Following the announcement last week of the first ever Deferred Prosecution Agreement in an OSHA matter, the Editor of the Corporate Crime Reporter interviewed Eric J. Conn, Head of Epstein Becker Green’s national OSHA Practice Group, who was involved in the matter, about OSHA enforcement trends in general, and OSHA criminal prosecutions in
OSHA Criminal Referrals on the Rise
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.
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