Seyfarth Synopsis: The United States Court of Appeals for the Fifth Circuit held that an untimely Notice of Contest to an OSHA citation was permissible due to “excusable neglect” by the employer, on account of a single unforeseen human error. Coleman Hammons Constr. Co., Inc. v. Occupational Safety & Health Rev. Comm’n, Case No. 18-60559 (5th Cir. Nov. 6, 2019).

After receiving an OSHA citation from federal OSHA, an employer has 15 working days from receipt of the Citation and Notification of Penalty to file a written Notice of Contest to the citations. 29 U.S.C. § 659(a).

Recently, the Fifth Circuit Court of Appeals addressed an excusable neglect argument in Coleman Hammons Constr. Co., Inc. v. Occupational Safety & Health Rev. Comm’n, Case No. 18-60559 (5th Cir. Nov. 6, 2019). Coleman Hammons, a construction company in Mississippi, received an OSHA Citation and Notification of Penalty while its superintendent was out of town. Coleman had standard operating procedures for receiving OSHA-related mail – the office manager opens the mail and directs it to the superintendent of the relevant construction project. On the day that the $70,000 citation arrived at the company, Coleman’s officer manager was not at her desk, so the company secretary signed the return receipt, did not open the letter, and placed it on the superintendent’s desk. By the time the superintendent returned from the construction project, over a month had passed and he immediately filed the Company’s Notice of Contest after the contest period had expired.

After the Company filed the late Notice of Contest, the administrative law judge (ALJ) stated that a misplaced citation in the company’s internal mail system demonstrated “inexcusable neglect” under the Federal Rules of Civil Procedure which apply to OSHA proceedings, and barred the company from contesting the citations with penalties of nearly $70,000. Relying on considerable precedent, the ALJ found that the untimeliness was inexcusable because the Company could have avoided the mishap if it had exercised “reasonable diligence,” by utilizing normal office procedures to receive and forward mail. The Review Commission upheld the ALJ’s ruling finding that the reason for the delay was within the employer’s control and therefore constituted a failure to exercise reasonable diligence, even though the Commission conceded that the employer had not acted in bad faith.

The Fifth Circuit’s decision is groundbreaking in that it articulates a new defense for a late Notice of Contest — a “single instance of unforeseen human error.” Both the secretarial error and the misplaced OSHA citation could be defensible under the Fifth Circuit’s new theory. “Excusable neglect” has morphed into a defense much like unforeseeable employee misconduct: if the employer can show that it had regular procedures in place and a minor error resulted in a reasonable delay, the lateness should be excused and the contest will go forward.

This is a federal court decision on a federal OSHA citation — some OSHA State Plan States have taken the position that the Notice of Contest deadline is absolute and there is no ability to argue excusable neglect in any form. Employers also should be aware that citations issued by state OSHA programs may have different appeal procedures and deadlines than the federal system. If they learn of uncontested OSHA violations, employers should promptly notify counsel, contest the citations as soon as possible, and notify the Agency in good faith of the intent to appeal.