OSHA Citation Liability 2023 - Do Not Miss The Forest For The Trees

March 21, 2023
By: Adam R. Young and Mark A. Lies, II

It is important to have a clear vision of the potential legal and other negative consequences that can arise from receiving an Occupational Safety and Health Administration (OSHA) citation in 2023 and beyond. Most employers are likely unaware that OSHA has emerged from the pandemic with a number of structural changes, not the least of which is a very aggressive campaign to replace significant manpower losses of experienced personnel, many of whom were the baby boomers who formed the original cadre of the agency.

What does this mean in terms of future enforcement and the potential for receiving a citation and whether the employer should challenge it? As these new OSHA compliance officers began to conduct their initial inspections, employers can expect that many inspections will be conducted in a cursory or incomplete manner because the compliance officer:

• Lacks experience in how to conduct a proper inspection either on-site or virtually;
• Lacks the substantive understanding and knowledge regarding the scope and interpretations of the underlying regulations and recognized industry safe practices; or
• Lacks experience with the many elements necessary to establish an OSHA citation and a misguided sense that the mere occurrence of an “accident” or “employee injury” is all the evidence necessary to establish a citation.

Citations Lacking Factual or Legal Foundation

Frequently, because of the foregoing factors, an employer may receive a citation that

• Has no factual foundation (i.e., the citation lacks a credible factual basis for the alleged violation description (AVD) as to how the employer allegedly committed the violation or the underlying incident actually occurred);
• Has no legal foundation (that is, the regulation does not apply to the underlying factual scenario in the AVD; for example, confusing the requirements for machine guarding with lockout/tagout (LOTO)); or
• Has no factual or legal foundation.

Failure to Consider Potential Defenses

In addition, because of the foregoing factors, the compliance officers (and perhaps their supervisors) frequently may not consider that the employer may have bona fide defenses to the issuance of any citation either due to lack of knowledge or experience in assessing the factual information that is forthcoming from the inspection, including:

• A citation is time-barred by the statute of limitations (that is, the citation was not issued within six months from when the alleged violation actually occurred, not when OSHA learns about it)
• Unavoidable employee misconduct is the cause of the alleged violation (that is, the employer took all reasonable and feasible actions to avoid the violation from occurring).
• Strict compliance with the regulation is simply not feasible from either existing technology or economically and the employer has developed equally effective alternative means to comply.

Employer Dilemma

Once the employer receives a citation, the clock starts running on the day following actual service of the citation and if the employer does not reach a satisfactory settlement or files a written notice of contest by the close of business on the 15th working day after service, the citation becomes final, the employer can no longer contest and the employer must abate the citations, whether or not there was any violation in the first place. Note: This time frame may vary in a non-federal (state plan) OSHA jurisdiction.

Thus, the employer will have to conduct a timely investigation of the citation to determine a) whether the violation occurred, b) whether the classification of the violation is appropriate (non-serious, serious, repeat, willful), c) whether the penalty is based upon consideration of all the facts and d) whether abatement is feasible.

Penny Wise and Pound Foolish

We often hear this scenario where an employer decides not to contest a citation that may have a monetary penalty that appears nominal, without considering that there are many additional negative liabilities that must be considered and the employer later regrets taking such peremptory action.

Consider the Forest and the Trees

Before deciding to accept a citation based on the assessment of the penalty, an employer must consider the following negative consequences in a typical scenario. Your company has just received a set of federal OSHA citations. A typical set of citations may have a total penalty of $15,000-$30,000. You have 15 working days from the date of receipt to contest or appeal the citations, or they will automatically become final. You are considering attending an informal conference with OSHA and accepting the citations to “put them behind you” because of the rather nominal proposed penalty. Putting citations “behind you” may set the company up for additional higher-gravity citations, greater penalties, criminal liability and lost business down the road. Employers often fail to appreciate the numerous adverse legal and negative business consequences of accepting a set of OSHA citations. In the long term, an employer often will be better served by contesting the citations (especially those to which it has strong defenses) and reaching a settlement with exculpatory, non-admission language that protects the company in collateral litigation.

