3-20-12; New OSHA memo Puts Accident Reporting and Safety Incentive Programs Under Vague/Ominous Federal Spotlight

We thank our reader for sending this OSHA memo along for the rest of us to struggle with moving forward. We hope the next administration isn’t so strident about messing with U.S. employers. If you would like a copy of the new OSHA memo, send a reply.

On March 12, 2012, OSHA’s Deputy Assistant Secretary Richard Fairfax issued a memorandum on the subject of employer safety incentive/disincentive policies. In our view, it is long on policy and woefully short on specifics. We assume OSHA isn’t going to penalize insurance carriers and TPA’s for cutting insurance premiums when lower injury levels result in lower premiums but you never know—if all the stuff below is “discriminatory,” we think that simple financial concept might also be viewed in the same light.

In it, the memo indicates Section 11(c) of the OSH Act prohibits an employer from ‘discriminating’ against an employee because the employee reports an injury or illness.

Deputy Secretary Fairfax indicates reporting a work-related injury or illness is, in OSHA’s view, a “core employee right.” We don’t remember that one in the U.S. Constitution’s Bill of Rights. Mr. Fairfax further advises ‘retaliating’ against a worker for reporting an injury or illness is illegal discrimination under section 11(c). He further states

If employees do not feel free to report injuries or illnesses, the employer's entire workforce is put at risk. Employers do not learn of and correct dangerous conditions that have resulted in injuries, and injured employees may not receive the proper medical attention, or the workers' compensation benefits to which they are entitled. Ensuring that employees can report injuries or illnesses without fear of retaliation is therefore crucial to protecting worker safety and health.

Well, duh. The memo states there are several types of workplace policies and practices that discourage reporting and constitute unlawful discrimination. The memo ominously outlines “some” of these policies and practices may also violate OSHA's recordkeeping regulations, particularly the requirement to ensure employees have a way to report work-related injuries and illnesses.

OSHA also claims there is a potential for unlawful discrimination under all of these policies that may increase when management/supervisory bonuses are linked to lower reported injury rates. The memo states: “[w]hile OSHA appreciates employers using safety as a key management metric, we cannot condone a program that encourages discrimination against workers who report injuries.” The operative term in that sentence is “encourages discrimination”--from our business perspective, we feel OSHA is reading something negative into a common safety technique of having risk and safety managers incentivized to provide safer workplaces.

Most important, the memo outlines what the Deputy Secretary denotes as the “most common discriminatory policies”

v  An employer's policy to discipline all employees who are injured, regardless of fault, is not a legitimate nondiscriminatory reason an employer may advance to justify adverse action against an employee who reports an injury. In addition, such a policy is inconsistent with the employer's obligation to establish a way for employees to report injuries and where it is encountered, a referral for a recordkeeping investigation should be made.

v  An employee who reports an injury or illness is disciplined and the stated reason is the employee has violated an employer rule about the time or manner for reporting injuries and illnesses. Please note we have numerous employers who have “same-shift” or 24-hour reporting requirements.

o   The memo indicates “such cases deserve careful scrutiny. Because the act of reporting the injury directly results in discipline, there is a clear potential for violating section 11(c) or FRSA.”

o   The memo also indicates “such procedures must be reasonable and may not unduly burden the employee's right and ability to report. For example, the rules cannot penalize workers who do not realize immediately that their injuries are serious enough to report, or even that they are injured at all.” Please note claimant attorneys across the U.S. are now certain to tell all of their clients who report events late to say they didn’t think the injury was serious enough to report, even when they lose a toe.

v  In a third situation, an employer may attempt to use a work rule as a pretext for discrimination against a worker who reports an injury. OSHA’s focus is various

o   Does the employer monitor for compliance with the work rule in the absence of an injury?

o   Does the employer consistently impose equivalent discipline against employees who violate the work rule in the absence of an injury?

