OSHA Discourages Financial Incentives for Low Reports of Workplace Injuries

Earlier this month, OSHA released a brief enforcement memorandum to its regional offices and whistleblower program managers that placed a bulls-eye on common employer programs which reward employees and managers for reducing workplace injuries. OSHA seems to assume that a decrease in reportable injuries is a fiction that is created to receive a financial incentive and is masking the higher rate of workplace injuries and risks to employee safety. The basis for the memorandum is §11(c) of OSHA which prohibits employers from discriminating against employees who exercise their rights under the Act. 29 C.F.R. § 1904.36.

According to OSHA, “[t]here are several types of workplace policies and practices that could discourage reporting and could constitute unlawful discrimination and a violation of section 11(c) and other whistleblower protection statutes. Some of these policies and practices may also violate OSHA's recordkeeping regulations, particularly the requirement to ensure that employees have a way to report work-related injuries and illnesses. 29 C.F.R. 1904.35(b)(1).” For example, “if the incentive is great enough that its loss dissuades reasonable workers from reporting injuries, the program would result in the employer's failure to record injuries that it is required to record under Part 1904. In this case, the employer is violating that rule, and a referral for a recordkeeping investigation should be made.” Moreover, “OSHA has also observed that the potential for unlawful discrimination under all of these policies may increase when management or supervisory bonuses are linked to lower reported injury rates. While OSHA appreciates employers using safety as a key management metric, we cannot condone a program that encourages discrimination against workers who report injuries.” (italics added).

Some of the “common potentially discriminatory policies” OSHA directs the regional offices and whistleblower program managers to scrutinize include:

1. A policy or practice of disciplining all employees involved in a workplace accident regardless of the circumstances. “OSHA views discipline imposed under such a policy against an employee who reports an injury as a direct violation of section 11(c) . . . . In other words, an employer's policy to discipline all employees who are injured, regardless of fault, is not a legitimate nondiscriminatory reason that an employer may advance to justify adverse action against an employee who reports an injury.”

2. A policy or practice of disciplining employees for the time or manner for reporting workplace injuries or illnesses. “OSHA recognizes that employers have a legitimate interest in establishing procedures for receiving and responding to reports of injuries. To be consistent with the statute, however, such procedures must be reasonable and may not unduly burden the employee's right and ability to report. For example, the rules cannot penalize workers who do not realize immediately that their injuries are serious enough to report, or even that they are injured at all. Nor may enforcement of such rules be used as a pretext for discrimination. In investigating such cases, factors such as the following may be considered: whether the employee's deviation from the procedure was minor or extensive, inadvertent or deliberate, whether the employee had a reasonable basis for acting as he or she did, whether the employer can show a substantial interest in the rule and its enforcement, and whether the discipline imposed appears disproportionate to the asserted interest.”

3. A practice of disciplining employees involved in accidents for violating safety rules when there is no evidence that the employer otherwise monitors for safety compliance, disciplines employees for violating the same rules in the absence of a reported accident, etc.

OSHA encourages employers to maintain and enforce legitimate workplace safety rules in order to eliminate or reduce workplace hazards and prevent injuries from occurring in the first place. In some cases, however, an employer may attempt to use a work rule as a pretext for discrimination against a worker who reports an injury. A careful investigation is needed. Several circumstances are relevant. Does the employer monitor for compliance with the work rule in the absence of an injury? Does the employer consistently impose equivalent discipline against employees who violate the work rule in the absence of an injury? The nature of the rule cited by the employer should also be considered. Vague rules, such as a requirement that employees "maintain situational awareness" or "work carefully" may be manipulated and used as a pretext for unlawful discrimination. Therefore, where such general rules are involved, the investigation must include an especially careful examination of whether and how the employer applies the rule in situations that do not involve an employee injury. Enforcing a rule more stringently against injured employees than noninjured employees may suggest that the rule is a pretext for discrimination against an injured employee.

4. Programs that reward employees for not reporting a workplace accident or illness. Disappointingly, OSHA believes that incentive programs for attending safety training are as effective as rewarding safe behavior. “For example, an employer might enter all employees who have not been injured in the previous year in a drawing to win a prize, or a team of employees might be awarded a bonus if no one from the team is injured over some period of time. Such programs might be well-intentioned efforts by employers to encourage their workers to use safe practices. However, there are better ways to encourage safe work practices, such as incentives that promote worker participation in safety-related activities, such as identifying hazards or participating in investigations of injuries, incidents or "near misses".

