Safety Basics XIII: From Inspections to Indictments—The Risks of Criminal Liability in Workplace Safety

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John Surma: Welcome back, everybody. This is the 13th in our 17-part series, the Safety Basics Series. And the Safety Basics Series is a series of podcasts that kind of mirrors the blog posts and the webinars in the OSH Law Primer series, and kind of gives a high-level overview of Occupational Safety and Health Law. We presented these in three different formats to give opportunity to folks who like to either hear things, or participate in webinars, or read articles. And we hope this is a value. We hope that you’ll join us for the last three episodes beyond this one, but certainly, we’re glad to have you here for the 13th in the series.
This 13th episode is on criminal liability, and this is criminal liability as it arises in the scope and course of Occupational Safety and Health Law. Not necessarily entirely focused on things OSHA-related, but primarily focused on things OSHA-related. With us today, I’ve got in Houston, Ryan Swink. Ryan is one of my partners in the Houston office of Ogletree Deakins. He is a great resource, and I’d encourage anybody who has any questions to reach out to him. Ryan, welcome to the podcast.

Ryan Swink: Good morning, John. Thanks for having me. Glad to be here.

John Surma: And we’re glad that you decided to come with us today and participate in this. I know that this can be a little bit of a challenge time-wise, and that is why we’re a little bit out of sync, but setting that aside, let’s get going with the podcast. So, I think everybody understands that OSHA is a federal investigatory agency. So, I would like to think that people realize there’s the potential for criminal exposures whenever you’re dealing with the federal government or a federal investigatory agency. Before we get too far into the podcast, are there any potential criminal consequences that are unique to OSHA?

Ryan Swink: So, yes and no. I mean, as you mentioned, being a federal agency, it’s going to have anytime you deal with federal agency, if you lie to them, you’re probably going to get yourself in some trouble. The OSH Act itself does have a criminal penalty provision. For the most part, it overlaps general federal law. One of the provisions criminalizes giving advanced warning about an inspection. The other one gives criminal penalties for making a knowingly false statement to your OSHA investigator. And then the third provision provides criminal liability in the event of a willful violation that’s going to result in a fatality.
For the most part, these provisions are going to overlap either with state or federal law, and a lot of times, other state or federal law are going to have harsher penalties. The one unique aspect of the OSH Act focuses on the willful violation resulting in a fatality and the ability to criminally prosecute corporate entities based on that violation.

John Surma: And you kind of alluded to or maybe you actually directly spoke to this, that the OSH Act’s provisions overlap federal criminal law in general. Could you explain that and point out the differences between the OSH Act’s criminal components and the federal criminal laws?

Ryan Swink: Yeah, certainly. So, the three provisions of the OSH Act all have statutory maximum penalties, and honestly, the OSH Act really doesn’t have much teeth. So, all three penalties provide up to six months of imprisonment and various fines capped either at 250,000 or 500,000. By comparison, the general federal criminal statute for making false statements to a government investigator has a statutory maximum of five years imprisonment, obstruction of justice or interfering with the execution of a warrant likewise has five-year max penalty. And then you have your state law homicide crimes that are going to have substantially greater penalties. So, while there is that criminal component of the OSH Act, it really lacks the teeth to serve the deterrence purpose that the criminal law is supposed to serve.

John Surma: And this might be an opinion piece, or this may be something that’s more fact-based on the verbiage of the act, but do the OSH Act criminal penalties serve a specific purpose that you’re aware of?

