Richard H. Glucksman, Glenn T. Barger, Jon A. Turigliatto and David A. Napper are featured in the special year-end edition of Construction Defect journal -
"The CA Supreme Court Grants Petition for Review of McMillin Albany LLC..." main page under #1 CDJ Topic: McMillin Albany LLC v Superior Court of California: Read Article
"A Homeowner's Subsequent Action is Barred as a Matter of Law by way of a Prior 'Right to Repair Act' Claim..." under #5 CDJ Topic: David Belasco v. Gary Loren Wells et al. (2015) B254525: Read Article
"Right to Repair Reform: Revisions and Proposals to State's 'Right to Repair Statutes'," is featured under #6 CDJ Topic: Construction Defect Legislative Developments: Read Article
Arthur J. Chapman and Lauren S. Kadish – Mr. Chapman and Ms. Kadish prevailed on a motion for summary judgment in a slander lawsuit filed against a prominent individual in the boxing industry. The Court found that the alleged statements were constitutionally protected statements of opinion, and not actionable as a matter of law. http://mynewsla.com/crime/2016/01/19/lawsuit-against-manny-pacquiaos-trainer-dismissed/
California Lawyer / Arbitration Update: An Overview of Recent California Appellate Decisions
A primer on the evolving case law governing the enforceability of arbitration clauses.
By: Richard Glucksman, Craig A. Roeb & Grace A. Nguyen
Arbitration is a common procedure for dispute resolution—specific clauses requiring arbitration frequently appear in both commercial and consumer contracts. Even so, lawyers continue to battle over when and how arbitration can be invoked. Those skirmishes have produced a flood of recent appellate decisions that has greatly transformed the availability and enforceability of arbitration.
During the last five years alone, several key cases have been handed down by the U.S. Supreme Court. Those decisions have centered on the Federal Arbitration Act (9 U.S.C. §§ 1-16) which governs transactions that involve interstate commerce—and in today’s world, that covers just about every transaction.
The Court has made abundantly clear that arbitration is a matter of agreement (Rent-A-Center West, Inc. v. Jackson, 130 S. Ct. 2772, 2776 (2010)), and that the FAA evinces a strong national policy in favor of arbitration where the parties have agreed to utilize it. Under the FAA, any state laws or policies that discriminate against arbitration are preempted. See ATT Mobility, LLC v. Conception, 131 S. Ct. 1740 (2011). Even where certain federal statutory rights are involved and the plaintiff prefers to proceed in court, the matter will be referred to arbitration if the parties have so agreed. This will occur in many cases despite a protest that arbitration is too expensive to resolve small claims. See Am. Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013)(antitrust case).
Arbitration can be invoked to resolve class actions too but the parties must specifically agree to do so. See Oxford Health Plans v. Sutter, 133 S. Ct. 2064 (2013); Stolt-Nielson S.A. v. AnimalFeedsInt’l Corp., 559 U.S. 662 (2010). The opposite proposition is also true: If parties have agreed to waive the arbitration of class claims and instead submit all individual claims to arbitration, the judiciary will respect that agreement and enforce it. ATT Mobility, 131 S. Ct. at 1750.
California’s arbitration policy, expressed in the California Arbitration Act (Cal. Code Civ. Proc. §§ 1281-1294.2) parallels the FAA. See Tiri v. Lucky Chances, Inc., 226 Cal. App. 4th 231 (2014). Even so, a number of recent California decisions offer an important gloss on this ubiquitous procedure, including the very recent California Supreme Court case of Sanchez v. Valencia Holding Company, 61 Cal. 4th 899 (2015).
In California, attorneys are tracking cases on a daily basis to see how the courts rule on a number of disputes concerning arbitration agreements. To assist in that effort, here is a brief discussion of recent California appellate decisions that discuss and interpret arbitration provisions.
Class Action Waivers
As noted above, the United States Supreme Court has expressly upheld the ability of parties to waive the arbitration of class actions. However, there are exceptions.
In a landmark decision by the California Supreme Court, mandatory class waivers were found to be generally enforceable with only one exception for claims brought under the Private Attorneys General Act (“PAGA”)(Cal. Lab. Code § 2698-299.5). In Iskanian v. CLS Transportation, 59 Cal. 4th 348 (2014), the plaintiff filed a class action complaint against his prior employer for overtime and meal and rest break violations. The plaintiff signed an arbitration agreement that contained a class action waiver. The defendant-employer moved to compel arbitration, which the trial court granted. However, shortly after the ruling, the California Supreme Court decided Gentry v. Superior Court, 42 Cal. 4th 443 (2007) and held that class action waivers in employment arbitration agreements were invalid under certain circumstances. The employer therefore withdrew its motion to compel arbitration and litigated the case.
The United States Supreme Court then decided Concepcion and in response, the employer renewed its motion to compel arbitration and dismiss the class claims. The employer claimed Concepcion invalidated Gentry. In Iskanian, the California Supreme Court agreed with that proposition, holding that Concepcion indeed had invalidated Gentry; the court also held the employer did not waive its right to arbitration by voluntarily withdrawing its motion to compel arbitration. However, the California Supreme Court also found that an employment agreement could not waive the employee’s right to bring a representative action under PAGA. Iskanian represents a partial win for employers, who can now be confident with arbitration agreements that have class action waivers, with the exception of PAGA claims. (With its PAGA ruling, Iskanian is also a partial win for employees, too.)
