1. What To Expect From OSHA In 2010 Mark A. Lies II 131 S. Dearborn Street, Suite 2400 Chicago, IL 60603 mlies@seyfarth.com (312) 460-5877

2. 2 | © 2010 Seyfarth Shaw LLP Program Objectives Discuss OSHA enforcement initiatives and trends. What to expect with a new administration. New penalty and liability policies. How to reduce the risk of OSHA citations. How to manage an OSHA inspection.

3. 3 | © 2010 Seyfarth Shaw LLP Many Different Categories of Employers and Employees On-Site Owner Owner’s Representative General Contractor Subcontractors Leased Employees Borrowed Employees Safety Consultants

4. 4 | © 2010 Seyfarth Shaw LLP OSHA Liability Initially, employer responsible for its own employees Employer had to ensure that its employees were protected against: ►“Recognized Hazards” To Employee Safety and Health (General Duty Clause) ►Hazards Identified In Specific Regulations (29 CFR 1926, e.g. falls, electrical, lead, silica, etc.)

5. 5 | © 2010 Seyfarth Shaw LLP OSHA Liability Liability was expanded under “Multi-Employer Workplace Doctrine” Now, each Employer is potentially responsible for the safety and health of another Employer’s Employee, if the Employer: ►Creates the hazard ►Exposes an Employee to the Hazard ►Is responsible to correct the hazard, or ►Is the controlling Employer on the site

6. 6 | © 2010 Seyfarth Shaw LLP Aggressive Enforcement Use of interpreters Emphasis on repeat citations Requests for Root Cause analysis and company insurance audits Cautionary tale: Use of knowledge of previous inspection to justify willful citation

7. 7 | © 2010 Seyfarth Shaw LLP Aggressive Enforcement Employee by Employee Citations ►PPE Standard ►LOTO procedures Enhanced Use of General Duty Clause ►Combustible Dust ►Workplace Violence ►New chemicals (not listed on Z tables) Enhanced Use of NFPA ►654 Combustible Dust ►70E National Consensus Standard-Electrical Safe Work Practices

8. 8 | © 2010 Seyfarth Shaw LLP OSHA Recordkeeping September 30, 2009 – National Emphasis Program (NEP) – OSHA Directive Number 09-08 (CPL 02) Intended to identify varying degrees of under-recording of workplace injuries and illnesses on OSHA Form 300 (29 CFR § 1904) Target – low rate employer establishments operating in historically high rate industries Establishments with 40 or more employees in select industries that have reported a Days Away, Restricted, or Transferred (DART) rate from 0.0 to 4.2 in 2007 will be targeted

9. 9 | © 2010 Seyfarth Shaw LLP OSHA Recordkeeping NEP Target Industries IndustryNAICS2007 DART Animal (except poultry) slaughtering3116118.1 Scheduled passenger air transportations4811118.1 Steel foundries (except investment)3315137.9 Other nonferrous foundries (except die-casting)3315287.6 Concrete pipe manufacturing3273327.5 Soft drink manufacturing3121117.3 Couriers4921107.3 Manufactured home (mobile home) manufacturing3219917.1 Rolling mill machinery and equipment manufacturing3335167.1 Poultry Processing311615 Cleaning and Sanitation Associated with Meat/Poultry Processing 230000

10. 10 | © 2010 Seyfarth Shaw LLP OSHA Recordkeeping NEP Target Industries IndustryNAICS2007 DART Iron foundries3315116.7 Nursing care facilities6231106.2 Fluid milk manufacturing3115116.1 Seafood canning3117116.1 Marine cargo handling4883206.1 Copper foundries (except die-casting)3315256.0 Bottled water manufacturing3121125.9 Refrigerated warehousing and storage4931205.9 Motor vehicle seating and interior trim manufacturing3363605.8

11. 11 | © 2010 Seyfarth Shaw LLP NEP Impact on Other Industries OSHA inspectors receive intensive training on recordkeeping. OSHA will inspect OSHA 300 Logs in every inspection. Increased recordkeeping citations with enhanced penalties. OSHA Recordkeeping

12. 12 | © 2010 Seyfarth Shaw LLP A compliance safety and health officer (CSHO) will select a group of employees whose records will be reviewed. For establishments with fewer than 100 employees, all records will be reviewed. For establishments with 101-250 employees, a representative sample of 50 percent of employee records will be reviewed. For establishments with over 250 employees, a representative sample of 33 percent of employee records will be reviewed. OSHA Recordkeeping Inspection

