California Employers Should Prepare For Increased Enforcement Of, And Litigation Over, New OSHA Standards Regarding Serious Violations

November 22, 2010


As a result of recently enacted AB 2774, which takes effect on January 1, 2011, California employers should be aware of and take steps to prepare for a significant increase in the number of serious citations issued—and, therefore, the amount of penalties proposed—by the California Division of Occupational Safety and Health (“Cal/OSHA”).

On September 30, 2010, amid mounting criticism from the federal Occupational Safety and Health Administration (“Fed-OSHA”) regarding California’s enforcement of workplace safety standards, Governor Arnold Schwarzenegger signed AB 2774 into law. The new law rewrites California Labor Code Section 6432 not only to reduce Cal/OSHA’s burden for proving a serious violation under California’s occupational safety and health laws, but also to create a rebuttable presumption that such a violation exists.

These changes are not surprising, considering that Fed-OSHA recently released a report that criticized both Cal/OSHA and the California Occupational Safety and Health Appeals Board (the “Appeals Board”). In its 2009 annual report on state occupational safety and health plans, Fed-OSHA concluded, among other things, that Cal/OSHA’s policies on classifying violations does not ensure that violations that would have been categorized as serious under federal standards are classified as serious by Cal/OSHA. In the special study on the appeals process included in the same report, Fed-OSHA determined that the Appeals Board made it too difficult for Cal/OSHA to establish serious violations, based in part on the Appeals Board’s interpretation of “substantial probability” and its rules for expert testimony, both being more stringent than those under Fed-OSHA. According to statistics provided by the U.S. Department of Labor for fiscal year 2009, Cal/OSHA classified 19% of violations as serious, compared to 77% for Fed-OSHA.[1] Fed-OSHA recommended that Cal/OSHA take administrative, judicial or legislative action to ensure consistency with federal standards on classifying serious hazards. AB 2774 aims to address some of these criticisms.

Reducing The Burden On Cal/OSHA To Prove Serious Violations

Currently, Section 6432 of the California Labor Code requires Cal/OSHA to establish a serious violation by proving that there is a “substantial probability that death or serious physical harm could result from a violation.” AB 2774 reduces Cal/OSHA’s burden in proving serious violations in three ways.

First, the new law changes the “substantial probability” standard to “a realistic possibility.” In the past, the Appeals Board has interpreted “substantial probability” to mean “more likely than not” or a likelihood of 51% or more. See, e.g., Jerlane, Inc., Decision After Reconsideration, Docket Nos. 01-R3D2-4344 through 4348, 2007 WL 2584817, at *28 (Aug. 20, 2007); Findly Chemical Disposal, Inc., Docket Nos. 91-R3D1-431 through 432, 1992 WL 528542, at *3 (May 7, 1992). The legislative history of AB 2774 suggests that the new standard of “realistic possibility” is designed to be less than 51%, but a question remains regarding how low the standard is. The phrase “realistic possibility” is not defined in AB 2774 or elsewhere in state occupational safety and health laws or regulations. As a result, there likely will be substantial litigation over what “realistic possibility” actually means, as Cal/OSHA likely will take the position that it is a minimal standard and classify far more violations as serious. This is consistent with Fed-OSHA’s apparent expectation that Cal/OSHA’s classification of 19% of violations as serious will increase to approach or match Fed-OSHA’s 77%. That is not good news for California employers.

Second, AB 2774 significantly expands the definition of “serious physical harm” as used in Section 6432. This phrase is currently undefined in Section 6432, and, thus, the Appeals Board has interpreted it to mean an injury or illness occurring in a place of employment or in connection with any employment which: (1) requires inpatient hospitalization for a period in excess of 24 hours for other than medical observation; (2) involves a loss of any member of the body; or (3) results in any serious degree of permanent disfigurement. See, e.g., California Family Fitness, Docket No. 03-R2D1-0096, Decision After Reconsideration, 2009 WL 1204893, at *2 (Mar. 20, 2009) (ruling that “serious physical harm” means “serious injury or illness” as defined in Cal. Lab. Code Section 6302(h)). Under the new law, however, Section 6432 greatly expands what is a serious violation by expressly defining “serious physical harm” to include the above definition subject to two noticeable differences. First, the new definition drops the requirement that the inpatient hospitalization last more than 24 hours, and, thus, any inpatient hospitalization—for purposes other than medical observation—for any period of time will fall under the new definition. Second, the new law includes as an additional, separate category “impairment sufficient to cause a part of the body or the function of an organ to become permanently and significantly reduced in efficiency on or off the job” such as, for example, “second degree or worse burns, crushing injuries including internal injuries even though skin surface may be intact, respiratory illness, or broken bones.” What constitutes “significantly reduced in efficiency” no doubt will be litigated in the months and years to come.

