The U.S. Court of Appeals for the District of Columbia Circuit recently provided some much-needed clarification to the meaning of “Willful” with respect to violations of the Occupational Safety and Health Act, in the case of Dayton Tire v. Secretary of Labor, No. 10-1362 (2012).  Violations of the OSH Act fall into one of four categories, with “Willful” and “Repeat” violations being the most severe, and carrying penalties up to 10x that of “Serious” or “Other than Serious violations.  29 U.S.C. § 666(a)-(c).  All OSHA violations, even Other than Serious violations, require a showing by OSHA that the employer had “knowledge” (actual or constructive) of the violative condition.  So if knowledge is required for all violations, what sets a “Willful” violation apart from the others?  The DC Circuit attempted to explain that difference in the Dayton Tire case, when it struck down the Willful characterization of several Lockout/Tagout (“LO/TO”) citations.

In doing so, the DC Circuit stated that the definition of Willful is a narrow one, requiring that an act be committed “voluntarily with either an intentional disregard of, or plain indifference to, the Act’s requirements.”  To make out a Willful violation, the Secretary of Labor must be able to demonstrate that “the employer was actually aware, at the time of the violative act, that the act was unlawful, or that [the employer] possessed a state of mind such that if it were informed of the [OSHA] standard, it would not care.”  The Court further clarified that “it takes a lot to be plainly indifferent,” and based on the Secretary’s failure to “cite a single piece of evidence indicating that [the manager] was actually aware . . . that the act was unlawful,” the Court vacated the penalties assessed again Dayton Tire in this case.

The LO/TO standard at issue in the case applies to “the servicing and maintenance of machines and equipment in which the unexpected . . . start-up of the machines or equipment, or release of stored energy could cause injury to employees.”  29 C.F.R. § 1910.147(a)(1)(i).  The LO/TO standard requires covered employers to “establish a program and utilize procedures for affixing appropriate lockout . . . or tagout devices to energy isolating devices.”  29 C.F.R. 1910.147(a)(3)(i).  Finally, the LO/TO standard requires that employers provide training “to ensure that the purpose and function of the energy control program are understood by employees and that the knowledge and skills required for the safe application, usage, and removal of the energy controls are acquired by employees.”  § 1910.147(c)(7)(i).  These training requirements vary depending on whether an employee is “authorized” (e.g., a maintenance employee who applies locks and tags to equipment) or “affected” (e.g., a machinen operator who works in the vicinity of a machine being locked out).  29 C.F.R. 1910.147(c)(7)(i)(A) & (B).

In 1989, when OSHA promulgated the LO/TO standard, Dayton Tire operated a tire-manufacturing facility in Oklahoma, but all service and maintenance at the facility was performed by an outside contractor.  Dayton Tire’s safety managers determined correctly that their employees were only “affected” employees, whose required level training in LO/TO is much less stringent than “authorized” employees.  Following a 1993 fatal injury to a Dayton Tire employee caused by the unexpected start-up of a machine, OSHA inspected the facility and issued to Dayton Tire 107 Willful violations, 98 of which were for alleged Willful failures to train 98 different Dayton Tire employees to the “authorized employee” level.

Dayton Tire contested the citations, and OSH Review Commission Administrative Law Judge (“ALJ”) affirmed the violations, and assessed a penalty of $518,000.  See Secretary of Labor v. Dayton Tire, No. 94-1374 (1997).  Although the ALJ found that Dayton Tire’s actions were “consistent with a good faith belief and effort to comply with the LO/TO standard throughout the Oklahoma City plant,” the Judge nevertheless characterized 37 violations as Willful because, he reasoned, Dayton Tire had knowledge that its parent corporation had previously been cited for similar violations of the LO/TO standard.  Id.  The case was appealed to the OSH Review Commission, which issued its opinion in 2010 (more than 12 years after the ALJ’s decision).  The Commission’s opinion upheld all of the violations as Willful, and increased the penalty to approximately $2 million.  Secretary of Labor v. Dayton Tire, No. 94-1374 (2010).  The Commission’s determination of Willfulness was not based on the parent corporation’s prior violations, but rather, was based on the original finding by Dayton Tire’s first safety manager that only the outside maintenance contractor’s employees were LO/TO authorized employees, which the Review Commission found to be “plainly erroneous.”  The Review Commission also criticized that when the subsequent safety manager relied on her predecessor’s assessment, she “either knew that her predecessor’s LO/TO analysis was incorrect or chose to avoid such knowledge by refusing to conduct her own assessment.”

The DC Circuit overturned the Commission’s decision based on plain indifference, noting that past Commission findings of plain indifference have only been upheld where a company made no effort to address repeated warnings from employees or OSHA that they were in violation of safety standards.  The incidents referenced by the Commission in the Dayton Tire case, however, failed to reach that level.  According to the DC Circuit, the original safety manager’s actions showed that she at least made an attempt to respond to concerns that were raised—“while [she] could have done more, she did not do nothing.”  The manager’s “responses evince negligence at most,” which is insufficient for a finding of Willful.  This decision provides a clearer standard for employers and OSHA, and should provide protection from Willful violations for employers who act in good faith, even if they are wrong.

Danielle L. Steele, a Summer Associate contributed to the preparation of this post.