For those of you in and around Omaha, you recall the tragic collapse of International Nutrition’s plant in early 2014, killing two workers and injuring several others. OSHA swept onto the scene and issued citations. Surprisingly, the penalties totaled only $120,000. While a large sum, one would think two deaths and a score of injuries would generate a larger fine. International Nutrition appealed the penalties and they have now been reduced to $78,000, about a 1/3 reduction. Below, I’ll set forth what happened.
The Original Penalties
International Nutrition was originally fined $120,650.00 for citations ranging from willful, serious, to other-than-serious. Here is the original citation. The table below summarizes the citation and penalties:
|Description of Citation||Gravity||Penalty|
|Employer did not furnish hazard free work environment||Serious||$6,160.00|
|Passageways and storerooms not kept clean||Serious||$6,160.00|
|Employer failed to provide written respiratory protection program||Serious||$2,640.00|
|Employer failed to provide medical evaluation to determine employee’s ability to wear respirator||Serious||$0.00|
|Employer failed to annually fit test respirators||Serious||$0.00|
|Employer failed to provide confined space training||Serious||$4,400.00|
|Employer failed to adopt an energy control plan||Serious||$6,160.00|
|Employer failed to provide training in Spanish; for new hires and on the use of energy control procedures||Serious||$6,160.00|
|Employer did not ensure employees successfully completed training and failed to evaluate operator’s performance||Serious||$6,160.00|
|Employer failed to install proper electrical systems and wiring||Serious||$6,160.00|
|Employer failed to install dust proof junction box||Serious||$0.00|
|Employer failed to provide HAZCOM training||Serious||$2,640.00|
|Employer exposed employees to hazardous worksite by overloading structure||Willful||$61,600.00|
|Employer failed to regulate air nozzles so as not to exceed 30 p.s.i.||Repeat||$12,320.00|
|Respirators were not provided with adequate respirator training||Other-than serious||$0.00|
|Employer failed to keep permits for one year||Other-than serious||$0.00|
Not surprisingly, the largest penalty, $61,600.00, stemmed from the willful violation that International Nutrition’s exposed workers to a hazardous work site.
Challenge to Penalties
International Nutrition chose to contest the penalties by filing a “Notice of Contest” with the Secretary of Labor. The Notice of Contest then begins the administrative proceedings, much akin to a lawsuit, in which the Department of Labor’s OSHA attorney files a lawsuit against International Nutrition alleging that International failed to abide by the OSHA regulations and asking that the penalties listed in the citation be imposed against International Nutrition.
During the pendency of an OSHA proceeding, parties generally continue to discuss settlement. And, that’s what happened here. Under the settlement with OSHA, International Nutrition’s penalties were reduced to $78,000. The biggest change was the willful penalty reduced to repeat and the associated penalty was reduced from $61,500 to $50,000. The number of the serious citations was also reduced from 12 to 5. International Nutrition must also participate in the Severe Violator Enforcement Program, which means it will be subject to follow-up inspections and increased company awareness of OSHA programs, such as an obligation to hire an OSHA consultant to work with the company’s OSHA compliance.
Take Away: International Nutrition must have had a pretty good OSHA program to limit the penalties that OSHA could impose after this tragic accident. This situation certainly underscores the importance of maintaining an effective OSHA program to minimize penalties.