Employment-related crimes.

• Author: Moroney, Brian
• Position: Annual white collar crime survey

1. INTRODUCTION

   This Article surveys the criminal penalties utilized to protect workers in the areas of occupational safety and employment practices. These penalties are part of larger regulatory measures enacted to ensure worker safety, eliminate labor conditions detrimental to the nation's commerce and the general welfare of workers, and provide labor unions greater protection from corrupt union and management officials. Section II of this Article discusses criminal sanctions relevant to worker safety under 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 criminal sanctions applicable to employment practices under the Fair Labor Standards Act ("FLSA").(3) Section IV discusses the Labor Management Relations Act ("LMRA") which prohibits payments and loans by employers to employees or labor organizations.(4) And finally, Section V reviews section 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 worker safety. Part A analyzes the OSH Act,(6) by examining the offenses of a willful violation of a specific standard resulting in an employee death and a false representation. In addition, this Section reviews the potential penalties for these offenses and the degrees of enforcement. Part B discusses state criminal law and its effectiveness in deterring violations of the OSH Act. Part B also examines current occupational safety and health reform efforts. Part C discusses the FMSHA,(7) including offenses and current reform efforts under the law.

   1. Occupational Safety and Health Act

      Congress enacted the OSH Act to ensure worker safety after increasing numbers of employee deaths and injuries in the late 1960s.(8) The OSH Act requires employers to furnish their employees with a working environment free from recognized hazards.(9) The statute also requires compliance with specific occupational safety and health rules promulgated by the Secretary of Labor.(10) Violation of these standards may lead to criminal sanctions, in addition to the civil sanctions contemplated by the OSH Act.(11)

      While the OSH Act provides for criminal sanctions in three situations, only two have been regularly enforced: (1) when an employer's willful violation of a standard, rule, order, or regulation causes the death of an employee;(12) or (2) when an employer makes a false representation regarding OSH Act compliance.(13) The third situation, criminal sanctions for any person giving advance notice of an inspection,(14) has not been criminally prosecuted.(15) Additionally, 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

         If (i) an employer (ii) willfully violates (iii) a specific standard, rule, order, or regulation, (iv) which causes the death of an employee, criminal sanctions may ensue.(17)

         i. Employer

         An "employer" is statutorily defined as a "person engaged in a business affecting commerce who has employees."(18) In addition, corporate officers in their individual capacities may also be criminally sanctioned under the OSH Act.(19) 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.(20) The potential liability of a third party or employee, acting in a capacity separate from his or her role as an employee, who aids and abets an employer, has not been resolved.(21)

         In multiple employer workplaces, the employer who creates or controls a hazard may be liable to employees of the other employers in that work place, which is known as the multi-employer doctrine.(22) In a general contractor-subcontractor situation the party controlling the work or work environment may be liable to the contractor's employees.(23) For example, a subcontractor which has control over the work environment may be liable to others' employees, including employees of the main contractor, even if the subcontractor has not created the hazard.(24)

         ii. Willful Violation

         "Willful violation" is not defined in the OSH Act, but the courts have adopted the Review Commission's and Secretary of Labor's interpretation of a voluntary action, done either with intentional disregard of or with plain indifference to the statutory requirements.(25) This interpretation does not require malicious intent to impose liability in the majority of jurisdictions. The First,(26) Second,(27) Fourth,(28) Fifth,(29) Sixth,(30) Seventh,(31) Eighth,(32) Ninth,(33) Tenth,(34) Eleventh,(35) and District of Columbia Circuits impose liability without malicious intent.(36) In contrast, the Third Circuit requires a showing of knowing, conscious, and deliberate flaunting of OSH regulations to support a finding of willful violation.(37) Finally, a simple good faith belief in compliance with the purpose of a standard through alternative measures is not sufficient to avoid liability.(38)

         iii. Specific Standard

         To willfully violate the OSH Act, an employer must willfully or repeatedly fail to comply with a specific standard, rule, order or regulation.(39) The Secretary of Labor has the burden of proving a willful violation occurred.(40) Although an employer is still subject to the general duty clause, employers are typically cited for willful violations of a specific safety standard.(41)

         iv. Causes Death

         Finally, for an employer to be held criminally liable, a violation must result in the death of an employee.(42) An "employee" is statutorily defined as "an employee of an employer who is employed in a business of his employer which affects commerce."(43) Causation has not been a significant issue because the legislative history of the OSH Act seems to support a lenient definition of causation.(44)

         b. Defenses

         Defenses available to an employer include (i) preemption, (ii) isolated occurrence, (iii) impossibility of compliance, (iv) greater hazard, and (v) general defenses. The employer has the burden of raising and proving an affirmative defense.(45)

         i. Preemption

         An employer may be able to present an affirmative defense of preemption. In 1992, the Supreme Court held that state regulation of occupational safety and health issues already regulated by a federal standard is preempted by the OSH Act.(46) States may, however, regulate worker safety if a state plan is approved by the Secretary of Labor as meeting the requirements of section 18 of the OSH Act.(47) Thus far, twenty-one states and two territories have received the Secretary's approval for their plans.(48)

         Occupational Safety and Health Administration ("OSHA") regulations governing the working conditions(49) of employees are themselves preempted by regulations or standards affecting occupational safety and health enacted by other federal agencies.(50) Although the rationale supporting such preemption is broadly phrased,(51) individual determinations based upon preemption tests often turn on specific aspects of the other agencies' regulations.(52)

         ii. Isolated Occurrence

         Employers may also assert that the death in question resulted from an isolated occurrence caused by the inappropriate or unforeseeable action of a single employee.(53) To assert the defense successfully, the employer must demonstrate that it established a safety rule, communicated the rule to employees, took steps to discover noncompliance, and enforced the rule when it was violated.(54)

         iii. Impossibility of Compliance

         An employer may claim the defense of impossibility if compliance cannot be achieved.(55) To establish this defense, the employer must prove compliance was impossible or infeasible(56) and that it used alternative safety measures if any were available.(57)

         iv. Greater Hazard

         An employer may assert the avoidance of a greater hazard as an affirmative defense.(58) If the hazard of compliance with a standard is greater than that of noncompliance and there are no alternative means,(59) an employer may escape liability.(60)

         v. General Defenses

         At least one court suggests there may be a technical defense when delay in prosecution prejudices the employer's case.(61)

         Further, it appears that an employer has the ability to claim vindictive prosecution.(62) The four elements of vindictive prosecution are (1) the exercise of a protected right; (2) the prosecutor has a stake in the exercise of that right; (3) the prosecutor's conduct is unreasonable; (4) and the prosecution was started with the intent to punish the exercise of that right.(63)

      2. False Representations(64)

         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 [OSH Act]" may be criminally prosecuted.(65) Such prosecution, however, is infrequently pursued.(66)

      3. Penalties

         To enforce the OSH Act's worker safety mandate, Congress provided for the possibility of both civil and criminal penalties.(67) For a first conviction of 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.(68) For subsequent convictions an employer faces fines of up to $20,000, imprisonment for up to one year, or both.(69) 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.(70) 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.(71)

      4. Enforcement

         As of September 1997, the Department of Justice had received only 121 referrals for OSH Act violations.(72) Of these...