By Mark A. Lies, II, Brent I. Clark, James L. Curtis and Craig B. Simonsen

In 1994, then Secretary of Labor, Robert Reich, personally served Dayton Tire (Dayton) with a citation alleging over one hundred willful violations of the Occupational Safety and Health Act (OSH Act). Dayton contested the citation, and by 1997, an appeal was before the Occupational Safety and Health Review Commission (OSHRC). The appeal then sat there, with the OSHRC, fully briefed and untouched, for over twelve years, until the Commission issued an order in 2010 affirming nearly all of the violations and assessing a $1.975 million penalty! The Circuit Court of Appeals has now reversed the OSHRC and found that the OSHRC lacked  substantial supporting evidence for finding that the violations were willful.  Dayton Tire v. Sec’y of Labor, No. 10-1362 (D.C. Cir., March 6, 2012).

In 1993 a Dayton employee died from injuries sustained when a machine activated unexpectedly. The incident prompted OSHA to send an inspector to the plant to assess Dayton’s lock-out/tag-out (LOTO) compliance. Based on that inspection, OSHA cited Dayton alleging 107 willful LOTO violations and proposing a penalty of about $7.5 million. Of the 107 cited violations, 98 were for failing to train individual Dayton employees to the “authorized” level. The remaining nine violations were for failing to develop adequate safety procedures for particular machines, failing to utilize LOTO procedures, failing to provide necessary locks and tags to authorized employees, and failing to conduct periodic inspections.

After a hearing before an OSHRC administrative law judge (ALJ), which included testimony from ninety witnesses over thirty-one days of trial, the ALJ issued a decision in 1997 that affirmed each violation that had not been withdrawn by OSHA. Additionally, even though the ALJ found that Dayton’s “actions were consistent with a good faith belief and effort to comply with the LOTO standard throughout the Oklahoma City plant,” he characterized thirty-seven of the violations as willful because “Dayton knew its corporate parent, Bridgestone, had previously been cited under the LOTO standard for similar violations.” Dayton Tire, 1997 WL 152083 (No. 94-1374, 1997). The ALJ assessed a total penalty of $518,000.

From 1997 until 2010 the case sat fully briefed before the OSHRC.  Then in 2010 two members of the Commission not only upheld the citations, but overturned the ALJ and found all of  the violations as willful.  Not surprisingly, Dayton appealed. 

First, the Circuit Court found that while it took the Commission more than twelve years to rule on the case, Dayton was not entitled to dismissal based on the OSHRC’s failure to adjudicate the case.  “Although we are empowered to set aside the Commission’s order on the basis of delay, we decline to do so here. Yes, in the words of the Secretary herself, the Commission’s twelve-year delay was ‘excessive and deplorable.’ But as Dayton admits—and its cited cases demonstrate—delay alone is not enough; it is the ‘consequence[s] of the Commission’s delay’ that dictate whether corrective action is needed. And in this instance, the consequences of the Commission’s delay do not justify setting aside its chosen penalty.”  The Court noted that “[w]hile the deterrent effect of a single penalty is difficult to assess with much precision, we are confident that enforcement of this penalty will have some effect on Bridgestone and employers in general.” Italics in the original. The Court concluded, though, that “[o]ur willingness to enforce the Commission’s penalty should not be mistaken for approval of its ‘deplorable’ conduct.” 

The OSHRC in its 2010 decision found sufficient evidence to conclude that Dayton had willfully violated the OSH Act as a matter of corporate policy. The linchpin of the OSHRC willfulness determination was its finding that Dayton’s safety manager either knew Dayton was non-compliant or was unwilling to investigate for fear of uncovering Dayton’s non-compliance. The Court found that this position was based more on speculation than evidence. Accordingly, the OSHRC’s willfulness characterization did not withstand review. The Court found the evidence in the record proved “negligence at most.”  Specifically, the Court noted that each time an issue was raised about Dayton’s compliance with the LOTO standard, the safety manager took some action.  While the safety manager’s effort and analysis may not have been as thorough as the Court would have hoped, the Court stated that it was “not nothing.”  The Court explained that establishing the plain indifference necessary to support a willful violation is a high burden.  The Court likens the test to a lack of good faith and in rejecting the OSHRC’s decision the Court states:

“Indeed, what the ALJ acknowledged and the Commission dismissed was the possibility of good faith.” The safety manager “made some effort to ensure Dayton’s LOTO compliance, and under these circumstances, some effort is enough to save Dayton from a willfulness determination.” Italics in the original.

The Court concluded that the OSHRC “lacked substantial supporting evidence for its finding that Dayton’s violations were willful. Accordingly, we vacate that portion of the Commission’s order and remand for the Commission to reassess the nature of Dayton’s violations and recalculate the appropriate penalty.”

The Dayton Tire case represents a major victory for employers.  The Court has affirmed that OSHA must have substantial evidence to establish a willful violation and an employer’s good faith belief regarding compliance, although mistaken, will negate a finding of willfulness. 

At the American Bar Association Committee on Occupational Safety and Health meeting on March 15, 2012, OSHRC chairman, Thomasina Rogers, discussed the timing issues raised by the Decision.  Commissioner Rogers stated that the Commission now has procedures in place to prevent long delays in ruling on cases under appeal.