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What To Do When OSHA Knocks On Your Door – Best Practices For Dealing With An OSHA Investigation

Prepared for -

77th Wisconsin Safety Council Annual Conference

April 16, 2019

Kalahari Resort & Conference Center

Daniel A. KaplanFoley & Lardner LLPMadison, WI Office(608) 258-4231dkaplan@foley.com

Overview

OSHA – The Basics

Enforcement Activities Under Trump Administration

OSHA’s Areas of Focus

The Inspection Process

– The Warrant Process

– Best Practices and Tips

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OSHA Administration – The Basics

OSHA – Federal Agency responsible for enforcement of OSH Act regulations

10 Regional Offices

– Wisconsin is in Region 5

– 4 Area Offices in Wisconsin

Appleton

Eau Claire

Madison

Milwaukee

OSHA Overview - Regulations and State Programs

OSHA – Occupational Safety & Health Administration – Federal Agency responsible for enforcement of OSH Act regulations

• OSH Act regulations – legally enforceable standards deemed necessary to protect workers on the job.

• Employers are responsible for knowing the standards applicable to their establishments and for ensuring employees have and use personal protective equipment where required for safety.

• Employees must comply with all rules and regulations applicable to their own actions.

• The General duty clause states that each employer shall furnish...a place of employment which is free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.

OSHA Overview - Regulations and State Programs

State-OSH Agencies – There are 22 approved State Programs in operations (including Puerto Rico) that have application to private industry (i.e., non-state or gov’t entities).

• For the most part, State Programs include regulations that closely resemble or mirror the Federal regulations

• However, some states have comprehensive Programs with additional or expanded regulations that extend beyond the requirements of the federal law

• E.g., California, Washington, Oregon

• Must comply with the applicable State Programs when operations in that State

• State Programs incorporate similar enforcement procedures and activities

• Current states with active Programs include: Alaska, Arizona, California, Hawaii, Indiana, Iowa, Kentucky, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Oregon, Puerto Rico, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington and Wyoming

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OSHA’s Overarching Concerns: Whistleblowers, Severe Injury Reporting, Electronic Injury Reporting

Whistleblower Enforcement

• OSHA is responsible for enforcing 22 different federal statutes as they relate to retaliation and whistleblowing

• Entire web site devoted to whistleblowing and retaliation: http://www.whistleblowers.gov/index.html

Severe Injury Reporting Program / Enhanced Reporting Obligations

• New reporting obligations as of January 1, 2015 (amputations, in-patient hospitalizations, loss of eye)

• Inspections scheduled in about 33% of all reports; with inspections occurring approximately 58% of amputation reports

• OSHA believes under-reporting still occurring (by at least 50%) – w/3nd year of program, OSHA began to impose unadjusted penalties for failure to report at the maximum: $12,934 each instance

Electronic injury reporting – initial due date was moved back to Dec. 30, 2017

• 2018 OSHA Form 300A – was due between Jan. 2 – March 2, 2019 (to be timely)

• OSHA Forms 300 and 301’s – NOT to be filed electronically (Notice of Proposed Rule Making)

• Failure to timely file electronically WILL lead to citation and penalties (Interim Enforcement Guidance – OTS Citations with MAX penalties)

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OSHA Enforcement Activities

Budget had stayed flat or reduced in prior 3-4 year period (2013-2017)

– FY2018-2019: first increase ($553M to $558M)

Fewer compliance officers (2012 to today)

Declining number of inspections

– 40,000+ federal inspections in 2012

– 32,020 in 2018

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Decreased Inspections

79,291 Inspections conducted in 2015 (35,820 by Feds, and 43,471 under State programs)

73,013 Inspections conducted in 2018 (32,020 by Feds, and 40,993 under State programs)

5-year trend: flat to slight decrease as to #inspections / slight increase in #citations even though fewer inspections

Use of new tool: Voluntary Investigation Report

Number of Citations issued has decreased over time as well

– But penalty amounts increased

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Increased Penalties

2016 Fed. Budget Bill approved inflation rate increases

OSHA penalty caps went up by more than 80% as a result in Aug. 2016

Add’l annual increase based on inflation rate every January

Increased Penalties 2015

– $7,000 (Serious / OTS)

– $70,000 (Willful / Repeat)

2019 (Jan. 23, 2019)

– $13,260 (Serious / OTS)

– $132,598 (Willful / Repeat)

Average fines / violation

– FY2009: $970

– FY2013: $2,135

– FY2015: $2,397

– FY2017: >$3,200

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Increased Penalties

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OSHA cites JBS Green Bay (Green Bay) (Sept. 27, 2019) for machine guarding

and PSM violations: 1 Willful and 10 Serious

violations – Fines total $221,726

OSHA cites Didion

Mining (Cambria) (June

2017) following explosion

due to combustible dust

killed 5 employees. 14

Willful violations (19

total). Fines total $1.84

Million

OSHA cites Avid Pallet

Services (Beloit) (March

26, 2019) for continued

employee exposure to

wood dust. Repeat,

Serious and OTS - Fines

total $188,302

OSHA cites C&D

Technology (Milwaukee)

