OSHA in 2019: A Review of What has Occurred and a Look Ahead

Operator:  Welcome to The Federalist Society's Practice Group Podcast. The following podcast, hosted by The Federalist Society's Labor & Employment Law Practice Group, was recorded on Wednesday, May 29, 2019, during a live teleforum conference call held exclusively for Federalist Society members.          

 

Wesley Hodges:  Welcome to The Federalist Society's teleforum conference call. This afternoon's topic is "OSHA in 2019: A Review of What has Occurred and a Look Ahead." My name is Wesley Hodges, and I am the Associate Director of Practice Groups at The Federalist Society.

 

      As always, please note that all expressions of opinion are those of the expert on today's call.

 

      Today we are fortunate to have with us Brad Hammock, who is Shareholder and Co-chair of the Workplace Safety & Health Practice Group at Littler Mendelson as well as a member of the Littler Mendelson's Workplace Policy Institute. After our speaker gives his remarks, we will move to an audience Q&A, so please keep in mind what questions you have for this topic or for our speaker today. Thank you very much for sharing with us. Brad, the floor is yours.

 

Bradford Hammock:  Thank you, Wesley. It's a pleasure to be here. I'm happy to talk about where things are currently with the Occupational Safety and Health Administration, and where things might be going over the next 18 months of the administration of President Trump, and potentially into a second term with the agency. I wanted to cover several things in this call, and then, obviously, look forward to receiving any questions that listeners may have.

 

      I'd like to talk about, in general, where things are with the leadership of OSHA. Just recently, there have been a number of developments related to who may be running and not running OSHA over the next 18 months and talk a little bit about that and what that means for the agency. I'd also really like to talk a little bit about where OSHA is from an enforcement perspective, both over the last couple of years and then this year in 2019, what are we seeing in terms of enforcement with the agency, what are some of the trends, and where things may be going over the next several months.

 

      I'd also like to speak a little bit about the key regulatory initiatives that the agency has undertaken over the last couple of years and what the timeline and meaning of those initiatives may be for the listeners. And then, finally, I'd like to talk about a couple of important OSHA judicial decisions that have recently come down that impact employers and really the future of the agency with respect to how it conducts inspections and also what types of employers the agency can cite during particular inspections. So a lot to cover, and I wanted to kind of go through those areas, and then as I said, at the end, welcome any questions about OSHA in general or safety and health policy.

 

      So let's get started. The first thing I wanted to talk about was the leadership of the agency. I think probably many people know that a few years ago, a couple years ago, Scott Mugno, who was formerly the Director of Safety with FedEx Ground, was nominated to lead the agency. That nomination was before the Senate for a long time. The Senate ultimately never confirmed Scott Mugno, and ultimately, just recently, got withdrew from consideration of the position. That now -- no one has been nominated since that occurred, and that's really occurred just in the last few days. And so right now, there's obviously no possibility that Scott Mugno will be leading the agency, certainly not over the next year and a half or so. Again, it remains to be seen what would happen in a second term for a Trump administration.

 

      But right now, Scott has withdrawn his nomination from consideration, which means the leadership of the agency, the political leadership of the agency remains with Loren Sweatt, who has been in that acting role for a couple of years now. Loren Sweatt was formerly a staff member with the House Education and Labor Committee and came over to OSHA shortly after the beginning of the Trump administration. She has taken that job for the last couple of years, and there's no indication that she is looking to leave that job, so the expectation is that from a leadership perspective, Loren will remain there at least through 2019, if not beyond.

 

      And it'll be interesting to see what happens with OSHA policy now that Scott has withdrawn his nomination and Loren is, I want to say, maybe even more established than she had been in that acting role. So that's the first thing that we -- where we are in 2019, sort of a change from 2018, I guess. Right now, we do not have any permanent Assistant Secretary nominee to lead the Occupational Safety and Health Administration. So we'll see how that unfolds, obviously, but it's significant over the next 6 to 18 months.

 

      But moving on from leadership, I want to talk a little bit about what OSHA is and where they may be going from an enforcement perspective in the Trump administration. And I'd like to talk a little bit to start about some key statistics because in this administration, it's really been continuing a trend that we've actually seen, really, for the past five or eight years, really stemming from the end of the Obama administration in terms of total number of OSHA inspections.

