On April 6, a panel of the U.S. Court of Appeals for the District of Columbia Circuit unanimously held that OSHA may no longer issue citations alleging that an employer failed, more than 6 months before, to record an employee injury on a log. In AKM LLC dba Volks Constructors v. Secretary of Labor, 675 F.3d 752 (D.C. Cir. 2012), the court rejected OSHA’s position that such violations were “continuing.”
The decision rejects OSHA’s longstanding practice, which had been endorsed by the Occupational Safety and Health Review Commission on two different grounds in 1993 and 2011, of issuing citations going as far back as 5 years – the period of time during which injury logs must be retained.
The Background of the Case
In November 2006, OSHA issued a citation alleging that Volks had failed as long ago as 2002 to record injuries on its Form 300 injury logs and to create Form 301 injury reports. Volks claimed that the citations were untimely because the Occupational Safety and Health Act has a 6-month statute of limitations.
The age and vagueness of the allegations made it difficult for Volks to defend against them. The employee responsible for keeping the 2002 log died more than a year before the inspection began. Moreover, OSHA’s allegations were vague; a typical allegation was, “a recordable injury that occurred to 06-01, on or about [a certain date] was not recorded on the OSHA Form 300.” The citation did not state the injury or what fact made it recordable.
As a small- to medium-size employer, Volks lacked the resources to investigate – and take through discovery and trial – over 100 different allegations of violations, all vaguely alleged and many nearly 5 years old. All it practically could do was argue that it was the victim of an unjustly stale prosecution.
So Volks entered into a stipulation with OSHA that effectively limited the issues in dispute to whether the citations were untimely issued. The stipulation also simplified the case for the judge and the parties. For example, it stated that the injury date was the date on which Volks had “receive[ed] information” of a recordable injury, and thus was the date that started the 7-day recording period in § 1904.29(b)(3).
OSHA at first argued to an administrative law judge of the Occupational Safety and Health Review Commission that it could prosecute Volks under a “discovery rule” – that is, that the limitations period did not start to run until OSHA knew or should have known of a violation. OSHA relied on the 1993 decision of the commission in Johnson Controls Inc., 15 BNA OSHC 2132 (OSHRC 1993).
Volks replied that the discovery rule applied in Johnson Controls was inconsistent with the D.C. Circuit’s 1994 decision in 3M Co. v. Browner, 17 F.3d 1453, 1460-63 (D.C. Cir. 1994), which generally disapproved of discovery-rule theories for administrative penalty prosecutions. Volks also cited the U.S. Supreme Court’s decision in TRW Inc. v. Andrews, 534 U.S. 19, 27 (2001), which rejected the view that discovery rules are generally implicit in federal statutes of limitations. The administrative law judge, believing himself bound by commission precedent, followed Johnson Controls and affirmed the citations.
Volks obtained review from the commission. There, OSHA switched theories, relying instead on a continuing-violation theory. OSHA likely did so because its appellate lawyers recognized that the 3M and TRW decisions had undermined any discovery-rule argument. OSHA argued that the violations continued until they were corrected or until the 5-year retention period for the records expired.
In an unusual move, the commission scheduled oral argument, which it had not heard for 4 years. The commission later upheld OSHA’s continuing-violation theory in a sharply split, 2–1 decision. Interestingly, the decision portrayed the commission’s 1993 Johnson Controls decision as resting on a continuing-violation theory.
The D.C. Circuit Emphatically Reverses
A unanimous, three-judge panel of D.C. Circuit emphatically reversed the decision. In a bluntly worded opinion, the court held that OSHA’s continuing-violation theory would “subvert” the statute of limitations, that it was “unreasonable,” was inconsistent with Supreme Court and D.C. Circuit precedent and would lead to “absurd consequences.”
The court first held that there was no ambiguity in the wording of the statute of limitations, which states that: “No citation may be issued … after the expiration of six months following the occurrence of any violation.” (29 U.S.C. § 658(a).) The court stated: “Like the Supreme Court [in the Title VII case of Nat’l R.R. Passenger Corp. v. Morgan, 536 U.S. 101 (2002)], we think the word ‘occurrence’ clearly refers to a discrete antecedent event – something that ‘happened’ or ‘came to pass’ ‘in the past,’” quoting several dictionary definitions cited by Volks. The court noted that every unrecorded injury and every resulting failure-to-record violation alleged by OSHA “were ‘incidents’ and ‘events’ which ‘occurred’ more than six months before the issuance of the citations.”
As to OSHA’s argument that the violations “continued” until the expiration of the 5-year record-retention period in OSHA’s regulations, the court observed that “[a]t best” this “approach diminishes [the limitations period] to a mere six-month addition to whatever retention/limitations period [OSHA] desires. We do not believe Congress expressly established a statute of limitations only to implicitly encourage [OSHA] to ignore it.” Congress, the court observed, “does not … hide elephants in mouseholes.”
The court also agreed with Volks that OSHA’s theory “runs afoul of our precedents,” which state that the “lingering effect of an unlawful act is not itself an unlawful act,” and that the “mere failure to right a wrong … cannot be a continuing wrong…,” for if it were, “the exception would obliterate the rule.”
