OSHA Regulatory Update

Monday, September 27 2010 12:00 AM


The following article is provided by Gary Auman. Gary is MICA's legal counsel and partner with the Law Firm of Dunlevey, Mahan & Furry in Dayton, Ohio.

We have all been aware of legislation pending in Congress as early as April 2009 to significantly amend the Occupational Safety and Health Act of 1970. An OSHA reform bill was introduced to the House of Representatives in the spring of 2009. A similar piece of legislation entitled "The Protecting America’s Workers’ Act" (PAWA) was introduced into the Senate by Ted Kennedy in early August 2009. Because of healthcare reform and many other employment law measures, most people felt that this OSHA legislation would not make its way through Congress before the end of 2010. Recently, the House of Representatives took PAWA and attached much of it as an amendment to The Robert C. Byrd Miner Safety and Health Act of 2010, H.R. 5663. On July 21, 2010, H.R. 5663 with OSHA remedial legislation attached to it was voted out of the House Education and Labor Committee on a party line vote of 30-17. While Republicans sought to scale back the bill through several amendments, all these amendments were defeated. Now it goes to the full House for a vote. As of the writing of this article, that vote has not yet been scheduled. Apparently, political strategists feel this will be the best opportunity to get both the Mine Safety and Health Act (MSHA) reforms and OSHA reforms passed in this Congress. The amendment to H.R. 5663 for OSHA contains some of the most onerous provisions proposed in PAWA. First, the amendment will significantly enhance whistleblower protections under OSHA. Even without the proposed amendments in H.R. 5663 I am already seeing a significant increase in the number of complaints filed by employees, terminated or laid off from their employment, alleging that they have been discriminated against because they engaged in some protected activity under the law. Unfortunately, with regard to OSHA discrimination or whistleblower protections, OSHA already reads the definition of "protected activity" very broadly.

As you will see the proposed amendments to the Whistleblower protection in the current law will greatly expand the "protected class" under OSHA. Protected activity under the Occupational Safety and Health Act of 1970 is defined in Section 11(c) of that law. Section 11(c)(1) states "no person shall discharge or in any manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this act, or has testified or is about to testify in any such proceeding, or because of the exercise by such employee on behalf of himself or others of any right afforded by this act." Of course, one of the rights afforded to employees by OSHA is to be provided a safe place of employment, so this latter phrase in Section 11 (c)(1) of the Act is intended to cover employees who make safety complaints related to their working conditions to their employers. Under the proposed amendment, this definition will be extended to include any employee who has been discharged or in any way discriminated against for reporting any injury, illness, or unsafe condition. This will extend whistleblower protection to any employee who files a workers’ compensation claim with their employer. Because OSHA now investigates any complaint of discrimination by an employee under the Act, I can foresee that an employee who filed a workers’ compensation claim in 2009 and who was terminated for tardiness or absenteeism in 2010, could complain to OSHA that as far as they are concerned they were terminated in 2010 because they filed a workers’ compensation claim (reported an injury or illness) in 2009. This may seem to be a stretch, but currently this is one area in which OSHA seems to consider the employer guilty until they prove themselves innocent. If OSHA responds as they currently do when receiving a whistleblower complaint, they will undertake a full investigation of the allegations raised by the employee immediately upon receipt. If this language remains in the Act and becomes law, employers will have to take a very hard look at their current disciplinary procedures to be sure that when taking disciplinary action against an employee for a valid and legal reason, they have sufficient documentation to protect themselves against a frivolous claim under this new proposed whistleblower protection of the Occupational Safety and Health Act.

