4 Responding to Catastrophic Loss After it Occurs is Too Late Prepare in advance of a catastrophic event Time immediately after the accident is critical Implementation of an immediate response program minimizes risk oThis must be in place BEFORE the catastrophic event occurs
5 Benefits of Effective Immediate Response Secure an early evaluation of the loss oBoth strengths and weaknesses Identification and preservation of evidence oEveryone in response team must work together oHave clearly identified roles oIn-house counsel, in-house claims management, technical experts, investigators, outside counsel
6 Pre-Incident Risk Analysis Effective immediate response begins with analysis of specific risks: oThink about worst case scenarios oIdentify risks and hazards oPlan for how and with whom you will address risks oDuty to identify and minimize risk is ongoing oPredicting beforehand minimizes risk, and generally reduces costs oNo plan is perfect but planning makes response more effective.
7 Pre-Incident Risk Analysis Job-Hazard Analysis: oA step-by-step method if risk identification related to a particular task List all steps required to complete task Review each step to determine what healthy and safety hazards are present Determine measures to eliminate or lessen effects of those hazards An outside inspection or audit of the health and safety program
8 Pre-Incident Risk Analysis Look for various control measures oEngineering Controls Machine guarding, guardrails, ventilation, and raw material substitution. oAdministrative Controls Job rotation and training oPersonal Protective Equipment (PPE) Last line of defense
9 Pre-Catastrophic Loss Preparation- The Playbook Identify the response team Team will include: oIn-house: counsel, safety specialists, HR, IT oOutside counsel oIndependent adjustors/investigators oExperts and specialists and oInsurer contact Have contact information readily available Policy considerations include: oMedia policy, response team members, record retention policy
10 Outside Counsel After notice of a catastrophic occurrence, response team leader should contact rest of team Outside counsel should be FIRST contacted Involvement of an attorney allows for free flow of information under the cloak of privilege with team leader.
11 Investigator/Adjustor After counsel has been contacted, an investigator should be dispatched to the scene and coordinate with counsel The investigator should have a high level of understanding of OSHA If it is determined that an expert is needed, one should also be present to conduct technical and scientific analysis
12 Company Personnel on Scene Supervisory personnel should be present oUsually a foreman, superintendent or project manager Company personnel should NOT speak with anyone other than the company representatives, counsel and the investigator oIf approached by law enforcement or OSHA investigators, company personnel may need to speak, but should first consult counsel
13 Accident Investigation Should be performed by someone: oExperienced in accident causation and investigative techniques oWork processes, procedures, and persons of a particular situation
14 Accident Investigation Report the accident to a designated person Provide first aid/medical care and prevent further injuries Investigate accident Identify causes Report findings Develop a plan for corrective action Implement the plan Evaluate the effectiveness of the plan Make changes for continuous improvement
15 Accident Investigation Look for the Root Cause Example: Investigation concludes accident due to worker carelessness and goes no further fails to seek answers to several important questions such as: oWas worker distracted? If yes, why? oWas safe work procedure being followed? If not, why not? oWere safety devices in order? If not, why not? oWas the worker trained? If not, why not?
16 Accident Investigation Task oSafe procedures used? Change in conditions to make normal procedure unsafe? Appropriate tools and materials available? Were the used? Were safety devises working properly? If not, why not? Equipment and Material oEquipment failure? What caused it to fail? Machinery poorly designed? Hazardous substances involved? PPE used? Users properly trained? Environment oWeather conditions? Housekeeping a problem? Temperature, noise, lighting? Toxic substances present? Personnel oWorkers experienced? Adequately trained? Physically capable? Tired? Stressed? Health? Management oSafety rules communicated and understood? Written procedures and orientation available? Procedures enforced? Adequate supervision? Workers trained? Job hazards previously identified? Procedures developed to overcome hazards? Unsafe conditions corrected? Regular equipment maintenance. Inspections performed?