While OSHA has not banned these common safety incentive programs which reward employees for avoiding recordable cases or lost work time due to injuries, these practice will clearly receive more scrutiny during investigations and reviews of VPP applications and re-certifications. These issues will also likely be raised during any union disputes. In addition, another byproduct of this analysis is that these employer practices may now become the basis for wrongful discharge claims under Ohio’s public policy tort law.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Applicant’s Record of Impairment and Illegal Interview Questions Send Charitable Employer Back to Court for Alleged Violations of Rehab

Last week, the Sixth Circuit Court of Appeals reversed summary judgment in favor of The Salvation Army by the District Court in Columbus where the plaintiff job applicant alleged that he was denied a job after he responded to a question his job interview about whether he was taking any medications by describing the psychotropic medications he was taking. Doe v. Salvation Army, No. 07-3822 (7/1/08). The Court found that there was a factual dispute for the jury to resolve about whether the plaintiff was “disabled” under the Rehabilitation Act and whether he was rejected for employment based solely on that disability.

According to the Court’s opinion, the plaintiff “suffers from paranoid schizophrenia disorder. From 1995 through 2005, because of his condition, he was hospitalized or lived in various group homes. In 2005, still under medical supervision, Doe began working with job developer Cordell DeGraw at the Center of Vocational Alternatives (COVA) in Columbus, Ohio. Sometime in May 2005, DeGraw contacted Charles Snider, the supervisor of the Salvation Army’s Adult Rehabilitation Center (ARC) warehouse and arranged for Doe to be interviewed for a truck driver position with the Salvation Army.” When the plaintiff “arrived for the interview, Snider instructed Doe to fill out an application and . . . Doe responded that he could not work on Fridays because, “[he] had to see [his] doctor, and . . . pick up [his] medicine.” Snider asked Doe “what kind of medication” he took, and Doe responded, “psychotropic medicine.” According to Doe, at that point, Snider “stopped the interview and said that his insurance would not cover me.” Doe offered to obtain a letter from his doctor, but Snider refused to reconsider.” According to the Salvation Army, “Snider testified that he ended the interview saying, “[w]hat I’ll have to do is have this checked out,” meaning apparently, that he wanted to determine whether the ARC’s insurance policy would cover a driver using psychotropic medication. However, Snider never pursued an investigation into the insurance coverage and later hired nine other drivers.”

The plaintiff argued that he was covered by the Rehabilitation Act because he was a person with a record of an impairment which limits a major life activity. “Doe submitted numerous doctor reports and evaluations to support his claim that he has a record-supported history of paranoid schizophrenia disorder, which caused substantial limitations to his major life activities of self-care, thinking, learning, and working.” While a person with only a record of a disability (in contrast to a present disability) would not require a reasonable accommodation, the Court determined that they were still protected from discrimination by the Rehabilitation Act.

The District Court determined that there was insufficient evidence that the Salvation Army was aware that Doe had a disability. However, the Court of Appeals noted that there was evidence that COVA informed the Salvation Army that “[w]e are an agency that works with people that have disabilities.” There was also evidence that the Salvation Army “was aware that COVA’s mission is to help individuals with disabilities and other challenges.

Nonetheless, the Rehabilitation Act only prohibits discrimination “solely” on the basis of the disability. “The Salvation Army argued, and the district court agreed, that Snider rejected Doe for safety concerns, not for reasons solely based on Doe’s disability. However, it was immediately after Doe revealed his specific medications that Snider abruptly ended the interview. Snider testified that he ended the interview stating, ‘I did not say flat out no,’ but rather, ‘I’ll have to check [the insurance] out.” As we now know, he did not do so.”

“An employer may not base a hiring decision on a perceived notion that the applicant’s disability renders him incapable to perform the job. See Holiday v. City of Chattanooga, 206 F.3d 637, 643 (6th Cir. 2000). The district court stated that “[c]ourts have unanimously held that an individual with a disability ‘cannot perform the essential functions of a job if his handicap poses a significant risk to those around him.’” But in May 2005, Snider ended Doe’s interview not because he concluded that Doe’s employment as a driver would pose a risk to others, but because Snider “wasn’t going to take a chance” on Doe. The Rehabilitation Act’s implementing regulations state rather remarkably, to be sure, that potential employers may not ask questions “to determine whether the applicant is an individual with handicaps or the nature or severity of a handicap.” 24 C.F.R. § 8.13(a). Snider testified that he inquired as to what types of medications Doe was taking. . . . We think it supports, although it does not necessarily prove, Doe’s claim that the Salvation Army violated the Rehabilitation Act.

Insomniacs may read the full decision at http://caselaw.lp.findlaw.com/data2/circs/6th/073822p.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.