avoiding the new enforcement-driven osha while …20the%20new%20enforcement... · osha and initial...

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AVOIDING THE NEW

ENFORCEMENT-DRIVEN OSHA

WHILE ACHIEVING OPERATIONAL

EXCELLENCE AND PROFITS

THROUGH SAFETY

April 8, 2010

Charlotte, NC

Presented by:

Edwin G. Foulke, Jr.

[email protected]

Howard A. Mavity

[email protected]

http://www.cagc.org/

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www.laborlawyers.com Phone (404) 231-1400

THANK YOU

FOR YOUR COMMITMENT TO SAFETY

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Avoid this . . .

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. . . and this!

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But you don’t want this approach

either!

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SAFETY AND HEALTH IN

THE 21ST CENTURY

Having great safety and health is important because …

1) it is morally the right thing;

2) it allows your employees to go home each night safely to their family and loved ones;

3) it keeps you from having to do the worst job any person could possibly have to do;

4) It legally required; and

5) it is essential for a company to be profitable and competitive in today’s marketplace.

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SAFETY AND HEALTH AT THE

GOVERNMENTAL CROSSROAD

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“If your attack is going too well,

you’re walking into an ambush.”

~ U.S. Army Infantry Journal

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THE ADMINISTRATION’S OWN

DESCRIPTION OF ITS FOCUS

• Secretary of Labor Hilda Solis:“Let me be clear, the Labor Department is back in the enforcement business.”

April 28, 2009 “Workers Memorial Day” Speech

• Assistant Secretary of Labor David Michaels:

“There is a new sheriff in town . . . this is not an abstract wish . . . it is a stern description of how OSHA is now working . . . and I take this phrase seriously.”

March 10, 2011, ABA

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1. BP Products North America, Inc. (TX) - $87 million

2. CES Environmental Services, Inc. (TX) – $1.4 million

3. Cambridge Contracting, Inc. (NY) - $484,000 – Nov.

4. Franklin Non-Ferrous Foundry (NH) - $250,000

5. Endres Processing Ohio, LLC (OH) - $473,000

6. Mar-Jac Poultry, Inc. (GA) - $379,800

7. Sims Bark Co & Sims Stone Co. (GA & AL) – $576,000

8. Tempel Grain Elevators, LLC (CO) - $$1.59 million

9. Frit Car, Inc. (AL) - $364,350

10. Cranesville Aggregate Co. (NY) - $509,000

11. Loren Cook Co. (MO) - $511,000

12. UCL, Inc. (OH) - $321,000

13. C.A. Franc (PA) - $539,000 and criminal referral

14. A-I Excavating (W) - $861,000

THE PROOF IS IN THE PENALTIES

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15. Diesel, Inc. (FL) - $318,900

16. All-Feed Processing & Packaging, Inc. (IL) - $518,520

17. A-1 Excavating (WI) - $861,000

18. Cambria Contracting, Inc. (NY) - $484,000

19. Metal Improvement Co. (IL) - $275,000

20. New Place Carpentry (CT) - $308,500

21. Crespac, Inc. (GA) - $266,400

22. Heberle Disposal Service, Inc. (NY) - $304,200

23. Cranesville Aggregate Co. (NY) - $509,000 – Nov.

THE PROOF IS IN THE PENALTIES

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LEADERSHIP CHANGES

Dr. David Michaels – Asst. Secretary for OSHA– research epidemiologist and interim Chair, Department of

Environmental and Occupational Health – GWU School of Public Health

– associated with challenges of science on which manufacturers and employers rely

– favors comprehensive Workplace Safety & Health Standard under which employers would have to develop and implement a hazard reduction plan and abatement

– focus on chemical and IH issues, ergonomics, and recordkeeping

– has commented on willingness to use 5(1)(1) General Duty citations more frequently

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LEADERSHIP CHANGES

Jordan Barab – Deputy Assistant Secretary for OSHA and Initial Acting Asst. Secretary

