Retail Under Siege What OSHA s Aggressive Agenda and Enforcement Actions Mean for the Retail Industry
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1 Retail Under Siege What OSHA s Aggressive Agenda and Enforcement Actions Mean for the Retail Industry James Curtis Meagan Newman Seyfarth Shaw, LLP 131 S. Dearborn Street, Suite 2400 Chicago, IL (312)
2 Program Objectives Provide OSHA Primer. Discuss current OSHA enforcement initiatives and trends. Discuss how to reduce the risk of OSHA citations. Discuss core safety issues for the retail industry Seyfarth Shaw LLP
3 OSHA Liability Initially, employer responsible for its own employees Employer had to ensure that its employees were protected against: Recognized Hazards To Employee Safety and Health (General Duty Clause) Hazards Identified In Specific Regulations (29 CFR 1926, e.g. falls, electrical, lead, silica, etc.) (Construction Industry) (29 CFR 1910, e.g. forklifts, confined space, noise, etc.) (General Industry) Seyfarth Shaw LLP
4 OSHA Liability Liability was expanded under Multi-Employer Workplace Doctrine Now, each Employer is potentially responsible for the safety and health of another Employer s Employee, if the Employer: Creates the hazard Exposes an Employee to the Hazard Is responsible to correct the hazard, or Is the controlling Employer on the site Liability can involve citations (against Employer) and criminal prosecution (against Employer and Management Representatives) Seyfarth Shaw LLP
5 Many Different Categories of Employers and Employees On-Site General Contractors Subcontractors Leased/Borrowed Employees Temporary Employees Consultants Seyfarth Shaw LLP
6 Many Different Categories of Employers and Employees On-Site Key: OSHA is looking at the workplace as a whole so should you Critical Issues: Contractual relationship Exercise of control over means and methods Seyfarth Shaw LLP
7 Aggressive Enforcement THE NEW OSHA: OSHA is back in the enforcement business and There is a new sheriff in town Sec. of Labor Hilda Solis [The Secretary s Statement] is not an abstract wish; it is a stern description of how OSHA is working and I take this phrase seriously. David Michaels Asst. Sec. of Labor - OSHA Translation: OSHA believes the best path to compliance is through aggressive enforcement Seyfarth Shaw LLP
8 Aggressive Enforcement Emphasis on repeat citations Cautionary tale: Use of knowledge of previous inspection to justify willful citation Requests for Root Cause analysis and company insurance audits Severe Violator Enforcement Program Revised Penalty Policy Non-English speaking employees Recordkeeping/Ergonomics/Dust/Live Electrical Work Issuance New Proposed Rules, e.g. Fall Protection Systems, May 24, 2010 (29 CFR 1910) Seyfarth Shaw LLP
9 Inspection Data In the last year, OSHA has conducted 3,535 inspections of retail facilities. Across all industries, inspection numbers along with the penalties assessed as a result of each citation issued have risen. Retail employers who previously did not consider OSHA to be a significant business issue have had to re-assess that position Seyfarth Shaw LLP
10 OSHA Liability Different Types of OSHA Citations Other than serious up to $7,000 per violation. Serious Up to $7,000 per violation. Willful Up to $70,000 per violation. Repeat Up to $70,000 per violation. Failure to Abate Per diem penalty up to $7,000 per day Seyfarth Shaw LLP
11 Aggressive Enforcement Employee by Employee Citations PPE Standard LOTO procedures Chemical exposure Enhanced Use of General Duty Clause Ergonomics Workplace Violence Combustible dust Laundry lint Seyfarth Shaw LLP
12 OSHA Recordkeeping OSHA Recordkeeping National Emphasis Program (NEP). Intended to identify under-recording of workplace injuries and illnesses on OSHA Form 300 (29 CFR 1904). Increased recordkeeping citations with enhanced penalties including violation-by-violation citations for under-reporting. OSHA will inspect OSHA 300 Logs in every inspection. Not just high hazard industries: $182,000 Repeat citations issued to a warehouse operations center for recordkeeping violations Seyfarth Shaw LLP
13 Incentive Programs Analysis of Employer Incentive Programs Evaluate policy. Does it encourage employees to underreport in exchange for prizes or other rewards? OSHA will conduct employee interviews focused on whether employees have been trained to report injuries or illnesses or discouraged to report. OSHA favorably considers incentive programs that award safety recommendations or enhancements Seyfarth Shaw LLP
14 Severe Violator Enforcement Program (SVEP) April 22, 2010 OSHA announces Severe Violator Enforcement Program (SVEP) Concentrates OSHA s enforcement efforts on employers with a demonstrated indifference to safety Seyfarth Shaw LLP
15 Severe Violator Enforcement Program (SVEP) Demonstrated indifference means: Willful citations Repeated citations Failure to abate violations Plus 1. A fatality or catastrophe. 2. Two or more willful or repeated violations at a high-emphasis industrial operation or process (e.g. fall protection, amputation, dust, silica, trenching, lead). 3. Three or more willful or repeated violations at a process safety management covered facility. 4. Prior egregious enforcement Seyfarth Shaw LLP
