The Continuing Safety Debate: Cost vs. Benefit: American Textile Manufacturers Institute, Inc. v. Donovan, et al., 452 U.S. 490

Date: Mar 01, 2000

American Textile Manufacturers Institute, Inc. v. Donovan, et al.

452 U.S. 490

The Benzene Decision, discussed in recent issues of Compliance Magazine, first articulated the standard under which the Occupational Safety and Health Administration (OSHA) must adopt standards for control of occupational safety and health hazards. In that decision, the question of economic cost versus benefit was left unresolved because the Supreme Court could not reach agreement on whether and how Congress intended OSHA to take cost into account. The Cotton Dust decision, coming a year later, addressed the cost-benefit calculus, and concluded that OSHA need not adopt only those standards for which a net benefit may be demonstrated. Congress, said the Court, defined the basic relationship between costs and benefits "by placing the 'benefit' of worker health above all other considerations save making attainment of this 'benefit' unachievable." In this "analysis," the Court ignored the fact that the benefits workers obtain from jobs include not only safety on the job, but also the other benefits that accrue to workers, such as increased job security, better wages and ancillary benefits, and improved quality of life, when the direct costs of production are kept low. This decision becomes critical when considering the proposed ergonomics and safety and health program standards now being hotly debated in Washington.

In 1976, OSHA proposed to lower the limit for occupational exposure to cotton dust in the textile and cotton processing industries from 1 milligram per cubic meter (mg/m3) to 0.2 mg/m3 for yarn manufacturing, 0.75 for slashing and weaving operations, and 0.5 for all other processing operations. Both labor and industry challenged the final standard, the AFL-CIO and the Amalgamated Clothing & Textile Workers arguing it was too lenient, and the National Cotton Council and the American Textile Manufacturers Institute (ATMI) arguing it was too stringent. On first blush, one might conclude, then, that OSHA got it just right. And the Supreme Court held that OSHA had enough evidence in the record to make the decisions it adopted in promulgating the standard.

The test for the validity of OSHA's decisions is whether the agency had "substantial evidence in the record taken as a whole" to support its conclusions. ATMI argued that the standard was too stringent because OSHA had not shown that the benefits of the standard would outweigh the costs to the industry. The AFL-CIO argued that the standard was too lenient because it did not go far enough, to the limits of technical feasibility, to protect workers from byssinosis, a chronic, disabling lung disease that was then endemic in the industry. In fact, cotton dust disease was one of the conditions that captured Congress' attention when the standard was adopted, and by the time OSHA proposed its new standard, prevalence estimates for ranged from 1% to 25% of workers in various cotton processing operations. Clearly, this was an unacceptable situation.

These prevalence rates reflected historical exposures, and, when OSHA decided to act, the American Conference of Governmental Industrial Hygienists (ACGIH) had modified its Threshold Limit Value (TLV®) to 0.2 mg/m3. The real question being debated was whether the standard would now become enforceable under what was a relatively new enforcement scheme, and one that had been criticized for being unreasonable and overzealous in its application. In addition, the industry was under heavy pressure from overseas competition, and was plagued by old, inefficient plants and operations that were simply obsolete.

OSHA had concluded that the standard was technically and economically feasible. The question of the level with regard to the risk was not really at issue. The parties disagreed about whether the costs of compliance had been properly allocated by OSHA. Under this kind of determination, the reviewing court must accept the agency's determination unless in adopting its rule, the agency has "misapprehended or misapplied" to applicable legal standard. Thus, said the Court, if OSHA's findings on the cost issue were supported by substantial evidence, which is defined as that which "a reasonable mind might accept as adequate to support such a conclusion&taking into account contradictory evidence." The Court then examined OSHA's findings and held that they were supported by the record, and that the agency had not abused its discretion.

What evidence was that? OSHA discarded an industry cost estimate for several reasons, and adopted a lower estimate, and also concluded that the estimate overestimated the costs to the industry by including costs associated with machines used for synthetic yarn only. However, it was the best available at the time, said OSHA, even as the agency acknowledged the limitations of the study. Furthermore, OSHA concluded that the standard was economically feasible because it would not destroy the industry entirely. While that may be small comfort for the individual businesses and workers who are left out in the cold, even the industry's own analysis concluded that "nothing in the RTI study indicates that the cotton industry as a whole will be seriously threatened but the impact of the proposed standard." This language sounded the death knell for the industry's arguments, and left OSHA's final decisions intact.

Key to the Court's review of the standard was the legislative history that the Court recounted in its decision. Much of the debate that delayed adoption of the standard was how far the agency can go in regulating occupational safety and health hazards. OSHA can only adopt standards where a significant risk of injury or illness might result, and can only require employers to adopt those provisions that are shown to materially reduce the risk involved, provided the provisions are feasible and do not threaten the livelihood of the industry. But OSHA presses beyond the level of both feasibility and risk when it proposed, as it has in the ergonomics standard, to require employers to eliminate the aches and pains of daily life, common symptoms suffered by all regardless of work or occupation. Whether it is possible to design work so that people do not get tired or fatigued at the end of the day is questionable, and whether the risk of such fatigue is properly a subject for OSHA regulation is clearly also an issue. How these choices will play out in the next several years depend more on the political than on the scientific or technical, and given the cost, one can expect significant battles between labor and management to continue over these standards.

The following article appears Compliance Magazine (August 1999) and it is reprinted with permission of Compliance Magazine. Copyright © 2000 by IHS Publishing Group. All rights reserved.

For further information about this article, please contact David G. Sarvadi at 202-434-4249 or by e-mail at sarvadi@khlaw.com.