Vacating citations
against a Texas company, an administrative judge has lambasted the Occupational
Safety and Health Administration for having “fallen short of any standard of
decency, honor, or reliability” by citing the company for alleged violations occurring
during a period in which OSHA had agreed in a written settlement the company
could establish a program to prevent such violations.
Administrative Law
Judge Patrick B. Augustine of the Occupational Safety and Health Review
Commission granted International Shipbreaking Limited, LLC (ISL) summary
judgment, saying OSHA was equitably barred from seeking to enforce the new
citations. The decision also erased a $22,300 penalty. ALJ Augustine’s June 23
ruling (Sec’y of Labor v. Int’l Shipbreaking Ltd., LLC, OSHRCJ, Nos. 14-0031
& 14-0032, 7/27/15), was issued by the Commission, without review, as a
final order on July 27. The government retains the option of appealing to the
U.S. Court of Appeals for the Fifth Circuit, in New Orleans.
Applied only
sparingly against the government, “equitable estoppel” may be appropriate when
one party is denied a benefit after it has reasonably relied upon the
misrepresentations of another party. Referencing court precedent, Augustine
explained that equitable estoppel here, among other things, requires proving
the government engaged in affirmative misconduct. That, in turn, requires a
showing of intentional wrongdoing or reckless conduct. ISL contended that
because it had breached the settlement agreement by conducting inspections
during the mutually agreed-upon abatement period, OSHA should be equitably
estopped from pursuing litigation.
In July 2013, OSHA
inspected two ships the company was breaking up for scrap, eventually issuing
citations for alleged electrical violations. The enforcement action came two
weeks after the agency and the company had come to terms on an agreement giving
ISL 60 days to institute an electrical safety check program, designate a
competent person to inspect electrical components, hire a certified
electrician, and institute an equipment-grounding-conductor program. Electrical
equipment inspections were to be conducted and documented at least quarterly.
In return, OSHA agreed to drop a host of citations for alleged violations
involving electrical infractions, personal protective equipment, fall
protection, fire prevention, and others issued in November 2011.
OSHA asserted the
2013 inspections were conducted as part of its National Emphasis Program (NEP)
on shipbreaking, the citations were not covered by the 60-day abatement period
in the settlement agreement, and, if it were estopped from pursuing its
litigation, ISL would have a “free ride” to continue violating the law. The
agency also claimed it was merely a coincidence that its inspectors visited the
ships so soon after reaching the settlement.
ALJ Augustine
disagreed. He determined OSHA’s NEP argument was hollow because, despite the
NEP, OSHA had discretion not to inspect some ships being broken down. In
addition, inspections of the two ships could have taken place either before or
after the abatement period, since the dismantling process was expected to take
11 months. Besides, the judge observed, of the 21 points on which the NEP is
supposed to focus, none include electrical violations, even though these were
the only violations OSHA reported. Finally, Augustine was “troubled” that OSHA
had engaged three times as many compliance officers for the July 2013
inspections as it had committed in 2011. “Contrary to [OSHA’s] argument, … the
Court finds that there are simply too many coincidences to be coincidental,”
Augustine said.
As for OSHA’s
contention that the settlement agreement did not address or apply to the
specific electrical violations the agency found, Augustine called that argument
“patently unreasonable,” “inconsistent,” “disingenuous,” and “an intentional
misrepresentation” of the agreement’s abatement provisions.
He also swept away
OSHA’s “free ride” contention. The agreement, he said, was a far-reaching
attempt to address electrical hazards and included a clause allowing OSHA to
enter ISL’s workplaces after the abatement period ended to verify that
conditions contained in the citations had been corrected. The language also
committed ISL to continue good-faith efforts to comply with the law, Augustine
said. ISL estimated its abatement costs came to $1.25 million.
Why would such a
provision be included if not to reaffirm ISL’s responsibility to correct
hazards and comply with the law during the abatement period, Augustine asked.
He added, “Given the expense involved and the comprehensive nature of the
abatement, the 60-day period could hardly be classified as a free ride. ...
[OSHA] acted recklessly, if not intentionally, in depriving [ISL] of a mutually
bargained-for right to reasonable abatement.”
Source:
lexology.
20 August 2015
