Courts Reject Prosecution of Parent Company for Training Lapses So Far

Sept. 11, 2003
Can OSHA hold a holding company liable for the alleged training inadequacies of employees who work for a subsidiary?

That's what the government is trying to do with MYR Group Inc. and its wholly-owned subsidiary L.E. Myers co., according to Corey Rubenstein, a lawyer defending the companies in a criminal case mounted by the Departments of Labor (DOL) and Justice (DOJ) late last year.

The case raises disturbing policy questions, according to Rubenstein and other labor lawyers familiar with the matter.

"By going after MYR Group for training failures, OSHA seems to be discouraging parent companies from providing training help to subsidiaries," commented Rubenstein. "If parent companies stay out of safety training completely, wouldn't they limit their liability?"

Because parent companies often have more resources to do safety training, decentralization could hurt safety in the long run.

If the government succeeds in holding MYR Group liable, one legal source argued, the government could conceivably hold any safety training company liable in the event of an OSHA violation.

Late last year, the Departments of Labor and Justice (DOJ) won a four-count criminal indictment of the MYR Group and L.E. Myers for willfully violating OSHA standards that allegedly caused the electrocution deaths of two high-voltage transmission tower linemen. The fatalities occurred in separate incidents in the Chicago area in 1999 and 2000.

So far the government's effort to hold MYR Group criminally liable for the deaths has failed: two federal judges have already dismissed the indictment. But DOJ has decided to try again. The trial, originally scheduled for Sept. 8, was postponed indefinitely pending the outcome of the government's decision to appeal its most recent defeat in the 7th Circuit of the district court.

The OSHA regulations that MYR is accused of violating are 29 CFR 1910.269(a)(2)(i) and (ii), which spell out training requirements for workers in the electric power generation, transmission and distribution industries.

The district court judge dismissed the indictment of MYR Group because, "while MYR was technically an employer as defined by the [OSH] Act, it was not the employer of the deceased workers and could therefore not be liable for their deaths." The judge held that because MYR Group was not the employer, it could not have violated the OSHA training requirements.

The government argues MYR can be held liable because of the 'multi-employer doctrine.' But according to another legal source familiar with the case, the government is "pushing the envelope" of the multi-employer doctrine, because the doctrine was intended to apply primarily to construction sites and the relationship between general contractors and sub-contractors.

The district court judge, in dismissing the indictment, held that even if MYR did not do an adequate job of training, this only creates a hazard and since MYR did not violate an OSHA standard, the agency cannot apply the multi-employer doctrine to the company.

Yet another thorny question raised by the case, according to one legal source, is how OSHA should enforce training requirements of temporary workers outside the construction industry.

In a separate civil action, OSHA cited L.E. Myers for one serious and six willful alleged violations, with proposed penalties of $423,500. The case remains stayed before the Occupational Safety and Health Review Commission.

Because the civil and criminal cases are still being litigated, both OSHA and DOJ declined to comment.

Sponsored Recommendations

10 Facts About the State of Workplace Safety in the U.S.

July 12, 2024
Workplace safety in the U.S. has improved over the past 50 years, but progress has recently stalled. This report from the AFL-CIO highlights key challenges.

Free Webinar: ISO 45001 – A Commitment to Occupational Health, Safety & Personal Wellness

May 30, 2024
Secure a safer and more productive workplace using proven Management Systems ISO 45001 and ISO 45003.

ISO 45003 – Psychological Health and Safety at Work

May 30, 2024
ISO 45003 offers a comprehensive framework to expand your existing occupational health and safety program, helping you mitigate psychosocial risks and promote overall employee...

Case Study: Improve TRIR from 4+ to 1 with EHS Solution and Safety Training

May 29, 2024
Safety training and EHS solutions improve TRIR for Complete Mechanical Services, leading to increased business. Moving incidents, training, and other EHS procedures into the digital...

Voice your opinion!

To join the conversation, and become an exclusive member of EHS Today, create an account today!