Editor’s note – Mark A. Lies II is a partner with the Chicago, Illinois, law firm of Seyfarth Shaw LLP. He specializes in product liability, occupational safety and health, workplace violence, construction litigation, and related employment litigation.
Patrick D. Joyce and Adam R. Young are associate attorneys in the Environmental, Safety, and Toxic Tort Group of Seyfarth Shaw. Joyce focuses his practice in the areas of occupational safety and health, environmental litigation, environmental counseling, and construction litigation. Young focuses his practice on workplace safety, whistleblower litigation, as well as occupational and mine safety and health regulatory compliance counseling and enforcement. Legal topics provide general information, not specific legal advice. Individual circumstances may limit or modify this information.
The new year is here and with that comes yet another year of enhanced Occupational Safety and Health Administration (OSHA) enforcement and new regulations. Further, due to the upcoming end of President Barack Obama’s time in office, questions exist as to whether OSHA will continue its aggressive agenda of enhanced enforcement with increased citations and greater penalties or whether the agency will respond to political pressure from Congress. In either case, this year will bring new levels of uncertainty with the agency not seen since the current administration took office in 2009. This article will address OSHA’s current and upcoming enforcement initiatives and trends, all of which will affect employers this year.
Though a number of enforcement initiatives may not technically be considered new for 2016, it can be expected that OSHA will continue to increasingly issue citations under the General Duty Clause and multi-employer worksite doctrine. It is also expected that OSHA will continue to focus its attention on the training and protection provided to temporary employees, especially under its powered industrial truck standard, personal protective equipment (PPE) standards, and lockout/tagout regulations. OSHA has also been stepping up its workplace heat illness initiative, sending expansive subpoena requests to dozens of employers engaged in industries where employees typically can be exposed to heat, including manufacturing and construction, even if no injuries or illnesses have been reported. As such, it is important that employers remain aware of these issues to try to limit liability in 2016.
Increased OSHA Penalties
The new bipartisan budget passed by both the House and Senate and signed by Obama in early November 2015 contains provisions that will raise OSHA penalties for the first time in 25 years. The budget allows for an initial penalty “catch-up adjustment,” which must be in place by August 1, 2016.
The maximum initial catch-up adjustment will be based on the difference between the October 2015 Consumer Price Index (CPI) and the October 1990 CPI. The 2015 CPI came in at 237.838. Based on the October 1990 CPI of 133.500, the maximum catch-up adjustment will be approximately 78.16 percent and the new maximum penalties could be:
• Other than serious violations – $7,000 (current); $12,471 (August 2016)
• Serious violations – $7,000 (current); $12,471 (August 2016)
• Willful violations – $70,000 (current); $126,000 (August 2016)
• Repeat violations – $70,000 (current); $126,000 (August 2016)
After the initial catch-up adjustment, OSHA will be required to implement annual cost-of-living increases, with the adjustment tied to the year-over-year percentage increase in the CPI. Adjustments must be made by mid-January each subsequent year.
OSHA has the option to implement a catch-up adjustment less than the maximum if the agency determines increasing penalties by the maximum amount would have a “negative economic impact” or the social costs of the increase outweigh the benefits, and the Office of Management and Budget agrees. However, Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels has long advocated for a substantial increase in penalties so it is difficult to envision the agency seeking anything other than the maximum increase.
Increased Use of the General Duty Clause
Under the Occupational Safety and Health Act’s General Duty Clause, designated as section 5(a)(1), employers are required to protect employees from recognized workplace hazards that are correctible and likely to cause serious harm or death. Where OSHA lacks a specific standard to address a workplace hazard, the agency has increasingly used the General Duty Clause as a “gap filler” for enforcement. OSHA thus has used the General Duty Clause to cite employers for a wide range of alleged hazards and to enforce policies the agency issued through guidance documents rather than formal regulations, including ergonomics, illness due to exposure to heat and cold, arc flash/arc blast, combustible dust, chemicals and other hazardous materials for which there is no existing regulation, and fall protection.
In 2016, it is expected the agency will use the General Duty Clause to cite employers for repetitive tasks causing ergonomic issues and musculoskeletal disorders. Moreover, in light of the increasing publicity given to tragic incidents involving workplace shootings, OSHA will continue its emphasis on citing employers for workplace violence incidents and violations, particularly in some industries such as healthcare, certain retail facilities, and public transportation. Employers should maintain policies and training on these issues to prevent liability and business disruptions from OSHA’s increased use of the General Duty Clause in 2016.
