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"Need to get their attention." What does that mean?
In OSHA, when you cite someone for a violation, usually you cite them for failing to have a guard to keep someone from falling. But OSHA has a possibility of citing someone in an egregious manner. Instead of just citing them for failing to have one guard to keep you from falling, you would cite them for failing to have a guard for each worker. So instead of one citation, you might get 15 citations for the same violation.
That's an egregious policy; it's only allowed where there is an egregious problem. And in the case of Tyler Pipe, local folks wanted that ability to cite by employee instead of just by standard.
I want to go back in terms of how the law works. It sounds like you're piling on with the law. Is that because the law doesn't have significant penalties to it, so you have to reapply it a number of times? I mean, why do it 15 times, and not just once?
The penalties in the OSHA Act [are] inadequate to deal with people that don't take their safety responsibility seriously. The penalties were first established in 1970. They've only been increased one time since then, and it's very low. A serious violation, something that might lead to someone's death, carries a maximum penalty of $7,000. That's not much of a penalty. If it's a willful violation, it carries a penalty of $70,000. But is someone is killed, even $70,000 is not much of an impact on that company.
So the current standards are inadequate. The current law is inadequate to deal with serious violators, repetitive violators, situations where people are put at risk day after day. In the absence ... of strengthening the law, OSHA has found ways to multiply their penalties to try to have a bigger impact.
You mean, in your frustration sitting as an OSHA inspector or official, you take the law and sort of manipulate it in order to make it more effective?
It's not manipulation by the individual inspector. This egregious policy has been tested through the courts. It has been affirmed that OSHA can do this, which is cite for each employee who is exposed to the hazard. That is the way they found current to try to get a bigger bang for the buck.
If I understand it correctly, you're saying that the fine is imposed, not because someone's been hurt, but because of the potential that someone may be hurt?
Yes, that's correct. The theory of the OSHA Act is that if there's a violation, if there is an exposed electrical wire, that exposed wire might kill somebody. So the penalty is because that wire is exposed. That might be a $500 penalty, and no one has ever been hurt. But if someone goes and touches that wire and gets electrocuted and gets killed, it's still an exposed electrical wire and that same $500 penalty.
Who thought of that idea?
[Laughs.] That's in the original legislation passed by Congress in 1970. The penalties are assessed because of the hazards that exist, not because of the consequences. The theory was you want to fix those hazards before they kill people, so assess a penalty when you see a hazard even before someone is killed.
The provisions for punishing a company or for taking action after someone is hurt were left to workers' compensation or left to liability to court judgments. When OSHA was passed, it was not envisioned that OSHA would be an agency that punishes a company where people get killed. It was an agency that was going out to prevent accidents.
But in fact, in practice, OSHA has figured out a way to use this statute to try and punish people for, let's say, killing someone on the job?
In practice, OSHA has so few inspectors that they can't get around to visit places and be preventive. In fact, OSHA can only go places where people have already been hurt, already killed. Their inspections are targeted to where there's a high rate of injuries. They got out in response to accidents.
So the theory of the law that OSHA would be preventative has never been able to be carried out since it's only funded at a level to enable it to respond to where problems have occurred.
Now let me take you back to Tyler, Texas. [With] Tyler, Texas, you said that the supervisors came to you and said, "This is an egregious situation." This is a company you called "a rogue company?"
Yes, a rogue company.
How did the criminal prosecution happen?
Within the OSHA Act, there is one clause that says if there is a willful violation of a rule and someone dies as a result of that willful violation, then it is a criminal violation. In such cases, OSHA turns that information over to the local U.S. attorney, and a local U.S. attorney can choose to bring criminal action or not.
The problem with that is that it's a misdemeanor. To willfully violate the law and kill someone is a misdemeanor under the OSHA Act -- another example of how inadequate the OSHA Act currently is.
A misdemeanor means the penalty is less than a year in jail?