Most recently, in the Sanchez case (cited above), the state supreme court found class action waivers enforceable in a consumer automobile sales contracts. The court held that the anti-waiver provision of the California Legal Remedies Act (“CLRA”) (Cal. Civ. Code §§ 1750-1784) is preempted in the context of an arbitration agreement covered by the FAA. The court painstakingly analyzed the application of the contract defense of unconscionability, relying on Concepcion, which reaffirmed that the FAA does not preempt general contract defenses. Because the court refused to find an exception to Concepcion as it had in the past, this case signifies at least a partial alignment with the U.S. Supreme Court’s pro-arbitration policy.
Arbitration & Non-Signatories
As a general rule, a party cannot be compelled to arbitrate a dispute unless he or she agrees to do so. Recent decisions in courts of appeal have shown that under general contract principles, parties may not enforce arbitration against non-parties, including non-party agents who are covered by the arbitration agreement and third parties who are not beneficiaries.
In a case involving a signatory’s agents, a developer built and sold a home to actor Nicholas Cage, who subsequently sold the home to the plaintiff by way of an agreement that contained an arbitration clause. The plaintiff sued the developer for construction defects and also sued Cage, Cage’s business manager, and the contractor for failure to disclose the defects. Cage’s business manager and the contractor cross-complained for indemnity. Because the agreement only covered disputes between Cage and the plaintiff, not Cage and his agents, the court of appeal denied Cage’s motions to compel arbitration against the plaintiff and cross-defendants. See Lindemann v. Hume, 204 Cal. App. 4th 556 (2012).
Similarly, a party may not enforce an arbitration agreement against a third-party who is not a beneficiary of the agreement. For example, in Epitech, Inc. v. Kann 204 Cal. App. 4th 1365 (2012), a corporation contracted with Kann Capital, a financial advisor, to obtain financing to pay the corporation’s creditors—not to satisfy the corporation’s obligations to the creditors. The court of appeal denied Kann’s motion to compel arbitration against certain creditors because the creditors were not third-party beneficiaries of Kann’s agreement with the corporation.
Although parties generally may not enforce arbitration against non-signatory third parties, these non-signatories may be able to enforce arbitration against signatory parties in certain situations. A case in point is Thomas v. Westlake, 204 Cal. App. 4th 605 (2012), where the court found that where a party seeking to enforce arbitration is alleged in the complaint to be an agent of a signatory party, the alleged agent may seek to enforce arbitration against the signatory parties. Additionally, in Marenco v. DirecTV, LLC, 233 Cal. App. 4th 1409 (2015), the court of appeal found that DirecTV had standing to enforce an arbitration agreement as a successor in interest to the signatory when DirecTV acquired the signatory.
This exception, however, does not extend to claims that do not arise from the contract containing the arbitration provision. In DMS Services, Inc. v. Superior Court, 205 Cal. App. 4th 1346 (2012), DMS purchased workers’ compensation insurance policies from Zurich and contracted with Zurich Services Corp. (“ZSC”) to act as a third-party administrator of policy claims. Neither agreement had arbitration provisions; however, Zurich required DMS to sign annual deductible agreements containing arbitration agreements. Zurich initiated arbitration against DMS for premiums and reimbursements of deductibles and DMS filed an action against ZSC. Ultimately, the court of appeal found that DMS’ claims against ZSC were not founded in, or inextricably intertwined with, the deductible agreements containing the arbitration provisions.
In the employment context, courts have denied the enforcement of an arbitration agreement that was included in an employee handbook, but never specifically signed by the employee. See Gorlach v. Sports Club Co., 148 Cal. Rptr. 3d 71 (2009). In Gorlach, the court rejected arguments that the agreement was enforceable under theories of equitable estoppel or implied-in-fact agreement. It was not enough for the arbitration agreement to be placed in the handbook. The employee must sign the arbitration agreement for the provision to be enforceable.
These cases illustrate that, depending on the ultimate goal of each party, when drafting arbitration provisions, attorneys should ensure that the appropriate parties are (or are not) signatories to the agreement. However, efforts to exclude certain parties from the agreements may be ineffective as certain third-party beneficiaries or successors-in-interest may still be able to enforce them.
While the FAA clearly favors arbitration, it does not foreclose the application of general contract defenses defined by statute or common law so long as they can be, and are, equally applied in a non-discriminatory manner to both non-arbitration and arbitration contracts. One such general defense is the commonly invoked doctrine of unconscionability. To be successful with this approach, the arbitration agreement must be procedurally and substantively unconscionable in order to be declared unenforceable. See Armendariz v. Foundation Health Psyche Services, Inc., 24 Cal. 4th 83 (2000).
