On The Lookout: OSHA Inspectors Are Targeting More Small Businesses

For months, Republicans in Washington have been beating a steady drumbeat about the harm regulations have on businesses, the economy, and job creation.

While the rhetoric has been loud, it is clear regulators around the country, including the Occupational Safety and Health Administration (OSHA), are not listening as they continue to fulfill their job descriptions.

The impact of regulations on businesses is constantly up for debate; but businesses - including franchisees - cannot ignore them for the health and safety of their employees and customers or the financial impact of a fine. In reviewing recent announcements and developments from OSHA, there appears to be an emphasis on the food and service industry oversight.

The image of health and safety inspectors moving through a factory or manufacturing facility are faded black and white memories. In today's heavy, service-focused economy, OSHA is focusing on smaller businesses and even opportunities to multiply their penalties across related business. If you own service or food franchise operations be aware OSHA is watching you.

Indeed, federal OSHA has inspected over 140 restaurants in 2011. Several states have their own OSHA-equivalent agency and when the federal and state OSHA statistics are combined, over 700 restaurants have been inspected this year.

Recently, Jordan Barab, the deputy assistant secretary of labor for OSHA, told a conference, "Despite what goes on in Congress, OSHA has no intention of pulling back or retreating."

An example of OSHA's emphasis on food and restaurant operations is their November 2011 formation of an "Alliance Program" with the Restaurant Opportunities Centers United (ROC-United) "to help reduce and prevent worker exposures to slip, trip and fall, and cut and burn hazards, as well as address workplace safety issues related to young workers and small businesses." ROC-United is a self-described national restaurant workers' advocacy organization. Just ROC's alignment with OSHA (rather than, say the National Restaurant Association) should provide a good sense of what direction the regulators are focusing.

From OSHA's announcement, their Alliance will develop case studies on lessons learned, and provide workers and employers with training on hazards and best practices within the restaurant industry.

My questioning the tactics of OSHA should not be interpreted as any effort to minimize the importance of worker and customer safety, but the tactics and targeting of employers - and particularly those operations where fines can multiply - is a reasonable question to ask.

For example, a Papa Johns Pizza franchise was cited this year with over $15,000 in fines for employees allegedly not having appropriate personal protective equipment, such as gloves, when handling kitchen items. The franchisee was further alleged to have failed to provide medical services and first aid to its employees. The company settled with OSHA.

Another tactic being deployed by OSHA is their increasing use of (negative) press releases and resulting media exposure to put small businesses on the defensive and encourage quick settlements. This tactic seems to cover a broad range of infractions - even minor citations are generating press releases. The head of OSHA, Dr. David Michaels, has testified that the agency's fine structure is not high enough or been increased by the Congress, to serve as a real deterrence or disincentive for employers to avoid violations.

A small business that has recently paid a penalty would certainly argue otherwise.

Wegmans Food Markets Inc. was cited this year for alleged repeat and serious violations of workplace safety standards at the company's corporate bakery and distribution center in Rochester, N.Y. The retail grocery chain faces a total of $195,200 in proposed fines. OSHA went beyond release press on "just the facts,"
 as it often does, by adding this commentary: "For the safety and health of its workers, Wegmans must take effective action to ensure that proper lockout/tagout safeguards are in place and in use at all of its locations."

In this current climate, a franchise operator should critically assess where hazards may exist in the workplace to address them before OSHA shows up. Many of the OSHA regulations hinge on an employer's initial responsibility to determine whether employees face an exposure and, then, on how to implement the various safeguards to eliminate or reduce the harm. Further, think about how well trained employees are on safety policies and practices. The more you train and focus on safety, the greater your chances of minimizing fines or avoiding them altogether.

Matt Deffebach is a partner with Haynes and Boone, Labor and Employment Practice Group.