On a lighter side, I don’t think OSHA currently has sufficient compliance officers to even come close to handling the number of claims of discrimination they are likely to see filed under the new and significantly broader protected class. The whistleblower amendments provided in this bill also establish a separate adjudication system for whistleblower complaints, and a new schedule of damages and settlement procedures for employees who take advantage of the whistleblower language. The amendment under the section for relief provides that, in addition to reinstatement without loss of position or seniority, the complaining employee would also be entitled to receive "compensatory and consequential damages sufficient to make the complainant whole, (including back pay, pre judgment interest, and other damages); and expungement of all warnings, reprimands, or derogatory references that have been placed in paper or electronic records or databases of any type relating to the actions by the complainant that gave rise to the unfavorable personnel action . . . " In addition to these damages, there is a provision for attorneys fees and costs "if the secretary or an administrative law judge, review board, or court grants an order for relief . . . the secretary, administrative law judge, review board, or court, respectively, shall assess at the request of the employee against employer – reasonable attorneys fees; and costs (including expert witness fees) reasonably incurred, as determined . . . in connection with bringing the complaint upon which the order was issued." So, in addition to returning the employee to his prior position of employment with back pay, the employer will now be liable to the employee for pre judgment interest and for any attorneys fees the employee might incur in bringing the complaint or pursuing the complaint against the employer.

In addition, to the preceding, the OSHA amendment also contains, in Section 702, language amending Section 9 of the Occupational Safety and Health Act of 1970 creating a body of victim’s rights for any employee who is injured on the job whose injury results in an OSHA investigation as well as the immediate family members of any employee killed on the job whose death results in an OSHA investigation. These rights will permit "victims" to meet with the Secretary (area director) regarding the inspection or investigation prior to the Secretary’s decision to issue a citation or to take no action. They will also receive a copy of any citation or report issued as a result of any such inspection, and be informed of any notice of contest or additional of parties to the proceedings after the citation is issued. Finally, they will be provided notification of the date and time of any proceedings, service of pleadings, and other relevant documents, and an explanation of the employer’s rights under the Occupational Safety and Health Act. They will also have the right to be notified of the time and date of any proceeding before the Review Commission and to receive copies of any pleadings or decisions relating to the proceeding before the Review Commission and an opportunity to appear and make a statement in accordance with the rules prescribed by the Commission. Under this language, if the "victim" elects to appear, he/she will be given an opportunity to make a statement before the Administrative Law Judge hearing the matter or before the full Review Commission hearing arguments on the case in accordance with whatever rules the Review Commission establishes to permit such a statement to be made.

Finally, prior to entering into any agreement to withdraw or modify a citation issued as a result of such an inspection, the "victim" or representative of the "victim" will be provided an opportunity to appear and make a statement before the parties conducting settlement negotiations. In order to facilitate this language under the amendment, the Secretary shall designate at least one employee in each area office of OSHA to serve as a family liaison. Section 703 of the amendment will amend Section 10 of the Occupational Safety and Health Act of 1970. Some of this language is going to be subject to interpretation and, I am sure, the subject of litigation, but I am going to provide you with the language in the amendment and my thoughts with regard to how it might be applied to employers. The first change to this aspect of the law is that the amendment states that each violation for which the Secretary designates as serious, willful, or repeated, the abatement period will begin to run upon the receipt of the citation. The amendment also states that the filing of a notice of contest by the employer will not operate as a stay of the period of abatement.

Currently, when a notice of contest is filed, the period to abate the citation is stayed or tolled pending the outcome of the notice of contest. Under the language of the amendment, the employer will have to begin to abate the citation immediately upon receipt of the citation. In other words, if the abatement period set out in the citation is "immediate", the employer will have to correct the alleged problem, even if the notice of contest is filed immediately upon receipt of the citation. We have all seen citations that are incorrectly issued by a compliance officer. I have challenged many that are later vacated either prior to or as a result of litigation. Under this amendment, even if the employer is right, he will have to expend resources to take unnecessary corrective action – unless he spends other resources to avail himself of the one alternative the amendment offers. There is a provision in the amendment for the employer to file a motion for a stay of the abatement period. Such a motion will have to be filed with the Commission. In such a motion, the employer will have to demonstrate a substantial likelihood of success in the notice of contest, that the employer will suffer irreparable harm absent a stay of the abatement period and that a stay will adversely affect the health and safety of workers. This will pretty much eliminate filing a notice of contest to stay abatement in order to negotiate a settlement of the citation unless the employer can demonstrate that it has a substantial likelihood of success in defending the citation if the notice of contest goes forward.

