Employment-related crimes.

AuthorO'Connor, Jennifer
PositionTenth Survey of White Collar Crime

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) is discussed in detail. As a supplement to these materials, the proposed bill(2) 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 Federal Mining Safety and Health Act ("FMSHA")(3) is also analyzed. The criminal law covering employment practices, the Fair Labor Standards Act ("FLSA"),(4) is discussed in the second section. Finally, section 302 of the Taft-Hartley Act prohibiting the payment or loans by employers to employees or labor organizations is reviewed.

  1. Worker Safety

    1. Occupational Safety and Health Act

      Due to the trend of increasing employee deaths and injuries in the late 1960s,(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) Although OSHA has only been minimally effective in achieving its stated goals, recent developments indicate an increasing responsiveness to problems of workplace safety.

      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 requires the presence of a hazardous condition meeting certain specified criteria; and (3) in order to apply criminal sanctions, there must be a willful violation of the Act.

        a. Employer

        For a party to be an "employer" for OSHA purposes, an employment relationship must be found to exist. An "employee" is defined as "an employee of an employer who is employed in a business of his employer which affects commerce."(10) When an inquiry into an OSHA violation is complicated by the involvement of one or more contractors, an employment relationship, and thus the potential for liability, is held to exist between the employee and the party in control of the work environment.(11)

        Until recently, "employers" under the OSHA definition had been limited to corporations as entities.(12) Under this reasoning, prison sentences could only be imposed upon sole proprietors since corporations cannot be jailed. Now that it has been settled that officers qualify as employers in other criminal contexts,(13) corporate officers, in their role as employers, have been criminally sanctioned under OSHA as well.(14) Several OSHA cases, however, establish that a mere employee cannot be subjected to criminal liability as an aider and abettor of the corporate employer's criminal violation of OSHA.(15) Yet the potential liability of a third party or of an employee acting in a capacity separate from his or her role as an employee who aids and abets an employer remains a live issue.(16)

        b. Hazardous Conditions

        To establish a violation of OSHA's general duty clause,(17) the Secretary of Labor must prove that: (1) the employer failed to render its workplace free of a hazard;(18) (2) the hazard was "recognized;"(19) (3) the hazard caused or was likely to cause death or serious physical harm;(20) and (4) the hazard was preventable.(21)

        c. Employee's Death

        Criminal sanctions may be applied where an employer's willful violation causes the death of an employee.(22) 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.(23) Criminal penalties may also be imposed on any party for giving advance warning to an employer of unannounced safety inspections(24) as well as for making false representations in a document filed pursuant to the statute.(25)

      2. Preemption

        In 1992, the Supreme Court held that state regulation of occupational safety and health issues already regulated by a federal standard is preempted because such state regulation conflicts with the full purposes and objectives of OSHA.(26) States may, however, regulate worker safety if a state plan is approved by the Secretary of Labor.(27) Thus far, twenty-three states and two territories have received the Secretary's approval for their plans.(28)

        OSHA regulations governing the working conditions(29) of employees are themselves preempted by regulations or standards affecting occupational safety and health enacted by other federal agencies.(30) Although the rationale supporting such preemption is broadly phrased,(31) individual determinations based upon preemption tests often turn on specific aspects of the other agency's regulation.(32)

      3. Penalties

        To enforce OSHA's worker safety mandate. Congress provided for the possibility of both civil and criminal penalties.(33) Employers who willfully(34) or repeatedly(35) 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.(36) Citations for serious violations(37) as well as those determined not to be of a serious nature(38) may earn a civil penalty of up to $7,000 for each violation.(39)

        The criminal sanctions are also statutorily limited. For a first conviction on a willful violation causing death to an employee, an employer faces a fine of up to $10,000, imprisonment for up to six months, or both.(40) For subsequent convictions, the employer faces fines of up to $20,000, imprisonment for up to one year, or both. A person convicted of providing unauthorized advance notice of any inspection conducted under OSHA may be subjected to a fine of up to $1,000, imprisonment for up to six months, or both.(41) Convictions for making false representations in documentation required under OSHA are punished with fines of up to $10,000, imprisonment for up to six months, or both.(42)

        Even the imposition of civil sanctions has been limited,(43) however, and criminal fines have rarely been used to punish employers.(44) To date, only one employer has been imprisoned,(45) although sentences involving home confinement and time in halfway houses have occasionally been imposed.(46) OSHA has drawn criticism for its limited deterrent effect on employers,(47) due to the small number of OSHA cases prosecuted by the Department of Justice,(48) and because of the minimal civil fines levied upon employers coupled with the use of monetary settlements in place of criminal prosecution.(49) One commentator has suggested that some employers may be more effectively prosecuted under the "knowing endangerment" provisions of the Clean Water Act(50) and the Resource Conservation and Recovery Act(51) than under OSHA.(52)

    2. State Criminal Law

      1. Effectiveness of State Criminal Law

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

        Several commentators assert that state criminal law may best serve the purposes of deterrence and punishment for workplace safety and health violations, since OSHA and its state equivalents are currently unable to effectively deter egregious conduct by employers and because state criminal law imposes prison sentences along with fines.(56)

      2. State Criminal Practice

        Only one employer has been convicted of murder for the workplace death of an employee.(57) However, the conviction in that case was reversed because the corporation and the individual defendant were charged with legally inconsistent offenses.(58) Prosecutors have resorted to state criminal law in order to convict employers who cause the deaths of their employees by charging employers with the lesser crime of manslaughter.(59) The use of the lesser charge may be due to the fact that few employers will have the criminal mental state required for a murder charge.(60) In any case, prosecutions of employers for manslaughter are likely to increase as long as the federal and state criminal safety sanctions remain largely ineffective.

    3. The Comprehensive Occupational Safety and Health Reform Act

      Bills are currently pending in Congress that would strengthen the criminal penalties that may be applied to workers under OSHA.(61) If these bills become law, the Comprehensive Occupational Safety and Reform Act ("COSHRA") will increase the severity of OSHA's criminal penalties.(62) Section 512 of COSHRA would increase the maximum length of imprisonment for a willful violation which causes a death from six months to ten years for a first conviction and from one year to twenty years for 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 penalties for this violation are five years for a first conviction and ten years for each subsequent conviction.(65)

      Additionally, COSHRA defines and expands the scope of employer liability. 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.(66) 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.(67) Finally, section 512 would make it clear that criminal prosecutions under state and local laws are not preempted by OSHA.(68)

      These proposed changes to OSHA were made with the view that meaningful criminal sanctions will...

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