Employer Workplace Safety Audits—No Good Deed Goes Unpunished

March 16, 2012

It is not uncommon for employers to utilize the services of a consultant and/or an insurance carrier to conduct a plant or facility safety audit, risk assessment, lost time control survey or other type of premises and procedure safety analysis. As an example, the insurance company offers to an employer an annual 'safety assessment and policy review' and assigns one of its field representatives (highly trained or otherwise) who conducts an internal safety inspection, performs some type of analysis of the laws/regulations and issues to the Company a report identifying safety violations, possible problems and recommendations as to modifications for the employer to implement in order to provide a more safe environment for its employees.

Employers have utilized these types of services in the interest of having a 'self-assessment,' and in order to learn of—and address—those areas of concern thought to be paramount. Similarly, employers assumed these activities by the consultant or insurance carrier personnel, including any reports issued, to be "protected." Employers also certainly felt that any internal assessments or self evaluations issued to the employer would be protected, and not become public or available to any government agency.

While employers may have felt they were doing a good thing and were protected from having to disclose self-assessments, that is not the case. As part of the Occupational Safety and Health Administration's (OSHA) investigation of an accident at Haasbach, LLC, OSHA requested the production of Haasbach's insurer's, Grinnell Mutual Reinsurance Company, records and written assessment of the employer's work conditions. When the request was rejected by the insurer, OSHA subsequently subpoenaed those records, as well as testimony from Grinnell personnel. Due to Grinnell's refusal to comply with OSHA's subpoena, OSHA sued the insurer in Federal Court (Hilda L. Solis v Grinnell Mutual Reinsurance Co., 2011 WL 1642534, N.D.Ill) . 

The Federal District Court Judge for the Northern District of Illinois, despite the insurer's claim that enforcing the subpoena would cause a chilling effect and discourage companies from allowing insurers (and others) to conduct safety inspections, held that OSHA had the authority to require production of evidence and obtain court enforcement of subpoenas seeking such evidence.

Since the issuance of the Grinnell Mutual Reinsurance Company decision, OSHA has made it a standard practice during workplace inspections not only to request from employers and third parties copies of safety audit reports, investigations, and analysis, but to utilize the information and documentation obtained to the detriment of employers.

Employers should take great care with respect to how consultants and insurance carrier personnel are utilized when performing safety assessments or conducting workplace environment evaluations. Information provided by the employer, data utilized or created by the consultants, and analyses or assessments issued by the consultants could be used by OSHA against the employer. This same information could become a significant issue in other court-related litigation pertaining to workplace injuries or accidents should there be a claim of an intentional tort or other cause of action by the injured employee. In addition, this same information could be requested by a union representing employees of the employer, and the National Labor Relations Board would then consider whether the union was entitled to the data, reports, etc. in order to properly represent the employees.

It is recommended that employers seek the legal opinion of counsel with respect to OSHA compliance issues, and to potential attorney work product or attorney-client privilege protections that might be available.  If properly structured, the employer may be able to protect the assessment, investigation, and reports or evaluations issued by consultants.

Employers should not be surprised if an effort to provide a better and safer employment workplace suddenly becomes detrimental evidence at a later date.

If you have any questions or need further information, please contact Marty Galvin, the author of this alert, at 313-568-6912, any member of the Dykema Labor & Employment practice (listed on the left), or your Dykema relationship attorney.

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