White Collar Corner: What to do when litigating an OSHA citation
Posted: 7:31 pm Thu, February 16, 2012
The Occupational Safety and Health Administration has inspected a workplace and has decided that OSHA standards have been violated. Subsequently, the employer receives a citation from OSHA in the mail. What are the next steps?
At this point, an employer has several decisions to make. First and foremost, the employer must determine whether to challenge the alleged violations within the citation before the Occupational Safety and Health Review Commission. If they decide to do so, what is the employer’s goal in making the challenge? To obtain a reduction in the proposed penalty’s classification or monetary amount, or both? To litigate and win dismissal of the citation after a hearing?
Contesting an OSHA citation may require the expenditure of substantial amounts of time and money, so the employer must understand the process in deciding which path to take forward. This article summarizes the process and some of the considerations to be evaluated in deciding if and how to challenge and litigate an OSHA citation.
When can an employer expect to receive a citation from OSHA? The Occupational Safety and Health Act of 1970 requires OSHA to issue a citation “with reasonable promptness,” but not more than six months after OSHA discovers, or reasonably should have discovered, a violation. Thus, an employer may not receive a citation from OSHA for several weeks or even months after an OSHA inspection.
The OSHRC has held that a citation issued within six months of the violation meets the reasonable promptness requirement of the OSH Act, unless the employer is able to demonstrate that it has been prejudiced in defending the citation by OSHA’s delay. This is a heavy burden on the employer, but all of the circumstances surrounding the delay should be evaluated as a possible defense to the citation.
Additionally, an employer should review the relevant dates carefully if a citation is received close to the end of the six month statute of limitations. In most instances, the six month statute of limitations begins to run on the date of the OSHA inspection.
OSHA is required to include certain information within the citation, including a specific OSHA standard or OSH Act provision alleged to be violated and a description of the alleged violation “with particularity.” These requirements are intended to give an employer “fair notice” of the nature of the violation.
The OSHRC has held that vacating a citation due to a lack of particularity is an extreme sanction that should only be granted where an employer has shown it has been prejudiced in its ability to defend against the citation. Again, this is a substantial burden for an employer to meet.
Classifications and proposed penalties
The citation will also contain proposed penalties and proposed dates by which the employer must rectify the alleged violation. The OSH Act provides OSHA with the authority to impose civil penalties of up to $7,000 per violation for those classified as “serious” or “other-than-serious” and up to $70,000 per violation for those classified as “willful” or “repeat.”
OSHA will classify a violation as “serious” where the agency concludes that there is a “substantial probability” that the hazardous condition in the workplace could result in “death or serious physical harm” to employees.
Where a potential incident due to a hazardous condition is not likely to cause death or serious physical harm, but will impact the safety and health of employees, OSHA will classify the violation as “other-than-serious.”
A willful violation exists where an employer has either demonstrated an intentional disregard for the requirements of the OSH Act or a plain disregard for employee health and safety. In other words, these are egregious violations of OSHA standards.
OSHA may classify a violation as repeat where the OSHRC has issued a final order against the same employer for the same or a substantially similar violation.
OSHA evaluates four factors in determining the amount of proposed penalties, including the gravity of the violation, the size of the employer, the good faith efforts of an employer to implement an effective health and safety management system, and the employer’s history of previous OSHA violations.
An obvious factor to consider when deciding to challenge an OSHA citation is the cost to defend versus the quantity of the proposed penalty. In most cases an employer is not inclined to spend $20,000 to defend a $7,000 proposed penalty. As noted above, statutory penalties may be substantially higher for willful and repeat violations. Therefore, employers facing willful and repeat violations in nearly all cases will usually challenge these violations to some degree.
The final order from prior litigation may be in the form of a settlement agreement between the employer and OSHA or a decision from the OSHRC. Therefore, if an employer has previously settled a citation, the employer may be susceptible to a repeat classification in the future for similar violations, depending on the language of the settlement.
