Will OSHA Put You in Jail? An Interactive Look at ... Legal presentation.pdf · the accident and at your history with the City Inspectors. ... investigation or proper administration

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© Copyright 2015All Rights Reserved

Will OSHA Put You in Jail? An

Interactive Look at Inspections

and Concerns About Criminal

laborlawyers.com

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Howard A. Mavity |Travis W. Vance

[email protected]

[email protected]

April 21, 2016

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WHAT MAKES AN EMPLOYEE’S DEATH WORSE?

Few things are as terrible as losing one of your employees.

Guilt is normal and even good. One’s shock and remorse stems from

one’s basic decency.

• Now assume that the local DA and law enforcement are interested …

and perhaps the ATF because an explosion occurred … which means

that the Chemical Safety Board and State and Local Fire Marshalls are

involved.

• Or maybe you lost a tower crane in New York City or Philadelphia, and

now, both law enforcement and other investigators on site looking at

the accident and at your history with the City Inspectors.

• Or maybe a chemical release occurred … and it’s a slow news day.




QUESTIONS TO ASK YOURSELF

• When should I worry about criminal exposure?

• What factors raise concerns?

• When should we lawyer up?

– Where is the job?

– What caused the fatality … fall, trenching, explosion, crane

collapse, chemical release?

– OSHA Emphasis areas?

– Local political climate, including elections?

– Number of Federal, State and Local agencies investigating?

– Multiemployer site?

– New Hires Temps, Subs involved?




PUT ON YOUR PARANOIA CAP

View your facts in the most negative fashion ….

• Did you or should you have known of the hazard?

• Did your GL insurer audit raise concerns about the dust

collection system?

• Have supervisors cut corners before on Confined Space

Entry?

• Was the project running behind … does it look as if

supervisors or customers were pushing?

• Were lift meetings properly handled, Operator training

and certification, maintenance?



CITATIONS UNDER THE ACT



OSHA HAS THE BURDEN TO PROVE CERTAIN

ELEMENTS

• Existence of a Hazard

• Exposure

• Applicable Standard

• Employer knew of or should have known of the Hazard

with the exercise of Due Diligence



SECTION 5(a)(1) GENERAL DUTY CITATIONS

• Existence of a Hazard

• Exposure

• Employer knew of or should have known of the existence

of the Hazard

• Hazard recognized by the Employer’s Industry

• Recognized Abatement



SUPERVISOR ROLE IN OSHA CITATIONS:

LEARNING OF OSHA VIOLATIONS

“Because employers can only obtain knowledge through

their agents, the actions and knowledge of supervisory

personnel are generally imputed to their employers, and

the Secretary can make a prima facie showing of

knowledge by providing that a supervisory employee knew

of or was responsible for the violation.”



UNPREVENTABLE EMPLOYEE

MISCONDUCT DEFENSE ELEMENTS

• Establish work rules designed to ensure safe work and to avoid

OSHA violations

• Communicate the work rules to employees

• Train the employees as needed

• Take appropriate steps to discover violations

• Effectively enforce the rules and practices when violations are

discovered; and

• Document the above actions



MOST PREVALENT

TYPES OF CITATIONS

•Other than Serious

• Serious

• Repeat

•Willful

•Varies in some State Plans, such as under

Cal-OSHA.



OTHER THAN SERIOUS

A violation that has a direct

relationship to job safety and health,

but is not serious in nature, is

classified as “other-than-serious.”

($0-7,000)



SERIOUS

A serious violation exists when the

workplace hazard could cause an accident or

illness that would most likely result in

death or serious physical harm, unless the

employer did not know or could not have

known of the violation.

($0-7,000) ($12,500?)



REPEAT

An employer may be cited for a repeated

violation if the employer has been cited

previously for the same or a substantially

similar condition and, for a serious violation,

OSHA's inspection history for the employer

lists a previous OSHA Citation issued within

the past three years.

