Introduction

OSHA recently issued a White Paper analyzing the first 18 months of its controversial enforcement initiative known as the Severe Violator Enforcement Program (“SVEP”).  Despite mounting evidence to the contrary, the White Paper somehow concludes that the SVEP is “off to a strong start,” and that it “is already meeting certain key goals,” including:

  1. Successfully identifying recalcitrant employers who disregard their OSH Act obligations; and
  2. Effectively allocating its follow-up enforcement resources “by targeting high-emphasis hazards, facilitating inspections across multiple worksites of employers found to be recalcitrant, and by providing Regional and State Plan offices with a nationwide referral procedure.”

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A candid review of the publicly available SVEP data, however, exposes SVEP’s underbelly, and casts doubt on the Program’s effectiveness.  Most notably, SVEP:

  1. Disproportionately targets small employers;
  2. Provokes 8x as many challenges to the underlying citations as compared to the average OSHA enforcement action;
  3. Encounters significant obstacles in executing follow-up inspections of SVEP-designated employers; and
  4. Finds virtually no systemic safety issues when follow-up and related facility inspections are conducted.

SVEP Background

We have written quite a bit about the SVEP previously on the OSHA Law Update Blog, but here is some background about what it is, who is being targeted, and what the consequences are.  On June 18, 2010, OSHA instituted SVEP to focus its enforcement resources on recalcitrant employers, whom OSHA believes demonstrate indifference to their employees’ health and safety.  SVEP replaced the much-maligned Enhanced Enforcement Program (“EEP”), a George W. Bush era enforcement program also intended to target wayward employers.  The EEP was criticized as ineffective and inefficient because its broad qualifying criteria created so many cases that OSHA struggled to conduct follow-up inspections.  OSHA, therefore, scrapped the EEP and instituted SVEP with narrower qualifying criteria and a better infrastructure for pursuing follow-up inspections.

Employers qualify for SVEP if they meet one of the following criteria:

  1. Any alleged violation categorized by OSHA as “Egregious”;
  2. 1+ Willful, Repeat or Failure-to-Abate alleged violations associated with a fatality or the overnight hospitalization of three or more employees;
  3. 2+ Willful, Repeat or Failure-to-Abate alleged violations in connection with a high emphasis hazard (e.g., falls, amputations, grain handling, and other hazards that are the subject of an OSHA National Emphasis Program); or
  4. 3+ Willful, Repeat or Failure-to-Abate alleged violations related to Process Safety Management (i.e., avoiding the release of a highly hazardous chemical).

Employers designated as severe violators face sanctions beyond the usual monetary fines.  Qualifying for SVEP subjects employers to:

  1. Mandatory follow-up inspections at the same facility;
  2. Nationwide inspections of related worksites that are part of the same corporate enterprise;
  3. Enhanced abatement and settlement terms; and
  4. A heavy-handed dose of public shaming.

With every SVEP citation, OSHA publishes a public press release that includes an inflammatory quote from a high-ranking OSHA or Department of Labor official about the employer.  The Assistant Secretary of Labor for OSHA and his senior staff refer to these press releases as a campaign of “Regulation by Shaming.”  In addition to the press releases, OSHA also maintains on its website, an embarrassing public log of SVEP employers.

The problem with these extreme consequences is that many employers do not belong in the Program.  The most fundamental flaw (and likely illegal element) of the SVEP is the timing in which OSHA “qualifies” employers for the Program, or as OSHA describes it in the White Paper, “how an SVEP case proceeds through OSHA’s enforcement process.”   OSHA freely admits that “[a]n inspection becomes an SVEP case upon the issuance of qualifying citations,” not upon a Final Order of OSH Review Commission.  This means that OSHA prematurely deposits employers into SVEP and publicly brands them as severe violators before proving the employers have violated the law at all, let alone in the aggravated manner required to label them severe violators.  Here is a detailed article about the problem with the timing of SVEP qualification.

OSHA compounds this premature branding by locking employers in SVEP until they can either disprove the underlying citations through the Contest process, which often can takes years, or maneuver through a multi-year, nearly impossible set of exit criteria if the citations are proven to have been valid.