 

      What we are seeing is a trend over the last, say, eight, nine years of a decline in overall inspection activity by OSHA, this is at least federal OSHA, across the country. In 2010, there were approximately 40,000 total federal OSHA inspections. Fast-forward that to 2018, and there were just 32,000 federal OSHA inspections. And the decline has been relatively steady. And I want to emphasize the decrease in inspections is not something that started in the Trump administration; it actually started under the Obama administration and has been a trend that has continued fairly steadily.

 

      Many people within OSHA that you speak to will tell you that while the overall number is declining, that doesn't necessarily mean the number of violations are declining and/or that the inspection activity is less rigorous or less aggressive. It's simply that there may be a focusing of resources on more complicated inspections, inspections that take longer, require more resources. There are a number of reasons for that, but I think it is instructive to note that overall, the number of inspections have been declining fairly regularly over the last 8 to 10 years.

 

      The other interesting thing that we've been seeing with enforcement is obviously, the average penalties are going up. And I think everyone who's listening to this knows, who's familiar with OSHA knows that the reason for that is Congress passed the increase in OSHA penalties a few years back that did a one-time increase overall of OSHA penalties for serious violations as well as willful and repeat violations, a one-time increase, and then now, a yearly adjustment upwards of those penalties. And we're really starting to see the impact of that now on the average penalties that we're seeing for enforcement.

     

      For example, going back to 2010, starting with that year again, the average penalty for serious violation for federal OSHA was $1000. Now, the average penalty is $5000 in 2018, and so you can see that steady increase. Of course, the 2015 number shows as well that there are still a lot of serious violations that are being issued that are at a relatively small penalty number associated with them, considering that the maximum serious penalty is about $13,000 now. But again, we're starting to see the impact of that congressional action to increase the penalties from a few years back. So a couple of interesting trends decreasing overall number of inspections that we're seeing in the enforcement context but an increase in the average penalties that we're seeing for those violations that are ultimately issued.

 

      I want to talk a little bit about another major enforcement trend that we've been seeing over the last few years at OSHA, and that relates to severe injury reporting rule that OSHA put in place a few years back, pre-dating the Trump administration, really starting with the Obama administration, where OSHA passed a rule that required employers to pick up the phone and call OSHA for the report of an amputation as well as the inpatient hospitalization of one or more employees.

 

      The interesting thing, if you look at this from an enforcement perspective overall with OSHA is it really changed the way that OSHA enforces its standards. It fundamentally shifted the agency, in my view, from one focused on programmatic inspections to one focused on responding to reports of amputations and inpatient hospitalizations. And if you look at the data that OSHA has when OSHA first promulgated this rule, it was conducting on-site inspections for essentially 60 percent of those amputation reports that were made as well as 30 percent of the inpatient hospitalizations. And it really drove the inspection resources of the agency in a way that I believe OSHA did not even predict. And it's taken a few years for OSHA to sort of readjust now, and I think it's instructive to think about once OSHA came out with this rule back in 2014, 2015, they were devoting significant resources to responding to these reports.

 

      We've started to see that shift from an enforcement perspective now a little bit away from responding to that. For example, OSHA in 2018 only responded to 50 percent of reports of amputations, down from 60 percent. But you're seeing the way that that rule impacted OSHA enforcement, and it'll be interesting to see in 2019 and 2020 and in the years ahead how that rule continues to impact and take resources from the agency in terms of what the agency's going to focus on for injury and for how it conducts inspection. So I think it's interesting to note those trends as well, how OSHA's actually coming on site and conducting inspections, and how it's been driven by the injury notice reporting rule that OSHA came out with in the Obama administration in the 2014 and 2015 timeframe.

 

      That does set up, though, the final piece of an enforcement trend that I want to highlight in the OSHA world, and that relates to what OSHA has recently done to re-up its Site-Specific Targeting Program. For those of you listening and following the OSHA world over the last decade or so, this -- what used to be the Site-Specific Targeting used to be OSHA's main programmatic inspection targeting program that the agency used to identify work sites to kind of go out there and what many people call sort of randomly inspect work sites.

 

      This is a program that used to be fairly routine before the Obama administration whereby OSHA would acquire data from employers, find out what their injury and illness rates were, and if their injury and illness rates were above the industry average, those employers would be put on a list. And the area offices would go through that list and conduct fairly comprehensive inspections of those work sites. This was called the Site-Specific Targeting Program. It sort of languished for awhile for a number of reasons, including the fact that OSHA was focused on the severe injury reporting rule and conducting inspections in that way.

