By Brent I. ClarkIlana R. Morady, and Craig B. Simonsen

Seyfarth Synopsis:  The Occupational Safety & Health Review Commission (Review Commission) issued two orders this month — the first we have heard from the Review Commission since April 27, 2017.  The orders followed, on August 28, 2017, James J. Sullivan, Jr., being sworn in as a new and needed third Commissioner.  Also on August 16, 2017, Heather L. MacDougall was sworn in as the Chairman, after being appointed to the position by President Trump.  These two orders represent the first of many expected now to come.

For the first time in over two years, the OSHA Review Commission is fully staffed with three Commissioners. The Review Commission is the independent federal agency that provides trial and appellate review of contested cases resulting from OSHA inspections.

Although two commissioners can and have been deciding cases, it is expected that cases will now be addressed more expediently with three Commissioners. In the past years, the Commission has been criticized for its heavy backlog. Dozens of cases await the Commission’s attention right now. Although the new 3-person panel has only issued two orders so far, we can expect to see many more orders issue in the coming months.

For employers this means that contests of citations that are appealed from administrative law judge decisions will likely be resolved more quickly than in the recent past. This also means that new case law precedent will be issued, which will affect employer defenses in a variety of safety and health contexts.

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 James L. Curtis, Brent I. Clark, Benjamin D. Briggs, and Craig B. Simonsen

Seyfarth Synopsis: With a dramatic change from a progressive democratic to a conservative republican administration we anticipate that OSHA is likely to pivot away from the enforcement heavy agenda to a more business friendly agency.

As we try to anticipate the President-Elect Donald Trump’s administration, supported by a Republican lead Congress, these are some of our thoughts and projections on what the future may hold for employers on the OSHA front.

Generally, we know from Candidate Trump claims that for the immediate future he may:

  • Propose a hiring freeze on all federal employees to reduce the federal workforce (except military, public safety and public health)
  • Propose a new requirement that for every federal regulation imposed, two existing regulations will be eliminated

While these claims are very broad in nature and offer no practical details on how they will be implemented, it sends a strong message of his goal of a more limited federal government and less federal government involvement in the workplace. Accordingly, these items may, to the extent that they are implemented, slow the frequency of planned inspections and the speed at which ongoing inspections and proposed citations are processed, and will likely halt (or dramatically slow) new regulations that may have been in the works. OSHA’s current pending and suggested rulemaking activities, such as its interpretation for narrowing the retail exemption under the Process Safety Management Standard, new permissible exposure limit (PEL) rules, and beryllium rules may all be re-considered and revamped in a new Republican administration.

Specifically, we know that David Michaels, PhD, MPH, Assistant Secretary of Labor for OSHA, will be leaving OSHA.  Michaels will likely be replaced by someone with a more pro-business perspective. However, we also know that the recently increased OSHA penalties are the law, therefore, will not likely be rolled back under the Trump administration.  We also believe that it is unlikely that the five year look back period for “repeat” violations will change.

As readers of our blog are aware, OSHA has recently proposed significant changes to the injury recordkeeping and anti-retaliation rules. Those changes are currently in litigation and OSHA has pushed back the effective date until December 1, 2016.  Given the change in administration, we would not be surprised if OSHA further delays implementation of these new rules.  If OSHA chooses to press forward with the new rules, they may be an early target for removal by the Trump administration.

We also believe that OSHA’s emphasis during the Obama administration on whistleblower and anti-retaliation claims will not be given the same focus under the Trump administration. Rather, we anticipate OSHA returning to more business friendly Voluntary Protection Program (VPP) and cooperative compliance programs over time.

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.

By Wan Li, Andrew S. Boutros, Kay R. Bonza, and Craig B. Simonsen

China map icon with a recycle iconSeyfarth Synopsis: The Chinese Ministry of Environmental Protection has just announced criminal, civil, and administrative enforcement statistics, and put companies on notice that those who violate environmental laws and rules may face blacklisting, including restrictions to their future business endeavors.

