Can employers rely upon compliance-method affirmative advice received from OSHA inspectors and OSHA consultation staff officials? Yes, as a number of recent cases and agency developments have shown.
For instance, Miami Industries, Inc. was cited for failing to guard certain tube-rolling machines.As an abatement measure, Miami devised a guard and discussed the adequacy of the guard with OSHA. At an informal conference, OSHA representatives indicated the guard was adequate (that would be satisfactory) and that Miami could resume operation of the rolling machines. OSHA conducted seven inspections and never cited the rolling machines.
Then, nearly 10 years later, OSHA again cited the rolling machines, contending that the guard was inadequate. Miami raised two defenses to the citation. First, Miami argued that even if the guard was not adequate, OSHA's sudden issuance of new citations years later was a denial of fair notice of what was required to be in compliance because OSHA had previously agreed that no further abatement was necessary and had not cited the rolling machines in seven subsequent inspections.
On the issue of fair notice, the OSHA Review Commission held that Miami was entitled to rely on OSHA's previous agreement that no further abatement was necessary. The commission also held that Miami was entitled to rely on the absence of further citations over a period of years because that "corroborated and was fully consistent with Miami's prior understanding" that no further abatement was required. The commission also found it significant that "since there had never been any injuries attributable to the guarding, no other circumstances were present that would put Miami on notice of a defect in its guards."
Based on these facts, the commission held that the citation to Miami must be dismissed for lack of fair notice. The commission also held that OSHA's previous approval of the guard constituted a de facto variance, so that OSHA was estopped from simply reciting Miami Industries after the citation at issue was dismissed.
On appeal, the Sixth Circuit U.S. Court of Appeals in Cincinnati affirmed the commission's holding that Miami had been denied fair notice. However, the Sixth Circuit disagreed with the commission's view that OSHA had granted a de facto variance and was estopped to recite the rolling machines. The Sixth Circuit in 1992 therefore held that the citation at issue must be dismissed, but that OSHA could enforce compliance in the future after fair notice to Miami.
The Miami Industries case was followed by and expanded on by the Trinity Marine Nashville case we worked on in 2001. There, the Fifth Circuit U.S. Appeals Court in Texas ruled that the fair-notice and estoppel defense applies when an OSHA inspector at a prior inspection approves an employer's procedures. In 1989, OSHA previously cited the Trinity Marine shipyard's portable plug-in boxes because the boxes were made of wood and allegedly were not weatherproof. But after discussions with the company and evaluating whether there were any safer alternatives, OSHA withdrew that citation. Since the citation was withdrawn, there was no abatement requirement under OSHA and Trinity was free to continue using those boxes. Then, without any notice that it had changed its mind, OSHA recited Trinity. But the Fifth Circuit Federal Appeals Court gave binding effect to what compliance advice OSHA offered to Trinity and dismissed the later citations.
How can employers lay a foundation for this "lack of fair notice" defense?
1) By pinning down OSHA's specific compliance method or abatement and then, relying on those discussions, by implementing that method and documenting the OSHA statements.
2) By inserting "constitutes compliance" clauses in any citation settlement agreements where the guard or compliance method is customized, contrary to established industry practice or just plain complicated to implement. If you want a copy of our "constitutes compliance" clause, please contact Ehlke Law Offices.
Is this defense of fair notice important? The proof is in the reactions of federal OSHA and some state OSHA agencies. OSHA has begun inserting anti-Trinity Marine case clauses in citation settlement agreements to negate employers from using the settlement discussions or approval to argue these defenses in the future. In 2002 Washington State's WISHA agency adopted this new policy, "Good Faith Reliance on
L&I advice by Employers:
"How should such issues be handled when citations are issued?
"If the inspector and supervisor (after any necessary consultation with WISHA P&TS) conclude that the employer was in fact relying upon incorrect guidance from an L&I representative, the conditions in question should not be cited. However, the citation and notice must include a message indicating that the conditions were not cited because the employer was relying upon previous L&I guidance and directing the employer to comply with the standard in the future.
"For example, such a message might read: ‘The employer was not cited for the unguarded point of operation on Machine A because the inspection determined that the employer was relying upon guidance given by a previous WISHA inspector. WAC 296-24- 15001(3)(b) requires that the point of operation of Machine A be guarded. The employer is hereby directed to comply with this requirement in the future, and any failure to do so will result in citation and possibly monetary penalties in the event of a future inspection.'"