($0-70,000) ($125,000??)



WILLFUL

A willful violation is a violation in which

the employer either knowingly failed

to comply with a legal requirement

(purposeful disregard) or acted with

plain indifference to employee safety.($0-70,000) ($125,000??)



PENALTIES – CRIMINAL VIOLATIONS

• Willful violation & employee death:

$10,000 or 6 months or both

• Second conviction:


• Advance notice of inspection


• Falsification of required records, etc.


• Murder or attempted murder of CO

Term of years to life



ADMINISTRATION’S FOCUS ON CRIMINAL

ENFORCEMENT OF WORKPLACE SAFETY

• The Administration’s supporters genuinely want to put employers in jail.

• Appointed Leadership believes that more prosecutions should occur and should focus on individuals; not just companies.

• Criminal focus is more common in non-safety settings, such as finance and environmental claims.

• Bad facts make bad law – as in the case of the OSHA Temporary Employee Initiative, a few egregious cases support the effort.

• The OSH Act has limited provisions for criminal action and limited teeth.

• Most high profile Fed cases and many State cases involved false testimony and evidence issues.



ADMINISTRATION’S FOCUS ON CRIMINAL

ENFORCEMENT OF WORKPLACE SAFETY

• For all of the talk and periodic pronouncements, OSHA criminal prosecution have never been a big priority to OSHA leadership.

• Career leadership, especially at the Regional level, which has the biggest role, have been wary of Fed criminal actions.

• Same for Solicitors to some extent.

• With their large workload and constant demands from D.C., US Attorneys have never had much interest in Fed OSHA prosecution.



Elements of the Crime

• Defendant was the employer;

• Defendant violated an OSHA Standard;

• The violation directly caused an employee’s death; and

• Defendant willfully committed the violation.



New Developments – Not Just Smoke

• New York and Philadelphia local prosecutions

• Cal-OSHA Bumble Bee Tuna

• 27 year sentence to Peanut Company CEO for salmonella

• Allman Biopic Criminal case

• Late 2015 – Regional Administrators approach US Attorneys and

some AGs;

• Yates Memo

• U.S. v. Gordon Smith

• Atlantic States Steel Pipe



Corporate Liability• If there are grounds to criminally prosecute a corporation, the

corporation may be held vicariously liable for acts/omissions

committed by an agent of the corporation if the act is committed:

• within the scope of the agent’s employment, and

• with some intention of benefitting the corporation.

Corporations may also be held vicariously liable for acts committed by an

agent of the corporation’s subsidiary.

Officers and directors of a corporation may be held liable for corporate

actions even if they are unaware of the misconduct.



Know the Law : Fatality Cases



Obstruction of Justice

18 USC § 1505 - Obstruction of proceedings before departments,

agencies, and committees

– Corruptly, or by threats or force, or by any threatening letter or

communication

– Influences, obstructs, or impedes or endeavors to influence,

obstruct, or impede

– The due and proper administration of the law under which any

pending proceeding is being had before any U.S. department or

agency

– Penalty: Fine and/or 5 years imprisonment.



Obstruction of Justice18 USC § 1519 - Destruction, alteration, or falsification of records in Federal investigations and bankruptcy

– Knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry

– In any record, document, or tangible object

– With the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any U.S. dept or agency. . . or in relation to or contemplation of any such matter or case.

– Penalty: Fine and/or 20 years imprisonment.



Mail Fraud

18 U.S.C. § 1341—Elements of Mail Fraud

– Having devised or intending to devise a scheme to defraud

(or to perform specified fraudulent acts), and

– Use of the mail for the purpose of executing, or attempting

to execute, the scheme (or specified fraudulent acts).



Conspiracy

18 U.S.C. § 371 - Conspiracy to commit offense or to defraud United States

– Two or more persons conspire

– Either to commit any offense against the U.S., or to defraud the U.S., or any agency thereof in any manner or for any purpose,

– And one or more of such persons do any act to effect the object of the conspiracy…

– Penalty: Fine and 5 years imprisonment or both, unlessthe object offense is a misdemeanor (penalty cannot exceed the max penalty for the misdemeanor).



