Despite the fact that the Occupational Safety and Health Review Commission (OSHRC) recently celebrated its 40th anniversary, many employers still do not fully understand the make-up of the OSHRC, the process for litigating OSHA citations and the reasons why they might want to litigate citations, proposed penalties and proposed abatements. Without this knowledge, employers cannot effectively evaluate their decision to litigate.
The OSHRC is the independent federal agency that adjudicates workplace safety and health disputes between OSHA and private industry. In the early 1970s, members of Congress feared that allowing one federal agency to set standards and regulations, conduct inspections and enforce the standards and regulations would be unfair to the regulated community, so the OSHRC was created.
As Senator Jacob Javits, R-N.Y., the author of the amendment to create OSHRC, artfully stated: “I feel very strongly that a great element of confidence will be restored in how this very new and very wide-ranging piece of legislation [the Occupational Safety and Health Act]will be administered if the power to adjudicate violations is in the hands of an autonomous body, more than one man, and more than in the Department of Labor itself. … We have a difficult piece of legislation reaching the whole of American business, involving millions of employees and tens of thousands of employers. This will give them a greater measure of confidence.”
Staffing for the OSHRC
The administrative law judges of the OSHRC perform, among other things, the duties of ruling on motions, making findings of fact and conclusions of law. Currently, there are offices in Washington, D.C. (headquarters),
Atlanta and Denver.
In addition to the judges, the OSHRC has a chairman and two commissioners who are located in the Washington office and are otherwise known as the supreme court of workplace safety and health law. They are confirmed by the United States Senate, and they serve a 6-year interval term at the pleasure of the president of the United States.
The Office of the General Counsel provides legal support to the chairman and the two commissioners. This office provides, among other things, legal advice to the members of the OSHRC regarding Petitions for Interlocutory Review and Petitions for Discretionary Review. In general, a Petition for Interlocutory Review is a request to rule on an issue before a trial has ended. A Petition for Discretionary Review is a request to rule on an issue after a trial has ended.
There are many reasons why an employer may litigate citations, proposed penalties and proposed abatements.
First, an employer may litigate in response to administrative liability. Under the OSH Act, 29 C.F.R. § 651 et seq., a citation may be characterized as serious, willful, repeat or failure to abate. Case law also dictates that OSHA may issue a per instance or per employee penalty if the language in the standard or regulation authorizes such penalty. This is otherwise known as an “egregious violation.”
A serious violation has a maximum penalty of $7,000, a willful or repeat violation has a maximum penalty of $70,000 and a failure-to-abate violation has a maximum penalty of $7,000 per day. An egregious violation may be characterized as willful and could carry the maximum penalty of $70,000. An employer may receive, for example, 10 proposed willful violations for allegedly failing to train 10 employees. Each proposed willful violation may carry the maximum penalty of $70,000 for a total proposed penalty of $700,000.
An employer may litigate in response to the existing proposed characterizations and penalties because they are grave. If the existing proposed characterizations and penalties are not grave, an employer still might want to litigate to minimize the risk of receiving grave characterizations and penalties in the future.
An employer does not have to carry the case to trial in order to minimize the risk. In fact, a substantial portion of the contested cases settle and do not make it to a trial. An employer can minimize the risk through settlement negotiations before, during and after discovery.
Second, an employer may litigate to minimize the risk of civil liability. Approximately 32 states authorize the use of OSHA standards and citations as evidence of negligence at trial, and approximately 14 states authorize the use of OSHA standards and citations as negligence per se at trial.
Regarding the former, an employer would still be allowed to argue that it did not owe the plaintiff a duty of care nor did it breach a duty of care, the first two elements needed to establish a negligence cause of action. Regarding the latter, an employer would be prohibited from presenting a defense that it did not owe the plaintiff a duty of care nor did it breach a duty of care. In essence, an employer would only be able to present a defense regarding causation and damages, the last two elements needed to establish a negligence cause of action. These issues may arise only if an employee can get out of the state workers’ compensation exclusivity provisions, or the employee is not an employee of the employer. Many experienced plaintiff counsel will allow OSHA to do a significant portion of the legwork, and then use the OSHA case in the civil case.
