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Legal Updates

OSHA Penalties May Increase Dramatically Now That OSHA May Impose Penalties On Per-Worker Basis

The authority of the Occupational Health and Safety Administration (“OSHA”) to impose penalties on a per-worker basis was recently upheld by the U.S. Court of Appeals for the District of Columbia.  This dramatically heightens the need for employers to actively manage their obligations under OSHA.

Specifically, in National Association of Home Builders v. OSHA, 602 F.2d 464 (D.C. Cir. 2010), the court held that OHSA lawfully treated an employer’s failure to provide both respiratory protection and corresponding training to 11 workers as 22 separate OSHA violations—two violations per each affected worker.

This is bad news for employers, as OSHA assesses penalties based on the number of violations found.  Penalties vary depending on the severity of the violations:  up to $7,000 for serious and other-than-serious violations, up to $70,000 for repeat violations, and between $5,000 and $70,000 for willful violations.  29 U.S.C. § 666(a)-(c).

Genesis Of OSHA’s Per-Worker Approach

1.  The Ho Case

The genesis of the court’s decision was an OSHA ruling regarding employer Eric K. Ho (“Ho”).  In January 1998, Ho hired 11 illegal immigrants to remove asbestos from a building he owned and was renovating in Houston, Texas.  Ho did not provide respiratory protection or any of the other personal protective equipment (“PPE”) required by OSHA. Nor did he provide required training on hazards associated with exposure to asbestos.

Approximately one month after the work started, a city inspector visited the site and observed that at least ten workers who were scraping fireproofing material from the building had visible dust in their breathing space yet did not have adequate respiratory protection.  The city inspector issued a stop-work order citing the possibility of exposure to asbestos.

Not deterred by the city’s enforcement efforts, Ho ordered the workers to work at night behind a locked fence.  Ho made no effort to conduct training or to provide appropriate PPE.

In March 1998, an explosion and fire occurred at the worksite, and several employees were injured.  The Texas Department of Health investigated the incident and found levels of asbestos in excess of federal and state standards.  This led to a criminal conviction under the Clean Air Act.

In addition, OSHA cited Ho for 22 willful violations of the applicable asbestos standard, determining that Ho failed to provide both required PPE and required training to each of the 11 affected workers.  Ho challenged OSHA’s per-worker approach, arguing that he was, at most, responsible for one violation of the standard’s respiratory protection requirement and one violation of its training requirement.

The Occupational Safety and Health Review Commission (“Commission”), an independent tribunal which hears employers’ challenges to health and safety citations,  agreed with Ho, vacating all but one of the respiratory protection violations and all but one of the training violations.  In the Commission’s view, “the plain language of the standard addresses employees in the aggregate, not individually.”  Erik K. Ho, 2003 WL 22232014 (O.S.H.R.C.)

2.  OSHA’s Challenge To Ho And The Ensuing Litigation

In 2008, OSHA effectively challenged the Commission’s Ho ruling by amending its PPE standards to “add language clarifying that the personal protective equipment and training requirements impose a compliance duty to each and every employee covered by the standards and that noncompliance may expose the employer to liability on a per-employee basis.”  73 Fed. Reg. 75,568 (Dec. 12, 2008).  This final rule became effective on January 12, 2009.

The National Association of Home Builders, along with the Chamber of Commerce and the National Association of Manufacturers, challenged the final rule, claiming that the Secretary of Labor had no statutory authority to determine the “unit of prosecution” for violations of OSHA standards.  This case was brought to the United States Court of Appeals for the District of Columbia Circuit, which, as noted, ruled in OSHA’s favor.

Impact Of National Association Of Home Builders

National Association of Home Builders significantly raises the stakes of OSHA non-compliance.  Unfortunately, it is unclear precisely when OSHA will wield its authority to issue penalties on a per-worker basis, creating further risk and uncertainty for employers.

OSHA’s Field Operations Manual states that each violation of a standard will result in only one citation unless the employer’s behavior is willful and egregious.  Certainly, the facts in Ho appear to satisfy this standard, as OSHA would be expected to impose harsh penalties on any employer that exposes workers to asbestos and then forces them to work at night behind a locked gate in order to evade a stop-work order.

But what about a more typical situation, such as a failure to provide respirators to a group of employees who faced potential exposure to lead or other heavy metals?  Neither the Field Operations Manual nor National Association of Home Builders indicates where OSHA is expected to draw the line.

Recommendations For Employers

Given the significance of National Association of Home Builders, we recommend that employers redouble their efforts to ensure compliance with the many OSHA standards related to PPE and training.  In particular, we strongly recommend that employers audit their OSHA practices and procedures and, in doing so, affirmatively identify and remedy any existing safety and health hazards.

In this regard, OSHA’s authority to issue penalties on a per-worker basis is not limited to violations of the asbestos standard concerning respiratory protection, which was in dispute in National Association of Home Builders.  As penalties calculated on a per-worker basis are unpredictable and can be extremely costly, employers now have yet another good reason for being proactive about OSHA compliance.

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If you have any questions about the National Association of Home Builders case or would like assistance with your OSHA compliance program, please do not hesitate to contact us.