CASE STUDY

How does the threat of criminal investigation affect

the OSHA Inspection and Enforcement Process?



In April 2013, your Raleigh facility was cited

for one serious violation of a fall protection

standard and a serious violation of a

personal protective equipment (PPE)

standard. Both citations carry a proposed

penalty of $7,000.



At the informal conference NC OSHA offers you the

following proposal:

- Reduce the PPE violation to Other than Serious and

$3,500

- Reduce the fall protection violation to Other than

Serious and $0

Do you accept NC OSHA’s deal?

• A. Yes

• B. No

28



Three Years Later – April 21, 2016 . . .

An OSHA Inspector (CSHO) is at the door, demanding to

conduct an inspection of your Gastonia facility.

Q. Do you have to allow this inspection?

A. Yes

B. No

C. Maybe



SHOULD YOU DEMAND A WARRANT?

• A policy call

• Few employers routinely require warrants

• May be necessary to gain time, such as when a manager

or counsel genuinely needs to be present

• An “ex parte” procedure

• What if you have concerns about criminal exposure?



THROUGHOUT THE ENTIRE INSPECTION

ALWAYS REMEMBER

• It is your site!• You have rights. . .

– Inspection conducted in a reasonable manner

– Inspection conducted during a reasonable time

• Completion of inspection within 6 months

• Be cooperative and responsive but maintain control of the inspection

• Fatalities present issues due to urgency;• Law Enforcement often involved in fatality,

but not investigating a “crime scene.”



OPENING CONFERENCE

• Ascertain purpose of the inspection– May affect scope, attitude and importance!

• Establish “scope” of the Inspection – get copy of complaint if applicable

• Set ground rules for inspection

• Don’t volunteer information – that’s the investigator’s job.

• Treat the Inspector in a professional fashion

• Notification of corporate officials and counsel

• Coordination with on-site contractors and vendors

• Trade secret issues

• Documents- Next Question!



During the Opening Conference, the CSHO asks for the following documents.

1. Your entire LOTO policy;

2. All new hire/orientation safety training for last five years;

3. Your OSHA 300 Logs;

4. The operator’s manual for your powered industrial trucks; and

5. Your MSDS (now SDS) sheets.

Do you give him all of these documents?

A. Yes

B. No



MAINTAINING CONTROL

• Includes determining before an inspection...

– What OSHA standards are applicable – do you comply?

– Know OSHA Emphasis areas

– Assure support staff (receptionists, secretaries, guards) are trained.

– Know what to say when government is at your door.

– Who is the right company person to contact, including your counsel?

– Have a written OSHA response plan in place.

– MUST have Catastrophe Response or Critical Incident Team in place BEFORE Fatalities, including advice on Criminal considerations.



PRE-INSPECTION ACTION PLAN

• OSHA Poster

• Assignment of responsibilities

• Training (documented, including OJT and temps)

• Recordkeeping

• Housekeeping

• Hazard Assessment and abatement

• PPE needed during inspection

• Review of previous citations

• Review of insurance and third-party audits

• Periodic self-audits and reviews

• If using temporary employees, check 300 logs and training



THE WALKAROUND

• Inspection may last several hours or several months; the CSHO may come back

• Employer – right to accompany Compliance Officer (“CSHO”)

• An Employee Representative, if any, must be permitted to attend entire inspection

• Limit the area seen by the CSHO –OSHA expects this action – require reason to expand scope and preserve evidence.



Keep All Requests within the

Scope of the Inspection

• “Please provide names of all temporary

workers.”

• “Please provide name of all contractors working

on site while I was present.”

• “If you don’t provide the lock-out tag-out

program by today at 5:00 p.m., I will note that it

does not exist.”