Third, an employer may litigate in order to avoid criminal liability in the future. Section 17(e) of the OSH Act states that if an employer willfully violated the law and the violation caused the death to an employee, that employer shall be guilty of a misdemeanor with a maximum of 6 months in prison. Under the Criminal Fine Enforcement Act, an individual can receive a maximum criminal penalty of $250,000, and the organization can receive a maximum criminal penalty of $500,000. The United States Department of Justice handles the criminal prosecution. There may be state criminal prosecution as well. Typically, administrative litigation is stayed pending the criminal prosecution.
Fourth, an employer may litigate in order to avoid abatement. Abatement can be extremely expensive and have minimal or no safety or health benefit. When evaluating the potential cost, employers should analyze the initial and ongoing capital and labor costs needed in order to implement the abatement. When evaluating the potential safety or health benefit, employers should consult with internal or external experts. Abatement costs often are a key factor in deciding whether to proceed with administrative litigation.
Fifth, an employer may litigate because OSHA has issued a negative press release. Currently, OSHA has been issuing negative press releases with very harsh language shortly after issuing citations and proposed penalties, but prior to employers defending themselves during litigation. Dr. David Michaels, assistant secretary of labor for OSHA, calls such press releases “regulation by shaming” and asserts that press releases can be “very effective.”
A negative press release can damage an employer’s relationships with current customers and employees as well as the employer’s ability to obtain relationships with potential customers. Negative press also can damage an employer’s reputation within the local community. During settlement negotiations, an employer may want to request that any negative press releases be removed from the Internet; otherwise, the press release will live forever.
Sixth, an employer may litigate to minimize the risk of OSHA conducting a follow-up inspection. In general, history and experience indicate that employers who tend to roll over after receiving significant citations and notifications of proposed penalties often receive more follow-up inspections (and therefore more citations and notifications of proposed penalties) than employers who politely push-back. It is a misperception in the regulated community that if an employer accepts the citations and pays the penalties as proposed, OSHA will not come back to the worksite for a follow-up inspection. History and experience indicate that employers who tend to fight everything at no cost often find themselves having repeated visits from OSHA.
Seventh, an employer may litigate to get out of the Severe Violator Enforcement Program. Certain criteria must be met before an employer can be put in the program. Once an employer is in the program, OSHA may conduct nationwide inspections of the employer at the same time or over a certain period of time. This can pose a significant risk to an employer and cause major business interruptions. There is no way to get out of the program unless an employer litigates.
Eighth, an employer may litigate to eliminate an increase in workers’ compensation costs. Several states have statutes or regulations that authorize the increase in workers’ compensation payments based on safety or health violations. The commonwealth of Massachusetts, for example, requires workers’ compensation payments to be doubled when an employee “is injured by reason of serious and willful misconduct of an employer.”
Ninth, an employer may litigate to eliminate the use of citations as leverage in collective bargaining process. Many unions use citations and penalties as leverage in the collective bargaining process in attempt to force an employer to agree to develop and implement other things related to safety or health in the workplace. Ignoring the fact that an employer has already abated the citation item, unions nevertheless try to use the citations as an indication that the worksite is dangerous and therefore in need of serious safety or health improvements.
Finally, an employer may want to litigate because it has pride in its workplace safety and health program. In this regard, many employers will litigate because the cited standard or regulation does not apply to them, they did not violate the terms of the cited standard or regulation, no employee was exposed to alleged violation or no one in management knew of the alleged violation. They take pride in the fact that their written program contains safety and health rules beyond what is required in a standard or regulation; they effectively communicate those rules to employees; they take affirmative steps to discover violations of the rules through internal and external auditing; and they discipline employees accordingly when they discover violations of the rules.
Reasons to Litigate
➤The existing proposed characterizations and penalties are grave and characterized as willful, repeat or egregious.
➤To minimize the risk of civil liability.
➤To avoid criminal liability in the future.
➤To avoid the costs and/or business disruption associated with abatement.
➤To force OSHA to recall a negative press release.
➤To minimize the risk of follow-up OSHA inspections.
➤To avoid being placed in the Severe Violator Enforcement Program.
➤To eliminate an increase in workers’ compensation premiums.
➤To eliminate the use of citations as leverage in the collective bargaining process.
➤The cited standard or regulation does not apply, the employer did not violate the terms of the cited standard or regulation, no employee was exposed to alleged violation or no one in management knew of the alleged violation.
