OSHA reg did not allow ‘cookie cutter’ approach to assessing hazards at multiple Walmart locations
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Monday, April 11, 2016

OSHA reg did not allow ‘cookie cutter’ approach to assessing hazards at multiple Walmart locations

By Lorene D. Park, J.D. The Fifth Circuit found reasonable the OSH Review Commission’s conclusion that Wal-Mart could not use its hazard assessment at one distribution center for other allegedly identical centers. Even if the centers had identical designs, working conditions could change due to lack of maintenance, new equipment, change in personnel, or other factors. However, the appeals court vacated the citation and penalty against Wal-Mart because, given the new interpretation of an ambiguous regulation, the company did not have adequate notice of its noncompliance (Wal-Mart Distribution Center #6016 v. Occupational Safety and Health Review Commission, April 6, 2016, Haynes, C.). Hazard assessments required. In 2006, Wal-Mart performed a hazard assessment of one of its 120 distribution centers, which was located in Searcy, Arkansas. The assessment was required by 29 C.F.R. §1910.132(d)(1), which states that an “employer shall assess the workplace to determine if hazards are present, or are likely to be present, which necessitate the use of personal protective equipment (PPE).” In January 2008, OSHA audited the Searcy distribution center as part of Wal-Mart’s application to enter that location into the voluntary protection program (VPP). During the audit, Wal-Mart informed OSHA that the hazard assessment would be applied to its other distribution centers. “Cookie cutter” approach rejected. In February, OSHA inspected a distribution center in New Braunfels, Texas and in August, Wal-Mart was cited for failing to conduct a hazard assessment for that location. An administrative law judge (ALJ) affirmed the violation and $1,700 penalty, finding that the Secretary of Labor reasonably interpreted the regulation to require individual hazard assessment of the New Braunfels center despite its similarities to the Searcy center. The ALJ rejected Wal-Mart’s argument that its “cookie cutter” approach to constructing and operating distribution centers removed any need to conduct an individual hazard assessment of the New Braunfels center, because this approach failed to confirm the uniformity of workplace conditions. In a 2-1 decision, the Occupational Safety and Health Review Commission affirmed based on Wal-Mart’s failure to personally observe that conditions at the New Braunfels center were identical to those in Searcy. Regulation ambiguous. On appeal, the Fifth Circuit found Section 1910.132(d)(1) unclear as to whether “assess the workplace” meant that Wal-Mart had to individually assess each distribution center or whether it could use a single hazard assessment for all distribution centers allegedly identical in layout and operations. The preamble was little help—it referred to a “particular” workplace, suggesting individual assessment, but also gave employers discretion, stating that the “employer is accountable . . . for the quality of the hazard assessment.” The appendix shed some light, stating that an employer assessing for PPE should do a “walk-through survey of the areas in question” and should “observe” for potential hazards. This seemed to envision individual observation. However, the appendix was explicitly designated as non-mandatory. Concluding that the regulation, preamble, and non-mandatory appendix failed to resolve the ambiguity as to whether Wal-Mart could use its Searcy hazard assessment for the allegedly identical New Braunfels location, the appeals court afforded substantial deference to the agency’s interpretation and found the Secretary’s interpretation, as confirmed by the Commission, to be “consistent with the regulatory language” and otherwise reasonable. Employer must at least confirm workplace is identical. As noted by the Secretary, even if distribution centers have identical designs, working conditions can change due to lack of maintenance, new equipment, change in personnel and adjustments to work processes. Thus, “while §1910.132(d)(1) may not require an employer to conduct a full-fledged hazard assessment of all identical workplaces, it is reasonable to interpret §1910.132(d)(1) to require an employer to confirm that workplaces are indeed identical before a hazard assessment for one workplace can qualify as the hazard assessment for another location.” Wal-Mart did not receive adequate notice. Although the Fifth Circuit agreed with the Commission’s conclusion, it vacated the citation and penalty because Wal-Mart did not receive adequate notice of its noncompliance. The appeals court explained that the Labor Secretary may issue citations as a means of interpreting an OSHA regulation, but if a citation is the “initial means” for announcing an interpretation, due process concerns are raised. Given that the regulation was unclear, that Wal-Mart notified OSHA during the Searcy audit that it was using that hazard assessment for its other distribution centers, and that the Searcy location achieved VPP status, Wal-Mart had a fair expectation that OSHA found its procedures satisfactory. Thus, at the time it was cited, it would not have known its practices violated Section 1910.132(d)(1).

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