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Anchorage / Dallas / Denver / No. Va. / Washington, DC Contact: Henry Chajet, (202) 457-6511; Mark Savit, (202) 457-5269;

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Presentation on theme: "Anchorage / Dallas / Denver / No. Va. / Washington, DC Contact: Henry Chajet, (202) 457-6511; Mark Savit, (202) 457-5269;"— Presentation transcript:

1 Anchorage / Dallas / Denver / No. Va. / Washington, DC Contact: Henry Chajet, (202) 457-6511; Mark Savit, (202) 457-5269; Copyright 2004 1 Reducing Risks of Employee Complaints, Misconduct And Related Government Investigations by The Patton Boggs Crisis Prevention & Management Team IMAA WINTER WORKSHOP 2004 1

2 Contracts GGoods, Services, Property Insurance Statutory Liability RRegulatory CCriminal Tort Liability Strict NNegligence Predictability Duties Breach of Duty Related Legal Concepts Impact Liability Risk Benefit Harm Damages Recovery Penalty 2

3 Missing Railing – Fall Accident The Role of Risk/Injury/Negligence/Guilt 3

4 Oil Spill 4

5 Rail Car 5

6 6

7 Refinery, pre-accident 7

8 Refinery, Post Accident 34,000 Claims / $350 Million Loss / 28 Injured / Millions In Potential Penalties & 2 Year Criminal Investigation 8

9 Refinery, Rebuilt 9

10 MSHA Liability Annual Inspections (2/4) and Incident Investigations Fines Rise With Risk And Fault Strict Liability For Civil Fines For Company Management Agent Fines For Knowing Violations Up to $ 60,000 Fine For Company and/or Agent Inspector Issued Closures Based On Risk, Fault, or Safety-Abatement Requirement Criminal Penalty for Willful Violation and Record Fraud Violation Is Evidence For Tort Claims $500.00 Per Covered Employee Fed Budget No State Plan Authorization 10

11 OSHA Liability Inspections Targeted and In Response to Incidents Fines Rise With Risk and Fault Misconduct And Feasibility Defense Fines Up To $70,000 For Company Only Only Court Ordered Closure Orders Abatement Stayed By Citation Contest Criminal Penalty For Willful Fatality Violations Criminal Penalty For Fraudulent Records $3.00 Federal Budget Per Covered Employee State Plan Enforcement Authorized Violations Are Evidence For Tort Claims 11

12 Federal Environmental Liability Regulatory/Compliance Components Clean Air Act Clean Water Act Resource Conversation and Recovery Act Safe Drinking Water Act Emergency Planning and Community Right to Know (EPCRA) General Duty Clause 12 Civil Liability –Strict Liability –Negligence Criminal Liability –“Knowing” or “Willful” Violations –Negligence

13 VIOLATION PREVENTION REQUIRES KNOWLEDGE For MSHA, all supervisors and site management should carry the pocket sized version of the regulations, and be trained in MSHA duties and response. For OSHA, have the applicable regulations at the site office, train management, and have a trained safety specialist available for response. For EPA, have the applicable regulations and permits on site, train management, and have an environmental specialist available for response. 13

14 Record Falsification False Or Misleading Information Conspiracy Obstruction Of Justice But Regulatory Violations Are Not The Leading Cause of EH&S Criminal Prosecutions: ALL 5 YEAR FELONIES, CONSTITUTE THE VAST MAJORITY OF EH&S PROSECUTIONS AND THEY GENERALLY OCCUR DURING THE INVESTIGATION 14


16 On Site Discussions Resolving complaints & stopping misconduct ASAP is the most effective and least expensive defense. Admissions, however, can incriminate people and the company. 16 Learning To Provide Favorable Information, Without Violating the Prime Directive, And Without Incriminating Yourself And The Company, Is A Critical Skill Requiring Knowledge & Training

17 Pre Event Policy Reviews Company Policy & Rules Records And Documents Complaint & Investigation Procedure Interview Policy Physical Inspection Procedure Evidence Collection / Preservation Supervisor Duties, Protection, Responsibility Contractors Plan For Government Investigation 17

18 Routine Event Site Team Serious Incident Team If possible, use people not at risk Hourly “Walk Around” Policy Expert Resource Legal Resource Designate Company Teams 18

19 Pre-Complaint Risk Reduction Activities Accuracy And Timeliness Of Filings Review Of Prior Government Inspections Complaints And Suggestions Review Training Records Audits (for counsel?) Safety Meeting Results Program To Prevent Repeat Violations. 19

