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November 18, 2012 | By Eric J. Conn and Lindsay Smith
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OSHA’s Severe Violator Enforcement Program

Please check your due process rights at the door

In June of 2010, the Occupational Safety and Health Administration (“OSHA”) rolled-out an enforcement initiative called the Severe Violator Enforcement Program (“SVEP” or the “Program”). The stated intent of the Program is for OSHA to focus more of its enforcement resources and energy on employers whom the Agency believes are recalcitrant or indifferent to their obligations under the Occupational Safety and Health Act (“OSH Act”). Generally speaking, OSHA qualifies employers as “severe violators” when the employers receive citations characterized as “Willful” or “Repeat” in certain specified circumstances, including violations of OSHA’s Grain Standard (29 C.F.R. 1910.272). Around this time last year, 182 employers were added to the SVEP. This year, that number has more than doubled.  

Qualifying for the SVEP subjects employers to:

  1. Enhanced, mandatory follow-up inspections at the same facility;
  2. Nationwide inspections of related worksites that are part of the same corporate enterprise;
  3. Enhanced abatement and settlement terms; and
  4. Increased public shaming.

Despite the SVEP’s substantial punitive elements, OSHA deposits employers into the Program before the underlying allegations become a Final Order; i.e., before the employers have had an opportunity to prove wrong the qualifying allegations before the OSH Review Commission.  Before the employer has a chance to do that, OSHA can, under the SVEP Directive, begin follow-up inspections and inspections at related facilities, add the employer to a public and embarrassing list of severe violators, and condemn the employer in the public arena through harsh enforcement news releases at the time of the issuance of the citations.  “Guilty before proven innocent” at its core.

This article explores the Constitutional Due Process implications raised by OSHA’s implementation of the SVEP, and especially the enforcement news releases that accompany employers’ placement into the Program.  It will also explain the ways that OSHA’s execution of the SVEP violates the Administrative Procedure Act (“APA”), which governs agencies’ rulemaking authority.  Finally, it discusses the other elements of the SVEP that strike at fundamental fairness and sound policy, such as the nearly impossible “exit ramp” OSHA created for employers to get out of the Program.

Constitutional Due Process

Entry Into SVEP

OSHA qualifies employers for the SVEP for allegedly committing violations of the following four varieties:

  1. Any violation categorized by OSHA as “Egregious”;
  2. One or more Willful, Repeat or Failure-to-Abate violation(s) associated with a fatality or the overnight hospitalization of three or more employees;
  3. Two or more Willful, Repeat or Failure-to-Abate violations in connection with a high emphasis hazard (generally speaking, the subjects of OSHA’s special emphasis programs, such as falls, amputations, and most recently added to the list of high emphasis hazards -- grain handling); or
  4. Three or more Willful, Repeat or Failure-to-Abate violations related to OSHA’s Process Safety Management Standard.

To be clear, employers are placed into the program based on alleged violations meeting these criteria, as opposed to Final Orders through adjudication or settlement.  OSHA promptly begins to subject the employers it qualifies into the Program to the punitive elements of the Program, notwithstanding Constitutional due process, which guarantees that “no person shall . . . be deprived of life, liberty, or property, without due process of law.”

Due process of the law means a fair and just judicial proceeding through which guilt or innocence is determined based on the evidence provided – all before a penalty may be imposed. Because being placed in the SVEP occurs at the time of issuance of citations, rather than after final disposition of those allegations, OSHA does not afford the employer an opportunity to contest the citations through the established administrative process, before subjecting them to the punitive sanctions associated with the Program.

Courts have begun to more closely scrutinize the impact of federal agency actions and regulations on the due process rights of individuals and entities. For example, in a recent Supreme Court case, Sackett v. U.S. EPA, Justice Alito found the current system of compliance orders administered by the Environmental Protection Agency under the Clean Water Act, which charge increasing penalties every day that an entity does not comply, even before the validity of the compliance order can be assessed, to be “unthinkable” in “a nation that values due process.” The goals of OSHA’s SVEP and EPA’s penalty structure under the Clean Water Act are the same, increase enforcement for employers accused but not proven to be recalcitrant, and so is the effect of these two enforcement schemes, an accumulation of penalties prior to a fair and impartial proceeding.

Public Shaming - Press Releases and SVEP Log

Upon issuing the citations and qualifying an employer as a severe violator, OSHA also issues a news release announcing the alleged violations and publically declaring the employer’s new status as a severe violator. OSHA also promptly adds the employer’s name to a list with other supposed severe violators, which is publicized on OSHA’s website.

Dr. David Michaels, Assistant Secretary of Labor for OSHA, has explained OSHA’s rationale for the enforcement press releases:

“The most effective means for OSHA to encourage elimination of life-threatening hazards . . . is to publicize the names of violators, especially when their actions place the safety and health of workers in danger.”

