Firing an employee who reports that your workplace is unsafe is rarely a good idea. Firing that employee within days after the Occupational Safety and Health Administration (OSHA) issues citations and penalties based on the reported safety violations almost guarantees that your termination decision will be deemed retaliatory. An Idaho employer is finding that out the hard way after a federal judge ordered last week that it pay a discharged employee his lost wages plus $100,000 in punitive damages. Perez v. Sandpoint Gas N Go & Lube Ctr., No. 2:14-cv-357 (D. Idaho Sept. 29, 2015).
Safety Concerns Not Rectified
Daniel Kramer worked at the Sandpoint Gas N Go & Lube Center, owned and managed by Sydney Oskoui. Kramer informed Oskoui that employees were being exposed to unsafe working conditions that potentially violated OSHA’s safety standards. He reported that employees at the Lube Center faced the following dangerous conditions:
- exposed wiring near water leaks which could result in an electrical shock;
- no nets over open automotive service bays which presented a fall hazard;
- expired fire extinguishers;
- no first-aid kit or eyewash station; and
- no hard hats for employees.
According to the lawsuit, the Lube Center did not repair or make any changes to alleviate the potentially unsafe conditions reported by Kramer.
OSHA Investigation Confirms Safety Violations
On February 12, 2012, Kramer notified OSHA about the unsafe working conditions at the Lube Center. Three days later, a Compliance Safety and Health Officer from OSHA’s Boise Area Office went to the Lube Center to conduct an investigation. The Officer found five violations of mandatory safety and health standards that presented a risk of death or serious bodily injury. An additional two violations that presented an other-than-serious risk were also found.
On April 12, 2012, OSHA notified the Lube Center and Oskoui that it would be issuing citations and penalties as a result of its findings from the inspection. Just four days later, on April 16, 2012, the Lube Center fired Kramer and another employee who it suspected had also filed an OSHA complaint.
Whistleblower Complaint Follows
After being terminated within days of the OSHA notice of citations and penalties, Kramer filed a whistleblower complaint with OSHA alleging that he was discriminated against in retaliation for filing his safety concerns. OSHA investigated his whistleblower complaint and agreed that his termination violated the Occupational Safety and Health Act. In August of 2014, the Secretary of Labor filed a whistleblower lawsuit against the Lube Center and Oskoui in federal court in Idaho on behalf of Kramer.
Default Judgment Award of Lost Wages and Punitive Damages
Despite admitting to six violations of mandatory OSHA safety standards and paying a civil penalty as a result of those violations, Oskoui attempted to get the lawsuit dismissed. At times, he tried to represent his company, the Lube Center, himself. Court rules, however, require that a corporation be represented by an attorney.
After more than a year of legal wrangling, Chief Judge B. Lynn Winmill entered a default judgment against both the Lube Center and Oskoui. His order requires that the Lube Center and Oskoui pay Kramer $979.25 in lost wages, plus pre- and post-judgment interest. More significantly, the defendants are ordered to pay Kramer $100,000 as punitive damages for the OSHA violations. The judgment also must be posted on employee bulletin boards at the Lube Center for 90 days. Both the Lube Center and Oskoui personally are on the hook for these amounts as the Judge held them jointly and severally liable.
Handling Whistleblowers and Avoiding Retaliation
Oskoui is appealing the default judgment but regardless of the result of his appeal, a great deal of time and expense could have been avoided had he handled Kramer’s safety concerns differently. Lessons from this case are clear. First, treat an employee’s safety concerns seriously. If Oskoui had investigated Kramer’s concerns when they were raised internally before Kramer went to OSHA, Oskoui may have discovered that conditions did indeed violate mandatory OSHA safety standards and he could have taken steps to rectify them before OSHA became involved. Second, if an employee files a complaint with OSHA, do not discharge them in retaliation for that complaint. Whistleblowers have protections and you add new violations and face additional liability for retaliating against the employee who raised the safety issues. Finally, do not skimp when it comes to safety. Your money is better spent fixing the unsafe conditions than paying a whistleblower $100,000 in punitive damages.