– Senior Labor Policy Advisor (Safety) for House Labor Committee for over five years

– Served as acting Assistant Secretary until Dr. Michaels was approved

Deborah Berkowitz – OSHA Chief of Staff– 1989-1998 Health Safety Director for UFCW

– 1979-1989 Director of Health & Safety Program at Food & Allied Services Trades Department

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OSHA AND THE CONGRESS

Congressional LegislationProtecting America’s Worker Act (S 1580 and HR 2067)

• Expands coverage – public sector employees

• Increases penalties – civil and criminal

• Changes in citation classification language

• Expands whistleblower coverage

• Expands fatality or serious injury investigation

• Prohibits unclassified citations

• Expands victim’s rights

• Expands employee and union rights

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• With the March 16, 2010 Congressional

Hearing, the Protecting American Workers Act

(PAW) has moved to the front burner, and new

revisions proposed, include changes in

proposed penalties, widening of the definition of

“any responsible corporate officer,” and related

changes to criminal standard from a “willful” to a

“knowing” violation leading to a serious injury or

death; also accelerated abatement provisions.

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PROTECTING AMERICA’S WORKERS ACT

(PAWA, HR 2067 / S 1580)

(SOME OF THE CHANGES)

Would Increase Civil Penalties (will be adjusted for inflation every 4

years):

• Willful or repeat (no fatality): $8000 →$120,000 (now = $5000→$70,000)

• Willful violation w/fatality (new): $50,000→$250,000

• Serious violation (no fatality): $12,000 (now = $7000)

• Serious violation w/fatality (new) $20,000→$50,000

• Non-serious violation (no fatality): $12,000 (max.) (now = $7000)

• Non-serious violation w/fatality (new): $20,000→$50,000

• Failure to correct (no fatality): $12,000 (now = $7000) (?)

• Failure to correct w/fatality (new): $20,000→$50,000 (?)

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PROTECTING AMERICA’S WORKERS ACT

(PAWA, HR 2067 / S 1580)

Would Expand Victim’s Rights:

• Allows employees (or their representatives) to contest OSHA citations re: failure to issue, classification and proposed penalty

• Includes injured workers and families in the OSHA investigatory and adjudicatory process

• Permits employees to object to modification or withdrawal of citation and ultimately to a hearing before the OSHRC

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Other Proposed Legislation

• Combustible Dust Bill

• Corporate Injury, Illness and Fatality Reporting Act of 2009

• S 2882: Taxpayer Responsibility, Accountability and Consistency Act of 2009

• S 1274: Amend SAFE Port Act

• Homeland Security Appropriation Bill (2010)

• Ergonomics

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OSHA AND THE OBAMA

ADMINISTRATION: FUNDING

FY 2008 FY 2009 FY 2010

Funding $494,641,000 $513,042,000 $563,620,000

FTE 2,097 2,147 2,368

FY 2011 (Proposed)

Funding $573,096,000

FTE 2,368

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THE ADMINISTRATION’S INCREASED

MANAGEMENT OF STATE-PLANS

• Review of all State Plans and “restructuring” the Operation of Federal and State OSHA programs.

– State Plan “Reviews” due June 2010

– Pressure on State Plans to follow D.C. direction, NEP’s, etc.

– HR 4864 introduced on March 16, 2010 to give Fed-OSHA more control over State-Plans

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THE ADMINISTRATION’S UNDERLYING

ENFORCEMENT GOALS

• The Administration has been candid about their workplace safety enforcement focus – take them at their word. It is not political posturing.

• Current enforcement trends and initiatives are not “new.” Review the last three years of testimony to the Congressional Labor Committee to see where OSHA is heading and how they will get there.