13. 13 | © 2010 Seyfarth Shaw LLP Scope of NEP Document Inspection 2007 & 2008 records OSHA Forms 300, 300A and 301 Medical records Worker’s compensation records Insurance records Payroll/absentee records Company safety incident reports Company first aid logs Alternate duty rosters Disciplinary records relating to injuries and illness OSHA Recordkeeping

14. 14 | © 2010 Seyfarth Shaw LLP Scope of NEP Inspection Interviews of designated recordkeeper, employees, management, first aid providers and healthcare professionals. Limited walk around inspection of main plant operations area. Possible expansion of scope of inspection or referral for inspection to other plant areas that may pose risks. OSHA Recordkeeping

15. 15 | © 2010 Seyfarth Shaw LLP Civil Potential citations for under reporting or other errors ►Other than serious ►Serious ►Willful ►Repeat ►Failure to Abate ►Egregious (violation-by-violation citation) Criminal Liability of Employer Liability of Management Representative for false certification OSHA Recordkeeping

16. 16 | © 2010 Seyfarth Shaw LLP Analysis of Employer Incentive Programs Evaluate policy. Does it encourage employees to underreport in exchange for prizes or other rewards. Conduct employee interviews focused on whether employees have been trained to report injuries or illnesses or discouraged to report. OSHA Recordkeeping

17. 17 | © 2010 Seyfarth Shaw LLP Protecting America’s Workers Act First Introduced in 2005. Introduced in 2009. Increased protection for whistleblowers. Changes to civil penalty structure ►Willful violation min. $50K up to $100K, can go up to $250K ►Prohibits “unclassified” citations.

18. 18 | © 2010 Seyfarth Shaw LLP Criminal Law Liability OSHA Potential liability if: ►Fatality ►Violation of specific regulation ►Violation was willful, and ►Violation caused fatality Penalty ►6 months imprisonment, and/or ►$500,000 fine per fatality for corporation ►$250,000 fine per fatality for individual NOTE: No Miranda Warnings Necessary

19. 19 | © 2010 Seyfarth Shaw LLP Criminal Law Liability OSHA Obstruction of justice for interfering with inspection Falsification of records Lying to federal inspector Misrepresentation of subcontractor status to avoid OSHA liability

20. 20 | © 2010 Seyfarth Shaw LLP Protecting America’s Workers Act Criminal Sanctions ►Amputation, disfigurement, loss of brain capacity. ►Changes crime from misdemeanor to felony (min. one year jail time). ►Subject to federal sentencing guidelines for imprisonment as well as monetary penalties.

21. 21 | © 2010 Seyfarth Shaw LLP Whistleblower Laws Potential Employer Liability If: ►Employee engages in “Protected Activity” (e.g., makes complaint about safety or health violation to Employer; files complaint with OSHA; participates in OSHA inspection), and ►Employee Suffers “Adverse Action” (e.g., termination, discipline, loss of benefits), and ►Employer takes Adverse Action and Retaliates against Employee because of Protected Activity ►Employee may File 11(c) Complaint with OSHA seeking damages ►OSHA will investigate complaint ►If OSHA finds reasonable cause that there was retaliation, case may be filed in Federal Court ►All States have Whistleblower Laws that may apply

22. 22 | © 2010 Seyfarth Shaw LLP Whistleblower Suits Employee right to refuse work if there is imminent danger. Changes under pending legislation include: ►Scope of protected activity to include reporting injuries or unsafe conditions to employers ►Compensatory damages ►Private right of action

23. 23 | © 2010 Seyfarth Shaw LLP Where do we go from here? More important than ever to establish strong unavoidable employee misconduct defense. (1) Program for the specific hazard, e.g. fall, electrical. (2) Employee training (documentation) (3) Prior enforcement (disciplinary records) (4) No reasonable opportunity for supervisor to identify and correct hazard.

24. 24 | © 2010 Seyfarth Shaw LLP Unavoidable Employee Misconduct How do we establish this defense? ►A good hazard assessment ►Training—there may be a cultural, literacy or language barrier. ►Need to use translators, interpreters. ►Need enforcement—yet, new supervisors many times have had no training in delivering discipline. ►Maintain records of enforcement/discipline.

