RECENT DEVELOPMENTS IN OSHA CRIMINAL ENFORCEMENT PRACTICES June 22, 2016 1001 G Street NW, Ste. 500W, Washington, D.C. (202) 434-4182 Presented by: David Sarvadi Partner sarvadi@khlaw.com Manesh Rath Partner rath@khlaw.com www.khlaw.com Copyright 2016
Please Don t Forget to Dial-In: Conferencing Number: (800) 768-2983 Access Code: 434 4318 (View the slides via webinar, and the sound via phone, above) An audio recording and slide deck will be provided post-webinar on www.khlaw.com/osha3030 www.khlaw.com Copyright 2016
MANESH K. RATH Manesh Rath is a partner in Keller and Heckman s litigation and OSHA practice groups. He has been the lead amicus counsel on several cases before the U.S. Supreme Court including Staub v. Proctor Hospital and Vance v. Ball State University. Mr. Rath is a co-author of three books in the fields of wage/hour law, labor and employment law, and OSHA law. On developing legal issues, he has been quoted or interviewed in The Wall Street Journal, Bloomberg, Smart Money magazine, Entrepreneur magazine, on "PBS's Nightly Business Report," WAVY-TV and C-SPAN. He was listed in Smart CEO Magazine's Readers' Choice List of Legal Elite. Mr. Rath has extensive experience representing industry in OSHA rulemakings. He has successfully represented employers including some of the largest in the country in OSHA citations and investigations before federal OSHA in regions across the country and in state plan states. Manesh Rath Partner rath@khlaw.com 202-434-4182 Mr. Rath currently serves on the Board of Advisors for the National Federation of Independent Business (NFIB) Small Business Legal Center. He served on the Society For Human Resources (SHRM) Special Expertise Panel for Safety and Health law for several years. He is the editor and co-author of the OSHA chapter of the Employment and Labor Law Audit (9 th and 10 th Editions) and a co-author of the book Occupational Safety and Health Law Handbook (2001). 3
DAVID G. SARVADI Mr. Sarvadi practices in the areas of occupational health and safety, toxic substance management, pesticide regulation, and product safety. Mr. Sarvadi represents clients before a variety of federal and state enforcement agencies in legal proceedings involving OSHA citations, EPA Notice of Violations, TSCA consent orders, CPSC Notices, FIFRA Stop Sale Use and Removal Orders, and EEOC Charges of Discrimination. He works with clients in developing, reviewing, and auditing compliance programs in all of these areas, and in obtaining agency rulings on proposed or novel activities and questions, seeking interpretations of regulations as they apply to specific sets of facts. He has been counsel to the National Coalition on Ergonomics from its inception. David Sarvadi Partner sarvadi@khlaw.com 202-434-4249 He has a background in occupational safety and health, having worked as an industrial hygienist for more than 15 years and became a Certified Industrial Hygienist in 1978, a designation he held until he voluntarily relinquished it in 2010. Prior to becoming an attorney, he managed a corporate industrial hygiene program for a Fortune 500 company. Mr. Sarvadi was selected by the National Academy of Sciences to participate in a panel of the Institute of Medicine that was asked to review a NIOSH study on the use of respirators. He was asked to participate because of his expertise in law and industrial hygiene. 4
TOPICS TO BE DISCUSSED Understanding OSHA s Criminal Enforcement Authority Background on OSHA s Use Of Criminal Enforcement State and local prosecution Recent Justice Department Memo (Yates Memo) Potential for individual liability for managers and executives What Employers Should Do 5
UNDERSTANDING OSHA S CRIMINAL ENFORCEMENT AUTHORITY Criminal sanctions only for: Willful violations leading to fatality (17(e)) Misdemeanor, $10,000 Maximum 6 months prison Advanced notice of an inspection (17(f)) Falsification of documents filed or required to be maintained (17(g)) Perjury during OSHA proceedings (18 USC 1001) OSHA does not prosecute. 6
BACKGROUND ON OSHA S USE OF CRIMINAL ENFORCEMENT Limited Cases. Examples: Atlantic States Cast Iron Pipe Co. Employee killed by forklift 2nd Employee struck by forklift, ensuing cover-up Employee lost eye when rotating blade broke, ensuing cover-up Employee lost three fingers in cement mixer Court upheld 70 mos. prison for plant manager; 41 mos. for HR manager in charge of safety; 30 mos. for maintenance supervisor; 6 for supervisor 7
