For employers, particularly those with multiple worksites, controlling corporate OSHA liability is generally a key goal. An employer that accepts a machine guarding violation at its Texas facility, for example, may get hit with a repeat violation at the same facility or another facility under federal OSHA’s jurisdiction. Similarly, that machine guarding violation may form the basis for a future willful violation issued by federal OSHA or by a state OSHA plan. Ensuring that OSHA liability does not snowball is particularly critical for contractors required to report OSHA violations on contractor and supplier information management systems. A willful or repeat violation, or even a significant number of serious violations, often results in an inability to obtain new business or continue to work for existing customers.

Given these consequences, OSHA’s new enforcement policies may make it more difficult for employers to enter into settlement agreements in which the employer accepts violations. With the possibility of future repeat or willful violations looming, employers may increasingly decide litigation is the best option. Employers with strong defenses to citations may nevertheless want to avoid the costs and uncertainties of litigation. Before these policy changes, employers might have been willing to accept violations and settle in a way that minimized the possibility of repeat and willful violations. As discussed further below, that is increasingly difficult in light of these policies.

Quick Hits

• OSHA’s new enforcement policies will likely make it more difficult for employers to accept citations in in settlement agreements.
• OSHA issued two significant enforcement policy changes: (1) a memorandum to Area Offices regarding “instance-by-instance” violations and the discretion afforded Regional Administrators and Area Directors not to group violations of the same standard into a single citation; and (2) a policy to expand situations in which an employer is placed into the Severe Violator Enforcement Program (SVEP).
• An employer placed in the SVEP risks losing substantial business.

OSHA’s New Enforcement Policies

OSHA issued two significant enforcement policy changes. First, OSHA issued a memorandum to Area Offices regarding certain “instance-by-instance” (IBI) violations and the obligation to group violations of the same standard into a single citation. With regard to IBI violations, OSHA urged Area Offices to issue citations this way in several situations, including in situations in which the Area Director wants to “achieve a deterrent effect.” For example, rather than issuing a single violation alleging an employer improperly trained employees or guarded machines, OSHA will issue one violation for each employee or machine. An alleged failure to train employees on how to wear respirators could result in fifteen violations—one for each employee the employer failed to train. Similarly, Area Directors were instructed to decline to group violations “in appropriate cases to achieve a deterrent effect.” Instead of a single citation alleging multiple violations of a single standard, OSHA may now issue multiple separate violations. It is difficult to conceive of a situation in which the Area Director does not want to “achieve a deterrent effect.” That is, after all, one of OSHA’s primary roles. As such, employers can expect OSHA to use these policies often.

Second, OSHA expanded the situations in which an employer may be placed into the Severe Violator Enforcement Program (SVEP). The stated purpose of the SVEP is to “focus enforcement efforts on significant hazards and violations by concentrating inspection resources on employers that have demonstrated a recalcitrance or indifference to their OSH [Occupational Safety and Health] Act obligations by committing willful, repeated, or failure-to-abate violations of OSHA requirements.” The consequences of placement in the SVEP include damaging press releases that are issued before the employer has an opportunity to present its defenses, letters to CEOs expressing disappointment in the company’s lack of care regarding employee safety, follow-up inspections at other worksites, and inclusion in OSHA’s SVEP log, which is posted on the agency’s website.

An employer will be placed into the SVEP if OSHA issues one or more willful or repeat violations related to a fatality or catastrophe (three or more employees hospitalized). Prior to the recent change, an employer also would be placed in SVEP if OSHA issued two or more willful or repeat violations of specific standards (e.g.,lockout/tagout, machine guarding, fall protection)—OSHA termed these “high emphasis hazards” or three or more repeat or willful violations of the Process Safety Management standard. On September 15, 2022, OSHA revised the SVEP directive to state that an employer would be placed in SVEP any time that two or more repeat or willful violations of any standard occurred.

Impact on Settlement Negotiations

These policy changes make it increasingly difficult for employers to enter into settlement agreements in which violations are accepted. Accepting any serious violation can snowball into future willful or repeat violations, which may result in inclusion in the SVEP. Similarly, settling cases in which the employer faces multiple IBI or ungrouped violations will be challenging. An employer facing fifteen separate violations of a standard may agree to accept one violation. The problem is that the single violation is a ticking time bomb that may ultimately land the facility in the SVEP.

