1. A fatality (of the employer’s employee or the employee of another employer under the “multi-employer” workplace doctrine);
2. Violation of a specific Occupational Safety and Health Administration (OSHA) regulation (the so-called general duty clause cannot be utilized);
3. The violation was willful (either an intentional violation, typically a direct order to commit the violation, or due to continuing conscious indifference); and
4. A causal relationship (between the violation and the fatality).
At present, a conviction is considered to be a misdemeanor, with a potential penalty of $500,000 per fatality against the employer and $250,000 against an individual manager, as well as six month’s imprisonment.
Conspiracy to Defraud OSHA
As a result of a March 2005 federal government initiative to investigate and prosecute companies that violate both Environmental Protection Agency (EPA) and OSHA laws, employers are now subject to substantially enhanced criminal liability, including felony convictions. Under the federal conspiracy statute found at U.S. Code, Title 18, Section 371, there is criminal liability for unlawful agreements to defraud the United States by impeding or impairing by dishonest means the lawful functions of government. This unlawful agreement to defraud the United States is frequently referred to as a “Klein conspiracy” from a Court of Appeals decision in United States v. Klein, 247 F.2d 908 (2nd Cir. 1957).
Forklift Hazards Create Criminal Liability
A conviction of an employer of multiple criminal indictments involving EPA and OSHA violations in United States v. Atlantic States Cast Iron Pipe Company demonstrates how an employer can be exposed to this liability for a conspiracy to defraud OSHA during an inspection.
In Atlantic States, the employer was indicted for defrauding OSHA by altering existing conditions at the employer’s foundry to conceal safety hazards to which employees were exposed. For example, in March 2000, an employee died after he was run over by the employer’s forklift. In the indictment, the government charged that the employer had ignored hazards involving forklift trucks, including brake problems and allowing untrained employees to operate the forklifts.
The indictment further charged that after the fatality the employer took action to deliberately conceal from OSHA what had occurred (perhaps to avoid OSHA citations). The concealment was alleged to include:
• repairing the forklift brakes before OSHA commenced its inspection (it should be noted that after a workplace fatality OSHA must be notified within eight hours and the accident scene cannot be disturbed until the OSHA inspector has an opportunity to commence the inspection and releases the scene);
• conducting a demonstration of the forklift for the compliance officer that was misleading (since the brakes had been surreptitiously repaired after the accident but before the inspector arrived);
• instructing employees to provide false information to the inspector as to how the fatality occurred;
• creating a false written inspection report after the accident that indicated that the forklift had been inspected prior to the accident and was in “perfect operating condition” (as all employers should be aware, there is a requirement to inspect forklift trucks each day prior to use for safe operation).
As a result of its continuing inspection, OSHA identified employees who were willing to testify against the employer as to the foregoing actions, resulting in the felony convictions. It is ironic to note that if the employer had not engaged in these post-accident wrongdoings and OSHA had decided to proceed with its limited criminal prosecution authority under the act, the employer’s liability would have potentially been limited to a misdemeanor. Thus, it appears that the concealment resulted in much greater liability than the underlying violation would have been.
Recommendations
Obviously, based upon the convictions, it appears that the jury believed that the employer engaged in an unlawful agreement to defraud OSHA. This points out the necessity for an employer to be extremely careful as it responds to the events occurring after a serious workplace accident, particularly involving a fatality.
Employers must consider the following actions as the basis for a post-accident response:
• Seeking prompt legal assistance from counsel experienced with OSHA law in order to preserve and assert legal rights and to establish appropriate legal privileges, including attorney-client, work product, and self-critical analysis.
• Preservation of the accident scene and all related evidence.
• Preparation of employees to respond to an OSHA inspection, including preparation for OSHA interviews.
• Informing employees of their rights during an OSHA inspection (including the right to refuse to be interviewed by the inspector; right to have another employee present during the interview; right to end the interview at any time; right to refuse to sign a statement or be tape recorded).
• Advising employees that they may be waiving their rights under the Fifth Amendment (against self-incrimination) by being interviewed by the inspector who is not required to inform them of their Miranda rights to remain silent and that anything they say or write can be used as a basis for future criminal action.
It can be expected that the federal government will continue to look for future opportunities to use the full arsenal of criminal statutes to enforce workplace safety, as occurred in this case. Thus, employers must be aware and prepare accordingly to avoid such liability.
Labor and the Law - June 2007 Render