1. www.laborlawyers.com 1 © Copyright 2015 All Rights Reserved 2015: The Year that Changed OSHA Enforcement Forever Legal Aspects of OSHA & Citation Defense: An Introduction June 23, 2015 laborlawyers.com Atlanta · Baltimore · Boston · Charlotte · Chicago · Cleveland · Columbia · Columbus · Dallas · Denver · Fort Lauderdale · Gulfport Houston · Irvine · Kansas City · Las Vegas · Los Angeles · Louisville · Memphis · New Jersey · New Orleans Orlando · Philadelphia · Phoenix · Portland · San Antonio · San Diego · San Francisco · Seattle · Tampa · Washington, DC Travis W. Vance |(704) 778-4163 tvance@laborlawyers.com tvance@laborlawyers.com @TVanceLawyer March 3, 2016

2. www.laborlawyers.com 2 © Copyright 2015 All Rights Reserved THANK YOU FOR YOUR COMMITMENT TO SAFETY

3. www.laborlawyers.com 3 © Copyright 2015 All Rights Reserved The Man in the Arena “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

4. www.laborlawyers.com 4 © Copyright 2015 All Rights Reserved Who Said That? A. Bill Clinton B. Ronald Reagan C. Teddy Roosevelt D. Winston Churchill

5. www.laborlawyers.com 5 © Copyright 2015 All Rights Reserved January 1, 2015- New Reporting Requirements Must report a fatality within eight (8) hours Must report an amputation within twenty-four (24) hours Must report an in-patient hospitalization within twenty-four (24) hours Must report a loss of eye within twenty-four (24) hours

6. www.laborlawyers.com 6 © Copyright 2015 All Rights Reserved North Carolina Distinction § 95-131. Development and promulgation of standards; adoption of federal standards and regulations. (a) All occupational safety and health standards promulgated under the federal act by the Secretary, and any modifications, revision, amendments or revocations in accordance with the authority conferred by the federal act or any other federal act or agency relating to safety and health and adopted by the Secretary, shall be adopted as the rules of the Commissioner of this State unless the Commissioner decides to adopt an alternative State rule as effective as the federal requirement and providing safe and healthful employment in places of employment as required by the federal act and standards and regulations heretofore referred to and as provided by the Occupational Safety and Health Act of 1970. Chapter 150B of the General Statutes governs the adoption of rules by the Commissioner.

7. www.laborlawyers.com 7 © Copyright 2015 All Rights Reserved North Carolina OSHA Inspections 2012- 4412 2013- 4726 2014- 3444 2015- 3293 Jan. 2016- 202 Feb. 2016- 219

8. www.laborlawyers.com 8 © Copyright 2015 All Rights Reserved Fewer Inspections Trend to Continue? Weight-Based Inspections Were Announced in 2015 8 points: significant case ($100,000-plus fine), 7 points: process safety management, 5 points: ergonomic hazard, 4 points: heat hazard, 3 points: fatality or catastrophe, 3 points: nonpermissible exposure level exposure hazards, 3 points: workplace violence, 2 points: combustible dust, 2 points: federal agency and 2 points: personal exposure sampling

9. www.laborlawyers.com 9 © Copyright 2015 All Rights Reserved 1. Fall Protection (1926.501) – 6,721 2. Hazard Communication (1910.1200) – 5,192 3. Scaffolding (1926.451) – 4,295 4. Respiratory Protection (1910.134) – 3,305 5. Lockout/Tagout (1910.147) – 3,002 6. Powered Industrial Trucks (1910.178) – 2,760 7. Ladders (1926.1053) – 2,489 8. Electrical – Wiring Methods (1910.305) – 2,404 9. Machine Guarding (1910.212) – 2,295 10. Electrical – General Requirements (1910.303) – 1,973 OSHA’S TOP 10 MOST CITED VIOLATIONS FISCAL YEAR 2015

10. www.laborlawyers.com 10 © Copyright 2015 All Rights Reserved August 3, 2016 An OSHA Inspector (CSHO) is at the door, demanding to conduct an inspection of your Atlanta, Georgia facility. During the opening conference, the CSHO mentions that a machine guarding complaint was filed by an employee. The CSHO explains that because your industry is considered high hazard, he will be expanding the inspection to a comprehensive, wall-to-wall inspection under an emphasis program. He hands you a memorandum stating the following:

