Criminal Sanctions for Workplace Safety Violations

In recent years, the federal Occupational Safety and Health Administration (OSHA) has established several initiatives designed to ramp up inspection and enforcement activity.  While OSHA has aggressively pursued alleged safety violators through sizeable civil penalties, it has taken a well-publicized position on its view that criminal penalties are also available under the OSH Act:

·         "The possibility of incarceration is a powerful deterrent."

Assistant Secretary of Labor for Occupational Safety and Health, Dr. David Michaels ("Assistant Secretary Michaels") – March 16, 2010

·         "It is a sad truth that nothing focuses attention like the possibility of going to prison. Unscrupulous employers who refuse to comply with safety and health standards as an economic calculus will think again if there is a chance that they will go to prison for ignoring their responsibilities to their workers."

Assistant Secretary Michaels – April 27, 2010

·         "It's an unfortunate fact that sometimes monetary penalties are just not enough.  Nothing focuses the mind like the prospect of time in prison."

Assistant Secretary Michaels – June 14, 2010

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Employers may face criminal penalties as a result of violating OSH Act, its state counterparts, or state or federal statutes of more general applicability.  These criminal prosecutions are typically brought under:

1.      Section 17 of the OSH Act, 29 U.S.C. § 666(e) - (g);

2.      State statutes like Section 182.667, subdivisions 1-3, of the Minnesota Occupational Safety and Health Act, Minn. Stat. §§ 182.651, et seq. ("MnOSHA"), and Sections 22-8-2.2-24.2, 49 of the Indiana Occupational Safety and Health Act, Ind. Code §§ 22-8-1.1-1, et seq. (InOSHA);

3.      Federal criminal statutes of general applicability like 18 U.S.C. § 1001, which generally prohibits lying to a federal officer or concealing or covering up by any trick, scheme or device a material fact relevant to a federal investigation; and

4.      State criminal statutes of general applicability that prohibit manslaughter, reckless homicide, and the like.

A.        Federal OSH Act Criminal Prosecutions

Section 17(e) of the OSH Act states:

"Any employer who willfully violates any standard, rule, or order promulgated pursuant to [this Act], or any regulations prescribed 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; except that if the conviction is for a violation committed after a first conviction of such person, punishment shall be by a fine of not more than $20,000 or by imprisonment for not more than one year, or by both."

29 U.S.C. § 666(e) (emphasis added) 

Some state OSHA statutes have even more severe penalties.  For example, MnOSHA's criminal penalties include a fine of up to $70,000 for a first conviction, and fines of up to $100,000 for any subsequent conviction.  Under federal OSHA and most state OSHA statutes these criminal penalties are on top of civil penalties.

Courts have interpreted the term "employer" in Section 17(e) to include individual corporate officials under certain circumstances.  There is the potential for criminal convictions under the OSH Act where there is a willful safety violation(s) that results in an employee death.  Accordingly, the threat of criminal prosecution is not to be taken lightly in today's regulatory environment.

However, not every OSHA violation that causes an employee's death will lead to a criminal prosecution.  First, the Regional Solicitor of Labor must refer the matter for prosecution to the Department of Justice or the local United States Attorney's Office.  And, as noted above, only "willful" violations may form the basis of the prosecution.  Courts have interpreted "willful" to mean that the employer has taken a deliberate action with knowledge of the Act's requirements or with "plain indifference" to those requirements, and the prosecutor must prove each element of the alleged violation.  Thus, a finding of a "willful violation" by the Occupational Safety and Health Review Commission does not necessarily result in criminal prosecution, much less a conviction. 

The case law also indicates that prosecutions are more likely where the evidence establishes that the target manager had actual knowledge of the safety hazard that caused the employee's death.  Prosecutors are emboldened and juries influenced by testimony that other employees had previously complained about the specific hazards that ultimately led to an employee's death.

B.        OSH Act Criminal Penalties that Apply Even in the Absence of Any Injury

Employers should also be aware that the OSH Act authorizes criminal sanctions against anyone who knowingly falsifies OSHA-related records or gives advance notice of an OSHA inspection. 

