OSHRC Modifies Its Test for Allowing Late Filed Contests
Under section 10 of the OSH Act, an employer has only 15 working days to contest a citation and proposed penalty from OSHA. If the Notice of Contest (NOC) is not sent to OSHA within the 15 days, the citation and proposed penalty are automatically “deemed a final order of the Commission.”
Using Federal Rule of Civil Procedure (FRCP) 60, the Commission may give relief from such final judgments. FRCP 60 has several bases for relief, but the most commonly asserted in motions to reopen after a late filed NOC is Rule 60 (b)(1), which provides that a final order may be set aside if it was entered due to “mistake, inadvertence, surprise, or excusable neglect.”
A 1993 Supreme Court decision (in a non-OSHA case), Pioneer Investment Services v. Brunswick Assoc., spelled out 4 factors that courts and agencies should consider when determining whether “excusable neglect” exists for missing a procedural deadline. The so-called “Pioneer factors” are: (1) the danger of prejudice to the opposing party, (2) the length of the delay and its potential impact on judicial proceedings, (3) the reason for the delay, including whether it was within the reasonable control of the movant, and (4) whether the moving party acted in good faith. The Supreme Court stated that “excusable neglect” should be based on “all relevant circumstances” and considering all of these factors.
The Commission’s new test makes it incumbent on employers seeking to reopen a final order due to a late-filed NOC to include some type of evidence about its “usual” procedures for handling such mail, to show that it has “sufficient procedures” in place and the failure to handle the NOC was an exception.
Even though the Commission has long stated that the Pioneer factors apply to late filed NOC cases, it has generally applied a one-factor test, which late NOC filers could rarely meet. Under the Commission’s one-factor test, relief was denied if the reason(s) for missing the 15-day time limit for filing the NOC “was within the control of the employer.” Under that test, it often required an “act of God” for an employer to be granted relief.
Three U.S. courts of appeals, the 3rd Circuit in George Harms Construction v. Chao, 371 F.3d 156 (3d Cir. 2004), the 11th Circuit in Randall Mechanical v. Sec’y of Labor, 798 F. App’x 604 (11th Cir. 2020) and the 5th Circuit, in Coleman Hammons Construction v. Sec’y of Labor, 942 F.3d 279 (5th Cir. 2019), reversed Commission decisions denying relief because the Commission gave too much weight to the single factor of whether the reason for delay was “within the control of the employer.” The remaining circuits have either not expressly ruled on the appropriate test or deferred to the Commission. As a result, the likelihood of success on a motion to reopen a final order entered due to a late-filed NOC now depends to which circuit the case may be appealed.
The most recent Commission FRCP 60(b) decision somewhat modified the Commission’s test and makes it incumbent on employers seeking relief to include a statement and “evidence” that the late filing was a “one off” incident, and not indicative of the business’s usual office procedures.
The facts in Burlington Capital PM Group, d/b/a Post Wosods Apartment Homes, (Dec. 31, 2020) were as follows: OSHA conducted an inspection in October 2019 at an apartment complex in Ohio. Following the inspection, OSHA’s Columbus, Ohio area office issued a single serious citation. OSHA sent the citation to Burlington’s corporate office in Omaha, Nebraska. A paralegal at the corporate office prepared a Notice of Contest and gave it to an administrative assistant to send via UPS to the OSHA area office. The administrative assistant mistakenly sent the Notice of Contest to Post Woods Apartment address, rather than to OSHA. In January, 2020, OSHA sent a delinquent payment notice to Burlington. On March 4, 2020, Burlington contacted OSHA, and after being informed that OSHA had not received its NOC, subsequently filed a motion to reopen with OSHRC, along with an affidavit from the administrative assistant stating that she inadvertently shipped the NOC to Post Woods rather than to OSHA.
The Administrative Law Judge to whom the case was assigned denied Burlington’s motion for relief, based on the “the reason for delay was within the control of the employer” test. The Commission reversed the ALJ’s decision, and remanded the case for proceedings on the citation.
The Commission said that it would distinguish “cases in which an employer’s deficient procedures lead to a delay in filing and those in which there is an unforeseeable misunderstanding or miscommunication that results in a delay despite the company’s otherwise sufficient procedures.”
The Commission then found that in Burlington, the delay was due to “an unforeseen error by the administrative assistant, not the result of a deficient procedure.” The evidence cited by the Commission that this was not indicative of deficient procedures was that the NOC of contest had in fact been prepared by the paralegal and given to the administrative assistant to mail. The assistant mailed it to the wrong address.
The Commission’s new test makes it incumbent on employers seeking to reopen a final order due to a late-filed NOC to include some type of evidence about its “usual” procedures for handling such mail, to show that it has “sufficient procedures” in place and the failure to handle the NOC was an exception. Indeed, a recent ALJ decision, L & C General Contractors, (ALJ, Dec. 31, 2020), found that where the employer did not include evidence specific to how it ordinarily handles such business mail, the employer had failed “to meet its burden to establish that it had orderly procedures” and relief under FRCP 60(b) was denied.