Ryan Swink: So, there is some specific kind of instances that OSHA and the government kind of rely on the act. And so one of those instances is the advanced notice provision. So, OSHA relies on this, or the Department of Labor relies on this heavily whenever there’s a challenge to the lack of judicial review for administrative warrants. So, generally speaking, OSHA will issue an administrative warrant, they’ll serve it on you, they’ll execute it, and by the time you realize what’s happening, the warrant has been completely taken care of, the search has happened. So there’s really no ability to obtain judicial review. And whenever that fact is challenged, OSHA constantly points to, “Well, Congress said it’s criminal to give advance notice of this warrant. So clearly Congress intended for there to be no pre-execution judicial review.”
Now, there are cases out there where the establishment has said, “No, you’re not coming in. I don’t care that you have a warrant.” And generally, at that point, they risk the possibility of contempt of court. And then there are other cases where the OSHA has gone and grabbed the U.S. Marshals and forcibly enforced their warrants. So, it’s kind of a gray area of the law that’s really still developing, but that’s kind of the purpose of the advanced notice provision or at least OSHA’s use of it. And then on the willful fatality, I kind of view it as a reputational harm more than necessarily a penalty. So on average, you see about three cases a year that are going to be prosecuted under this statute as opposed to 4 to 6,000 fatalities a year.
And so it’s really kind of something that the worst of the worst maybe OSHA prosecutes under the criminal provision, but for the most part, when you see fatalities resulting in prosecution, it’s going to be state-level prosecutions against individual managers or supervisors as opposed to using the OSH Act’s ability to hold corporate employers criminally liable.

John Surma: Now, you recently were involved in a case where you secured an order quashing a subpoena in a client’s inspection where a warrant was used. Did that start out as an administrative warrant?

Ryan Swink: It started out initially as an administrative warrant, and we tried to negotiate with the solicitor’s office to kind of narrow the scope. They wouldn’t really agree. Ultimately, the client did let OSHA onto the premises basically under protest, and simultaneously we filed our motion for relief. The court issued a stay of that warrant probably about two days after, and we are currently awaiting a ruling, so we’ll see what happens. There’s a whole lot of procedural questions that have to be worked out, but we think we have a strong argument for it. And certainly, getting that immediate stay of the warrant was a win from our perspective, from our client’s perspective.

John Surma: Well, thank you for that, Ryan. Now, you mentioned that there’s less than three cases where there’s a willful fatality criminal charge or a criminal charge arising under the OSH Act’s provisions relating to willful fatalities. From the standpoint of the advanced notice, my experience has been those are pretty few and far between. Is that kind of what the statistics show as well?

Ryan Swink: Yeah, I mean, I have not been able to actually find a case or a published case where a claim has been brought under the advanced notice provision. And when you think about it, who’s going to have advanced notice? The OSHA folks, the solicitor’s office, and then the court, right? So, generally speaking, OSHA does have the ability to not violate the statute, reach out to an employer and say, “Hey, just so you know, we have an administrative warrant, we’re going to be there at 10 A.M.” And that generally isn’t an issue. I suppose that that’s kind of there for if you get some rogue individual within OSHA or within the courts that is going around letting employers know. But as far as I can tell, it hasn’t really been enforced in the context of trying to obtain a criminal penalty against an individual.

John Surma: Thank you. I had a case this spring. It was a fatality inspection. I thought it was kind of interesting. We reported the fatality as you’re required to do within eight hours of it happening. And the assistant area director contacted me. It happened on a weekend. He contacted me on a Sunday evening and basically told me that they were going to be out the next day, which I thought was interesting because I thought, “This seems to me to be giving me advanced notice of an inspection, and you probably shouldn’t be doing it.” Of course, I’m not going to object because that gave me an opportunity to be prepared, not that we weren’t already preparing, but I thought it was interesting.
And it doesn’t seem as though you’re going to have a whole lot of employers contacting the U.S. Attorney’s Office or whomever to say, “Hey, look, this assistant area director in whatever area office gave me a heads up that they were coming out the next day.” My suspicion is that it’s a pretty rare case. I do have a recollection of many, many years ago, maybe before I even started practicing law that there was a case where some sort of administrative person within an area office gave somebody that they knew heads up of impending OSHA activity. And I recollect there being a criminal investigation about that. But I want to say that goes back to the ’80s, maybe the very early ’90s. I mean, I do think it’s a very rare situation, but it also seems just overall, criminal prosecutions are exceptions and not the rule. Is that a fair assumption?

