In recent federal district court proceedings concerning OSHA demands for documents said to be relevant to a July 2010 fatal grain accident at facilities operated by Haasbach LLC, a U.S. District Court Judge for the Northern District of Illinois upheld a subpoena served by OSHA on the employer’s workers’ compensation insurance carrier. The records were inspection reports conducted for and by the insurance carrier at the employer’s facilities.

The court was not persuaded by the arguments of the insurer, Grinnell Mutual Reinsurance Co., that the ruling discourages self audits. Grinnell argued that employers would be discouraged from allowing insurers to conduct safety inspections if the material can be used against the company in later enforcement or litigation.

In praising the decision, OSHA Assistant Secretary David Michaels said: “Workers’ compensation loss control activities overlap with OSHA’s efforts to bring about safe and healthful workplaces….”

COMMENT: While many arguments have been made over the years to encourage recognition of a privilege for information developed during company self audits (in this case by the employer’s insurance company), case law has not supported such a privilege. As a result, employers should recognize that problems identified during audits need to be resolved expeditiously. Since records of problems found may be used against the employer in agency enforcement actions or civil litigation, documentation of the corrective actions will form a critical part of the company’s records.