OSHA Inspections Not Just a Cost of Doing Business

Inspections by regulatory agencies governing workplace safety and health, such as inspections by the Occupational Safety and Health Administration, can be turned into tools to be used by employees to sue their employers directly. In Laidlow v. Hariton Machinery Co., Inc., 170 N.J. 602 (2002), the New Jersey Supreme Court held that under certain circumstances, which to date remained muddled, an employee can sue his employer directly for injuries sustained during employment. The Laidlow decision articulated the circumstances sufficient to defeat the bar on employees suing their employers directly. Employers can take immediate steps to minimize their exposure to such liability. The plaintiff Laidlow suffered debilitating injuries in the workplace while operating a piece of machinery and sued his employer directly under common law theories. For approximately 13 years while Laidlow was employed by the employer, the safety guard on the piece of machinery on which he was injured was tied up to prevent it from engaging. The employer admitted that the guard was purposely disengaged for speed and convenience — in other words, to increase production. In addition, when OSHA would inspect the facility, the employer would put the safety guard in place to deceive the OSHA inspector. Immediately after the inspection was completed, the safety guard was disabled, reverting back to the condition that existed prior to the inspection. Although there were no injuries resulting from the operation of the machinery on which Laidlow was injured, he alleged that there were several near misses where he and other employees were almost injured. Laidlow also alleged that he made several complaints to his employer regarding the dangerous condition of operating the machinery without the guard. Despite these complaints, the employer did nothing to correct the condition. INTENTIONAL WRONG The employer moved for summary judgment on the basis that the New Jersey Workers’ Compensation statute prevented the plaintiff from suing his employer directly. Specifically, the employer pointed to N.J.S.A. 34:15-8, the Workers’ Compensation Act, which provides in pertinent part: Such Agreement shall be a surrender by the parties thereto of their rights to any other method, form or amount of compensation or determination thereof than as provided in this article. … If an injury or death is compensable under this article, a person shall not be liable to anyone at common law or otherwise on account of such injury or death for any act or omission occurring while such person was in the same employ as the person injured or killed, except for intentional wrong. This provision, known as the “Exclusivity Bar,” prevents employees from suing their employer unless the injury was from an intentional wrong. The supreme court, in discussing circumstances under which an employer can be directly liable for an employee’s injury, observed that the removal of a safety guard can meet the intentional-wrong standard to allow an employee to sue his employer directly. The court subscribed to the conclusion in Mabee v. Borden, Inc., 316 N.J. Super. 218 (App. Div. 1998), that the “removal of a safety guard can meet the intentional wrong standard.” However, such a determination requires a case-by-case analysis. In Laidlow, the court held that a jury could conclude that the employer acted in an intentional manner, thereby precluding it from the protections of the Workers’ Compensation statute. The court pointed to the following facts: [w]e are satisfied that a reasonable jury could conclude, in light of all surrounding circumstances, including the prior close-calls, the seriousness of any potential injury that could occur, Laidlow’s complaints about the absent guard, and a guilty knowledge of [defendant employer] as revealed by its deliberate and systematic deception of OSHA, that [defendant employer] knew that it was substantially certain that the removal of the safety guard would result eventually in injury to one of its employees. Thus, a jury question was presented on that issue. An OSHA inspection can occur as a result of a complaint by an employee or an accident. Regardless of the reason of the inspection, OSHA has broad investigatory powers when inspecting a workplace. OSHA inspectors are authorized to walk through the workplace and identify violations. They are also authorized to interview employees, take photographs and review records such as injury and illness records. It is through these investigative techniques that information necessary to sue an employer can be established. For instance, if OSHA is investigating an accident relating to a piece of machinery, it can establish through interviews of both employers and employees whether close calls occurred in which employees were almost injured. An inspector can also establish the employer’s past practices of using guards or other protective measures, and whether such guards or protective measures are routinely bypassed by the employees at the instruction of the employer. Likewise, inspectors are able to determine if employees have complained of hazardous conditions in the workplace that were ignored by the employer. In addition, by reviewing an employer’s injury and illness records, which are required to be kept under OSHA regulations, an inspector is able to establish whether injuries have occurred from a particular piece of equipment in the workplace. The inspector, in deciding to issue a citation to an employer, must make a finding that there is a high probability of injury occurring because of a hazardous condition existing in the workplace and that the employer knew that the condition existed. Although the supreme court in Laidlow recognized that a violation of OSHA’s standards does not automatically mean an employer acted in an intentional manner, thereby allowing a plaintiff to bypass the Workers’ Compensation bar, the findings of an OSHA investigation can and most likely will be used by a plaintiff’s attorney to form the basis of a suit. OSHA is authorized to issue citations, the two most serious of which are classified as either a serious or willful violation. In order to establish a willful violation, the inspector must have found the employer knew that the hazardous condition existed but made no reasonable effort to eliminate it. The inspector need not establish that the employer had a bad purpose or evil intent: It is sufficient that the OSHA inspector establish the violation was deliberate, voluntary or intentional as distinguished from a negligent act. Similarly, in establishing a serious violation, the inspector must show that there was a substantial probability that death or serious physical harm could result from the hazardous condition and the employer knew or could have known of the violation. In determining probability