16 Severe Violator Enforcement Program (SVEP) Severe violator gets heightened scrutiny including: 1. Follow up inspections 2. Inspections at other worksites operated by the employer 3. Increased P.R., including news releases and communications with corporate headquarters 4. Settlement would require increased safety obligations (e.g. hire additional safety personnel, injury/illness reporting obligations, self auditing requirements) 5. Agree to Section 11(b) language which allows for future enforcement through contempt proceedings 6. Elimination of certain citation penalty reductions In effect a blacklist and guilty until proven innocent Seyfarth Shaw LLP
17 Revised Penalty Policy April 22, 2010 OSHA issues revised penalty policy OSHA believes penalties are too low to deter violations OSHA wants to be like EPA Under revised policy: 1. OSHA will increase base penalty by 10% for any history of highgravity serious, willful and repeat violations over the last five years 2. At informal conference area directors cannot: Reduce or withdraw willful or repeat citations without regional or national office approval. Reduce the penalty by more than 30% 3. Look back 5 years to employer citation history for Repeat citations (previously 3 years) Seyfarth Shaw LLP
18 Native Language Requirements April 28, 2010 OSHA issued a memorandum that all training must be given in a language that the employee understands Certain OSHA regulations require training, others require Employer to prove training was effective or understood OSHA will look at how employer provides work instructions to employees and whether it is different than safety training (e.g. safety training in English but supervisor gives work instructions in Spanish). OSHA will interview employees to determine whether they understand English only training (e.g. if employee cannot speak English but all training documents are English only, you have a problem). Employers must determine whether employees are literate Bilingual trainers and documentation may be required to prove training was compliant Seyfarth Shaw LLP
19 New Workplace Violence Enforcement Procedures In September OSHA issued new enforcement procedures for inspections in response to workplace violence incidents. Workplace violence is a recognized hazard in some industries and OSHA believes this hazard can be avoided or minimized. Retail employers should assess their workplaces for these hazards. Criminal intent Customer/Client Co-worker Personal Employers with late-night hours or locations in high-crime areas should pay special attention. Violations of General Duty Clause are possible especially where previous incidents have occurred and steps could have been taken to reduce risk Seyfarth Shaw LLP
20 Whistleblower Laws Potential Employer Liability If: Employee engages in Protected Activity (e.g., makes complaint about safety or health violation to Employer; files complaint with OSHA; participates in OSHA inspection), and Employee Suffers Adverse Action (e.g., termination, discipline, loss of benefits), and Adverse Action is because of Protected Activity (i.e. retaliation). Employee may File 11(c) Complaint with OSHA seeking damages OSHA will investigate complaint If OSHA finds reasonable cause that there was retaliation, case may be filed in Federal Court All States have Whistleblower Laws that may apply Seyfarth Shaw LLP
21 Whistleblower Laws OSHA has greatly stepped up whistleblower enforcement. Any employee who raises a safety complaint is a potential whistleblower. Take it seriously. Investigate. Document close-out Seyfarth Shaw LLP
22 Criminal Law Liability OSHA Potential liability if: Fatality Violation of specific regulation Violation was willful, and Violation caused fatality Penalty 6 months imprisonment, and/or $500,000 fine per fatality for corporation $250,000 fine per fatality for individual NOTE: No Miranda Warnings Necessary Seyfarth Shaw LLP
23 OSHA Crowd Management Safety Guidelines Possible citations based on General Duty Clause. Advised employers to: Have trained security or crowd management personnel or police officers on site Create a detailed staffing plan that designates a location for each worker and provide training to employees Prepare an emergency plan that addresses potential dangers Contact local fire and police agencies to determine if the event site meets all public safety requirements. "Crowd control is critical to preventing injuries and deaths," said OSHA Assistant Secretary Dr. David Michaels Seyfarth Shaw LLP
24 Core Hazards Safety Issues for Retail Industry Ergonomic hazards Electrical (one of OSHA s top 10 cited standards) Forklifts Hazard communication Overhead racking Fall protection Seyfarth Shaw LLP
25 Core Hazards Safety Issues for Retail Industry HAZARD COMMUNICATION Major source of OSHA citations. OSHA 101 Do you have MSDS for all workplace chemicals? Have employees been trained? Are employees using PPE where necessary? Gloves Chemical Splash Goggles Seyfarth Shaw LLP