Less than a year in jail, less than $500,000 in fine. It's a minor penalty. The most effective prosecutions of deaths are, in fact, not being taken by the federal government. They have been taken by state and local prosecutors under manslaughter charges at the local and state level, because the federal law is so weak. ...
But we found in this case -- and we found in many cases -- that, if you will, the economic consequences of trying to criminally prosecute a major employer come into effect in terms of somebody doing something about it.
I'm not going to pass judgment on why some prosecutor chooses to bring or not bring a case. But I think equally as important as the standing in the community of that industry is the fact that the U.S. attorney has a lot of possible cases to bring.
The U.S. attorney is generally going to spend his or her time on felony convictions, on things with big fines. If all you can bring is a misdemeanor case, it just doesn't get the attention that a felony case would.
It appears to be true that, under federal law, you get a more severe penalty for harassing a wild burro on federal land than you do for willfully killing a worker in your factory?
That's true, and we have many more wildlife protectors than we have industrial plant inspections. ...
Does the OSHA law adequately protect workers in the United States?
No. OSHA law cannot adequately protect workers in the United States [for] a couple of reasons. One, OSHA can't be everywhere. The protection of an individual worker starts at that plant level -- that worker looking out for himself or looking out for his or her fellow employees. That's the most important thing anybody can do to running safe on the job -- have a conscious program of looking after each other. OSHA can't be everywhere any time.
OSHA has to be able to give support to those employees who don't get support from their employers. When there are employers that are careless or overlook or don't give any priority to safety and health, OSHA has to be available to come in and help those employees get the employer's attention, if you will, and force action. But on a daily basis, there's no way OSHA's going to be in every workplace. ...
How long were you director of OSHA?
Three years.
How many criminal prosecutions were referred during that time? Do you know?
I can't tell you the number. There were a substantial number referred, because there were a fair number of local violations that led to death. But I could probably count on one hand the number of criminal prosecutions that were actually pursued by the Justice Department.
Were you aware, when you heard about the plant in Tyler, Texas, and the subsequent investigation and the egregious situation, that similar deaths took place in another plant owned by the same company a month or so later?
I don't recall tying the two together. The Tyler Pipe Company operates some plants as Tyler Pipe. It's [owned] by someone else -- Ransom Industries is who we acknowledged in the press release about who was responsible. But Ransom Industries is, in turn, owned by someone else. The subsequent death you referred to was in another subsidiary of this overall holding company. So OSHA at that time -- I don't recall tying the two parts of this holding company together.
So if you go to OSHA's central file system in Washington and typed in Tyler Pipe, you wouldn't necessarily come up with connections to all the other plants that are related to it?
No. The OSHA investigator, when they're making a determination of what penalty to issue, researches the corporate history of the company, tries to research the corporate ties of the company. If there are two different sites under different names but owned by same management, it is possible to tie the two together, which might have the impact of increasing the penalty. But in this day and age of companies operating under lots of different names and difficult to track down, we don't always tie together two subsidiaries to the same holding company.
I asked at other government agencies -- the Justice Department and elsewhere, EPA -- and there doesn't seem to be any central file anywhere in the federal government that would link all the violations that a company might rack up, given its subsidiaries and so on in one spot.
No, there's not, and as often as American companies are buying and selling each other, it would be a tough database to try to maintain.
But there's no way really to put together a pattern and practice, if you will?
No. You'd have to go agency by agency, company by company, to try to determine that, and that is a difficult task.
And [that] hasn't been done, for instance, in the eventual owner actually of Tyler Pipe?
To my knowledge, it has not. It may have by now, but while I was there, it was not done.
This is your press release. If you could read for us the highlighted area at the bottom of the page, just describe what this is, and then maybe read just what it is.
This is a press release that I issued at the time I was assistant secretary, when we announced the million-dollar fine against Tyler Pipe Company for this particular death and the violations that we found at that time. It said, "At the time, this company should be particularly aware of safety and health policies, having experienced a total of 32 OSHA inspections including five accident investigations. But our continued visits reveal that safety has not been a primary concern to management."
