By Mark A. Lies, IIJames L. Curtis, Adam R. Young, and Craig B. Simonsen

Seyfarth Synopsis:  A contractor’s employee fell 36 feet while working at a warehouse construction site and not using fall-protection equipment.  Following a bench trial before the District Court, the Defendant contractor DNRB, Inc. was convicted of a Class B misdemeanor for willfully violating two safety regulations (29 C.F.R. § 1926.760(a)(l) and (b)(l)), and causing the employee’s death. The Eighth Circuit upheld the conviction.

  1. Willful Fall Protection Citation Based on Fatality Leads to Criminal Prosecution.

OSHA commonly cites construction employers whose employees fail to use fall protection.  In fact, 29 CFR § 1926.501 (Fall Protection in Construction) is the most frequently cited regulation by federal OSHA.  Employers who fail to provide and enforce the use of fall protection do so at their own peril, as OSHA will cite employers with willful violations, dramatically increasing the civil penalties.  In the event of a fatality a willful citation can then lead to a criminal prosecution by the Department of Justice.

  1. Presence of Fall Protection Equipment Does not Negate Criminal Intent.

United States v DNRB, Inc., No. 17-3148 (8th Cir. July 17, 2018), is an example  of just this kind of prosecution, where OSHA cited the employer for a willful violation of the fall protection standard for steel erection rules, 29 C.F.R. § 1926.760.  The Contractor was also criminally prosecuted, convicted, and sentenced to the maximum penalty.

On appeal, the employer challenged the sufficiency of the evidence, several evidentiary rulings and the sentence imposing the statutory maximum fine of $500,000.  It argued that the Department of Justice failed to prove the three elements necessary to find a criminal conviction (29 CFR § 666(e)): (1) that the company violated an applicable standard, (2) that it did so willfully, and (3) that the violation caused an employee’s death.

Principally, the employer argued that its conduct was not willful because it provided fall protection and anchorage points, and the employee was wearing a harness.  The Court countered that while the employee had a personal fall-arrest harness and connectors, he was not using them to secure himself to an anchorage point on the warehouse’s frame.  The Court explained that “the regulations state that employees ‘shall be protected’ by appropriate equipment, not that they merely be provided with or possess such equipment” (emphasis added).

  1. Court Relies on Past Citation and Prior Warning to Establish Criminal Intent.

The Eighth Circuit then noted that the Contractor had a previous citation for violating the same standard (§1926.760), and so concluded that the Contractor was aware of its requirements.  “Moreover, a supervisor’s knowledge can be imputed to his employer, and there was evidence supporting a conclusion that [the employee’s] supervisor … intentionally disregarded the safety requirements here.”  In fact “a crane operator stated that he expressly warned [the supervisor] about [the employee’s] failure to use fall-protection equipment.”

Finally, the Court found that the employee would not have fallen to his death had he been connected to an anchorage point, and that the employer’s failure to make him use required fall-protection equipment was a “but-for cause” of his death.  In addition it determined that the fall was “a foreseeable and natural result” of working more than 30 feet above the ground without using fall-protection equipment.

  1. Employers Must Enforce Safety Rules and Contest Unfounded Citations.

Employers may draw numerous lessons from this case.  Foremost is the absolute importance of providing fall protection, supervising employees who are exposed to fall hazards to ensure they use the equipment, and enforcing the employer’s safety rules.  Only then will employers be able to prove the affirmative defense of employee misconduct when an employee fails to use his assigned fall protection equipment.  United States v DNRB, Inc., shows the perils for employers who fail to enforce safety rules and fail to respond to reports of noncompliance by an employee.  This case also illustrates how accepting and settling citations may set-up an employer for a willful citation in the future, and even a criminal prosecution in the event of a fatal accident.  Employers should consult with legal counsel regarding an OSHA fall protection citation and ensure that any defensible citations are contested and vacated.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Workplace Safety and Health (OSHA/MSHA) Team.

By Andrew S. Boutros, Benjamin D. Briggs, and Craig B. Simonsen

iStock_000042612884_MediumSeyfarth Synopsis: Companies cannot go to prison, but their executives and managers can when they violate the OSHA laws. And, companies can face stiff fines and other business-disrupting (or ending) collateral consequences for conduct resulting in worker deaths. Make sure that your company’s safety programs and training efforts are “up to snuff” if you wish to avoid OSHA liability.