17 Accident Investigation Physical Evidence All equipment involved must be secured Chain of custody and investigation protocol should be established Secure evidence on scene oWitnesses, instrumentalities, documentation Steps to consider: oWitness statements, photographs, testing and sampling, drug and alcohol testing of persons involved. This is where a pre-determined documentation retention policy comes into play. Limit risk and exposure.
18 Rapid Response Activity Identify: oPersons inured or killed (and notify contacts) oLocation of the accident-position of injured oDate/time of the accident oEyewitnesses oSupervisory Personnel oAll contractors on the site oSupervisors of the injured party
19 Rapid Response Activity Locate: oWarnings and safety devices on the site oFlagging, tie-offs, and barriers oGuarding and safety mechanisms oOperators manuals oAnnual crane inspection oDaily crane inspection oDrug screen results oLease Agreement oLoad Chart used for this set up oMaintenance records oPhotos and measurements of the accident oSigned Job Ticket oContracts of all involved parties oInsurance policies and certificates--Later
20 Rapid Response Activity Determine: oThe activities ongoing at time of accident oWhat the injured party was doing at the time of the accident oEnvironmental and weather conditions oRoot cause of accident oNature and scope of the injury oThe owner or furnisher of tools or equipment One should preserve evidence or document conditions before conditions are altered by ongoing construction
21 Rapid Response Activity Obtain: oAccident reports oPolice/Fire department reports, including photos, measurements, and accident reconstruction analyses oJobsite progress photographs and any accident site photographs oAny site, security, or newscast video footage oHandwritten or recorded statements of witnesses oOSHA investigation documents and reportstakes time oCoroners records, including autopsies, toxicology reports, photos oTool box meeting handouts oSafety manuals oSafety meeting records oSite safety plans
22 Post-Response Efforts Assembling all information secured and evaluate the strengths and weaknesses of potential claims Documenting strengths and weaknesses while the information is fresh If facts are favorable, you may respond to claims if and when the claim is brought If unfavorable, you can begin to increase reserves and prepare an intelligent response to claims If the claim is not resolved, then you have all the information you will need at your disposal to defend the claim.
23 Contacting OSHA Reporting requirements: oIf a fatality occurs, the accident must be verbally reported to local OSHA office or by using the OSHA toll-free number within 8 hours of the employees death. oMust also report any incident resulting in the hospitalization of three or more employees
24 THE OSHA INSPECTION FROM OPENING CONFERENCE THROUGH NOTICE OF CONTEST
25 Before OSHA arrives What is at stake for the employer? oOSHA civil liability and penalties oOSHA criminal liability and penalties oAbatement costs oNegative media attention oDisrupted employee relations oIncreased insurance rates oLost business opportunities, particularly job bidding and contracts
26 Crackdown on Enforcement Under the Obama administration, OSHA has stepped up enforcement efforts and increased penalties Clear that current OSHA leadership is strong proponent of worker protections, and is using penalties to generate revenue Construction industry is a target Crane industry-1926-1400-is big target
27 Crackdown on Enforcement April 22, 2010, OSHA issued a revised penalty policy: oOSHAs thought is that Increased penalties results in greater deterrence oPublicize citations and do not settle easily Threshold for publication of a violation formerly $100,000... Now, it is $45,000 Negative press can be more harmful than citation itself oMore serious and willful violations
