On November 28, 2016, the U.S. District Court for the Northern District of Texas denied a preliminary injunction that sought to block the nationwide implementation of the new Occupational Safety and Health Administration’s anti-retaliation rule, “Improve Tracking of Workplace Injuries and Illnesses.” The rule requires employers to make considerable changes to their work-related injury or illness reporting procedures and gives OSHA alternative enforcement authority for employer violations of these new reporting procedures and the rule’s provisions.

In denying the preliminary injunction, the district court determined that the plaintiffs had failed to demonstrate that they would suffer irreparable injury absent a nationwide injunction enjoining implementing of the rule or that an injunction was necessary to protect the public interest. The district court’s denial was issued in an action challenging OSHA’s rule as arbitrary and capricious and an abuse of discretion exceeding the authority granted pursuant to the Occupational Health and Safety Act and violating the Administrative Procedures Act. The plaintiffs challenging the rule are a collection of trade groups, Great American Insurance Company, a provider of workers’ compensation insurance, and companies that have purchased workers’ compensation coverage from Great American. The denial of the injunction means that major parts of the rule go into effect on December 1, 2016 while the litigation challenging the rule proceeds in the district court.

Background: OSHA Rule

The OSHA rule, which is effective beginning today, December 1, 2016, includes the following new employer obligations and prohibitions that employers should be aware of:

1. Employers must now implement “reasonable” reporting procedures

• This part of the rule allows OSHA to evaluate reporting procedures against a “reasonability” standard.
• OSHA states that a rule would not be reasonable if  “it would deter or discourage a reasonable employee from accurately reporting a workplace injury or illness.”
• OSHA believes that reporting procedures with too many steps, that are too rigid or that are too difficult to complete, are unreasonable.
• Employees must also be given a reasonable timeframe to report work-related injuries or illnesses that develop over time.

2. Employees’ rights to report injury/illness without retaliation and the anti-retaliation provision

• The OSHA rule adds a provision to federal regulations which prohibits an employer from discrimination for employee reporting of a work-related injury or illness.  
• Employers must also inform their employees of the new reporting procedures and advise the employees that they are prohibited from discriminating against employees for reporting a work-related injury or illness.
• The OSHA rule also authorizes OSHA to issue citations to employers for discriminating against its employees for reporting a work-related injury or illness.  OSHA can issue citations even in circumstances where the employee does not file his or her own anti-discrimination complaint under Section 11(c) of the Act.

3. New electronic submission of work-place injury and illness reporting records

• The rule does not change any forms that must be submitted manually, but requires certain employers to also electronically submit these records to OSHA.
• Employers with 250 or more employees that are required to keep work-related injury and illness records must electronically submit these records yearly to OSHA.
  • • An electronic copy of 2016 Form 300A is due on or before July 1, 2017.
    • For 2017, electronic copies of Forms 300A, 300 and 301 are due July 1, 2018.
    • Beginning 2019, electronic copies of these reports are due on or before March 2nd of each year.
• Employers with 20-249 employees in designated industries must also electronically submit work-related injury and illness records yearly to OSHA.
  • • For 2016, an electronic copy of Form 300A is due on or before July 1, 2017.
    • For 2017, an electronic copy of Form 300A is due on or before July 1, 2018.
    • Beginning 2019, an electronic copy of the Form 300A is due on or before March 2nd of each year.

What Does This Mean for Employers?

Implementation Schedule. With the court’s denial of the preliminary injunction, the requirements of the rule take effect as follows:

Reasonable Reporting Procedures and Requirements	December 1, 2016
Anti-Retaliation Rule	December 1, 2016
Electronic Reporting	January 1, 2017

The electronic reporting requirements will be phased in over the next few years. For 2017 and 2018, electronic submittals for the preceding year are due on or before July 1 of each year. Beginning 2019, annual reports will be due on or before March 2 of each year.

What is the Impact on Employer Policies?

The rule does not adopt a particular form of reporting policy that OSHA considers reasonable but leaves development of the policy with the employer’s discretion. However, the rule has the potential to particularly affect employers’ policies concerning post-accident drug testing, employee incentive programs and executive compensation incentives, where OSHA has indicated the following concerns on specific policy provisions.

