By James F. Laboe

There are 7 factors I counsel employers to consider when deciding whether to contest an OSHA violation. Last week, in Part 1 of this series, I discussed two of these factors:

• The strength of OSHA's case, that is, how good a chance OSHA (technically, the Secretary of Labor) has of proving that a violation occurred and/or that the proposed fine amount or abatement is appropriate; and
• The size of the fine involved.

Let's now look at the next two factors.

3. Abatement Requirements and Associated Costs

Prompt abatement of hazardous work conditions should be the goal of everyone in the workplace - it is certainly OSHA's top priority. However, if an employer has a good faith basis to challenge the validity of a citation, that employer should also take into account the direct and indirect effects of any proposed abatement.

For example, a serious citation carrying a mere $500 civil penalty might not look like a big deal. But it could have a multimillion dollar impact if abating the citation involves making significant changes to operations, processes or machinery, (e.g. performance of group lockout tagout). In addition, employers with multiple sites need to understand that the abatement required at one facility typically has to be implemented at all facilities.

To be clear, I'm not suggesting that employers contest an OSHA citation for the sole purpose of avoiding legitimate abatement requirements. I'm merely suggesting that if you have a good faith belief that the alleged violation is not just, you should seriously consider the effects of the abatement in deciding whether to contest the citation.

4. Adverse Effect on Competitive Position

The potential losses from OSHA citations often involve more than fine amounts. They may also have an adverse effect on your reputation and competitive position. For example, if you have a history of OSHA citations you might have a harder time bidding for contracts, especially if the citation is characterized as willful or serious. That's because almost all companies look at safety and OSHA citations in evaluating bidding companies and are more apt to select bids from competitors who don't have citations.

Expensive abatement requirements might also harm your competitive position by forcing you to raise your fees or prices. You'll be at a particular disadvantage vis-à-vis your competition if you have to implement work procedure modifications that are more burdensome than industry standards.

Conclusion

Next week, I'll take you through the final three factors. Until then, Stay Safe Everybody!

The Canadian Perspective

Jim's analysis is completely relevant to Canadian companies even if the terminology he uses isn't. As we noted last week, Canadian employers, like their American counterparts, have a right to contest OHS violations. The factors Jim sets out in his series are the same ones Canadian employers should consider when deciding whether to exercise this right.

HEALTH & SAFETY LAW TRAVELOGUE

THE U.K.

Norm Keith - bio

By Norm Keith, B.A., LL.B., CRSP

Britain is the birthplace of the Industrial Revolution and one of the first countries to enact workplace health and safety laws. But in the past two decades, Britain has been governed by political leaders who believe in de-regulation, including in the area of workplace safety. There has even been talk of privatizing the Health and Safety Executive, the British equivalent to OSHA. But this has not happened.

Health & Safety Profile: The United Kingdom

• Population: 60.3 million
• Labor Force: 29.6 million
• Total Accidents: 30,666
• Total Fatalities: 168
• Life Expectancy: 78.27 years
• GDP per Capita: $27,700
• Government Type: Constitutional Monarchy and Democratic State
• OHS Legislation: OHS statute and regulations. Regulatory enforcement is moderate. Criminal enforcement is minimal.

(Statistics are from 2003)

About Norm Keith

Norm Keith, BA, LL.B., CRSP, is a partner in Gowlings' Employment and Labour Group, specializing in occupational health and safety law, workers' compensation, privacy law, labour and employment law, and alternate dispute resolution. He has extensive experience with wrongful dismissal, human rights, labour arbitration, judicial reviews, Ontario Labour Relation Board cases and fiduciary duty lawsuits.

To view his bio, click here. You can contact Norm by email here or by phone at (416) 862-5699.

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