Beveridge & Diamond
 

D.C. Circuit Rejects Longstanding Interpretation of Statute of Limitations for OSHA Recordkeeping Violations in Volks Constructors

Beveridge & Diamond, P.C., April 27, 2012

In a case of first impression in the courts of appeals, the D.C. Circuit has held that OSHA cannot cite employers for failure to record work-related injuries and illnesses more than six months after the initial obligation to record the cases occurred.  This emphatic decision disagrees with a line of Occupational Safety and Health Review Commission decisions going back nearly two decades.  It may mean the end of big recordkeeping enforcement cases.

The Occupational Safety and Health Administration (OSHA) has brought numerous blockbuster recordkeeping cases in the past as a way of sending a message to employers about the importance of compliance.[1]  These cases depended on accumulating a large number of unrecorded alleged cases, often over multiple years.  This in turn raised the question of whether the six-month statute of limitations in the Occupational Safety and Health (OSH) Act precludes citations for cases for which recordkeeping obligations arose more than six months prior to issuance of the citations.  The Occupational Safety and Health Commission (OSHRC) has repeatedly said no, that citations can cover cases for which the recordkeeping obligation arose any time during the five-year record retention period.

On April 6, 2012, the U.S. Court of Appeals for the D.C. Circuit rejected OSHRC’s longstanding interpretation in AKM LLC d/b/a Volks
Constructors v. Secretary of Labor
.[2]  The court found that the statute of limitations provision, section 9(c) of the OSH Act, clearly requires OSHA to issue citations for recordkeeping violations within six months of the date the employer failed to record an injury or illness, and that using the record retention period to expand this time period ten-fold was unreasonable.  On the basis of this holding, the court vacated citations for 171 alleged violations.  The D.C. Circuit’s holding is likely to have a significant impact on OSHA’s recordkeeping enforcement, as OSHA will no longer be able to cite employers for violations spanning several years.

I.                   Facts and Prior Decisions

In May 2006, OSHA conducted an inspection of AKM LLC, which does business as Volks Constructors (Volks).  During the inspection, OSHA learned that Volks had violated OSHA’s recordkeeping requirements several times between January 11, 2002 and April 22, 2006.  On November 6, 2006 — six months and 10 days to 54 months after the obligation to record the cases arose — OSHA issued citations to Volks for: 67 alleged violations for having incomplete incident report forms (29 C.F.R. § 1904.29(b)(2)); 102 alleged violations for not entering injuries into the log (29 C.F.R. § 1904.29(b)(3)); 1 alleged violation for failing to conduct a year-end review (29 C.F.R. § 1904.32(a)(1)); and 1 alleged violation for allowing the wrong person to certify a year-end summary (29 C.F.R. § 1904.32(b)(3)).  The proposed penalties totaled $13,300.

The statute of limitations for violations of the OSH Act is “six months following the occurrence of any violation.”[3]  OSHA’s issuance of the citations to Volks was consistent with its past practice of citing employers for recordkeeping violations that occurred more than six months prior, but within the five-year period the employer would have been required to retain a record in accordance with 29 C.F.R. § 1904.33(a).  This practice was first addressed and upheld by the OSHRC in 1993[4] and has been consistently upheld by the OSHRC since.[5]  The OSHRC’s rationale was that such violations were continuing violations until the time that they were abated or until the five-year retention period set forth in 29 C.F.R. § 1904.33(a) expired.  In 1993, in Johnson Controls, Inc., the OSHRC explained:

Just as a condition that does not comply with a standard issued under the Act violates the Act until it is abated, an inaccurate entry on an OSHA [log] violates the Act until it is corrected, or until the 5-year retention requirement of [the regulation] expires.  Thus a failure to record an occupational injury or illness as required by the Secretary’s recordkeeping regulations . . . does not differ in substance from any other condition that must be abated pursuant to the occupational safety and health standards . . . .[6]

Volks disagreed with OSHA’s interpretation of the statute of limitations and moved to dismiss the citations on the ground that they were untimely.  The Administrative Law Judge (ALJ), Irving Sommer rejected Volks’ argument and upheld the citations.  He relied heavily on the reasoning set forth in Johnson Controls and stated that “Volks’ arguments . . . are essentially old arguments the Commission has considered and rejected before.”[7]

Volks then appealed to the OSHRC, which held oral argument on the issue.  The majority of the Commissioners, Chairman Rogers and Commissioner Attwood, agreed with the ALJ and upheld the citations.  They found that Johnson Controls and the subsequent OSHRC cases were controlling because “the instant case involves the obligations to make a record and maintain it for a specified time period.”[8]  Commissioner Thompson dissented.  He stated that the statute of limitations was “plain and unambiguous” and that the limitations period begins to run on the date when a recordable injury or illness should have been entered on a required log.  He further stated that OSHA’s issuance of the citations more than six months after the injuries should have been recorded “eviscerates the very concept of statutes of limitations and violates all notions of fundamental fairness and due process.”