26 Core Hazards Safety Issues for Retail Industry ERGONOMIC HAZARDS Muscle strains, sprains and pulls are likely a significant percentage of your OSHA recordable injuries. Federal OSHA is enforcing ergonomic hazards under Section 5(a)(1). California OSHA has ergonomic standard. Two or more diagnosed repetitive motion injuries in the same job classification in 12 month period. San Diego CAL-OSHA citations Seyfarth Shaw LLP
27 Ergonomics OSHA is once again begin enforcing ergonomics violations through the General Duty clause, Section 5(a)(1) General Criteria: Conduct review of OSHA Logs, worker s compensation, first aid to identify nature of prior ergonomic-related injuries/illnesses Perform individual job assessments for ergonomic stressors Develop engineering or administrative controls to address stressors Conduct employee training on signs and symptoms of cumulative trauma disorders (CTD s) and establish employee reporting procedure Develop medical surveillance program to monitor CTD s and provide treatment Enforce use of engineering or administrative controls through discipline Maintain appropriate OSHA recordkeeping, e.g., OSHA 300 Log and supporting documentation Seyfarth Shaw LLP
28 Core Safety Issues for Retail Industry ELECTRICAL HAZARDS OSHA s ongoing emphasis on electrical hazards. NFPA 70E and live electrical work. Who is doing your electrical maintenance work? Properly trained? Adequate PPE? Seyfarth Shaw LLP
29 Core Safety Issues for Retail Industry OVERHEAD RACKING Ensure that all materials stacked in overhead rack is safe and secure. Conduct daily walks around visual inspections to check for hazardous conditions. Pallets should be inspected and discarded if broken. Stacked materials should not exceed racking weight capacity. Any racking repairs must ensure that load limits are not compromised Seyfarth Shaw LLP
30 Where do we go from here? More important than ever to establish strong unavoidable employee misconduct defense. All four elements required (1) Program for the specific hazard, e.g. fall, electrical. (2) Employee training (documentation) (3) Prior enforcement (disciplinary records) (4) No reasonable opportunity for supervisor to identify and correct hazard Seyfarth Shaw LLP
31 Unavoidable Employee Misconduct How do we establish this defense? A good hazard assessment Training there may be a cultural, literacy or language barrier. Need to use translators, interpreters. Need enforcement this is where most employers fail. Maintain records of enforcement/discipline Seyfarth Shaw LLP
32 How to Reduce the Risk of OSHA Citations Make Sure Written OSHA Programs are current and up to date Ex. Hazard Communication Program, Lock Out Tag Out Program, Confined Space Entry Program, Blood Borne Pathogen Program, Emergency Action Plan, Powered Industrial Truck Program, Respiratory Protection Program, Process Safety Management Program Seyfarth Shaw LLP
33 How to Reduce the Risk of OSHA Citations Make Sure the Company is Following each of its Written Programs Ex. Current Chemical Inventory and Current MSDS's, Machine Specific Energy Control Procedures for each piece of equipment; Confined Spaces have been evaluated and labeled; Employees using respirators have been fit tested Seyfarth Shaw LLP
34 How to Reduce the Risk of OSHA Citations Make Sure Periodic Requirements Under Specific OSHA Standards Are Being Met Ex. LOTO: annual periodic inspection of energy control procedures is complete and documented; annual rescue training for confined space rescue employees; conduct 3 year fork truck driver recertification; annual fire extinguisher training, etc. Do you have software in place that tracks training deadlines? Seyfarth Shaw LLP
35 How to Reduce the Risk of OSHA Citations Make Sure Training is Documented for all Covered Employees: OSHA standards typically mandate employee training Ex. Emergency Evacuation Plan and Drills, LOTO for affected employees; Hazard Communication Seyfarth Shaw LLP
36 How to Reduce the Risk of OSHA Citations Conduct Internal Compliance Reviews: (Ex. Safety Inspections/Walk through) Use Auditors from other departments for a fresh set of eyes Understand that internal reviews are discoverable by OSHA and others Be prepared to promptly fix and/or address what you find Documenting Corrective Action/Close Out is as Important as Finding action items Seyfarth Shaw LLP
37 How to Reduce the Risk of OSHA Citations Know and use your own OSHA history Location specific citations Company wide citations Large employers beware. OSHA perceives a corporate disconnect. Audit conditions covered by applicable national and local emphasis programs Make sure Audit Reports are properly handled: Confidentiality Seyfarth Shaw LLP
38 How to Reduce the Risk of OSHA Citations External Audits Ex. Audit conducted by outside safety consultant Privilege issues with Outside Audits Outside audits are not privileged unless directed by a counsel Company and Outside Counsel can retain consultants to create arguments the audit may not be discovered by OSHA etc Seyfarth Shaw LLP
39 How to Reduce the Risk of OSHA Citations Focus on hazards that are at core of your business. Focus on hazards that are driving your OSHA recordables. Consider training facility management on proper handling of OSHA inspection Seyfarth Shaw LLP
40 Seyfarth Shaw LLP THANK YOU!
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