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A cautionary tale: Individuals can be held liable for OSHA fines
Oct
On the Front Lines with Fisher Phillips
by Travis Vance and Pamela Williams
What happens if an employer refuses to pay a fine assessed by OSHA? The short answer is that the obligation to pay the penalty doesn’t simply evaporate if a company refuses to comply.
In fact, the company isn’t the only one that should be concerned about potential repercussions for refusing to pay fines. After a New Jersey-based construction company failed for four years to pay $412,000 in penalties OSHA assessed against it, the 3rd Circuit Court of Appeals recently found the company’s president – and only board member – in contempt and therefore liable to pay the company’s penalty.
The Department of Labor pursued the company for years, seeking to enforce its penalty with multiple hearings before the Occupational Safety and Health Review Commission (OSHRC) and, eventually, the Federal Court of Appeals. Its efforts concluded recently when the court found the company’s president liable and ordered him to pay the entire penalty amount within 30 days. His liability will decrease by whatever his company pays and any amount he demonstrates that he is unable to pay.
Granted, this is an extreme situation where an employer that was held liable for a large penalty relating to numerous alleged safety violations failed to attempt to negotiate a decreased amount or payment plan and ignored the court of appeals’ orders to pay. But the import of the decision is clear.
OSHA has sent a message and will no doubt use this case to warn employers that it will do everything in its power to hold them accountable for their safety and penalty obligations under the Occupational Safety and Health Act. Flaunt OSHA penalties at your own risk, because contempt of court can be costly. And the possibility of being held individually liable adds an additional layer of concern.
Travis Vance is a partner in the firm’s Charlotte office. He can be reached at tvance@fisherphillips.com or 704.778.4164. Pamela Williams is a partner in the firm’s Houston office. She can be reached at pwilliams@fisherphillips.com or 713.292.5622. Visit their website at fisherphillips.com .
