US OSHRC recent remand orders demonstrate difficulties smaller employers face

In Q4 2021, the Commissioners of the Occupational Safety & Health Review Commission (OSHRC) released two remand orders and one final decision further to a Petition for Discretionary Review. Links to the full text of these decisions are provided in the summaries below.

The two cases involving remand orders illustrate the difficulties that smaller employers can face when navigating safety and health laws, and that they can suffer harsh consequences for failure to follow procedural rules. However, these decisions also show the kinds of circumstances in which relief from dismissal of an employer’s notice of contest can be obtained.

In Secretary of Labor v. Generational Buildings, LLC, the employer had timely contested a four-item serious citation that OSHA had issued against it. However, the assigned Administrative Law Judge then issued an order dismissing the company’s notice of contest, and affirming the citation, for failure to timely show cause why it had not registered with the OSHRC’s Electronic Filing System (EFS).

After the case had been assigned to the judge, the employer was given notice as to EFS requirements. Eight days later, the judge issued an order giving the company 14 days to show cause as to why it had not registered with the EFS, or to seek an exemption based on undue hardship, failing which it risked dismissal of its case. Prior to the order, the judge’s assistant had twice called the employer to remind it to register with the EFS, first leaving a message and then speaking with an unnamed person who said they would pass the message on.

When the employer failed to show cause, the judge dismissed the employer’s case. In doing so, he found that the employer’s conduct involved repeated failure to comply and “contumacious conduct.” As the employer was unrepresented, the judge also found that its conduct was attributable to it alone.

On review of the judge’s decision, the Commissioners found that dismissal was too harsh of a sanction. They noted that the show cause order was issued only eight days after assignment to the judge. And, although the judge’s assistant had called the employer, it was unclear whether the employer ever received those messages or understood the need to register immediately with the EFS. According to the Commissioners, the judge ought to have provided a few more days for the employer to respond to his assistant’s calls and, instead of a show cause order, “could have issued an interim order highlighting the registration requirement and explaining that as a self-represented party, the company could request an exemption due to hardship.”

The Commissioners also opined that the employer’s conduct did not support a finding of contempt or disregard for the OSHRC’s proceedings. The employer had in fact participated in the case as shown by its timely filing an answer to the Secretary’s complaint. And past decisions from similar cases showed that it is generally not considered contumacious for a self-represented employer’s first failure to respond to a show cause order. Generally, contempt requires the showing of a pattern of disregard.

Noting that, in addition to the foregoing reasons, the Secretary had not claimed any prejudice as a result of the employer’s conduct, the judge’s decision was set aside and the case was remanded for further proceedings.

Secretary of Labor v. Knock Out Homes Incorporated involved a default judgment and dismissal of the employer’s notice of contest for failure to file an answer. Two weeks after the judgment became a final order, the employer, appearing pro se, filed a request for relief under Federal Rule of Civil Procedure 60(b)(1).

The employer’s stated grounds for relief were having no employees and an alleged inability to access what it called the “OSHA portal,” despite allegedly making multiple attempts with “an OHSA employee” trying to help with gaining access.

The Commissioners noted that such a request for relief essentially involves taking into account all relevant circumstances to determine if providing the requested relief is equitable. These include factors such as: prejudice to opposing party; the length of delay and its potential impact on judicial proceedings; the reason for the delay, and whether it was in the movant’s control; and, whether the movant acted in good faith. The Commissioners also noted that the movant must also allege a meritorious defense.

The Commissioners were persuaded that the employer may have mistakenly believed that the OSHRC and OSHA are one and the same. The company’s “Late Notice of Contest” letter was directed “To OSHA” and more than once appeared to incorrectly refer to the Commission’s electronic filing system (EFS) as the “OSHA portal.” Further, the letter appeared to relate to “a different set of contested citations previously docketed in the Commission’s EFS several years ago”, noting that if the employer “had attempted to file its letter as a notice of contest using information associated with that prior case, an error message would be generated by the EFS.” The Commissioners also found that “it is not clear from the record what filings [the employer] has received in this matter given that the return receipt for the judge’s show cause order does not show who signed for it on the company’s behalf and the Secretary’s motion for default judgment does not indicate whether counsel conferred with [the employer] prior to filing it, as required by Commission Rule 40(d), 29 C.F.R. § 2200.40(d).”

In these circumstances, the Commissioners set aside the judge’s order and remanded the case to the judge to consider whether the employer is entitled to the relief sought. In so doing, the judge was directed to grant the employer a chance to “present evidence supporting its claim that it attempted in good faith to participate in the Commission’s proceedings and put forth a meritorious defense.”

In Roadsafe Traffic Systems, Inc., following a fatality in which an employee was struck and killed by a company vehicle while installing raised reflectors on a highway, the employer was issued a citation alleging a serious violation of the Occupational Safety and Health Act’s general duty clause. Following a hearing, an Administrative Law Judge affirmed the violation and assessed a US$12,675 penalty. The Commissioners affirmed this outcome following review.

For the Commissioners, the basis of the alleged violation was not the fatal incident but rather the employer’s practice of allowing work from the bed of a moving truck without fall protection. The employer’s safety manual and job safety analyses, together with testimony from the employer’s Chief Operating Officer, established the company’s recognition of a fall hazard.