 

      Well, just recently, the end of last year, this administration sort of refreshed and restarted the Site-Specific Targeting Program based upon injury and illness data compiled through OSHA's electronic recordkeeping rule, which we'll talk about a little bit later. But they essentially brought in the requirement that employers submit to OSHA summary data of their injury and illness rates. And based upon that data, OSHA's review of it, OSHA has again generated lists of employers to conduct these comprehensive programmed inspections.

 

      It's called OSHA's Site-Specific Targeting Program, and it's something that, again, has sort of languished for a while and now is back on. And the list itself that OSHA's put out includes probably around 3000 different establishments, those principally that have injury and illness rates above their industry averages. And so for employers that are one that list, they should expect to see an OSHA inspection at some point over the next several months.

 

      The reason I juxtapose this programmatic inspection activity with the severe injury reporting is it's -- they're sort of the opposite. And it is interesting to see whether OSHA and this administration continues a focus of going back to programmatic inspections as opposed to being reactive, really, and just responding to reports by employers of amputations or inpatient hospitalizations. Site-Specific Targeting is a major program, and it will certainly drive a lot of the resources of the agency from an enforcement standpoint. So again, it's kind of an interesting shift. We'll see how it plays out over the next several months, but it's something to keep in mind and kind of a change in this administration from where enforcement resources are going and being targeted.

 

      So that's kind of the upshot of the major trends that I'm seeing in the enforcement standpoint, in the enforcement world, declining overall inspections, increase in penalties, and then we're seeing a shift a little bit from reactive inspections to more proactive, what I would call programmatic inspections based on injury and illness rates. It was sort of an interesting shift that we'll have to continue to monitor.

 

      I did want to talk also a little bit about some regulatory initiatives that are going on at OSHA. Some of them are deregulatory, and some of them are sort of indicative of future regulatory activity that it's important to highlight. I would say, in general, the regulatory agenda for the Trump administration has been different, obviously, from the regulatory agenda of the Obama administration. But there has been some continuity, and it's important to highlight where a certain thing, certain regulatory initiatives may be going, may be headed, and whatnot.

 

      I'd like to first start just to highlight a couple of the major deregulatory initiatives that OSHA undertook when it -- over the last couple of years. One related to the beryllium rule that was finalized under the Obama administration, and another is the electronic recordkeeping rule, which was also finalized during the Obama administration. First, with beryllium, that was a rule that was -- really came out at the very end of the Obama administration, and a number of stakeholders in the employer community raised concerns regarding that final rule, how it was proposed, how it was finalized. And the agency took several steps to try to address those concerns that had been raised.

 

      One to highlight is in the shipyard and construction industries where OSHA went back into rulemaking to reduce some of the requirements that had been initially proposed and finalized by the Obama administration. At the very end of the administration, without proposing changes to the construction industry specifically, OSHA had finalized a reduced permissible exposure limit for beryllium as well as several ancillary provisions and applied them to the construction and shipyard industries. Shortly thereafter, it was finalized, and the Trump administration came in.

 

      The Trump administration reproposed that rule to eliminate the ancillary provisions for that. That rulemaking is still ongoing, but it's an example of a deregulatory action, potentially, that was undertaken by the agency. And I say potentially because, as I said, they proposed to eliminate the ancillary provisions, but that rule is still at the agency and has not been finalized yet. So we don't know whether ultimately that will be a deregulatory action.

 

      Also, with respect to electronic recordkeeping, OSHA recently finalized a rule that pulled back some of the requirements that OSHA had put forward in the end of the Obama administration with respect to the electronic recordkeeping rule. And to back up, those related to requirements that OSHA had put in under the Obama administration to require employers to electronically submit to the agency information from their OSHA 300 logs, 301 forms, and 300A summary forms. These are a variety of different documents that employers must keep that record work related injuries and illnesses under OSHA's recordkeeping rules.

 

      Those three forms had been -- information from those three forms had been required by OSHA under the Obama administration to be submitted to the agency electronically, and then OSHA said that it would post this information online. When the Trump administration came in, one of the regulatory initiatives that they undertook was to reevaluate the need for the agency to collect information from two of those three forms, the 300 log and the 301 form. And ultimately, the agency recently decided to remove the requirement that employers submit the information from the 300 and 301 forms to the agency electronically. So again, another deregulatory action that the agency undertook in that situation.