We have previously written about the need for multinational companies operating in China to comply with Chinese environmental and workplace safety laws and regulations. See for instance Multinationals in China Should be Aware of Increased Enforcement of Environmental Law, Monitoring Requirements – and Fraud, and International Employers Watch Out: China Will Assign Hefty Fines for Worker Safety Violations.

Now more recently, in the last thirty days, the Ministry of Environmental Protection (MEP) in the People’s Republic of China (PRC) has been publishing notices and warnings to “polluters” and industries about their potentially non-compliant business activities.

For example, the MEP’s just-released news announcement summarizing enforcement actions makes clear just how serious China is taking compliance failures of environmental laws and rules. Specifically, the August 1, 2016, notice, Supreme People’s Court Releasing White Paper on China’s Environmental Resource Trial, provides a progress report “since the establishment of Environmental Resource Courts.” In this regard, the notice provides the following eye-popping statistics about China’s enforcement activities from January 2014 to June 2016 by its courts nationwide:

  • A total of 37,216 criminal cases of first instance trial involving air, water and soil pollution that brought 47,087 people to justice;
  • A total of 195,141 civil cases of first instance trial involving resource ownership, environmental infringement and contract disputes; and
  • The conclusion of 57,738 administrative cases of first instance trial involving the environment and its resources.

Only a few days earlier, on July 28, 2016, the MEP, together with 30 other government agencies, issued another announcement warning companies that those who seriously violate environmental laws and rules will face restrictions to their future business endeavors. Specifically, companies may be barred from entering certain businesses, blocked from applying for business permits, or disqualified from loans. In the words of the MEP, “[t]hey will not qualify for preferential policies.” The MEP also highlights 14 serious violations, including operating or engaging in construction work without environmental assessments or permits, and illegally discharging pollutants.

The MEP notes that it will manage a blacklist of companies with “bad environment records” and will share it with other government agencies.

In fact, in what can be viewed as a prospective “industry sweep,” on July 28, 2016, the MEP announced a “national-scale environmental inspection” in the iron and steel industry. The notice states that local areas will be required to strengthen enforcement activities and inspections in this industry, as well as “make effort to reveal, solve, and expose a batch of prominent environmental violations in this industry.”

According to Tian Weiyong, Director General of the Ministry’s Bureau of Environmental Supervision and Inspection, under this program, local areas are required to organize inspectors and inspections involving the “main firms in the iron and steel industry” within their administrative regions. The inspections will also assess how well the iron and steel makers have “attained emission standards and installed and run the automatic monitoring equipment.”  The inspections are slated to occur between June and October 2016.

Multinational businesses and industries that have interests and facilities in China–especially now in the iron and steel industries– may wish to examine the extent of any potential liability in their holdings, in particular since companies with “bad environment records” may be subject to business-disrupting (if not ending) blacklisting.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the International Employment Law Team, the Environmental Compliance, Enforcement & Permitting 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

shutterstock_144257470In a recent Federal District Court OSHA 11(c) retaliation case, Perez v. Sandpoint Gas N Go, 14-cv-357 (9-29-2015), Chief Judge B. Lynn Winmill provides a strong reminder that the Courts will protect from retaliation employees who raise workplace safety issues.

In this case, the whistleblower had contacted OSHA in 2012 to complain about workplace safety issues. OSHA conducted an on-site inspection and issued citations. After receiving the citations, the employer fired the complaining employee. Judge Winmill found for the Secretary of Labor, and awarded both compensatory and punitive damages to the whistleblower.

While the Court only awarded about $980 in compensatory damages for lost wages and interest, the Court also awarded $100,000 in punitive damages. This punitive damage award should serve as a strong reminder that employers need to take safety complaints seriously and cannot retaliate against the employee who raised the complaint in the first place.

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

iStock_000009254156LargeIn a decision last week, the Occupational Safety and Health Review Commission (OSHRC) found that the six month statute of limitations for OSHA to cite an employer does not apply to Process Safety Management (PSM) violations that present a continuing hazard. Secretary of Labor v. Delek Refining, Ltd., OSHRC Docket No. 08-1386 (April 23, 2015).