2016- What’s New with OSHA Inspections

1. First penalty increases since 1990

- Serious- increase from $7,000 to $12,500

- Willful/repeat- increase from $70,000 to $125,000

2. Weight-based inspections

- Fewer, more complex inspections

3. Company-wide abatement initiative

- Sec. of Labor v. Central Transport, LLC

4. New reporting requirements- Amputations/in-patient hospitalization, loss of eye

5. Expanding Complaint-Based Inspections (Why?)

5. Be aware of State Plan differences.



Back to the Inspection . . .

You take the CSHO to your three story lobby where you

find 2 employees of a subcontractor working to install

equipment about 25 feet above the ground, without fall

protection.

The CSHO takes a video of the work being done

and asks you whether you think the workers should

have fall protection.



Q. Do you have to allow the CSHO to

videotape or take photographs?

A. Yes

B. No



THE INSPECTION

• CSHO will usually take photographs– Video equipment – Right to protect proprietary trade secrets

• CSHO may perform relevant tests– e.g., air sampling, noise monitoring

• Advise CSHO that only side-by-side sampling or monitoring will be allowed (problems with Salt Lake OSHA Lab)

• Have your IH specialist watch the calibration process

• We’re developing our defenses throughout the inspection



Do you answer the CSHO’s question about

whether the workers should have fall protection?

A. Yes

B. No



As you talk near where the work is being conducted,

one of your supervisors and an hourly worker walks by

discussing whether the subcontractor employees should

be wearing fall protection. The CSHO wants to

interview the hourly worker and the supervisor.

Q. Do you have to permit these interviews?

A. Yes

B. No

C. It depends



Q. Can you (or someone else) sit

in on these interviews?

A. Yes

B. No

C. It depends



Q: Should you sign a witness statement?

A. Yes

B. No



• Interviews

– Schedule away from production floor or work area

– Normally in company conference room

• Signed statement

• Deposition

THE INSPECTION



THE INSPECTION

• Hourly employee interviews

– OSHA takes position no management present

– Up to employee – can have Employee Representative

– Advise employee of his/her rights, appreciation of cooperation, and to tell the truth

• Warning: Employees have whistleblower rights. Be sensitive to not appear to OSHA or the employee to be coercing the employee or soliciting misrepresentations.

• What if a criminal investigation is open?

– Individual counsel? Obstruction? Conspiracy? Evidence?



Assume that two employees were crushed after

the walls of a trench collapsed.



During the Inspection, your internal investigation quickly reveals that

the supervisor overseeing the work knew that the trench was unstable

but told the workers to enter the area without a trench box.

Q: Do you fire the supervisor?

A: Yes

B: No

Q: Do you hire counsel for the supervisor?

A: Yes

B: No



How to Handle These Facts?

• Boxes were available.

• Supervisor was an older employee but a new hire. He worked for another contractor for many years and you assumed that he was well trained. In safety walkarounds, your site safety professional mentioned that he was a bit rigid and “did things like he had always done the work.”

• Unbeknown to you, the supervisor was involved at a trenching fatality and a Fed-OSHA inspection in Illinois years before and fired.

• He and the customer engineer had talked at length that morning about being behind and how to catch up the work.

• One of the employees was well trained and the other was new, and while he received training, his language and literacy skills were weak.

• Regular safety walkarounds occur at your jobs, as well as periodic visits by the regional safety manager.

• A sub complained to one of your project engineers that your employees “not working safely” a few days before, but provided no facts.

• It’s been a rainy month.



How do you handle the investigation of the fatality?

Do you take written witness statements?

A. Yes

B. No

Do you have counsel on site?

A. Yes

B. No

What documents are most important for defenses and challenges to

OSHA making out the elements ?