11. www.laborlawyers.com 11 © Copyright 2015 All Rights Reserved October 28, 2015 This memorandum establishes guidance for inspections conducted in poultry slaughtering and processing establishments, North American Industry Classification System (NAICS) 311615, Poultry Processing. All such inspections, programmed and unprogrammed, shall cover the hazards listed below: Ergonomics/Musculoskeletal Disorders; Personal Protection Equipment (PPE)/Payment for PPE Lockout/Tagout – Electrical; Machine Guarding Slips, Trips, and Falls; Process Safety Management – Ammonia Chemical hazards – Ammonia, Chlorine, Hydrogen Peroxide, Peracetic Acid, Carbon Dioxide Occupational Noise; Egress and blocked exits Sanitation and cleanup operations These focus hazards shall be addressed in addition to other hazards that may be the subject of the inspection or brought to the attention of the compliance officer during the inspection. The goal of this policy is to significantly reduce injuries and illnesses resulting from these hazards through a combination of enforcement, compliance assistance, and outreach.

12. www.laborlawyers.com 12 © Copyright 2015 All Rights Reserved Q: Is this inspection permissible? - Yes - No - Depends

13. www.laborlawyers.com 13 © Copyright 2015 All Rights Reserved What the Courts Say Marshall v. Barlow's, Inc. (S. Ct. 1978) “The owner of a business has not, by the necessary utilization of employees in his operation, thrown open the areas where employees alone are permitted to the warrantless scrutiny of Government agents. That an employee is free to report, and the Government is free to use, any evidence of noncompliance with OSHA that the employee observes furnishes no justification for federal agents to enter a place of business from which the public is restricted and to conduct their own warrantless search.” “Also, a warrant would then and there advise the owner of the scope and objects of the search, beyond which limits the inspector is not expected to proceed.”

14. www.laborlawyers.com 14 © Copyright 2015 All Rights Reserved Donovan v. Sarasota Concrete Co. (11 th Cir. 1982) “In evaluating probable cause, when an inspection is pursuant to an administrative plan, the principal concern is that the plan be neutral. When, however, an inspection is pursuant to an employee complaint, as in the present case, a more individualized inquiry is required. This distinction is drawn because employee complaints lack the administrative and legislative guidelines that ensure that the target of the search was not chosen for harassment. Because of this increased danger of abuse of discretion and intrusiveness, we join those courts that have recognized that a complaint inspection must bear an appropriate relationship to the violation alleged in the complaint.”

15. www.laborlawyers.com 15 © Copyright 2015 All Rights Reserved Trinity Constr. v. Sec. of Labor (6 th Cir. 1994) “Because administrative and legislative guidelines ensure that employers selected for inspection pursuant to neutral administrative plans have not been chosen simply for the purpose of harassment, courts have held that administrative plan searches may properly extend to the entire workplace. In the case of searches based on employee complaints, however, such safeguards are absent. Given the increased danger of abuse of discretion and intrusiveness presented by such searches, we agree with those circuits that have explicitly recognized that a complaint inspection must bear an appropriate relationship to the violation alleged in the complaint.”

16. www.laborlawyers.com 16 © Copyright 2015 All Rights Reserved Opening Conference At the opening conference, the CSHO requests the following documents: 1. SDS sheets 2. 300 Logs 3. All of your LOTO training documents 4. Powered industrial truck maintenance documents 5. List of all subsidiaries/related entities of your company 6. Root cause analysis report from 2015 amputation at your facility

17. www.laborlawyers.com 17 © Copyright 2015 All Rights Reserved Q: Do you give the CSHO all of these documents? -Yes -No -Maybe

18. www.laborlawyers.com 18 © Copyright 2015 All Rights Reserved The Citation You allow the comprehensive inspection, and five months later, you receive a Citation by U. S. certified mail: Citation 1 Item 1Type of Violation: WILLFUL 29 CFR 1926.501(b)(1): Employees working on a walking/working surface with an unprotected side more than 6 feet above the lower level were not protected from falling: (a)On or about August 3, 2016 and at times prior, the employer did not ensure that workers were protected from fall hazards. A supervisor and hourly worker were exposed to falls of over 25 feet when they were not wearing fall protection at the employer’s job site. The employer had knowledge of this hazard, as evidenced by the previous violation of 29 CFR §1926.501(b)(1), Inspection No. 12345678, of employer’s Raleigh, NC facility, which was issued on January 30, 2013 and later vacated. Date By Which Violation Must be Abated: 12/31/2016 Proposed Penalty: $125,000.00

19. www.laborlawyers.com 19 © Copyright 2015 All Rights Reserved Q: Can OSHA issue a penalty of $125,000 for a single item? -Yes -No -Depends

20. www.laborlawyers.com 20 © Copyright 2015 All Rights Reserved Increased Penalties In November 2015, OSHA announced it had authority to increase penalties for the first time since 1990. Given this development, we expect OSHA to increase the maximum fine for serious citations to $12,500 and willful/repeat citations to $125,000 in August 2016. Additional increases reflecting inflation likely will follow on January 15 of each subsequent year.

