Historically, there are few criminal convictions for violations of the Occupational Safety and Health Act of 1970, and the majority of those violations were related to dishonesty during OSHA inspections and interviews. Though criminal prosecutions under the Act are relatively few, OSHA’s Field Operations Manual states “the Area Director, in coordination with the Regional Solicitor of Labor, shall carefully evaluate all willful cases involving employee deaths to determine whether they may involve criminal violations of Section 17(e) of the Act.”
Fiscal year 2014 saw a record number of criminal referrals and prosecutions under the Act. Criminal referrals and prosecutions are likely to increase based on a recent memorandum issued by Deputy Attorney General Sally Quillian Yates. On September 9, 2015, Yates issued a memorandum to a variety of different assistant attorneys general, the FBI, the Director, Executive Offices of the U.S. Trustee, and every US Attorney. The subject line on that memorandum stated “Individual Accountability for Corporate Wrongdoing.” Though it may appear to be directed primarily at the financial sector, the distribution list clearly shows that its scope is far broader, as the following quote demonstrates:
One of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing. Such accountability is important for several reasons: it deters future illegal activity, it incentivizes changes in corporate behavior, it ensures that the proper parties are held responsible for their actions, and it promotes the public's confidence in our justice system.
The memorandum sets forth six elements of the effort to ensure individual accountability for corporate wrongdoing:
- In order to qualify for any cooperation credit, corporations must provide to the Department all relevant facts relating to the individuals responsible for the misconduct.
- Criminal and civil corporate investigations should focus on individuals from the inception of the investigation.
- Criminal and civil attorneys handling corporate investigations should be in routine communication with one another.
- Absent extraordinary circumstances or approved departmental policy, the Department will not release culpable individuals from civil or criminal liability when resolving a matter with a corporation.
- Department attorneys should not resolve matters with a corporation without a clear plan to resolve related individual cases, and should memorialize any declinations as to individuals in such cases.
- Civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual's ability to pay.
The U.S. Attorney’s Office is conducting a training conference on the issues raised by this memorandum on September 16, 2015; and over the coming months, will develop its program further. We anticipate that in the relative near future we will see an increase in criminal referrals from OSHA (and other agencies), consistent with 2014 data, and an increase in efforts to hold individuals accountable for non-compliance. Employers should keep in mind the subjective nature of much of what is outlined in the memorandum (i.e., what is considered cooperation), as well as the fact that investigators are now directed to focus on individuals from the onset of the investigation and that an individual’s inability to pay will not necessarily impact the prosecution’s discretion.
We will continue to monitor this issue and will write about significant developments in the future.