One of the hidden dangers of the OSHA inspection is the risk that company trade secrets will be disclosed. But, as we discussed last week, OSHA has established a set of requirements companies can follow to protect their trade secrets. Last week, we explained the rules. Here's how to take advantage of those rules. There's also a Model Memo in the Tools section you can adapt to implement the strategy.

A Practical Strategy to Protect Trade Secrets

To avail yourself of this protection for trade secrets, you need to alert your staff to take certain steps when OSHA inspectors show up. If nobody tells the OSHA inspector that the information being handed over is a trade secret at the time it's disclosed, it might be too late to protect it against public disclosure later.

The Model Memo in Tools shows safety directors and other staff members who deal with OSHA inspectors what to do when and if OSHA inspectors arrive. Although you shouldn't use it verbatim, you need to make sure that your memo, like ours:

Warns of the Danger: First notify staffers that OSHA inspections can threaten the confidentiality of important proprietary information and that they must take steps to keep that information secure.

Explains What a Trade Secret Is: Tell staff what a trade secret is. List examples. Better yet, draw up a list of all proprietary information that could be compromised during an OSHA inspection and attach it to the memo.

Tells Staff to Request Protection: Explain that the law gives you the right to request that OSHA protect your trade secrets from public disclosure if you request it. And tell staffers to make sure they request it. Instruct them to use the Model Notice in Tools for this purpose.

Explains How to Complete Notice: Instruct staffers to list each item of proprietary information disclosed during the OSHA inspection as a trade secret on the Notice form. Tell them to sign and date the Notice once it's completed and have the OSHA inspector do the same. Finally, have them give the inspector a copy and keep the original on file with the other documents generated by the inspection.

Solicits Questions: Last but not least, have staffers to check with management if they have any questions or uncertainties regarding trade secrets and the protection notification process.

Conclusion

We're not quite done yet. There's one more document you need to create to safeguard your trade secrets from disclosure after an OSHA inspection. I'll tell you what that document is and show you how to create it on the Monday after Labor Day, Sept. 8.

* * * * *

THE CANADIAN PERSPECTIVE

The principles of this article are also relevant in Canada. But the rules for protecting trade secrets vary. So you'll have to adapt the Model Memo in TOOLS in accordance with the requirements of your own province. As noted last week, the best way to determine what your province requires is to go to the OHS agency website and search for "trade secrets."

And, in the interest of equal time, the article below addresses a matter of Canadian law.

DUE DILIGENCE

Anatomy of a Successful Due Diligence Defence

By Glenn Demby

While working on a water main project in Ontario, a company has to "pull" a pipe around a corner onto a side street. A worker standing on the northeast corner is instructed to monitor pedestrian traffic during the pull. While walking north in the westbound lane of the road, the pipe strikes him from behind and breaks his leg. The company, supervisor and foreman are charged with failing to ensure that material was moved in a manner that didn't endanger a worker. But the court dismisses all charges [R. v. King Paving & Materials Co.].

Due Diligence Is Not Dead

The defendants in King Paving did something that has become increasingly difficult: They proved to a judge's satisfaction that they exercised due diligence to prevent a safety violation. The King Paving case is an important reminder that due diligence is still a viable defence. It's also a good illustration of the kinds of health and safety programs and documentation companies need to prove they showed due diligence.

The Principles of Due Diligence

When a safety incident occurs, the first instinct is to blame the company. Although this reaction is understandable, it's not always fair. As the court in King Paving observed, "Legitimate accidents can and do occur... despite the best precautions being in place." The point of due diligence is to ensure that defendants get a chance to prove their innocence and aren't automatically held liable simply because an incident occurs.

But the due diligence defence has become very hard to prove. In recent years, only a few companies - and individuals, such as directors, supervisors and workers - have actually been able to use it successfully. The King Paving case is thus worthy of attention. How did these defendants succeed where so many others have failed?

Which Safety Measures Satisfy Due Diligence Standards

The best way to answer that question is to take a close look at what the company and supervisors did right. In finding that the defendants had shown due diligence, the court focused on two aspects of the company's safety efforts:

General safety program. The court said the company was "in the forefront of the spirit and intent of the OHSA in the approach" it took toward safety in the workplace. The company "took considerable steps on an ongoing, daily basis to ensure and establish and maintain a safe workplace" for its workers on all projects, the court noted. As for the supervisor and foreman, both were experienced workers. The foreman in particular had a reputation for "being very safety conscious," the court added.

Pull procedures. A good general safety program isn't enough, though. Courts also look at the safety procedures that were in place for the specific work involved in the incident. The King Paving court found that the pull procedures used during the incident were reasonable, noting that the supervisor and foreman had:

> Used the same basic procedures and crew they'd successfully used in another recent pull;

> Adjusted the procedures to account for the fact that this pipe was heavier and larger than the pipe in the previous pull;

> Considered the presence of leaves in the gutter and concluded that they wouldn't interfere with the pipe's progress;

> Placed a backhoe in the intersection to prevent the pipe from rolling into traffic;

> Held a "tool box" meeting for the crew and explained what had to be done;

> Told all workers to stand clear of the pipe's path and not to stand in the southwest corner of the intersection; and

> Specifically told the victim to stand on the northeast corner.

In addition, the foreman, who was the only supervisor present during the pull, visually scanned the area while the pipe was being moved. And the last time the foreman saw the injured worker, he was standing on the northeast corner as directed. So the court concluded that the company, supervisor and foreman had taken all reasonable steps to ensure that the pipe was safely moved. Bottom line: The worker - who was, in fact, a lead hand and should have known better - wouldn't have gotten hurt if he'd stayed on the northeast corner as instructed.

The Due Diligence Lesson

King Paving provides solid reaffirmation that continuing to maintain an effective safety program and documenting compliance efforts will help the company and individuals who work for it minimize the risk of liability under OHS laws.

Case Cite

R. v. King Paving & Materials Co., [2007] ONCJ 610 (CanLII), Dec. 18, 2007

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