OSHA to Reduce Reliance on Permissible Exposure Limits
In a move that could drastically affect day-to-day operations at a large number of employers, OSHA has signaled in a new permissible exposure limit (PEL) request for information from industry and other stakeholders that it plans to “revoke a small number of obsolete PELs.” Though the rulemaking did not list the PELs OSHA is considering revoking, the revocation of any PELs opens the door for greater use of the General Duty Clause to regulate employee exposure through standards that are not generally industry standards. Several commentators believe the PEL walk back is simply OSHA’s attempt to increase employer liability for more citations while avoiding formal rulemaking to establish PELs. Combined with higher fines to be implemented by August 2016, this could be seen as a new revenue stream for OSHA.
Multi-employer Worksite Doctrine
The presence of multiple employers, contractors, consultants, and temporary workers at the same workplace is increasingly common in construction, manufacturing, and other industries. OSHA has taken note and made the prosecution of multiple employers at the same workplace a major priority. Under OSHA’s multi-employer worksite policy, more than one employer may be citable for a hazardous condition that violates an OSHA standard. This can occur even when the employer being cited had no employees exposed to the hazard in issue. The agency will use a two-step process to determine whether more than one employer is to be cited.
The first step is to determine whether the employer is a creating, exposing, correcting, or controlling employer. A creating employer, who caused a hazardous condition, is citable even if the only employees exposed are those of other employers at the site. The exposing employer, whose own employees are exposed to the hazardous condition, is citable if it knew of the hazardous condition or failed to exercise reasonable diligence to discover the condition, and it failed to take steps consistent with its authority to protect its employees. The correcting employer, who is responsible for correcting the hazardous condition, is citable if it fails to meet its obligations of correcting the condition. The controlling employer, who has supervisory authority over the worksite and the power to correct safety and health violations or require others to correct them, is citable if it fails to exercise reasonable care to prevent and detect violations on the site. In general industry, the host employer is typically the controlling employer, while in the construction industry it is the general contractor and, therefore, carries a higher compliance burden than other employers.
If OSHA determines an employer falls into one (or more) of these four categories, it will then determine whether the employer met its obligations with regard to preventing and correcting the violation(s). It is important to note that the multi-employer worksite policy can also be utilized for criminal prosecution of employers if the following underlying elements are present: a fatality, a willful violation of a specific regulation, and a causal connection between the violation and the death. As OSHA continues its aggressive application of the multi-employer worksite doctrine, employers should be wary as to potential liabilities for contractors, temporary workers, and other non-employees at their worksites.
Final Implementation of Hazard Communication Standards
OSHA adopted new Hazard Communication Standard safety data sheets (SDS) in December 2013. Chemical end users must be in compliance with the new SDS from up-stream suppliers and manufacturers by June 1, 2016. Employers should not simply swap in a new SDS for an old material safety data sheet (MSDS) and throw away the old MSDS. Previous MSDS should be kept on file for several reasons:
• The prior MSDS provides proof that an employer was compliant with the old Hazard Communication Standard.
• The prior MSDS can be useful evidence in defending against workers’ compensation claims by employees for occupational diseases alleged to have arisen from exposure to hazardous materials during the course of employment.
• The prior MSDS can be useful evidence in defending third-party toxic tort claims alleged to have been caused by exposure to hazardous materials that the employer may have incorporated into products manufactured and sold by the employer or by-products that are resold or distributed by the employer.
The new SDS also present an opportunity for employers to update training, hazard communication, and safety procedures for chemicals. The new SDS include 16 separate sections, some of which are similar or identical to the existing MSDS sections. There are, however, a number of significant changes and compliance challenges.
When OSHA begins enforcement on June 1, 2016, it will focus on whether the employer has reviewed the SDS to identify any new risks as well as whether it has evaluated its existing compliance programs in light of the 16 requirements in the new SDS.
The Hazard Communication Standard affects nearly every employer, from chemical manufacturers to retailers to hotels whose employees work with cleaning agents. Employers need to be aware of their obligations to communicate hazards of chemical substances and must have a process for updating existing labels, SDS, hazard assessments, and training programs to comply. Here are some best practices for employers to follow:
• Employers should review the new SDS in a timely fashion upon receipt.
• If the employer does not receive the SDS in a timely manner, it should promptly communicate in writing with the manufacturer to obtain the SDS. If the employer does not receive the SDS by June 1, 2016, OSHA has indicated that it will not cite employers who show “good faith efforts” to obtain the SDS.