The Review Commission is instructed under the amendment to develop rules of procedure to conduct a hearing on such a motion for a stay on an expedited basis. The amendment provides that a hearing before the Administrative Law Judge on motion for such a stay shall occur not later than 15 days from the filing of the motion for a stay unless extended at the request of the employer. The decision on the motion for the stay must occur not later than 15 days following the hearing. There is also provision for objecting to a decision of the Administrative Law Judge on an employer’s motion for a stay by any party that is aggrieved by such a decision. What is not in the amendment is information as to whether the abatement dates are stayed until an employer’s motion for a stay has been adjudicated. Since, at a minimum, the motion for the stay could take 30 days from the time it is filed until a decision is issued, there is no indication as to what action, if any, the employer will have to take while its motion for a stay is pending on abatement dates that provide less than 30 days to correct an alleged violation from the date the employer receives the citation.

Additional language is provided in the statute which amends Section 17(d) of the Occupational Safety and Health Act of 1970. This amendment extends failure to abate violation penalties to apply to any citation in which the corrective action indicated in the citation has not been abated by the abatement date stated in the citation unless a stay has been issued. Again, I pointed out that this creates a very awkward situation for those cases in which the compliance officer or area director issues a citation with an abatement within 30 days of the date the employer receives the citation and the Administrative Law Judge hearing a motion for a stay takes the full 30 days to issue the stay. Failure to abate citations under this Bill can be fined at up to $12,000 a day. I do not want to rehash the amendments to the penalty structure which existed in the PAWA and have been made part of the amendment to the Mine Safety and Health Act, because they have been discussed many times in the past. The civil penalties have been increased as mentioned before by approximately 72 percent on the high end. Of greater interest in the civil penalties is the designation of new categories for criminal penalties and criminal sentencing.

Under the existing Occupational Safety and Health Act of 1970, an employer who is convicted of a willful OSHA violation which resulted in a fatality, can, in addition to civil penalties, be imprisoned for up to six months. Under the proposed amendment to the Act, in a similar situation, an employer who "knowingly violates any standard, rule, or order promulgated under Section 6 of the Act or of any regulation prescribed under the Act (willful violation), and that violation caused or contributed to the death of any employee, shall, upon conviction, be punished by a fine in accordance with Title XVIII of the United States Code and/or by imprisonment for not more than ten years."

The same amendment to the Occupational Safety and Health Act of 1970 provides that for a repeated offense the potential period of prison time is up to 20 years. Both of these amendments also include the possibility of having to pay a substantial fine in addition to the prison time. While potential prison sentences are also spelled out for other possible actions by an employer, the amendment also creates a new criminal sanction for a willful violation which results in serious bodily harm to an employee, but does not cause death to the employee. This penalty is to be punished by a fine in accordance with Title XVIII of the United States Code or by imprisonment for up to five years or both. Serious bodily harm is defined as "serious bodily harm means bodily injury or illness that involves (A) a substantial risk of death; (B) protracted unconsciousness; (C) protracted and obvious physical disfigurement; or (D) protracted loss or impairment either temporary to permanent of the function of a bodily member, organ, or mental faculty." Under this definition a very large number of workers’ compensation claimants would qualify as having suffered serious bodily harm, which could result in criminal prosecution if their employer were alleged to have committed a willful violation of the Occupational Safety and Health Act which resulted in that harm. The effective date of the amendments to the Occupational Safety and Health Act of 1970 is stated to be 90 days from the enactment of the amendment. State plan states would have to enact the provisions of the amendment within 12 months of the enactment of the amendment by the federal government.