BACKGROUND ON CRIMINAL ENFORCEMENT IN OSHA CASES Examples: Port Arthur Chemical and Environmental Svcs LLC Alleged: former president failed to implement engineering and administrative controls to protect against hydrogen sulfide exposure President directed employees to falsify transportation documents to conceal wastewater shipments Two truck drivers died President 12-month sentence: false statement 8
STATE AND LOCAL PROSECUTION Federal OSHA criminal provisions do not pre-empt states from enforcing their own criminal code Examples California Bumble Bee Foods: $6 million willfully violating safety rules San Francisco Fatality Roofing Company New York task force to investigate workplace fatalities and determine need for criminal penalties Harco Construction LLC convicted, trench collapse (June) Criminal charges pending, 2 subcontractors, 2 individuals 9
DOJ MEMO - REJUVENATION OF THE WORKER ENDANGERMENT INITIATIVE Cooperation with DOJ Environmental Crimes Section (ECS) of the Environment and Natural Resources Division (ENRD) Only handful of criminal prosecutions under OSH Act each year On average about 2/year Since 1972, 400k fatalities, about 80 criminal prosecutions 3 in 2013 Causes? Penalties have not increased substantially. Difficulty in prosecution? Definition of federal crime. 10
DOJ MEMO (CONTINUED) Pair up with other serious offenses False statements Obstruction of justice Witness tampering Conspiracy Environmental crimes Endangerment crimes Penalties: 5-20 years prison Significant fines Other additional deterrent tools 11
DOJ MEMO (CONTINUED) MOU with DOL to pair up in enforcement More aggressive enforcement US Attorney s Offices responsible for criminal worker safety prosecutions Criminal referrals Data sharing Training Looking to other federal statutes 12
POTENTIAL FOR INDIVIDUAL LIABILITY FOR MANAGERS AND EXECUTIVES First Yates Memo (Sept. 9, 2015) Hold individuals responsible for corporate misdeeds Cooperation Sharing all facts Identifying individuals responsible for misconduct, regardless of rank Reveals all facts about individuals responsible for misconduct Focus corporate investigations on individuals Resolution of corporate investigations will not protect individuals from criminal or civil liability. 13
CURRENT ENFORCEMENT TRENDS Following the Rejuvenation of the Worker Endangerment Initiative DOJ has prosecuted the following cases: Fatal Fall: Owner of Roofing Company 10 months in prison Fatality, Improper Lockout Tagout: Behr Iron and Steel Inc. 5 years probation Maximum fine of $500K Contrast with MSHA: Kosmos Cement plead guilty to violating MSHA Fine of $400K Big Stone Gap Coal Trucking guilty plea Providing advance notice of safety inspections Fine $375K 14
OVER-CRIMINALIZATION CONCERNS House Judiciary Committee Task force to "rein in the explosion of federal criminal law, commonly referred to as over-criminalization." Considering a number of reform Bills e.g., The Regulatory Reporting Act of 2015 Rein in federal overreach Require federal agencies to submit a report to Congress detailing potential criminal penalties Congress determines if criminal penalty is appropriate Public Concerns Over Criminalization Given the number of federal regulations, how does the average person know when he or she has crossed over the line into forbidden territory. Social Media Polls 60% felt that there were too many regulations for individuals to be in compliance 100% of the time 15
WHAT EMPLOYERS SHOULD DO 1. Consult with Counsel Any serious accident including hospitalization, amputation, fatality Prepare in advance by training staff 2. Respond to document requests, requests for identification of witnesses 3. Evaluate potential conflicts of interest 4. Identify areas of privilege, trade secret, or selfincrimination 5. Develop protocol for preparing employees 6. With the foregoing exceptions, cooperate to the fullest extent possible 7. Document production efforts, obtain and review civil transcripts for accuracy, take statements 16
Next OSHA 30/30 Please join us at 1:00 PM Eastern U.S. Wednesday, July 20, 2016 www.khlaw.com/osha3030 17
TO STAY UPDATED: Catch our group on LinkedIn: Keller and Heckman Workplace Safety and Health The OSHA 30/30 with Manesh Rath now available as a Podcast! Find it at: Khlaw.com/osha3030 or on any podcast streaming service (itunes, Podcast Addict) 18
Thank you! Please take a moment to fill out the survey on your screen. Keller and Heckman LLP 1001 G Street NW Suite 500 West Washington, DC 20001 (202) 434-4182 rath@khlaw.com David Sarvadi sarvadi@khlaw.com Manesh Rath rath@khlaw.com www.khlaw.com