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A recent U.S. Supreme Court decision affirmed the six-month statute of limitations on alleged Occupational Safety and Health Act violations.
In a rare unanimous decision, issued Feb. 27, 2013, the Court held in Gabelli v. Securities and Exchange Commission (SEC) that the SEC could not take advantage of the discovery rule to expand the limitations period for civil penalty claims beyond that set by statute. The SEC argued that its penalty claim accrued when it discovered the misconduct, not when the misconduct occurred. The Court disagreed, finding that such a discovery rule, used in private actions for damages, does not apply to government actions for penalties.
This ruling affects all cases in which the government is seeking civil penalties against private parties, including the Occupational Safety and Health Administration’s (OSHA) claim that recordkeeping violations are tolled, or suspended, until an OSHA investigator discovers them, which typically occurs during the investigation of an unrelated workplace accident.
“The decision will impact employers in a very straightforward way,” said Kevin Mullen, a Dallas-based employment attorney at Littler Mendelson.
“It will mean that employers can and should raise a limitations defense to any claim by OSHA that recordkeeping or other alleged OSHA violations that occurred more than six months ago are actionable because they were just discovered by the OSHA investigator,” he told SHRM Online. The Gabelli holding should apply to any case in which OSHA seeks monetary penalties, Mullen said.
The Gabelli ruling effectively eliminates what remained of the Occupational Safety and Health Review Commission’s 1993 Johnson Controls decision, said Jim Lastowka, a partner and head of the McDermott Will & Emery OSHA group, based in Washington, D.C.
Lastowka explained to SHRM Online that OSHA brought cases under the discovery rule before the Johnson Controls decision, but that Johnson Controls was the first opportunity for the commission to discuss the use of the rule in the context of recordkeeping citations. The commission endorsed the use of a discovery rule in OSHA recordkeeping cases at that time.
The six-month time bar applies to all violations of OSHA requirements, not just recordkeeping violations, Lastowka said. “As a result, employers should not accept an OSHA citation alleging violations more than six months old.”
Roy Maurer is an online editor/manager for SHRM.
Follow him on Twitter @SHRMRoy.
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