Employment-related crimes.

• Jurisdiction: United States
• Author: Marcus, Barbra
• Date: 01 January 1997

1. INTRODUCTION II. WORKER SAFETY

   1. Occupational Safety and Health Act

      1. Employer's Willful Violation of Standard Causes Death

      a. Elements of the Offense

      i. Employer

      ii. Willful Violation

      iii. Specific Standard

      iv. Causes Death

      b. Defenses

      2. False Representations

      3. Penalties

      4. Enforcement

   2. State Criminal Law

      1. Effectiveness of State Criminal Law

      2. State Criminal Practice

   3. Occupational Safety and Health Reform

   4. Federal Mine Safety and Health Act

      1. Federal Mine Safety and Health Offenses

      2. Federal Mine Safety and Health Reform III. THE FAIR LABOR STANDARDS ACT

   1. Elements of the Offense

      1. Employee

      2. Employer

      3. Willful Violation

   2. Penalties

   3. Enforcement IV. PAYMENT OR LOANS BY EMPLOYER TO EMPLOYEES OR LABOR ORGANIZATIONS

   1. Elements of the Offense

      1. Employer

      2. Willfulness

      3. Money or Thing of Value

      4. Representative of an Employee

      5. Requests or Receives

   2. Exceptions

   3. Penalties V. PROTECTING UNION FUNDS UNDER THE LABOR-MANAGEMENT REPORTING AND DISCLOSURE ACT

   1. Elements of the Offense

      1. Officer or Employee

      2. Appropriation of Union Assets for One's Own or Another's Purpose

      3. Fraudulent Intent

      4. Lack of Benefit to Union or Lack of Union Authorization

   2. Defenses

   3. Penalties

1. INTRODUCTION

   This article surveys the criminal penalties currently available to protect workers in the areas of occupational safety and employment practices. The first section discusses worker safety through the Occupational Safety and Health Act ("OSH Act"),(1) the proposed bills designed to reform the OSH Act,(2) and the Federal Mining Safety and Health Act ("FMSHA").(3) The second section looks at the criminal law covering employment practices in the Fair Labor Standards Act ("FLSA").(4) The third section covers [sections] 302 of the Taft-Hartley Act, which prohibits the payment or loans by employers to employees or labor organizations. Finally, the fourth section reviews [sections] 501(c) of the Labor-Management Reporting and Disclosure Act ("LMRDA"), which prevents appropriations of union funds for non-union purposes.(5)

2. WORKER SAFETY

   1. Occupational Safety and Health Act

      Due to the trend of increasing employee deaths and injuries in the late 1960's,(6) Congress enacted the Occupational Safety and Health Act ("OSH Act")(7) to ensure worker safety.(8) The OSH Act includes a general duty clause requiring employers to furnish their employees with a working environment free from recognized hazards.(9) Violation of the general duty clause may lead to criminal sanctions.(10) In addition, the statute requires employers to comply with specific occupational safety and health rules promulgated by the Secretary of Labor.(11)

      While the OSH Act provides for criminal sanctions in three situations, only two have been regularly enforced. Criminal prosecutions have been initiated either when an employer's willful violation of a standard, rule, order or regulation causes the death of an employee or when an employer makes a false representation regarding OSH Act compliance.(12) The section of the OSH Act which contemplates criminal sanctions for any person giving advance notice of an inspection has not been a source of criminal prosecutions.(13) Finally, employers may be subject to both civil fines and criminal sanctions for the same violation in separate prosecutions.(14)

      1. Employer's Willful Violation of Standard Causes Death

      a. Elements of the Offense

      Criminal violations occur when (i) an employer's (ii) willful violation of (iii) a standard, rule, order or regulation (iv) causes the death of an employee.(15)

      i. Employer

      For a party to be an "employer" for Occupational Safety and Health Administration (OSHA) purposes, an employment relationship must exist. An "employee" is defined as "an employee of an employer who is employed in a business of his employer which affects commerce."(16)

      In work places where multiple employers are involved, the employer who creates a hazard may be liable to others' employees.(17) Use of a general or subcontractor creates an employment relationship--and, therefore, the potential for liability--between a contractor's employees and the party in control of the work or environment.(18) Subcontractors may also be liable for others' employees, even if they have not created the hazard.(19)