28 Crackdown on Enforcement Higher penalties: oSize of penalty: Reduced 10-40% for employers with less than 250 employees No reduction if over 250 employees oGood faith requirement: A 15% quick fix incentive for immediate abatement of hazardous condition oRepeat offenders: Increased time frame for repeat violations from 3 years to 5 years oMinimum penalties: Serious violation penalty now $500 oIncreased penalties for egregious violations
29 Crackdown on Enforcement Record keeping: oOSHA looking to stop incentive programs for employees who do not report illness or injury Example: reward systems where employee receives monetary bonus for each month/year with no reported injury or illness. oUnrecorded injury may be characterized as a willful violation oOSHA may also view non-payment of bonus as retaliatory conduct by employer
30 Crackdown on Enforcement Severe Violator Enforcement Program-2010: oConcentrates OSHAs enforcement efforts on employers with a demonstrated indifference to safety oDemonstrated indifference means history of: Willful violations Repeat violations Failure to abate violations Plus a fatality or catastrophe oA higher emphasis industrial operations or processes (e.g., fall protection, dust, silica, trenching) oPrior egregious enforcement of employer
31 Crackdown on Enforcement Consequences of SVEP: Severe violator gets heightened scrutiny including: oFollow up inspections at other worksites operated by the employer countrywide oSettlement requires increased safety obligations (e.g., hire additional safety personnel, injury/illness reporting obligations, self auditing requirements) oElimination of certain citation penalty reductions oRequirement to report any serious violation and consent to inspection
32 OSHA Violations To establish a violation of an occupational safety or health standard, OSHA must prove: o(a) the applicability of the cited standard; o(b) the employers non-compliance with the standards terms; o(c) employee access to the violative condition; and o(d) the employers actual or constructive knowledge of the violative condition
33 OSHA Violations Potential Citations: oOther than serious oSerious oWillful oRepeat oFailure to abate a hazard by OSHAs deadline
34 Types of Violations A serious violation requires only that the employer knew or should have known of the violation A willful violation is committed either with actual knowledge of the violation or with plain indifference to the violation
35 Types of Violations A willful violation does not result simply because a hazardous condition should have been obvious A willful violation requires evidence of the employers knowledge or indifference at the time of the alleged violation
36 Types of Violations Willful violations carry higher civil penalties- up to $70,000 per citation compared with $7,000 for a serious violation Willful violations can result in criminal prosecution of the employer and its individual managers if the willful violation caused an employees death
37 Types of Violations A repeat violation results from OSHA citing an employer for a previous substantially similar violation Repeat violations can be based on prior General Duty Clause violations or specific violations
38 Types of Violations OSHA maintains a national online database on which an OSHA compliance officer can, and will, search for any violations previously issued to an employer anywhere in the country A violation will be considered a repeat violation if the violation occurred within 5 years of the final order date of the previous violation
39 Types of Violations Repeat violations carry penalties of up to $70,000 To an uninformed employer, what may seem like a harmless serious or other than serious violation, with a nominal or no monetary penalty, may lay the foundation for a subsequent repeat violationSO BEWARE
40 Criminal Liability There is potential criminal liability if: oA violation of a specific regulation oThe violation was willful, and oThe violation caused an employees death
41 Criminal Liability Penalty: o6 months imprisonment, and/or o$500,000 fine per fatality for corporation o$250,000 fine per fatality for individual NO MIRANDA WARNINGS DURING AN OSHA INSPECTION!