25. 25 | © 2010 Seyfarth Shaw LLP How to Reduce the Risk of OSHA Citations Make Sure Written OSHA Programs are current and up to date Ex. Hazard Communication Program, Lock Out Tag Out Program, Confined Space Entry Program, Blood Borne Pathogen Program, Emergency Action Plan, Powered Industrial Truck Program, Respiratory Protection Program, Process Safety Management Program

26. 26 | © 2010 Seyfarth Shaw LLP How to Reduce the Risk of OSHA Citations Make Sure the Company is Following each of its Written Programs Ex. Current Chemical Inventory and Current MSDS's, Machine Specific Energy Control Procedures for each piece of equipment; Confined Spaces have been evaluated and labeled; Employees using respirators have been fit tested

27. 27 | © 2010 Seyfarth Shaw LLP How to Reduce the Risk of OSHA Citations Make Sure Periodic Requirements Under Specific OSHA Standards Are Being Met Ex. LOTO: annual periodic inspection of energy control procedures is complete and documented; annual rescue training for confined space rescue employees; conduct 3 year fork truck driver recertification; annual fire extinguisher training, etc.

28. 28 | © 2010 Seyfarth Shaw LLP How to Reduce the Risk of OSHA Citations Make Sure Training is Documented for all Covered Employees: OSHA standards typically mandate employee training Ex. Emergency Evacuation Plan and Drills, LOTO for affected employees; Hazard Communication

29. 29 | © 2010 Seyfarth Shaw LLP How to Reduce the Risk of OSHA Citations Conduct Internal Compliance Reviews: Ex. Safety Inspections/Walk through (generally find physical conditions) Understand that internal reviews are discoverable by OSHA and others Be prepared to promptly fix and/or address what you find Documenting Corrective Action/Close Out is as Important as Finding action items

30. 30 | © 2010 Seyfarth Shaw LLP How to Reduce the Risk of OSHA Citations Internal Audits Continued Use Auditors from other departments for a fresh set of eyes Use Auditors from other plants with current plant personnel Know and use your own OSHA history ►Plant specific citations ►Company wide citations

31. 31 | © 2010 Seyfarth Shaw LLP How to Reduce the Risk of OSHA Citations Know and audit conditions covered by applicable national and local emphasis programs Make sure Audit Reports are properly handled: Confidentiality

32. 32 | © 2010 Seyfarth Shaw LLP How to Reduce the Risk of OSHA Citations External Audits Ex. Audit conducted by outside safety consultant Privilege issues with Outside Audits ►Outside audits are not privileged unless directed by a counsel ►Company and Outside Counsel can retain consultants to create arguments the audit may not be discovered by OSHA etc.

33. 33 | © 2010 Seyfarth Shaw LLP How to Reduce the Risk of OSHA Citations Make sure audit reports are properly handled Be Prepared to promptly fix or address what you find Documenting Corrective Action/Close Out is as important as what you find

34. 34 | © 2010 Seyfarth Shaw LLP How to Reduce the Risk of OSHA Citations Most Frequently Cited OSHA Standards (Pay Attention to Relevant Areas) ►Hazard Communication (Employee Training and MSDS’s) ►Lockout Tagout (Authorized Employee Training) ►Lockout Tagout (Machine Specific LOTO Procedures) ►Personal Protective Equipment (Certification of Hazard Assessment) ►OSHA 300 Log Recordkeeping ►Electrical Safety (Safe Work Practices, AEC Flash Protection) ►Powered Industrial Trucks (Daily Truck Inspections, Operator Retraining) ►Machine Guarding

35. 35 | © 2010 Seyfarth Shaw LLP How to Reduce the Risk of OSHA Citations Effective Use of Safety Committees Make sure the committee has the right personnel (motivated and committed) Train Committee Members in OSHA compliance issues Consider empowering safety committee members to conduct work observations Consider having committee members conduct safety inspections and document findings (be prepared to fix what is found)

36. 36 | © 2010 Seyfarth Shaw LLP How to Reduce the Risk of OSHA Citations Keep Good Minutes of Meetings and Issues (descriptions are critical) Assign Corrective Action to specific persons Track status of Corrective action and document close out Watch out for: delayed close out, repeat items Create Task Forces for complicated fixes/problems Create a Mechanism for Assigning an Issue to Management for Resolution

37. 37 | © 2010 Seyfarth Shaw LLP Inspection Management Increased enforcement and penalties make inspection management more critical than ever. The most effective defenses are developed Before and During an inspection, not after the inspection ►Why?