21. www.laborlawyers.com 21 © Copyright 2015 All Rights Reserved Q: Can Fed-OSHA use a state plan citation as the basis of a willful citation? - Yes -No -Depends

22. www.laborlawyers.com 22 © Copyright 2015 All Rights Reserved Fed-OSHA and State Plan Overlap Federal OSHA has specifically stated that it can use a state plan citation as the basis of a willful citation in a Federal state. Its Field Operations Manual (at p. 3-1) provides: If an establishment has an inspection history that includes citations received while performing work in a State Plan State, CSHOs should be aware of this information. This inspection history may be used to document an employer’s heightened awareness of a hazard and/or standard in order to support the development of a willful citation and may be considered in determining eligibility for the history penalty reduction. However, the State Plan citation may not be used to support a repeat violation.

23. www.laborlawyers.com 23 © Copyright 2015 All Rights Reserved Q: Can OSHA use a withdrawn/vacated citation as the basis of a willful citation? -Yes -No -Maybe

24. www.laborlawyers.com 24 © Copyright 2015 All Rights Reserved Q: Because your supervisor was one of the employees not wearing fall protection, can you properly raise the “rogue supervisor” defense? -Yes -No -What’s the Rogue Supervisor Defense?

25. www.laborlawyers.com 25 © Copyright 2015 All Rights Reserved Quinlan Enterprises Case (11 th Cir. 2016) 11th Circuit Appeals affirmed on Jan. 8, 2016 that the Occupational Safety and Health Review Commission properly held an employer responsible for violating Occupational Safety and Health Act standards when two employees, a foreman and a subordinate, were caught working without fall protection and using a stepladder in an unsafe manner. In arguing against liability for the workplace safety violations, Quinlan cited the 11th circuit's decision in ComTran Group Inc. in which the court ruled in favor of the employer because of the actions of a rogue supervisor. In that case, the appeals court found it would be “fundamentally unfair” to ascribe the supervisor's knowledge to the employer because the supervisor was the one engaging in the misconduct and imputing knowledge would release the Occupational Safety and Health Administration from its burden of proving the employer's knowledge of the violation. The court determined the fact that the supervisor, who normally serves as the “eyes and ears” of the employer, engaged in the misconduct essentially rendered the company “blind and deaf.”

26. www.laborlawyers.com 26 © Copyright 2015 All Rights Reserved Contesting the Citation You decide to contest the citation. After receiving your notice of contest, OSHA files a complaint asking the Review Commission to order abatement of the fall protection hazard at not only your Atlanta facility, but your other 75 facilities throughout the United States. This would require you to create and institute a new fall protection training program at every facility. Is this request proper? -Yes -No -Maybe

27. www.laborlawyers.com 27 © Copyright 2015 All Rights Reserved Sec. of Labor v. Central Transport, LLC (Dec. 2015) This case arose after OSHA conducted a single inspection at the Respondent’s Massachusetts facility. OSHA cited the Respondent for, among other items, violation of a standard governing the safe operation of powered industrial trucks. After the citations were contested, OSHA sought abatement of the industrial truck hazard at not only the Massachusetts location, but the other 170 shipping terminals operated by the Respondent in the U.S. The Respondent argued that in seeking abatement of alleged hazards at worksites it never conducted, OSHA violated, among other things, notions of due process. The ALJ disagreed, citing the “other appropriate relief” clause of Section 10(c) of the Act as a possible basis for the relief sought. In its opinion, the court downplayed the precedential ramifications of its holding, citing previous cases identified by the Secretary where the OSHRC found that “there is no language in the [OSH] Act dictating that the only way in which an abatement requirement can be imposed is through a citation,” and held that OSHA could move forward with its request for enterprise-wide abatement.

28. www.laborlawyers.com 28 © Copyright 2015 All Rights Reserved www.laborlawyers.com Settlement Negotiations During a settlement conference, OSHA asks if you desire to enter into an enterprise wide settlement agreement. Under this agreement, you would have to abate not only the alleged hazard at your Atlanta facility, but at also your other facilities throughout the United States, including North Carolina. Q: Is this permissible? -Yes -No -Maybe

29. www.laborlawyers.com 29 © Copyright 2015 All Rights Reserved www.laborlawyers.com Enterprise-Wide Settlement Agreements Only 25 of these agreements have been publicly recorded since OSHA was enacted in 1970. However, 23 enterprise-wide agreements have been reached since January 1, 2010. These agreements, copies of which can be found on OSHA’s website, are generally used to require employers to perform company-wide abatement of hazardous conditions and/or implement new safety policies and procedures. Instead of correcting the alleged hazard only at the location where the inspection at issue took place, the employer must rectify this issue at multiple locations, including at times facilities located in state-plan states. If some of respondent’s stores are located in states that have assumed authority of the enforcement of OSHA standards pursuant to Section 18 of the Act (“State Plan Worksite”), the state plans are encouraged to honor or agree to the terms of this Agreement.