 

      From a regulatory perspective, though, I do want to emphasize a few things of interest to note. OSHA has recently come out with two requests for information that touch on significant aspects of the work environment from a safety and health perspective. One relates to the use of powered industrial trucks, and one relates to lockout/tagout and some of the technological advances in lockout/tagout that have come up over the last several years with respect to machine design and interlocks and the like.

 

      These have the potential to be significant rulemakings that OSHA is looking at if they proceed to go into rulemaking on them. Again, this is just requests for information. But these are two areas, powered industrial trucks and lockout/tagout, that are really ubiquitous across all of industry. And to the extent OSHA proceeds to gather information and potentially go into rulemaking in these areas, they could have a significant impact on employers, so certainly something to watch.

 

      The other thing that is worth noting is that OSHA just announced in their regulatory agenda that they would be coming out with a request for information to update Table 1 of their crystalline silica rule. That RFI was slated to be released in May. According to the recent regulatory agenda, I'm not certain that will happen since it's almost the end of May now. However, it does suggest that OSHA is close to publishing an RFI on that topic, which is of great interest to a number of employers who have exposure to silica and are trying to come into compliance with OSHA's silica rule. Three very important RFIs dealing with subject matters that have a wide reach, wide ranging, and so things to keep an eye on and see how those develop over the next 6 to 18 months.

 

      Obviously, because they're in the RFI stage, it would be unlikely that these rules would come to fruition in any manner at the end of a first term of a Trump administration. Obviously then, the election would have consequences as to how these particular rulemakings would potentially unfold. However, again, obviously, they deal with very important issues and something to keep your eye on. So both some deregulatory initiatives and then the start of getting some comments to put some things in place -- how those things shake out, we'll just have to see.

 

      And then finally, before taking a few questions, I did want to talk about a couple of different judicial decisions that have recently come out that I think are really important in the broader OSHA context, and these are obviously things dealing with the agency but not from a regulatory perspective. One of those cases is out of the Eleventh Circuit. It's U.S. v. Mar-Jac Poultry, and it relates to the ability of OSHA to expand the scope of its inspection authority when it's conducting an enforcement action.

 

      In particular in that case, OSHA was doing an unprogrammed injury inspection of a workplace as a result of the severe injury reporting rule and then attempted to expand the inspection beyond the four corners of the injury that had occurred based upon its review of the employer's recordkeeping logs—we just talked about the 300 and 301 and whatnot—suggesting that it found some other areas of concern, like slips, trips, and falls, etc., just by reviewing those injury and illness logs, and therefore attempted to expand the inspection to cover those things that it found in those logs. The employer in that case objected to that, and it ended up going through the court system. And ultimately, the Eleventh Circuit ruled in favor of Mar-Jac Poultry, the employer in that case.

 

      And it was a very significant rulemaking because it essentially said that the identification of some injuries that had occurred on a recordkeeping log does not give administrative probable cause to expand the inspection to those areas. I mean, just because an injury occurs doesn't mean that there's harm, or there's a potential violation, or even a potential hazard that would give the agency probable cause to expand the inspection. And so it was a very interesting decision which curtailed the agency's authority to expand inspections. Again, recently decided, fall of last year. And so one of the things that's interesting to watch is how this decision unfolds and whether other circuits adopt this kind of decision, but it's certainly one that is significant when looking at OSHA's overall inspection authority.

 

      The other case I wanted to just highlight is one out of the Fifth Circuit called Hensel Phelps Construction. It is a case where the court looked at OSHA's multi-employer worksite policy. And this is for those of you on the call who may know, this is a policy whereby OSHA, typically in the construction context, will cite an employer -- a variety of employers in the context of an incident or a violation based upon the relationship that the employer has not just to the employees but to the overall worksite. And under the Multi-Employer Worksite Doctrine, OSHA contends that it can cite various general contractors for violations essentially that have occurred by their subcontractors on a multi-employer worksite.

 

      In this particular situation, OSHA cited a Texas general contractor as the controlling employer in this violation, and to that point—this took place in the Fifth Circuit—to that point, the Fifth Circuit had been the only circuit that had not permitted OSHA to extend, pursuant to the Multi-Employer Worksite Doctrine, violations to general contractors who did not have employees exposed to a hazard. Well, in this case, OSHA ultimately appealed up to the Fifth Circuit, and the Fifth Circuit overturned its decision in Hensel Phelps, in that case, and so now, the Fifth Circuit has joined every other circuit in recognizing OSHA's authority to cite general contractors under the Multi-Employer Worksite Doctrine for violations of its subcontractors, even when employees -- it's own employees are not exposed to the hazard.