In Delek, the Secretary alleged that the employer violated 29 CFR § 1910.119(o)(4), by failing to properly close out recommendations from a PHA conducted years before by a prior owner. The employer claimed that citation was time-barred by OSHA’s six month statute of limitations. The Review Commission disagreed, holding that the statute of limitations did not apply because the violations presented a “continuing hazard”.

In Delek, the employer argued that the citations were barred by the statute of limitations based on the D.C. Circuit’s decision in AKM, LLC v. OSHRC, 675 F.3d 752 (D.C. Cir. 2012). In AKM, the D.C. Circuit found that OSHA could not issue a citation for a recordkeeping violation that was older than six months. The basis for the Court’s ruling was that employers are required by the Act to record workplace injuries within seven days of the date the injury occurred. Accordingly, the failure to record becomes a violation after the seventh day and that starts the statute of limitations to run.

The OSHRC disagreed that AKM, LLC applied to the facts before it. Delek involved PSM citations for failure to close out recommendations resulting from a prior PHA that had been conducted years before by a prior owner. Unlike the recordkeeping violation in AKM, the Commission found that the alleged violations were not one time failures to perform a specific task, but presented an ongoing hazard to the employees because the employer failed to act on the recommendation in the PHA with corrective action. According to the Commission, the failure to act on the recommendations means that the dangers identified in the PHA still persisted. Thus, each day that passed without the recommendations being addressed was a continuing violation that could be cited by OSHA, even years after the initial recommendation appeared in the PHA.

There was a vigorous dissenting opinion by Commissioner MacDougall. According to Commissioner MacDougall, the reasoning behind the application of the six month statute of limitations that was applied in AKM applies equally to the PSM citation in Delek. MacDougall argued that the “continuing violation” theory cannot be applied to contravene the plain language of the operative statute of limitations in the Act and unreasonably extend the six month time period. According to Commissioner MacDougall, this would have the absurd consequence of extending the statute of limitations ad infinitum.

Absurd or not, Delek significantly limits the holding in AKM, LLC. As lessons to be learned, employers should review safety audits and ensure that any recommendations have been closed out. This is especially true of PSM facility operators who should review their prior PHA’s and ensure that all of the recommendations have been properly closed out, no matter how old the recommendation may be.

In addition, in a situation where there has been or will be an acquisition of a PSM facility, the employer who is acquiring the facility will want to consider a more comprehensive due diligence inquiry prior to the acquisition to ensure that the PSM program is compliant — since the acquiring employer will be assuming liability for PSM violations that preexisted the acquisition. Employers are encouraged to watch for further developments in this matter.

By Jeryl L. Olson and Patrick D. Joyce

Our retail clients with stores and warehouse facilities in the State of New York are warned that the State of New York Department of Environmental Conservation (NYDEC) has announced that it will begin enforcing regulations relating to hazardous waste against big boxes, supermarkets, pharmacies and other retailers which generate waste materials containing chemicals which are commonplace in household products, such as those in detergents, cosmetics, air fresheners, bug spray, and prescription and over-the-counter pharmaceuticals.

By hazardous waste regulations we mean those in New York set forth in Title 6, Chapter IV, Subpart B, Parts 370-372, which follow closely the federal Resource Conservation and Recovery Act (RCRA). In this article “RCRA” is used to denote both the New York and federal rules.

The upcoming enforcement initiative, which will include planned and unplanned inspections by NYDEC, formal Requests for Information, and other traditional state enforcement strategies, is very similar to the one waged against retailers in California over the past several years. (See related Seyfarth discussion in Retail Detail: New Rules Affecting Retail and Transportation Industry Reverse Logistics). California’s retail waste enforcement effort has led to significant penalties for retailers in California also imposing upon retailers the costs of developing and implementing technologies, systems, and processes to manage retail hazardous waste. The success (in terms of penalties) of the California enforcement initiative and the expected level of enforcement and penalties of the New York initiative is largely due to retailers’ failure to understand, and adhere to, hazardous waste regulations applicable to retail wastes.

