Expect the Unexpected: Advanced Preparation for OSHA Complaints and Investigations

Overview What are your odds of being inspected? Key areas of OSHA investigation and enforcement Investigation protocol and procedures Citations: Accept, negotiate, or fight? Reducing fines and reclassifying citations Planning and preparing for your inspection 1

Behind the Numbers: More Investigations, Broader Regulatory Authority 2

Expanded OSHA Budget & Enforcement OSHA Budget increases: 2013: $535,246,000 2014: $552,247,000 2015: $565,010,000 39,228 OSHA inspections in 2013 yielded: 58,316 Serious violations; 319 Willful violations; and 3,139 Repeat violations. 2,200 OSHA inspectors 3

Most Commonly Cited OSHA Standards - 2013 1. Fall protection (8,241 violations) 2. Hazard communication (6,156) 3. Scaffolding (5,423) 4. Respiratory protection (3,879) 5. Electrical wiring violations (3,452) 6. Powered industrial trucks (3,340) 7. Ladder-based violations (3,311) 8. Lockout/tagout (3,254) 9. General electrical violations (2,745) 10. Machine guarding violations (2,701) 4

Targets for OSHA Inspection National, regional, and local emphasis programs National emphasis programs Combustible dust Hazardous machinery Process safety management (PSM audits) Nursing and residential care facilities Trenching and excavation Substance-specific safety standards (silica, hexavalent chromium, and metal industries) 5

Targets for OSHA Inspection Texas located in OSHA Region 6 (including NM, OK, AR, and LA) Region 6 emphasis programs Upstream oil and gas industries Construction (including crane use and demolition) Work zone safety and health High noise in manufacturing industries Fall hazards in non-construction industries Heat illnesses and work site risks 6

Targeted Industries Construction Petrochemical Drilling, well servicing, and refining Landscape and agricultural services Steel and metalworking General manufacturing 7

If your company operates in an industry utilizing a targeted material, process, or machinery, you are at substantially higher risk of OSHA inspection. 8

OSHA s Investigation Process and Protocols 9

What Prompts OSHA Investigations? Top priority: Imminent danger complaints One of eight circumstances trigger imminent danger inspection Second priority: Fatalities and catastrophes Three or more workers requiring hospitalization 10

What Prompts OSHA Investigations? Third priority: Responding to generalized complaints From employees or outside agencies Complaining of generalized unsafe or unhealthful conditions Could be formal or informal follow-up Fourth priority: Programmed inspections for high-hazard workplaces Targeting occupations, workplaces, and substances posing especially high hazards PSM/PHA Audits Lowest priority: Follow-up inspections 11

Overview of Inspection Process Four steps of OSHA inspection process: Opening Conference Inspection of written records and employer programs Visual inspection of facility Closing Conference Inspection may be opened and completed within several days However, OSHA may take up to six months to issue Citation and penalties 12

Opening of Inspection You will almost never get advanced notice of inspection In limited circumstances, up to 24 hours notice for catastrophes, imminent dangers, after-hour inspections Compliance Safety and Health Officer (CSHO) will appear at your door step During working hours Present his/her credentials Ask to see the facility owner or manager in charge 13

Opening Conference Considerations General considerations Should you require an administrative warrant? Treat CSHO in professional and courteous manner Provide quiet, private location for opening conference Request basis for inspection Request copy of complaint, if one exists Involve appropriate members of OSHA investigation team, to be selected in advance 14

Opening Conference (cont.) Ask CSHO to establish parameters of: Scope of inspection (processes, equipment, etc. to be inspected) Photography and videography of workplace Informal interviews with employees Respond to CSHO inquiries honestly Violations deemed to exist at opening of inspection cannot be avoided Delays and/or remedial measures cannot avoid citation or fine 15

General Considerations At outset of inspection, thoroughly explain safety program Involve your internal subject matter experts wherever appropriate You must be honest and forthright Yet you have no duty to volunteer information not requested by CSHO Understand risk of managerial admissions May form basis of willful penalties and citations 16

Record and Document Inspection OSHA-mandated records Provide copies of mandated forms (OSHA 200 logs, OSHA 101 forms, etc.) Non-OSHA mandated records Includes LOTO program, HazCom procedures, etc. Ask for written request of such documents o Legal/Management review of requests 17

Record and Document Inspection Non-OSHA mandated records (cont.) CSHO may request documents be created (including letters, reports, summaries, etc.) Do not create or provide such documents without approval of legal counsel and management Maintain detailed list of all documents provided to CSHO Include written verification documents provided to CSHO 18

Record and Document Inspection OSHA Directive requires verification of certain programs in every inspection, regardless of basis: Injury/illness recordkeeping Lockout/tagout Hazard communication Permit-required confined space Employee access to medical and expense records Written safety and health program Always be prepared to timely discuss and provide such records 19

Facility Inspection Strictly confine inspection to areas: (i) identified in warrant, if required or (ii) agreed upon at Opening Conference Plain view violations may give basis for expanding inspection Management personnel must always accompany and observe inspector Employee/union representative may participate, as well 20