o   Vague rules, such as a requirement that employees "maintain situational awareness" or "work carefully" may be manipulated and used as a pretext for unlawful discrimination. Where such general safety rules are involved, the investigation must include an especially careful examination of whether and how the employer applies the rule in situations that do not involve an employee injury.

v  Finally, some employers establish programs that unintentionally/intentionally provide employees an incentive to not report injuries. For example, an employer might enter all employees who have not been injured in the previous year in a drawing to win a prize, or a team of employees might be awarded a bonus if no one from the team is injured over some period of time.

o   Such programs might be well-intentioned efforts by employers to encourage their workers to use safe practices.

o   However, OSHA feels there are better ways to encourage safe work practices, such as incentives that promote worker participation in safety-related activities, such as identifying hazards or participating in investigations of injuries, incidents or "near misses".

o   OSHA's VPP Guidance materials refer to positive incentives, including providing T-shirts to workers serving on safety and health committees; offering modest rewards for suggesting ways to strengthen safety and health; or throwing a recognition party at the successful completion of company-wide safety and health training.

o   Incentive programs that discourage employees from reporting injuries are problematic because an employer may not "in any manner discriminate" against an employee because the employee exercises a protected right, such as the right to report an injury.

o   An important factor to consider is whether the incentive involved is of sufficient magnitude that failure to receive it "might have dissuaded reasonable workers from" reporting injuries.

Where OSHA may be going with enforcement of this memo is anyone’s guess. We don’t think the government should tell U.S. business how to run safety programs and what kind of safety bonuses and what color safety t-Shirts to give out. We understand there may be differing views on this controversial topic--we appreciate your thoughts and comments. Please do not hesitate to post them on our award-winning blog.

3-13-12; Post Dis!!! Please don’t shoot the messenger but you are going to have to pay for and then post new union-organizing posters in your workplace

While U.S. employers have fought and fought this invasive concept, private employers subject to the parameters of the National Labor Relations Act (“NLRA”) (which is just about every private employer in our country from hot dog stands to General Motors®) will be required at the end of April 2012 to post written notice to all employees about their rights to organize and potentially form labor unions.

On March 2, 2012, a Federal District Court judge in Washington, D.C. ruled the National Labor Relations Board or NLRB has the authority to promulgate and enforce a rule requiring most private employers to display the new poster entitled “Employee Rights Under the National Labor Relations Act.” The ruling was issued in National Association of Manufacturers v. NLRB.

The rationale behind this tactic by the NLRB centers on its belief employees are somehow tragically unaware of their rights under federal labor law and U.S. employers should be forced by our government to inform them. The Board created its own rule on the subject under its statutory authority to adopt “such rules and regulations as may be necessary to carry out the provisions of [the NLRA].”

Fortunately for employers, the Board’s attempt to sanction employers who fail or refuse to post the required posting notice was declared unlawful by the Federal District Court. The NLRB attempted to sanction employers who failed to display the poster by way of finding failure to post the required notice to be an unfair labor practice (i.e. holding such conduct would be deemed unlawful interference with, restraint, or coercion of employees in the exercise of their rights under the law); and tolling the standard 6-month statute of limitations for filing unfair labor practice charges against employers who fail to post the notice.

The Federal District Court did not rule out the possibility of finding failure to post these new documents could be considered and used as evidence of an unfair labor practice:

[N]othing in this decision prevents the Board from finding that a failure to post constitutes an unfair labor practice in any individual case brought before it. But the ruling does mean that the Board must make a specific finding based on the facts and circumstances in the individual case before it that the failure to post interfered with the employee’s exercise of his or her rights.

Forewarned is forearmed, folks. While other legal challenges remain pending, this recent new decision is almost certain to require you to have to be ready to post these dopey posters on or before April 30, 2012. If you need the website to get the posters, send a reply.

We appreciate your thoughts and comments. Please do not hesitate to post on our award-winning blog.

3-13-12; The 7th Circuit reverses and remands a case following a jury verdict based on a single improper jury instruction! This Illinois-based employer is now facing renewed exposure after...

