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At a Glance:
Title:
453-02-0362-e1
Date:
March 24, 2003
Status:
Enforcement

453-02-0362-e1

March 24, 2003

DECISION AND ORDER

I. Introduction

Sanderson Farms, Inc., appealed the decision of the Texas Workers’ Compensation Commission (“Commission”) designating Sanderson as a “hazardous employer” pursuant to the Hazardous Employer Program (“the Program”) as established by Section 411.041 of the Texas Labor Code. SFI asserts the Commission’s decision was erroneous because the Program, as applied to private employers, is preempted by the Occupational Safety and Health Act (“OSH Act”). The Administrative Law Judge agrees and reverses the decision of the Commission.

II. Procedural History

The hearing was convened on December 12, 2002, by Tommy L. Broyles, Administrative Law Judge. Yvonne M. Williams, attorney, represented the Commission’s Staff (Staff) and John C. Carsey, attorney, appeared on behalf of SFI. The record closed January 24, 2003, after written closing arguments were filed.

There were no contested issues regarding notice or jurisdiction, which are addressed in the findings of fact and conclusions of law without further discussion.

III. Background

In 1970, Congress enacted the OSH Act providing for the development and promulgation of occupational safety and health standards with a stated purpose of assuring every working man and woman with safe and healthful working conditions and to preserve the Nation’s human resources.[1] With its enactment, Congress preempted state regulation of occupational safety and health issues for which a federal standard exists. In only two instances may a state regulate occupational safety and health issues: (1) when there is no federal standard in the area of regulation or (2) where a state has submitted a state plan and received delegation of authority from the federal government to promulgate and enforce OSH Act standards.[2] It is undisputed that the State of Texas has not received delegation of authority; therefore, any regulation by the Commission must be in areas without federal standards.

The Commission’s Hazardous Employer Program designates employers with a high frequency of workplace injuries as “hazardous.” The designation is based on a mathematical formula which compares the severity and length (i.e., number of days lost from work) of workplace injuries to that which is reasonably expected in an employer’s industry. As initially implemented, hazardous employers were required to (1) complete a survey report describing any hazardous conditions and noting any regulations violated (primarily of the OSH Act standards), (2) submit to inspections, and (3) submit an accident prevention plan as a means to correct any violations. Failure to comply with safety regulations was a Class B administrative violation.

In Robinson v. TWCC, the Court of Appeals (“Court”) concluded the Program, as administered, was preempted by the OSH Act.[3] In so finding, the Court held, “[w]e render judgment that to the extent the Program addresses workplace safety issues for which an OSH Act standard is in effect, the Program is preempted by the OSH Act.” The Court rejected the Commission’s claim that the Program did not actually regulate workplace safety, but was only an accident prevention plan not regulated by any OSH Act standard.[4] Instead, the Court noted that both the Program and OSH Act seek to prevent future injuries by securing workplace safety and noted that both force compliance with OSH Act standards to accomplish this purpose.

In response to Robinson, the Commission revised the Program, as it pertains to private employers designated as hazardous, by eliminating requirements for an inspection and accident prevention plan, as well as all penalties. However, the Commission still designates employers as “hazardous” based on their accident records and sends a copy of the designation letter to the employer and its insurance carrier. In the letter, the Commission encourages the employer to submit to a consultation and inspection for workplace safety violations, primarily of OSH Act standards.[5]

IV. Discussion and Analysis

The sole issue is whether the Program, as currently administered by the Commission, is preempted by the OSH Act. Section 667(a) of the OSH Act establishes the extent of preemption, albeit by negative implication: “[N]othing in this chapter shall prevent any State agency or court from asserting jurisdiction under State law over any occupational safety or health issue with respect to which no standard is in effect under section 65 of this title.” It is now well established that a state may not regulate occupational safety or health issues where a federal standard exists absent submission of a state plan and federal delegation of authority.[6]

In the context of this regulatory scheme, standard is a term of art. While standard is often used interchangeably with regulation, it should not be so used in this instance. For federal preemption to occur, state regulation must impede upon one of the specific standards promulgated pursuant to Section 655 of the OSH Act.[7] Federal record-keeping and reporting requirements are not addressed by the OSH Act standards. Rather, they are regulations found in Sections 657 and 673 of the OSH Act. Based on this distinction, the Commission argues that the Program is not preempted because it concerns record-keeping, an area where no federal standards exist.

Sanderson responds that preemption occurs when state regulation impedes upon health and safety issues addressed by federal standards. According to Sanderson, the issue addressed by the Program is whether higher than expected workplace injury rates can be attributed to violations of the workplace safety standards set forth in the OSH Act. Under this argument, the Program is preempted because it addresses issues already addressed by the OSH Act standards.

