?Occupational Safety and Health Administration (OSHA) penalties for violations of the Occupational Safety and Health Act (OSH Act) vary based on several factors and in rare instances may lead to Department of Justice (DOJ) or state prosecution for criminal liability.
“There’s really no typical penalty because penalty assessment will differ based on statutory factors including gravity of hazard, good faith of employer, size of the business and history of violations,” said John Ho, an attorney with Cozen O’Connor in New York City.
The maximum penalty this year for a serious or “other-than-serious” violation is $14,502 per violation. A serious violation has a minimum penalty of $1,036 per violation while an other-than-serious violation has a minimum penalty of $0 per violation.
A willful or repeated violation has a maximum penalty of $145,027 per violation and minimum penalty of $10,360 per violation. Failure to satisfy a posting requirement can result in up to $14,502 per violation. Failure to abate can result in $14,502 per day unabated beyond the abatement date, generally limited to 30 days maximum.
“These penalties are adjusted to inflation and will periodically rise accordingly,” said Jonathan Snare, an attorney with Morgan Lewis in Washington, D.C., and Jason Mills, an attorney with Morgan Lewis in Los Angeles, in a joint e-mail.
A reduction can be given if there is no history of previous violations. A maximum reduction of 25 percent is permitted for good-faith efforts, said Jeff Beck, an attorney with Faegre Drinker in Indianapolis. In addition, penalties may be reduced for smaller employers.
Individual Liability
Individual liability under OSHA is found only on rare, egregious occasions and focuses on situations in which a single person repeatedly and deliberately disregarded OSHA rules, Snare and Mills said.
In a February case, Secretary of Labor v. Quevedo-Garcia, OSHA cited a company and its individual owner under an alter ego theory of liability (also known as veil-piercing theory), finding the individual personally liable for more than $2 million in workplace safety penalties.
The underlying OSHA citations involved eight willful, 10 repeated and 12 serious violations for hazards, including failure to use fall, head or eye protection; unsafe use of stepladders; scaffolding, housekeeping and fire safety deficiencies; and lack of stair rails or forklift training, Snare and Mills said.
The administrative law judge’s decision in the Quevedo-Garcia case is likely to be appealed or settled, noted Eric Hobbs, an attorney with Ogletree Deakins in Milwaukee.
OSHA also provides for individual liability in cases of retaliation, with the applicable section of the OSH Act stating “no person shall” discharge or discriminate against an employee for filing complaints or instituting procedures under OSHA, Snare and Mills said.
In one such instance, the secretary of the Labor Department sued both a medical clinic and a doctor who owned and supervised the reporting employee in a retaliation claim. In Solis v. Brighton Med. Clinic, the district court found that “the OSH Act must have intended for personal liability in its inclusion of ‘persons,’ and not just ’employers.’ “
For smaller employers, including individual employers, the teaching of the Quevada-Garcia case is that if an employer wants the benefit of limited liability that a corporate form provides, it must observe and adhere to the corporate formalities the law imposes or risk liability beyond the legal employer of record, said Dan Wolff, an attorney with Crowell & Moring in Washington, D.C.
Variety of Enforcement Mechanisms
“For larger employers, the bottom line is that workplace safety matters for a number of reasons, and OSHA is just one player in the mix of enforcement mechanisms if an accident occurs or if unsafe practices are allowed to persist,” Wolff said.
Especially where hazardous conditions are permitted to persist in the workplace, employers can run into legal trouble on multiple fronts. “OSHA can issue citations and seek civil penalties, but an employer may also be exposed to tort lawsuits and criminal liability at either the local or federal level, depending on the circumstances and jurisdiction,” he said.
Workers’ compensation will often bar civil lawsuits for negligence, but typically that applies only when the complaining employee is the employer’s worker, Wolff explained. Lawsuits brought by the employees of contractors or families of employees may not be barred. When the employer is alleged to have acted with recklessness or intent, even lawsuits by employees may not be barred in certain jurisdictions, he added.
Criminal Liability
Beyond that, if a fatality results from the employer’s willful conduct, the DOJ may get involved—”or in a ‘state plan’ state, the local prosecutor—and suddenly the employer could be facing criminal liability,” Wolff said.
The OSH Act creates criminal liability in three circumstances, he noted:
- Willful conduct on the part of the employer that leads to an employee’s death.
- Giving advance notice of an OSHA inspection.
- Making a false statement or representation in any document filed with OSHA or required by OSHA or the OSH Act to be maintained by the employer.
OSHA doesn’t enforce the criminal aspects of the OSH Act—it refers any potential criminal conduct to the DOJ. “Once a referral is made to the DOJ, the DOJ may also investigate for other criminal conduct beyond the OSH Act,” such as conspiracy or obstruction of justice, Wolff noted.
Some states with “little OSH Acts”—those states with their own OSH statutes and OSH agencies—allow for the citation of individuals for OSHA noncompliance and for individual criminal liability for OSHA violations, particularly when the violations lead to employee injury or death, Hobbs said.
Even in states where the federal OSHA enforces the OSH Act, state criminal laws may apply to work incidents that result in serious injury or death to employees. “While not common, state district attorneys and state’s attorneys do prosecute individuals for their alleged criminal conduct,” he said.
Nonetheless, “criminal sanctions under OSHA have been rare,” Beck said. “The willfulness of the violation must be proven beyond a reasonable doubt, so the citation alone is not sufficient.”