OSHA Alert

OSHA Going After Entire Companies, Not Just Individual Sites

Date First Published on SafetySmart Compliance: March 12th, 2012
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Historically, OSHA has carried out its inspection and enforcement duties one workplace at a time and issued citations and orders based on the conditions of the particular location inspected. But yesterday (Jan. 18, 2012), OSHA did something that it had done only once before in its history: It sought enforcement against an entire enterprise, i.e., not 1 or 2 but all 60 of the company’s sites!

If your company has multiple locations, you need to be concerned about this new OSHA enterprise-wide enforcement strategy. Here’s what you need to know and do.

The Market Basket Case

The new case comes from New England (Region 1) and focuses on a supermarket chain called the Market Basket that has over 60 locations in Massachusetts and New Hampshire. The trouble began in April 2011 when an employee at a New Hampshire store fell 11 feet to a concrete floor. OSHA determined that the mezzanine he fell from wasn’t adequately guarded.

About a month later, an OSHA inspector shopping at another Market Basket location nearby noticed the same lack of guardrails on a mezzanine over 11 feet high. The red flag was raised.

Sure enough, a check revealed that 3 other Market Basket stores had been cited for lack of guardrails to protect workers from falls greater than 11 feet. OSHA detected a similar pattern regarding lack of protection against laceration from knives in the deli, produce and bakery departments. Proposed fines:

VIOLATIONS PROPOSED FINES
4 willful $261,000
7 repeat $225,500
19 serious $102,700

Bad stuff but nothing out of the ordinary for an OSHA case.

But yesterday, the case took a dramatic new turn when OSHA announced that it’s asking OSHRC to order Market Basket to implement corrective actions not just at the stores where the violations were discovered but at all 60 of its locations.

“Hazardous conditions at multiple locations. . . demand a swift and comprehensive corrective response at the corporate level,” according to the press release (emphasis added).

The New OSHA Enterprise-Wide Strategy

This is only the second time OSHA has sought enterprise-wide rather than site-specific enforcement. The first was in July 2010 when OSHA demanded that the US Postal Service take actions to correct electrical work violations at 350 postal facilities across the nation. USPS has appealed and the case is pending.

Should You Be  Concerned?

2 cases do not a trend make. Still, there’s no doubt that a far-reaching change is taking place. Market Basket and USPS aren’t blips on the radar screen but the early stages of a new OSHA strategy to go after whole companies rather than individual locations.

Thus, for example, on June 22, 2011, OSHA issued a new Compliance Directive authorizing the use of Corporate Settlement Agreements (CSAs), i.e., settlements with multi-location corporations covering all locations under the company’s control. According to the Directive:

With a CSA, OSHA is able to obtain formal recognition by the employer of the cited hazards and formal acceptance of the obligation to seek out and abate those hazards throughout all the workplaces under its control. CSAs also enable OSHA to leverage resources more widely and thus use them more efficiently by avoiding numerous inspections of like corporate locations. The result is more timely reduction and uniform abatement of serious hazards at multiple worksites.”

No doubt about it. CSA authority dramatically extends OSHA’s control over a corporation’s safety program. Thus, for example, in its Sept. 1, 2011 press release announcing its CSA settlement of fall protection violations, OSHA boasted that a national roofing company and its 14 affiliates “have agreed to completely reinvent a uniform safety and health program.” The press release goes on to describe all the specific measures the company has to take at all its sites under the CSA.

 

Is It Legal?

 

A good argument can be made that OSHA has gone too far. Like it or not, the OSHA scheme is designed to root out hazards at particular locations. OSHA is supposed to cite and correct the hazards it detects, not the hazards it presumes exist at locations it doesn’t actually inspect.

Also absent from the OSHA system is the authority of the agency to make companies “reinvent” their safety programs according to terms dictated by OSHA.

3 Things You Can Do

The problem, of course, is that if you’re part of a multi-location corporation, challenging the legal validity of an OSHA activity isn’t a practical compliance strategy. So unless and until the courts strike it down, you need to know about and be prepared to deal with enterprise-wide enforcement.