A. What about willful concerns?

B. Criminal concerns?



CLOSING CONFERENCE

• Employer’s opportunity for free discovery

• Advise of observed unsafe conditions

• Usually, brief description as to possible violations – no discussion of penalties,

classification and abatement dates

• Note any abatement made during the inspection

• Suggest possible corrections

• Request photos and monitoring results

• Discuss appeal rights

• Not a time for debate

• Take good notes and attempt to better understand any possible citations



Citation 1 Item 1 Type of Violation: REPEAT

29 CFR 1926.501(b)(1): Employees working on a walking/working surface with

an unprotected side more than 6 feet above the lower level were not protected

from falling:

(a) On or about April 21, 2016 and at times prior, the employer did not

ensure that workers were protected from fall hazards. The crew was exposed to

falls of over 25 feet when they were not wearing fall protection at the employer’s

construction site.

This is a repeat of an earlier citation for violation of 29 CFR

§1926.501(b)(1), Inspection No. 12345678, of employer’s Pittsburgh facility,

which became a final order on January 30, 2013.

Date By Which Violation Must be Abated: 5/31/2016

Proposed Penalty: $70,000.00



Citation 2 Item 1 Type of Violation: WILLFUL

29 CFR 1926.651(k) Daily inspections of excavations, the adjacent areas, and protective systems shall be made

by a competent person for evidence of a situation that could result in possible cave-ins, indications of failure

of protective systems, hazardous atmospheres, or other hazardous conditions. An inspection shall be

conducted by the competent person prior to the start of work and as needed throughout the shift.

Inspections shall also be made after every rainstorm or other hazard increasing occurrence. These inspections

are only required when employee exposure can be reasonably anticipated.

(a) On or about April 21, 2016 and at times prior, the employer did not ensure that workers were

protected from collapse hazards while working in a trench. Two members of the employers crew were killed

when the trench they were working in was not protected with a trench box that was readily accessible. The

employer was aware of this recognized hazard but deliberately subjected its employees to these conditions.

Date By Which Violation Must be Abated: 5/31/2016

Proposed Penalty: $70,000.00

This matter will also be forwarded to the NC Department of Justice for criminal prosecution of Manager

John Smith and Supervisor Gary Doe.



CITATION OPTIONS

• Agree to citations, pay full penalty

• Informal conference/informal settlement

• Notice of Contest – 15 working days (Federal); some state plan states different time period

• Formal settlement

• Hearing



Q. Are there any considerations other than

the amount of fines/penalties?

A. Yes

B. No



Some of the Additional Costs of

Accepting OSHA Violations

1. Abatement costs- How much will it cost to make the changes/repairs OSHA requires? Is it still feasible to do your work?

2. Repeat/willful costs (3-5 years)

3. Increased insurance/bond premiums

4. Opportunity Costs (Has your company ever been cited for an OSHA violation?); new federal regulations/black list

5. Public perception

6. Use of OSHA citation as evidence of negligence in companion liability case

7. Referral to other agencies, leading to additional penalties (e.g., EPA)

8. Circumventing Exclusive Remedy provisions? Criminal? Individual liability?



Q. The informal conference is our last chance

to resolve the matter on favorable terms before

“going to war” with OSHA by contesting the

Citations and having a hearing/trial.

A. True

B. False



HEARINGS

• Occupational Safety and Health Review Commission

• Formal complaint and answer

• Discovery similar to Federal Court

• Hearing before Administrative Law Judge

• ALJ issues written opinion

• Appeal to three-member Review Commission

• Other options – expedited proceedings



Thank You

Atlanta · Baltimore · Boston · Charlotte · Chicago · Cleveland · Columbia · Columbus · Dallas · Denver · Fort Lauderdale · Gulfport

Houston · Irvine · Kansas City · Las Vegas · Los Angeles · Louisville · Memphis · New England · New Jersey · New Orleans

Orlando · Philadelphia · Phoenix · Portland · San Antonio · San Diego · San Francisco · Tampa · Washington, DC


Howard A. Mavity | Travis W. Vance

[email protected]

[email protected]