of death or serious physical harm, OSHA considers several factors, including the type of accident or hazard that the violated standard is designed to prevent; the type of injury or illness that may occur as a result of the hazard or accident; and third, whether the injury or illness could result in death or serious physical harm. Based on the foregoing factors, OSHA will determine whether a substantial probability of death or serious physical harm could result from an alleged violation. WHAT DID THEY KNOW? In assessing an employer’s knowledge, the inspector must establish that the employer actually knew of the hazard or could have knowledge of the hazardous condition through the exercise of reasonable diligence. Actual knowledge is usually based on comments made by the employer or the employer’s representative during the course of an inspection. Actual knowledge also could be based on employer’s written records or documents. OSHA follows the general rule that if the inspector was able to discover the hazardous condition, the employer could have known of the hazardous condition through the exercise of reasonable diligence. In addition to the penalty that can be assessed with each of these types of violations — which ranges from $7,000 for each serious violation to $70,000 for each willful violation — these citations along with the information obtained by the inspector can form the basis of a direct suit against the employer. Specifically, the same type of facts that a jury can use to make a determination that an employer acted in an intentional manner can be established by an OSHA inspection. For instance, OSHA can establish the same facts found in the Laidlow case about prior close calls, the seriousness of a potential injury, prior complaints by employees of the hazardous conditions, past practices of the employer in using a guard and whether the employer knew of the alleged hazard in the workplace. Because of OSHA’s ability to document such facts, an employer should clearly take precautions to either eliminate or minimize this potential liability. Being proactive will go a long way in minimizing or eliminating findings by OSHA that work against an employer. Establishing health and safety programs that eliminate hazardous conditions in the workplace are paramount in this effort. In order to minimize the possibility of an OSHA citation or adverse finding of OSHA, employers should develop a continuing and effective occupational safety and health program. In general, the elements of an effective program are management commitment, employee involvement, work site analysis, hazard prevention and control and training. Management commitment provides the motivating force and the resources for organizing and controlling activities within the organization. In an effective program, management regards workers’ safety and health as a fundamental value of the organization and applies its commitment to safety and health protection with as much vigor as it applies its commitment to any other organizational goal. Specific ways to enhance management commitment and employee involvement include: � clearly state your policy on safety and health issues; � establish and communicate clear goals for safety and health programs and define objectives; � provide visible top management involvement; � arrange for and encourage employees’ involvement in such health and safety programs; � assign and communicate responsibility for all aspects of the program to certain individuals such as managers; � provide adequate authority and resources; � hold managers, supervisors accountable under these programs; and � review program operations at least annually. In order for safety and health programs to be effective, an employer needs to analyze and evaluate the work facility to anticipate and prevent harmful occurrences. Typically, employers should conduct a base line worksite survey to determine hazards in the workplace. In addition, a reliable system should be in place for employees to notify management of hazardous conditions and near misses. Employers should undertake an investigation of these complaints and implement any control techniques that are required to eliminate or minimize these hazards. Training is also an essential component of an effective safety and health program. Training should address the safety and health responsibilities of both management and employees. Employee training should be designed to ensure that all employees understand and are aware of the hazards to which they may be exposed and the proper methods for avoiding such hazards. By taking these proactive steps employers can prevent accidents and illnesses in the workplace, and avoid OSHA investigations that may result in citations and the possibility of a employee lawsuit. In addition to being proactive, an employer must be ready to react to an OSHA inspection. An employer can and should do specific things during an OSHA inspection. For instance, the employer should ascertain from the inspector the reason for the inspection. Similarly, while the inspector is walking through the employer’s facility, the employer should have someone escort the inspector. And when possible, the employer should document the inspector’s activities (that is, who does the inspector interview, the type of measurements taken by the inspectors, photographs taken, and so on). Although the employer should answer all questions in a truthful manner and should not mislead or deceive an inspector in any way, information should not be volunteered. Although OSHA does have the right to interview employees privately, the employer should also try to sit in on any interviews that the inspector may conduct with employees. If the inspector performs any type of monitoring in the workplace, the employer should consider performing similar monitoring at the same time. The purpose of the side-by-side monitoring is to document and confirm the results obtained by the OSHA inspector. At the conclusion of an inspection, the employer should request all results obtained by the inspector during the inspection and should question the inspector as to why certain conditions constitute an alleged violation. In addition, the employer should request from the inspector recommended methods to abate the alleged violation. Any suggestion made by the inspector should be documented by the employer. When responding to an inspector’s request, the employer should be aware that some internal reports may be protected by the attorney-client privilege or some other privilege. Knowing how to react to an OSHA inspection can minimize an employer’s exposure to OSHA citations and the possibility of the findings by the OSHA inspector that will allow an employee to sue his employer directly. The author is special counsel in the environmental department at Cole, Schotz, Meisel, Forman & Leonard of Hackensack, N.J.