The Commission’s current position is similar to the position it took before the Robinson Court where it characterized the Program as an accident prevention plan for which no OSH Act standard existed. The Court rejected that argument, noting that as a part of the Program (as then administered) consultants inspected for violations of OSH Act standards and maintained the authority to fine employers for violations. The Court determined that, regardless of the Program’s purpose of assuring workplace safety as an accident prevention plan, it regulated workplace safety issues already addressed by OSH Act standards and was thus preempted. In making this determination, the Court noted that the Program shared the OSH Act’s prophylactic purpose of assuring every person safe and healthful working conditions, sought to prevent future injuries by securing workplace safety, and forced compliance with OSH Act standards to accomplish its purpose.[8] The Commission now presents the Program as a record keeping regulation, without enforcement provisions and penalties, and again asserts that no OSH Act standard is infringed upon.[9] The ALJ agrees that the Commission may keep records concerning violations of OSH Act standards without triggering federal preemption because such a limited action would not be asserting jurisdiction or influence on whether OSH Act standards are violated. But despite the Commission’s best efforts to redefine the Program, it is hardly mere record keeping. As demonstrated by the Robinson court, assessment of the Program must go beyond the Commission’s own technical classification of it and instead must look to whether it regulates workplace safety issues already addressed by OSH Act standards. Using the factors discussed in Robinson, it is clear that the Commission’s efforts to redefine the Program fail to save it from federal preemption.

As in Robinson, the Program and OSH Act continue to share the same purpose and attempt to prevent future injuries by securing workplace safety by reviewing violations of workplace safety standards promulgated pursuant to the OSH Act.[10] Only this time, the Commission uses pressure from the acts of designation and notice to insurance companies to enforce compliance rather than administrative penalties. Under the Program, the Commission is allowed to designate employers as “hazardous” for a twelve month period, encourage inspections and consultations, and notify insurance companies of the hazardous employer designation.[11] Commission employees testified that insurance companies are informed in order to persuade hazardous employers to find and eliminate violations, primarily of OSH Act standards, that are contributing to the high injury rate.[12] Clearly, by these actions the Commission continues to assert jurisdiction over enforcement of OSH Act standards.

Although not outcome determinative in this case, it should be noted that in 1999, the Occupational Safety and Health Administration (OSHA) implemented its own program that identifies employers with high injury rates. As a part of OSHA’s Site Specific Targeting (SST) program, employers that are identified are listed on a public website and may be inspected by an OSHA inspector who determines whether there are workplace safety violations. While the SST program is not identical to the Commission’s Program, it is so similar in purpose and practice--both programs address violations of OSH Act standards--that it highlights concerns over duplicative regulation. The Supreme Court made it clear that the OSH Act evidences Congress’ intent to avoid subjecting workers and employers to just this type of duplicative regulation concerning enforcement of the OSH Act standards.[13] If the State of Texas desires an occupational safety and health program tailored to its own needs, its only option is federal delegation and approval of a state plan as provided in § 667(b) of the OSH Act.[14] The Program as currently implemented is preempted by federal law.

V. Conclusion

The Program as currently implemented addresses workplace safety issues for which an OSH Act standard exist. Accordingly, the request to designate Sanderson as a hazardous employer pursuant to the Program is denied.

VI. Findings of Fact

  1. On August 1, 2001, the Texas Workers’ Compensation Commission (“Commission”) sent notice to Sanderson that it was identified as a hazardous employer.
  2. On August 1, 2001, the Commission sent notice that Sanderson had been identified as a hazardous employer to its insurance company, Liberty Mutual Insurance Group.
  3. On October 9, 2001, the Commission issued notice of the contested case hearing with the time, place, and purpose of the hearing noted.
  4. On December 12, 2002, a hearing was convened before an Administrative Law Judge of the State Office of Administrative Hearings. Representatives for SFI and the Commission’s staff appeared.
  5. The Commission’s Hazardous Employer Program (“the Program”) designates employers with a high frequency of workplace injuries, as compared to similar businesses or industries, as hazardous.
  6. The designation is based on a mathematical formula which compares the severity and length (lost days at work) of workplace injuries to that which is reasonably expected in an employer’s industry.
  7. The designation letter encourages employers to obtain a full Safety and Health Consultation which addresses, among other things, standards promulgated pursuant to the Occupational Safety and Health Act (“OSH Act”).
  8. Employers identified as hazardous remain so designated for twelve months.
  9. The purpose of designating employers as hazardous is to effect change in the employer’s health and safety practices to address, among other things, violations of standards promulgated pursuant to the OSH Act.
  10. A copy of the letter designating employers as hazardous is sent to the employer’s insurance company.
  11. The purpose of sending the letter to the employer’s insurance company is to effect change in the employer’s health and safety practices to address, among other things, violations of standards promulgated pursuant to the OSH Act.
  12. The Program as currently administered regulates workplace safety issues already addressed by OSH Act standards.
  13. The State of Texas has not submitted a state plan seeking delegation of authority to promulgate and enforce OSH Act standards.