In Cook, Deborah v. IPC International Corp., the 7th Circuit’s ruling can only be described as frustrating from a business perspective. After what appears to be a situation where Plaintiff had argued their way into a corner and suffered a failure of proof, a jury heard the facts and denied her claim. The 7th Circuit reversed and remanded for a new trial based on an arguably confusing application of law in a jury instruction.

Plaintiff Cook was a mall cop—a security guard at a southern Illinois mall. She alleged she was fired because of her gender. Her employer argued she was not terminated until after and because she had refused a mandatory transfer to another facility. During the proceedings at trial, the issue of the "Cat's Paw" theory came into play, but in a somewhat obfuscated manner. The Cat’s Paw theory of liability takes its title from one of Aesop’s fables. In this ancient tale, a monkey who wants his chestnuts roasted persuades a cat to fetch them, in the process the cat burns its paw. In the context of the 7th Circuit case, the monkey represents Cook's supervisor, and the cat was the regional manager who came in and arguably put forward the transfer offer. If the supervisor, with discriminatory motives, manipulates the higher-level manager into firing the employee, the company can still be liable for sex discrimination, according to the law. However, this theory was not argued at trial.

At all times Plaintiff argued her supervisor was the individual who terminated her employment several days after she was given a transfer offer by the regional manager. Based on Plaintiff’s assertion this was not a Cat’s Paw situation where the supervisor had a singular influence over the regional manager, but a straightforward termination where the supervisor made the decision to terminate her, the trial court issued a jury instruction requiring the jury, if they wanted to find for Plaintiff, to find the supervisor was the sole decision maker for the Defendant. Judge Posner wrote for the unanimous three judge panel, “[t]his is all a dreadful muddle, for which we appellate judges must accept some blame." He described the Cat’s Paw metaphor as "judicial attractive nuisance," and added "[v]ague judicial terminology... confuses judges, jurors and lawyers alike."

In writing for the majority, Judge Posner went on to state the case was legally, if not factually, simple, and should have been presented to the jury in a simple manner. Plaintiff alleged her supervisor fired her because she was a woman. Her employer argued she wasn't fired but quit voluntarily by not accepting a transfer. This is not entirely accurate, as the employer actually asserted Plaintiff was terminated after her refusal to accept the transfer. According to the Judge Posner, a jury only had to choose between those two competing narratives. The ultimate ruling of the 7th Circuit was the question of whether the supervisor was the sole decision maker was not a fact which needed to be found for Plaintiff to prevail upon her case, and therefore the instruction was improper.

A thorough review of the underlying case confirms a confusing collection of arguments, but what is clear is there was an honest question as to what actually happened to Plaintiff at or around the time of her alleged termination. She admitted she was offered a transfer but the circumstances of that transfer were in dispute. All the testimony presented indicated Plaintiff was contacted on multiple occasions after her locker was cleaned out in reference to her decision regarding the transfer offer, and that Plaintiff refused to return phone calls from the regional manager. Combined with the argument Plaintiff was not arguing constructive discharge, her claim becomes very ephemeral at best.

Regardless, as Plaintiff maintained the argument she was terminated by her supervisor, when she admitted she was offered a transfer by the regional manager, it appears she simply painted herself into a corner and suffered a failure of proof. If her supervisor were only carrying out the orders of her employer, the claim would not appear compensable as the only inference would be the supervisor was complying with the transfer ordered by the employer. In order to win under the conditions Plaintiff set up, her supervisor had to be a lone actor, deciding on his own to terminated her employment. Even if the instructions were bad, and unnecessary, we must ask whether they constituted reversible error, given the admission she was offered a transfer.

As stated above, this decision came down just last week, and may still be subject to reconsideration. To fully disclose, we are handling this matter and we have no intention of affecting any future legal or factual outcome—the goal is to cover this legal occurrence from an academic perspective. This article was researched and written by Arik D. Hetue, J. D. who can be reached at ahetue@keefe-law.com. Please feel free to email him for questions or comments, or post them on our award winning blog.