Ryan Swink: That is a fair assumption. I mean, when you look at just the procedures that OSHA has to go through to get from inspection to criminal prosecution, I mean, the area director takes a look at it, has to recommend criminal prosecution. It then has to go up to the OSHA regional administrator, from there to the Solicitor’s Office, regional or national. So, you’ve got three levels of review just within the Department of Labor deciding, “Okay, is it even worth sending to the Department of Justice?” And assuming the answer to that is yes, the Department of Justice still has to decide to take the case, right? And the federal DOJ kind of prides itself on its 98-99% conviction rate. And in part that’s because they’re very selective with the cases they take, right?
They’re not going to take these cases that are on the fence or questionable, or even really that there’s not kind of that reward for them. So, if you’re prosecuting them just under the advanced notice, is it worth the DOJ’s time to spend a year, a year and a half prosecuting someone just for a six-month criminal penalty? And a lot of times it’s not. And so you really have to kind of go above and beyond normal, just kind of lawyering or jockeying with OSHA to get to the point where criminal penalties are coming into play. So that’s not to say that criminal penalties don’t happen, and you shouldn’t be aware because you certainly should. And I think that’s kind of our general advice to clients.

John Surma: What you’re talking about here specifically relates to prosecutions “by OSHA”, that’s separate and apart from depending upon who’s running OSHA and the administration. It has been in many cases, the practice for OSHA anytime there’s a fatality to make a referral to the state. And when I say the state, that could be the county district’s attorney or some “state’s attorney” that gets the criminal referral to take a look at what’s going on and really prosecute or look at it in terms of prosecuting from a state criminal law perspective. And OSHA does at times to have a hand in making those referrals, right?

Ryan Swink: Yeah, absolutely. And I mean, even if it’s something where OSHA doesn’t come out, they simply ask for an RRI. Before that, when that fatality or catastrophe happens, you have EMS showing up on scene. Generally, EMS is going to contact the local policing authority. They may come out, and they may take a look, and they may conduct an investigation that’s entirely separate from OSHA’s investigation. So, certainly, anytime you have one of these fatalities or these catastrophes, there are going to be multiple agencies other than OSHA that have a hand in it, and that may be considering what action, if any, is appropriate from their perspective.

John Surma: And you raise a good point, and that is that, especially with fatalities and to some extent with catastrophes, a lot of times employers forget the fact that they have a crime scene on their hands. And when the police or sheriff’s department or whatever that local policing authority is, and when they arrive and when they start doing their investigation into what happened, you are dealing with a crime scene, you are dealing with a criminal investigation, even though there was nobody there, cloak and dagger, gun, what have you. And it’s important to be mindful of the fact that those interactions, while typically friendly in nature, are not risk-free. Now dealing with OSHA and getting back to dealing with OSHA, are there other criminal issues employers should be concerned with?

Ryan Swink: Yeah, absolutely. I mean, I think the biggest thing and probably the easiest conviction that the federal government gets in almost any case has to do with lying, right? So always tell the truth. And certainly, there will be instances where the truth needs to be cast in a certain way in order to protect employers. Certainly, getting lawyers involved helps in doing that, right? So, you have, you know, X, Y, Z happened, we need to disclose it to OSHA. OSHA directly asked about it, “Okay, let’s let our lawyers workshop it, work up how we’re going to present it. As opposed to having a manager or supervisor sit in an interview with OSHA and then potentially get pinged because they were slightly inaccurate in what they said. Lawyers have a little bit of ability to workshop how things are said and how things are presented. So that’s certainly number one.
And then number two has to do with tampering and obstruction, falsifying records, or threatening or unduly influencing investigators. And so, a lot of times, you have this clash between what the investigator wants to do, and then the protections that employers are afforded under the Constitution. And so, in terms of asserting that right, you’re going to get a lot of pushback from inspectors if you’re just an individual employer saying, “Well, you don’t have the constitutional right to do that.” They’re going to threaten you with, “Oh, well, you’re obstructing my investigation. I’m going to hold you criminally liable.” So having a lawyer in place that buffers someone who knows the law, is willing to, has that knowledge to put OSHA within the confines of its constitutional obligations is going to be really helpful.