 

      So two important decisions, one related to OSHA's ability to expand inspections and one related to OSHA's Multi-Employer Worksite Doctrine, both significant in sort of different ways. And it'll be interesting to see in both instances how the agency reacts. Obviously, in the latter situation, the Fifth Circuit has now come around to all the other judicial circuits related to the Multi-Employer Worksite Doctrine, but that and the Eleventh Circuit case, it'll be interesting to see how that all unfolds over the next several months.

 

      So that's kind of OSHA from a nutshell. We've got some enforcement trends that we're seeing, we've got some regulatory initiatives that are out there that we're tracking, and then, finally, a couple interesting judicial decisions that we see in the OSHA context that are worth watching over the next several months. And then, obviously, it'll be interesting to see how Loren Sweatt continues to operate in her role as Acting Assistant Secretary now that Scott Mugno has withdrawn his nomination. And so it'll be interesting to watch that over the next several moths as well.

 

      And with that, Wesley, I'm happy to see if anyone has any questions, wants to talk a little bit more OSHA. It's been a pleasure to walk everyone through this and update everyone on what's going on in the world of safety and health.

 

Wesley Hodges:  Well, thank you so much, Brad. Your remarks were very insightful, and we do appreciate your time. And Brad, it looks like we do have one question out of the gate, so here is our first caller.

 

Betsy Dorminy:  Good afternoon. This is Betsy Dorminy in Atlanta, Georgia. We actually did that Mar-Jac case, so it's kind of fun to hear you talk about it.

 

Bradford Hammock:  Great.

 

Betsy Dorminy:  But I wanted to ask you about the Review Commission and what you think is going to be happening there. I guess we have a vacancy, if I'm remembering correctly?

 

Bradford Hammock:  Yeah, wow. Great question. Congratulations on the Mar-Jac case. That's terrific.

 

Betsy Dorminy:  Well, we thought it was pretty significant.

 

Bradford Hammock:  Yeah. No, it really is. It's great stuff. Like I said, it was a great job on that. So yes, with the Commission, it's very interesting. And to piggy-back on that, the Review Commission, obviously, is the body that hears contested OSHA cases. And generally, it's comprised of three members to have a quorum, and that sort of -- well, not to have a quorum, but, really, to bring out any decisions, it's really helpful to have three judges that are appointed and are sitting.

 

      And right now, as it turns out, we actually only have one. Two of the commissioners, one, Cindy Attwood, has just cycled off, and the other, Heather MacDougall, has resigned and taken a job with a company. And so at this point, we just have one commissioner. And it's unclear when and/or if we may get any other positions filled. And so, to your point, boy, who knows what's going to happen. But obviously right now, we're not going to be getting any decisions. It remains to be seen how this shakes out over the next few months.

 

      And just one other thing, there had been -- over the last few months, there had been several kind of important Review Commission decisions that had come down, I didn't have a chance to talk about them here, but they had been pretty prolific in writing some important decisions. And now, unfortunately, I think we'll be in a holding pattern. And I guess I also haven't heard any real good rumors as to who might be in line for some of those jobs as well.

 

Betsy Dorminy:  Well, we'll stay tuned then. Thank you.

 

Bradford Hammock:  Yeah, absolutely.

 

Wesley Hodges:  Well, thank you so much, caller. We do appreciate your question. Seeing no questions from the audience, Brad, I turn the mike back to you. Do you have any further comments for us, or anything you want to dive into, or closing thoughts today?

 

Bradford Hammock:  Just to reiterate that I think that, again, I think OSHA's going to be very interesting to watch over the next 18 months, Loren Sweatt sort of taking the reigns now. We'll see what happens from a regulatory, deregulatory, even enforcement perspective. So it'll be interesting to watch, and I look forward to the possibility of coming back and updating everyone again in the next few months. So we'll see what happens.

 

Wesley Hodges:  Excellent. Well, we certainly hope you do, Brad. It's quite a multifaceted crystal ball that you're looking into, and we do appreciate your insight. So on behalf of The Federalist Society, I would like to thank you for the benefit of your very valuable time and expertise today. We welcome all listener feedback by email at [email protected]. Thank you all for joining us for the call. We are now adjourned.

 

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