(May 18, 2018) for lead

exposure and failure to

maintain compliant lead

program. 2 Repeat and 6

Serious violations - Fines

total $147,822

Region 5 – Recent Significant Wisconsin Citations

OSHA cites Dowa THT America (Bowling Green, OH) (March 21, 2019) for various violations related to exposing employees to

atmospheric, thermal, electrical, and mechanical hazards as they performed maintenance inside heat-treating furnaces. OSHA

issued 25 violations, including Willful, Repeat, Serious and OTS classifications - Fines total $1.33 Million

Number of cases with fines totaling more than $100,000 has increased significantly in past 5 years

Since January 2015: more than 500 citations with penalties in excess of $100,000 (fed cases only)

Since January 2015: more than 75 citations with penalties in excess of $250,000 (fed cases only)

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Areas of Focus - Citations Most Cited Regulations (FY2018)

– § 1926.501 – Fall Protection

– § 1910.1200 – Hazard Communication

– § 1926.451 – Scaffolding

– § 1910.134 – Respiratory Protection

– § 1910.147 – Lockout/Tagout

– § 1926.1053 – Ladders

– § 1910.178 – Powered Industrial Trucks

– § 1926.503 – Fall protection training

– § 1910.212 – Machine Guarding

– § 1926.102 – PPE (Eye and Face)

Most Often Cited Willful Violations

– Lockout/Tagout(1910.147)

– Lead (1910.1025

– Mechanical Power Presses (1910.217)

– Machine Guarding (1910.212)

– General Duty Clause (5(a)(1))

OSHA’s National Emphasis Programs

• National Emphasis Programs (NEPs) – 2018

• Combustible Dust

• Federal Agencies

• Hazardous Machinery (guarding emphasis; amputations)

• Hexavalent Chromium

• Lead

• Primary Metal Industries

• Process Safety Management

• Shipbreaking

• Trenching & Excavation

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Severe Violator Enforcement Program

Employers cited with Willful, Repeat, Failure to Abate (involving a fatality, “high-emphasis hazard,” highly hazardous chemical (PSM-covered), or egregious enforcement issues)

– Fatality requires only one causally-related violation

– High-Emphasis hazards are those that are the subject of certain NEPs; must be two (2) violations; must be “high gravity” violations

– PSM-covered requires three (3) violations that may lead to release of hazardous chemicals

Requires mandatory follow-up inspections, increased company-wide inspections, reduced settlement opportunities

OSHA is averaging about 100 SVEP cases a year since introduction in 2010

– 23% involve fatalties

Very difficult to get “out” of SVEP once in

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Fatality Cases

Willful violations can lead to criminal exposure

Fatality results from violation of safety regulation

Area Director must complete summary memorandum to DOJ recommending prosecution

– Only the DOJ can make the recommendation to pursue criminal prosecution

– Can lead to / thru a grand jury process (depending on jurisdiction)

– Penalties can range: $250,000 (individual) - $500,000 (corporation) per Item

– Up to 1 year in jail possible (executives / management of operations / safety directors / even supervisors in some instances)

The Inspection Process / How to Handle an Inspection

The Inspection Process

3 Basic Types of Inspections

– Complaint

– Programmed

– Report (not a complaint)

Compliance officer

– Must respect 4th Amendment Restrictions (see later)

– Procedures:

Opening Conference (parameters of inspection)

Inspection (can include interviews)

Record / Information accumulation

Closing Conference

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The Inspection Process

OSHA Enforcement Procedures

OSHA’s Field Operations Manual (FOM)

– Directive No.: CPL 02-00-148

– Link to Field Operations Manual

OSHA’s web site is very useful

– www.osha.gov

Regulations

Interpretative guidance (letters)

Compliance directives

Establishment search information (citations past/present)

What to Do When OSHA Shows Up

Two OSHA compliance officers

Demanding to conduct a “wall-to-wall” inspection (or any inspection at all)

What do you do?

Do not to panic

Get copies of their identification

Have identification information faxed to your attorney or corporate safety

Ask compliance officers for the purpose for their visit (why/what brought them here) and the scope of their intended inspection

Ask if they have a warrant

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DO NOT!!

Invite OSHA in to look around

Automatically allow OSHA in per their request

Be afraid to discuss scope, parameters of contemplated inspection

Be afraid to make them wait for a little, while you contact whomever you need to be contacted (including attorney)

Be afraid to ask for a warrant

The Law About Warrants

4th Amendment

OSHA must respect the 4th

Amendment to the Constitution – freedom from unreasonable searches and seizures

Can require OSHA to go away unless they have a warrant

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Warrant or No Warrant

You can let OSHA in without a warrant

You can also require OSHA to obtain a warrant before allowing them into the workplace

May allow for better control of the inspection

Won’t OSHA get mad; be punitive? NO!!!

