OSHA rules in crosshairs after court ruling

A recent decision by the U.S. Supreme Court that overturned 40 years of precedent in giving deference to government agencies in deciphering ambiguities in statutes they administer raises questions about the authority of the U.S. Occupational Safety and Health Administration, among other agencies, experts say.

The June decision in Loper Bright Enterprises v. Raimondo may lead to legal challenges over past, present and future OSHA regulations and put more onus on employers to develop safety procedures.

In its most recent ruling, which centered on compliance with fishing regulations, the court ruled 6-2 that a previous case, Chevron v. Natural Resources Defense Council, improperly granted regulatory agencies the ability to interpret statutes when creating regulations. The conservative majority said the Administrative Procedure Act of 1946 requires courts, not administrators, to decide whether an agency has acted within its statutory authority.

Legal experts expect challenges to regulations after Loper, and one agency seen as potentially vulnerable is OSHA.

“There’s going to be an impact on their ability to implement new regulation schemes without statutory approval,” said Eric Baisden, co-chair of the labor and employment practice group at Cleveland-based Benesch, Friedlander, Coplan & Aronoff LLP.

Loper provides a new framework for interpreting laws that will force administrative agencies to implement health and safety rules “in a way consistent with the expectation of Congress,” said Andrew Brought, a Kansas City, Missouri-based partner with Spencer Fane LLP who represents employers.

Marcy Goldstein-Gelb, co-executive director of the Somerville, Massachusetts-based National Council for Occupational Safety and Health, said Loper “gives another tool in the arsenal of industry associations to whack at worker safety protections.”

“They’re already flocking to the courts at every possible opportunity to try to weaken OSHA and others,” she said.

A Department of Labor spokeswoman said OSHA’s rulemaking process is “thorough and extensive” to ensure it is “consistent with the law and the department’s statutory authority.”

The ruling raises questions over whether existing regulations and standards that went through extensive rulemaking may be susceptible to being challenged or whether they would be grandfathered in, experts say.

“Rules that are already final, even if they were published before the Loper decision, are absolutely ripe for challenge,” said Jamie Spataro, a Pittsburgh-based shareholder with Littler Mendelson PC, who represents employers.

OSHA’s proposed heat safety standard, which is in the rulemaking stage, is one example of a rule that may need to be “narrowed” following the decision, he said.

In addition, OSHA’s use of the general duty clause to cite employers could come under scrutiny, he said.

Loper may have a “chilling effect on OSHA itself to enforce and promulgate rules that are meant to protect employees,” said Jared Smith, Cleveland-based risk control manager for Safety National Casualty Corp.

The decision will likely lead to challenges of OSHA standards that spur the largest fines and are responsible for curbing some of the most severe and catastrophic workplace injuries, he said.

Employers will have to be more proactive with workplace safety and “not rely so much on an OSHA administration, OSHA rulings or OSHA interpretations of what’s safe,” Mr. Smith said.

“It’s going to put more of the impetus back on the employer to make sure that they’re keeping their employees safe and relying on the experts within the organization and not necessarily on experts outside of the organization,” he said. “It’s going to require them to provide a greater level of scrutiny on their safety practices and making sure that they’re adopting policies that are going to keep their employees safe.”

While the Loper decision may affect various regulatory agencies, another recent high court decision, Allstates Refractory Contractors LLC v. Julie A. Su, turned away a challenge to OSHA’s general authority.

In denying the appeal, the justices in July did not address the plaintiff’s claim that OSHA’s power to create safety standards was unconstitutional. Some experts say Allstates may affect the scope of future challenges (see related story below).

Experts question the interplay between the two rulings and whether one or the other might have more of an impact on the future of safety standards. The Allstates case was similar to a 2011 lawsuit that challenged OSHA’s general authority (see box above).

“We’re not certain that Loper had a chance to fully marinate within the court” when Allstates was decided, Mr. Spataro said.

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Second decision protects agency from threat

While some workplace safety advocates worry over the possibility of more safety standards being challenged following a U.S. Supreme Court ruling lessening the power of administrative agencies, others say the concern is exaggerated because of another high court ruling issued in July.

In Allstates Refractory Contractors LLC v. Julie A Su, Acting Secretary of Labor, the justices turned away an appeal by Waterville, Ohio-based construction contractor Allstates, which challenged the ability of the U.S. Occupational Safety and Health Administration to issue and enforce workplace safety standards.

Allstates claimed OSHA had acted unconstitutionally because Congress prohibits delegating legislative authority to executive branch agencies.

The Supreme Court, in denying the appeal, affirmed OSHA’s powers. Justices Clarence Thomas and Neil Gorsuch dissented.

“The Supreme Court majority, over the opposition of two justices, let stand the rejection of these claims, which would have catastrophically hobbled OSHA’s mandate to protect worker safety,” said Marcy Goldstein-Gelb, co-executive director of the Somerville, Massachusetts-based National Council for Occupational Safety and Health.

The Supreme Court’s decision in Allstates let stand a 6th U.S. Circuit Court of Appeals ruling that found Congress appropriately delegated rulemaking authority to OSHA.

“The challenge basically upholds the constitutionality of the (Occupational Safety and Health) Act’s delegation of responsibility to set standards to the agency,” said Drew Brought, a Kansas City, Missouri-based attorney with Spencer Fane LLP who represents employers.

While uncertainty remains over which safety standards might be challenged following the Supreme Court’s ruling in Loper Bright Enterprises v. Raimondo, which rolled back administrative powers, worker safety advocates say the Allstates decision remains in their corner.

Ms. Goldstein-Gelb also said a statute of limitations on past OSHA actions may prevent some future lawsuits from materializing.