There was a high level of injury at this company. I mean, the statistic was amazing, actually. Does it surprise you?
We have companies in this country with very high accident rates. Tyler Pipe is one of them. I always hate to see someone with a high accident rate, and particularly where that continues year after year after year. Does it surprise me? No, I know they're out there. Part of the job of OSHA is to find them and get their attention.
We interviewed a former plant manager who's worked at a number of the plants that are owned by the parent company of Tyler Pipe. His general description of the attitude of the company was that, "OSHA, you know, we just hold them at the front gate for as long as possible. We don't care that's part of the cost of doing business. It's a company policy." You guys are like a mosquito in this situation.
Now you've got two elements of that statement. Holding OSHA to front gate before they get in -- sometimes the companies do make OSHA go get a search warrant before they come and inspect the company. Sometimes they, by various administrative mechanisms, hold an inspector up for an hour or two before the inspector gets in. The kind of things that get corrected during that time are pretty much housekeeping issues. If you're talking about serious machine problems, [they] can't correct that in an hour and a half. ...
But the fact that they consider OSHA a mosquito, that they'd rather pay the fines than bring their plants into compliance, that they think that the law is so ineffective that it's more profitable for them to take the risk by not having safety programs in place than to comply with the law -- that is a serious problem, and that does occur in this country. And that is of great concern to OSHA folks at the state and national levels. ...
[The Tyler Pipe case] was settled for $250,000. I understand people in OSHA weren't particularly happy with that.
No, they weren't happy. But the maximum it could have been settled for was $500,000. The problem is not the difference in $250,000 and $500,000. The problem is that the maximum penalty is a misdemeanor; $500,000 is the maximum penalty. You can't send someone to jail for any significant period of time for willfully violating the law and killing somebody. That's the problem. The law is inadequate. ...
The inadequacy for repetitive violations -- OSHA is allowed to multiply the penalty times 10 for repeat violation. But if you start off with a $7,000 penalty and you get to $70,000 -- again, for a big company like McWane holding company, $70,000 is nothing. It does not make an impact on that company. To a family that's lost a breadwinner or lost a child, there is no amount of money that can make up for that loss. But just about anything that OSHA can assess, it's an insult to the family that--
And then workers' comp immunizes the company with further litigation.
The deal in workers' comp that was struck back in the 1930s is that, in return for a company not contesting someone's claim, that claim will be paid quickly. But the employee loses the right to sue. So if someone is hurt on the job [and] files for workers' compensation, the insurance company or the company pays for the medical bills of that person, and the person is not out any money.
But in terms of any incentive to the employer to avoid the future consequences or future incidents -- workers' comp does not provide any kind of penalty to provide an incentive toward these chances of a future accident.
So if I'm a rogue employer, I don't have to worry about OSHA because the fines really aren't significant? Is what you're saying?
If you're a rogue employer, it takes a long time before the OSHA fines it to be a level to have an impact. In Tyler Pipe, for instance, by the time this death occurred, the fine was a million dollars. By the time you get a million-dollar fine, you start to pay attention. But it took a long time. That was the fifth [accident investigation], 32 [OSHA inspections], 60 percent of the people hurt. It took a long time for OSHA to get to that level.
Before it gets to that level, whoever's injured is limited in how much they can collect because of workers' comp, and they can't sue me?
Right. The OSHA Act provides no penalty because someone is hurt. The only penalty is if there is a hazard. ...
In fact, if I watch television and see reports, my understanding of workers' comp is that workers are constantly defrauded.
The insurance industry has made a great point of trying to advertise the fraud that does exist. There may be some fraud [in] any government program. But the insurance companies' own records show that the biggest fraud in workers' compensation is employers failing to report what their employees are actually doing, so they can pay lower premiums.