Most recently, in the Sanchez case (cited above), the California Supreme Court held that various formulations of the unconscionability doctrine (for example, “overly harsh” or “so one-sided as to ‘shock the conscience’”) represent the same standard. The court highlighted the significance of context when applying the unconscionability doctrine, stating that the “ultimate issue in every case is whether the terms of the contract are sufficiently unfair, in view of all relevant circumstances, that a court should withhold enforcement.” 61 Cal. 4th at 912.
The Sanchez court relied in part on Sonic-Calabasas A, Inc. v. Moreno, 57 Cal. 4th 1109 (2013), which affirmed the courts’ authority to strike down arbitration agreements based on the unconscionability doctrine. In Sanchez, the court analyzed several allegedly unconscionable provisions of the subject arbitration agreement, such as preservation of the rights to self-help remedies and clauses providing for the possibility of the car dealer seeking a second arbitration. The court ultimately reversed the lower court’s finding that the agreement was unconscionable as a matter of law, repeatedly rejecting findings that the provisions favored one party or another.
As with traditional contract cases where this defense is invoked, appellate courts applying the unconscionability doctrine to arbitration agreements have found agreements unconscionable in circumstances, for example, where the arbitration agreement was not sufficiently identified or highlighted or where the circumstances surrounding the execution of the contract were unfair and unreasonable. See, e.g., Sanchez v. CarMax Auto Superstores of California, LLC, 224 Cal. App. 4th 398 (2014); Securitas Security Services USA, Inc. v. Superior Court, 234 Cal.App.4th 1109 (2015). More recently, the court of appeal upheld the trial court’s decision to deny the employer’s request to compel arbitration in a wrongful termination action where the employee was presented with an arbitration agreement on a take-it-or-leave-it basis. The employee had no choice but to sign the agreement or lose her job offer and unemployment benefits. See Carlson v. Home Team Pest Defense, 239 Cal. App. 4th 619 (2015).
California attorneys should be vigilant and ensure that the arbitration provisions are not unconscionable, either procedurally or substantively. When advancing an argument as to an agreement’s unconscionability, attorneys can likely rely upon settled case law addressing unconscionability in other contract contexts. Most importantly, attorneys should be mindful that the question of unconscionability concerns whether or not the terms of the contract are, to quote Sanchez, supra, “sufficiently unfair, in view of all relevant circumstances.”
Enforceability by the Arbitrator
Parties to an arbitration agreement may agree to delegate to the arbitrator, instead of a court, questions regarding the enforceability of the agreement. See Freeman v. State Farm Mut. Auto. Ins. Co., 14 Cal. 3d 473, 480 (1975). “Because the parties are the masters of their collective fate, they can agree to arbitrate almost any dispute—even a dispute over whether the underlying dispute is subject to arbitration.” Bruni v. Didion, 160 Cal. App. 4th 1272, 1286 (2008).
If the parties require an effective delegation clause, they must make certain that the language of the clause is clear and unambiguous (see First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995)), and that the delegation is not revocable under state contract defenses. Delegation clauses are effective, absent a showing of unconscionability. Tiri v. Lucky Chances, Inc., 226 Cal. App. 4th 231 (2014); Malone v. Superior Court, 226 Cal. App. 4th 1551 (2014).
An interesting case in this area is Ajamian v. CantorCO2e, 203 Cal. App. 4th 771 (2012). The case involved an employment dispute. The employer appealed after the trial court denied a petition to compel arbitration. The employer argued that the arbitrator should have determined the issue of the enforceability of the arbitration clause because the clause itself required arbitration under American Arbitration Association (“AAA”) rules which vest the arbitrator with that authority. The court of appeal affirmed the trial court’s order denying arbitration. While the appellate court acknowledged that under AAA rules the arbitrator may decide enforceability, the employer did not provide clear and convincing evidence that the employee was aware of this provision since she was not provided with a copy of the AAA rules. The agreement did not make any specific reference to who should decide the “arbitrability” issue. (As a practice tip, any party making reference to particular rules in an arbitration agreement should provide those rules and obtain a written acknowledgment that they have been received, or at a minimum include the Internet address where a person who is asked to sign the agreement can access them; see Brinkley v. Monterey Fin. Servs., 2015 WL 7302268 (Cal. Ct. App.).)
More recently in Pinela v. Nieman Marcus Group, Inc., 238 Cal. App. 4th 227 (2015), the court of appeal found that an arbitration agreement between a Texas-based employer and a California-based employee was unconscionable because the agreement included a clause designating the application of Texas law. The plaintiff-employee had brought a class action in California claiming violations of California wage and hour laws. The employer moved to compel arbitration. The trial court denied the motion on the basis that the agreement was illusory. The employer appealed arguing that the agreement delegated the enforceability issue to the arbitrator and that the agreement was not illusory and was enforceable. The court of appeal upheld the trial court’s decision—but on the ground that the agreement was unconscionable. The court read both the choice of law provision and delegation clause together. The choice of law provision provided that Texas law governed. The delegation clause required all questions of enforceability to be determined by the arbitrator, however, the arbitrator was prohibited from altering the rights of the parties. As a whole, the court found that the two provisions did not allow the arbitrator to apply California law in determining unconscionability and therefore the agreement itself was unconscionable.