Employers must prominently post a copy of a citation at or near the place where the alleged violation occurred or, if such a placement is impracticable, in a place where it is readily observable by all affected employees. The goal of the posting requirements is to provide affected employees with notice of the citation, and the main factor of where to post a citation is reaching the most affected employees possible.
Additionally, if there is an employee representative for the workplace, the employer should notify the employee representative of the citation. As noted below, employees and employee representatives may petition for party status during the contest of a citation. An employer who fails to comply with the posting requirements faces a potential penalty of up to $7,000.
Early settlement possibilities with the OSHA area director
To encourage settlements and reduce the number of conferences, OSHA offers Expedited Informal Settlement Agreements to some employers. OSHA will mail a written Expedited Informal Settlement Agreement, along with the citation, offering to reduce the total proposed penalty by 50 percent if the employer agrees to hire an outside safety consultant and develop a safety and health management system.
If the employer does not commit to hiring a consultant, the penalty reduction will be limited to 30 percent. OSHA will not offer an Expedited Informal Settlement Agreement for citations containing willful and repeat violations or violations resulting from accident investigations. Additionally, Expedited Informal Settlement Agreements are not available to employers with a history of delinquent payments of previous penalties or a poor history of cooperation with OSHA.
By signing the agreement, the employer waives its right to contest each violation and abatement date contained within the citation, and the signed agreement will become a final order by the OSHRC, exposing the employer to possible future repeat violations for similar citations. Employers, therefore, should weigh potential defenses to any violations before signing an Expedited Informal Settlement Agreement, even if the monetary reduction is appealing at first glance.
In order for the employer to decide whether to move forward with contesting the citation, an employer may also meet in an informal conference with the local OSHA office that issued the citation/s to gain a better understanding of OSHA’s stance regarding the alleged violations. During the informal conference OSHA is not obligated to share the agency’s files with the employer.
Although an employer does not need to have an attorney present during the informal conference, in many instances it is advisable for the employer to have counsel present, especially where the alleged violations are severe in nature and/or the proposed penalties are extremely high.
The informal conference also allows OSHA and the employer to engage in settlement discussions. As with Expedited Informal Settlement Agreements, the area director for OSHA is authorized to reduce proposed penalties by up to 30 percent and an additional 20 percent to employers with 250 or fewer employees that agree to retain a safety and health consultant.
Settlements forged during the informal conference may provide additional advantages for the employer beyond simply reducing a penalty. Unlike Expedited Informal Settlement Agreements, settlement discussions during the informal conference provide an employer with the opportunity to present defenses with the possibility of having OSHA eliminate violations from the citation. Additionally, OSHA may revise the dates by which the employer must abate the violations.
These conferences can be useful for settling comparably minor citations and to learn information about OSHA’s position; however, with highly contested matters or matters where the employer is looking to litigate unless there is a substantial reduction in the penalty, in the classification or in the number of citations, they often will not result in settlement.
Contesting and litigating the citation
If the employer and OSHA cannot agree to a settlement, the employer must submit a letter to the OSHA area director notifying the agency that the employer intends to contest the citation within 15 working days of receiving the citation. This is a strict deadline under the OSH Act, and an employer risks a final default order by the OSHRC affirming OSHA’s alleged violations if the employer files a late notice of contest.
Employers and their attorneys must know the final date that a notice of contest may be submitted and ensure that this timeframe is met when contesting a citation. It is a best practice to submit the notice of contest immediately upon receipt of the citation, either at or before any settlement conference, to avoid any risk of default.
After the notice of contest is submitted, OSHA, by the regional solicitor’s office of the Department of Labor (New York City for citations in Rochester and Buffalo), will file a complaint with the OSHRC. The OSHRC’s rules provide that OSHA must file the complaint within 20 days of receiving the notice of contest. However, unlike the strict 15-day deadline for an employer to file a notice of contest, OSHA is granted substantial flexibility in meeting the OSHRC procedural rules.