      Corporate officers have also been criminally sanctioned under the OSH Act.(20) In a majority of jurisdictions, a "mere employee" who is not an officer can not be liable as an aider and abetter of the employer's criminal liability.(21) 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 has not been resolved.(22)

      ii. Willful Violation

      A willful violation for OSH Act purposes is one involving voluntary action, done either with an intentional disregard of, or plain indifference to, the statutory requirements.(23) Thus, malicious intent is not necessary to impose liability in a majority of jurisdictions.(24) In addition, a good faith belief in compliance with alternative measures is not sufficient to avoid liability.(25)

      iii. Specific Standard

      For a violation of the OSH Act to occur, an employer must fail to comply with a specific standard, rule, order or regulation.(26) The burden of proof lies with the Secretary of Labor.(27) Few employers have been cited for willful violations absent a specific safety standard.(28)

      iv. Causes Death

      Finally, for the employer to be held criminally liable, the violation must result in the death of an employee.(29)

      b. Defenses

      Defenses available to an employer include preemption, isolated occurrence, impossibility of compliance, greater hazard, and technical issues.

      First, an employer may be able to present a defense of preemption. In 1992, the Supreme Court held that state regulation of occupational safety and health issues already regulated by a federal standard was preempted by the OSH Act.(30) States may, however, regulate worker safety if a state plan is approved by the Secretary of Labor.(31) Thus far, twenty-three states and two territories have received the Secretary's approval for their plans.(32)

      OSHA regulations governing the working conditions(33) of employees are themselves preempted by regulations or standards affecting occupational safety and health enacted by other federal agencies.(34) Although the rationale supporting such preemption is broadly phrased,(35) individual determinations based upon preemption tests often turn on specific aspects of the other agency's regulation.(36)

      In addition to preemption, employers may have other defenses available. Employers frequently argue that the death resulted from an isolated occurrence caused by inappropriate actions of a single employee.(37) When compliance cannot be achieved, an employer may claim impossibility of compliance.(38) If the hazard of compliance with a standard is greater than that of noncompliance and there are no alternative means, an employer may argue "greater hazard."(39) Finally, there may be a technical defense when delay in prosecution prejudices the employer.(40)

      2. False Representations

      Anyone who knowingly makes a false statement, representation or certification in any application, record, report, plan or other document filed or required to be maintained pursuant to the OSH Act may be criminally prosecuted.(41) Such prosecution, however, is infrequently pursued.(42)

      3. Penalties

      To enforce the OSH Act's worker safety mandate, Congress provided for the possibility of both civil and criminal penalties.(43) 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.(44) For subsequent convictions, the employer faces fines of up to $20,000, imprisonment for up to one year, or both.(45) 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.(46) Convictions for making false representations in documentation required under the OSH Act are punished with fines of up to $10,000, imprisonment for up to six months, or both.(47)

      4. Enforcement

      The OSH Act has drawn criticism for its limited deterrent effect on employers,48 due to the small number of OSHA cases prosecuted by the Department of Justice(49) and because of the minimal civil fines levied upon employers coupled with the use of monetary settlements in place of criminal prosecution.(50) Criminal fines are rarely used to punish employers.(51) To date, only two employers have been imprisoned,(52) although sentences involving home confinement and time in halfway houses are occasionally imposed.(53) One commentator suggested that the "knowing endangerment" provisions of the Clean Water Act (54) and the Resource Conservation and Recovery Act(55) may be effective supplements to enforcement of the OSH Act.(56)

   2. State Criminal Law

      State criminal sanctions against employers, which are not completely preempted by the OSH Act, also act as a deterrent to criminal employment violations. The following section discusses the effectiveness of and practices under state criminal laws.

      1. Effectiveness of State Criminal Law

      Although states are preempted by the OSH Act from regulating safety in the workplace, the application of certain state criminal sanctions against employers is not preempted.(57) The OSH Act does not preempt the application of traditional state criminal laws in the context of the workplace.(58) For example, employers whose OSH Act violations result in death may instead be prosecuted for homicide under state criminal statutes.(59)

      Several commentators have asserted that state criminal laws may best serve the purposes of deterrence and punishment for workplace safety and health violations, since they feel that the OSH Act and its state equivalents are currently unable to effectively deter egregious conduct by employers and...