The article How to Contest an OSHA Violation sketches out the steps to follow to contest an OSHA citation. Of course, all of this begs a big question: Should you even bother to make the effort?
To Challenge Or Not To Challenge
The decision about whether to contest an OSHA citation is one employers need to approach with care and deliberation. Contesting an OSHA citation isn’t easy. It takes time, money and effort. And success is far from guaranteed. Too many employers rush into a contest without fully understanding what’s involved.
But damned-if-you-don’t may also apply. Failing to challenge an OSHA citation that you have a good chance to beat can lead to unforeseen and adverse consequences down the road. Many employers fail to recognize, let alone analyze these consequences. This is especially true when the size of the civil penalty isn’t significant. Many employers will simply accept the citation and “pay the two dollars” to appease the local OSHA area office or labor unions.
Factors to Consider
How should employers decide whether to contest an OSHA citation? I advise my clients to consider the following seven factors:
This list isn’t exhaustive and employers must take into account pertinent issues affecting their particular operation.
1. The Strength of the Citation(s)
Employers need to consider how strong a case OSHA has. To prove a violation of a cited standard under Section 5(a)(2) of the OSH Act, OSHA (technically, the Secretary of Labor) must prove by a preponderance of the evidence (i.e. more than 50%) that:
So the first thing an employer should ask is whether OSHA has a good chance of proving all 4 of these elements by a preponderance of evidence.
Another factor affecting the strength of the case is the availability to the employer of defenses. There are 2 kinds of defenses: substantive and procedural. The former includes, among others, unpreventable employee misconduct, vagueness of the standard, no hazard, greater hazard and infeasibility of compliance. Procedural defenses include failure to follow inspection procedures, citation not issued with reasonable promptness, etc. So, the second question employers should ask is whether any of these defenses are available.
2. The Potential Fine
The OSH Act provides the Secretary with the authority to issue citations and monetary penalties. OSHA’s maximum penalties increased in 2016 (August 1, 2016). Going forward, the agency will continue to adjust its penalties for inflation each year based on the Consumer Price Index.
New Maximum Penalty of $12,471 per violation for the following violations:
New Maximum Penalty of $12,471 per day beyond abatement date for:
New Maximum Penalty of $124,709 per violation for the following violations:
States that operate their own Occupational Safety and Health Plans are required to adopt maximum penalty levels that are at least as effective as Federal OSHA’s.
Employers should understand how penalties were specifically assessed against them. Otherwise, an employer won’t be able to make an informed decision regarding the “fairness” of the civil penalty and whether to contest it.
3. Abatement Requirements and Associated Costs
If an employer has a good faith basis to challenge the validity of a citation, that employer should also take into account the direct and indirect effects of any proposed abatement. For example, a serious citation carrying a mere $500 civil penalty might not look like a big deal. But it could have a multimillion dollar impact if abating the citation involves making significant changes to operations, processes or machinery, (e.g. performance of group lockout tagout). In addition, employers with multiple sites need to understand that the abatement required at one facility typically has to be implemented at all facilities.
Employers shouldn’t contest an OSHA citation for the sole purpose of avoiding legitimate abatement requirements. But if you have a good faith belief that the alleged violation is not just, you should seriously consider the effects of the abatement in deciding whether to contest the citation.
4. Adverse Effect on Competitive Position
The potential losses from OSHA citations often involve more than fine amounts. They may also have an adverse effect on your reputation and competitive position. For example, if you have a history of OSHA citations you might have a harder time bidding for contracts, especially if the citation is characterized as willful or serious. That’s because almost all companies look at safety and OSHA citations in evaluating bidding companies and are more apt to select bids from competitors who don’t have citations.
Expensive abatement requirements might also harm your competitive position by forcing you to raise your fees or prices. You’ll be at a particular disadvantage vis-a-vis your competition if you have to implement work procedure modifications that are more burdensome than industry standards.
5. The Potential for Repeat Violations
Not all OSHA violations carry the same consequences. It depends on how OSHA characterizes the violation. As noted above, a repeat violation can carry with it a fine of up to $70,000 per violation. To establish a repeat violation under section 17(a) of the OSH Act, the Secretary must prove that:
Given the harsh penalty range for repeat violations, employers must take care to evaluate the potential for future repeat violations. This is especially true since “substantially similar violations” may be committed at different locations/worksites of the same company. It’s also worth noting that if the past and present violations are of the same OSHA standard, then the burden to prove the “substantially similar” element shifts from the Secretary to the employer to prove otherwise.
6. The Risk of Collateral Litigation
All employers must be aware of the laws of the states where they conduct business. These laws will often dictate the type of collateral litigation an employer may face, directly or indirectly, as the result of OSHA violations and/or workplace accidents.
Personal injury actions by employees against employers are generally prohibited by state workers’ compensation statutes. However, third-party lawsuits (e.g. against architects, engineers and property owners, products liability lawsuits, etc.) are a very common by-product to workplace accidents. In addition, some states impose heightened damages against employers in connection with workplace accidents.
7. The Impact on Labor Relations
One final issue employers must consider in evaluating whether and how they contest OSHA citations is their relationship with respective labor unions. Maintaining a positive relationship with labor unions is a goal that should be shared by all employers. Contesting OSHA citations may have an adverse impact on these relationships. Employers must be aware of such impacts and govern themselves accordingly.