OSHA Penalty Pitfalls

Kaspar Wire Works, Inc. was cited by OSHA for more than 400 alleged willful and serious violations, mostly OSHA 200 recordkeeping violations of various standards with some $41 million in proposed penalties. OSHA used its disputed authority to make each recordkeeping failure to record injuries on the OSHA 200 log as a separate citation item. It based the per-instance separate penalties assessment on a claim that Kaspar's violations were "egregious and willful."

The OSHA court (Review Commission) trial judge found that 382 violations were willful, but reduced the fines to $257,000. Then the OSHA court and the Federal U.S. Appeals Court in the Washington, D.C. Circuit held that 1) there was substantial evidence to support the commission's finding of willfulness; 2) Secretary of Labor has authority to assess per-instance penalties for "Egregious and willful" violations; and 3) imposition of per-instance penalties was not unlawful on procedural grounds.

Total penalties were assessed at $224,050. Some proposed willful recordkeeping citation classifications had their willful label removed because the company had never been cited for similar failures in the past (on restricted workday recording items). The hundreds of recordkeeping citations were upheld as willful because OSHA staff had previously trained the same recordkeeping personnel in how to complete the OSHA 200 log for injuries, yet the company only recorded the cited injuries on its internal first-aid log.

Kaspar Wire argued that its recordkeeping practice was not willful because over the years OSHA inspectors had repeatedly reviewed its practices without ever citing Kaspar Wire for a recordkeeping violation until this 1990 inspection. Unlike other Circuit Courts, the D.C. Circuit panel of three judges brushed aside this argument, saying that "the commission is not bound by the representations or interpretations of OSHA compliance officers."

However, this minority view may have been influenced by the unique facts in this case: Only one prior inspector testified that the employer was complying with OSHA's recordkeeping standards, as against two OSHA inspectors who testified that the employer had clearly and intentionally violated those requirements. There also was evidence that the DOL's bureau of Labor Statistics had independently confirmed that all of the injuries in question should have been recorded on the OSHA 200 log.

A willful pressguarding citation was upheld where the OSHA inspector photographed the unguarded press and an OSHA supervisor determined that based on the photograph, the picture of one employee using the machine "indicated that multiple employees were probably using the machine."

The test used for willfulness by the D.C. Circuit was: "an act done voluntarily with either 1) an intentional disregard of, or 2) plain indifference to the Act's requirements."

The court stated that an employer's action can be willful even if the employer does not have an evil motive or bad purpose in its noncompliance. The Court also said no willful can be found when the OSHA standard's requirements are confusing or ambiguous (but found those conditions didn't occur in the recordkeeping regulations). (Kaspar Wire Works, Inc. v. Secretary of Labor, 268 F.3d 1123 (D.C. Cir. 2001)

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