By: Jordan B. Schwartz and Eric J. Conn
Section 17(e) of the Occupational Safety and Health Act (“OSH Act”) provides for a Class B misdemeanor criminal penalty, including imprisonment up to six months and substantial monetary fines if an employer’s willful violation of any OSHA standard causes the death of an employee. Section 17(e) states:
“Any employer who willfully violates any standard, rule, or order promulgated pursuant to Section 6 of this Act, or of any regulations proscribed pursuant to this Act, and that violation caused death to any employee, shall, upon conviction, be punished by a fine of not more than $10,000 or by imprisonment for not more than six months, or by both.”
Pursuant to the Sentencing Reform Act of 1984, 18 USC § 3551 et seq., which standardized penalties and sentences for federal offenses, the criminal penalty for willful violations of the OSH Act causing loss of human life was amended to be punishable by fines up to $250,000 for individuals (18 U.S.C. Sec. 3574(b)(4)), and $500,000 for organizations (id. at Sec. 574(c)(4)).
To obtain a conviction under Section 17(e), a prosecutor must establish beyond a reasonable doubt (unlike the lower civil standard for ordinary OSHA enforcement actions) that:
- An OSHA Standard (not the General Duty Clause) was violated;
- The violation was committed by the employer;
- Courts evaluating OSH Act criminal prosecutions distinguish between “employees” and “employers.” Only in extremely rare circumstances are individuals considered to exert so much control over a corporate entity that the individual would be considered, for all intents and purposes, to be “the employer” for purposes of an OSH Act criminal charge. Although a corporate officer or director might in some circumstances be deemed to be the “employer,” this is only in the case where “an officer’s or director’s role in a corporate entity (particularly a small one) may be so pervasive and total that the officer or director is in fact the corporation and is therefore an employer under §666(e).” U.S. v. Cusack, 806 F. Supp. 47, 50 (D.N.J. 1992).
- The violation of the Standard was the direct cause of an employee’s death; and
- Prosecutors must prove beyond a reasonable doubt that the conduct which amounts to the violation of an OSHA standard was both the “cause in fact” (i.e., the employer’s conduct was the “but-for cause” of the accident) and the “legal cause” (the harm was a foreseeable and natural result of the conduct) of the injury.
- The violation was committed Willfully by the employer.
- Courts are in substantial agreement that “willfully” under Section 17(e) refers to a deliberate action taken by the employer with knowledge of both the hazardous condition and the OSH Act’s requirements (i.e., the employer knew the conduct was dangerous and unlawful).
Here is some guidance on the Justice Department’s website about OSH Act criminal cases.
In the forty years since Congress enacted the OSH Act, there have been more than 400,000 workplace fatalities, yet fewer than eighty total OSH Act criminal cases have been prosecuted – less than two per year– and only approximately a dozen have resulted in criminal convictions. Historically, the prosecutions have typically targeted cases in which the employers were alleged to have falsified documents and lied to OSHA in conjunction with violations related to an employee fatality. The cover-up was worse than the crime. Chronic violators and employers who demonstrated a systematic rejection of worker safety laws also appear to have been more likely to face charges.
Recently, however, OSHA has begun to increase the frequency in which it refers cases to the Justice Department for investigation by a U.S. Attorney and possible criminal sanctions. In fact, we have been told off-the-record from several representatives within OSHA and the Department of Labor Solicitor’s office (OSHA’s lawyers), that as a matter of policy, OSHA now makes a criminal referral in every case involving an employee fatality and a willful violation. Regardless whether that is in fact happening, in the past few years, we have certainly seen a rise in the instances of charges being brought and/or significant plea deals being negotiated.
Criminal action by the government appears to be most likely in cases involving both employee safety and environmental laws. For example, in late July 2012, a federal grand jury in Texas indicted an environmental services company and its former president on conspiracy charges for illegally transporting hazardous materials that resulted in the death of two employees. The 13-count indictment alleged that Port Arthur Chemical and Environmental Services LLC and its former president willfully failed to determine and implement administrative and engineering controls and to provide protective measures to keep employees’ exposure to hydrogen sulfide within prescribed limits. The indictment also alleged that the company illegally transported hazardous materials by knowingly using false documents and improper placards, and exposed workers to hydrogen sulfide that resulted in the deaths of two truck drivers at the facility.
In late September 2012, four former managers from Atlantic States Cast Iron Pipe Company lost their appeal of prison sentences and financial penalties in connection with several safety and environmental compliance violations, and the cover-up of those violations. The convictions and sentences stem from a number of safety and environmental incidents at Atlantic’s Phillipsburg, NJ plant in the late 1990s and early 2000s, including:
- An employee who was run over and killed by a forklift;
- An employee who had been struck by a forklift and suffered a broken leg and an ensuing cover-up;
- An employee who lost his eye when a piece of rotating blade from the saw he was using broke off and struck him in the face, and the ensuing cover-up;
- An employee who lost three fingers in an incident involving a cement mixer; and
- A series of Clean Air Act and Clean Walter Act violations;
As a result of losing their latest appeal, the Company will be placed on four years’ probation and required to pay an $8 million fine. In addition, the following employee jail sentences were upheld:
- 70 months in prison for the former plant manager;
- 41 months in prison for the former human resources manager in charge of safety;
- 30 months in prison for the former maintenance supervisor; and
- 6 months in prison for a former supervisor.
In addition to willful OSHA violations that caused an employee fatality, employers (and employees) can face criminal sanctions in the following circumstances:
- Falsifying OSHA documents. Section 17(g) of the OSH Act provides for a criminal charge against anyone (not just employers) who ‘knowingly makes any false statement, representation, or certification in any application, record, report, plan, or other document filed or required to be maintained pursuant to this Act . . . .”
- Advance notice of an OSHA inspection. Section 17(f) of the OSH Act makes it a criminal act for “[a]ny person to give advance notice of any inspection to be conducted under this Act, without authority from the Secretary or his designees . . . .”
- Perjury during OSHA proceedings. 18 U.S.C. § 1001 provides felony penalties for false statements made in connection with any matter within the jurisdiction of the U.S. government, including any person who knowingly: (a) falsifies or conceals material facts; (b) makes materially false statements; or (c) presents any false document.
- Environmental Statutes. In addition to the criminal sanctions provided for under Section 17 of the OSH Act, employers with catastrophic events that also impact the environment could be subject to prosecution under: (a) the Clean Water Act; (b) the Clean Air Act; (c) the Resource Conservation and Recovery Act (RCRA); or (d) the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
- State Criminal laws. The OSH Act does not preempt prosecution under state criminal laws, such as manslaughter or negligent homicide for work related deaths and injuries.