38. 38 | © 2010 Seyfarth Shaw LLP Inspection Management (cont.) Inspection Plan – Basic Blocking Tackling (1) Point person and backup/weekend person (Murphy’s Law is that accidents will happen during the night shift and on weekends). (2) Relevant written OSHA policies and logs should be readily available.  Keep copy in easily accessible binder –Update annually or as otherwise required

39. 39 | © 2010 Seyfarth Shaw LLP Inspection Management (cont.) When OSHA Arrives: ►Politely receive the compliance officer. ►Show compliance officer to conference room/empty office. ►Immediately notify the point person. ►Point person takes control of the inspection is responsible for all communications with Compliance Officer and shadows Compliance Officer throughout inspection. ►First impression is important.

40. 40 | © 2010 Seyfarth Shaw LLP Inspection Management (cont.) Two Keys to Successful Inspection Management (1)Focus (2)Control Inspection Focus Determine why OSHA is inspecting Types of inspections: (1) Fatality/catastrophe (2) Employee complaint (3) Programmed –Local National emphasis program –Wall to wall inspection

41. 41 | © 2010 Seyfarth Shaw LLP Inspection Management (cont.) The Reason OSHA is Inspecting Drives the Scope of the Inspection Once You Determine the Scope, Control Inspection by Limiting it to Only Those Items Within the Scope

42. 42 | © 2010 Seyfarth Shaw LLP Inspection Management (cont.) Fatality/Catastrophe Inspections ►Fatality/catastrophe inspections involve the highest risk of significant citations ►Highly recommend involving counsel in the on-site inspection as early as possible ►Limit the inspection to the safety issues surrounding the accident ►Be aware of emotional issues surrounding serious accidents and try not to let them negatively impact the inspection

43. 43 | © 2010 Seyfarth Shaw LLP Inspection Management (cont.) Employee Complaints ►Compliance Officer should give employer a copy of the specific complaint. ►If the Compliance Officer does not, ask for it. Employer is entitled to a copy. ►Complaint items should drive the scope of the inspection. Note: You are not entitled to know identity of complaining employee and it does not matter.

44. 44 | © 2010 Seyfarth Shaw LLP Inspection Management (cont.) Plain View Doctrine ►Compliance officer can issue citations for any violations in “plain view.” ►If Compliance Officer doesn’t see it he/she can’t cite you for it. Admissions ►Never admit to a violation (“I’ll check into that”). ►Never admit you don’t have something (“let me get back to you on that”).

45. 45 | © 2010 Seyfarth Shaw LLP Inspection Management (cont.) Immediately Correct Unsafe Conditions Identified by The Compliance Officer Without Admitting That The Condition Constitutes a Violation ►May avoid the citation ►May lessen the classification or penalty of a citation

46. 46 | © 2010 Seyfarth Shaw LLP Inspection Management (cont.) Employee Interviews ►Non-Management Interviews  Explain employee rights  Conduct your own investigation ►Management Interview  Right To Counsel  Binding Admissions ►Avoid the “casual” interview ►Remember: Everything is on the record. Do not engage in idle conversation concerning safety issues.

47. 47 | © 2010 Seyfarth Shaw LLP Inspection Management (cont.) Document Control Is Important ►No Such Thing As A “Safety Program”  Ask Compliance Officer which specific program he/she is looking for. ►Only Provide OSHA with Documents That Are Within The Scope Of The Inspection. ►OSHA Can Issue Citations For Violations Relating To Any Document The Employer Gives To Them. ►General Rule Of Thumb: Less Is More

48. 48 | © 2010 Seyfarth Shaw LLP Inspection Management (cont.) How to Push Back ►If Compliance Officer seeks information beyond the scope of the inspection: (1) Inquire how/why that relates to the inspection; (2) If OSHA insists on obtaining the information, tell them you are “not denying access” but need to get authority before responding to OSHA’s request; (3)Involve counsel who can work with Area Director and Solicitor’s office to define the scope. Again, less is often more.

49. 49 | © 2010 Seyfarth Shaw LLP Thank you! Mark A. Lies II 131 S. Dearborn Street Suite 2400 Chicago, IL 60603 mlies@seyfarth.com (312) 460-5877 11908143v1