Business Reputation

Establishment Search

OSHA citations are public records and are made publicly available. All OSHA inspections, citations and failure to contest are publicly available on OSHA’s Establishment Search website. As the name suggests, the website is searchable by employer name and location. The Establishment Search identifies the classification, regulation and status of any citation. State plans (23 states where state agencies enforce occupational safety and health for private employers) may choose to upload additional factual information to that listing.

Press Releases

OSHA issues press releases relating to many citations where the agency often alleges unsafe acts and failures by the employer. The Obama and Biden administrations have used this press release tool more often, allegedly to “shame” employers and amplify the effects of the agency’s limited enforcement resources. Press releases can be widely reviewed and result in lost business opportunities, jeopardizing existing relationships with business partners, and lost confidence from consumers in publicly facing industries. Bloomberg and other new outlets track OSHA citations and may draft articles about citations issued to and accepted by employers.

Commercial Tracking Services

Many sophisticated businesses use commercially available third-party tracking services to run suitability checks on potential business partners. The best services track OSHA citations and can flag the employer as a “yellow” or “red” based on the history of the employer’s acceptance of citations. Serious classifications can result in a “yellow” or “red” rating, as can any citations associated with a fatality. Conservative business partners may blacklist employers based on their third-party listing, including those who have a “red” rating. If your business works in industries where potential business partners utilize these third-party tracking services, especially construction, OSHA citations can have a major negative business consequence.

Future Citations

Repeats

Any citation that the employer accepts goes onto the OSHA Establishment Search database and can serve as the basis for a repeat. During inspections, OSHA reviews that database and can use any accepted citation as a “predicate” for a repeat classification for five years. The repeat must be issued for a substantially similar hazard, normally cited under the same regulation. Repeats are enhanced classifications that result in five or 10 times the penalty, currently up to $145,020. These citations are much more costly to employers and deleterious to business reputations. OSHA penalties are adjusted and increased annually by the agency based on a number of factors.

Willfuls

Because accepting a citation admits knowledge of an alleged hazardous condition, accepting a citation can also result in a basis for a future willful citation in the future. Willful violations have a 10 times enhanced penalty currently up to $145,020. In the case of a willful citation relating to a fatality, there is potential criminal liability, prosecution and imprisonment of managers.

Severe Violator Enforcement Program

OSHA’s Severe Violator Enforcement Program (SVEP) tracks alleged serious offenders of the OSHA standards. The agency maintains a publicly available list and includes employers based solely on the allegations in OSHA citations. A repeat or willful associated with a fatality results in the employer being placed in the SVEP, as can multiple high gravity citations. The SVEP can result in increased inspections, citations and bad publicity.

Tort Litigation

The acceptance of OSHA citations may provide evidence for use in tort litigation. When an employee is injured in a typical accident, the workers’ compensation program usually provides the exclusive remedy for employee compensation and recovery. In some states like Wisconsin, Ohio and California, following the occurrence of an accident and issuance of citations, an employee can pursue and receive an enhanced workers’ compensation payment (by up to 50%) based on the acceptance of the citation if the injury were due to a violation of a safety regulation. In certain jurisdictions, a citation depending on the classification can allow an employee to avoid worker’s compensation and pursue direct civil action against the employer.

However, if the injured worker is a non-employee (such as a contractor or staffing agency employee), the worker is not similarly barred from bringing a negligence action. Depending on the state and circumstances, the acceptance of OSHA citations may be admissible in those actions. A plaintiff may use non-compliance with OSHA standards as evidence of negligence.

Conclusion

We regularly advise employers on the defenses they may have to OSHA citations and the bases to contest them. We also provide compliance training, including complimentary webinars to employers and associations. If you need additional information, please do not hesitate to contact us.