Danger of Conflicting Rulings
Under cases such as Sanchez and Concepcion, the FAA preempts state laws that do not favor the enforcement of arbitration agreements. However, parties should carefully consider the provisions included in each agreement because the terms of the parties’ agreement and the arbitration rules agreed upon by the parties are not preempted.
Accordingly, as California law favors arbitration, the FAA does not preempt the application of section 1281.2(c) of the California Code of Civil Procedure, which grants the court discretion to refuse to enforce arbitration where there is a possibility of conflicting rulings. California attorneys should be aware that trial courts have discretion to deny arbitration if all three conditions set forth in section 1281.2(c) are satisfied:
- a party to an arbitration agreement is a party to a pending action with a third party;
- the third party action must arise out of the same transaction or related transactions, and
- there must be a possibility of conflicting rulings.
It is crucial to note that each of these conditions must be satisfied in order to trigger the court’s discretion. See Acquire II, Ltd. v. Colton Real Estate Group, 213 Cal. App. 4th 959 (2013). If that is not the case, the court has no power under section 1281.2(c).
A good example of how this procedure works is Mastick v. TC Amerirade, Inc., 209 Cal. App. 4th 1258 (2012). In that case, the court refused to enforce arbitration agreements governed by California law if doing so would result in conflicting rulings with related litigation. The court denied an investment management company’s bid for arbitration in a professional negligence suit. See Mastick v. TC Amerirade, Inc., 209 Cal. App. 4th 1258 (2012).
The Mastick case is significant in another respect: The court of appeal noted that the parties could contractually agree that the FAA would not govern their arbitration, even if the contract involved interstate commerce.
When to Appeal
An order denying a motion to compel arbitration is appealable. However, an order granting such a motion is not appealable. See Reyes v. Macy’s, Inc., 202 Cal. App. 4th 1119 (2011).
Although review of an order compelling arbitration is generally not appealable until after a final judgment has been entered, in certain circumstances, immediate review may be appropriate. One such instance occurred in Garcia v. Superior Court, 236 Cal. App. 4th 1138 (2015), where a trial court order compelling arbitration was subject to immediate review because the judge failed to consider an FAA exception exempting the subject contracts. Therefore, despite the general rule, litigators should be conscious of various exceptions and provisions that may allow for appeal from such orders prior to the arbitrator’s final judgment.
There have been several legislative attempts to alter the landscape of arbitration in California. The most recent of those is AB 465 which would have outlawed mandatory arbitration as a condition of employment. That bill, however was vetoed by Governor Brown in October. The veto message contained a concise summary of the Governor’s position: “California courts have addressed the issue of unfairness by insisting that employment arbitration agreements must include numerous protections to be enforceable, including neutrality of the arbitrator, adequate discovery, no limitation on damages or remedies, a written decision that permits some judicial review, and limitations on the costs of arbitration. See, e.g., Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal. 4th 83 (2000). If abuses remain, they should be specified and solved by targeted legislation, not a blanket prohibition. In addition, a blanket ban on mandatory arbitration agreements is a far-reaching approach that has been consistently struck down in other states as violating the Federal Arbitration Act.”
As these cases demonstrate, California public policy favors arbitration in support of the FAA’s liberal pro-arbitration policy. To that end, courts in this state have narrowly construed statutory exceptions to deny arbitration, leading to greater enforcement of clauses requiring this widespread ADR procedure. Courts apply this public policy so broadly that not only are arbitration agreements between parties and their beneficiaries and agents enforceable, but such agreements may also be enforced on occasion by non-signatories. Given this state of the legal landscape, attorneys should be mindful of how an arbitration agreement may affect or even determine the course of a matter headed for litigation.
- See original publication at California Lawyer
Richard H. Glucksman and Craig A. Roeb are shareholders and Grace A. Nguyen is senior counsel with Chapman, Glucksman, Dean, Roeb and Barger in Los Angeles. They represent clients—individuals, publicly traded companies, joint ventures, and private entities—in business, commercial, construction, employment, product liability, and transportation litigation.
Chapman, Glucksman, Dean, Roeb & Barger has become a multi-faceted law firm with offices in Los Angeles, Orange County, Sacramento and the Bay Area. Our AV rated firm has diverse practice groups consist of highly skilled, insightful, responsive and pragmatic lawyers who vigorously advocate our client's interests, and secure economical, result-oriented and creative solutions to complex issues.
OSHA INSPECTIONS: What To Expect And How To Prepare
In 2014, 4,679 individuals were killed while working in the United States – an equivalent of 3.3 fatalities per 100,000 full-time workers and more than 13 deaths per day.1 Obviously, workplace safety is a major concern. To ensure safe and healthful working conditions, in 2014, there were 36,163 federal the Occupational Safety and Health Administration (“OSHA”) inspections and 47,217 State Plan OSHA inspections.2
In order to assure that the OSHA standards are complied with, on-site employer inspections are conducted by Compliance Safety and Health Officers (“CSHO”) and, except in limited circumstances, the employer has no advance notice of the inspection.3 Inspections target imminent danger, catastrophes and fatalities, worker complaints and referrals, severe violators, and high injury or illness rates.4
This bulletin will provide an overview of the inspection process and highlight some employer strategies and procedures to implement before, during, and after the inspection.