The court rejected OSHA’s argument that statutory provisions authorizing OSHA to require preservation of injury records justify an inference that Congress intended violations of record-making requirements to be treated as continuing violations. OSHA’s reasoning, the court held, “is not persuasive enough to overcome the ‘standard rule’ that the limitations period is triggered by the existence of a complete cause of action …,” citing Supreme Court decisions mentioned by Volks.
The court did note that there might be cases in which OSHA might prevail on a continuing-violation theory, but the court’s examples were limited. It mentioned current failures to place guards on machines and the current presence of untrained employees in dangerous situations. It would seem, however, that a continuing-violation argument is unnecessary in both those cases. In both, physically violative conditions actively persist into, and thus “occur” during, the limitations period.
Finally, the court stated that OSHA’s continuing-violation theory leads to the “absurd consequence” that the limitations period “could be expanded ad infinitum if, for example, [OSHA] promulgated a regulation requiring that a record be kept … for as long as [OSHA] would like to be able to bring an action based on that violation. There is truly no end to such madness.” The court noted OSHA’s concession that, under its theory, if it amended the record-retention period to 30 years (instead of the current 5), it could cite employers 30 years after they failed to record. “We cannot believe Congress intended or contemplated such a result,” wrote the court.
Judge Garland wrote his own special concurring opinion, stating that OSHA’s regulations “cannot reasonably be read” to impose continuing obligations. Judge Brown, who wrote the opinion for the court, also filed a concurring opinion, stating that the court should, in the future, closely examine whether judicial deference to agencies’ interpretations extends to statutes of limitations.
Ramifications of the Volks Decision
The most immediate effect of the court’s decision is to prevent the review commission from relying on its precedents in Volks and Johnson Controls. Although the commission has said that it is not bound to follow the disagreeing views of the circuit courts of appeals, it has recognized an exception: It will follow a court decision if the case is appealable to that circuit. Inasmuch as all employers can appeal to the D.C. Circuit, that exception always will apply. The practical effect of the court’s decision in Volks is to render the commission’s decisions in Volks and Johnson Controls dead letters at the judge and commission levels. The court’s decision in Volks will control.
In theory, OSHA might, after losing in a different case, try to bring the same issue to another circuit court, hope to prevail there, and then try to get the U.S. Supreme Court to resolve the disagreement. But a circuit split is unlikely. Not only is the D.C. Circuit’s unanimous decision supported by several independent lines of reasoning, but the case law of other circuits and the Supreme Court lack precedents on which such an effort could rest. Indeed, Supreme Court precedents refute OSHA’s position.
An End Run Through Rulemaking?
It also is unlikely that OSHA would try to make an end run around the Volks decision by amending its regulations to, for example, just declare that an employer’s duty to record continues through the end of the storage period. The majority opinion in Volks (unlike Judge Garland’s concurring opinion) rested not on the wording of OSHA’s regulations but on the wording of the OSH Act’s statute of limitations, which only Congress can change.
As noted above, the court held that the statute of limitations “clearly” requires “a discrete antecedent event” within the limitations period. An amended regulation that merely declares that the duty to record continues would not be triggered by any such discrete event within the limitations period and would thus be inconsistent with the statute.
Moreover, the majority signaled its disapproval of any such tactic. As noted above, the court termed “madness” the prospect that OSHA might adopt “a regulation requiring that a record be kept of every violation for as long as the Secretary would like to be able to bring an action based on that violation.” It also stated that nothing in the OSH Act “suggests Congress sought to endow this bureaucracy with the power to hold a discrete record-making violation over employers for years…” The court would see any such amendment for what it is – an attempt to “subvert” the statute of limitations by mere artifice, and without express rulemaking authority to do so.
OSHA might, however, try to accelerate an effort now underway to require employers to electronically file their injury logs with OSHA. In 2010, OSHA issued an advance notice of proposed rulemaking, asking whether such a requirement should be imposed (Modernization of OSHA’s Injury and Illness Data Collection Process, 75 Fed. Reg. 24505 (2010)). The next stage, the publication of a proposed rule for public comment, is undergoing review by the White House’s Office of Management and Budget. Once the rule is finalized, OSHA conceivably could, much as the IRS does, use computers to analyze logs for patterns of under-recording.
Inasmuch as the Volks decision swept away the bases for OSHA’s reliance on a continuing-violation theory in record-keeping cases, employers should not, in general, accept OSHA citations that allege failures, occurring more than 6 months before the citations were issued, to record cases on their injury records.
Employers should, however, be mindful of the limitations of the Volks decision. There are points that it did not discuss, many of which will be illustrated in part two of this article, which will appear in the July issue of EHS Today.
Arthur G. Sapper argued the Volks case. He is a partner in the OSHA Practice Group of McDermott Will & Emery, a former deputy general counsel of the Occupational Safety and Health Review Commission and a former professor of OSHA law. He has participated in numerous audits and cases involving OSHA injury record-keeping, and can be reached at 202-756-8246 or [email protected]
(Editor’s Note: This article is only for educational purposes and to provide a general understanding of the law, not legal advice about actual cases. Questions about actual cases should be directed to an attorney.)