John Surma: Yeah. And it’s important to emphasize at this point, I think, that a lot of times the folks with OSHA argue and sometimes argue pretty persuasively as though they have knowledge of various rights, various legal components. And the case that kind of sticks out in my mind is I had an assistant area director in Austin one time argue with me that attorney-client privilege didn’t apply to an OSHA investigation because it was not a legal proceeding. And while number one, it is a legal proceeding, that clearly is a misunderstanding of what the attorney-client communication privilege is about.
And so, I would caution our audience, and I think I would emphasize the point that you’ve made several times, having a lawyer involved in this process a lot of times makes a lot of sense because OSHA will tell you what they think that your rights are or what they think your privileges are or their perspective on things, and it’s not always right. Is the criminal exposure something that’s limited to the fat cat or fatality catastrophe inspection?

Ryan Swink: No. I mean, ultimately, you never know what you’re going to do. Your inspector could be having a bad day, so it could be something very small that they’re out there for and you say something or do something that just rubs them the wrong way, and all of a sudden they have a magnifying glass out and they’re looking at you really closely, and they’re looking for that lie, that small little thing that you misspeak, but according to OSHA you didn’t misspeak, you lied intentionally to deceive them. And then all of a sudden, something that should be relatively minor could explode into something that takes up years of your life dealing with potential criminal exposure.

John Surma: Yeah. And I didn’t think about this at the beginning of the podcast and I probably should have, but I think it bears reminding folks that even though sometimes an OSHA compliance officer will show up with what looks like a badge and even though they are folks that are federal investigators, they are not law enforcement officers regardless of what the “badge” may look like. So everybody needs to keep that in the back of their mind. So what else should employers be thinking about when it comes to criminal exposures, and criminal liability, and OSHA investigations?

Ryan Swink: I think the biggest recent development or semi-recent development is OSHA’s reliance on other federal statutes to enforce what they perceive to be employee safety issues. And so, this kind of kicked off in 2015 with the worker endangerment initiative. This was a memo that was sent out to all of the area offices to kind of push other enforcement tools when dealing with workplace accidents, and particularly some of the environmental statutes, which are going to carry harsher penalties. We’ve seen that throughout the year, there was the 2015 Port Arthur tank explosion that was prosecuted rather than under the OSH Act, under the environmental statutes resulted in a criminal prosecution and a three and a half million dollars plea deal or settlement, depending on how you look at it.
In 2013, there was an explosion at a corn mill that killed several people and was prosecuted under the Clean Air Act, and there were issues with the clean air permits that they ultimately relied on to initiate that criminal prosecution. And then in 2022, there was a confined spaces fatality in Nebraska that was prosecuted under the RCRA. So, it’s kind of the intersection of employee safety and environmental statutes. There is a lot of overlap to those two, but the environmental statutes do pose significantly increased criminal penalties. So, while you may be dealing with OSHA, you also need to keep in mind your obligations under the various environmental statutes.

John Surma: Well, Ryan, I think those are all really good points. In closing and winding this episode down, is there anything else that employers should be thinking about and maybe preparing for, or preparing to try to insulate themselves from criminal exposures?

Ryan Swink: Yeah, absolutely. I think number one is documentation. Everything that you do, my saying is, according to OSHA, if it’s not documented on paper, it didn’t happen. So, making sure that you have in place a robust and effective health and safety program that really focuses on documenting all of the actions that you take in advance of this fatality or catastrophe. And also just being prepared for the possibility that it may happen. If the first time you thought about what you’re going to do if OSHA shows up is when OSHA shows up, you’re already behind the eight ball. Having that relationship established with counsel and counsel that has experience with OSHA, and even the relationship with OSHA, is going to be extremely helpful.
And then having a realistic expectation about how you’re going to deal with OSHA. Certainly, we always counsel cooperating with OSHA to the degree that it’s reasonable, right? A lot of times, OSHA will come in and they’ll ask for the moon, and they know if you have counsel there, they’re not going to get the moon, and they’re not expecting to get it. So having counsel there to advise you to deal with OSHA and kind of reining them in a little bit is extremely important.

John Surma: Well, Ryan, I really appreciate that. I think those are some great insights. Everybody who’s listening in the audience, we appreciate you joining us. We look forward to having you here for the balance of the episodes. And we hope you have a wonderful day. Thank you very much for joining us.

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