Going through an OSHA inspection is scary enough. But the stakes are even higher than you might think. The threat posed by an OSHA inspection isn't limited to the issuance of citations and orders. It can also result in public disclosure of your company's most sensitive trade secrets. This series will explain the danger and set out a strategy you can use to ensure that OSHA inspectors don't compromise the confidentiality of your trade secrets.

OSHA Inspections & Trade Secrets

When OSHA inspectors come to your facility, they can demand access to all kinds of information including proprietary and confidential business information. Secret formulas, manufacturing processes, business arrangements-everything in the files is subject to disclosure. On one level, this might not seem like a big deal. After all, OSHA doesn't publish the materials they collect from private businesses during inspections...

... Unless it has to. There's a law called the Freedom of Information Act (FOIA) which entitles journalists, commercial entities and individuals to request specific information from a public agency. Although FOIA includes provisions to guard the confidentiality of trade secrets provided by companies to regulatory agencies, these protections might not cover all of the information you deem proprietary.

The good news: OSHA has a procedure for shielding certain kinds of proprietary information gathered during inspections from FOIA requests.

The bad news: OSHA doesn't follow the procedure automatically. You need to specifically notify OSHA that certain information it collected is proprietary so it can activate the protection process.

The OSHA Inspection Trade Secret Protection Rules

The OSHA trade secret protection rules are contained in the OSHA Field Inspection Reference Manual (the Manual) handed out to inspectors. According to the Manual, trade secrets mean "matters that are not of public or general knowledge," including "any confidential formula, pattern, process, equipment, list, blueprint, device or compilation of information" used by an employer to gain a business advantage over competitors that don't know or use the information. This can include not just written documents but photographs, computer tapes, databases and other forms of information.

To get protection, employers must notify the OSHA inspector when granting access to information that they think is a trade secret in the course of an inspection. Once inspectors are on notice, they must handle the information in a confidential manner to ensure that it's not intentionally or inadvertently disclosed to the public. Specifically, OSHA will label information considered a trade secret as "Administratively Controlled Information; Restricted Trade Information."

OSHA officials can't disclose information labeled this way to anybody except other OSHA officials and only under limited conditions or during a legal proceeding involving the inspection, e.g., an OSHRC appeal. OSHA officials who fail to abide by these restrictions face the risk of criminal penalties.

Conclusion

Next week, I'll set out a practical strategy that you can use to take advantage of the trade secret protections afforded by the Manual. I'll also give you two Model Tools you can use to implement the strategy.

THE CANADIAN PERSPECTIVE

This article is also relevant to the Canadian members of our audience. That's because the OHS agency of each province has rules that companies can use to safeguard their trade secrets during an inspection. The rules parallel but aren't precisely the same as the OSHA rules. And they vary from province to province. The best way to determine what your province requires is to go to the OHS agency website and search for "trade secrets."

WHERE ARE ALL THE C-45 PROSECUTIONS?

The Views of 6 Legal Experts

By Glenn Demby

Editor's Note: Since the lead article is more directly relevant to U.S. law, here's a story of primary interest to Canadians.

Remember C-45? That was the law that made certain safety violations a crime, the same law that prosecutors were going to use to march corporate officers and directors off to jail when their companies violated OHS laws. If you've forgotten all about C-45, it's hard to blame you. After all, since the law took effect on March 31, 2004, there have been all of two C-45 prosecutions - and neither of them was against a corporate officer or director. C-45 hasn't lived up to the hype and it probably never will. So what's the story with C-45? Why haven't there been more C-45 prosecutions? Like we did in July 2005, the Insider put these questions to some of Canada's leading OHS and criminal lawyers. Here's what they had to say.

1. GREG YOST (Counsel, Crim. Law Policy, Dept. of Justice (Ottawa) & co-author of C-45)

(Note: Mr. Yost is speaking on his own behalf, not on behalf of the Ministry.) I can't comment on why the legislation has not thus far led to more prosecutions as I'm not involved in the enforcement of the legislation. However, it may be that time is a factor. About a year ago, there was a prosecution of Ontario Power Generation (OPG) and some of its employees as a result of deaths caused by the opening of a dam while people were swimming downstream. I followed the story in the papers. The judge dismissed the charge against OPG and made specific reference to the fact that the accident occurred before Parliament had changed the law of corporate criminal liability. The clear implication to my mind was that C-45 could have made OPG liable.