Third, under the new law, Cal/OSHA inspectors will be able to provide testimony and offer expert opinions regarding each element of a serious violation, including whether there is a “realistic possibility” that death or serious physical injury could result, and the custom and practice of injury and illness prevention in the workplace.[2] In the past, the Appeals Board has rejected such testimony because Cal/OSHA’s inspectors lacked sufficient expertise, such as a specific familiarity with the alleged condition at issue. See, e.g., California Family Fitness, 2009 WL 1204893, at *2-3.

Rebuttable Presumption That Serious Violation Exists

Remarkably, in addition to reducing the standard for serious violations, AB 2774 creates a rebuttable presumption that such a violation exists when Cal/OSHA issues a serious citation after making “a reasonable attempt to determine and consider” a variety of different factors before issuing the citation. These factors include: (1) employer training for employees and supervisors to prevent exposure to the hazard or similar hazards; (2) the employer’s procedures for discovering, controlling access to, and correcting the hazard or similar hazards; (3) supervision of employees exposed or potentially exposed to the hazard; (4) the employer’s procedures for communicating health and safety rules and programs to employees; and (5) any information the employer wishes to provide, including without limitation, the employer’s explanation of the alleged condition, why it believes that a serious violation does not exist, and why it believes that it will be able to establish the absence of employer knowledge -- in other words, that it did not know and could not have known, without the exercise of reasonable diligence, of the existence of the serious violation.

Cal/OSHA will be able to satisfy this new requirement by simply delivering to the employer, at least 15 days before issuing the serious citation, a standardized form containing the descriptions of alleged violations it intends to cite as serious and soliciting the above information from the employer. If Cal/OSHA fails to provide this standardized form or offers factual information at the hearing that is inconsistent with the description provided to the employer on Cal/OSHA’s standardized form, the Appeals Board may draw negative inferences against Cal/OSHA. If an employer offers information at the hearing inconsistent with what it provided in response to Cal/OSHA’s standardized form, then the Appeals Board may draw a negative inference against the employer. Notably, however, AB 2774 specifies that if the employer fails to respond to the standardized form, it may still offer information at the hearing and no negative inference may be drawn.

Once Cal/OSHA has established that it made a reasonable attempt to determine and consider these factors, the burden shifts to the employer at the hearing to rebut the presumption of a serious violation by establishing the absence of employer knowledge. The new law, however, expressly provides that, in order to establish the absence of employer knowledge, the employer first must demonstrate that it “took all the steps a reasonable and responsible employer in like circumstances should be expected to take, before the violation occurred, to anticipate and prevent the violation, taking into consideration the severity of the harm that could be expected to occur and the likelihood of that harm occurring in connection with the work activity during which the violation occurred.” Relevant here will be the factors mentioned above. In addition, the employer must demonstrate that it effectively abated the hazard as soon as the violation was discovered. This abatement requirement is new and provides additional incentive to the employer to abate the condition as soon as possible to preserve its right at the hearing to establish lack of employer knowledge prior to being notified by Cal/OSHA of the alleged condition.

What Employers Can Do Now To Prepare

As noted in the latest Fed-OSHA report, Cal/OSHA’s penalty structure remains the highest in the country, as the average first-time penalty for serious violations is four times higher than the national average. To be proactive and to prepare for the new standards and procedures implemented by AB 2774, California employers should consider any one or more of the following:

  • Reviewing and updating of its Injury and Illness Prevention Program (“IIPP”) materials, as well as all other safety policies and procedures, such as lock-out-tag-out policies.
  • Reviewing and ensuring implementation of its revised/updated IIPP.
  • Updating training materials.
  • Conducting and documenting training of both supervisors and employees regarding general safe practices as well as particular hazards that may result in death or serious injury.
  • Conducting a privileged audit to determine the existence of serious violations -- and promptly correcting them.

By taking these steps, employers will be better prepared to rebut the presumption of a serious citation under the new version of Section 6432 and present their arguments in the most favorable light, whether in response to a standardized request form from Cal/OSHA prior to the issuance of a citation or at the hearing before the Appeals Board. In addition, because of the lack of clarity and guidance regarding the meaning of material phrases in the new Section 6432, employers facing serious citations in the next year should expect increased litigation over those standards—all the more reason to make preventative measures a New Year’s resolution.

[1]It is noteworthy that under Fed-OSHA, a “serious” violation carries a maximum civil penalty of $7,000. Under Cal/OSHA, the maximum for a serious violation is $25,000.
[2]Under the new law, to qualify as an expert, the inspector need only establish that his or her training is up to date.