The Administrative Procedure Act regulates federal agencies’ ability to issue rules through a formal rulemaking process. It also mandates that agencies not impose sanctions “except within the jurisdiction delegated to the agency and as authorized by law.” Under the APA, an offended party may only challenge an agency action as exceeding the scope of its authority if it constitutes a final agency action, and sanctioning an employer constitutes such an action. Thus, if employers can establish that OSHA’s use of an SVEP enforcement press release is a sanction, and that it is arbitrary, capricious, an abuse of discretion or otherwise unlawful, then the APA provides a platform to challenge the practice.

Under the APA, an employer could successfully argue, similar to the federal court holding described above, that OSHA’s SVEP press releases constitute sanctions because they injure the reputation of the employer. An employer could also meet the “arbitrary, capricious, an abuse of discretion or otherwise unlawful” requirement of the APA by citing the penalty provision of the OSHA Act, which does not authorize “regulation by shaming.” Thus, OSHA is currently issuing a penalty outside of its discretionary reach. In fact, the OSH Act only provides for general publication concerning investigations, findings and regulations. Therefore, an employer could assert that the current press releases, used as a “far less expensive or bureaucratic” enforcement tool, go far beyond the intended purpose of the publications allowed in the OSH Act — another potential basis to challenge OSHA’s actions under the APA.

You can check in, but you can never leave

The final problematic element of the SVEP is the manner in which employers can (or really, cannot) be removed from it. For more than two years, OSHA operated the SVEP without providing employers any way out of the Program, other than by eliminating the underlying SVEP-qualifying citations through the potentially multiyear contest process or persuading OSHA to withdraw the SVEP-qualifying citations in a settlement. After much clamoring from industry, OSHA finally updated the SVEP to include an “exit ramp” — at least on paper. By memorandum from the director of enforcement programs to the regional administrators on Aug. 16, 2012, OSHA set forth a series of nearly impossible removal criteria.

The memo provided a framework for getting out of SVEP, but the extremely harsh removal criteria provide little relief to employers. The memo explains that:

“[A]n employer may be removed from the SVEP after a period of three years from the date of final disposition of the SVEP inspection citation items. Final disposition may occur through failure to contest, settlement agreement, Review Commission final order, or court of appeals decision.” Of course, it is not as easy as just waiting those 1,095 days from a Final Order. Employers must have also “abated all SVEP-related hazards affirmed as violations, paid all final penalties, abided by and completed all settlement provisions, and not received any additional Serious citations related to the hazards identified in the SVEP inspection at the initial establishment or at any related establishments.”

If employers fall short of any of these requirements, they will have to wait an additional three years to be considered for removal. Even if the employer does meet all the criteria, removal from SVEP is not guaranteed. In all cases with the exception for those involving corporatewide settlements, the regional administrator has the final say as to whether an employer is removed from the program. That discretionary decision is based on vague, undefined factors related to follow-up inspections and enforcement data. Employers who agreed to corporate-wide settlements are reviewed for removal by the Director of Enforcement Programs (DEP) in OSHA’s National Office.

There are two aspects of these removal criteria that make them unduly harsh. First, under these guidelines, employers are punished for exercising their rights to challenge OSHA citations. By dumping employers into the SVEP before a Final Order, and then not starting the removal clock until after a Final Order, employers with legitimate disagreement about the underlying citations face the choice of trying to prove their innocence (in a process that can take several years), while remaining publicly branded as a “Severe Violator” all the while, or waiving their right to try to prove their innocence, in hopes that OSHA will exercise its vague discretion to remove them from the SVEP in three years.