Scope of Inspection

Before demanding a warrant, attempt to gain agreement on scope (parameters) of inspection

– Speak first with Compliance Officer (CSHO), but do not be afraid to approach the Area Director

Often depends on type of inspection

– Complaint = limit to areas of complaint

– Report = limit to areas included in report

– Program = addressed by type of program (but may also include a wall-to-wall)

What will OSHA do?

What kind of Area Director do you have?

Is s/he a table pounder –demanding compliance and threaten to go to court, or

Will s/he reach a mutual agreement on the scope and parameters of inspection?

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Exceptions to Needing a Warrant

Employer consent

Third-party consent (e.g., Airport authority, property owners, general contractors)

“Open fields” doctrine

Viewable by the public

Plain view

Imminent danger

How Does OSHA Get A Warrant

Ex parte application

Federal district court

Typically via the magistrate judge

Must establish “administrative probable cause”

Administrative Probable Cause

Different than criminal probable cause

Depends on the basis for the search:

Pursuant to neutral OSHA program

Instigated by an employee’s complaint

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Warrant Scope

Full Scope -- Entire Facility

OR

Narrow Inspection

The Inspection Process –Start of Inspection

Opening Conference

– Client should have Safety Director, HR, Operations Manager

– CSHO outlines basis for inspection, scope, parameters

– May also ask for various policies and records

Will always ask to review OSHA 300 Log

Walk-Around Inspection

Be prepared to “parallel” OSHA inspection

– Employer team should have camera, video (if OSHA has video), etc.

– Note pad – designated observer and note keeper

Capture where and what CSHO does

– Monitor/test if CSHO conducts monitoring/tests

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Employee Interviews OSHA will normally ask to speak to employees and

management

– CSHO will ask to speak to employees without management present

Employee gets to choose (interview, no interview, who is in interview)

You want to be able to explain rights to employees before request to interview

– If CSHO asks to speak to Management employee

Must allow management (attorney) to be present

Management should NEVER sign any statement or notes

– Maintain notes of who CSHO interviews

Employee Interviews

Tools / Preparation

– General Interview Guidance (handout)

– Know Your Rights (handout)

– Do you want a translator

– Never sign a statement

Why?

Lots of Good Reasons

Who can be present?

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Copies of Materials Provided

Whenever you provide materials to CSHO, always maintain an add’l copy for your working file (to share with your attorney)

You have time when producing information

– ONLY thing required to be made available immediately: OSHA injury and illness logs (3-5 years)

– Advise CSHO that materials sought will be emailed if possible

– You should review all materials before sending

– Don’t fear supplementing materials if helpful

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Closing Conference

OSHA must hold a closing conference at conclusion of inspection (same day, weeks or months later)

– Will identify anticipated violations

Citation must be issued within six (6) months

Penalty Computation

FOM Outlines Process for Calculation of violation penalties

Gravity-Based Penalty determinations (GBP)

Penalty Adjustment Factors

– Size (0%-60% reduction)

– Good Faith (15% or 25% reduction)

– History (10% reduction)

Informal Settlement Conference

Within 15 working days of receipt of Citation

Conducted with Area Director and usually compliance officer

Date/Time posted at workplace not less than 3 days before

Union representatives/employees permitted to attend

Informal Settlement Agreements (form is similar everywhere)

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Notice of Contest

Not later than 15th

working day after receipt of citation (NO exceptions)

Must identify items, penalties and abatement dates that are being challenged

Pointer: challenge everything if filing Notice of Contest (later leverage)

Affirmative DefensesMost frequently used defenses

– Pre-emption of General Duty clause

– Multi-employer worksite

– Infeasibility

– Greater hazard

– De minimis violation

– Unavoidable employee misconduct

– Statute of limitations

Unavoidable Employee Misconduct

Must prove four elements

– Safety policy in place to address hazard

– Policy adequately communicated to involved employees

– Failure of employee to follow policy could not be predicted (employer conducts inspections to discover)

– Company enforces its safety policies through discipline

Can be raised at Informal Settlement Conference as well to help persuade Area Director

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ATTORNEY ADVERTISEMENT. The contents of this document, current at the date of

publication, are for reference purposes only and do not constitute legal advice. Where

previous cases are included, prior results do not guarantee a similar outcome. Images of

people may not be Foley personnel.

© 2019 Foley & Lardner LLP

Questions / Comments?Daniel A. Kaplan

Co-Chair Labor & Employment Practice Group

Foley & Lardner LLP

150 E. Gilman Street

Madison, WI 53703

(608) 258-4231 (direct)

dkaplan@foley.com

ATTORNEY ADVERTISEMENT. The contents of this document, current at the date of

publication, are for reference purposes only and do not constitute legal advice. Where

previous cases are included, prior results do not guarantee a similar outcome. Images of

people may not be Foley personnel.

© 2019 Foley & Lardner LLP

Thank you.