I. When does OSHA conduct inspections
As a preliminary matter, is important to understand when OSHA conducts an inspection. Inspections can be random, because of an employee complaint, or sparked by special emphasis programs. In fiscal year 2014, OSHA conducted 36,163 federal inspections, of which 9,570 related to employee complaints.5 It is therefore critical that employers have an internal mechanism for managing employee complaints, as this would encourage employees to handle the matter internally, rather than by filing an OSHA complaint. Furthermore, employers should stay abreast of national and local special emphasis programs that may apply to them as this increases the likelihood of inspection. For example, nationally, OSHA has several special emphasis programs focusing on, federal agencies and hazardous machinery.6 In California, featured safety programs including those focusing on longshoring activity and retail facilities.
II. Pre-inspection precautions and strategies
a. Establish employee responsibilities
In order to facilitate an efficient and minimally invasive inspection, employers must ensure that employees are aware of their roles and responsibilities should a CSHO arrive for an inspection. Best practices provide that the employer establish an “inspection team” comprised of individuals with distinct responsibilities during the inspection. At a minimum, management should identify who is responsible for meeting with the CSHO, who will be the primary contact person for the CSHO, and who will be present during the inspection. Because the employer has the right to mimic any tests performed by the CSHO, the employer should designate an individual responsible for doing so. Further, it is helpful if the employer also designate a member of maintenance or the facilities department for OSHA inspections. Should the individual identify any easily remedied violation during the walkthrough, he/she would be able to abate the violation during the course of the inspection, thereby lessening the chance of a citation.
b. Identify an individual responsible for maintaining potentially relevant records
The employer should also ensure that someone is designated with the task of maintaining certain records that are of critical importance during an OSHA inspection, including: training records, OSHA logs, internal audit documents, and third party audit documents.
On a related note, it is important that the employer stay current on the OSHA recordkeeping and reporting requirements.8 As of January 1, 2015, all employers are subject to certain reporting requirements, even those exempt from OSHA recordkeeping requirements. As of January 1, 2015, OSHA has revised its recordkeeping regulations to partially exempt new industries.9
Furthermore, training records can be essential evidence when the employer seeks to establish an affirmative defense based on unpreventable employee misconduct, discussed later. If the employer has performed internal safety audits or has had a third-party safety audit performed, it is imperative that the employer address and abate any safety issues identified. In practice, it is nearly guaranteed that the CSHO will request these documents during the course of the inspection and track abatements. Where applicable, any invoices or documentations related to the abatements should be retained by the employer. If the inspection reveals that an internal or third-party audit identified a safety violation that was not abated, the employer can be subject to penalties for a willful violation.
III. During the inspection
Throughout the course of the inspection, remember: it is your facility and you have rights concerning the inspection process. The CSHO must conduct the inspection in a manner that is not unreasonably disruptive. In general, the inspection will begin with an Opening Conference, which is followed by a walkthrough, interviews, and a Closing Conference.
a. Opening Conference 11
At this point, the CSHO will explain the scope and purpose of the inspection. The CSHO will likely request documentation from the employer. Note that the OSHA standards set forth the records the employer is required to provide.12 Therefore, it is sometimes important that management consult with the company’s OSHA counsel before providing documents to the CSHO, in order to avoid inadvertently disclosing more information than necessary. The Opening Conference is an opportunity for the employer to notify the CSHO of any trade secret issues and for the officer to gain an understanding of the employer’s operation and safety standards. While this should be an open dialogue, it is important that the employer does not reveal more information than necessary thereby avoiding the possibility that the CSHO is provided with information that can be used against the employer.
The facilities walkthrough can take anywhere from a couple of hours to a couple of months depending on the size and complexities of the facility and safety standards. As previously noted, the employer has the right to accompany the inspector.13 In this, if the inspectors intend to take photographs or hire experts for testing, the employer has the right to do the same. If there are any discrepancies noted between the results of the CSHO expert or employer expert, the discrepancies should be immediately documented and addressed. If the employer requires that employees complete certain training programs prior to being allowed access to the facilities, then the employer has the right to require that the CSHO complete the training as well. Furthermore, if the facility safety standards restrict the use of photography or the introduction of chemicals necessary for expert testing, then the CSHO is precluded from violating these standards.14 For example, the facility may restrict flash photography as there would be an adverse chemical reaction in the plant; if this is the case, the CSHO may not violate this safety standard and is precluded from photographing the area.