Dr. Michaels and others in senior leadership roles at OSHA refer to this tactic as “Regulation by Shaming,” and it is used most brazenly against those employers OSHA places into the SVEP.  Historically, OSHA avoided this kind of public scorn by limiting enforcement press releases to only the most significant cases (generally penalties exceeding $100,000), and even then, issued short, simple press releases that provided only the most basic information about the enforcement action (e.g., number of citations and the size of the penalty), and stuck only to just the facts.  The hallmarks of the news releases from today’s OSHA are that they are issued for relatively minor enforcement actions, and hardly stick to the facts. OSHA today issues a press release for any set of citation with penalties exceeding $40,000 (including cumulative penalties for multi-employer cases), describes the nature of the citations, the proposed penalty, and always includes a provocative and inflammatory quotation from a senior OSHA or Department of Labor official intended to embarrass the employer.

Here are some examples of the quotations included in recent OSHA news releases, which illustrate their inflammatory nature:

  • “Failing to provide protective equipment and hazard communication training shows zero commitment to worker safety and health.”
  • “This company has operated in a way that disregards the safety and health of its employees . . . OSHA will not tolerate employers that do not protect their workers.”
  • “The level of disregard for workers’ safety demonstrated by this employer is irresponsible . . . It should not take a fire or explosion to implement necessary safety measures to protect employees.”

The SVEP news releases also expressly state that the employer has been placed into the Program, publically branding the employer as a “Sever Violator.”  Again, this is publicized before the employer has the opportunity to correct any mistakes in the allegations or to contest and prove wrong the citations.

These news releases foster negative public perceptions about employers, which lead to a loss of customers, profit, hurts employers ability to recruit and retain employees, impacts insurance rates, and employers’ abilities to obtain financing from lenders. Accordingly, OSHA’s “regulation by shaming” news releases are undoubtedly a penalty, and since these penalties are laid upon employers before employers have any opportunity to prove their innocence, they are unlawful.  Courts have already found other agencies’ press releases to be penalties. For example, in relation to an EEOC press release, a federal district court in Arizona warned that “[the] United States and its employees have a special duty not to injure the reputations of its citizens.”

In many cases, OSHA’s press releases unjustly injure the reputations of our nation’s employers, as they are based on unproven allegations. They are all premature, and most turn out to be wrong. Nevertheless, OSHA never issues follow-up news releases to correct inaccuracies favorable to employers, and it has never apologized for its mistaken allegations.

APA Implications for OSHA Practices

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 a 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 regulation by shaming practice that accompanies entry into the SVEP. 

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 OSH Act, which does not include “regulation by shaming.” Thus OSHA is currently employing 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 the Program once they qualify.  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 multi-year 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 August 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 1095 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 corporate-wide 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. 

Second, an employer’s place in the SVEP will be extended not by the heightened type of violations (i.e., Willful, Repeat, and Failure-to-Abate) that are required to initially qualify for the Program, but by any related “Serious” violation at any facility within the enterprise. This poses several problems because SVEP mandates numerous follow-up inspections, today’s OSHA rarely conducts an inspection without issuing a citation, and over the past three years, OSHA has been handing out Serious violations like Halloween candy. Between 2006 and 2010, the types of violations that will keep you in the SVEP (i.e., Serious or greater) are up more than 247%, and the types of violations that can allow for removal (i.e., Other-than-Serious violations) are down more than 10%.  In these circumstances, the SVEP exit ramp looks more like a tight rope without a net.

Special Consideration for the Grain Handling Industry

The SVEP is cause for concern for employers in the grain industry. On April 12, 2011, OSHA authorized the inclusion of grain handling hazards on the list of High Emphasis Hazards in the SVEP. Thus, it is now easier for employers in the grain handling industry to be categorized as severe violators, because two or more willful or repeat violations or failure to abate notices based on the grain standards means inclusion in the SVEP.

A quick review of OSHA’s public SVEP Log reveals that the number one qualifying criteria for the SVEP is through the High Emphasis Hazards. Couple that with OSHA’s aggressive inspection programs targeting the grain industry -- the Local and Regional Emphasis Programs in all the major grain states in the country, demands that grain handlers be aware of the increased probability of being classified as severe violators. Accordingly, grain handlers must not only take steps to prepare for OSHA inspections to best position themselves to avoid the types of violations that lead to qualifying for the SVEP, but must also seriously consider challenging all violations cited under the Grain Standard, even Other Than Serious low or no dollar penalty citations.  Any past violation, even Other than Serious violations, can serve as the basis for a Repeat violation, which has the very real consequence of turning an employer into a “Severe Violator."

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