The Case

The $190,000 Wal-Mart Settlement & What It Means for You

Date First Published on SafetySmart Compliance: September 12th, 2013
Topics: Lockout Tagout | Machine Guarding | Materials Handling & Storage |

In Wal-Mart, OSHA takes its repeat violations powers to new extremesAlthough an OSHA offense is never good, OSHA comes down the hardest on repeat offenders. This policy of penalizing repeat offenses makes a lot of sense, especially to the vast majority of employers who care about their workers’ safety and try to follow the rules. The problem is OSHA’s stubborn insistence on treating all locations owned by the same corporation as a single person. The OSHA if-it-happened-in-Hawaii-it-happened-in-Delaware mentality came to a head recently when OSHA settled a national case with Wal-Mart. Here’s a look at the settlement and what it means.

THE CASE

What Happened: The story begins in August 2011 when OSHA inspected a Wal-Mart superstore in Rochester, NY, after a worker complained. Inspectors discovered a series of violations like blocked fire exits, no LOTO procedure for performing maintenance on a trash compactor and an unguarded grinder. Had the store been the only location of the business, these violations would have warranted serious citations carrying a maximum fine of $7,000 a pop.

But this was a Wal-Mart.  And while they were a first for the Rochester store, the violations were similar to those OSHA found at other locations both in New York and 8 other states, including Alabama, Arkansas, Florida, Georgia, Illinois, Missouri, North Dakota and Oklahoma. Result:   OSHA treated the violations as repeat offenses carrying a maximum fine of $70,000 per–$288,000 in total penalties + $67,500 more for 14 serious violations. OSHA appealed.

On August 7, 2013, OSHA and Wal-Mart announced that they had agreed to settle the case.

What the Settlement Requires 

Wal-Mart has agreed to:

  • Pay $190,000 in fines, about half the $365,500 OHSA had proposed;
  • Abate, i.e., correct all of the cited violations;
  • Post the terms of the settlement in all affected stores; and
  • Adopt safety improvements at 2,857 of its 4,600 U.S. retail establishments in the U.S. (all the stores in states subject to federal OSHA; stores in states with their own OSHA, like California, are “encouraged” to adopt the same improvements).

Wal-Mart Stores, Inc.,  No. 13-1570-NAT, National OSHA, August 7, 2013

WHAT IT MEANS TO YOU

The case isn’t just a piece of news. The safety improvements the settlement agreement requires Wal-Mart to make offer insight into the specific measures OSHA thinks are necessary to achieve compliance with some of its most frequently cited standards. So it pays to break down these crucial details:

Trash Compactor Safety Procedures

Under the settlement, Wal-Mart must:

  • Ban workers and managers from entering or putting any part of their body in a trash compactor or climb into a chute where there’s a risk they might fall into it;
  • Equip each trash compactor with an interlock device to ensure the compactor operates only when the chute door is closed;
  • Ensure that compactors are operated only in the presence and under the direction of a supervisor, salaried member of management or other designated person who’s been trained in the safe operation, use and supervision of the trash compactor who will make sure the operation follows all the safety rules and report any problems to the proper authorities;
  • Keep a list of all persons designated to perform the above functions;
  • Keep written logs of any transfer of authority to such designated persons;
  • Keep all chute doors locked when the compactor isn’t used and allow only salaried management members or designated persons to unlock them; and
  • Implement procedures for clearing jams in the compactor;
  • Use outside contractors with appropriate training in LOTO procedures to clear jams that can’t be fixed following the internal procedures;
  • Redesign the warning signs on trash compactor chute access doors  that list the above no entry policy (see first item) and procedures for resolving jams;

Safety Training

The settlement also requires Wal-Mart to train or re-train all affected workers, managers or contractors in the above policies and procedures. Crucial details: The training must:

  • Include a statement in the training repeating that nobody may enter, stick any part of their body in or climb on compactors and chutes;
  • Make sure trainees know that the compactor can’t be operated unless the chute door is closed and that it will have a well maintained interlocking device;
  • Indicate who can be a designated person for purposes of carrying out the procedures above;
  • Describe the procedures for dealing with jams; and
  • Provide for initial compactor safety training for new workers.

Improve Hazcom Training

Another source of compliance are the measures OSHA will require Wal-Mart to implement to improve its Hazcom safety training, including:

  • Make MSDSs accessible to workers in all work areas through its intranet;
  • Modify the intranet so that workers can access MSDSs by entering either the chemical and product name or UPC bar code;
  • Improve the safety of its “Solution Centers” where chemical cleaners are dispensed, including establishing a contingency plan dealing with what happens if the Solution Center protocols don’t work; and
  • Provide more detailed training and re-training on safe use of the Solution Centers.

Audit Compliance with Settlement

Especially eyebrow raising is Wal-Mart’s agreement to have independent third party monitors audit at least 80% of the covered sites every 4 months and verify via written report that the hazards are being abated in accordance with the settlement agreement.

CONCLUSION

OSHA’s aggressive attribution of repeat violations to multiple locations of the same business is nothing new. But the Wal-Mart settlement extends the policy further than ever. It’s not just about increasing fines any more. OSHA is now using the policy to literally tell national companies how to run their safety programs. Regardless of how you feel about Wal-Mart and its reputation for mistreating workers, this new expansion by OSHA of its repeat violation authority should be of concern to all employers, especially those you have multiple operations.

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