• Employers should evaluate the workplace using the SDS to identify hazardous chemicals and how their employees may be exposed.
• Employers whose employees work with or around hazardous chemicals must ensure that they review the updated SDS and assess each of the employer’s underlying compliance programs (e.g., emergency action plan, storage of flammable and combustible materials, PPE, respiratory protection, etc.) that may be impacted by the SDS.
• Employers should ensure that employees who work with or around hazardous chemicals are trained to recognize the pictograms and hazard warnings that will be required under the new Hazard Communication Standard. Employers should document this training and develop mechanisms to ensure that employees understand the hazards of working with or around hazardous chemicals.
In 2014, OSHA implemented an initiative to protect temporary employees under the premise that those workers are not provided the same level of training and protections as full-time employees. Under this initiative, OSHA inspectors are required to ask during inspections whether the inspected worksite has temporary employees and determine whether those employees are exposed to hazardous conditions. Moreover, OSHA will also inquire during the inspection as to whether the training provided to the temporary workers is in a language and vocabulary the workers can understand. If OSHA determines that the host employer failed to provide adequate training or protections to the temporary employees, OSHA could issue citations not only to the temporary staffing agency, but also the host employer under the multi-employer worksite doctrine. In order to enforce this initiative, OSHA has hired compliance officers who are bilingual (or certified interpreters) to conduct employee interviews to determine if the employees understood the training. If the training was in English and the employee is not fluent in English, then the training is not “effective” and the employer can be cited. Likewise, if the training material is in writing and the employee is illiterate, the training may not be considered effective.
Potential Recordkeeping Rule Changes
One anticipated rule would require employers to electronically submit their injury and illness records “regularly” instead of only when OSHA requests them through a formal request. With such disclosure, the OSHA 300 Log and supporting documents could be used to trigger OSHA inspections. In addition, the records would be made available to the public so anyone could see an employer’s injury and illness rates. This opens employers to risk of adverse public reaction if such information becomes available in the media without understanding the context of the records and the complexity of the recordkeeping requirements leading the public to erroneously construe the injury and illness rate as creating an unsafe workplace. This disclosure could also result in additional workers’ compensation litigation by attorneys who could utilize this information to file claims.
Even more concerning for employers is another anticipated rule that would make the recordkeeping requirements an “ongoing obligation.” OSHA is expected to interpret this change to allow the agency to cite recordkeeping violations up to five years old, well past the act’s six-month statute of limitations. This is in direct contradiction to well-established case law, including a 2012 Washington, DC, circuit decision affirming the six-month limit (AKM LLC v. Perez ). There is hope, however, from a recent Eighth Circuit Court of Appeals case that prevents OSHA from reinterpreting a rule in such a way that is “plainly erroneous or inconsistent with the regulation” (Perez v. Loren Cook Company). This will be an area to which employers should pay close attention.
New Silica Rule Expected January 2017
Crystalline silica particles are commonly dispersed in the air when workers cut, grind, crush, or drill silica-containing materials such as concrete, masonry, tile, and rock. OSHA estimates that 2.2 million American workers are regularly exposed to respirable silica, with most in the construction industry. Other common sources of exposure are building products manufacturing, sandblasting, and hydraulic fracturing (fracking) of oil and gas wells. Crystalline silica exposure can cause lung cancer, chronic obstructive pulmonary disease, and silicosis, an incurable and sometimes fatal lung disease.
OSHA has outlined a new silica rule as a top priority since the beginning of the Obama administration. The agency sent a draft rule to the Office of Management and Budget in February 2011 and has pledged to release a final rule by January 2017. OSHA’s silica rule will establish permissible silica exposure limits for all workers at 50 micrograms per cubic meter of air, cutting allowable exposures in half in general industry and maritime businesses, and even more in construction. The rule will also require that employers conduct periodic air monitoring, limit workers’ access to areas where exposures are high, enforce effective methods for reducing exposures, provide medical exams for workers who have been exposed to elevated levels of silica, and require worker training about silica-related hazards.
Enhanced Criminal Liability
OSHA has had the ability to seek criminal liability against employers and managers since the advent of the law if a willful violation of a regulation causes the death of an employee, although a conviction is a misdemeanor with a six-month period of imprisonment and a $500,000 penalty for the employer and $250,000 for an individual. This seemingly minimal criminal liability has now given rise to a recent criminal enforcement agenda announced by the Department of Justice (DOJ) on December 17, 2015, to seek additional liability against employers when there is a workplace safety violation having nothing to do with a fatality. DOJ will seek criminal penalties under other criminal laws for lying during an OSHA inspection, making false statements in government documents, obstructing justice, and tampering with witnesses. All are felonies and can result in imprisonment ranging from 5 to 20 years and enhanced monetary penalties.