As you can see by the preceding comments, we are confronted with a very serious threat. It appears from the language of the amendment that very little thought, as usual, has been given to the practicalities of the requirements of the proposed legislation. From expanding whistleblower protection to cover virtually any employee who files a workers’ compensation claim to creating an untenable abatement situation under issued OSHA citations, to creating a potential for criminal penalties that could affect many, many employers and be based upon a one-sided evaluation of a factual situation in which the employer has not yet even been able to put forth a defense, this pending legislation, if passed in its current form, could have a disastrous affect on American industry. Field Operations Manual Amendments I would like to comment very briefly on amendments to the Field Operations Manual which are now in place. While waiting to see how the proposed legislation in H.R. 5663 is eventually resolved, the Administrator of the Occupational Safety and Health Administration, Dr. Michaels, decided to move forward on his own agenda. Again, with what appears to be very little thought, he has issued amendments to the Field Operations Manual which were announced on April 22, 2010, in a memorandum to his regional administrators. He indicates that these changes will become effective over the next several months. It is hard to gauge which of these changes are in effect now and which may only be in effect at some future point, but some of the procedural changes are currently being implemented.

One of the more significant changes is a prohibition created by Dr. Michaels, to area directors concerning informal conference considerations. Dr. Michaels has restricted area directors to offer settlements of pending OSHA citations being discussed at an informal conference of up to a 30 percent penalty reduction. He is now requiring that an area director, to offer a reduction greater than 30 percent, must have approval of the regional administrator. He has also authorized area directors to offer an additional 20 percent reduction to employers with fewer than 250 employees who agree to retain the services of an outside safety and health consultant. A word to those of you who might fit this category, you may find that the retention of an outside safety and health consultant will be significantly more costly than the 20 percent penalty reduction you might be able to receive from the area director. Dr. Michaels has made several other significant changes to the existing penalty structure in his memorandum and through his changes to the Field Operations Manual. His announced intention for these changes is to increase the average penalty for a serious violation from the current reported amount of less than $1000 goal amount of between $3000 and $4000.

I fail to see how these changes in penalty structure and restrictions on the authority of experienced area directors to negotiate fair and reasonable settlements of pending cases, will have any impact on the safety of the American worker. Unfortunately, amendments to the Field Operations Manual do not have to proceed under the Federal Administrative Procedures Act nor do they have to work their way through Congress. They are literally in place the day the Administrator of OSHA announces them to be. As I have already indicated, the only instruction we have on this particular topic is that they will be put into place over the next several months (and that comment dates back to April 22, 2010). Severe Violator Enforcement Program On June 18, 2010, OSHA unveiled its Severe Violator Enforcement Program (SVEP). This program was announced through OSHA Instruction CPL 02-00-149. Again, to provide you some summary information, this program is designed to apply to employers who have demonstrated indifference to their OSHA obligations by committing willful, repeat, or failure to abate violations. If an employer is classified as a severe violator, OSHA instruction provides that there is a requirement for mandatory follow-up inspections following the issuance of citations, increased corporate awareness of OSHA enforcement, as well as in corporate-wide agreements and federal court enforcement under Section 11(b) of the Occupational Safety and Health Act. There are criteria in the instruction that limits the application of the instruction as it applies to willful, repeat, and failure to abate violators.

As you can see, Congress and OSHA are both hard at work to increase restrictions and enforcement availability with regard to all employers in the United States. Unfortunately, in many cases, both Congress and OSHA are permitting what appear on their face to be political considerations to overshadow their common sense. While the amendments to the Field Operations Manual and the Severe Violator Enforcement Program are already partially or totally in effect, there is still an opportunity to modify the pending legislation. Unfortunately, based on the reception this legislation received when it was voted out of the House Education and Labor Committee, cooler heads may have no impact on the political steamroller which is presently heading for the American employer with no warning bell or siren those employers know it is coming. You can judge for yourself how this legislation will impact your business. All of the members of our trade association are committed to providing a safe workplace for their employees. Unfortunately, that may no longer be enough. Because regulatory enforcement does not always equate with practical safety, employers who are providing a safe place to work for their employees may find themselves spending thousands of dollars to fix things that really aren’t really broken.

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