By: Thomas H. Welby Published: April 2016

Forum-Shopping: A Tool for Tough OSHA Appeals

On a recent appeal from an Administrative Law Judge (ALJ) decision upholding an employer violation of OSHA’S “General Duty Clause,” the Occupational Safety and Health Review Commission (“Commission”) reversed the ALJ, and vacated the citation and assessed no monetary penalty.

The Commission did so, notwithstanding that the citation arose out of an occurrence in Texas in which two employees died, in an active sewer line manhole, from hydrogen sulfide toxicity, and asphyxia due to low oxygen concentration.  The facts in the case were not pretty.  Prior to entering the manhole, the Crew Leader did not discuss either the dangers of entry or emergency procedures with the crew, or perform any air monitoring, complete an entry permit, wear personal protective equipment, ventilate the space, or set up rescue equipment.

How did the employer beat the citation on such awful facts?  Well, actual or constructive knowledge on the part of the employer is an element of every OSHA violation.  When a supervisory employee participates in the violative conduct, under Commission precedents, his knowledge will be imputed to his employer.  In which case, the Secretary will be deemed to have met his burden of proof as to “knowledge,” without the need to prove any defect or inadequacy in the employer’s safety program.  That’s the “majority rule.”

Happily for the employer, the sewer line fatality appeal was decided in the employer’s favor because the Fifth Circuit (which includes Texas) has a rule in common with the Third Circuit (which includes New Jersey) that imposes an additional proof burden on the Secretary.  This “minority rule,” which governs in three Circuits, is more favorable to the employer than the Commission precedent.  Where the minority rule applies, the Secretary, in a case involving the misconduct of a supervisor, must prove also (for the supervisor’s misconduct to be imputed to his employer) that the supervisor’s misconduct was foreseeable.  To accomplish that, the Secretary must show that the employer’s safety program was inadequate. Not having made such a showing, the Secretary in our Texas sewer line case did not succeed on appeal.

If this rule on imputation were the decisive issue on your next OSHA case, and you had been cited in New York and the ALJ ruled against you, there might be a way to get that outcome reversed, if you could get your case examined, on appeal, where the minority rule applies.  Despite your citation having arisen within the Second Circuit, you would probably get the advantage of the minority rule, if your company’s headquarters are in New Jersey (or anywhere in any of the eleven states that make up the Third, Fourth, and Fifth Circuits).

Thus, a key part of evaluating an employer’s prospects in an OSHA appeal (and a strategic consideration ideally addressed at the trial level) is to identify the critical legal issues, and to investigate whether the outcome might vary, according to whether the same were to be determined under the Commission’s own precedents — or, in the alternative, in one or another of up to three Courts of Appeals by which an appeal might be heard.  (This process is what we refer to as “forum-shopping”).

As you probably know, a majority of the states are overseen by federal OSHA, but others have state-administered “Little OSHAs.”  In states having “Little OSHAs,” trials and appeals are not as described in this article, but generally are conducted in the administrative agencies, and the courts, of the individual State.  While New York, New Jersey and Connecticut do have OSHA-approved, state-administered plans for public sector employment, private sector employers are under the jurisdiction of federal OSHA.  Thus, when your construction company gets cited anywhere in our tri-state area, it will be federal OSHA that issues the citation.

Congress having decided to separate enforcement and adjudicative functions in setting up OSHA, the OSH Act of 1970 created the Commission as an administrative court in (federal) OSHA matters.  “Commission” means both [a] the agency within the U.S. Department of Labor that administers contest proceedings, and employs the ALJs who conduct the trials of such matters, and also [b] the panel of three Commissioners, appointed by the President, who act as an appellate tribunal, where either the respondent or the Secretary disputes the ALJ’s decision as to the violation and/or the penalty.

OSHA appellate practice differs in many respects from appeals in state and federal court systems.  Most state court systems grant a party losing at trial at least one appeal “as of right,” but OSHA appeals are by permission only.  Generally, an appellant in state or federal court has one court only in which to pursue his appeal; under OSHA, he may be able to choose from as many as three.  Another peculiarity is that the Commission, unlike any appellate court of which I have knowledge, has authority to direct the review of an ALJ decision, even in a case in which neither party has requested it.  (This power is infrequently invoked, except to address novel issues, or where ALJ decisions involving similar facts and legal rules have produced inconsistent outcomes).

An ALJ decision not reviewed becomes a “final order” after 60 days but, unless reviewed by the Commission and/or by a Court of Appeals, it does not acquire the force of a legal precedent binding in subsequent cases (although a court in a later case may consider it, as “persuasive authority”).  If the employer wishes to challenge not only the penalty amount, but also the merits of the citation, its petition for review must clearly so state.

If the Commission grants the request for review, it may review any issue raised in the request, or any other issue on its own motion.  Within the range of penalties authorized by the OSH Act, it can not only reduce or vacate, but it can also increase, the penalty imposed by the ALJ.  As an appellate tribunal in operation for 45 years, the Commission has developed an ample body of its own legal precedents.  Usually, however, the Commission will state, and apply, the law of the Circuit to which it expects any petition for appeal to be directed, as a federal Court of Appeals is a higher judicial authority than the Commission.  Of course, not every issue of interpretation of the OSH Act, or OSHA’s myriad standards, will have been addressed by every Circuit.  In the absence of an inconsistent rule from the Circuit to which an appeal is thought to be likely, the Commission will apply its own precedents, if any, or will decide the issue, in its discretion, as a “matter of first impression.”

A final order of the Commission (that is, the Commission’s decision upon review, or an ALJ decision deemed “final” because the Commission has declined to review it) can become the subject of a petition, by any party, for review by any of the U.S. Courts of Appeals for the Circuit (1) in which the alleged violation occurred; (2) in which the employer’s principal place of business is located; or (3) the District of Columbia Circuit.  Review by a Court of Appeals is discretionary, and not a matter of right.

More often than not, in light of the modest penalties in most OSHA cases, your citation will not merit the costs of an appeal.  Even where an appeal might be worthwhile, litigating in a potentially distant court may increase the expense beyond what is prudent.  Assuming, however, that you have identified a sufficient reason to consider even an initial contest and an ALJ trial, you should ask experienced OSHA counsel to evaluate what are the rules that govern your citation, what the Circuits are that might ultimately hear an appeal from an adverse ALJ decision, and whether one forum or another might have a rule affording you better chances for success.

In a given case, “forum-shopping” could benefit you, without even having to litigate your citation.  While such scenarios may be unusual, it could occur that although you have been cited in New York, the Eighth Circuit has a unique rule on the legal issue determinative of your contest, and your company happens to be based in Omaha.  By pointing this out to OSHA’s attorneys even before the ALJ hearing, not inconceivably you could get your citation downgraded, with penalties reduced, or even withdrawn

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