Employment-related crimes.

• Author: Darden, David B.
• Position: Thirteenth Survey of White Collar Crime

1. INTRODUCTION

   This Article surveys the criminal penalties currently available to protect workers in the areas of occupational safety and employment practices. Section II discusses worker safety through the Occupational Safety and Health Act ("OSH Act"),(1) state criminal law, and the Federal Mine Safety and Health Act ("FMSHA").(2) Section III analyzes the criminal law covering employment practices in the Fair Labor Standards Act ("FLSA").(3) Section IV covers the Labor Management Relations Act ("LMRA"), which prohibits payments and loans by employers to employees or labor organizations.(4) Finally, Section V 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

   This Section discusses the criminal laws relevant to aspects of worker safety. Part A analyzes the OSH Act,(6) including the offense of willful violation of a standard leading to the death of an employee, false representation, penalties, and enforcement. Part B discusses state criminal law and its effectiveness in deterring violations of the OSH Act. Additionally, Part B examines current efforts in reforming occupational safety and health. Part C discusses the FMSHA,(7) including offenses and current reform efforts under the law.

   1. Occupational Safety and Health Act

      Due to the trend of increasing employee deaths and injuries in the late 1960s,(8) Congress enacted the Occupational Safety and Health Act (OSH Act)(9) in an attempt to ensure worker safety.(10) The OSH Act includes a general duty clause requiring employers to furnish their employees with a working environment free from recognized hazards.(11) Violation of the general duty clause may lead to criminal sanctions in addition to the civil sanctions already required by the OSH Act.(12) The statute also requires employers to comply with specific occupational safety and health rules promulgated by the Secretary of Labor.(13)

      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.(14) 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.(15) Finally, employers may be subject to both civil fines and criminal sanctions in Separate prosecutions for the same violation.(16)

      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 specific standard, rule, order or regulation; (iv) causes the death of an employee.(17)

         i. Employer

         For a party to be an "employer" for OSH Act purposes, an employment relationship must exist. An "employee" is statutorily defined as "an employee of an employer who is employed in a business of his employer which affects commerce."(18)

         In work places where multiple employers are involved, the employer who creates a hazard may be liable to others' employees, such as those of a general contract or a subcontractor.(19) Use of a general contractor or subcontractor creates an employment relationship; thus, the party controlling the work or work environment can be liable to the contractor's employees.(20) Subcontractors may also be liable to others' employees, including employees of the general contractor, even if the subcontractors have not created the hazard.(21)

         In addition, corporate officers also have been criminally sanctioned under the OSH Act.(22) In the Third, Fifth and Seventh Circuits, a "mere employee" who is not an officer cannot be liable as an aider and abettor of the employer's criminal liability.(23) 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.(24)

         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.(25) Thus, malicious intent is not necessary to impose liability in the majority of jurisdictions, including the First, Second, Fourth, Fifth, Sixth, Seventh,(26) Eighth, Ninth, Tenth, Eleventh, and District of Columbia Circuits.(27)

         In addition, a good faith belief in compliance with alternative measures is not sufficient to avoid liability.(28)

         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." The burden of proof lies with the Secretary of Labor.(30) Only a few employers have been cited for willful violations absent a specific safety standard.(31)

         iv. Causes Death

         Finally, for the employer to be held criminally liable, the violation must result in the death of an employee.(32)

         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.(33) States may, however, regulate worker safety if a state plan is approved as meeting the requirements of section 18(c) of the OSH Act by the Secretary of Labor.(34) Thus far, twenty-one states and two territories have received the Secretary's approval for their plans.(35)

         Occupational Safety and Health Administration ("OSHA") regulations governing the working conditions(36) of employees are themselves preempted by regulations or standards affecting occupational safety and health enacted by other federal agencies.(37) Although the rationale supporting such preemption is broadly phrased,(38) individual determinations based upon preemption tests often turn on specific aspects of the other agency's regulation.(39)

         In addition to preemption, employers may have other defenses available. Employers frequently argue that the death resulted from an isolated occurrence caused by the inappropriate or unforeseeable action of a single employee.(40) When compliance cannot be achieved, an employer may claim the defense of impossibility.(41) 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."(42) Finally, there may be a technical defense when delay in prosecution prejudices the employer.(43) Additionally, several bills pending in Congress, if enacted, would increase the affirmative defenses available to employers.(44)

      2. False Representations(45)

         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.(46) Such prosecution, however, is infrequently pursued.(47)

      3. Penalties

         To enforce the OSH Act's worker safety mandate, Congress provided for the possibility of both civil and criminal penalties.(48) 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.(49) For subsequent convictions, the employer faces fines of up to $20,000, imprisonment for up to one year, or both.(50) A person convicted of providing unauthorized advance notice of any inspection conducted under the OSH Act may be subjected to a fine of up to $1,000, imprisonment for up to six months, or both.(51) 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.(52) Recent Democratic attempts to increase OSHA criminal penalties were defeated along partisan lines.(53)

      4. Enforcement

         The OSH Act has drawn criticism for its limited deterrent effect on employers,(54) due to the small number of OSH Act cases prosecuted by the Department of Justice(55) and because of the minimal civil fines levied upon employers coupled with the use of monetary settlements in place of criminal prosecution.(56) Criminal fines are rarely used to punish employers.(57) To date, only two employers have been imprisoned,(58) although sentences involving home confinement and time in half way houses are occasionally imposed. One commentator suggested that "knowing endangerment" provisions of the Clean Water Act(60) and the Resource Conservation and Recovery Act(61) may be effective supplements to enforcement of the OSH Act.(62)

         The Clinton Administration has proclaimed that it "will not tolerate a lax attitude toward worker safety and health"(63) through its "New OSHA" initiative.(64) In addition to backing up its focus on enforcement with a needed increase in funding,(65) OSHA has provided significant incentives for those participating in the program, including decreased fines(66) and focused inspections. There is some doubt whether the current enforcement levels will provide effective deterrence.(68)

   2. State Criminal Law

      State criminal sanctions against employers, which are not completely preempted by the OSH Act, can also deter criminal employment violations. The following two sub-sections discuss the effectiveness of and practices under state criminal laws.

      1. Effectiveness of State Criminal Law

         Although the OSH Act preempts states from regulating safety in the workplace, the OSH Act does not prohibit states from imposing certain of their own criminal sanctions against employers.(69) The OSH Act does not preempt the application of traditional state criminal laws in the context of the...