20 Identifying and Responding to “High Risk” Violations 20

21 IF THE HAZARD IS OBVIOUS Take immediate action to eliminate the risk or protect against it. No false or misleading statements. No needless rebuttal or discussion. Promise to investigate & prevent a similar, future event. Formulate an implement a prevention plan. Avoid discussing how long the violation existed, or whether anyone knew about it. 21

22 Violation Risks: HIGH RISK VIOLATIONS: –Pose civil or criminal liability risks (“willful” allegations) or costly abatement: –GET HELP !! LOW RISK VIOLATIONS: –Informal process for minor citations available to reduce history, severity, and penalties. 22

23 Mitigating Factors – Reducing Guilt, Negligence & Risk w/ Company Programs 23

24 Negligence or Degree of Guilt (TIME ANALYSIS) How long did the violation exist before the inspector discovered it? (RISK ANALYSIS) Seriousness justify increased attention? (COMMUNICATION ANALYSIS) Records; complaints; observations; work orders; discussions; directions; prior consent; physical evidence; repeat violation; etc. NONE>>>MOD>>>HIGH>>>RECKLESS>>>WILLFUL 24

25 Negligence and Degree of Guilt Confidential Self Analysis “REASON TO KNOW?” -- Direct Observation? Communication? -- Opportunity To Observe? Routine Activities? Pre-shifted, Inspected, or Traveled? Records or Reports? Physical Evidence? Discussions? Complaints? 25

26 Invalid Negligence and Degree of Guilt Allegations? “Mitigating circumstances” Violation not pre identified -- e.g. pre-shift Prior inspectors approval Company rules prohibiting the violation Employee discipline for rule violations Unforeseeable employee misconduct 26

27 Negligence and Degree of Guilt Action or involvement of management personnel? Did management observe, direct, or approve of the action? Should management have known? The government will try to define company fault through the acts of its “agents,” including the CEO down to the hourly “lead-man.” 27

28 Recordkeeping: The Double Edged Sword 28

29 Workers’ Compensation Records Medical records Insurance records Foreman, Supervisor or Safety Department Reports of Incidents or Injuries Personnel Records Safety Audit or Evaluation Materials Records Not Required To Be Maintained By Law 29

30 Records Not Required To Be Maintained By Law Company Policy Memoranda, Rules, Procedures or Correspondence Facility Logs or Books Used for Communications Between Foremen and/or Supervisors Maintenance Records, Logs, Manuals, or Work Orders Personal Notebooks or Documents (e.g. the Foreman’s pocket notepad) 30

31 Part 50 Accident, Injury and Illness Pre-Shift Mobile Equipment Inspection Work Place Inspection Reports Employee Training Records MSHA Plans (Training, Diesel, Ventilation) OSHA Programs (Haz Com, Lead ) Mandated EPA monitoring and plan documents Examples Of Records Immediately Available To The Government 31

32 Privileged Records? Confidential Records? Trade Secret Records? Inspection, Audit Reports, Investigation and Incident Reports – Privilege Claims? –Investigations done for counsel re litigation –Self Evaluation Audits or Inspections In Anticipation of Litigation 32

33 Privileged Records, Confidential Records, Trade Secret Records Correspondence with Counsel Cost data Production data Business Confidential 33

34 Inspection Records RequiredNon Required Preshift M.E. Area Safety Mandated Injury/Illness Reportable Incident Reports Supervisor Notes Production Records Medical Notes Company Accident reports Water sampling Air sampling Equipment Failures 34

35 Other Non Required Records and Certifications Maintenance Remediation and Response Budget Insurance Meeting Minutes Personal Files Workers Comp Files 35

36 How to Respond to Government Requests  Have Required Records Available In Advance  Seek record request in writing  Explain company policy ( e.g. immediate delivery of required records but approval needed for other, confidential company records)  Document and track response  Seek advice of counsel in serious matters 36

37 Producing Documents and Records CAA/CWA/RCRA Permits & Applications Discharge Monitoring Reports Hazardous Waste Manifests Annual Generator / TSD Reports Spill Reports UST Notifications Process and Waste Water Flow Charts Facility Maps 37

38 Responding to Complaints & Whistleblowers Whistleblowers provide knowledge of alleged hazards and risks of severe enforcement. Discrimination against whistleblowers or complainers is an expensive violation of law that can lead to government prosecutions and liability risks.  Address all complaints in good faith  Respond in a calm, professional manner  Protect against hazards immediately 38

39 Addressing Complaints  If employees refuse to work, after an evaluation demonstrating safety, and clear communication, the standard disciplinary program should be used.  Discipline beyond that routinely applied for similar, past actions will be used to show discrimination.  When in doubt regarding discipline, Get Help! 39

