OSHA Charges Retail: Higher Fines for Repeat Violations Across Multiple Locations
HIGHLIGHTS:
- The Occupational Safety and Health Administration's policy of assessing safety violations on a company-wide basis is in full force. OSHA is assessing the higher penalties associated with repeat safety violations made by multi-location employers, including retail chains.
- There are several steps companies can take to avoid repeat violations and decrease the likelihood of coming under OSHA scrutiny.
The Occupational Safety and Health Administration (OSHA) continues to enforce its policy of assessing safety violations on a company-wide basis. As a result, OSHA has assessed the higher penalties associated with repeat safety violations where a multi-location employer, such as a large retail chain, has two or more similar violations of the Occupational Safety and Health Act ("Act") at any of its locations within a five-year period, rather than issuing citations and assessing penalties for repeat violations occurring at the same facility.
Despite increasingly heavy criticism, OSHA has remained resolute in defending the need for this enforcement practice. In fact, OSHA's inspectors, under the directives of its June 2013 enforcement memorandum, are paying closer attention to blocked aisles and exit routes at retail stores.
(See this previous Holland & Knight alert for additional coverage of this topic.)
Forever 21: OSHA Doubles Down on Safety Complaints in New York and New Jersey
Forever 21, Inc., headquartered in Los Angeles, is a fast-fashion retail clothing chain for men and women. According to Forbes, the company, which has annual revenues of nearly $4 billion and 30,000 employees, operates nearly 500 stores across the United States, Canada, Europe and Asia (under the names Forever 21, XXI Forever, For Love 21, Heritage 1981 and Reference).
On January 7, 2014, OSHA announced that several days earlier it cited Forever 21 for seven separate violations found at both Forever 21's Paramus, New Jersey and Times Square, New York City locations. OSHA inspected the stores in July 2013 after receiving complaints concerning various safety hazards. The proposed fines levied by OSHA against Forever 21 total $236,500. At the Paramus store, OSHA cited Forever 21 for four repeat violations (for obstructed exit routes, an unmounted fire extinguisher, and boxes and other material not securely stored against fall or collapse. It also uncovered fluorescent lighting exposed to contact and breakage. At the Times Square store, OSHA cited Forever 21 for two repeat violations (obstructed exit routes and uncovered fluorescent lighting exposed to contact and breakage) and a serious violation for failure to keep the store clean and orderly. As for the repeat violations issued at the Paramus and Times Square locations, OSHA relied upon predicate violations that occurred at both a New Jersey store (not the Paramus location) more than a year earlier, and at a New York City store (not the Times Square location), nearly two years earlier.
According to OSHA, since 2012, Forever 21 has also been previously cited for various exit access violations in Nevada and Massachusetts (in addition to New Jersey). Forever 21 has 15 business days from receipt of the citations and proposed penalties to: (1) comply, (2) meet informally with OSHA's area director and perhaps work out a settlement, or (3) contest the findings in whole or in part before the independent Occupational Safety and Health Review Commission.
The Forever 21 case, out of OSHA's Region 2 (covering New Jersey, New York, Puerto Rico and the Virgin Islands), were the latest citations in a recent rash of violations issued out of New York-area offices for safety hazards concerning exit access at retail stores. In the last year, major retail operators have been cited and fined for exit obstructions and blockages, including for repeat violations occurring at different locations.
Why OSHA's Policy on Repeat Violations Matters
Since April 29, 2010, OSHA's stated policy concerning the issuance of repeat violations allows the agency to assess a repeat violation against a multi-location company if it has found the same or similar unsafe condition at any other location operated by the same company within the previous five years — no matter the size or scope of its geographical presence and the breadth of the company’s products or service lines. A repeat violation carries a mandatory fine of up to $70,000 for each violation. (By comparison, a "serious" violation, one where there is a substantial probability that death or serious physical harm could result from the hazard, and that the employer knew or should have known of the hazard, carries a mandatory penalty of up to $7,000 for each violation.)
For Forever 21, OSHA proposed a penalty of $66,000 for one of the four repeat violations at the Paramus store, and a penalty of $70,000 for one of the two repeat violations at the Times Square store. About the repeat violations at Forever 21 locations, Robert Kulick, an OSHA Regional Administrator, said "It is unacceptable for Forever 21 to continue repeating these violations and, which are common among retailers, and put workers at serious risk. Retail managers have a legal responsibility to inspect their stores, identify potential hazards and quickly eliminate them to ensure worker safety health."
Clearly, the larger the chain of retail outlets, the greater the challenge for the company in ensuring that certain hazards never occur in any location.
The Takeaway: Avoiding Repeat Violations
Although OSHA has various enforcement initiatives and programs focused on both certain high-risk industries and targeting those employers with poor safety records, avoiding repeat violations is an objective every multi-location employer should make a top safety priority in 2014. Being cited for repeat violations is one sure way to place a multi-facility company squarely within OSHA's crosshairs, even if only a few or even one of the many locations have proven noncompliant with the Act.
Key to avoiding, if not eliminating, repeat violations for multi-facility companies starts and ends with education, communication and timely and regular information sharing across the company, both vertically and horizontally.
It is of paramount importance in a multi-facility operation — especially in the retail industry, where each facility is by and large operating in the same dynamic manner — to take affirmative action:
- put in place a safety director to coordinate education, training and compliance initiatives
- if feasible, designate regional safety officers to self-evaluate the stores in their regions, regularly confer with each another and report to the national safety director
- appoint a safety representative at each location to regularly monitor the local operation for safety compliance and report regularly to the company’s regional safety officers
- share safety information — especially arising out of any OSHA inspections or citations — with all regional officers, and discuss that information, to immediately address and eliminate underlying potential or actual existing hazards at other locations
- dedicate, update and make available real-time electronic databases to those charged with safety compliance company-wide, to allow for expedient remediation and abatements of hazards before any complaint is made to OSHA or before any accident leading to serious injury occurs
Taking these steps will undoubtedly pay dividends for large employers in avoiding OSHA scrutiny and costly repeat violations.
Consulting Counsel
Holland & Knight’s Labor, Employment and Benefits Team can provide additional information on this topic and other OSHA-related issues that could affect your business.