• Do not focus solely on probable increases in inspections. Consider trends such as:

– inspections have not yet increased, but “inspections found in compliance” have declined 30%, and “egregious cases” have increased;

– quiet but efficient OSHA working groups focusing on issues from raising penalties without passage of the PAW to recordkeeping;

– efforts to focus on larger multi-location employers, and to determine“patterns,” possibly triggering willful, repeat, or item-by-item classification, orplacement in EEP-type programs;

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THE ADMINISTRATION’S UNDERLYING

ENFORCEMENT GOALS

• Patiently taking methodical steps such as with Ergonomics issues– proposal to add MSD’s to 300 Log.

• Increase in CSHO’s, IH’s, and Whistleblower investigators through new hires and reassignment of consultation officers– e.g. Region IV hired 59 FTE’s and 4 whistleblower investigators

– 2011 proposed Budget and reallocation of 35+ consultation offices; effect on VPP?

• More scrutiny on VPP, Alliances, and trainers

• Change in tone – see the www.OSHA.gov weekly list of catastrophic injuries with employer identifiers, and ongoing efforts to make other employer information public

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UNDERSTAND HOW D.C. IS CHANGING

OSHA’S “METHODS”

• Increased focus on “routine” items, and using “repeats” to increase penalties for multi-location employers

• Effective use of NEP’s, especially Combustible Dust and Amputations; similar to the success of the PSM NEP– Over 140 Local Emphasis Programs

• Anticipate further NEP emphasis on lead, silica, PSM –chemical plants, Hex, and industry sectors, such as poultry, and foundries– D.C. reviewing Regional comments about high hazard facilities

– D.C. evaluating the amputations NEP

– NEP for Hexavalent Chromium

• More follow-up inspections; especially about abatement

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UNDERSTAND HOW D.C. IS

CHANGING OSHA’S “METHODS”

• focus on recordkeeping enforcement and changes in how injury and illness data is viewed and utilized;

– reasons for the Recordkeeping NEP

– Oct. 1, 2009 Directive – focus on employers in high hazard industries who have low rates

– proposed requirement to record MSDS’s and reliance on “subjective symptoms”

– removal of language from the Recordkeeping Directive that minor musculoskeletal discomfort is not recordable if a hcp determines that the employee is able to perform his job functions and the employer assigns a work restriction to prevent more serious injury

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• larger penalties;– already risen 20% per serious item since Mr. Barab complained

about the average serious penalty amount

– Use of Significant cases and Egregious citations.

• emphasis on the elements of a comprehensive safety & health management program;– Could elements of HR 2113, “Corporate Injury, Illness & Fatality

Reporting Act” be required?

• There were as many egregious citations in the first quarter of 2009 as all of the last fiscal year

• Pending suit against OSHA writing standards to focus on per-condition or per-employee violations

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• reliance on professional safety and industrial hygiene groups to establish standards and an emphasis on chemical exposure issues;

• more involvement of organized labor in the safety process;

• ongoing review and revision of the OSHA FOM and Directives, especially with regard to IH (Industrial Hygiene) issues;– update of TB and Bloodborne Pathogens Directives

– June 6, 2010 requirement that employers notify employees of all Hex exposure monitoring results

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SEVERE VIOLATORS ENFORCEMENT

PROGRAM

• The following circumstances will be reviewed as a

possible SVEP case:

– Fatality or catastrophe situation

– Industry operations or processes that expose

employees to the most severe occupational hazards

and those identified as “High-Emphasis Hazards”

– Exposing employees to hazards related to the

potential release of a highly hazardous chemical

– All egregious enforcement actions.

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PROGRAM

• “High-Emphasis Hazards” means only high gravity serious violations of specific standards covered under falls or the following NEPS:– Amputations

– Combustible dust

– Crystalline silica

– Lead

– Excavation trenching

– Shipbreaking.

• Regardless of the type of inspection being conducted, low and moderate gravity violations will not be considered for a SVEP case.