There is fraud in workers' comp. Most of it's on the employer side. Some of it is on the employee side. But workers' comp itself, about 90 percent of people for whom it works -- and for 90 percent of the people, it does work -- still, what it does is pay your medical bills when you get hurt. It really does not provide you replacement for the wages that you'll not earn the rest of your life. It does not provide any incentive to a company to prevent the next accident from occurring. ...
You say that, for most companies, it's good business to comply, to take care of their workers. What we've discovered, at least in one case, is that a company has all the right paperwork. They post all the signs, have the manuals, but really doesn't instruct its workers or have group meetings. Safety is considered a cost of doing business, and it's better business, apparently, to ignore it, in reality.
There are companies with good programs on paper, written by some consultant some place, but never applied in the workplace. Then it's easy to tell when you walk into a workplace; within 30 minutes, you can tell whether there's attention being paid to the details that are necessary to keep people safe or not. ...
But in terms of safety being a good policy or good program or safety pays -- if you account for the costs of an accident, not just the hurt to the individual, not just the payment to that family and the medical bills, but if you look at training the new workers to take its place; you look at the down time that occurs when a serious accident occurs; you look at the damage to the equipment; you look at all the time that the corporation and officers of the corporation spend reviewing the accident, trying to correct that problem -- for a good company that takes its job seriously and safety, the cost of an accident is probably 10 times the actual dollar outlay for the injured worker.
There are many, many hidden aspects of an accident that a company that's doing its job pays. So when we say safety pays, when we say an investment in safety pays off, you avoid not only the cost to the individual, but you avoid all those indirect costs.
But in a world where we have globalization, global competition, where we have an economy that appears to be headed towards possibly a recession or worse, in a world where we're moving more towards self-regulation and self-policing, it doesn't look good for safety.
I would never make the argument that the only reason for safety is finances. I think safety is good business, but you also have to believe in protecting your employees. You have to care about your fellow human on this planet. If you do, you're going to make that investment and you're going to keep your folks safe. But there are a lot of companies for whom bottom line profit is the only criteria they run by.
You had successors at OSHA [who] are now talking about more self-policing, if you will, and less enforcement, saying, to quote your replacement, "Enforcement has reached the point of diminishing returns."
I disagree with John on that, [with] John Henshaw, who is the current assistant secretary for OSHA. There is a need for companies to self-police. There is a need for people to look after their own workplaces and their own employees, and that's important. All of our laws are predicated on people wanting to comply, whether it's a speed limit on the highway or the safety laws. The laws are predicated on people wanting to comply.
But there are too many examples of companies that take advantage of their employees, companies that pay only lip service to safety, for me to believe that enforcement is not needed. From what I've seen in this country from OSHA's ability to be only reactive, what we need is more people doing enforcement, rather than less. ...
And when they say that the injury rates are down, the death rates are down in the United States and industry, not true, or?
I think it is true that deaths are down. I think it is true that injuries are less today than they were eight years ago. Injuries do go in a cycle. When the economy gets good, people work faster, there are more people employed who aren't trained, so the injuries go back up a little. There is something to injuries following the economic cycle.
But overall, are we safer today than we were 20 and 30 years ago? Yes, I think we are. Does that mean that we've done everything we need to do? No, it doesn't. There are still way too many places where people are put at risk. I guess, like other activities in life, the people most at risk are the least educated. The people doing the most dangerous jobs are the people who are enticed to do that with only money, and are not trained in how to avoid the risks.
And we can't really protect them, because the law doesn't have any teeth?
The law has inadequate teeth. And we are not doing enough to protect them. ...
Who is the obstacle to making the law real, to have real effect?
Any change in the law has to come from Congress. In this era, regulatory programs, enforcement programs are not popular in Congress. It's actually Richard Nixon that signed the original OSHA Act. It's certainly possible to get more effective laws than what are on the books, even with a Republican leadership. But especially since 1994, the Congress has not been supportive of regulatory programs. Any thought of enhancing and improving the regulatory programs and giving them more deterrent effect has been lost in Congress. ...
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