The deadline passed last week for OSHA to appeal a recent decision by an Administrative Law Judge (“ALJ”) that struck down OSHA’s attempt to expand its Personal Protective Equipment (“PPE”) standard by way of an enforcement memorandum that mandated oil and gas employers ensure their employees don flame retardant clothing (“FRC”) during drilling operations (OSHA’s “FRC Memo”). The Judge ruled that the FRC Memo constituted “improper rulemaking under the aegis of an enforcement standard.” See Sec’y of Labor v. Petro Hunt LLC, OSHRCJ, No. 11-0873 (June 2, 2012). The Occupational Safety and Health Review Commission (“Review Commission”) also declined to independently take-up the decision for review, so the ALJ’s decision is now officially a Final Order of the Review Commission.
The ALJ’s decision represents a meaningful victory for employers as it relates to any PPE enforcement action, not just those related to FRC. The ALJ chastised OSHA for attempting to circumvent the formal notice and comment rulemaking process required by the Administrative Procedure Act (“APA”), by issuing the FRC Memo rather than amending its regulations. Although OSHA did not appeal the Judge’s ruling, the Agency has expressed, through both words and actions, disagreement with the Judge’s ruling.
The Petro Hunt case arose out of an October 15, 2010 OSHA inspected at an oil production worksite in North Dakota, after the Sherriff’s Department notified the Agency that a fire engulfed a treater shed. Following the inspection, OSHA cited the employer for allegedly failing to provide and require employees to wear FRC. The employer contested the citation, and a hearing was held before ALJ Patrick Augustine in November 2011. In this case of first impression, the ALJ concluded that the FRC Memo did not simply interpret the standard but, rather, amounted to a new standard that should have been subject to the formal rulemaking process under the APA.
Judge Augustine reasoned that the FRC Memo transformed the PPE standard from a “performance-based” standard – which grants employers reasonable discretion to assess the nature of hazards at their workplaces and select appropriate PPE to address those hazards – into a specification standard – in this case, an obligation to provide a specific form of PPE (flame retardant clothing), during oil and gas operations “regardless of the particular circumstances that may be present at any individual facility.” In striking down the FRC Memo, the Judge stated:
Complainant cannot ‘require’ anything more than what is authorized by the regulations. If [the Secretary of Labor] wishes to specifically require that FRC be worn in all instances at oil and gas operations, then she must report to the required notice and comment rulemaking process. Otherwise, [OSHA] must independently prove in each case that Respondent had actual notice, or that a reasonable person in Respondent’s position would have recognized a hazard requiring the use of FRC.
The ALJ also rejected OSHA’s argument that the Review Commission should grant deference to OSHA’s interpretation in the FRC Memo, because, Judge Augustine explained, the interpretation was “unreasonable and inconsistent” with established regulations. The ALJ proceeded to vacate the citation, reasoning that OSHA failed to establish that the employer had actual notice of a need for FRC at the inspected worksite, or that a reasonable person familiar with the circumstances and industry would have recognized the existence of a flash fire hazard. To support his decision, the ALJ highlighted the following facts:
- OSHA’s failure to establish that flash fires were a hazard at the worksite;
- None of the employer’s employees suffered injuries due to fires in the previous two years; and
- The employer conducted a thorough hazard assessment, and reasonably concluded that engineering and administrative controls (methods of addressing hazards generally preferred over reliance on PPE), adequately addressed any potential fire hazard.
Though Petro Hunt was a case of first impression, and the ALJ’s decision has not been appealed, it does not appear that it will resolve the ultimate question about the validity of the FRC Memo. Federal OSHA has already issued a new citation in Texas alleging the same violation, and the FRC issue for oil production-related operations is also percolating in State Plan States. Wyoming OSHA, for example, recently tried and lost a similar case after the death of an oilfield drilling rig crew member who was not required to wear FRC. OSHA representatives have said publicly they do not believe these decisions have precedential impact, and federal OSHA has already issued another citation to a different employer based on the FRC Memo. If the newly cited employer contests the citation, and the case assigned to a different ALJ, a different outcome is possible.
The ALJ’s decision in Petro Hunt goes beyond merely confirming that the PPE standard does not automatically require FRC in the oil and gas industry, it strikes back OSHA’s recent trend of attempting to impose additional substantive legal requirements via enforcement memoranda and interpretation letters. This case demonstrates that employers can and should challenge OSHA’s attempts to rewrite its standards without following the formal notice and comment rulemaking process, which has become a trend. Indeed, the FRC Memo is not OSHA’s first attempt to skirt the rulemaking process through interpretive memos and letters. Other examples of OSHA’s attempt to depart from long-standing enforcement positions include:
- a recent surge of citations to grain handlers for allowing employees to work inside of grain bins with energized sweep augers (based on a string of inconsistent, contradictory, and unfounded interpretation letters);
- OSHA’s new residential fall protection directive (STD 03-11-002) and enforcement memorandum (which introduces new legal requirements for construction employers without rulemaking); and
- OSHA turning its back on 15-years of precedent and its own still-active 1996 enforcement memo regarding the use of fall protection on top of rolling stock, in which OSHA expressed that citations would only issue when “employees are working atop stock (e.g., a railcar) that is positioned inside of or contiguous to a building or other structure where the installation of fall protection is feasible.”
Employers facing citations in these circumstances should fight back like the employer in the Petro Hunt case.
Marshall E. Jackson, Jr., a Summer Associate, contributed significantly to this article.