reassuring employers that submission of incident information in RRIs will not result in citations and fines could encourage more employers to come into compliance with the new reporting rule.
Retail store Dollar Tree has agreed to a hefty fine as well as continual monitoring of its stores across the US. A third-party monitor will conduct audits on 50 stores over the next two years. This settles a wide range of complaints arising from 13 different OSHA inspections. The agency is increasingly using this tactic of issuing repeat citations for the same violations at different company worksites. This could have a much bigger impact beginning next year, when OSHA fines are set to rise about 80 percent.
OSHA has employed many creative strategies to maximize its enforcement efforts during the Obama administration. One such tactic involves scrutinizing employers with multiple worksites (retailers are a particularly easy target), sending compliance officers to inspect one of the worksites, issuing citations, and then visiting the employer’s other worksites, identifying the same problems found in the first worksite inspected, and issuing repeat citations to the employer based on the citation issued at the original worksite. This approach gives OSHA significant bang for its buck, not only creating the opportunity to issue more citations by inspecting multiple facilities, but also making it possible for the agency to issue costly repeat citations, which carry fines as much as ten times higher than the current limit on citations classified as serious.
This is what happened to Dollar Tree Stores Inc. (Dollar Tree), which recently entered into a corporate-wide settlement agreement with OSHA to resolve citations arising from 13 different inspections – many involving blocked emergency exits, obstructed access to exit routes, electrical equipment, and improper storage of merchandise. The settlement applies to some 2,400 Dollar Tree stores throughout the United States subject to regulation by Federal OSHA, but state plans having Dollar Tree stores located in their jurisdiction have been strongly encouraged to adopt the parameters of the settlement agreement as well.
Dollar Tree must pay $825,000 in fines to resolve the citations, but that is just the beginning. In addition, the retailer must provide immediate safety training in its stores in a manner that all employees are able to comprehend, abate the issues identified in the inspections as quickly as possible, issue a newsletter regarding health and safety issues to its employees at least quarterly, submit to multiple safety audits at stores selected by OSHA, and quickly address any issues identified in the audits.
Dollar Tree must also put a number of additional administrative and engineering controls in place, but what is perhaps the most onerous element of the agreement is that it requires the employer to adopt a safety and health program focusing on the core elements included in OSHA’s Safety and Health Program Management Guidelines (Guidelines). The Guidelines were originally published in 1989, but major revisions have recently been published and OSHA is welcoming comments on the new version through February 15, 2016.
Dollar Tree must design a program that focuses on the core elements set forth in the 1989 Guidelines, as the revised version has not yet been finalized. Specifically, the retailer must: (1) demonstrate its commitment to workplace health and safety; (2) involve employees in the safety and health program; (3) identify health and safety hazards; (4) control health and safety hazards; (5) provide education and training for all employees related to the safety and health program; and (6) evaluate the safety and health program. Essentially, the settlement agreement requires the employer to create a culture of safety throughout the organization. Although Dollar Tree is required to create a program addressing all of these elements, the Guidelines are not prescriptive. OSHA recognizes that every business is different and offers a non-exhaustive list of possibilities that employers could choose from in creating a safety and health program that comports with every element of the Guidelines.
Employers should expect OSHA to more frequently demand the incorporation of the Guidelines in future settlement agreements. The agency has publically announced that adoption of the Guidelines and the creation of a safety culture is a top priority.
So what actions can employers take now?
If OSHA has already issued repeat citations to your organization for alleged violations at multiple locations, consider discussing with counsel whether working toward achieving a corporate-wide or regional settlement is a good option for your business. If, as anticipated, OSHA raises fines by about 80% this year (see related story), and your business continues to accumulate citations, those citations could become increasingly more costly in the coming months and could be far more difficult to settle as OSHA will have increased bargaining power once the fines are raised.
Review the proposed revisions to the Guidelines and submit comments regarding their strengths, weaknesses, and potential impact on your business.
Review your organization’s safety and health programs and consider taking proactive measures to create a program that includes the elements of the guidelines. Although an initial administrative and financial investment will likely be required, creating a safety culture usually pays dividends — improving worker safety and morale, decreasing workers’ compensation costs, and decreasing the possibility of receiving OSHA citations.
Under a new bipartisan budget bill, OSHA civil penalties will rise next year to reflect the difference between the Consumer Price Index in 1990 and in 2015 – an increase of as much as 82%. After this “catch up” adjustment, the fines will keep pace with inflation moving forward. Valerie describes how employers can boost their safety programs and avoid OSHA citations.
OSHA has been unable to increase the civil penalties it can impose when an employer is cited for a violation since 1990. But that is all about to change. Hidden within the Bipartisan Budget Act of 2015, signed by President Obama on November 2, 2015, is a provision requiring OSHA to significantly increase its civil penalties. A one-time “Catch Up Adjustment” will be based on the percentage difference between the Consumer Price Index in October 2015 (to be released later this month) and October 1990 – resulting in a penalty increase of approximately 80%. This means that the $7,000 cap on serious violations would grow to $12,600 and the $70,000 limit on willful and repeat violations would increase to $126,000. Had OSHA applied this increase to fiscal year 2014 penalties, which totaled $143.6 million, the total would have jumped to $258.5 million. After this initial adjustment is made, OSHA will be required to adjust penalties every year using the annual percentage increase in the Consumer Price Index.
Although the agency is not required to take the full penalty increase, it probably will. OSHA has tried for years to convince Congress to increase the civil penalties the agency can impose when an employer is cited for a violation. Most recently, on October 7, 2015, Assistant Secretary of Labor for OSHA, Dr. David Michaels, told a House subcommittee that the “most serious obstacle to effective OSHA enforcement of the law is the very low level of civil penalties allowed under our law, as well as weak criminal sanctions,” and that “OSHA penalties must be increased to provide a real disincentive for employers accepting injuries and worker deaths as a cost of doing business.”
The budget changes go into effect July 1, 2016 and the increased penalties will take effect by August 1, 2016 in all states regulated by Federal OSHA. The law does not automatically apply to states regulated by State Plans, but since State Plan programs must be at least as effective as Federal OSHA, State Plans are likely to increase civil penalties as well.
This change adds yet another powerful weapon to OSHA’s growing enforcement arsenal. OSHA under the Obama administration has made liberal use of the General Duty Clause, weighted inspections, and new reporting requirements – all of which have resulted is OSHA inspections of industries and employers that it has never targeted before. Now more than ever, employers should be prepared for a potentially costly encounter with OSHA.
Employers are well-advised to:
Ensure that safety programs are comprehensive and up to date
Ensure that employees receive all necessary safety training, can demonstrate that they understood the training, and that all training is well-documented
Assess the workplace for hazards and address any identified hazards as quickly as possible
Talk with union representatives or employees at non-unionized facilities about their safety concerns and address any bona fide concerns as quickly as possible
Taking these steps will demonstrate the employer’s commitment to safety and help reduce the possibility of receiving what soon will be very costly OSHA citations.