2. CHERYL A. EDWARDS (Former OHS prosecutor, partner, Heenan, Blaikie, Toronto)

My best guess, from my discussions with Crown Counsel and other sources, is that the Crowns who prosecute criminally have been directed to carefully assess whether other processes (such as regulatory prosecutions) are more appropriate for application to the circumstances of a workplace tragedy before using court resources reserved for criminal matters. Police (at least in Ontario) have been given no more resources to investigate workplace accidents for possible acts of criminal negligence. Courts are stretched already to try to hear the existing load of criminal cases.

Convictions are far easier to secure for the Crown in a regulatory matter, and far more difficult to achieve under the Criminal Code, even as amended by C-45. In my opinion, all cases come down to whether there's a reasonable prospect of conviction of the individual and organization, and whether the OHS regulatory process, which is usually in full swing simultaneously, is better for these cases.

3. NORM KEITH (CRSP, Partner, Gowling, Lafleur Henderson, LLP, Toronto)

There haven't been more C-45 prosecutions because:

1) Police and Crown Attorneys haven't been properly educated or trained on the details of Bill C-45, its content or purpose;

2) There's a lack of coordination of criminal and OHS regulatory investigations and an absence of legislation permitting the police and OHS regulators to share information and evidence or the two prosecution branches to cooperate; and

3) There's a lack of political will to enforce the Criminal Code, from both Ministers in charge of OHS regulators and prosecutors, and possible lack of police resources.

4. JOHN ROSEN (Leading criminal defence attorney)

I think that the real reason there haven't been more C-45 prosecutions is that most safety incidents are investigated by OHS officials who are more comfortable working within the parameters of the provincial regulatory law than in the criminal system. Provisions under the Criminal Code are hard to prove. And perhaps the right case hasn't come along yet. The vast majority of managers are highly conscious of safety issues and do all they can to avoid safety incidents. Prosecutors are after companies with a pattern of safety violations or no safety system at all and managers who don't take safety seriously, which is a very small percentage of all managers.

5. DAVID MYROL (Former Crown prosecutor, partner, McLennan Ross LLP, Calgary)

More cases should slowly emerge over time but there will never be a flood of Bill C-45 prosecutions. Although the federal government passed the amendment, it didn't provide new resources for its enforcement. Also, a regulatory case is easier to prosecute than a criminal case. In terms of the path of least resistance, there's a natural tendency for prosecutors to use the regulatory tool rather than the criminal one. Prosecutors are more likely to use C-45 in high profile cases and cases involving clear criminal behaviour.

6. JOHN PEARSON (Crown Prosecutor, Ontario)

(Note: This statement is Mr. Pearson's personal opinion and doesn't necessarily reflect the views of the Ministry of the Attorney General.) C-45 addressed a need to modernize the idea of organizational liability. It created a new tool for law enforcement, but it's a very special tool and not a very easy one to use. In OHS, the emphasis is on prevention and avoiding tragedies. Criminal prosecution is designed to hold an individual accountable after a tragedy has happened. From the perspective of most prosecutors, the best deterrent is to hold individuals responsible, not organizations. Also, the criminal process is more difficult than the regulatory process. There's a higher burden of proof in criminal prosecutions than in regulatory prosecutions.

MEMBER REPLY
The Berlin Wall Today

In response to your article on Wednesday about the Berlin Wall, I was in Berlin a couple of months ago. Most of the Wall has been dismantled, except for a few areas. The few pieces left have become a national historical site and fenced to prevent souvenir hunters from chipping pieces. The Germans call the souvenir hunters "Woodpeckers." I've included a few photos of Checkpoint Charlie as it stands today. As you can see it is a tourist spot. You can get your photo taken with the two actors for 1 Euro (about $1.50). New construction has now filled-in most of the buffer zones (No Man's Land) on the communist side of the Wall.

The City of Berlin is also in a quandary about what to do with the old Tempelhof Airport where many of the airlift deliveries took place. The airport is costly to maintain and is no longer the primary airport for the city. Good article and reminder of how people's lives can change overnight.

John "Bubba" Riehs
Sr. Safety Specialist
Lower Colorado River Authority
La Grange, TX

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