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

The D.C. Circuit Court of Appeals recently found, in AKM LLC v. Secretary of Labor, — F.3d —-, 2012 WL 1142273 (DC Cir., April 06, 2012), that where the Occupational Safety and Health Administration (OSHA) had issued certain recordkeeping citations and penalties for alleged errors on the OSHA 300 log more than six months after the alleged erroneous entries were made on the log, that the citations were untimely, and were vacated.

The question before the Court in this case was whether the Occupational Safety and Health Act’s (OSH Act) recordkeeping requirement, in conjunction with the five-year regulatory retention period, permits OSHA to subvert the OSHA Act’s six-month statute of limitations. Because the Act says that “[n]o citation may be issued . . . after the expiration of six months following the occurrence of any violation,” 29 U.S.C. § 658(c), the Circuit Court agreed with the employer, Volks Constructors (Volks), that the citations were untimely and vacated them.

OSHA had cited and fined Volks for failing to properly record certain workplace injuries and for failing to properly maintain its injury log between January 2002 and April 2006. OSHA issued the citations in November 2006, which was at least six months after the last unrecorded injury occurred.

The OSH Act provides that “[e]ach employer shall make, keep and preserve” records of workplace injuries and illnesses “as the Secretary . . . may prescribe by regulation.” 29 U.S.C. § 657(c)(1). Under the regulations, employers must prepare an incident report and a separate injury log “within seven (7) calendar days of receiving information that a recordable injury or illness has occurred,” 29 C.F.R. § 1904.29(b)(3), and must also prepare a year-end summary report of all recordable injuries during the calendar year, id. § 1904.32(a)(2). The employer “must save” all of these documents for five years from the end of the calendar year those records cover. Id. § 1904.33(a).

OSHA began an inspection of Volks and found that Volks had not been diligent in completing the OSHA logs, forms, and summaries between 2002 and early 2006. In response, OSHA issued the set of citations that were at issue in this case. The allegedly improperly recorded injuries occurred between January 11, 2002, at the earliest, and April 22, 2006, at the latest. The dates ranged from about 54 months before the issuance of the citation, and six months plus ten days before the issuance of the citation.

On appeal before the Occupational Safety and Health Review Commission (OSHRC) the Secretary said all the violations for which Volks was cited constituted “continuing violations” that prevented the statute of limitations from expiring until the end of the five-year document retention period, in 29 C.F.R. § 1904.33(a). The Secretary argued that all of Volks’s violations, stretching as far back as January of 2002, were still occurring on May 10, 2006, when the inspection began and could be cited.

In reviewing the issue the Court looked to the text of the statute. It found that if Congress had clearly expressed its will regarding the statutory period of limitations for violations, then the Court’s inquiry was at an end. Chevron, U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837, 843 (1984). The Court used very clear and strong language to indicate the Secretary’s error in this issue. “We think the statute is clear; the citations are untimely…” and further “[d]espite the cloud of dust the Secretary kicks up in an effort to lead us to her interpretation, the text and structure of the Act reveal a quite different and quite clear congressional intent that requires none of the strained inferences she urges upon us.”  In addition, “[w]e do not believe Congress expressly established a statute of limitations only to implicitly encourage the Secretary to ignore it.” 

Finally, the Court expressed its serious concerns in rather draconian terms:

“Indeed, the Secretary’s interpretation has absurd consequences in the context of the discrete record-making failure in this case. Under her interpretation, the statute of limitations Congress included in the Act could be expanded ad infinitum if, for example, the Secretary promulgated a regulation requiring that a record be kept of every violation for as long as the Secretary would like to be able to bring an action based on that violation. There is truly no end to such madness.”

Emphasis added.

The Court summed it up this way: “The Act clearly renders the citations untimely, and the Secretary’s argument to the contrary relies on an interpretation that is neither natural nor consistent with our precedents. The petition for review is granted and the citations are vacated.”

This decision raises serious questions about OSHA’s ability to issue citations for past violations, not only under the recordkeeping standard, but under other OSHA standards as well. Employers who have been cited for violations that occurred more than six months before OSHA issued the citation should consider whether they have a viable statute of limitations defense.