Employee Conduct and the OSH Act: New York State Electric & Gas Corp. vs. Secretary of Labor, U.S. Court of Appeals for the Second Circuit, July 3, 1996

Date: Oct 01, 1996

Lawrence P. Halprin, a partner at Keller and Heckman who has followed the development of OSHA's lockout/tagout standard since its inception, co-authored this month's column.  We discussed this case in the January 1996, issue of Compliance Magazine.  The decision of the Sixth Circuit Court of Appeals was recently issued.

In what could be a landmark decision, the U.S. Court of Appeals for the Sixth Circuit rejected OSHA's interpretation of the "scope" provision of its Lockout/Tagout standard.  Reich v. General Motors Delco Chassis Division.  In doing so, the Court upheld the split decision of the Occupational Safety and Health Review Commission (OSHRC) discussed in a previous column in General Motors Corporation, Delco Chassis Division, OSHRC Docket Nos. 91-2973, 91-3116 & 91-3117 (Consolidated), which was decided on April 26, 1995.   

The "scope" provision of the Lockout/Tagout Standard states that the standard applies when workers are exposed to "unexpected energization, equipment start-up or release of energy" while performing maintenance and servicing activities.  Delco acknowledged that it did not use lockout/tagout for some maintenance and servicing work.  It argued that the Standard did not apply to those activities because there was no potential for unexpected energization. 

The premise of Delco's argument was that the equipment was designed in such a way that any employee in the zone of danger would be aware of any attempt to activate the equipment and, therefore, would have ample warning and adequate time to stop those attempts or safely leave the zone of danger before the equipment started to run.  Therefore, any energization could not be "unexpected."  The Administrative Law Judge (ALJ) and a majority of the Review Commission agreed; OSHA appealed the decision to the Sixth Circuit.  In appealing the decision, OSHA did not challenge the factual findings of the Review Commission but only its interpretation of the "scope" provision. 

The case involved a situation in which an employee opened and passed through an interlocked gate to access and perform servicing work on a piece of equipment.  The equipment was not locked out but was immediately deactivated (placed in an idle but still energized mode) when the gate was opened.  The servicing employee apparently did not maintain exclusive control over either the gate or the circuit controls which would restart the equipment.  However, the factual findings of the Review Commission, not challenged on appeal, were as follows:  1) there was an eight to twelve step process to restart the equipment; 2) there were built-in delays with audible and/or visual alarms between some of these steps; and 3) therefore, the servicing employee would have adequate notice of a start-up to evacuate the area before an injury could occur.  In other words, there was no potential for unexpected energization and, therefore, the Lockout/Tagout Standard did not apply.   

OSHA would have applied the standard on the basis that the machine had hazardous energy sources and servicing and maintenance work was being performed.  The Review Commission found that the employee was adequately protected against unexpected energization by the machine's control circuits (rather than one or more energy isolating devices). 

On appeal, OSHA argued that "unexpected" included "unplanned" or "unanticipated."  In OSHA's view, every machine with an energy source capable of causing serious injury would be deemed to pose the potential for unexpected energization during maintenance or servicing activities and would be covered by the standard. 

The Appellate Court, in a notably brief opinion, rejected OSHA's interpretation.  It found that the standard is intended to apply when an employee is endangered by machine start-up without the employee's knowledge.  Here, the court said, "The plain language of the lockout standard unambiguously renders the rule inapplicable where an employee is alerted to or warned that the machine being serviced is about to activate. . . .  The word "unexpected" connotes an element of surprise . . . . [emphasis added]"  The court rejected OSHA's interpretation because it would "cover virtually all machines whether or not the servicing employee knows ahead of time that start-up is imminent and has ample time to leave the area before the machine movement can become hazardous."  OSHA's interpretation, said the court, expressly omits the word "unexpected." 

An analysis of this case arguably points to the inadequacy of the underlying rulemaking which generated the Lockout/Tagout Standard and to the likelihood of a new rulemaking.  It also illustrates the type of factual inquiry which is likely in future cases unless this decision is overturned. 

Under the Court's holding, OSHA will no longer be able to presume that lockout/tagout is required simply because a maintenance or servicing activity is being performed.  OSHA will have to demonstrate that there is an exposure to unexpected energization while performing that activity.  In General Motors, the presence of the alarms and delays was important because the servicing employee apparently did not have exclusive control over the relevant control circuits.  If the employee had exclusive control over the interlocked gate or the circuit controls, a logical extension of the court's holding is that lockout/tagout would not apply for that servicing activity even without the alarms.  A further logical extension would be that lockout/tagout would not apply in any situation where the relevant control circuits were under the exclusive control of the employee performing the servicing work and adequate to prevent unexpected energization.  This seems to highlight the apparent internal inconsistency of the standard which states that control circuit devices are not energy isolating devices. 

Even if OSHA follows the General Motors decision, the Agency may attempt to limit its impact by challenging the reliability and integrity of control circuits.  We question whether this approach would be successful and believe it raises issues more appropriately addressed in a rulemaking. 

The impact of the General Motors decision could be enormous for all types of servicing and maintenance activities.  Instead of presuming that every employee performing servicing work without locking/tagging out is exposed to hazardous energy in violation of the Standard, it appears that OSHA compliance personnel will be forced to determine whether the Standard applies on a machine-by-machine, task-by-task basis.  This type of inspection would be far more resource-intensive and it seems likely that many OSHA compliance personnel would require additional training on control circuit design and operation. 

We understand that OSHA is now waiting for an analysis from the Solicitor's Office before it decides whether to pursue an appeal, litigate the issue in another circuit or heed the following advice of the Sixth Circuit: 

If the Secretary wishes to broaden application of the standard, the rulemaking process affords him a ready opportunity to do so. 

We think OSHA should reopen the rule to consider the issues raised by General Motors because they are clearly controversial and warrant further public comment and review.  Furthermore, as a general principle, we believe safety is better achieved through a rule based on a worker having exclusive control over the relevant energy sources rather than one in which parties are left to litigate the adequacy of alarms and the time available to escape from the zone of danger. 

This article appeared in Compliance Magazine(October 1996) and it is reprinted with permission of ComplianceMagazine. Copyright © 1996 by IHS Publishing Group. Allrights reserved.

For further information about this article, please contactDavid G. Sarvadi at 202-434-4249or by e-mail at sarvadi@khlaw.com or Lawrence P. Halprin at 202-434-4177or by e-mail at halprin@khlaw.com.