On Monday, April 3, 2017, a tragedy occurred just south of downtown St. Louis. A boiler-related explosion occurred at Loy-Lange Box Co., leaving casualties at their facility and another nearby business.
Accidents like this are unfortunate for all parties involved. Loy-Lange will surely be facing some difficulties. In addition to possible litigation from injured parties and their families, representatives of Loy-Lange will be spending a lot of time with personnel from the Occupational Safety and Health Administration (OSHA) in the upcoming years.
Most companies will never have to worry about an OSHA inspection. Multiple investigators from both the St. Louis office and the Kansas City office have told me that the agency is simply overworked and understaffed. That being said, if your company is selected for an inspection, it will certainly cause an inconvenience, if not outright panic. In general, there are three reasons why an inspector will knock on the door.
- Complaint – Employees often file complaints with OSHA. The motivation behind a complaint can range from anger to general fear for his safety and the safety of others. Complaints may be filed in a variety of ways. The bottom line is that OSHA makes it quite simple for someone to file a complaint.
- Accident – If OSHA finds out about a major accident, you can bet that they will be on scene soon thereafter. In fact, there are some types of accidents that require employers to notify OSHA within 8 hours of their occurrence.
- Random/Follow-up/Target Program – These all fall into the same category because they do not occur directly from a specific accident or complaint. OSHA has the right to conduct random inspections, so to some extent, you should always be prepared. Additionally, they make conduct an inspection to follow up on previous complaints or citations, especially if the company has made abatements. Last, there are target programs. Regularly, OSHA will create an agenda whereby they intend to crack down on certain types of hazards.
This is an extensive topic, but here are a few things that an employer needs to know before OSHA begins walking around the campus.
- Does OSHA have the right to be there? Yes, OSHA may show up unannounced. However, they do not have the right to be on the premises without a valid warrant. And, usually, they will not obtain a warrant unless it is absolutely necessary. An employer does have the right to eject OSHA personnel from the premises unless a valid warrant has been provided.
- What is the scope of the inspection? OSHA must limit its inspection to the scope of the why they are there. For example, if an inspector visits pursuant to an accident, his inspection should be limited to the site area where the accident occurred. The last thing you want is for an inspector to walk around freely. He will always find other issues.
- What are an employer’s rights? An inspector will not inform an employer of its rights. Frankly, he is unlikely to be familiar with all of an employer’s rights. You have the right to have counsel present. You also have the right to have a representative or employee be present during the inspection. I would suggest walking alongside the investigator with a camera or video-recording device. Apart from the items above, the most important right is that employer has the right to advise its employees of their rights. In my experience, an inspector will always tell an employee that his statements are protected. They are protected by whistleblower laws. However, an employee’s rights range much further than that. Without a subpoena, which will never be produced during an inspection, the employee has an absolute right to not cooperate with OSHA officials. His rights to not speak or cooperate with an inspector are absolute. The choice is his alone. That being said, an employer cannot retaliate against an employee or discourage him from cooperating.
The bottom line is that companies, particularly those in manufacturing, construction, or otherwise labor-intensive industries, need to be prepared. A poor showing at an OSHA inspection will create a negative public record and may be very expensive with citations, fines, abatement, and litigation. At Schaeffer Law, we have the experience to deal with OSHA matters by providing counsel and representation specific to our clients’ requirements.
Last month, a jury in the U.S. District Court for the Northern District of California entered a verdict awarding $8 million in damages to the former general counsel (Sanford Wadler) of Bio-Rad Laboratories, a life-sciences company headquartered in the San Francisco area. Wadler claimed that he was wrongfully terminated and retaliated against for reporting his suspicion to an audit committee that Bio-Rad had violated the Foreign Corrupt Practices Act (FCPA). One topic at issue was whether Wadler could use documents and information protected by attorney-client privilege to put on his case against his former employer.
The Court found that Bio-Rad waived its claim to attorney-client privilege, and therefore, the Court admitted the evidence, overruling Bio-Rad’s objection. In its ruling, the Court noted that other items provided by Bio-Rad during the case’s discovery phase contained a presentation, a complaint, and other communications that should have been protected by the attorney-client privilege. And, in providing these during discovery, Bio-Rad expressly waived its claim to privilege. By doing so, this opened the door for Wadler to use otherwise privileged information that bolstered his claim at trial.
Additionally, the court noted another important takeaway. One of the reasons Bio-Rad gave for Wadler’s employment termination was that he failed to perform his job adequately. The Court stated that this reason created an implied waiver to the privilege. So, even if the Court had ruled that Bio-Rad had not expressly waived privilege by offering the above discovery, the fact that Wadler was fired for failing to perform his job adequately would have been enough to overrule the objection.
If you are company management, this case should serve as a warning that in-house company counsel shouldn’t be treated differently from other potential whistleblowers. This creates yet another reason for companies to rely more heavily on outside counsel, as their rights and position as non-employees of the company are much different.