Appeals Court Dismisses Indictment of MYR Group for Alleged Training Lapses

March 23, 2004
The government has failed once again in its effort to prosecute criminally a holding company for alleged safety training inadequacies.

The U.S. Court of Appeals for the Seventh Circuit dismissed the indictment of MYR Group Inc. for violating OSHA rules requiring that employees be properly trained in safe working procedures (29 CFR 1910.269(a)(2)(i), (ii). The March 16 decision represents the second setback in the case for the U.S. Attorney's office for the northern district of Illinois. Previously, a U.S. district court dismissed the indictment. Legal sources familiar with the case believe if the government wishes to pursue the case, it may be running out of legal options.

MYR has a wholly owned subsidiary, L.E. Myers Co. (LEM), which repairs high-voltage power lines. MYR oversees the safety programs of its subsidiaries and is jointly responsible with its subsidiaries for safety training. On two separate occasions, LEM employees were electrocuted while repairing power lines.

LEM and MYR were both charged with willfully violating OSHA safety training rules, even though OSHA never cited MYR. The indictment against LEM was put on hold pending the MYR decision, but the LEM criminal case is now likely to proceed to trial. Civil suits against both companies have been stayed until the criminal matter is resolved.

The government argued, according to the 7th Circuit's Judge Posner, that OSHA rules apply to MYR simply because MYR is an employer, even though MYR is not the employer of the deceased workers. The duties created by the OSHA rules apply to all employees on the site, not merely the workers of the employer accused of the OSHA violation.

"Breathtaking vistas of both criminal and civil liability open before our eyes," wrote Judge Posner in rejecting the government's indictment. "A firm that sold a defective espresso machine to a coffee shop would be subject to OSHA liability if the machine exploded and scalded a waiter." OSHA could become a products-liability statute, Posner declared, with criminal sanctions for willful violations.

In the original 7th Circuit decision, Judge Elaine Bucklo dismissed the indictment with a somewhat different analysis: that the OSHA standard violated, 29 CFR 1910.269(a) requires "the employer" to provide the training, and only LEM, not MYR, was the employer of the dead workers.

Posner also rejected the government's contention that MYR could be charged through the "multi-employer doctrine," as that applies to construction cases where all employers share in controlling hazards that affect employees on the site.

Corey Rubenstein, a lawyer defending the MYR, applauded the appeals court's decision that a company involved in training workers cannot be held criminally responsible when those workers are killed or injured.

"We think the court was right on the mark, for seeing what was a huge distortion of criminal law," commented Rubenstein. "There is absolutely no precedent for the government's position."

One question that apparently perplexed Judge Posner is whether OSHA approved of the criminal case against MYR. "We have not even been told," Posner exclaimed at the end of the decision, "whether OSHA approves, or for that matter knows of, the extension of liability urged by the U.S. attorney."

According to an OSHA official, "The Department of Labor was, of course, fully aware of all the steps taken in this case." OSHA is reviewing the decision and had no further comment.

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