Employment-related crimes.

• Author: Hayes, Monica L.
• Position: Ninth Survey of White Collar Crime

1. Worker Safety 456 A. Occupational Safety and Health Act 456 1. Elements of the Offense 456 a. Employer 456 b. Civil violation 457 c. Criminal violation 458 2. Preemption 459 3. Penalties 459 B. Federal Mine Safety and Health Act 462 C. State Criminal Law 463 1. Effectiveness of State Criminal Law 463 2. State Criminal Practice 464 D. The Comprehensive Occupational Safety and Health Reform

   Act 464 II. The Fair Labor Standards Act 465 A. Elements of the Offense 468 1. Employee 468 2. Employer 471 3. Willful act 472 B. Penalties and Enforcement Authority 473 This article surveys the criminal penalties currently available to protect workers in the areas of occupational safety and employment practices. Under the worker safety section, the Occupational Safety and Health Act ("OSHA")(1) and the Federal Mining Safety and Health Act ("FMSHA")(2) are discussed in detail. As a supplement to these materials, the proposed bill(3) designed to reform OSHA is presented with a discussion of the modifications to the criminal penalties and enforcement sections of OSHA contained in the legislation. The criminal law covering employment practices, the Fair Labor Standards Act ("FLSA"),(4) is also examined.

1. WORKER SAFETY

   1. Occupational Safety and Health Act

      Due to the trend of increasing employment deaths and injuries in the late 1960's,(5) Congress enacted the Occupational Safety and Health Act(6) to ensure worker safety.(7) OSHA includes a general duty clause(8) which requires employers to furnish their employees with a hazard-free working environment. In addition, the statute requires employers to comply with specific occupational safety and health rules promulgated by the Secretary of Labor.(9)

      1. Elements of the Offense

         There are three main components of the general duty clause of OSHA relating to its violation: (1) the violation must have been committed by an employer"; (2) a civil violation must meet certain specified criteria; and (3) in order to apply criminal sanctions, certain criteria are mandated.

         1. Employer

            Until recently, "employers" under the OSHA definition have been limited to corporations as entities.(10) Under this reasoning prison sentences could only be imposed upon sole proprietors since corporations cannot be jailed.(11) Because it has now been settled that officers qualify as employers in other criminal contexts,(12) in more recent OSHA cases, corporate officers as employers have been criminally sanctioned under this broader definition.(13) Furthermore, recent OSHA cases establish that an employee cannot be subjected to criminal liability as an aider and abettor of the corporate employer's criminal violation of OSHA.(14) However, the potential liability of a third party or an employee acting in some other capacity who aids and abets his employer remains a live issue.(15)

         2. Civil violation

            To establish a serious civil violation of OSHA's general duty clause,(16) the Secretary of Labor must prove that: (1) the employer failed to render its workplace free of a hazard;(17) (2) the hazard was "recognized"(18); (3) the hazard caused or was likely to cause death or serious physical harm;(19) and (4) the hazard was preventable.(20)

         3. Criminal violation

            Criminal sanctions may be applied where an employer's willful violation causes the death of an employee.(21) A willful violation for OSHA purposes is one involving voluntary action, done either with an intentional disregard of, or plain indifference to, the statutory requirements.(22) Criminal penalties may also be imposed for giving advance warning of unannounced safety inspections(23) and for making false representations in a document filed pursuant to the statute.(24)

      2. Preemption

         In 1992, the Supreme Court held that state regulation of occupational safety and health issues for which a federal standard is in effect and which have not been approved by the Secretary of Labor is preempted and that such state regulation consequently conflicts with the full purposes and objectives of OSHA.(25) States may, however, regulate worker safety if a state plan is approved by the Secretary of Labor.(26) Twenty-three states and two territories have received the Secretary's approval for their plans.(27)

      3. Penalties

         To enforce OSHA's worker safety mandate, Congress provided for the possibility of both civil and criminal penalties.(28) Employers who wilfully or repeatedly(29) violate the general duty clause or any specific OSHA standard may be assessed a civil penalty of not more than $70,000 for each violation, but not less than $5,000 for each willful violation.(30) Citations for serious violations(31)as well as those determined not to be of a serious nature(32) may earn a civil penalty of up to $7,000 for each violation.(33)

