Court: Responsibility on Small Business for Lack of Knowledge of OSHA Citation
A recent decision by the U.S. Court of Appeals for the Fifth Circuit considered the sufficiency of service of an OSHA citation and proposed penalty on a small business, and whether relief would be granted for the small business’ failure to contest the citation within 15 working days of when service was deemed to have been made.
Under sections 9 and 10 of the OSH Act, OSHA must issue a citation to the employer “with reasonable promptness” and no later than 180 days after the occurrence of the violation. The proposed penalty for the violation must be sent to the employer by certified mail. In practice, OSHA sends both the citation and proposed penalty together by certified mail. OSHA’s usual practice is to ask an employee present during the inspection or investigation for an address to send any citations. Sometimes the address given by the employee is one that is seldom used or monitored, or the person who is responsible for handling mail is away for a period of time. In those situations, the deadline for contesting the citation (15 working days from date of service) may pass before the mail is seen or responded to.
In the Fifth Circuit case, OSHA investigated the employer, D.R.T.G. Builders (DRTG), following a report of a workplace fatality. OSHA subsequently issued a two-item citation and proposed penalty.
The citation and proposed penalty were sent by USPS certified mail to an address that had been provided by employees during the inspection. The address also was the residence address of the person listed as the owner of the small construction business, though he was apparently absent or away during this time. When no one was present to sign for the certified mail, USPS left a delivery slip at the home address, stating that the certified mail would be held at the post office for pick up. No one picked it up from the post office.
Upon learning that the certified mail was not claimed, OSHA sent the citation by UPS Next Day Air. This time the envelope was simply left on the doorstep of the address that had been provided.
OSHA considered the UPS delivery as the date of service, even though it is not clear whether the UPS delivered package was ever seen by anyone from DRTG. When DRTG did not file its contest within 15 working days (by October 16) of the UPS delivery, OSHA considered the citation and penalty to be a final order.
According to the Court DRTG learned of the citation when a “next of kin” letter with a copy of the citation enclosed was sent by OSHA to a relative of the deceased who was also an employee of DRTG. That employee immediately forwarded the citation to DRTG’s counsel on October 18, which was after the 15 working days to contest the citation had already passed.
DRTG filed a notice of contest on November 5. OSHA informed the company that it had not been timely filed and the citation was a final order. DRTG filed a motion for relief with the OSH Review Commission. An ALJ rejected DRTG’s motion, and the Commission declined review. DRTG then appealed to the Fifth Circuit.
The first issue addressed on appeal was whether OSHA’s method of service of the citation and proposed penalty were proper under the OSH Act. The Court said that the test for sufficient service is “whether the service is reasonably calculated to provide an employer with knowledge of the citation and notification of proposed penalty and an opportunity to determine whether to abate or contest.” Regarding the requirement in the OSH Act that service (of the proposed penalty) be by certified mail, the Court cited OSHA’s Field Operations Manual, which allows use of mail delivery service to be used in addition to certified mail. The Court held that the service in this case satisfied both the statute and notice requirements: “Because OSHA first sent the notice by USPS certified mail and then took steps that were reasonably calculated to provide DRTG with notice, OSHA properly served DRTG with notice of the citation.”
DRTG also sought relief under Federal Rule of Civil Procedure 60 (b), under which final orders may be set aside if the party seeking relief can show “excusable neglect.” Claims of “excusable neglect” under Rule 60(b) are evaluated against four factors: the danger of prejudice, the length of the delay and its potential impact on judicial proceedings, the reason for the delay, and whether the movant acted in good faith.
In this case the Court said 3 of the 4 four factors (all except the first) weighed in favor of OSHA and denied DRTG relief. The Court noted that DRTG waited more than two weeks to file its notice of contest even after it learned of the citation (from the next of kin letter) on October 18.
The Court particularly focused on DRTG’s lack of showing that it had a system in place to assure that mail (such as the OSHA citation) was seen and responded to. The Court contrasted DRTG’s lack of evidence regarding a “standard operating procedure for mail” and evidence that missed mail was not common with the Fifth Circuit’s 2019 decision in Coleman Hammons Constr. Co. v. OSHRC, where Court said the employer did show that it had a process and system in place to receive, open and respond to mail, and the missed citation had been attributable to a single instance of unforeseen human error. In Coleman Hammons the Court of Appeals did grant relief on the basis of excusable neglect.
The decision is a good reminder that even though most business and communication may be done electronically, OSHA citations are paper-based, and need to be timely acted on. It is also a good reminder for employers to ensure that when an OSHA inspection takes place, that the inspector is given an address where any citations resulting from the inspection will be timely seen.