ALM Properties, Inc.
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That Was Quick
In a case closely watched by the business community, in April the U.S. Court of Appeals for the D.C. Circuit sharply curtailed the period of time that companies can be cited for Occupational Safety and Health reporting violations, reversing the decision of an administrative panel and long-standing precedent.
The key issue: Can employers be cited by OSHA for record-keeping violations that occurred up to five years earlierthe current agency practiceor is the statute of limitations strictly six months?
Judges Karen LeCraft Henderson, Merrick Garland, and Janice Rogers Brown agreed that the statute was clear and the citations were untimely. "We do not believe Congress expressly established a statute of limitations only to implicitly encourage the secretary [of Labor] to ignore it," wrote Brown in the lead opinion. Garland issued a concurring opinion, as did Brown (in addition to the lead opinion).
The case began in 2006, when OSHA inspected the Prairieville, Louisiana, facility of Volks Constructors, a heavy industrial contractor.
OSHA fined Volks a total of $13,300 for 67 record-keeping violations, alleging that Volks failed to log a number of injuries and illnesses within the required seven-day period. The earliest such recordable injury or illness occurred at Volks on January 11, 2002more than four years before the citations. But the statute states: "No citation may be issued . . . after the expiration of six months following the occurrence of any violation."
Volks appealed the citations to the OSH Review Commission, which in November 2010 took the rare step of holding oral argumentsthe first in four years. In a 2-to-1 decision, the commission upheld the citations as timely.
The company pursued the case before the D.C. Circuit, arguing that the statute set a clear six-month limit, and that employers face an undue burden trying to defend a case based on stale evidence. The Small Business Legal Center of the National Federation of Independent Business filed an amicus brief supporting Volks.
The government countered that all the violations for which Volks was cited were "continuing violations," which meant that the statute of limitations doesn't expire until the end of the law's five-year document retention period.
The court didn't buy it. "We think the word 'occurrence' clearly refers to a discrete antecedent event," Brown wrote. "In this case, every single violation for which Volks was citedfailures to make and review recordsand every workplace injury which gave rise to those unmet recording obligations were 'incidents' and 'events' which 'occurred' more than six months before the issuance of the citations."
Still, the court didn't shut the door if violations were truly ongoing. "Where, for example, a company continues to subject its employees to unsafe machines . . . OSHA may be able to toll the statute of limitations on a continuing violations theory since the dangers created by the violations persist," Brown wrote.
But when it comes to record-keeping, the statute of limitations is six months. "Nothing in the statute suggests Congress sought to endow this bureaucracy with the power to hold a discrete record-making violation over employers for years, and then cite the employer long after the opportunity to actually improve the workplace has passed," Brown wrote.
McDermott Will & Emery partner Arthur Sapper, who argued the case for Volks, said in a statement: "We are gratified by the total vindication of our client. We believed all along that the statute of limitations was controlling and needed to be given greater respect."