The U.S. Department of Justice announced this week that a high volume ferrous and nonferrous scrap processor was sentenced to five years’ probation, and ordered to pay restitution of $350,000 to an employee-victim’s estate.  According to the DOJ the employer was also previously ordered to pay a fine of $520,000 in a related administrative OSHA case. See also Sentencing Memorandum, and Stipulation and Settlement Agreement, U.S.A. v. Behr Iron & Steel, Inc., No. 3:16-CR-50015 (June 30, 2016 and July 12, 2016, respectively).

Factually, this employer shredded metals with a shredding machine in the employer’s facility. In the process the shredded pieces fell onto a conveyor belt located underground in a “shredder discharge pit.” The shredded materials were then moved by the conveyor belt out of the discharge pit and through a sorting process. During the process it was not uncommon for some of the shredded metals to fall onto the ground of the discharge pit near the conveyor belt. Employees working on the shredding machine were required to clean the discharge pit on a daily basis. The employees shoveled shredded materials from the floor of the discharge pit onto the running conveyor belt. In March 2014, a company employee was cleaning a discharge pit when the employee’s arm was caught by an unguarded conveyor belt.  The employee was pulled into the machinery and killed.

In the court proceedings, the employer admitted that there was “no lock or operable emergency shut off switch in the discharge pit for the conveyor belt, and the conveyor belt did not have guards designed to protect employees.” The employer also admitted that employees in the discharge pit were “not adequately trained to use the shredder or the conveyor belt, and that the company had not developed and implemented confined space protection for employees entering the discharge pit.”

This case provides a solemn reminder for employers that safety is the responsibility that every employer must embrace with the utmost seriousness. When a knowing failure to fulfill this responsibility leads to a tragic fatality, as it did in this case, employers can find themselves facing not only administrative penalties and civil liability, but potential criminal liability. Companies cannot go to jail, but their executives and managers can. Here, Behr Iron & Steel Inc. received a probationary sentence.  But, under different more egregious circumstances, a company could face even stiffer fines and other business-ending collateral consequences that force it to turn off the lights:  The “corporate death penalty,” as it is known.  The old Benjamin Franklin adage applies equally in OSHA cases:  “An ounce of prevention is worth a pound of cure.”

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the OSHA Compliance, Enforcement & Litigation Team or the White Collar, Internal Investigations, and False Claims Team.

By Brent I. Clark, James L. Curtis, and Craig B. Simonsen

Safety at workThe U.S. Department of Justice (DOJ) and the Department of Labor (DOL) announced last week an expansion of its worker endangerment initiative to address worker safety violations through the use of enhanced criminal fines and penalties.

According to Deputy Attorney General Sally Quillian Yates, “on an average day in America, 13 workers die on the job, thousands are injured and 150 succumb to diseases they obtained from exposure to carcinogens and other toxic and hazardous substances while they worked.” “Given the troubling statistics on workplace deaths and injuries, the Department of Justice is redoubling its efforts to hold accountable those who unlawfully jeopardize workers’ health and safety.”  Department of Labor Deputy Secretary Chris Lu stated that “today’s announcement demonstrates a renewed commitment by both the Department of Labor and the Department of Justice to utilize criminal prosecution as an enforcement tool to protect the health and safety of workers.” DOJ News Release (December 17, 2015).

According to the DOJ, last year it held meetings to explore a joint effort to increase the frequency and effectiveness of criminal prosecutions of worker endangerment violations. This culminated in a “decision to consolidate the authorities to pursue worker safety statutes within the Department of Justice’s Environment and Natural Resource Division’s Environmental Crimes Section.”  In a December 17, 2015 Memo, sent to all U.S. Attorneys across the country, Deputy Attorney General Yates urged federal prosecutors to work with the Environmental Crimes Section in pursuing criminal prosecutions for worker endangerment violations.

The worker safety statutes had generally provided for only misdemeanor penalties.  However, prosecutors have now been encouraged to consider utilizing Title 18 and environmental offenses, “which often occur in conjunction with worker safety crimes,” to enhance penalties and increase deterrence.  Specifically, the Memo indicates that prosecutors can “make enforcement meaningful” by charging other serious offenses that often occur in association with OSH Act violations. Examples offered include false statements, obstruction of justice, witness tampering, conspiracy, and environmental and endangerment crimes. To facilitate interagency cooperation in implementing this initiative, the DOJ and the DOL have also executed a Memorandum of Understanding on Criminal Prosecutions of Worker Safety Laws (December 17, 2015).

Employers should be leery of these now “added” enforcement authorities. With penalties ranging from five to twenty years of incarceration and significant money fines, criminal enforcement of workplace safety accidents are now significantly more serious.