Even more, the employer has the right to protect their trade secrets.15 Since the OSHA reports are discoverable to the general public, the employer has certain rights concerning their trade secrets that they should be aware of so that they can protect their trade secrets during the inspection.
c. Interviews 16
The inspection process will oftentimes include employee interviews. In order to ensure minimal business and productivity interruption, the employer should schedule these interviews away from the production floor. These inspections are conducted in private, however, the employee may request a union representative be in attendance. Further, the CSHO will typically seek to document the discussion through an Interview Statement that is signed by the interviewee. The employee/interviewee should carefully review the statement before signing.
d. Closing Conference 17
At this conference, the CSHO will explain violations noted during the walkthrough inspection. Although it might be tempting for employers to explain or discuss the violations with CSHO, employers should be careful not to inadvertently provide the CSHO with information that can be used against them by either proposing an unreasonable abatement date or admitting to a violation. This conference can be an important opportunity for the employer to gain free discovery and insight into the CSHO’s findings.
e. Citations and Options
No later than six months after the inspection, a citation may be issued against the employer.18 This citation must describe the violation “with particularity.” 19 Upon receipt of the citation, the employer must post the citation at or near the place of violation for three days or until it is abated, whichever is later.20 The citation will prescribe an abatement deadline; however, if the employer is unable to comply with the deadline, OSHA readily grants extensions.
The citation will indicate a proposed penalty that the employer may accept and pay in full, attempt to informally settle, or file a notice of contest. Of note, the timeframe for filing a notice of contest can vary by state.
f. Common defenses to OSHA citations
i. Lack of Employer Knowledge
In order to establish a violation, OSHA must prove by a preponderance of the evidence that:
- The cited standard applies;
- The employer failed to comply with the standard;
- The employees had access or exposure to the violative condition; and
- Employer had knowledge of the violative condition. 21
The final factor is often decisive. OSHA must prove by a preponderance of the evidence that either: 1) the employer had actual, direct knowledge of the condition; or 2) the employer should have known about the condition through the exercise of reasonable diligence.22 Note that where a supervisor has knowledge of a violation, the knowledge is imputed on the employers to prove a prima facie case.23 Hence, it is imperative that employers train supervisors to conduct review of safety conditions and to report unsafe conditions.
ii. Unpreventable Employee Misconduct
The employer may also raise the “unpreventable employee misconduct” defense.24 Generally, to establish this defense, the employer must prove:
- The employer has safety rules designed to prevent the violation;
- The employer has adequately communicated the safety rules and standards to employees;
- The employer has provided any necessary safety training;
- The employer has taken steps to discover violations of the safety rules and standards; and
- The employer has enforced the rules and standards when violations have been discovered. 25
From a practical standpoint, it is incredibly important that the employer maintains documentation of the above. As described previously, the retention of certain records can be critical in an OSHA inspection. Safety training records, documentation of any abatements of violations identified in internal or third-party audits, and other documents may be helpful in instances where an employer seeks to establish this defense.
Although an OSHA inspection can be a stressful and nerve-wracking experience for any employer, proper preparation can help alleviate the stress and uncertainly of the experience. Employers should ensure that all employees are familiar with the employer’s procedures for OSHA inspections in order to make certain that the inspection process, from beginning to end, is as streamlined and minimally invasive as possible. With proper procedures in place, the employer can ensure that the employer is prepared to comply with the OSHA inspection requirements, while still exercising its rights (through things such as side-by-side testing and protection of trade secrets).
3 29 C.F.R. § 1903.6
10 29 C.F.R. § 1903.7(d)
11 OSHA Instruction, Field Operations Manual, 3(V) Opening Conference (available: https://www.osha.gov/OshDoc/Directive_pdf/CPL_02-00-159.pdf)
12 29 U.S.C. § 657(c)
13 29 U.S.C. § 657(e)
14 29 C.F.R. § 1903.7(c)
15 29 U.S.C. § 664; 29 C.F.R. § 1903.9
16 OSHA Instruction, Field Operations Manual, 3(VII) Walkaround Inspections (available: https://www.osha.gov/OshDoc/Directive_pdf/CPL_02-00-159.pdf)
17 OSHA Instruction, Field Operations Manual, 3(VIII) Closing Conference (available: https://www.osha.gov/OshDoc/Directive_pdf/CPL_02-00-159.pdf)
18 29 U.S.C. § 658(c); 29 C.F.R. § 1903.14(a)
19 29 U.S.C. § 658(a); 29 C.F.R. § 1903.14(b)
20 29 U.S.C. § 658(b); 29 C.F.R. § 1903.16(b)
21 http://www.oshalawupdate.com/2012/10/24/osha-faq-series-faq-2-unpreventable-employee-misconduct-defense/; New York State Elec. & Gas Corp. v. Secretary of Labor (2d Cir. 1996) 88 F.3d 98, 105
22 Id.; Tampa Shipyards Inc. (O.S.H.R.C. Mar. 10, 1992) 15 O.S.H. Cas. (BNA) ¶ 1533
23 Tampa Shipyards Inc. (O.S.H.R.C. Mar. 10, 1992) 15 O.S.H. Cas. (BNA) ¶ 1533
24 29 C.F.R. § 2200.34
25 P. Gioioso & Sons, Inc. v. Occupational Safety and Health Review Com'n (1st Cir. 1997) 115 F.3d 100, 109; Cbi Services, Inc. (O.S.H.R.C. Oct. 29, 2001) 19 O.S.H. Cas. (BNA) ¶ 1591; Burford's Tree, Inc (O.S.H.R.C. Jan. 8, 2010) 22 O.S.H. Cas. (BNA) ¶ 1948; Psp Monotech Indus. (O.S.H.R.C. Aug. 14, 2008) 22 O.S.H. Cas. (BNA) ¶ 1303; see also OSHA Instruction, Field Operations Manual, 5(VI) Affirmative Defenses (available: https://www.osha.gov/OshDoc/Directive_pdf/CPL_02-00-159.pdf)
Chapman, Glucksman, Dean, Roeb & Barger has become a multi-faceted law firm with offices in Los Angeles, Orange County, Sacramento and the Bay Area. Our AV rated firm has diverse practice groups consist of highly skilled, insightful, responsive and pragmatic lawyers who vigorously advocate our client's interests, and secure economical, result-oriented and creative solutions to complex issues.