         The imposition of civil sanctions is limited,(34) however, and rarely have criminal fines been used to punish employers.(35) To date, only one employer has been imprisoned,(36) although home confinement and time in halfway houses have occasionally been imposed.(37) Due to the small number of OSHA cases prosecuted by the Department of Justice,(38) and because of the minimal civil fines levied upon employers coupled with the increasing use of settlements rather than prosecution,(39) OSHA has drawn criticism for its limited deterrent effect on employers.(40) One commentator has suggested that some employers may be more effectively prosecuted under the "knowing endangerment" provisions of the Clean Water Act(41) and the Resource Conservation and Recovery Act(42) than under OSHA.(43)

   2. Federal Mine Safety and Health Act

      The Federal Mine Safety and Health Act,(44) like OSHA, protects worker health and safety through a combination of civil, criminal, and administrative enforcement mechanisms. An operator of a mine(45) in which a safety or health violation is found is civilly liable without a showing of fault(46) and is criminally liable(47) if the violation is willful.(48)

      FMSHA also imposes civil and criminal liability on corporate officers, directors, and agents of a corporate operator who knowingly authorize, order, or carry out a violation.(49) An agent of a noncorporate operator is not subject to any penalties under FMSHA.(50) Although the Mine Safety and Health Administration has a more vigorous criminal enforcement program than OSHA,(51) few criminal prosecutions have been brought under FM-SHA.(52)

   3. State Criminal Law

      1. Effectiveness of State Criminal Law

         Although states are preempted by OSHA from regulating workplace safety, the application of all state criminal sanctions against employers is not invalidated.(53) State courts have held that state penal laws applied in a workplace context are not preempted by OSHA,(54) and employers have been prosecuted for homicide under state criminal statutes.(55)

         Because OSHA and the state equivalents are unable to effectively deter egregious conduct and because state criminal law imposes prison sentences along with fines, the state criminal law may best serve the purposes of deterrence and punishment.(56)

      2. State Criminal Practice

         In only one case has an employer been convicted of murder when an employee died in the workplace.(57) However, because the corporation and the individual defendant were charged with legally inconsistent offenses, the judgment was reversed.(58) Prosecutors have resorted to state criminal law in order to convict employers that cause the death of their employees, charging employers with the lesser crime of manslaughter.(59) This may be due to the fact that an employer may not have the criminal mental state that the charge of murder is intended to address.(60) In any case, state criminal manslaughter prosecutions of employers should increase as long as the federal and state safety criminal sanctions remain largely ineffective.

   4. The Comprehensive Occupational Safety and Health Reform Act

      Bills are currently pending in the House(61) that would strengthen the criminal penalties that may be applied to workers under OSHA. If these bills become law, the Comprehensive Occupational Safety and Reform Act ("COSHRA") will increase OSHA's criminal penalties.(62) Section 512 of the proposed Act increases the maximum imprisonment penalty for a willful violation that causes death from six months to ten years (first conviction) and one year to twenty years (each subsequent conviction).(63) More importantly, Section 512 would also create a new criminal offense for a willful violation that causes serious bodily injury.(64) The proposed maximum penalty for this violation is five years (first conviction) and ten years (each subsequent conviction).(65) The proposed acts define "serious bodily injury" as "bodily injury that involves a substantial risk of death, protracted unconsciousness, protracted and obvious physical disfigurement, or protracted loss or impairment of the function of a bodily member, organ, or mental faculty."(66)

      COSHRA, as proposed, also defines and expands the scope of its new coverage. Section 512 would provide that criminal fines assessed against directors, officers, or agents of an employer shall not be paid out of the employer's assets.(67) COSHRA would also allow supervisors and other managers to be held criminally liable for willful violations that result in the death or serious bodily injury of an employee.(68) Finally, section 512 would make it clear that criminal prosecutions under state and local laws are not preempted by OSHA.(69)

      These proposed changes to OSHA were made with the view that meaningful criminal sanctions will improve worker health and safety by deterring potential violators.(70) The criminal penalties would be increased under COSHRA because the previous misdemeanor sanctions under OSHA make it less likely that a prosecutor would pursue a case.(71)

2. The Fair Labor Standards Act

   The Fair Labor Standards Act(72) was enacted in 1938 to eliminate labor conditions detrimental to the nation's commerce and to the general welfare of workers.(73) The...