Seyfarth 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.