An employer placed in the SVEP risks losing substantial business. Some customers refuse to do any business with employers included in the SVEP and will terminate existing contracts, and some cities will not approve work permits for SVEP companies. Since the SVEP was put in place during the Obama administration, OSHA’s attorneys have said, often and loudly, that they will not negotiate over inclusion in the SVEP. This leaves employers between a rock and a hard place: Accept citations that may land them in the SVEP or incur the cost, angst, and uncertainty that comes with litigation? The situation is most acute for employers with multiple facilities because they face the most risk of repeat or willful violations. Contractors required to report their OSHA citation histories to existing and potential customers face a significant loss of business, and, potentially employee layoffs. For employers that are not contractors, the damage may nevertheless be significant in terms of harm to the company’s reputation and relationships with employees and labor unions.

OSHA generally does not recognize or acknowledge the business damage that willful, repeat, or SVEP violations can cause employers or their employees, who may face layoffs resulting from business losses. OSHA also loses the ability to negotiate corporate-wide abatement of hazards in a settlement agreement. Specifically, if an employer decides to litigate and loses, the employer will likely be required to abate the alleged hazards only at the cited facility or worksite. Had the case been settled, such that the employer was not included in SVEP, the employer might have been willing to revamp training, work practices, engage a third-party consultant to assist in addressing particular hazards, or otherwise address a hazard on a corporate-wide basis. This type of abatement is more extensive than what OSHA is able to obtain in litigation and benefits far more workers. OSHA’s refusal to acknowledge business losses and willingness to forego the opportunity to obtain corporate-wide abatement are troubling.

Considerations for Employers

As discussed, two or more repeat or willful violations subjects an employer to placement in the SVEP. How might an employer steer clear of those violations? With regard to repeat violations, it may be easier said than done. To prove a repeat violation, OSHA must show that the two violations are “substantially similar.”

OSHA generally makes out a prima facie case for a repeat violation by showing the employer previously violated the same standard within a five-year period. With most violations, this is easy for OSHA to do. And the situation is most punitive for large companies. For example, a violation for failing to have a Safety Data Sheet required by the Hazard Communication standard at one facility can easily morph into multiple repeat violations at other facilities.

While it will not always be possible to avoid a repeat violation, employers can minimize risk by implementing abatement measures on a corporate-wide basis. For example, if an employer accepts a machine guarding violation at one facility, it can make sure the same equipment is appropriately guarded at other facilities. Similarly, if the employer accepts a violation alleging a procedure or policy is deficient, it can make that change across similar facilities.

OSHA’s standard for proving a willful violation is more nebulous. According to the Field Operations Manual, OSHA must prove that the employer “intentionally or knowingly” violated the cited standard, or was “plainly indifferent” to the hazard. For example, was the employer aware of a specific hazard, but failed to take steps to mitigate it? This proof scheme implicates “state of mind”-type evidence: What did the employer know and when did it know it? What was the employer’s response to addressing a particular hazard?

In addition to the steps listed above with regard to repeat violations, employers may want to consider the following:

Organization-Wide Hazards

Employers may find it useful to retain an expert or consultant to address a specific hazard that exists throughout the employer’s operations. An evaluation showing that the employer adequately addressed a hazard or implemented the recommendations of an expert cuts against any claim from OSHA that the employer did not care about safety or the specific hazard.

Routine Auditing

A site-specific auditing program assessing hazards in the workplace may be valuable for some employers because audits can be used to show that an employer took steps to address hazards and may not have had actual knowledge that a hazard existed. On the flip side, if an employer audits, but fails to implement or respond to action items, that could be significant proof of a willful violation.

Employee Misconduct Defense

Employers may want to take steps to present a viable unpreventable employee misconduct defense. To make out this affirmative defense, the employer must show: (1) it implemented a work rule or policy addressing the hazard; (2) it trained employees and ensured they knew the requirements of the work rule; (3) it took steps, such as implementing active supervision or routine worksite audits, to identify violations of the rule; (4) it took disciplinary action, such as retraining, counseling, suspension, or termination, when violations of the rule were identified. If all of these elements are met, OSHA will be less able to prove a willful violation and may not be able to prove any violation.

Training

Employers will want to ensure employees understand their training. Written or online tests can be used to prove that employees understood the training. Employers may need to address employees’ language proficiencies when implementing new training programs.

Employee Involvement

Safety committees, a program to allow safety suggestions from employees, and consultations with employees about the safest ways to conduct particular operations can show that the employer is not indifferent to workplace safety. As with auditing, responding to employee suggestions or views may turn out to be critical for employers when faced with these situations. If the employer rejects an idea, it may need to ensure that it has a clear business justification for doing so.