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OSHA’s SVEP White Paper

OSHA’s White Paper analyzed data associated with the 191 SVEP cases as SVEP cases as of September 30, 2011, the end of FY 2011.  The White Paper breaks-down and analyzes SVEP cases based on various measures, including:

  • SVEP qualifying criteria;
  • Industry type (construction and non-construction);
  • Employer size (by number of employees); and
  • Whether a follow-up inspection had be conducted or attempted.

The data reveals that alleged violations related to “high-emphasis hazards” represents the majority of SVEP cases (65%), whereas only one Process Safety Management case has qualified as SVEP.

Click here to see table.

The data also shows that construction companies represent 60% of SVEP employers, with manufacturing of all types the second largest contingent.

Click here to see pie chart.

Finally, OSHA is mandated to conduct follow-up inspections at every SVEP designated employer.  By September 30, 2011, only 48% of the 191 SVEP cases were even ineligible for follow-up inspections (OSHA will not conduct a follow-up inspection while the underlying case remains in the contest phase).  Of that 48%, more than half had received follow-ups or attempted follow-ups.  By February 29, 2012, however, nearly all of the SVEP cases eligible for follow-up inspections had follow-ups or attempted follow-ups.

The Reality of SVEP

Contrary to OSHA’s claims, the SVEP data presented in the White Paper and otherwise publically available actually reinforces the serious concerns that many employers have raised about the Program since its inception.

  1. SVEP Disproportionately Targets Small Employers

The majority of SVEP-qualifying employers are small businesses.  Roughly 75% of SVEP cases have involved companies with fewer than 100 employees (roughly 70% of the SVEP construction companies have 25 or fewer workers).

Click here to see table.

It is certainly the case that small businesses lack the resources of their larger competitors, which often means less sophisticated safety programs.  As the economy limps along, and small businesses struggle to survive, the solution to the safety gap should not be to dump these small employers into a Program that overwhelms them with enforcement resources, which will likely be the straw that breaks their backs.  Rather than SVEP resources and punishment, perhaps OSHA could allocate more compliance assistance to these employers.

  1. SVEP Cases Have Extraordinarily High Rate of Contest

Nearly 50% of the citations that qualified employers for SVEP have been contested, and some 30% remain under contest – some for nearly three full years.  That compares to a national contest average of only 8%.  The high contest rate for SVEP cases is particularly problematic because of OSHA’s unfair policy of branding employers as “Severe Violators” even before the contest is complete.

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  1. OSHA Faces Obstacles Conducting SVEP Follow-up Inspections

OSHA has faced significant challenges in conducting follow-up inspections of many SVEP employers.  The biggest obstacle has been finding small construction employers due to the short-term nature of their jobs, mobility in the nature of their work, and their small size.  In fact, OSHA could not locate 52 construction companies for follow-ups inspections.  Other failed attempts to re-inspect have been a result of the employers going out of business.  The White Paper boasts that nearly all SVEP employers eligible for a follow-up inspection have been inspected or a follow-up inspection was attempted, but so many of those were failed attempts, so it is not clear why that is viewed as a success.

  1. Follow-up Inspection Data Indicates SVEP Targets Wrong Employers

OSHA really hangs its “strong start” hat on the fact of all the follow-up inspections and related facility inspections it has conducted.  The purpose of the follow-up inspections, of course, is to validate that OSHA has targeted the bad actors; i.e., to demonstrate the recalcitrance of the SVEP employers.  The problem for OSHA is, the results of follow-up inspections demonstrate the opposite – the SVEP employers are not recidivists, they are not bad actors, and they are not indifferent to their OSH Act obligations.

To say nothing of the 20+ employers whom OSHA admits now never belonged in SVEP (i.e., OSHA has withdrawn the qualifying citations), the SVEP White Paper reports that “no follow-up inspection to date has itself been designated as an SVEP case.”  Likewise, of the 21 inspections conducted at related facilities, 19 resulted in none or only minor violations.  Not only are the SVEP follow-up inspections not revealing recalcitrant employers, they are revealing the safest of all workplaces.  46% of SVEP follow-up inspections have been “in compliance” inspections; i.e., no citations were issued at all, which compares to a national average rate of 25% of inspection as in compliance.  Based on this data, it is clear that SVEP is not rooting out employers with systemic safety issues.

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In principle, SVEP is an admirable program.  Of course OSHA should focus its enforcement resources on bad actors.  As it is being implemented, however, the Program prematurely punishes employers, and many instances, punishes the wrong employers altogether.