42 Criminal Liability Other criminal liability can result from: oObstruction of justice for interfering with OSHA inspection oFalsification of records oLying to a compliance officer TELL THE TRUTH
43 The Opening Conference When OSHA arrives: oBe courteous oShow compliance officer to a conference room or empty office oNotify designated point person oPoint person takes control of the inspection and is responsible for all communications with compliance officer and sticks to him throughout inspection
44 The Opening Conference Company representative and union representative (if applicable) should attend the opening conference Compliance officer will give reason for inspection oAccident, complaint, referral, general inspection, programmed This is where management strategy becomes crucial
45 The Opening Conference If reason for OSHA inspection is an accident- show concern for worker safety and promote it First impression on OSHA is important All employees should have knowledge of the safety program All employees should know what a competent person is If reason for OSHA inspection is an employee complaint, ask to see complaint
46 The OSHA Inspection The inspection may be inevitable, but a citation might not be Must manage the inspection process as effectively as possible OSHA is there to get the facts, not help you Be informed of your rights and prepare your employees Be cordial but cautious, and always remember OSHAs objective
47 The OSHA Inspection Consent: oEmployer has a right to request a warrant before inspection Not always advisable to do so May increase the compliance officers suspicions May increase future inspections May put you on OSHAs radar oPlain View Doctrine: When worksite is visible from a public area, an OSHA compliance officer has the right to photograph and observe from that location oConsent may be given by any management official including a foreman or superintendent Make sure employees are aware of this oOn a multi-employer worksite, consent comes from site controller Usually owner, developer, or general contractor
48 The OSHA Inspection In deciding whether to allow the inspection based on an accident, management should consider the following matters: oDid the accident in fact occur involving the employer oIs the accident scene still in existence or have the conditions changed oIf fatality-site frozen until OSHA commences its inspection unless doing so creates a hazard to employees
49 The OSHA Inspection In deciding whether to allow the inspection based on an employee complaint, management should consider the following matters: oIs the complaint valid? oDoes it identify the correct workplace, employer or equipment oDoes it identify a hazard which in fact exists at the worksite
50 The Walk Around NEVER allow an OSHA compliance officer to walk the worksite unattended Company and Union representatives have right to accompany the compliance officer Take parallel videos, photos, samples, notes and measurements oDo not rely on or expect OSHA to share its findings with you
51 The Walk Around Control of the scope of the inspection oWhere will the inspector be permitted to go at the worksite oWhat operations will the inspector be allowed to observe oIf employer allows the inspector broader access than to evaluate the accident or complaint, the employer is subject to citations for anything that the inspector observes because the employer voluntarily consented to a broader inspection oWhatever the inspector observes during the walk around that is in plain view is subject to citation oCommunicate scope to inspector to reach an informal agreement regarding the scope of the inspection before the inspection begins
52 Multi-Employer Worksites Liability was expanded under Multi-Employer Workplace Doctrine Each employer is potentially responsible for the safety and health of another employers employee if the employer: -Creates the hazard -Exposes an employee to the hazard -Is responsible for correcting the hazard, or -Is the controlling employer on the worksite
53 OSHA Document Requests Insist that requests for documents be made to a single source and in writing Considerations include: oAre the documents produced responsive to OSHAs requests? oDont give OSHA something they havent asked for oIs it privileged? Always keep a copy of whats sent to OSHA Never allow the compliance officer unfettered access to documents
54 Employee Interviews Any supervisory employee may be interviewed by OSHA oAny foreman, crew leader, lead man, or other employee considered in charge oApplies even if person is in a union Employers Counsel may be present during management employees interviews Union or hourly employee may be interviewed privately (or with steward) if they consent What is said can be used as evidence TELL THE TRUTH!Lying to OSHA is a CRIME! oCan be charged with felony for obstructing a federal investigation oCan do prison time!!!!
