It is no secret that the Occupational Safety & Health Administration (OSHA) is making it tougher to settle cases, at least on terms that employers prefer. Enforcement is “Job One” for OSHA these days, and with the sequestration of agency funds now in effect, cooperative programs are the first areas where the cuts are being felt, while the head of OSHA promised that there would be no reduction in inspection activity. This means that enforcement activity under the more than a dozen “National Emphasis Programs” (NEPs) will continue unabated. Several of these impact the highway and heavy construction sector where contractors are primarily engaged—among them: crystalline silica, trenching and excavation, and fall protection.
When OSHA issues high-hazard citations to an employer, including those issued under a NEP inspection, or an employer receives willful, repeat, or failure-to-abate violations (particularly if associated with a fatality or catastrophic event where three or more workers are hospitalized), the employer may be placed under OSHA’s “Severe Violators Enforcement Program” (SVEP). An employer who is placed under SVEP must inform OSHA of all its work locations and these will be subject to inspections as well. A company stays under SVEP for 3 years at a minimum.
SVEP cases, as well as other “significant” matters ($100,000+ in proposed fines), are now frequently subject to OSHA requirements for Corporate-Wide Settlement Agreements (CSAs). If the terms of the CSA are subsequently violated by the employer, the company can be prosecuted under OSHA’s “failure to abate” provisions and additionally fined. As part of entering into a CSA, the employer also waives its right to seek a warrant or to require OSHA to obtain a subpoena to access non-mandatory documents, giving the agency (in effect) warrantless search authority.
A CSA specifically requires that terms of abatement (changes in engineering or administrative controls are generally required to correct the cited condition) reached with one company worksite must be applied throughout the company’s other locations, often including extension to affiliated or subsidiary companies as well. In construction, an employer may have to notify OSHA periodically of the locations where it will have workers present so OSHA can do spot check inspections, to verify compliance with the terms of the CSA.
Some CSAs, like an early agreement with Beverly Enterprises, Inc., require the employer to voluntarily implement a company-wide ergonomics program to reduce employee exposures to improper workstation design, lifting hazards, and other factors that can cause cumulative trauma disorder or musculoskeletal problems.
A CSA entered into with Exel Inc. in December 2012, by contrast, took aim at corporate incentive programs as a condition of settlement. The employer had received multiple willful citations for violations of OSHA’s recordkeeping regulations (29 CFR Part 1904), which require accurate recording/reporting of occupational injuries and illnesses. These standards are applicable to all employers, both general industry and construction. The settlement involved reducing $283,000 in penalties to $143,000, changing the willful violations to “unclassified,” and requirement of new procedures and training on recordkeeping compliance. Obviously, there are economic advantages to entering into a CSA, particularly for contractors whose willful violations (if upheld) could lead to debarment from state or federal work.
SAFETY INCENTIVE PROGRAMS
What was novel in the Exel CSA were provisions on corporate safety incentive programs. The employer stipulated that incentive programs based on injury and illness statistics can have the effect of discouraging workers from reporting injuries/illnesses or dissuade management from recording them on the mandatory OSHA logs that OSHA can use to select employers for site-specific enforcement programmed inspections.
The incentive programs barred by OSHA in CSAs include programs that reward individual workers, or a work team, with cash, dinners, or other prizes for going specific periods without any lost-time injuries/illnesses, or that base supervisor bonuses on lost workday data. In Exel, the employer agreed to eliminate any components of its incentive and bonus programs that based any prizes, awards, or benefits on the number of injuries and illnesses at the facility or those based on attaining a certain incidence rate over a set period of time. The employer also eliminated its program where incentive program awards were reduced by 20 percent if there was more than one recordable injury within a specific timeframe.
Other CSA components that OSHA may require include:
- Developing a safety and health management program at all locations;
- Hiring a benefits expert consultant to assist in developing alternate safety-based provisions in its incentive and bonus programs;
- Requiring corporate-wide noise abatement procedures, where citations for noise overexposures were issued as part of the settled case;
- Agreeing to the use of specified personal protective equipment (e.g., flame-resistant clothing or certain types of respiratory protection), and,
- Hiring a third-party consultant to conduct periodic safety and health audits of the workplace or to assess potential specified hazards (e.g., fire, trench collapse, combustible dust) and make recommendations on how to mitigate those hazards, which the employer would have to implement.
OSHA has issued guidelines for its area and regional personnel to use in entering into, and administering, CSAs, Directive Number CPL 02-00-152 (June 22, 2011). It suggests that OSHA plans to use CSAs in an ever-broader range of cases, especially where an employer has a pattern of non-compliance with OSHA requirements across multiple locations, any high-profile enforcement cases (such as those involving multiple fatalities), situations of extensive recordkeeping deficiencies, or where high gravity serious violations are involved. All CSA will have a termination date, which is not to exceed 2 years from the date of the final order. ■
About The Author:
Adele L. Abrams, Esq., CMSP, is an attorney and safety professional who is president of the Law Office of Adele L. Abrams PC, a ten-attorney firm that represents employers in OSHA and MSHA matters nationwide. The firm also provides occupational safety and health consultation, training, and auditing services. For more information, visit www.safety-law.com.
Modern Contractor Solutions, April 2013
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