In late December 2003, the New York Times published a series of articles that was highly critical of the Occupational Safety and Health Administration (“OSHA”).1 The articles recounted tragic workplace accidents that resulted in fatalities and willful violations, but were not referred by OSHA to the Department of Justice (“DOJ”) for potential criminal prosecution. While the long-term impact of the series is not clear, Congress has clearly taken notice, and legislation has been introduced that would increase the criminal penalties available for willful violations of federal OSHA standards that cause employee fatalities. It also seems likely that in high-profile cases, OSHA may become more reluctant to enter into settlement agreements and may refer more cases to DOJ. Also, even without an OSHA referral, DOJ has the power, so far seldom used, to initiate its own investigation of a workplace fatality, and the Times series may spur DOJ to take this initiative more often. Finally, employee advocacy groups have already begun to clamor for criminal investigations where major accidents have occurred.

Given the atmosphere created by the Times articles, employers that experience an incident resulting in an employee fatality must be cognizant of the increased risk of a criminal investigation. Accordingly, such employers would be well-served to engage experienced counsel immediately to assist in addressing OSHA’s investigation of the fatality and navigating the complicated issues that potential criminal liability presents.

Criminal Penalties under the OSH Act

A willful violation of an OSHA standard that results in the death of an employee is a misdemeanor that carries a maximum prison sentence of 6 months and a maximum fine of $250,000 for an individual and $500,000 for an organization. A “willful” violation is generally defined as an intentional violation or a violation committed with “plain indifference” to the requirements of the standard.

All workplace fatalities must be reported to OSHA within 8 hours, and OSHA typically arrives at the worksite to investigate soon after the report. OSHA’s fatality investigation procedures state that an “initial determination whether there is potential for a criminal violation” must be made “early in investigations.” The “potential” for a criminal violation is based upon “evidence that an OSHA standard has been violated and that the violation contributed to the death,” and whether “there is reason to believe that the employer was aware of the requirement of the standard and knew it was in violation of the standard.” If the local OSHA Area Office believes that a criminal investigation should be conducted, the case is referred to an OSHA Regional Office for review, and then to the Office of the Solicitor, the branch of the Department of Labor whose attorneys represent OSHA. The Office of the Solicitor makes the final determination as to whether a matter will be referred to DOJ for criminal investigation and prosecution.

In states subject to federal OSHA enforcement,2 criminal investigations normally result from OSHA referring a matter to DOJ. As noted, however, even if OSHA does not conclude that a violation is “willful,” DOJ may still investigate and criminally prosecute an employer. In addition, local prosecutors may investigate and prosecute for state law crimes such as manslaughter and criminally negligent homicide. In fact, the Times series points out that some states now require OSHA inspectors to report fatalities caused by safety violations to prosecutors, and other states, including Arizona, California and Michigan, have increased penalties for violations that result in fatalities or severe injuries.3

The New York Times Series

The first article described a trench collapse that killed a 22-year old plumber’s apprentice in June 2002. According to OSHA’s investigation, the employer failed to place a trench box into the trench or slope the sides to keep the trench from collapsing. In 1989, the same company committed an identical violation with the same result – a collapsed trench that caused a fatality, which resulted in a $13,700 fine and a promise to follow OSHA’s trenching standards. Based partially on the previous violation for the same conduct, OSHA issued a citation alleging a willful violation with a proposed penalty of $90,000. In a settlement agreement, OSHA agreed to reduce the penalty to $54,000, and more significantly, to re-characterize the violation from “willful” to “unclassified.” No criminal referral was made.

The technique of reclassifying violations from “willful” to “unclassified” arose in the 1990’s. Technically, the OSH Act does not create a category of violation termed “unclassified.” The term was created by the Office of the Solicitor and the OSHA defense bar as a means of resolving difficult, high-profile cases. In a fatality situation, the re-characterization of a citation often has significant benefits for the employer. As a condition of agreeing to re-characterize a willful violation as “unclassified,” OSHA usually demands payment of most of the proposed penalty amount stated in the original citation. In exchange, the employer eliminates the stigma of a willful violation and reduces the chances that the citation will be used against the employer in collateral state court litigation brought by the employee’s family. In most states, workers’ compensation provides the exclusive remedy for an employee’s family in the event of a fatality. In some states, however, an employer whose action is proven to be “intentional” or “willful” may be liable for some degree of additional damages, including pain and suffering and punitive damages. If an employer accepts a willful OSHA violation in a settlement agreement or is found by a judge to have committed a willful violation, it is typically easier for an employee or his family to use the citation to prove that an intentional tort was committed.

