A federal district court has held that the Occupational Safety & Health Administration (OSHA) does not have authority to review an employer’s internal safety and health audits as part of a routine inspection, without first establishing an independent basis for believing that specific hazards exist. In Solis v. Grede Wisconsin Subsidiaries LLC, the court noted that there must be a balance between the employer’s privacy interests and OSHA’s investigatory interests. However, because OSHA has previously published guidance and policy that indicates it will not “routinely” request voluntary self-audit reports at the initiation of inspections, this raised the employer’s legitimate expectations of privacy in such documents—thereby requiring OSHA to have good cause to breach its policy.
As a bit of background, in July 2000, OSHA published its “final policy” concerning its right to access voluntary safety and health self-audits (www.osha.gov). It states:

The policy provides that the Agency will not routinely request self-audit reports at the initiation of an inspection, and the Agency will not use self-audit reports as a means of identifying hazards upon which to focus during an inspection. In addition, where a voluntary self-audit identifies a hazardous condition, and the employer has corrected the violative condition prior to the initiation of an inspection (or a related accident, illness, or injury that triggers the OSHA inspection) and has taken appropriate steps to prevent the recurrence of the condition, the Agency will refrain from issuing a citation, even if the violative condition existed within the six month limitations period during which OSHA is authorized to issue citations. Where a voluntary self-audit identifies a hazardous condition, and the employer promptly undertakes appropriate measures to correct the violative condition and to provide interim employee protection, but has not completely corrected the violative condition when an OSHA inspection occurs, the Agency will treat the audit report as evidence of good faith, and not as evidence of a willful violation of the Act.

This is pretty critical because while OSHA wants to encourage companies to be proactive in inspecting and documenting hazards in the workplace—and to take prompt remedial action to correct such hazards—employers would be reluctant to do so (at least the documentation part) if they thought OSHA could then compel production of the audits via their administrative subpoena powers and use the documented hazards as the basis for writing up citations and imposing civil penalties.
Although the 2000 policy defined the term “self-audit” to include health and safety audits conducted for an employer by a third party, OSHA has eroded the “audit privilege” by using its powers to compel production of such third-party audits from safety and health professional consultants, as well as from insurance companies that often provide audits to their insured employers as part of their services. I had one such situation arise not long after the policy came out, where a consultant’s reports and testimony was compelled via subpoena in an effort to sustain nearly $500,000 in penalties against a construction and demolition subcontractor.
More recently, in a 2011 insurance company case, Solis v. Grinnell Mutual Reinsurance Company, an US District Court in Illinois also upheld OSHA’s right to gain access to such documents. Grinnell argued that enforcing OSHA’s subpoena would have a “chilling effect” on businesses allowing their insurers to conduct safety inspections and on insurers conducting such inspections to determine risk of loss. The court rejected that argument, stating: “Assuming for the sake of argument that this is true, correcting that problem is a policy decision to be made somewhere other than in the federal courts.”
In the latest case of Grede Wisconsin Subsidiaries, OSHA was conducting an inspection under one of its National Emphasis Programs (rather than conducting an accident-related inspection, which was the trigger for the subpoena in the Grinnell case). OSHA requested 2-years’ worth of safety and health audits and the employer refused, citing the OSHA policy and its constitutional rights. OSHA countered that the policy was not a “rule,” that it only sought the audits after “initiating” an inspection (as opposed to using the audits as the basis for the inspection), and that—based on the employer’s previous violations and those discovered during the current inspection—its exercise of subpoena power satisfied the Fourth Amendment (which protects against unreasonable search and seizure).
In its Grede decision, the court forced OSHA to return to its original policy, noting that once such a “reasonable expectation of privacy” in self-audits has been created, it would violate the Fourth Amendment to compel production of these through a subpoena. However, “once OSHA identifies an independent basis to believe that a specific safety or health hazard warranting investigation exists, its broad subpoena powers in the area of health and safety in the workplace” authorize OSHA to use a subpoena for “relevant portions of voluntary self-audit reports relating to the hazard.”
Therefore, a subpoena cannot be used to go on a wholesale fishing expedition, but simply will be limited to those specific items that are on OSHA’s radar. In those situations, if an audit reveals that the employer had prior knowledge of the specific hazards and failed to implement timely corrective action, OSHA will likely be able to sustain any violations as “willful” (meaning they could be subject to the maximum $70,000 civil penalty per citation). Moreover, where willful citations are sustained in a case arising from a National Emphasis Program (such as the current ones in construction involving trenching and excavation, crystalline silica, and residential fall protection), the employer can be placed under the OSHA “Severe Violators Enforcement Program,” which then leads to every other worksite of that employer in the U.S. receiving an OSHA inspection. ■
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, September 2013
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