40 Following an Employee Complaint  Involve a second management person, if possible, at earliest stage to provide a witness.  Gain an understanding of the complaint/concern by seeking information from the complainant and others involved.  Employees should not be permitted or ordered to work in the affected area, or with the equipment or process in question during the evaluation of the complaint. 40

41 Addressing Complaints Use experienced people to thoroughly evaluate the complaint. If possible, provide complaining employee opportunity to observe. Explain evaluations and conclusions clearly and calmly. 41

42 Risk Reduction: Contractor Issues Pre-qual Procedures Compliance with Laws Provisions Training Inspections Enforcement / Breach Indemnification & Defense Provisions Insurance Requirements Certifications & Licenses Qualified to Perform 42

43 Serious Incident and Disaster Response Explosions Fatalities Spills and Releases Others 43

44 Government Authority & Expected Response: Agencies and Law Enforcement ALPHABET SOUP EPA, OSHA, MSHA, FRA, OPS, FEMA, NHTS, NTSB STATE AND LOCAL AGENCIES 44

45 Investigation Policy Review: Commitment, Cooperation and Honesty Policy Company Team, Leader & Spokesman Secure Reaction Time & Obtain Advice Site Entry & Security – Investigation Meeting Room Accompaniment / Escort / Walk around Records And Documents Interviews Respect for Personal Rights Opening & Closing Conference Physical Inspection Trade Secrets & Confidential Information Evidence Collection / Preservation Casual Conversations Insurance, Indemnification And Defense Contractors Audit Results & Disclosures Expert Resource Policy Legal Resource Policy 45

46 Company Investigation Team Plan Ahead 46

47 Notifications (Governments, Community, Insurance and Employees) Preplanned checklists Rehearsed 47

48 OSHA must be notified within 8 hours when: An occupational fatality occurs, or Three or more employees are hospitalized. 48

49 MSHA Notice Designate personnel, before an accident occurs, to call MSHA. Every defined accident (12 listed items) must be reported to District or Subdistrict Manager immediately. “Immediately” means RIGHT NOW. DO NOT WAIT. Speak with a LIVE PERSON, avoid recordings. WHEN IN DOUBT, REPORT. 49

50 Accident Investigation by the Company MSHA-Employers required to conduct investigation of all reportable accidents, and of all occupational injuries and illnesses. 50

51 Written Incident Reports: CAUTION OSHA & MSHA require reports with accident description, cause, and prevention steps. Reports can provide evidence of regulatory violations and be used as admissions in criminal and civil cases. SERIOUS INCIDENT REPORTS SHOULD BE DRAFTED WITH COUNSEL’S GUIDANCE, IN ANTICIPATION OF LITIGATION 51

52 Extreme Caution: Avoid Obstruction and Evidence Tampering Charges Do not alter an accident site, until completion of all investigations, and/or it is released by government investigators, except: 1.To rescue or recover an individual, 2.Prevent or eliminate an imminent danger, or 3.Prevent destruction of property. 52

53 Your Rights IF YOU TALK TO THE GOVERNMENT, YOU MUST TELL THE TRUTH No “Miranda” warnings for investigations if you are not “in custody” Not required to talk to an investigator Right to counsel Right to discontinue an interview at any time Right to refuse to be recorded Right to refuse to sign a written statement Present exculpatory evidence Evaluate the direction of the investigation by asking questions Collect evidence Seek technical assistance 53

54 Your statements can be used against you. Do not advise others to talk or not talk with the investigator. Do not make damaging admissions. Avoid making inconsistent statements. Do not alter or destroy documents. Do not suggest to others how the event occurred or why it occurred. NEVER LIE OR MISLEAD THE INVESTIGATOR PITFALLS 54

55 Government Tactics 55 Telephone calls and visits at home Questions during site visits in front of hourly personnel Questions in the hallway that seem informal Leading questions Group interviews “You are not the target” “If you have nothing to hide”

56 Press and Community Relations 56 Focus On: Integrity Environmental Safety and Security Investigation To Prevent Repeat Occurrence Cooperation With Government Investigators Compassion For Injured Commitment to Environmental Protection & Safety & Health Avoid: No Comment Statement Detailed Answers Discussions On Fault Admissions

57 Liability Risk Reduction Can Be Achieved Through Knowledge & Training Comments or questions, contact the Patton Boggs Crisis Prevention and Management Team: Henry Chajet, Mark Savit, John Austin, David Farber, Duane Siler, Susan Mathiascheck, Willa Perlmutter, Brian Hendrix Mike Palmer Washington, DC (202) 457-6000 Carolyn McIntosh Cole Wist Hugh Thatcher Denver, Colorado 303-830-1776 57

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