Facility Inspection Non-Management Interviews Employee interviews Limited informal interviews on facility floor If interviews are of a longer duration, they may be facilitated outside the production facility Employee has substantial rights regarding interview Employee may insist on private interview Employee may request your or union presence Employee may refuse to participate altogether 21

Facility Inspection Management Interviews You have a right to be present during management interviews May form basis of company admissions of liability Carefully determine which individuals are deemed management Tension between right to be present during interview and potential admissions Carefully limit responses Avoid speculation, innuendo, or opinions Do not comment on existence of violation or abatement 22

Facility Inspection Designated management representative should take photographs/videos identical to those of CSHO Keep detailed notes of inspector s remarks, employee interview responses, and potential violations If obvious violations exist, undertake immediate abatement Will not avoid citation or penalty, but may show good faith and limit potential fines 23

Closing Conference Ensure attendance of appropriate management personnel Do not acknowledge or admit existence of alleged violations CSHO will identify issues and potential violations Ask suggestions for potential abatement measures You may politely dispute the existence of a hazard, employee exposure, or applicability of particular regulations 24

Closing Conference Keep detailed notes of all alleged violations Ask CSHO to designate all photographs and videos of your facility as Confidential May limit distribution of proprietary or trade secret information After Closing Conference, but before Citation is received, attempt to abate alleged violations, if possible Provide proof of interim abatement measures 25

Receipt of Citation OSHA may take up to six months to issue Citation Three key items: Violations Proposed penalties Abatement periods Different categories of violations: De minimus No fine Other than serious Typically no or low fines Serious Up to $7,000 fines Willful & Repeat Up to $70,000 fines 26

Three Options for Handling Citation Agree, accept Citation, and pay all fines File a Notice of Contest Request Informal Conference with Area Director 27

Informal Conference Generally the preferred option Gives opportunity for negotiated settlement, not restricting party s rights to: (i) accept and pay Citation in full or (ii) file Notice of Contest Employer may request any number of penalty reductions, including: (i) small employer, (ii) good faith compliance, and (iii) history reduction Equally important: 28

Informal Conference Informal conference allows you to negotiate three critical items in Citation: Reduce size of financial penalties (small employer, good faith compliance, and historical fine reductions) Recategorize violations to less serious items (with lower fines) Negotiate abatement deadlines OSHA is highly incentivized to seek settlement terms with employers 29

Notice of Contest OSHA Citation is merely the Agency s allegations against your company OSHA is not a judge or jury If you do not settle or accept the Citation, OSHA must prove its allegations through administrative lawsuit Notice of Contest must be filed within 15 days of Citation Case then proceeds to litigation before Occupational Safety & Health Review Commission 30

Considerations in Accepting Citation Acceptance of violations could lead to follow-up inspections If violations found again, could be subject to Repeat violations (up to $70,000 per violation) Must complete abatement within prescribed time period If penalties exceed requisite threshold, OSHA will issue press release announcing fines OSHA will refuse to keep Citation or fines confidential 31

Advanced Planning & Preparation for OSHA Inspection 32

Factors Contributing to Severe Penalties Perceived lack of cooperation Knowledge of OSHA standards and regulations Failure to track information/documents provided to OSHA Employee training and communication Development and implementation of safety program Enforcement of safety-related standards, including employee discipline as appropriate Safety record, history, and past violations 33

Ensure Regulatory Compliance Determine OSHA regulations and standards applicable to your industry and operations Construction 29 CFR 1926 General Industry 29 CFR 1910 Agriculture 29 CFR 1928 Engage safety consultants (internal or external) as necessary to guarantee compliance Ensure OSHA-mandated audits are completed as required I.e., PSM audits once every three years, PHA every five 34

Preparing Inspection Response Plan Identify designated representative(s) for potential inspection scenarios Train and exercise individuals on responsibilities once inspection opened Ensure OSHA-mandated forms are accurate Periodic audits, as necessary Consider self-audits of OSHA regulatory compliance 35

Preparing Inspection Response Plan (cont.) Considerations in developing response plan Identify standards and safety issues most applicable to your industry Competitor inspections Inspection plan and protocol Ensure records are organized and easily located Designate representative and backup Identify workspace, routes appropriate for site-specific inspections 36

Develop Detailed Health & Safety Program Most common elements of safety program: Employee participation; Hazard and safety audits; Regular employee training and education Continual improvement and evaluation. Program may limit liability in event of OSHA inspection and reduce injury/healthcare costs May be implemented internally or with external subject matter experts 37

Understand Abatement Obligations Abatement has two components: The cost of abatement and The time necessary to complete abatement. Before you accept Citation and abatement deadlines, consider whether your company can afford abatement, and whether it can be completed in time. OSHA will provide longer abatement periods, yet be less flexible once settlement agreement is finalized. 38

Final Thoughts Know your subject matter experts, and involve them as necessary Keep collegial, yet cautious, tone and relationship with OSHA inspector Understand implications of accepting Citation, even if fines are low now Involve counsel as you see fit 39