30. www.laborlawyers.com 30 © Copyright 2015 All Rights Reserved www.laborlawyers.com OSHA 2015- Recap (The Top Ten) 1. Increased Penalties 2. New Reporting Requirements 3. Fewer, Weight-based Inspections 4. Expanding complaint-based inspections 5. Elimination of “rogue supervisor” defense 6. Expansion of inspections (abatement) to other facilities 7. Enterprise-wide settlement agreements 8. Use of previous vacated citations as basis of willful 9. Seeking information during inspection relating to subsidiaries/related entities and 10. Requesting Root Cause Reports

31. www.laborlawyers.com 31 © Copyright 2015 All Rights Reserved www.laborlawyers.com An Alternative Approach The $175 Citation

32. www.laborlawyers.com 32 © Copyright 2015 All Rights Reserved www.laborlawyers.com An Alternative Approach Following a programmed-based inspection, Fed-OSHA cites ABC Company, Inc. (“ABC”) for violations of lock-out tag-out and fall protection standards. Both citations carry the maximum (current) penalty of $7,000. Under current Fed-OSHA procedure, ABC is given the option of accepting the citations and paying $14,000 to the government, paying a lesser amount after a settlement is reached, or engaging in costly, protracted litigation to contest the citations. Why not also give ABC the option of paying a professional, third-party vendor to provide 4-hour training sessions to all of ABC’s employees affected by the alleged hazards, in exchange for dismissal of the citations? Wouldn’t that use of the money more directly support and promote employee safety? Even OSHA claims that every dollar spent on an illness and injury prevention program, including training, results in 4 to 6 dollars in savings from an increase in productivity and fewer injuries. Spending money on professional training instead of penalties would certainly promote employee safety.

33. www.laborlawyers.com 33 © Copyright 2015 All Rights Reserved www.laborlawyers.com Alternative Approach Continued In-house safety training is often insufficient. Unfortunately, the in-house training provided by many employers is not effective or virtually non-existent. I’ve heard horror stories of plagiarized employee sign-in sheets, and training conducted while the employee works on an assembly line, or sits in a cafeteria. Employees cannot retain important safety information under these circumstances. Professional, third-party safety training would result in higher-caliber, more consistent instruction. Organizations such as the National Safety and Health Council offer excellent, comprehensive training. Training by such professionals leads to employees who are more knowledgeable about the hazards in their workplace and safer work environments. Unfortunately, this generally doesn’t happen when the employer simply strokes a check to pay a penalty.

34. www.laborlawyers.com 34 © Copyright 2015 All Rights Reserved www.laborlawyers.com Alternative Approach Continued The proposed parameters: – The Professional Training Option would only be available in inspections where there is no fatality or willful citation, and where the employer has been not cited for any serious violation within the last three years by Fed- OSHA or any State Plan; – The Professional Training Option could not be used in lieu of paying a penalty for more than three citation items arising from any single inspection; – OSHA and the eligible employer can negotiate the details of the proposed training, including the duration and number of employees to be included; – Any training conducted under the Professional Training Option could not serve as a substitute for any other training mandated by OSHA regulations; – The employer must certify to OSHA within ninety days after settlement that the training has been completed, including providing employee sign-in sheets, and documents confirming certification/licensure of the training party; and – An eligible employer cannot be compelled to exercise the Professional Training Option if it wishes not to do so.

35. www.laborlawyers.com 35 © Copyright 2015 All Rights Reserved Questions? Thank You Atlanta · Baltimore · Boston · Charlotte · Chicago · Cleveland · Columbia · Columbus · Dallas · Denver · Fort Lauderdale · Gulfport Houston · Irvine · Kansas City · Las Vegas · Los Angeles · Louisville · Memphis · New England · New Jersey · New Orleans Orlando · Philadelphia · Phoenix · Portland · San Antonio · San Diego · San Francisco · Tampa · Washington, DC www.laborlawyers.com Travis W. Vance Direct: (704) 778-4163 tvance@laborlawyers.com