Criminal and Civil Liability For Environmental Health and Safety Professionals

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1 Criminal and Civil Liability For Environmental Health and Safety Professionals McGregor W. Scott Partner, Orrick Herrington & Sutcliffe LLP Bay Area Safety Symposium, March 4, 2015

2 Sources of Liability Federal safety regulations OSHA» Civil and criminal penalties State safety regulations Cal/OSHA» Civil and criminal penalties 2

3 Federal Safety and Health Regulation: OSHA The Occupational Safety and Health Act ( OSHA ) Defines employer as a person engaged in a business affecting commerce who has employees. (29 U.S.C. 652(5)) Employer responsibilities include (29 U.S.C. 654, 657):» Maintain a workplace which is free of recognized hazards likely to cause death or serious physical harm ( General Duty Clause );» Comply with occupational safety and health standards that are promulgated by the Secretary of Labor;» Maintain accurate records of all work-related accidents and diseases;» Inform employees of their protections and duties under the Act; and» Permit the inspection of its premises. 3

4 OSHA Continued Grants employees many important legal rights and requires employees to comply with safety and health standards. Subjects employers to civil penalties and criminal prosecution for violation of the Act. Enforced by the Occupational Safety and Health Administration of the Labor Department. 4

5 Civil Penalties Under OSHA Penalties can range from $5,000 to $70,000 per violation, depending on the following considerations (29 U.S.C. 666):» Good faith of the employer (safety policies/procedures, training);» Gravity of the violation;» Employer s past history of compliance; and» Size of the employer. Once a citation is issued, employers have 15 days to contest ( 659(a)):» If uncontested, citation becomes final and is not subject to review.» If contested, hearing is scheduled before an administrative law judge; right of appeal. 5

6 Criminal Sanctions Under OSHA Willful violation causing death to employee may be punished by a fine up to $10,000 and/or six months imprisonment. 29 U.S.C. 666(e).» Must be based on non-compliance with an occupational safety and health standard, rule, or order (i.e., may not be based on the general duty). Criminal cases under the Act are brought by the United States Department of Justice. 6

7 Criminal Sanctions Under OSHA Continued Other conduct subject to criminal sanctions (29 U.S.C. 666 (f)-(g)):» Unauthorized advance notice of an inspection punishable by a fine up to $1,000 and/or by imprisonment up to six months;» False statements, representations or certification punishable by a fine up to $10,000 and/or imprisonment up to six months. Corporations and corporate officers and directors may be criminally liable. 7

8 State Regulation States can regulate occupational safety and health issues for which no federal standard is in effect. In addition, states can implement their own OSHA rules and regulations, subject to the approval of the Secretary of Labor. California has its own occupational safety and health program, approved by the Secretary of Labor. See Cal. Labor Code 6300 et seq. 8

9 Cal/OSHA Employer responsibilities include, among other things ( 6401, ) :» Establish, implement and maintain an effective injury prevention program;» Furnish and use safety devices and safeguards adequate to render employment safe and healthful;» Adopt and use safe and healthful employment practices, methods, operations and processes; and» Do every other thing reasonably necessary to protect the life, safety and health of employees. 9

10 Civil Penalties Under Cal/OSHA Enforcement of Cal/OSHA rests with the Division of Occupational Safety and Health ( DOSH ). Enforcement process is similar to that under Fed/OSHA and includes a 15-day contest period » If contested, hearing is scheduled before an administrative law judge; right of appeal Civil penalties range between $7,000 for minor violations and $70,000 for willful violations, depending on the following factors ( 6319, ):» The size of the business;» The gravity of the violation;» The good faith of the employer; and» The history of previous violations. 10

11 Criminal Sanctions Under Cal/OSHA Cal. Labor Code 6423 Misdemeanor Violations that constitute misdemeanors:» Knowingly or negligently committing a serious violation (i.e., there is a substantial probability that death or serious physical harm could result);» Repeatedly violating a standard if the violation creates a real and apparent hazard;» Knowingly failing to report a death;» Failing or refusing to comply with standard after notification and expiration of abatement period if failure or refusal creates a real and apparent hazard;» Inducing another to commit any of the above acts. Punishable by a fine up to $15,000 and/or imprisonment up to one year.» Corporations and LLCs are subject to a fine up to $150,000. Statute of limitations is one year. 11

12 Criminal Sanctions Under Cal/OSHA Cal. Labor Code Felony Willful violation of standard causing death or serious injury to employee Applies to any employer or employee with direction, management, control, or custody of the workplace or employees. Punishable by a fine up to $100,000 and/or imprisonment up to one year in county jail; or a fine up to $250,000 and/or imprisonment in state prison up to three years.» If the employer is a corporation or a limited liability company, the fine may not exceed $1.5 million. Id. Statute of limitations is 3 years. 12

13 Criminal Sanctions Under Cal/OSHA Additional criminal sanctions under the Labor Code for:» False statements ( 6426);» Advance notice of inspection ( 6321); and» Failure to check for asbestos materials ( ). Cal. Pen. Code 387 imposes a fine up to $1M upon any corporation or LLC that has actual knowledge of a serious concealed danger and knowingly fails to both report it in writing within 15 days to OSHA and warn its employees in writing. Cal. Penal Code 192 employer may also be prosecuted for involuntary manslaughter if violation of OSHA standard results in death. 13

14 California s Unfair Competition Law Cal. Bus. & Prof. Code et seq. District Attorney may also bring a civil action for any unlawful, unfair or fraudulent business act or practice Civil penalty up to $2,500 per violation per employee ( 17206) Statute of limitations is four years after the cause of action accrued ( 17208) 14

15 Criminal Liability Summary Prosecutor Federal OSHA U.S. Department of Justice Cal/OSHA District Attorney Maximum Fine $10,000 $250,000 / $1.5 million Maximum Imprisonment 6 months 3 years 15

16 The Investigation and D.A. World Investigations take a very long time» Very common to get right up to statute of limitations California District Attorneys in larger counties have dedicated prosecutors who handle these cases D.A. s Association has circuit prosecutors who assist the rural counties 16

17 Construction Industry Inherently Dangerous How to buy insurance for when that bad accident happens to you: 1. Rigorous, meaningful safety policies and procedures 2. Training, training, training 3. Resolve collateral issues around accident» Workers comp» Serious and willful claims» Lawsuits by family members 4. D.A. will not understand your business and how it functions» You have to help your lawyer understand your business 17