Federal OSHA Penalties 101: A look at high-dollar cases

In October 2009, the Labor Department’s Occupational Safety and Health Administration (OSHA) made national headlines when it proposed a record-setting $87 million penalty against BP Products North America Inc. for the company’ failure to correct serious safety hazards at its Texas City, Texas refinery. Ten months later, OSHA announced that it reached a settlement with BP regarding some of those violations and penalties, with the firm agreeing to pay $50.6 million.

It’s not unusual for the penalty amounts proposed by OSHA to be reduced significantly to a figure eventually paid by the employer. OSHA informally settles many cases with employers by reducing the penalty amount in exchange for the firms’ agreement to promptly correct the hazardous conditions.

Some employers prefer to formally contest OSHA’s findings and have their cases heard by administrative law judges with the independent Occupational Safety and Health Review Commission (OSHRC) rather than negotiate with OSHA. Through this proceeding a proposed penalty amount may also be modified. (Under the OSH Act, the independent Occupational Safety and Health Review Commission (OSHRC) actually assesses the monetary penalties; OSHA proposes an amount based on parameters set forth in the statute, but the ultimate penalty amount is considered a final order of the OSHRC, not OSHA. Those parameters include a $7,000 maximum for a serious violation, and a $70,000 for a willful or repeated violation.)

Federal OSHA offers on its website, a list of 25 cases with the highest proposed penalty amounts. At the top of the OSHA list is the 2009 case mentioned above involving BP Products North America. It also includes cases from Louisiana, Georgia, Connecticut, Maine, and eight other States. Like the BP case, many of these employers ultimately paid millions of dollars less than the amount initially proposed by OSHA. I’ve replicated the listing from OSHA’s website and created a new document, with a column showing the penalty amount ultimately paid by the employer. The exceptions are three cases that remain in litigation. Of the $230,050,440 million proposed in these 25 high-dollar cases, the penalty amount paid to-date is just under $114 million.

Looking at these record-setting OSHA penalty cases made me curious about the outcome of more typical federal OSHA cases in which monetary penalties are assessed. I requested data from OSHA for all federal inspection cases in which a monetary penalty was proposed in 2006. I asked for the penalty amount proposed, the adjusted penalty (after settlement or OSHRC decision,) amount remitted, and dates for debt collection activities. I decided to use the year 2006 for two primary reasons. First, to allow enough time to pass so that cases contested by the employer would have made their way through the OSHRC litigation process with a decision made on a final penalty amount; and second, to account for employers who arranged with OSHA multi-year payment plans to pay off their penalty. (In a recent fatality case in my hometown, Jetka Steel will be making installment payments on its OSHA penalty through June 2014.)

The raw data of the federal OSHA penalty data for 2006 (as of January 2012) is posted here. [Be forewarned, its a spreadsheet with more than 70,000 entries.] In brief it reveals the following:

There were 25,328 inspections by federal OSHA in which a monetary penalty was proposed in 2006. Those proposed penalties totaled $119,840,965.18.

Through informal and formal settlements and administrative law decisions, the penalty amount owed was reduced to $75,668,973.19, or about 63% of the amount initially proposed.

To-date, $63,514,340.66 (or 84% of the amount owed) has been paid to the U.S. Treasury.

The total penalty amounts paid in 2006 ranged from as little as $1 (in a worker-fatality case) to $2.41 million. The $1 penalty was assessed to Duron and Duron Concrete Construction of Corpus Christi, TX following the fatal injury incident on April 26, 2006 of one of the firm’s owners. The $2.41 million penalty was paid by BP North American Products for violations at its facility in Oregon, Ohio.

More on the $119.8 million in penalties proposed by OSHA in 2006 in a future post. Look later this week for part two of “Federal OSHA Penalties 101: Stuck in a time warp.

Comments

  1. #1 William Oliver
    1215 Randolph, South Bend, IN 46613
    November 3, 2012

    I work at a nearby fiberglass filament manufacturing company and there is a specific resin that is made from a mixture of bulk epoxy, AC Methylanhydride and a catalist called lindax… this particular resin is named HTM (High Temperature Moderation) and everyone who is around it weather in direct contact or in the same area experiences eye irritation, skin irritation, or lung irritation—employees such as myself, that have had prolonged direct contact with this chemical have had them all including a prolonged caugh and darkenning of skin around the eyes even when wearing safty glasses…i have never smoked a cigarette in my life or a joint but i have caugh that wont go away…employees have complained about this chemical and the curing ovens are not sealed properly and smoke pours from them as the resin bakes and nothing is done…we complain and nothing is done. I need my job, as underpaid as I am, to support my family. I have proof of workplace safety hazards and can get more even videos of ovens spewing smoke as they cure parts and other employees that can attest to injuries attributed to exposure to these chemicals. I am hoping someone such as a lawyer, a chemical expert or an OSHA employee can contact me and tell me if I have merrit to file a complaint and be guaranteed no employer reprocussion…contact me via e-mail if you can help. Thank you.

    Sincerely, William.