By James L. Curtis and Craig B. Simonsen

iStock_000060649768MediumOn International Workers’ Memorial Day, U.S. Senator Al Franken, the top Democratic Senator on the Employment and Workplace Safety Subcommittee, introduced legislation to amend the Occupational Safety and Health Act.

The legislation would expand OSHA’s coverage to include public employees. The bill would also significantly increase penalties for OSHA citations, raising the maximum penalty for willful to $120,000 per citation from the $70,000 maximum currently in place.

The bill as proposed will also cover millions of additional workers, including flight attendants, state correctional officers, and workers in government agencies. The bill will provide felony charges for an employer’s repeated and willful violations of OSHA that result in a worker’s death or serious injury. The bill will also set a minimum penalty of $50,000 for a worker’s death caused by a willful violation. The bill would mandate that the DOL investigate all cases of death or serious incidents of injury in the workplace. The bill proposed to amend the General Duty Clause to include “all workers on the work site.”

We will continue to watch this legislative effort closely. However the bill faces stiff resistance from Republicans.

By Mark A. Lies, II, Kerry M. Mohan, and Craig B. Simonsen

A former safety manager at a Tennessee Valley Authority (TVA) Nuclear Site was sentenced to 78 months in prison for major fraud.

The safety manager had allegedly hidden over 80 injuries to obtain over $2.5 million in safety bonuses. He was convicted at trial in November 2012, after being charged by a federal grand jury with eight counts of major fraud against the TVA. On April 11, 2013, U.S. District Judge Curtis L. Collier sentenced the manager to serve 78 months in prison followed by two years of supervised release.

The employer in this case had a contract with TVA to provide maintenance and modifications to the facilities and to provide construction for a reactor restart. The safety manager allegedly generated false injury rates which were used by the employer to collect safety bonuses of over $2.5 million from TVA. As part of a civil agreement filed with the United States in 2008, the employer paid back twice the amount of the received safety bonuses.

At trial, the defendant was convicted of providing the false information about injuries at four plants in 2004, 2005, and in 2006. The evidence presented at trial encompassed over 80 injuries, including broken bones, torn ligaments, hernias, lacerations, and shoulder, back, and knee injuries that were not properly recorded. Some employees testified that they were denied or delayed proper medical treatment as a result of the fraud. The evidence showed that the defendant intentionally misrepresented or simply lied about how the injuries had occurred and how serious the injuries were.

Judge Collier imposed a more severe sentence for the defendant after the Judge found that the defendant had obstructed justice when he testified falsely during the trial. At trial the defendant denied intentionally misclassifying injuries, and disputed the evidence to the contrary in the medical records and from injured employees. The defendant also denied knowing that safety bonuses were tied to his classifications of the injuries. Investigators, however, found emails sent by the defendant with this information and additional information tying the safety bonuses to the injury rates in the defendant’s desk drawers.

This stern sentence sends another stark reminder to individuals in the safety community that it does not pay to falsify records for short-term gain.

By Meagan Newman and Craig B. Simonsen

The Occupational Safety and Health Review Commission (OSHRC) recently concluded in Secretary v. Aerospace Manufacturing CT Systems, LLC, OSHRC Docket No. 11-0315 (September 22, 2011) that civil proceedings may be stayed pending the outcome of parallel criminal proceedings. In this case following a fatality at Aerospace Manufacturing CT Systems, LLC (Aerospace), the Occupational Safety and Health Administration (OSHA) conducted an inspection and issued the company a willful citation under the Occupational Safety and Health Act. Two months after the Secretary filed a civil complaint with the OSHRC, the case was referred to the Department of Justice (DOJ) for potential criminal investigation and proceedings.

Procedurally the Secretary also filed a motion with the Administrative Law Judge seeking a stay of the Commission’s proceedings. In the motion, it was argued that a stay was necessary to prevent the proceedings before the Commission from interfering with any potential criminal prosecution and to prevent the Secretary from being prejudiced in its ability to conduct discovery in the pending Commission case. Aerospace filed an opposition to the Secretary’s motion, and the judge denied the Secretary’s request for a stay because no indictment had yet been issued against Aerospace.

The OSHRC in its decision concluded that civil proceedings may be stayed pending the outcome of parallel criminal proceedings. Although indeterminate stays are strongly disfavored, the Commission “‘ha[s] deferred civil proceedings pending the completion of parallel criminal prosecutions when the interests of justice seemed to require such action.’” C & S Erectors, 18 BNA OSHC 1052, 1053, (quoting United States v. Kordel, 397 U.S. 1, 12 n.27 (1970)).