            1.         False statements or records.

Section 17(g) of the OSH Act states:

"Whoever 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 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."29 U.S.C. § 666(g) (emphasis added) 

Several state statutes criminalize similar conduct.  See, e.g., Minn. Stat. § 182.667, subd. 1; Cal. Lab. Code § 6426; Iowa Code § 88.14, subd. 7.   

            2.         Advance notice of inspections.

Section 17(f) of the OSH Act states:

"Any person who gives advance notice of any inspection to be conducted under this Act, without authority from the Secretary or his designees, shall, upon conviction, be punished by a fine of not more than $1,000 or by imprisonment for not more than six months, or by both."29 U.S.C. § 666(f) (emphasis added) 

Several state statutes criminalize similar conduct.  See, e.g., Minn. Stat. § 182.667, subd. 3; Ind. Code § 22-8-1.1-24.2;  Iowa Code § 88.14, subd. 6.

These provisions literally apply to any "person," not just the employer.  Indeed, on October 27, a federal jury in West Virginia convicted an employer's chief of security for lying to inspectors who were investigating whether the employer had routinely violated the analogous "advance-notice" prohibitions in the federal Mine Safety and Health Act (MSHA).  The prohibited notices involved security at the entrance to the mine radioing down into the mine to tell operations management that MSHA inspectors had arrived at the site and would be coming down into the mine to inspect.  The investigation that led to this conviction was an outgrowth of a fatal explosion at a mine in April of 2010.

C.        Other Federal Criminal Statutes of General Applicability

Corporate officials may also be subject to more severe criminal penalties for false statements under federal criminal law. 

Specifically, 18 U.S.C. § 1001 provides felony penalties for false statements made in connection with any matter within the jurisdiction of the executive, legislative, or judicial branch of the United States government.  Under the statute, anyone who knowingly and willfully (1) falsifies or conceals a material fact; (2) makes a materially false statement; or (3) makes or uses any false writing or document before any branch of the United States government is subject to felony penalties.  These penalties include a fine of up to $250,000 for an individual and up to $500,000 for an organization (or two times any resulting financial gain or loss related to the falsification), or a prison sentence of up to five years.  This general criminal statute was one of the bases for the prosecution referenced above in connection with the mine explosion fatality.

D.        State Criminal Statutes

Finally, employers and their agents can also be prosecuted under state criminal laws of general applicability—including homicide or manslaughter laws—for work-related deaths and injuries.  Recent prosecutions for alleged violation of such laws have occurred in various states including, California, New York, and Ohio.     

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When an employer is faced with the tragic event of the death of an employee, the employer's  next steps are critical in attempting to avoid criminal prosecution.  Employers must take great care to preserve the accident scene and all evidence in order to avoid destruction of evidence, spoliation, or obstruction claims.  Specifically, the following steps should be taken to minimize the risk of criminal prosecution, spoliation, or obstruction claims:

1)      Immediately notify OSHA (or, in a state plan state, the state occupational health agency) of a workplace fatality or the in-patient hospitalization of three or more employees following a work-related incident.  Also, immediately notify the appropriate family members of the injured employee.

2)      Follow all OSHA recording requirements, including completing the OSHA 300 form.

3)      Secure and take out of service all equipment (including safety and personal protective equipment, if applicable) involved in the incident until it can be checked, cleared and released by OSHA, experts and counsel.

4)      Secure the worksite until cleared by OSHA, other governmental authorities and legal counsel.

5)      Preserve all evidence surrounding the accident scene.

6)      Locate and preserve all safety maintenance logs, maintenance records, equipment leasing records, training records, attendance rosters at safety meetings, and safety disciplinary records.

7)      Consider involving legal counsel in internal investigations to try to protect from discovery internal witness interviews, and internal discussions and deliberations concerning the investigation.

Employers obviously must be aware of the potential for criminal prosecutions arising out of workplace accidents.  Consideration of the above matters may assist employers in attempting to avoid such prosecutions.