Volks then petitioned for review of the OSHRC decision to the U.S. Court of Appeals for the D.C. Circuit.

II.   Majority and Concurring Opinions

In the D.C. Circuit’s decision, Judge Brown wrote for the court that “we agree with Volks that the citations are untimely and should be vacated.”  She closely examined the text of the statute of limitations and determined that it unambiguously required OSHA to issue citations within six months of the failure to record an injury.  The statute of limitations runs from “the occurrence of any violation,” and the court found that “occurrence” refers to an “incident” or “a discrete antecedent event.”  In this case, “every single violation for which Volks was cited—failures to make and review records—and every workplace injury which gave rise to those unmet recordkeeping obligations were ‘incidents’ and ‘events’ which ‘occurred’ more than six months before the issuance of the citations.” 

The court rejected as an unreasonable “cloud of dust” the Secretary’s interpretation, previously upheld by the OSHRC, that the violations were continuing in nature, and thus not barred by the statute of limitations.  In the court’s view, that interpretation rendered the six-month period in the statute “superfluous” and “incorrectly assumes that the obligation to maintain an existing record expands the scope of an otherwise discrete obligation to make that record in the first place.”  While acknowledging that “continued actions may extend the statute of limitations, nothing in [a previous case] suggests that inaction has the same effect, and this case is about inactions.”  The decision distinguished situations where a company continues to subject its employees to unsafe machines; in that situation, “OSHA may be able to toll the statute of limitations on a continuing violations theory since the dangers created by the violations persist.”

The court also noted that under the Secretary’s interpretation, the statute of limitations could be expanded indefinitely by increasing the record retention period, and that this consequence was not intended by Congress.  The court concluded that because the text of the statute was clear and OSHA’s interpretation was unreasonable, OSHA’s interpretation was not entitled to deference under the Chevron doctrine.

The court’s opinion addressed the idea that a six-month statute of limitations is too short, saying that neither the court nor OSHA could “unsettle Congress’s chosen means” of encouraging prompt enforcement. 

In a footnote the court suggested that OSHA could argue in a new case that the OSH Act incorporates a discovery rule (i.e., that the statute of limitations does not begin to run until OSHA discovers the violation).  OSHA had raised this issue with the ALJ, but did not pursue it before the OSHRC or the court.

Judge Brown also authored a concurring opinion that addressed the issue of whether the Chevron doctrine is applicable in cases addressing an interpretation of a statute of limitations provision.  She suggested that application of the Chevron doctrine was not appropriate in such cases, because limitations provisions do not involve an agency’s area of special expertise or involve a question of policy that Congress has delegated to an agency to resolve.  She cautioned that “[o]ur narrower disposition of this case, instead assuming without deciding that Chevron applies, should not be read as foreclosing a future panel of this Court from tackling anew the deference owed to agency interpretations of statutes of limitations, even those reached and conveyed in the proper form.”

Judge Garland authored a second concurring opinion that offered an alternative basis for the court’s decision.  Rather than addressing the reasonableness of OSHA’s longstanding interpretation, Judge Garland looked at the nature of the violations in this case and determined that they were discrete violations that occurred beyond the limitations period.  He explained that they could not be considered continuing violations because OSHA did not cite Volks for failing to save its logs and incident reports for the five-year retention period and because OSHA’s regulations do not impose a continuing obligation to update logs and incident reports after the seven-day period during which the injury or illness must be recorded.  He noted, however, that other recordkeeping requirements, such as the record retention regulation, did impose continuing obligations.  Judge Garland explained, that if an employer lost or destroyed a record before the end of the five-year period, the employer could be cited more than six months after the date the record was lost or destroyed; the limitations period in that scenario would extend to “six months after the fifth year.”

III.   Discussion

The Volks Constructors decision is the first judicial decision that has addressed OSHA’s expansive interpretation of the OSH Act’s statute of limitations.  While it is not considered binding on the OSHRC or on other courts of appeals, the D.C. Circuit is so influential that OSHA is likely to follow its reasoning unless the decision is successfully appealed.  That would mean that henceforward, OSHA would be unable to cite recordkeeping violations occurring over an extended period to produce the kind of large cases that have been a hallmark of recordkeeping enforcement in the past.

The decision is silent on the extent to which its ruling on inaction being insufficient to toll the statute of limitations as a continuing violation applies to failures to meet reporting requirements.  The OSHRC has held that in failure-to-report cases, the statute of limitations does not begin to run until OSHA discovers the violation.[9]  An EPA ALJ recently held that failure to report as required by section 8(e) of the Toxic Substances Control Act is continuing in nature and the statute of limitations does not begin to run until the information is reported.[10]

OSHA launched an injury and illness recordkeeping national emphasis program in 2009.  The program’s directive had instructed OSHA inspectors to review records for two full calendar years.[11]  The national emphasis program officially ended on February 19, 2012, so OSHA does not need to address there whether to accept the Volks Constructors decision for its national activities. 