Glenn T. Barger -
Speaker ADR Mediation/Getting the Job Done – Interactive Workshop, November 18, 2015
Glenn T. Barger and Brian D. Kahn- Co-chairing the ASCDC/CDCMA CD Seminar, December 3, 2015
Glenn T. Barger -
Mr. Barger has recently been appointed President Elect of Association of Southern California Defense Counsel
Greg K. Sabo and Grace A. Nguyen were sucessful in having a MSJ granted in favor of an ER doctor in a medical malpractice case involving large potential damages, complex medical and legal issues.
Lauren S. Kadish has been selected as Co-chair of the ASCDC Young Lawyers Committee 2015.
Ashley H. Verdon has been selected 2015 Super Lawyers Southern California Rising Star.
Thomas L. Halliwell - Speaker, West Coast Casualty Seminar, May 14-15, 2015, Disneyland Hotel. Mr. Halliwell will be speaking on Recent Important Appellate Decisions in California, Nevada and Arizona.
Grace A. Nguyen - Ms. Nguyen was recently appointed President of the Loyola Law School Alumni Board of Governors.
Grace A. Nguyen - Speaker, SCALL on February 27-28, 2015. Ms. Nguyen will be speaking on Social Media and Litigation at the Thriving in the Nework Economy Conference.
Glenn T. Barger and Heather M. Patrick -
CGDRB instrumental in 3-month trial wherein a defense verdict was reached against Fred Adelman, an attorney known for his plaintiffs' work in the construction defect arena, including negligence, SB 800 and fraud causes of action.
Brian D. Kahn and John T. Brazier -
Speakers 2014 Construction Defect Seminar, December 11, 2014 at Hilton, Costa Mesa.
Brian D. Kahn - CGDRB congratulates and welcomes Brian D. Kahn to the partnership.
Ms. Dubow will be presenting an ALI-CLE Seminar on Disability Law February 4, 2015, at 2:00 pm PST, offered through the American Legal Institute Continuing Legal Education.
Mr. Mehta has been selected 2015 Super Lawyers Southern California Rising Star.
Ms. Perkins was recently appointed Board Member to the Friends of the Sacramento Crisis Nurseries. Friends of the Crisis Nurseries is an auxiliary fundraising and public awareness group of the Sacramento Children's Home.
Mr. Barger has been added to the LACBA Litigation Executive Committee.
Richard H. Glucksman – Webinar ALI CLE - Building Green & LEED Certified: Negotiation, Drafting and Execution Strategies
Tuesday, July 28, 2015 | 12:00 — 1:30 p.m. Eastern
Telephone Seminar | Audio Webcast
20th Annual MC Consultants Western Region Construction Litigation And Insurance Coverage Conference, September 17-19, 2014. Mr. Kahn will be moderating the panel “An Overview: Public Works Arbitrations – Across The Western United States”.
Actuary Leadership Forum, Center for Insurance Studies at California State University Fullerton. Mr. Glucksman will be speaking on Construction Casualty Losses.
Link to Article
March 16, 2016 - Erwin D. Chemerinsky, Dean, UC Irvine School of Law
Dean Chemerinsky is the founding Dean of UC Irvine School of Law and a preeminent constitutional scholar. Dean Chemerinsky will be speaking on recent US Supreme Court decisions that affect the Firm’s practice, as well as individuals and businesses.
TBA - Paul T. Hayden, Interim Dean of Loyola Law School, Thomas V. Girardi Professor of Consumer Protection Law.
Paul T. Hayden has been a member of the Loyola Law School faculty since 1995, concentrating his teaching and writing on tort law and legal ethics. After law school he clerked for the Honorable Dorothy W. Nelson of the United States Court of Appeals for the Ninth Circuit, and for the Honorable J. Spencer Letts of the United States District Court for the Central District of California. He is an elected member of the American Law Institute and a member of the American Bar Association’s Center for Professional Responsibility.
October 29, 2015 - Senator Ben Allen, 26th Senate District
Senator Ben Allen, 26th Senate District which consists of the Westside and coastal South Bay communities. Senator Allen serves as chair of the Senate Elections and Constitutional Amendments Committee as well as the legislature's Joint Committee on the Arts. He is a member of the Senate Budget and Fiscal Review Committee, the Budget Subcommittee on Education, the Natural Resources and Water Committee, the Transportation and Housing Committee, and the Veterans Affairs Committee. He was born in raised in Santa Monica and previously worked for Richardson & Patel and Bryan Cave.