The challenges of RCRA compliance for retailers often arise not from management of traditional maintenance wastes at stores and warehouses, but out of mismanagement of returned, damaged, out-of-date, and off-spec products and pharmaceuticals; retailers traditionally have failed to handle such products as “wastes” or “hazardous waste.” Retailers are just becoming aware that their wastes are subject to the same rules as, and must be managed in the same manner as waste at industrial facilities. Compliance for retailers is complicated by the fact that in addition to wastes generated at “big box” retailers, retail wastes are generated at thousands of small facilities, in small amounts, and must be managed by (occasionally seasonal) retail employees with little-to-no-training or experience in the management of hazardous waste. Additionally, retail wastes are generally managed in limited spaces in stores, and stores can have hundreds if not thousands of different products that can be potentially considered waste or hazardous waste. Finally, the costs of managing retail wastes (including transportation and disposal costs) are significant relative to the small volumes of waste generated in individual store locations.

Facilities that have long relied on “reverse logistics” for handling retail products that are out of date, damaged, recycled, donated or otherwise managed in the reversal logistics process will find that, as in California, such historical practice may not been seen by NYDEC as meeting RCRA requirements. While New York laws do not prohibit the use of reverse logistics (and NYDEC actually has on-line guidance about reverse logistics), NYDEC believes many retailers are not in compliance with RCRA requirements that apply to reverse logistics. Thus, retail facilities may have to make significant changes in their policies and processes for handling hazardous retail wastes that have previously been handled in the reverse logistics process.

Warned of the impending enforcement, retailers in the State of New York have an opportunity now to ensure their retail waste compliance program meets state and federal laws, and to avert or mitigate enforcement actions relating to improperly managing retail wastes. Under the NYDEP formal “Environmental Audit Incentive Policy” (CP-59), retail facilities who suspect they do not meet RCRA requirements can enter into an agreement with NYDEC to undertake audits to determine compliance, and thereafter to voluntary disclose, and correct non-compliance discovered in the audits. In return, the facilities who undertake the audits and correct deficiencies can significantly reduce penalties to TDEC, and are allowed to develop a strategy to achieve compliance in a reasonable period of time in the future. Retail facilities who do not want to take advantage of the voluntary audit/disclosure program should immediately ensure their programs for managing retail hazardous wastes meet all of the notification, labeling, segregating, containment, transport, manifesting, employee training, contingency planning and recordkeeping and reporting requirements applicable to retail wastes under RCRA. Retailers who have facilities in California, and therefore already have experience in developing RCRA compliance programs for retail wastes, should consider expeditiously implementing those programs in their retail facilities in New York.

To assist retailers in meeting retail waste requirements, NYDEC has developed several guidance documents, in the form of “plan outlines” and “checklists,” which detail the steps necessary for retailers and pharmacies to comply with RCRA.  Such guidance includes:

  • Facility compliance plans;
  • Facility employee training plans;
  • Guidance on management of universal waste; and
  • Use of reverse distribution with reverse logistics.

The NYDEC guidance is available on the NYDEC website, where NYDEC has also posted copies of briefings it conducted in 2014 for retailers warning of the enforcement initiative. The briefings are entitled “Briefing on RCRA and Pharmacies” (November 10, 2014) and “Briefing and Panel Discussions on RCRA Pharmacies and DEC’s Art Policy” (December 18, 2014).

We strongly encourage our retailers in New York to take the enforcement initiative seriously, and to promptly ensure retail facilities are handling retail hazardous waste in compliance with federal and state laws. Facilities who suspect they are not handling retail wastes in full compliance with laws should carefully consider availing themselves of the voluntary audit/disclosure process, and seek legal advice if assistance is needed in the process. In the event a facility has already received a notice of inspection, or worse, an enforcement notice, we recommend you discuss this with your Seyfarth Shaw attorney and/or another attorney promptly.