Impermissible Reporting Requirements, Discipline and Policies That Violate Anti-Retaliation Provisions. On October 19, 2016, OSHA provided some insight on what it considers an unreasonable reporting procedure in a published guidance memorandum. In the memorandum, OSHA emphasizes that an employer’s reporting policy must give the employee a sufficient amount of time to report an injury or illness after the employee has realized that he has suffered a work-related injury or illness. The rule also states that policies that require immediate reporting of an injury or that create an “undue burden” is also in violation of the reporting procedures.  OSHA has indicated employer procedures will be measured against a reasonability standard; specifically, whether a reasonable employee would be deterred from reporting an illness or injury because of the policy or procedures.

Although the rule does not prohibit employers from disciplining employees for violating its safety rules, the rule does prohibit employers from disciplining employees for reporting work-related injuries or illnesses. In such cases, OSHA will evaluate whether the employer has a legitimate business reason for the disciplinary action or if OSHA believes the purpose of the disciplinary response may be construed as retaliation for reporting the work-related injury.

Post-Injury Drug Testing. OSHA has also indicated that blanket post-injury drug testing programs are considered facially unreasonable, because OSHA believes this practice arguably dissuades employees from reporting injuries and being automatically subjected to testing. OSHA does state that the rule is not a ban against post-injury drug testing. However, OSHA maintains that the employer must have an objectively reasonable basis for conducting the drug test. OSHA will look to whether the drug testing was done to all who could have contributed to the injury, and if, on the whole, the employer had a reasonable basis in believing that drugs and/or alcohol contributed to the incident.

OSHA offers other examples of situations where it believes that drug testing would not be reasonable, including (1) where an employee reports a wasp or bee sting; (2) where an employee reports a repetitive strain injury; or (3) where an employee reports an injury caused by a lack of machine guarding or a tool malfunction.

Safety Incentive Programs. Under the new rule, OSHA has indicated that it will scrutinize safety incentive programs that reward employees for achieving low injury rates as being potentially unreasonable. OSHA believes these types of programs have the effect of excluding and, in effect, disciplining workers for reporting work-related injuries. Examples include safety incentive programs that award periodic prizes in drawings that exclude workers who reported an OSHA-recordable injury; incentive programs predicated on workers remaining “injury-free” that could result in peer pressure on employees to not report; and rate-based incentive programs, which reward workers for achieving low rates of reported injury and illnesses.

Alternatively, OSHA has indicated support for positive safety incentive programs that reward employees for compliance with safety rules over a period of time and for participating in and completing safety training programs. OSHA has also encouraged incentives and programs through its Voluntary Protection Programs.

Executive Compensation and Bonuses. Similarly, OSHA views incentive programs that link executive compensation with achieving low injury and illness rates as problematic because of the potential such arrangements could result in underreporting workplace injuries. OSHA’s premise is that, in such circumstances, a manager or supervisor might be motivated to retaliate against employees for reporting workplace injuries, thereby creating a disincentive for employees to report injuries at all. Although the new rule does not expressly prohibit such arrangements, OSHA has indicated that such programs will be closely scrutinized.

How Should Employers Prepare for the Rule?

Employers can take the following steps as the main parts of the rule go into effect on December 1, 2016:

• Ensure that the latest OSHA Rights Posters (from April 2015) are posted at work sites. As an alternative, employers can prepare and post a memo on company letterhead that advises employees about their rights to report work-related injuries free from retaliation and provides a protocol for reporting work-related injuries or illness for that location.
• Internally review their current policies for illness and injury reporting and drug testing to ensure they are consistent with the rule and, if necessary, amend their existing procedures or implement new procedures consistent with the rule.
• Provide refresher training on recordkeeping requirements, maintaining records and filing reports.
• Work with counsel as needed to evaluate and update injury reporting policies and safety incentive and management compensation programs.
• Begin to prepare the necessary records for electronic submission by July 1, 2017 and thereafter.

For more information or for assistance implementing OSHA’s new rule, please contact experienced counsel.  

This Update was republished in Law360 on 12.05.2016, "How Employers Can Prep For New OSHA Injury Reporting Rule."

 © 2016 Perkins Coie LLP

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