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Click here for the full text of this decision FACTS:Skilled Craftsmen provides temporary workers to various industrial businesses. Regardless of what job they are assigned to, Skilled Craftsmen workers are covered by Skilled Craftsmen’s workers’ compensation insurance. The Texas Workers’ Compensation Commission conducted an audit on Skilled Craftsmen. Over the one-year period of the audit, three Skilled Craftsmen employees were injured in on-the-job accidents. Two were injured while working as general shop helpers; a third was injured while working as a pipe cutter. Consequently, the commission identified Skilled Craftsmen as a hazardous employer. Pursuant to the hazardous employer identification program, Skilled Craftsmen’s workers’ compensation insurance carrier was notified. Skilled Craftsmen appealed the designation to the Office of Administrative Hearings, but before its hearing, Skilled Craftsmen filed suit seeking a declaration that the statutory scheme that allows identifying and labeling private employers as hazardous was pre-empted by the Occupational Health and Safety Act. Alternatively, Skilled Craftsmen argued the formula for identifying hazardous employers was arbitrary and unreasonable as applied to a temporary-help agency, due to the agency’s dynamic workforce. The commission countered that the process, as it pertains to private employers, was not pre-empted because 1. there is not a federal standard for identifying hazardous employers; 2. and the Texas program does not actually regulate occupational health and safety issues, since it does not require the company to take any corrective action. The trial court ruled for the commission, finding that the OSHA does not pre-empt the program. HOLDING:Reversed and rendered. The court notes that, in Gade v. National Solid Wastes Management, 505 U.S. 88 (1992), the U.S. Supreme Court essentially said that, if a state wishes to regulate an issue of worker safety for which there is a federal standard, the only option is to get prior approval from the Secretary of Labor. The court rejects the commission’s contention that it does not require an employer designated as hazardous to take corrective measures. The court points out that designation can have a severe impact on businesses in the form of higher insurance premiums or stigma. The program is clearly punitive and is designed to deter similar behavior by employers who have not been so identified. Unless corrective measures are taken, the designation remains in place. The court acknowledges that an employer may be designated as hazardous without ever violating the OSHA. But, since removal of a hazardous designation requires an employer to take action to reduce the number workplace injuries, the commission is implicitly regulating the causes of the injuries. “Because OSH Act standards cover such a wide spectrum of occupational health and safety issues, it is difficult to envision how an identified employer could take action to reduce workplace injuries without addressing an area for which a federal standard exists. . . . While an action taken in response to a hazardous designation by the Commission might not contravene any OSH Act standard, the Program is not saved from preemption because it supplements rather than contradicts OSH Act standards. . . . The Supreme Court has held that Congress intended to avoid subjecting workers and employers to duplicative regulation.” OPINION:Bea Ann Smith, J.; Law, C.J., Smith and Pemberton, JJ.

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