October 8, 2014 - Jim McDonnell, Los Angeles County Sheriff-Elect
Jim McDonnell Los Angeles County Sheriff-Elect and fomer Chief of Police for the Long Beach Police Department. Sheriff McDonnell served with the Los Angeles Police Department for 29 years and held every rank in the department up to Chief of Staff, second-in-command of the LAPD. He has received numerous community and department awards, including the LAPD’s highest award for bravery, the Medal of Valor.
July 23, 2014 - Matthew Dababneh, California State Assembly, 45th District
Mr. Dababneh serves on the Budget, Rules, Insurance and Governmental Organization, as well as the Budget Subcommittee on Education Finance. Mr. Dababneh previously served as the Chief of Staff for former Congressman Brad Sherman.
March 18, 2014 - Hon. Henry A. Waxman, 33rd Congressional District
Hon. Waxman is the U.S. Representative for California’s 33rd Congressional District and has been serving in Congress since 1975. He is considered to be one of the most influential members of Congress.
January 22, 2014 - Hon. Michael P. Vicencia, Assistant Supervising Judge of the Los Angeles Superior Court, Southeast District (Long Beach)
Assistant Supervising Judge of the Long Beach Superior Court. Hon. Vicencia was involved in overseeing the construction of the new Long Beach Courthouse, which was accomplished with virtually no public funds.
January 8, 2014 - Jerry Braun, Esq., Officer of The Other Bar, Substance Abuse Expert
The Other Bar is a supporting organization to assist the legal profession in recovery from substance abuse.
October 24, 2013 - Hon. Jackie Lacey, Los Angeles County District Attorney
Hon. Jackie Lacey was sworn in on December 3, 2012 as the 42nd District Attorney of Los Angeles County. She is the first woman and first African-American to serve as LA County’s District Attorney.
April 9, 2013 - Patrick Kelly, Esq., President of State Bar of California
Mr. Kelly is the president of the State Bar of California – the largest state bar in the United States. He took over as the 88th president of the State Bar of California in October 2012. He is a veteran trial lawyer and western regional manager of Wilson Elser.
January 24, 2013 - Justice Victory Chaney, California Court of Appeal, 2nd Appellate District
Justice Chaney is a justice on the Second District, Division Two California Court of Appeal. She worked at the Los Angeles City Attorney's Office for 11 years before her judicial appointment in 1990. She was first appointed to the Los Angeles Municipal Court. In 1994, she was promoted to the Superior Court where she presided until her appointment to the appellate court in 2009
November 1, 2011 - Robert Grace, Esq., Assistant Deputy District Attorney – Major Crimes Unit
Robert “Bobby” Grace is a Deputy District Attorney for Los Angeles County working in the Major Crimes Unit. He jointed the DA’s office in 1988 and has successfully prosecuted over 60 homicide cases, including some of LA’s most heinous and famous, including Chester Turner and the Black Widow Killers.
October 4, 2011 - Hon. Deanell Reece Tacha, Dean, Pepperdine University School of Law and former Judge of the United States Court of Appeal, 10th Circuit
Hon. Tacha was appointed by President Reagan to the U.S. Court of Appeals for the 10th Circuit where she served as a circuit judge from 1986-2011. She served as Chief Judge from January 2001 through 2007. She was appointed Dean of the Pepperdine University School of Law in 2011.
December 2, 2010 - Justice Lee Smalley Edmon, California Court of Appeal, 2nd District and Former Presiding Judge of the Los Angeles Superior Court
Justice Edmon is the presiding justice of Division Three for the 2nd District Court of Appeal. Justice Edmon previously served as a judge of the Los Angeles Superior Court and served as the Los Angeles Superior Court’s first female presiding judge from 2011 to 2012.
November 11, 2010 - Victor Gold, Dean, Loyola Law School of Los Angeles
Victor Gold was named 16th Dean of Loyola Law School and Senior Vice President of Loyola Marymount University in January 2009 after spending a year as interim dean. He has earned myriad accolades as a legal educator and scholar since he started teaching at Loyola in 1984.
Richard H. Glucksman, Glenn T. Barger, Jon A. Turigliatto and David A. Napper are featured in the special year-end edition…read more →
Arthur J. Chapman and Lauren S. Kadish – Mr. Chapman and Ms. Kadish prevailed on a motion for summary judgment in a…read more →
OSHA INSPECTIONS: What To Expect And How To Prepare In 2014, 4,679 individuals were killed while working in the United States…read more →
Extra Extra By: Richard Glucksman, Esq., Jon A. Turigliatto, Esq. & David A. Napper, Esq. ALL CLAIMS FOR CONSTRUCTION DEFECTS IN RESIDENTIAL…read more →
Richard H. Glucksman – Webinar ALI CLE - Building Green & LEED Certified: Negotiation, Drafting and Execution Strategies Tuesday, July…read more →
Ms. Dubow will be presenting a Webinar with ALI CLE on Employers Beware: Social Media Liability and Proactive Preventive Measures,…read more →
20th Annual MC Consultants Western Region Construction Litigation And Insurance Coverage Conference, September 17-19, 2014. Mr. Kahn will be moderating…read more →