Going down the road of litigation isn’t always the right path to take when your organization is on the receiving end of an OSHA citation.
Your company has just been cited for a safety violation or workplace incident by the Occupational Safety and Health Administration (OSHA). What should you do now?
You have 15 days to respond and according to John Ho, the co-chair of the OSHA workplace safety practice at international law firm Cozen O’Connor, contesting an OSHA citation shouldn’t necessarily be your automatic response. There are many factors to consider when determining a course of action, he says, explaining that a decision should weigh issues that may have significantly greater liabilities than the actual OSHA penalties imposed.
“Lawyers are expensive and usually you’re going to spend more money on litigation, even if you win,” Ho says. “To fight a $30,000 to $50,000 OSHA (fine) – the cost/benefit analysis could probably tilt you away from litigating.”
Ho, a former trial attorney with the United States Department of Labor, shared his insights during a presentation he gave at a recent safety conference on how an organization might handle OSHA audits and contest citations.
To Contest or Not
Among the issues to consider when deciding whether to pay the fines or go to trial are:
Employer negligence or tort claims: If an employee is injured and a tort claim is made or a fatality occurs and an employer is accused of being negligent, then these may be the ultimate determiners of an Employer of Record moving forward to contest a citation. In these cases, employers need to make sure their OSHA legal counsel is working with general liability counsel.
What is your contract worker liability: In situations where you are not the Employer of Record and are employing contractors and sub-contractors, there may be an indemnification provision for these workers through work agreements. Check them to understand what your liabilities might be in the case of a contract employee who suffers a workplace injury or is killed. Be aware that workplace incidents or previous OSHA citations may risk the continuation of contracts.
Do you seek to participate in public bidding: Government contract bids typically require that a company declare previous violations of U.S. labor laws. Having too many of these can disqualify companies from bidding on government contracts.
How might labor unions react: A company’s OSHA citations could be used as leverage during labor negotiations by unions or perceived as a reason for workers to unionize. Citations can give the appearance that a company is perceived to not be doing enough to ensure worker safety.
Does the citation involve the General Duty Clause: This is a legislative provision that says employers must provide a workplace free from serious hazards that could cause death or serious harm to workers. If an OSHA citation is issued under this provision, then the likelihood of winning the case is lower, Ho says, explaining these cases are much harder to disprove.
Top 10 OSHA citations: These are the most frequently issued worker safety citations and can change in any given year. If a company receives an OSHA citation, it is likely to be from among OSHA’s Top 10 list, so it’s always wise to eliminate these hazards from a workplace.
Continually rising OSHA penalties: OSHA fines usually increase every year and are based on the consumer price index related to inflation. Currently OSHA fines for repeat and willful violations is a maximum of $145,027 for each occurrence. Ho says that 90 percent of OSHA citations are “serious” and adds that fatalities are much more likely to be prosecuted. The Build Back Better Act proposed by U.S. President Joe Biden includes legislation that will impose significant increases to OSHA penalties. While the legislation is dead for the moment, due to business resistance, Ho warns it could resurface.
Appealing an OSHRC Decision
Contested citations are brought before the Occupational Safety and Health Review Commission (OSHRC), which is an independent U.S. federal agency that is not part of the Department of Labor or OSHA. The OSHA trial attorney assigned to the case has 30 days to file a complaint, but as a matter of course will usually ask a judge for an extension, Ho says. Things move relatively quick after that.
“Unlike federal court, it’s not going to take three years to litigate these claims,” he said. “I think you can expect about a year from start to finish.”
An OSHRC decision can be appealed to a three-person appointed panel and, if an OSHA citation guilty ruling is not overturned, another appeal can be made to circuit court, Ho says.
Legal Fee Awards
If you do contest an OSHA citation and win the case, then you can apply for an attorney’s fee award, through the Equal Access to Justice Act (EAJA) that provides payment for attorney fees and other expenses. Ho says an award is likely to be granted if there is no conviction, unless a court determines that the U.S. Secretary of Labor was “substantially justified” in bringing an OSHA case to trial or there are other special circumstances that might make an award “unjust.”
“Bear in mind that if you’re paying your lawyer $500 an hour, you’re not going to get back $500 an hour,” he says. “There are (legal) rates where the government is going to say, ‘OK, we’ll give you $200 or $250.’ But it’s worth knowing this (program) is out there and it should be part of your deliberation as to whether you want to fight an OSHA judgement.”
A more simplified OSHRC proceeding, usually for smaller businesses, considers less serious OSHA infractions, involving more basic issues of law and fact, limited discovery and OSHA penalties of not more than $30,000. These hearings typically take less than two days to conduct and a small business employer can appear at an appeal hearing with or without council.
“If your case qualifies for a simplified proceeding,” Ho says, “then a least you’re going to know that you can probably be done in three months.”