55 Employee Interviews Employees Rights: oRight to a private 1 on 1 interview with compliance officer- confidential-no retaliation-no disclosure oRight to refuse to be interviewed by compliance officeremotional- fearful-intimidated/manipulated to expose them to liability-if refuse subpoenathen employee full scope of rights-legal counsel oIf consent-right to have person of their choice to attend-if compliance officer refuses to allow-decline interviewwithout reason oRight to end interview and leave at any time-without reason oRight to refuse to be recorded, photographed, or sign statement
56 Employee Interviews Hourly employees right to legal counsel oRight to have person of choice present-so legal counsel would qualify oRight to be represented in judicial and administrative proceedings oEmployer has obligation to defend employees when faced with liability for acts which occurred within the course of their employment oPotential criminal liability for fatality or multiple injuriesright against self incrimination
57 Employee Interviews OSHAs objections to employers legal counsel representing an hourly employee during OSHA interview: oEmployers attorney-conflict of interest-not OSHAs right to object to conflict of interest-right of employee to accept as long as disclosure and knowing waiver of conflict oEmployee exposure to retaliation for what is said in presence of employers attorneybut employee protected from retaliation by Act
58 Employee Interviews OSHAs rights: oRight to interview the employee in private if employee consents oRight to have truthful responses to questions
59 Employee Interviews Employers rights: oRight to participate in non-private employee interviews and, if the compliance officer refuses, require that the interviews occur on non-paid work time oRight to end interviews if disruptive, unreasonably interfere with ongoing work or become confrontational
60 Closing Conference Negotiation starts here OSHA knows whats going on-interviews, walk around, documents Can be in person or over the telephone Obtain as much information from compliance officer as possible: oWhat citations will be recommended oHow will each be classified oWhat should company do going forward oWhat abatement should be done, and how oBasis for each citation
61 Closing Conference Clarify any misunderstandings of fact DO NOT: omake admissions; oargue; oget angry; oinsult the compliance officer or OSHA; or odiscuss the financial situation of your company, the economy, or the government
62 Issuance of Citations Citations arrive by way of certified mail and are tracked by OSHA Citations must be received within 6 months of inspection or they are stale and can be easily defeated Citations will reference standard(s) violated, set out proposed penalties, and outline your rights Act on Citations IMMEDIATELY
63 Issuance of Citations Review Citation(s): oFactual Errors -Is the Citations Alleged Violation Description (AVD) correct? -Did the alleged violation actually occur oLegal Errors -Does the specific regulation apply to the hazard? -Does another regulation apply? -Is there an exemption within the regulation? -Is the General Duty Clause inapplicable (i.e., does a specific regulation apply to the hazard)
64 Issuance of Citations Interview company witnesses involved in the alleged violation to confirm the facts Review employer documentation of: -Applicable safety or health program for the hazard -Employee training -Employer discipline for prior violations of the safety and health program
65 Issuance of Citations Have 15 working days (exclusive of federal holidays) from receipt of citation to file a written Notice of Contest Failure to file Notice of Contest within 15 working days of receipt of a citation precludes any challenge to any part of the citation CONTEST PERIOD CANNOT BE EXTENDED
66 Informal Conference OSHA encourages the informal conference and it should be pursued A potential means for resolution without litigation or appeal Allows employer to gain understanding of exactly what OSHA expects Occasionally, settlement terms may be favorable to employer if citation remains as issued oBe creative with settlement terms: e.g., provide additional training
67 Informal Conference Schedule Informal Conference at the same time Notice of Contest is filed Prepare employer representatives for their roles Assemble documents for production at Informal Conference Prepare employers position regarding citations oVacate, amend, reduce classification, reduce penalty, modify abatement date
68 Informal Conference At Informal Conference oExplain employers commitment to safety and health Discuss employers concern about accepting citations that are not factually or legally correct because of future liability for repeat or willful violations
69 Informal Conference Articulate employer factual and legal defenses Do not make admissions of violations during the Informal Conference Request that citations be vacated, amended, etc., as appropriate Consider OSHAs response to companys proposal Does OSHAs proposal expose company to future repeat or willful violations Confirm with OSHA employers abatement obligations If reach settlement, carefully review Informal Settlement Agreement to confirm that it reflects agreed upon terms
70 Informal Conference If no settlement, prepare written Notice of Contest and file within the fifteen working day period if not already done Post Notice of Contest at worksite Employer will be contacted by OSHA Solicitor, attorney representing the agency, within several weeks to discuss settlement If not done already, consider retaining attorney who is experienced in OSHA law to advise employer
71 Notice of Contest To Contest…Or Not To Contest Consider: oNature of violation Repeat? Willful? Severe? oProposed penalties oCost to contest oCost of abatement If prohibitively costly and delays completion of work, may not want to challenge oWhether employer believes citation is proper or not Improper standard applied, violation did not occur, regulation inapplicable etc.
72 Notice of Contest After the complaint and answer are filed, case goes to OSHRC (Review Commission) Majority of cases settle before going to hearing