Since a July 28, 2000 Final Policy was published in the federal register, OSHA has maintained it will not use an employer’s own, voluntary safety and health audit as a roadmap to identify and issue citations against it. According to the Final Policy, while OSHA may in some circumstances request internal audit reports, “the Agency will not use [them] as a means of identifying hazards upon which to focus during an inspection.” Employers are thereby encouraged to proactively identify and then correct hazardous conditions in the worksite without fear of self-incrimination.
In a recent initial Review Commission decision (Sec. of Labor v. BP Products North America, Inc. et al.), however, the evidence showed that OSHA intentionally violated its Final Policy by making “extensive use” of the employer’s own audit report to identify and issue the contested citations. Despite being “troubled” by OSHA’s “blatant contravention” of its Final Policy, the Administrative Law Judge (ALJ) permitted the evidence, in effect, condoning the practice for future use.
BP Products North America, Inc. et al.
At issue in BP Products North America, Inc. et al. were 3 citations alleging several safety violations, mostly of the Process Safety Management (PSM) standard. The citations were issued on March 8, 2010 stemming from a 2009 inspection under OSHA’s Petroleum Refinery PSM National Emphasis Program.
Before discussing the merits of the case, the ALJ highlighted OSHA’s controversial use of the employer’s voluntary audit - the “Middough Report” – that was commissioned by the employer and completed by a third party safety consultant as part of a refinery revalidation project in 2008. According to the trial record, OSHA learned of the Report and requested copies (in draft) before beginning its inspection. After reviewing the Report, OSHA claimed it “randomly selected certain pressure vessels and piping equipment,” which served as the primary focus for its inspection and resulted in the contested citations. At trial, though, the evidence showed that “OSHA made extensive use of the Middough Reports during its inspection of the refinery.”
The ALJ determined that OSHA’s actions were in “blatant contravention of its Final Policy,” in which the agency had explicitly assured employers it “will not use self-audit reports as a means of identifying hazards upon which to focus during an inspection.” As the ALJ noted, “[t]he majority of the items at issue were self-identified by [the employers] in documentation provided to OSHA,” contradicting OSHA’s claims that the inspected pressure vessels and piping were randomly selected.
While not discussed by the ALJ, OSHA also violated its policy that it will “not routinely” request self-audit reports unless there is good reason. According to the Final Policy:
“OSHA intends to seek access to such reports only in limited situations in which the Agency has an independent basis to believe that a specific safety or health hazard warrants investigation, and has determined that such records may be relevant to identify or determine the circumstances of the hazardous condition.”
In BP Products North America, Inc. et al., however, no independent basis existed. As one of the OSHA Industrial Hygienists in the case testified, “we were told that [the employer] had a study done … we came to the understanding that it was done by the Middough report, so we asked for – we made a request for that report.” In fact, according to the ALJ, there were many instances where “the [OSHA inspectors] did not otherwise verify the self-identified deficiencies or conduct independent hazard assessments.”
Despite acknowledging OSHA’s blatant violation of its Policy, the ALJ refused to use it “as a basis for vacating the alleged violations self-identified in the reports” and proceeded to discuss the merits of OSHA’s case. At one point, the ALJ even pointed to the Middough Report as evidence that the employer had the required knowledge to sustain one of the alleged violations: “[The employer] was aware of the Middough report and thus knew of the violative condition.”
Lessons Learned for Employers
BP Products North America, Inc. et al. makes clear that employers cannot rely on OSHA’s 2000 Final Policy to refrain from using such audits during inspections. Employers should therefore be mindful of the following considerations when conducting internal safety audits.
First, audit reports should be written carefully on the assumption they will become a public document that OSHA may request and review. Second, employers should consider whether the audit may reveal significant safety and health concerns. If this is the case, employers should further consider engaging outside legal counsel to conduct the audit under privilege. Under the right circumstances, this can allow all versions of the report to remain privileged so that employers can lawfully refuse to produce it to OSHA. Otherwise, employers may find OSHA using their own internal reports as a road map to find violations during an inspection and as evidence at trial.
As we have previously discussed, internal audit reports prepared by third-party experts at the request of counsel can be protected under the attorney-client privilege, provided that certain conditions are met:
- The internal audit report must have originated from an employer’s request for legal advice from counsel (e.g., is the employer in compliance with a specific OSHA standard?);
- In order to provide the legal advice, the attorney must require the services of the third party to translate technical or complex information; and
- The employer provides information (pertaining to the audit) to the third-party expert, as opposed to the expert gathering its own information.
Under these circumstances, employers may successfully assert attorney-client privilege over the audit report and prevent OSHA from ever acquiring it.
In light of OSHA’s actions in BP Products and the ALJ’s response, employers must ensure careful measures are taken with counsel at the outset of any internal safety audit. This way, employers can proactively address employee safety without fear of writing their own citations.
For more information, please contact Mark Dreux, Head of the Arent Fox OSHA Group, at 202-857-6405.