The business community is watching a potentially precedent-setting case that could sharply curtail the period of time that companies can be cited for Occupational Safety and Health reporting violations.
The issue is “of serious consequence to small businesses of all industries,” according to an amicus brief from the National Federation of Independent Business Legal Foundation, which complains that companies are subject to stiff fines for such violations and find it difficult to defend five-year old charges.
Signaling a potential change in agency policy, the OSH Review Commission last week heard oral arguments on the matter – the first time it has held oral arguments in four years.
At issue: Can employers be cited by OSHA for record-keeping violations that occurred up to five years in the past – the current agency practice - or is the statute of limitations strictly six months?
The case, Secretary of Labor v. AKM LLC d/b/a Volks Constructors, began in 2006, when OSHA inspected the Prairieville, La., facility of Volks Constructors, a heavy industrial contractor.
The agency issued citations alleging that Volks violated several recordkeeping regulations — specifically, that the company failed to record on its injury log a number of injuries and illnesses within the required seven-day period. The earliest such recordable injury or illness occurred at Volks on Jan. 11, 2002 – more than four years before the citations.
Volks lawyer Arthur Sapper, a Washington-based partner at McDermott, Will & Emery, argued in a brief that Section 9(c) of the OSH Act, 29 U.S.C. 658(c), states: "No citation may be issued ... after the expiration of six months following the occurrence of any violation."
In an interview, Sapper said, “Some charges are almost five years old, and the statute of limitations is only six months.”
Employers face an undue burden “trying to defend a case based on stale evidence,” he said. “Employers find it very difficult to reconstruct the facts of the case years later. “
In 1993, the agency in Johnson Controls Inc. held that the clock starts ticking not when the reporting violation actually occurs, but rather “six months from the time the [Secretary of Labor] does discover, or reasonably should have discovered, the facts necessary to issue a citation.”
Sapper argues the decision has been eclipsed by subsequent case law, including the Supreme Court’s 2007 decision in Ledbetter v. Goodyear Tire & Rubber Co.
The Department of Labor lawyers Robert Aldrich, Michael Doyle, Joseph Woodward and Gregory Jacob disagree, writing in their brief that “precedent squarely forecloses Volks’s argument and Volks has not offered persuasive reasons for the commission to depart from that precedent.”
They contend that an inaccurate entry violates the law until date it is corrected (or the five-year record retention requirement expires), not the date that the entry actually was or should have been made.
National Federation of Independent Business Legal Foundation counsel Karen Harned and Elizabeth Milito write in their amicus brief that this places an unfair burden on employers.
“The sixth-month limit was not included by Congress so that employers could get away with violations,” they wrote. ”Rather, Congress understood the burden of mounting a defense once a claim has become stale. An employer's ability to tell its story dissipates sharply as time passes, particularly when it comes to subtle details.”
A decision is expected in April 2011.