The Litigation Process
Pursuant to section 9(a) of the OSH Act, an employer has 15 working days from the receipt of the citations and notification of proposed penalties to file a notice of contest with OSHA. In general, an employer loses its rights to challenge the validity of the citations and notification of proposed penalty if the notice of contest is not filed within the 15-day period. The 15-day period does not give an employer a significant amount of time to evaluate the impact of the citations and notification of proposed penalty. That is why it is very important for an employer to understand in advance why it may want to litigate.
During the 15-day period, an employer has the right to schedule an informal conference with OSHA. During the informal conference, OSHA may reduce the total proposed penalty by a few dollars and re-characterize a citation item from serious to an other-than-serious violation. In general, OSHA does not make significant concessions at this stage in the process. After receipt of the notice of contest, OSHA has 15 working days to forward the notice of contest to the OSHRC for docketing. The OSHRC assigns a docket number to the notice of contest. This starts the formal litigation process.
There are two types of trial proceedings, simplified and conventional. A case qualifies for simplified proceedings if:
➤ There are relatively few citation items;
➤ The aggregate penalty is not more than $20,000;
➤ There are no allegations of willful or repeat violation;
➤ There are no fatalities;
➤ A hearing is expected to take less than 2 days; or
➤ The case involves a small employer.
A motion to remove the case from simplified proceedings must show good cause for removal. A joint motion, however, does not require a showing of good cause. In general, simplified proceedings involve the waiver of pleadings, minimal discovery and a less formal trial. Very few cases in Simplified Proceedings go to trial.
A conventional proceeding involves pleadings, discovery and a formal trial. If the proposed penalty is $100,000 or greater, the chief administrative law judge must assign a settlement judge (not the trial judge), and the parties are required to attend a settlement conference. Typically, the settlement conference is held after discovery is complete. Some settlement judges require the parties to submit a position paper that explains the strengths and weaknesses of their case and what it will take to actually settle the case and will use the information to try to persuade each party to reach a middle ground. Other settlement judges do not require a position paper and take a more hands-off approach. Experience indicates that the latter type of settlement judge tends to be less successful in resolving the case.
Very few cases actually proceed to trial. When a case actually settles depends, for the most part, on the attorney representing OSHA. Some attorneys for OSHA attempt to initiate settlement discussions early in the case after receiving the inspection file. Some attorneys for OSHA only will talk settlement after discovery is complete because it is not until after discovery is complete that counsel on both sides fully can evaluate the strengths and weaknesses of their case and advise their clients where a middle ground might be reached. Some attorneys for OSHA will only talk settlement at the eve of trial. This is designed, for the most part, to gain the most leverage as possible.
Employers must be prepared in the event that the case does not settle. This includes drafting a pre-hearing statement, preparing fact and expert witnesses for examination and assembling exhibits to be used at trial.
After the trial is completed, the administrative law judge will issue a written decision with findings of fact and conclusions of law. The administrative law judge either will affirm, modify or vacate the citations, characterizations or proposed penalties. The written decision becomes a final order 30 days from the date of docketing unless one of the parties files a Petition for Discretionary Review and the petition is granted.
If the Petition for Discretionary Review is granted, the parties will be asked to file briefs and will be given time to respond. Oral arguments may be requested, but that is rare and takes place only when there is a significant issue that affects the regulated community as a whole.
After reviewing the briefs, and oral argument if heard, the chairman and commissioners will issue a written decision. A party has 60 days from the date of the final order to file an appeal with the appropriate U.S. Court of Appeals. An employer is authorized to file an appeal in the circuit in which the violation is alleged to have occurred, where the employer has its principle office or in the Court of Appeals for the District of Columbia Circuit. OSHA is authorized to file an appeal in the circuit in which the violation is alleged to have occurred or where the employer has its principle office, but not in the Court of Appeals for the District of Columbia Circuit.
If the appeals court reverses an OSHRC decision, the administrative law judges are bound to follow the legal precedent in the OSHRC decision, not the legal precedent in the U.S. Court of Appeals decision.
Michael T. Taylor, Esq., is counsel in the Washington, D.C., office of Pillsbury Winthrop Shaw Pittman LLP. He focuses on all aspects of occupational safety and health law. He represents employers and trade associations during federal and state OSHA enforcement litigation and rulemaking proceedings. He also provides OSHA inspection counseling, safety and health compliance counseling, catastrophe management, safety and health audits, safety and health due diligence reviews and whistleblower representation for clients. In addition, he represents employers and trade associations in a wide range of industries. He previously served as acting general counsel of the OSHRC. He can be reached at [email protected] or 202-663-8041.