Another potential benefit of re-characterization is that it may decrease the chances of criminal prosecution. While DOJ or state authorities may investigate violations that OSHA does not characterize as “willful,” they are typically less likely to do so. The case for a criminal violation is less compelling to a jury, and federal resources are stretched, particularly given the war on terrorism. As such, DOJ may be reluctant to investigate a violation that OSHA does not deem willful and that could result only in a misdemeanor conviction.

The second Times article discussed the reasons OSHA does not refer more cases for criminal prosecution, but does not provide a definitive explanation. Former OSHA officials were reported to have stated that “Washington” values “numbers” – more inspections and more citations issued. Involvement in a criminal case takes time away from generating these types of numbers, they reportedly said, because of the resources needed to investigate and prosecute such a case. In addition, some officials were critical of the Office of the Solicitor. According to the article, “OSHA investigators used words like ‘smoke screen’ and ‘snow job’ to describe the legal objections they encounter,” and also stated that the Office of the Solicitor does not refer cases to DOJ unless the violations are “obscenely willful.”

The Political Fall-Out

Perhaps the most significant effect of OSHA’s criminal enforcement policies occurred before the Times series was published: increased scrutiny from state authorities. Some states, like California, Michigan, and Washington, have long maintained active state occupational safety and health plans with aggressive enforcement policies. California in particular was singled out in the third Times article as prosecuting more criminal cases than all other states combined. As Arent Fox attorneys who have had cases involving Cal-OSHA can attest, even in cases that do not involve a fatality or even an injury, fines are much higher and Cal-OSHA attorneys are often reluctant to settle cases favorably to employers.

Other states have responded on a more ad hoc basis to highly-publicized fatalities and catastrophes. For example, Delaware state authorities prosecuted a refinery after a sulfuric acid tank collapsed, killing one employee. After OSHA agreed to unclassified violations, Delaware’s Attorney General brought criminal charges. According to the Times article, the company pleaded guilty and paid the maximum fine of $46,000. State law has since been amended to permit a maximum fine of $250,000.

Congress has also taken notice of OSHA’s criminal enforcement record. Prior to the Times series, Senator Jon Corzine (D-NJ) introduced Senate bill S. 1272, which would make criminal violations of OSHA standards Class C felonies rather than misdemeanors that would carry a maximum prison sentence of 10 years. The day after the series was published, Senator Frank Lautenberg (D-NJ) sent a letter to OSHA Assistant Secretary John Henshaw calling OSHA’s failure to refer more cases for criminal investigation an “astounding record of failure” and “gross negligence” on OSHA’s part. Senator Lautenberg intends to introduce a bill requiring OSHA to provide a periodic update to Congress on the number of workplace fatalities and a description of “any and all actions taken by OSHA to punish those companies which have placed these employees in danger.”

Advice for Employers

When OSHA investigates a fatality, the level of scrutiny is high and OSHA’s mentality often is that the employer must have committed a significant violation because a fatality has occurred. Even before the Times articles were published, employers were well-advised to consult with counsel in the event of an employee fatality or significant incident.If experienced counsel is not retained early in the process, it is often impossible to protect the company’s rights effectively and minimize liability.

The Times series resulted in significant adverse publicity for OSHA with the public, labor unions and Congress. As a result, OSHA is likely to begin to refer more cases for criminal investigation. In addition, Congress is focused on the issue of criminal enforcement, and OSHA and the Office of the Solicitor will clearly want to offer some examples of tough criminal enforcement the next time they testify on Capitol Hill. OSHA may also be more reluctant to agree to re-characterize violations from “willful” to “unclassified,” which could have a significant impact on the liability employers may face. In other words, the risk of an adverse result arising from a fatality investigation has increased, and employers are best advised to respond accordingly.

1. The series was written by New York Times writer David Barstow and consisted of three articles published on December 21, 22 and 23, 2003.
2. In twenty-one states and Puerto Rico, the state government enforces occupational safety and health requirements. In those states, any criminal investigation or prosecution would not be conducted by DOJ, but rather by state or local prosecutors.
3. Arizona, California and Michigan are among the states that have state occupational safety and health plans.