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PROGRAM

• The SVEP also includes the following action elements

for employers who meet the SVEP criteria:

– Enhanced follow-up inspections

– Nationwide referrals, which will include State Plan states

– Increased company awareness, which will include issuing news

releases

– Enhanced settlement provisions

– Increased use of Federal court enforcement action (contempt of

court) under Sec. 11(b) of the OSH Act

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TAKE-AWAYS FOR THE BUSINESS

• Don’t be complacent simply because you have received few OSHA citations, are known as a squared away employer, and get along well with OSHA just fine;

• Focus on the “details:” Injury & illness recordkeeping, “routine” construction and general industry violations, and up-to-date documented training, testing, and other periodic requirements;

• Prepare for continuing National, Region IV and local emphasis efforts including combustible dust and amputations, and recognize that these efforts also affect construction;

• Take seriously any 3/9 Notification Letters of High Injury Rates (SST);

• Anticipate and get ahead of the effects of OSHA initiatives and rulemaking, including IH issues, recording MSD’s, cranes, and Haz Comm.

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TAKE-AWAYS FOR THE BUSINESS

(CON’T)

• Continue with VPP and cooperative efforts or find alternatives;

• Consider the effects of an aging and increasingly unhealthy workforce, especially in light of the MSD focus, GINA, and the ADA revisions;

• Reconsider how to respond to even small OSHA citations, especially if you are a multi-location employer;

• Self audit your sites, S&HM program, and seek “patterns;”

• Prepare for focus and general duty citations about MSD’s;

• Review and revise OSHA Inspection and Catastrophe Management Procedures;

• Audit Recordkeeping and establish improved “coordination;” and

• Expect unions to use safety issues in organizing; use safety yourselves to build better employee involvement and communications.

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OUR ULTIMATE AUDIENCE:

“TAKE AWAYS” FOR YOUR SUPERVISORS

• Do not overreact, but also do not be lulled into

thinking “things are the same.”

• Expect continuing increases in OSHA enforcement

efforts and the resulting legal exposure.

• Understand a supervisor’s “legal” role in maintaining

safety and preventing OSHA citations.

• Recognize the importance of consistent enforcement

of safety rules and training.

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OUR ULTIMATE AUDIENCE:

“TAKE AWAYS” FOR YOUR SUPERVISORS

• Properly document discipline, corrections, and required training.

• Use pre-work planning, safety meetings, and inspections to eliminate hazards, show due diligence, and establish a “lack of notice of hazards.”

• Get recordkeeping perfect – avoid both over- and under-reporting; address “coordination.”

• Do not solely rely on injury and illness rates to monitor safety management success.

• Learn how to manage OSHA inspections under a new Administration.

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ACHIEVING OPERATIONAL

EXCELLENCE THROUGH SAFETY

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Indirect costs of workplace fatalities, injuries and illnesses:

– Time lost from work by injured employees

– Time lost by fellow employees

– Decrease in productivity, efficiency and quality

– Loss of efficiency due to break-up of work crews

– Time lost by supervisor

– Hiring cost for new/replacement employees

– Training costs for new/replacement employees

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Indirect costs of workplace fatalities, injuries and illnesses: (cont’d)

– Replacement costs for damaged tools and equipment

– Time lost while damaged equipment is out of service

– Overhead costs while work was disrupted

– Damage from incident’s fire, water, chemicals, explosions

– Failure to fill orders or meet production deadline

– Time lost dealing with outside agencies and groups

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Indirect costs of workplace fatalities, injuries and illnesses: (cont’d)

– Bad publicity affecting employees, clients and community

– Lost of order or bidding rights for government contracts

– Legal costs

– Possible negligent tort liability

– Possible criminal liability

– Company bottom line impacted by injuries, illnesses and fatalities.

