Epstein Becker Partner Eric Conn On the Rise of OSHA Enforcement

Enforcement of worker death and injury cases by the Occupational Safety and Health Administration (OSHA) is up across the board.

And criminal prosecutions of worker death cases are sure to follow.

That’s the take of Eric Conn, a partner at Epstein Becker & Green in Washington, D.C.

“OSHA enforcement is up in every measurable metric, including number of inspections, number of inspections resulting in citations, number of citations per inspection, average penalty per violation, average penalty per inspection, number of significant cases — cases with $100,000 penalties or more, million dollar cases,” Conn told Corporate Crime Reporter in an interview last week. “Every measure you can think of — it is all up and it is all up somewhat significantly since 2009.”

“The priorities of the agency have also shifted,” Conn said. “There used to be a more balanced approach within OSHA on compliance assistance and cooperative programs in addition to the enforcement side. Almost all of the money and resources and attention that the agencies previously put on cooperative programs has disappeared and been redirected to the enforcement side. We are seeing more boots on the ground, more compliance officers. And that is partly why we are seeing this big surge in enforcement activity.”

And Conn is seeing an increase in activity when it comes to criminal enforcement of Occupational Safety and Health Act (OSH Act) cases.

“Historically, you almost never saw criminal enforcement,” Conn said. “There might have been one or two cases a year since the OSH Act was passed 40 years ago. In that time, there have been over 400,000 workplace fatalities. But fewer than 80 OSH Act cases have been criminally prosecuted over that period of time.”

“We look at whether cases are being referred to the U.S. Attorney for an investigation. Historically, it took the most egregious case for the file to even be referred.”

“I have heard that now, any case that involves a fatality and a willful violation gets a referral to the U.S. Attorney’s office.”

“There are different types of referrals. There is the aggressive referral, where the agency advocates aggressively to the U.S. Attorney to pursue the case.”

“And then there is a cold referral, where OSHA says — there is this policy that says a wilful violation with a fatality must be sent to the U.S. Attorney’s office — but maybe the agency doesn’t believe it’s an appropriate case for a prosecution.”

“I’m not sure that’s really happening. I know of cases with wilful violations and fatalities that apparently have not been referred. But we have certainly seen a big surge in the frequency of cases that have been referred. I don’t think it is every willful case with a fatality. But just about every willful case with a fatality is at least referred to the U.S. Attorney for review.”

When you say — I have heard — you have heard from?

“That’s talk among attorneys in the practice and communications with OSHA officials at different levels,” Conn said.

In an OSHA criminal settlement that broke last week, Conn represented Adams Thermal and negotiated the first ever deferred prosecution agreement in a worker death case.

“U.S. Attorneys offices are engaging in this more than they have in the past,” Conn said. “One of the biggest issues here is that the criminal charge under the OSH Act is a misdemeanor. And historically it has not been pursued very aggressively by the Department of Justice.”

“But in the last five years, we have seen more interest by U.S. Attorneys in these cases. They are taking them up more actively. And as a result, we are seeing more criminal settlements — a plea deal, or other possible resolution that might come before an actual prosecution.”

Over the first 40 years, there were an average of two criminal cases a year. How many have there been over the last five years.

“There is not a pool where I’ve been able to find the data,” Conn said. “And I’ve looked for it. It’s all been anecdotal.”

OSHA does not have a database reflecting how many criminal resolutions there are every year?

“They do not,” Conn said.

Conn wrote a paper earlier this year for the Washington Legal Foundation on OSHA’s Severe Violator Enforcement Program (SVEP).

What is SVEP?

“It’s OSHA’s policy on how to focus enforcement resources on employers that the agency believes are recalcitrant or particularly bad actors,” Conn said. “It is not a brand new or novel enforcement program. It replaced a program known as the Enhanced Enforcement Program (EEP). The EEP was focused on employers with multiple repeat violations.”

“The problem with the EEP was that it was ineffective. What made it ineffective was OSHA’s inability to follow up with the employers it was qualifying into the program. The agency has some belief that these are particularly bad actors. The question became — why aren’t they going in and revisiting these employers for follow up enforcement?”

“And one of the biggest problems at the time was that the qualifying criteria were so broad that the program was pulling in too many employers.”

“Now, they have replaced the EEP with SVEP. The SVEP has many of the same deficiencies as the EEP and some of its own very glaring problems.”

“This SVEP program is bad policy. And if you look at it hard enough, it’s not constitutional. They are qualifying employers into the SVEP based on alleged violations that meet certain characteristics. And generally speaking it’s willful or repeat violations in certain categories — like willful and repeat violations related to a fatality, willful and repeat violations related to certain high emphasis hazards, and willful and repeat violations related to process safety management.”

“The problem is that they are qualifying employers into the program just at the time that they have made an allegation. And if you look at other data and statistics that track how dramatically OSHA citations change from the time they are issued to the time they become a final order, OSHA’s violations more often than not are wrong.”

“The characterizations they assign to violations are wrong. But it is these violations and characterizations that are qualifying employers for this program. And they are qualifying before any final order, any final dispositions, really before an employer has an opportunity to tell its side of the story. And to me there are significant punitive elements to this program that can and do kick in before the employer has an opportunity to defend itself.”

“The consequences of being in the Severe Violators Enforcement Program include mandatory follow up inspections at the same facility where the citations were issued, plus inspections at related facilities.”

“If you are in the SVEP, OSHA is going to pursue certain enhanced elements of a settlement with you. So, they put you in based on allegations, and as you negotiate with them to demonstrate that they are wrong or that the characterization of willfulness is wrong, they are only going to settle with you based on these enhanced terms.”

“These terms include requiring you to bring in a third party auditor to do a safety audit of your workplace and report the findings to the agency.”

“They are going to require that your settlements be corporate wide. Right now under the OSH Act, if OSHA finds a violation, they can require you to abate that violation. And the abatement requirement applies only to the workplace where the inspection took place.”

“In an SVEP settlement, OSHA is going to mandate that you make these changes throughout the corporate enterprise. And very often, they will ask for abatement that is above and beyond what is required by the law. So, this can seriously impact multi-workplace employers.”

OSHA engages in what it calls “regulation by shaming.”

What is regulation by shaming?

“That is use of media, press statements and public statements by OSHA officials in cases that have penalties around $30,000 or more and other meaningful enforcement actions,” Conn said. “They talk about these enforcement actions. The press statements include a quotation from an OSHA official. These quotations tend to be inflammatory and they castigate the employer. These press statements come out just as an allegation has been made. At the time OSHA alleges that an employer has violated the law, they put out a press release that bad mouths, that demeans, that describes an employer as careless, that portrays the employer in a very negative way.”

“The focus of that program has been to shame that employer and scare other employers into conducting themselves differently.”

(For the complete transcript of the Interview with Eric Conn, see 27 Corporate Crime Reporter 35(12), September 16, 2013, print edition only.)

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