VII. Conclusions of Law

  1. The State Office of Administrative Hearings has jurisdiction over matters related to this proceeding, including the authority to issue a decision and order, pursuant to Tex. Gov’t Code Ch. 2003 (Vernon 1999) and Tex. Lab. Code §411.049 (Vernon 1995).
  2. The purpose of the Occupational Safety and Health Act (“OSH Act”) is “to assure so far as possible every working man and woman in the Nation safe and healthful working conditions and to preserve our human resources... .” Occupational Safety and Health Act, 29 U.S.C. § 651(b) (1994).
  3. To achieve this purpose, the OSH Act provides for the promulgation and enforcement of occupational safety and health standards. Occupational Safety and Health Act, 29 U.S.C. §651(b)(9) and (10) (1994).
  4. The OSH Act preempts any state regulation of an occupational safety or health issue with respect to which a federal standard has been established, unless a state plan has been submitted and approved. Occupational Safety and Health Act, 29 U.S.C. § 667 (1994).
  5. As currently administered, the Commission’s Program is a state regulation of occupational safety and health issues with respect to which a federal standard exists. Tex. Lab. Code Ann. § 411.041 (Vernon 1995) and Occupational Safety and Health Act, 29 U.S.C. § 655 (1994).
  6. Based upon the foregoing Findings of Fact and Conclusions of Law, the Texas Workers’ Compensation Commission’s identification of hazardous employers, as currently administered, is preempted by the Occupational Safety and Health Act. Occupational Safety and Health Act, 29 U.S.C. § 667 (1994).

ORDER

IT IS, THEREFORE, ORDERED that the appeal of Sanderson is granted, and the Commission’s determination of Sanderson as a hazardous employer is reversed.

Signed this 24th day of March, 2003.

Tommy L. Broyles
Administrative Law Judge
STATE OFFICE OF ADMINISTRATIVE HEARINGS

  1. 29 U.S.C. § 651(b) (1994)
  2. 29 U.S.C. §§ 667(a) and 667(b) (1994)
  3. Robinson v. Texas Workers Compensation Commission, 934 S.W. 2d 149 (Tex.App.-Austin 1996, writ denied).
  4. Id. at 156.
  5. Testimony of Commission employee James Richard Oliver, Safety Program Coordinator for the OSHA consultation program.
  6. Gade v. National Solid Wastes Management Association, 112 S. Ct. 2374 (1992). Section 667(b) of the OSH Act provides that any State desiring to assume responsibility of occupational safety and health standards with respect to which a Federal standard has been promulgated shall submit a State plan for the development of such standards and their enforcement. Texas has not submitted such a plan.
  7. Id. at 2378.
  8. Robinson 934 S.W. 2d at 155.
  9. The Commission also argues that the Program is of extreme importance with resolution of this issue in the Commission’s favor “pivotal to the operation of the workers health and safety program with the Texas workers compensation system. “Texas Workers’ Compensation Commission’s Final Argument, p.1. However, the Commission does not provide--and the ALJ does not find--any authority suggesting that the importance or success of the Program can save it from preemption. To the contrary, the success of the Program in reducing violations of OSH Act standards evidences its impact on, and interference with, regulation of occupational safety or health issues for which federal standards exist.
  10. While the Robinson court noted that shared purposes are evidence of duplicative regulation, the ALJ does not find this alone invokes preemption so long as the state is asserting jurisdiction over an occupational safety or health issue where no OSH Act standard is in effect.
  11. Employers with under 20 employees can seek relief from the hazardous designation by agreeing to a full Safety & Health Consultation (OSHCON). Sanderson has more than 20 employees. Testimony of Commission employee, Mr. Oliver.
  12. Testimony of Commission employees: Scott Gallacher, Manager of Safety Data Verifications for the Workers’ Health and Safety Division, and Mr. Oliver.
  13. Gade at 2384.
  14. 29 U.S.C.§667(b) (1994)
End of Document
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