In order for an employer to have an untimely complaint dismissed, the employer will need to demonstrate that it was prejudiced by the late filing or that OSHA acted contumaciously. Further, it is common practice for OSHA to file, and for the OSHRC to grant, boilerplate motions by OSHA for an extension of time to file the complaint, ostensibly to continue settlement discussions with the employer.
Employers are required to answer or move to dismiss the complaint within 20 days after the complaint is served upon them. Although employers will be granted some leeway on the answer date, an employer should file a motion for extension with the OSHRC if it concludes that additional time is required. It is advisable that the employer communicate with the Department of Labor attorney to request a stipulated agreement so that the answer may be filed at a date later than the 20 days under the OSHRC rules.
If the citation includes relatively few items with an aggregate penalty of less than $20,000, and does not involve a willful or repeat violation or a fatality, an employer may request simplified proceedings within 20 days of the date of the employer receiving notice that the case is on the OSHRC docket.
The goal of the simplified proceedings is to reduce the time and expense required to litigate relatively minor citations. Under the simplified proceedings procedures, discovery is not available as a right and is limited to conditions and time limits provided by the administrative law judge assigned to the matter. Additionally, written briefs are not provided by the parties, and the federal rules of evidence do not apply to hearings under the simplified proceedings rules.
Where practicable, the administrative law judge will issue a decision from the bench, and the judge will reduce the order to writing and transmit it to the employer within 45 days after the hearing. The judge’s decision may be appealed to the OSHRC. The simplified proceedings may represent a valuable alternative to employers that have received relatively low gravity citations due to the speed and cost reductions involved.
For matters that do not apply for simplified proceedings, the OSHRC’s regular rules of procedure will apply to hearings before the OSHRC. Parties are entitled to some discovery, including requests for admissions, production of documents, and interrogatories. However, depositions are only available if the parties consent or if a judge orders depositions upon the showing of good cause. The parties both provide written briefs prior to the hearing, and the federal rules of evidence apply to the hearings before the administrative law judge. A judge’s decision may be reviewed by the OSHRC, and the OSHRC’s decision may be appealed to the federal court of appeals.
Obviously, contesting a citation to the point of an OSHRC hearing is an expensive proposition, and an employer should discuss with its counsel the potential costs and risks associated with undertaking a contest to a hearing, including attorney fees and expert expenses. In many cases, however, it is to the advantage of the employer to be prepared to contest a citation to a hearing.
Settlement after litigation has commenced
Employers and OSHA may continue to engage in settlement discussions where litigation has commenced. In many instances, the exchange of information between the parties will aid in settlement discussions by exposing potential weaknesses in the positions of the parties. As part of a settlement agreement, an employer may be able to negotiate language that the employer does not admit to any of the alleged violations within OSHA’s citation.
The Expedited Informal Settlement Agreements offered by OSHA do not contain non-admission language for the employers, which is another significant risk in signing the Expedited Informal Settlement Agreements. In nearly all cases, OSHA will agree to some form of non-admission language in negotiated settlements, at least to the extent that the settlement can be used as an admission in any proceeding outside of the OSHRC.
However, OSHA is generally unwilling to include non-admission language that prevents OSHA from using the settlement in future OSHRC proceedings, and employers should know that OSHA may still base a “repeat” violation on a negotiated settlement that contains non-admission language that is limited to proceedings outside the OSHRC.
Although it may appear to an employer that an early offer of settlement by OSHA is attractive, there are potential pitfalls down the road when an employer admits to committing OSHA violations in exchange for a reduction in penalties. Employers should discuss any OSHA citation with legal counsel to understand the risks and advantages of settling versus contesting the citation.
Timothy W. Hoover is a partner with Phillips Lytle LLP and is co-chair of the Firm’s White Collar Criminal Defense and Government Investigations Practice Team. He handles white collar and criminal defense matters in federal and state courts. He can be reached at firstname.lastname@example.org or (716) 504-5754.