Employers contested citations in fiscal 2011 more often than the Occupational Safety and Health Administration previously claimed, OSHA Deputy Assistant Secretary Richard Fairfax acknowledged March 27.
OSHA now says the correct contest rate for 2011 is 10.7 percent, about one-third higher than the 8 percent rate OSHA officials have previously cited. Agency officials say the disparity reflects a recent change in how the contest rate was calculated.
In speeches to safety and business groups, OSHA officials had pointed to the 8 percent contest rate, just one percentage point higher than the last year of the George W. Bush administration, as proof that tougher enforcement had not pushed substantially more employers to challenge penalties.
The new penalty system, including lower deductions and an increased vulnerability to costly repeat violation citations, took effect with the start of fiscal 2011 on Oct. 1, 2010 (40 OSHR 843, 10/14/10).
The number of citations issued has increased, from 96,742 in fiscal 2010 to 103,334 in 2011, OSHA records show.
During 2011, employers filed 3,175 penalty appeals with the Occupational Safety and Health Review Commission, a 62 percent increase from 2008, the Bush administration's last year. In 2008, employers appealed 1,962 OSHA cases, according to review commission's most recent audit. One appeal can cover multiple citations.
Jonathan Snare, now an industry attorney, who served as acting head of OSHA and as the Department of Labor's acting solicitor under President Bush, said that during his DOL tenure there was an increase in appeals of Mine Safety and Health Administration citations, after the agency boosted its penalties in 2006 and 2007 (40 OSHR 160, 2/25/10).
“That's not a surprise to me, based on my experience with MSHA,” Snare said about the growth of OSHA appeals. “I was expecting it to jump.”
Until late March, OSHA officials said there had not been significant growth in contested inspections.
“We've seen a very, very tiny, if any increase in our contest rate as a result of these changes in penalties,” David Michaels, deputy of secretary of labor for occupational safety and health, told an agency advisory panel in December. As Michaels talked, he projected slides showing 8 percent contest rates for 2011 and 2010 and 7 percent contest rates for 2007 through 2009.
As recently as March 14, during a gathering of the American Bar Association's Occupational Safety and Health Law Committee, Fairfax noted the 8 percent rate. Fairfax added that the contest rate for small businesses was higher (42 OSHR 233, 3/15/12).
Questions about the accuracy of OSHA's 8 percent claim had been raised because numbers from the independent review commission showed far more OSHA inspections were appealed to the commission than OSHA's 8 percent claim could have produced.
In January, BNA made the first of several requests to OSHA for the data used by the agency to determine the 8 percent contest rate. The agency declined to provide numbers.
Review Commission Chairman Thomasina V. Rogers, addressing the ABA safety committee on March 15, noted that while OSHA said the number of contested citations appeared to be leveling off, she had not seen such a trend.
“At the commission, the caseload has been rising,” Rogers said (42 OSHR 278, 3/22/12).
Another measure of increasing legal appeals is the growing number of attorneys practicing in the field. Eric Hobbs, chairman of the ABA's safety committee and an industry attorney based in Milwaukee, Wis., told BNA that during the past five years, committee membership had increased 14 percent to 397 members.
OSHA has recently begun citing the higher contest rate. During a March 27 presentation to a business group, Fairfax said the correct contest rate was 10.7 percent, a figure OSHA rounds off to 11 percent.
When BNA asked OSHA what prompted the change, the agency said in a written statement that in years prior to calculating the original 2011 contest rate, OSHA looked at the number of contested inspections compared to the number of inspections with citations issued.
However for 2011, the 8 percent contest rate was based on the number of inspections contested compared with the total number of inspections--including inspections that did not result in citations, the statement continued.
OSHA officials making presentations using the 8 percent rate did not know a different formula had been used. “Once we were made aware of this, we started immediately reporting the 11% value,” the statement said.
The review commission anticipates the challenges will continue to increase. The commission's fiscal 2013 budget request, cited a “marked increase” in contested cases and estimated there will be 3,350 cases that year, 175 more appeals than in 2011.
To deal with the growing number of appeals, the review commission encourages employers and OSHA to settle many cases using “simplified proceedings.”
The commission is predicting that about 50 percent of cases it receives in 2012 and 2013 will be handled this way. During 2011, simplified proceedings were used for 1,370 cases that were either settled or had the citations withdrawn, commission data showed. In 2008, there were 802 cases settled or withdrawn.
The simplified proceedings options is available when proposed penalties total $20,000 or less, or up to $30,000 when found eligible by the commission's chief judge, according to commission rules.
With the program, employers have their concerns heard by an administrative law judge unburdened by the formal rules of procedure and evidence. Employers can represent themselves, and most paperwork, including legal filings, is eliminated.
OSHA also has a settlement system that encourages employers facing lesser penalties not to challenge citations by offering them a lower fine. An employer who agrees to an “expedited informal settlement agreement” has the proposed penalty cut by up to 40 percent.
An OSHA spokesman said the agency does not track how often expedited settlements are used. The option has been available since the 1990s, and OSHA is trying to increase its use.
Snare said increased fines and the possibility that accepting a penalty now could lead to receiving a repeat violation within five years, and, potentially, placement in the Severe Violator Enforcement Program, give employers reasons for considering an appeal. “You've got to evaluate the implications and the impacts case-by-case,” Snare said.
By Bruce Rolfsen