Safety citations stand despite employer’s buyer’s remorse

An administrative law judge of the Occupational Safety and Health Review Commission found an informal settlement agreement entered into by an employer was binding and enforceable despite the employer’s “buyer’s remorse.”

On April 24, 2017, the U.S. Occupational Safety and Health Administration’s area office in Lubbock, Texas, inspected an employer’s worksite in Amarillo, Texas, and alleged 20 violations of the Occupational Safety and Health Act, including one serious violation with a proposed penalty of $64,462 and one other-than-serious violation with a proposed $406 penalty, according to review commission documents in Secretary of Labor v. Wrangler Plumbing Inc., doing business as Garbage Gators.

On Nov. 15, 2017, OSHA held an informal settlement conference with employer representatives Willis Malone and Kathy Malone, with the employer’s safety consultant in attendance. No agreement was reached at this conference, and the employer later submitted its first notice to contest the citation. The parties continued to engage in settlement discussions and ultimately reached settlement on all items, with an agreement executed in December 2017.

However, the employer filed a second late notice of contest on May 1, 2018, arguing that there was a question about whether it was properly served the citation within the statute of limitations period, that the OSHA area director refused to discuss the issue or look at a letter from the employer’s attorney during the informal settlement talks, and that the employer “felt beat, had no options” and was left at the area director’s “mercy.” The attorney had previously advised OSHA officials that he would not be attending the informal conference and the employer would be represented by its safety consultant.

But the employer waived its right to contest the citation and penalty notification when it signed the agreement, according to government officials who argued that the employer was not forced to do anything it did not want to do, was not pressured to sign an agreement on Nov. 15, 2017, had the benefit of counsel and the safety consultant to advise him during the negotiation period, and that Mr. Malone voluntarily executed the agreement.

The employer preserved its right to contest the validity of the citation when an agreement was not reached at the informal settlement conference and there was no indication in the record that OSHA would not entertain settlement in the future if a settlement agreement was not reached at that November conference, the law judge stated in ruling against the employer. In addition, any pressure the employer may have felt was balanced by its representation by an attorney and safety consultant familiar with OSHA law, according to the law judge.

“These individuals were involved and were available for counsel to prevent any overreaching or pressure from OSHA to settle on certain terms,” the law judge said.

In addition, the nearly three-week period between the informal settlement conference and execution of the agreement allowed the employer time to consider its options, discuss its positions and render an “informed and voluntary” decision, meaning the employer “was not pressured or rushed into settling the case on terms it did not like or consequences it did not understand,” the law judge stated.

The agreement was “binding and enforceable,” including the negotiated penalty reductions outlined in the agreement, the law judge stated in vacating the employer’s late second notice of contest, which the law judge determined to be “the paradigmatic example of buyer’s remorse.”

The secretary “presented clear and convincing evidence of an executed informal settlement agreement” signed by the employer that fully resolved the case and waived the employer’s right to subsequently contest the proposed violations or penalties, according to the law judge.

The employer’s “arguments are post-hoc rationalizations intended to void a binding agreement which (the employer) later decided it did not like,” the law judge stated. “The court is leery of the precedent that would be set if a party could unilaterally withdraw from an informal settlement agreement as (the employer) proposes here.”

The administrative law judge’s decision became a final order of the review commission on Friday.

A representative of the employer could not be immediately reached for comment.