A temporary win for Obama’s OSHA

Just days after a Texas federal court put the brakes on a key aspect of the Obama administration’s regulatory efforts in the wage and hour arena, another Texas federal judge has handed the Occupational Safety & Health Administration (OSHA) a victory by refusing to grant an injunction that sought to delay the implementation of the Agency’s rule regarding workplace injuries and illnesses.

As we noted in our prior legal update from May 2016, the new OSHA rule, entitled “Improve Tracking Workplace Injuries and Illness,” requires most employers to submit workplace injury and illness information electronically. This information will then be posted on a publically accessible website. The rule also incorporates OSHA’s existing statutory prohibition of retaliation against an employee who reports workplace injuries and illnesses and requires employers to inform employees of their right to report without fear of retaliation, among other provisions.

On July 8, 2016, an assortment of business groups filed suit in the United States District Court for the Northern District of Texas, Dallas Division, seeking to block the new rule.  In particular, the groups were concerned with the rule’s potential impact on their ability to conduct drug testing and to implement safety incentive programs. The groups’ arguments were focused on language provided by OSHA in the preamble section to the new rule that, in their view, would severely restrict an employer’s right to maintain an incentive based safety-incentive program, such as those that offer employee benefits in the absence of incidents of workplace injuries. Further, the groups argued that the preamble language could be broadly construed to restrict an employer’s right to require post-accident drug testing.

The challenged portions of the new rule were originally set to take effect in August 2016 with the remaining portions becoming effective on January 1, 2017. However, because of the suit, the Department of Labor agreed to delay enforcement of those provisions until November 1, 2016 and then subsequently agreed to move that date back to December 1, 2016, to give the parties additional time to make their arguments before the court.

Ultimately, Judge Sam A. Lindsay, found that the business groups’ arguments to delay the rule were based “almost entirely on unsupported beliefs, unfounded fear, and speculation.”  Judge Lindsay concluded that the rule does not block “per se” the implementation of post-accident drug tests or safety incentive programs and noted that it was “not entirely clear” that any of the programs described by the groups would actually be blocked by the new rule.  Further, the court noted that the groups were already covered by a prohibition against retaliation, as they conceded.

Regardless of Judge Lindsay’s ruling, there is little doubt that the incoming Trump administration will take a fresh look at the rule’s requirements and that most will be modified significantly, if not stricken entirely. However, in the intervening period, employers face a lot of uncertainty.  Specifically, unless a higher court is willing to step in, employers will be obligated to comply with the drug testing, safety incentive program and anti-retaliation aspects of rule starting on December 1, 2016, and then be prepared to comply with the remaining reporting obligations, which take effect 30 days later on January 1, 2017.

As such, it is recommended that employers strive to limit post-accident drug testing to situations where drug use is reasonably likely to have contributed to the incident.  In this regard, it is important to note that drug testing undertaken in accordance with the employer’s state workers’ compensations laws will not violate the new rule, as noted by OSHA in the preamble. Further, employers should continue to review their safety-incentive programs to ensure that they are not retaliatory, for example, by excluding employees who report workplace injuries from any benefits offered by the program or penalizing an entire group of employees because of a reported injury in their department. Employers should also continue to maintain consistency in their application of discipline for violations of safety rules. Finally, employers should ensure that the already required OSHA poster is displayed at each workplace, which would meet their obligation under the new rule to advise employees of their right to report workplace injuries/illnesses without fear of retaliation.

Norton Rose Fulbright’s employment and labor team will continue to closely monitor developments in this area and provide additional updates and alerts.