By Andrew H. Perellis and Craig B. Simonsen

Marion Herz, the Chief of Staff for EPA’s Office of Compliance, just blogged that EPA has launched a new compliance website to “make it easier to stay informed about our work and to share tools that can help companies and others follow the law.”

Herz notes that the Enforcement and Compliance History Online (ECHO) database “lets you analyze compliance and enforcement data through dashboards, maps and charts. It also gives you access to other EPA tools designed to identify pollution sources, including greenhouse gases, wastewater discharges and toxic chemicals.”

Another related recent EPA blog discusses the Agency’s recent updates to the ECHO database, which provides information about environmental inspections, violations, and enforcement actions for EPA-regulated facilities. “As one of our most important and popular resources, ECHO houses information about more than 800,000 facilities nationwide, and last year, it was visited more than 2 million times.” Emphasis added.

Significant updates to ECHO include the ability for anyone with access to the Internet to download data to analyze violations at any of the 800,000 ECHO facilities, which data is now updated within the week.

With this now ever expanding and broadening release and publication of individual facility environmental inspection and compliance data, it is important that responsible company representatives are accessing and monitoring what the Agency is posting on your facilities. The data, hopefully, will not be a surprise (though in some cases it may likely be), but errors in data transmission and uploading are inevitable, and corrections should possibly be submitted and documented in company files. Consider whether it is important that your company data be reflected accurately online by the Agency, and take steps to monitor and correct erroneous data if is the case.

By James L. Curtis and Craig B. Simonsen

The Occupational Safety and Health Administration has just released its whistleblower statistics, showing another jump in the number of whistleblower cases filed with OSHA in FY 2014, to over three thousand.

This is the first time that the total number of claims filed has topped 3,000, and is the result of a steady climb in each of the last 10 years.

http://www.whistleblowers.gov/whistleblower/wb_data_FY05-14.pdf.

It is likely that there are numerous factors pushing these numbers higher each year. The increased media coverage of high profile whistleblower cases and the significant monetary awards to whistleblowers in the financial and government contracting industries has no doubt had a significant impact. Additionally, OSHA has added on-line reporting capabilities to make it easier for individuals to file claims. Further, there is increased cooperation between government agencies in investigating whistleblower cases.

Whatever the reason, employers should understand that this upward trend appears to be here to stay and should take proactive steps to protect themselves from disgruntled workers’ increasing awareness of the potential financial benefits of filing whistleblower claims.

By Ada W. Dolph and Craig B. Simonsen

A railroad’s decision to terminate an apprentice electrician whose OSHA injury report revealed he had not been truthful in his employment record about other prior workplace injuries was unlawful retaliation under the whistleblower provision of the Federal Railroad Safety Act, 49 U.S.C. § 20109 (FRSA), OSHA has ordered.  The railroad was ordered to pay $50,000 in compensatory damages, $150,000 in punitive damages, more than $22,000 in back wages and interest, and reasonable attorney’s fees.

After the employee was seriously injured at work, the injury was reported to OSHA and included information regarding prior unrelated workplace injuries.  The company investigated the injury, reviewed the information reported to OSHA, and concluded that the employee had been dishonest with the company about his prior workplace injury record.  As a result, the company terminated the employee’s employment.  The employee filed a whistleblower complaint under FRSA asserting that his employment had been terminated in retaliation for reporting workplace injuries.  OSHA agreed, leveling this significant damages award against the company.

This decision demonstrates how broadly OSHA will interpret employee whistleblower protections.  Employers should tread lightly when taking disciplinary action that is the fruit of any aspect of employee activity that is permitted under the whistleblower provisions of FRSA or any of the 21 other statutes that OSHA is charged with enforcing. 

Ada Dolph is a Partner and Craig Simonsen is a Senior Litigation Paralegal, in Seyfarth Shaw LLP’s Chicago office.  If you would like further information on this topic, please contact a member of the Workplace Whistleblower Team, your Seyfarth attorney, Ada Dolph at adolph@seyfarth.com, or Craig Simonsen at csimonsen@seyfarth.com.