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Elements of an effective safety and health

management system

1. Strong management commitment and all

employee involvement

2. Worksite analysis

3. Hazard prevention and control

4. Training for employees, supervisors and

managers

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Companies with an effective safety and health management system demonstrate the economic power of safety and health

– U.S. Postal Service – 50% lower workers’ compensation costs

– Lockheed Martin – 87% lower workers’ compensation costs

– C.R. Meyer – 60% lower injury and illness rates than industry average

– Valero Energy – 64% lower TCIR

– International Paper – 69% lower injury rate than industry

– GE Plastics – 77% drop in injury/illness rate

– Welco Lumber Mills – 96% drop in workers’ compensation costs; 28% rise in production

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Effective safety and health management system results in the changes needed to be successful in the local, national and global marketplace

– Organizational alignment – development of overall strategic approach

– Safety becomes part of every employee’s responsibility from the bottom to the top – changes in roles and responsibilities

– Perhaps first time employees feel company cares for them

– Culture change impact at work and at home

– Fosters Leadership Development

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Effective safety and health management system results (cont’d)

– Fosters Sustainability and Growth

– Accentuates Education and Training

– Results in Common Language and Common Practices

– Less injuries and illnesses result in more productivity, better efficiency and improved quality

– End result – improved bottom line, more profitable and more competitiveness – allows company to pay higher wages, improved benefits, and maybe keep jobs in America – significant return on investment

– Safety and health becomes a profit center and protects the Company’s Reputation/Brand

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Why safety compliance is so important for managers and supervisors

• It’s up to management to set the example and ensure that employees follow the rules.

• Managers and Supervisors handle much of the safety and work training, including OJT and Safety Observations.

• Safe work habits relate to other legal, labor, performance, and quality areas.

• Safety Compliance can affect the ability of the Company to bid for and obtain work.

• Managers and Supervisors can have individual liability.

• Managers and Supervisors’ behavior or knowledge of hazards creates corporate liability.

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Safety Responsibility:

Discipline – the Key Element

Discipline has a “pro-employee” purpose and is the

cornerstone of an effective safety management

program. Analyze the role of Discipline by the

elements of the OSHA “Affirmative Defense” of

“Unpreventable Employee Misconduct.”

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Unpreventable employee misconduct defense elements• Establish work rules designed to ensure safe work and to avoid

OSHA violations

• Communicate the work rules to employees

• Train the employees as needed

• Take appropriate steps to discover violations

• Effectively enforce the rules and practices when violations are discovered; and

• Document the above actions

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So why don’t supervisors discipline more poor performers?• Belief that terminations are not an important part of a

positive Safety & Health Management Program

• Fear of getting sued

• Concern that even a poor employee is better than no employee

• Lack of Supervisor Training

• Communication and Coordination Breakdown

• Lack of Time

• Trying to be a “buddy supervisor”

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Response to concerns: why discipline benefits everyone• Removes poor performers in the workplace

• Creates “limits” for employees

• Improves morale when employees see good/bad behavior recognized

• Limits potential negligent retention and negligent supervision claims

• Provides the necessary accountability for an effective Safety Program

• Consistent discipline avoids the appearance of discrimination and unfairness

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Safety and health excellence becoming more criticalWhy?

– Other countries catching up to America in productivity, efficiency and quality

– The graying of the current workplace

– The incoming workforce

What is the solution?

– Integrate safety with health into all aspects of management and operations

– Sincere and continuous commitment to safety and health

– Address problems head on

– Wellness

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Elements to a successful Wellness Program

– Review of company’s Health Insurance Program

– Case Management

– Disease Management

– Incentives and Pay for Performance

– Communications

– Benchmarking and Analytical Review

– Legal Compliance

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Fisher & Phillips LLP

is dedicated exclusively to representing employers in the practice of employment, labor, benefits, OSHA, and

immigration law and related litigation.

THESE MATERIALS AND THE INFORMATION PROVIDED DURING THE PROGRAM SHOULD NOT BE CONSTRUED AS LEGAL ADVICE OR AS CRITICAL OF THE CURRENT OR PAST

ADMINISTRATIONS.

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945 East Paces Ferry Road

Atlanta, GA 30326

avoiding the new enforcement-driven osha while …20the%20new%20enforcement... · osha and initial...

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