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Whistleblower Alert: OSHA's New Enforcement Memorandum Targets Disciplinary Policies, Incentive Programs

Date: Mar 30, 2012

OSHA has issued a new guidance memorandum aimed at field compliance officers and those investigating whistleblower complaints. The memorandum instructs investigators to strictly scrutinize certain employer disciplinary policies and incentive programs for potential unlawful discrimination. The memorandum flags four policies in particular due to the potential for unlawful discrimination under each:

(1) Policies that discipline injured employees regardless of circumstances and regardless of whether the employee reports his injury.

Reporting an injury is always a protected activity under the whistleblower protection laws and OSHA requires employers to establish a means for employees to report injuries. Therefore, policies that punish an injured employee, whether or not he reports his injury, are a direct violation of OSHA section 11c.

(2) Policies that discipline employees for violating internal reporting rules.

If an employer has rules regarding the specific time or manner in which injury or illness reports must be made, the memorandum instructs that careful scrutiny should be given to situations in which an employee is disciplined for reporting in a manner that violates those rules. Such reporting rules are not prohibited, but the memorandum instructs investigators to pay careful attention to whether the rule serves a legitimate purpose and is consistently enforced by the employer, the extent of the employee's violation, and whether the discipline is disproportionate to the infraction. Such rules may not place an undue burden on the employee's right to report injuries and illnesses.

(3) Policies that discipline injured employees for violation of safety rules.

Although OSHA encourages workplace safety rules, the memorandum requires investigators to conduct careful examinations into whether such rules serve as pretext for unlawful discrimination. The investigator is instructed to consider whether the employer monitors for compliance in the absence of injury; whether the employer consistently imposes equivalent discipline against employees who violate the rule in the absence of injury; and how the rule is applied in situations that do not involve employee injury. Particular attention must be paid to vague rules that may be manipulated and used as pretext for unlawful discrimination. Unlawful discrimination is likely when a safety rule is enforced more strictly against injured employees than against their non-injured counterparts.

(4) Incentive Programs.

As a general matter, it is OSHA's position that the chance of unlawful discrimination increases when management or supervisory bonuses are linked to lower reported injury rates. Programs that reward individual employees who have not been injured, or teams that have the lowest number of reported injuries, may discourage employees from reporting their injuries. An employee who reports an injury may not receive the same reward that his non-reporting colleague receives, which in itself can be viewed as unlawful discrimination. Additionally, if the employee's report will disqualify his entire work group from receiving an award, that employee may be even less likely to report. The memorandum directs investigators to consider whether the incentive involved is of sufficient magnitude that failure to receive it might have dissuaded reasonable workers from reporting injuries.

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Throughout the memorandum, OSHA notes that violations of any of the policies described above may involve concomitant violations of OSHA's injury reporting requirements. OSHA has already notified employers in the Voluntary Protection Program that their safety programs must be reviewed to determine whether they discourage reporting before their participation in the program will be renewed.

As OSHA continues to focus its efforts on protecting whistleblowers and enforcing its recordkeeping rules, OSHA's view is that employers must vigilantly ensure that their disciplinary policies do not discourage employees from reporting workplace injuries and that any incentive-based programs contain clear directives to employees to report such injuries and illnesses. However, OSHA's policy on these programs could have a negative effect on injury and illness reporting requirements and on disciplinary programs that employers must have to assure employee compliances with rules and regulations. Virtually all employers have requirements to report injuries and illnesses to supervisors within 24 hours of the occurrence of the injury, largely driven by workers compensation insurance requirements.

In addition, injured employees often are guilty of violating specific work rules, and while there is a natural reluctance to add to a seriously injured person's suffering, employers must take steps to discipline employees who fail to follow work place safety rules vigorously. The key is to have a uniform enforcement policy, uniformly applied, for both reporting and work practice violations. Disciplined must be directed at assuring that employers report all injuries and illnesses and that they comply with all safety rules; employers must be careful that their policies and disciplinary practices do not discourage employees from exercising their rights or from reporting work-related injuries.

Documentation of the policy and its application will be critical to any defense of a complaint by OSHA that the employer discriminates against employees on one of these bases.

Keller and Heckman provides assistance in all areas covered in this Alert, including whistleblower litigation. Interested employers should contact David G. Sarvadi at (+1 202.434.4249, sarvadi@khlaw.com)