With the advent of this criminal prosecution initiative, employers must be extremely careful during OSHA inspections, particularly in the aftermath of a fatality or serious injury, and not engage in any conduct that remotely approaches lying during an inspection, obstruction of justice, or tampering with witnesses. Employers must engage knowledgeable counsel at the outset to understand and avoid these liabilities.
OSHA’s Use of the Rapid Response Form
On January 1, 2015, OSHA’s more robust reporting rules took effect, requiring employers to report all work-related inpatient hospitalizations, amputations, and losses of an eye within 24 hours of the event:
• Within eight hours after the death of any employee as a result of a work-related incident (which includes heart attacks), and
• Within 24 hours after the inpatient hospitalization of one or more employees or the occurrence of an injury to an employee involving an amputation or loss of an eye, as a result of a work-related incident.
To streamline these reports, OSHA adopted the Interim Enforcement Procedures for New Reporting Requirements, allowing the agency to triage new reports to determine whether the report warrants an inspection or a Rapid Response Investigation (RRI). Category 1 reports – including fatalities, multiple hospitalizations, repeat offenders, and imminent dangers – will automatically trigger an on-site inspection. Category 2 reports may trigger an on-site inspection if it involves two of the following factors: continued exposure, safety program failure, serious hazards, temporary workers, referrals from other agencies, and pending whistleblower complaints. If Category 2 factors are not present, the agency may initiate a RRI in lieu of an inspection.
OSHA may also initiate an RRI where the area director believes there is a “reasonable basis that a violation or hazard exists.” The agency will direct employers to find out what led to the incident and what modifications can be made now to prevent future injuries to other workers. OSHA will fax a letter instructing employers to “immediately conduct your own investigation into the reported incident and make any necessary changes to avoid further incidents,” and complete a Non-Mandatory Incident Investigation form attached to the letter. The employer’s report and investigation will be used by the agency to determine whether to conduct its own inspection. A word of caution: these rapid response forms could be used against employers as admissions of liability for a violation of a regulation as well as grounds for OSHA to find a “willful” violation if the employer responds in a way that it appears to admit prior knowledge of the hazard that could be an “admission” of liability. Accordingly, as rapid response forms are increasingly used in 2016, employers should write only limited, careful responses and avoid any language that might support an admission. Employers must preserve attorney-client privilege in the conduct of their underlying root cause analysis investigation and disclosures on the forms, and seek the advice of counsel where necessary.
How to Deal with an Aging Workforce
According to the Bureau of Labor Statistics, one in every five American workers is over 65 years old and by 2020, one in every four will be over 55. Though the overall effects of an aging workplace are not entirely clear, OSHA has begun to analyze the potential hazards associated with these employees and will likely propose guidance. Following are precautions employers should take to protect aging employees:
• Workstations and job tasks must be matched to the needs of the individual employee.
• Older workers tend to have fewer accidents, but when they do, the injuries tend to be more severe resulting in a longer recovery time.
• Older workers tend to experience more back injuries.
• Older workers are more likely to develop musculoskeletal injuries because they have been performing repetitive motions for a longer period of time.
• Muscular strength and range of joint movement may decrease.
• Vision and hearing challenges may be more prevalent in older workers.
Midnight Regulations and Interpretations
As with any outgoing administration, there is always the potential for “midnight regulations,” often implemented through rulemaking in the waning days of an administration, particularly after an election. Though Obama will not leave office until January 20, 2017, employers should prepare for last-minute regulations or potential executive orders that may have lasting effects on employers. For example, under the Clinton administration, OSHA issued an ergonomics rule shortly after the 2000 election that Congress was forced to repeal shortly after President George W. Bush took office in January 2001. The likelihood of midnight regulation under Obama depends heavily on which party wins the presidency in November 2016. To avoid potential political fallout for a new administration, OSHA will likely implement any new regulations as early as possible in 2016.
The first seven years of the current administration have been very challenging for employers under OSHA and other employment laws. This year may be the most challenging yet as the current administration wants to promote its agenda in the waning days of its authority. The president has said he intends to “leave it all on the field” as to his agendas, which means that employers must continue to be vigilant, keep informed, and respond properly.
February 2016 RENDER | back