Employers hit with OSHA’s most serious—and expensive—citations may have new leverage for appeal, as long as they “did not do nothing,” a new federal-court ruling concludes.
The U.S. Court of Appeals for the District of Columbia Circuit has thrown out more than 100 willful violations and nearly $2 million in penalties imposed by the Occupational Safety and Health Review Commission, an independent agency that reviews decisions of the Occupational Safety and Health Administration.
|The OSHA fine bounced from nearly $7.5 million, to $518,000, to $1.975 million. It will now be reassessed again.|
In a ruling March 6, the appeals court said that the Review Commission overstepped its bounds in 2010 when it fined Dayton Tire & Rubber Co. $1.975 million for OSHA citations originally issued in 1994.
The $70,000-per-violation question: How to prove that a violation was “willful?”
At issue was a then-highly-publicized case involving the death of a Dayton Tire Co. employee, who was killed in 1993 at a plant in Oklahoma City, OK, after a machine activated unexpectedly.
In 1994, then-Secretary of Labor Robert Reich personally and publicly served Dayton, owned by Bridgestone/Firestone Inc., with 98 willful violations related to employee training and nine involving lock-out/tag-out (LOTO) issues. The proposed penalty: about $7.5 million.
Willful violations are OSHA’s highest level of infraction, reserved for the most egregious wrongdoing. One violation can carry a fine of up to $70,000—10 times that of a so-called “serious” violation.
According to OSHA, a willful violation involves “intentional disregard for the requirements of the law or plain indifference to employee safety and health.”
Appeals: ‘There it Sat…’
Dayton contested the 107 citations before the Review Commission.
In 1997, after a 31-day trial that included 90 witnesses, a commission Administrative Law Judge (ALJ) affirmed each violation that OSHA had not already withdrawn.
In addition, even though the judge found that Dayton’s “actions were consistent with a good faith belief and effort to comply with the LOTO standard,” he upheld 37 violations as willful because “Dayton knew its corporate parent, Bridgestone, had previously been cited under the LOTO standard for similar violations.”
|One issue in the case was whether the company or its maintenance contractor was responsible for complying with LOTO standards.|
The judge then reduced the fine to $518,000. However, Dayton appealed again, to the full commission—and “there [the case] sat, fully briefed and untouched, for over 12 years,” the appeals court ruling noted.
When the Review Commission finally acted in 2010, it overturned the ALJ, deemed all of the violations willful, and imposed a $1.975 million penalty.
The plant, meanwhile, had closed in 2006.
Dayton then took the case to the Appeals Court, basing its primary challenge on the years-long delay in assessing the penalties.
The court agreed that the delay was “excessive and deplorable” but “grudgingly decline[d]” to dismiss the case for that reason, ruling that the panel’s “dawdling—while regrettable—did not render its order inequitable or pointless.”
The delay, the court added, had not harmed Dayton.
On the other hand, the court sided with Dayton’s claims about the severity of the violations, saying the commission lacked evidence “for its finding that the violations were willful.”
The court defined a willful violation as “an act done voluntarily with either an intentional disregard of, or plain indifference to, the [Occupational Safety and Health] Act’s requirements.”
To prove such serious wrongdoing, OSHA “must show that the employer was actually aware, at the time of the violative act, that the act was unlawful, or that it possessed a state of mind such that if it were informed of the standard, it would not care,” the court found.
That is a tall order, the court added—one that can be negated by a “good faith, reasonable belief by an employer that its conduct conformed to the law.”
In this case, the court noted, the ALJ had found evidence that “an effort was made to comply with the standard on a plant-wide basis.”
Questions of Responsibility
A key issue in the case was a determination by former plant safety manager Phillip McCowan that Dayton’s employees were not responsible for LOTO compliance because the company contracted out the equipment service and maintenance work to a third party called Ogden Allied.
When Kelley Mattocks succeeded McCowan as safety manager in 1992, she reviewed and accepted that assessment, despite several warnings from employees and an OSHA inspector that Dayton was non-compliant, the court said.
The Review Commission ruled that Mattocks “either knew Dayton was non-compliant or was unwilling to investigate for fear of uncovering Dayton’s non-compliance,” but the court said that conclusion was “based more on speculation than evidence.”
The court called Mattocks’ conduct “negligent at most” and said: “While Mattocks could have done more, she did not do nothing.”
It added: “[I]t takes a lot to be plainly indifferent.”
Entitled to ‘Good Faith’
The court found that “an employer is entitled to have a good faith opinion that his conduct conforms to regulatory requirements.”
Employer conduct “should not be construed as constituting a willful violation of the [OSH] Act merely because [the Department of] Labor holds a contrary opinion on the facts and advises the employer of that opinion.”
“Indeed, what the ALJ acknowledged and the Commission dismissed was the possibility of good faith. “
The Review Commission says it now has procedures in place to prevent long delays on appeals cases.
Dayton, for one, hopes so.
The appeals court kicked the case back to the Review Commission for yet another assessment, adding as it did so:
“We trust the commission will act before the decade is out.”