Are OSHA’s Latest Enforcement Policies Making Informal Settlements Impractical?

You may be aware of OSHA’s most recent enforcement policies regarding instance-by-instance citations (“IBI Citations”) and the expanded circumstances which may put an employer into the Severe Violator Enforcement Program (“SVEP”). What you may not be aware of is that these new enforcement policies have significantly changed the benefits of settling matters with OSHA during informal conferences.

Summary of OSHA’s Latest Enforcement Policies

In the last two years, OSHA has issued two major enforcement policy changes. The first policy change strongly encouraged Area Offices to issue citations on an IBI basis, as opposed to grouping similar violations into one citation. In other words, to achieve a stronger deterrent effect, OSHA may cite six individuals on a roof or working on a machine unsafely, rather than one grouped citation for the violative conduct.

The second major policy change involved OSHA expanding SVEP status for employers. The SVEP focuses enforcement efforts on employers who have demonstrated an indifference to their obligations under the Occupational Safety and Health Act. Under the new policy, employers are placed into the SVEP when OSHA issues two or more “Willful” or “Repeat” violations of any standard. Once a company is placed into the SVEP, they are subject to damaging press releases, letters to CEOs, follow-up inspections, and inclusion on the SVEP log.

How the New Policies are Impacting Settlement Negotiations

While effective deterrents, OSHA’s new policies have had an unintended consequence on settling “Serious,” “Repeat” or “Willful” violations. Quite simply, any “Serious” violation by an employer makes them more susceptible to “Willful” or “Repeat” violations, which could place an employer in the SVEP. Similarly, the IBI Citation policy places additional financial challenges on employers attempting to settle multiple ungrouped violations. Accordingly, employers have been left to decide whether to accept citations that could place them in the SVEP, settle large IBI penalties or incur the cost, trouble, and uncertainty that comes with litigation.

Consequences for Employers

Employers must now think twice before deciding to settle a case with OSHA and certainly they should be careful about entering settlements without experienced legal counsel. Should an employer decide to settle a case, and thereby establish that a high-level violation occurred, it would only take one more of those violations to potentially end up in the SVEP. As previously noted, the SVEP could have serious negative implications since some private and public companies refuse to do any business with employers in the SVEP. Additionally, there are cities throughout the United States that will not approve permits for companies listed in the SVEP.

In light of these new aggressive and expensive OSHA policies, we recommend employers place an increased emphasis on “Serious,” “Willful” and “Repeat” violations. Needless to say, if you are unsure if settlement or litigation is the best path forward, please contact the Labor and Employment Attorneys of Meyers Roman: Seth P. Briskin, Lester W. Armstrong, Steven P. Dlott, R. Mark Gottfried, Joseph C. Pokorny or Alexander M. Stewart at 216-831-0042.

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