Although the Volks Constructors decision is likely to decrease the scope of OSHA’s enforcement activity with respect to recordkeeping, OSHA is actively working to enhance and improve employers’ recordkeeping practices.  On March 12, 2012, OSHA criticized workplace policies and practices that could discourage injury and illness reporting – such as disciplinary measures against injured employees and incentives for employees that remain injury free – and announced that it would conduct recordkeeping investigations where such policies and practices were found.[12]  

OSHA is also working to revise its recordkeeping requirements.  Last year, it proposed to revise its list of industries subject to recordkeeping requirements and to change its injury notification requirements.[13]  Another proposal, which would update its requirements for submitting the annual survey of injuries and illnesses, is now under extended review at the Office of Management and Budget.[14]

For more information, contact Mark Duvall at mduvall@bdlaw.com, or Jayni Lanham at jlanham@bdlaw.com.  

For a printable PDF, please click here.


[1] See, e.g., OSHA News Release, “US Labor Department’s OSHA cites 2 companies, proposes $288,000 in fines for workplace safety and health violations involving foreign students” (Feb. 21, 2012) (9 alleged recordkeeping violations over 4 years); OSHA News Release, “US Department of Labor’s OSHA cites Houston manufacturing company for hiding work-related injuries and illnesses; fines exceed $1.2 million” (Sept. 1, 2010) (proposed penalties of $1,215,000 for 83 alleged recordkeeping violations over 27 months); Saw Pipes USA, Inc., 21 BNA OSHC 1306 (No. 91-0422, 2005) (proposed penalties of $472,000 for 59 alleged recordkeeping violations over 36 months); Jindal United Steel Corp., 21 BNA OSHC 1298 (No. 00-2231, 2005) (proposed penalties of $990,000 for 110 alleged recordkeeping violations over 2½ years); Hercules, Inc., 20 BNA OSHC 2097 (No. 95-1483, 2005) (proposed penalties of $3,140,000 for failure to abate citations based on previous 189 alleged recordkeeping violations over 36 months); Kaspar Wire Works, Inc., 18 BNA OSHC 2178 (No. 90-2775, 2000) (proposed penalties of $1,236,000 for 382 alleged recordkeeping violations over 24 months as well as other alleged violations); Pepperidge Farm Inc., 17 BNA OSHC 1993 (No. 87-0922, 1997) (proposed penalties of $289,603 for 176 alleged recordkeeping violations over 32 months); Kohler Co., 16 BNA OSHC 1669 (No.888-237, 1994) (proposed penalties of $1,398,000 for 466 alleged recordkeeping violations over 12 months);  Caterpillar Inc., 15 BNA OSHC 2153 (proposed penalties of $776,000 for 194 alleged recordkeeping violations over 12 months).

[2] No. 11-1106, (D.C. Cir. Apr. 6, 2012), 2012 U.S. App. LEXIS 6940.

[3] 29 U.S.C. § 658(c).

[4] See Johnson Controls, Inc., 15 BNA OSHC 2132 (No. 89-2614, 1993).

[5] See AKM LLC, d/b/a Volks Constructors v. Secretary of Labor, 23 BNA OSHC 1414 (No. 06-1990, 2011) (citing cases).  

[6] Johnson Controls, Inc. 15 BNA OSHC at 2135-36.

[7] Secretary of Labor v. AKM LLC d/b/a Volks Constructors, OSHRC Docket No. 06-1990 (June 25, 2007).

[8] AKM LLC, d/b/a Volks Constructors v. Secretary of Labor, 23 BNA OSHC 1414 (No. 06-1990, 2011).  

[9] See, e.g., Yelvington Welding Service, 6 BNA OSHC 2013 (No. 15958, 1978).

[10] See In re Elementis Chromium, Inc., f/k/a Elements Chromium, L.P., Docket No. TSCA-HQ-2010-5022 (Mar. 25, 2012), www.epa.gov/
oalj/orders/elementis-chromium-jdgmnt-on-pleadings-032511.pdf
.  

[11] OSHA Directive 10-07 (CPL 02) (Sept. 28, 2010), http://www.osha.gov/OshDoc/Directive_pdf/CPL_02_10-07.pdf.

[12] Memorandum from Richard E. Fairfax, Deputy Assistant Secretary, to Regional Administrators and Whistleblower Program Managers re Employer Safety Incentive and Disincentive Policies and Practices (March 12, 2002), http://www.osha.gov/as/opa/whistleblowermemo.html.  

[13] See Proposed Rule: Occupational Injury and Illness Recording and Reporting Requirements – NAICS Update and Reporting Revisions, 76 Fed. Reg. 36414 (June 22, 2011).

[14] Office of Information and Regulatory Affairs, Office of Management and Budget, Executive Order Submissions Under Review (RIN 1218-AC49), http://www.reginfo.gov/public/do/eoReviewSearch;jsessionid=
04C7B247E7451AAAC8A73546C2416151
.

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