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US employers using staffing company or other temporary workers face substantial liability for failing to properly manage safety and Occupational Health & Safety Act (OSHA) obligations owed with respect to temporary or other contract labor workers, as demonstrated by the $3.42 million in fines that the  U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) assessed against Ohio auto parts’ manufacturer, Sunfield, Inc. for safety risks that it exposed temporary workers to by its failure to disconnect machinery from a power supply and prevent sudden movement before maintenance and service, and to train workers in how to operate machine presses safely and to service and maintain them.

The fines assessed against Sunfield are one of the largest OSHA penalties ever filed against a company in the automotive parts industry.

Under OSHA, employers are responsible for providing safe and healthful workplaces for their employees. OSHA’s role is to ensure these conditions for America’s working men and women by setting and enforcing standards, and providing training, education and assistance.   OSHA’s regulations, temporary and host employers are both responsible for ensuring employees are trained about safety hazards in the facility where they are placed to work. 

According to OSHA’s June 29 announcement, OSHA’s investigators inspected Sunfield’s Hebron plant after two workers suffered severe injuries in separate incidents in January and February 2016. The facility has an extensive history of federal safety violations dating back 20 years. The company, which investigators found to have a high rate of employee turnover, supplies parts for several major Japanese and domestic automakers.

OSHA today issued citations for 46 egregious willful, two willful, one repeated and eight serious safety violations with penalties totaling $3,426,900 to Sunfield. The agency also placed the company in OSHA’s Severe Violator Enforcement Program for failure to address these safety hazards. Most of the violations involve lack of machine safety procedures which expose workers to amputation, lacerations and other injuries.

U.S. Secretary of Labor Thomas E. Perez in the announcement of the sanctions said, “OSHA’s investigation found the company’s leadership failed in its obligation to properly train workers for the jobs they were hired to do, and created a culture that routinely tolerated willful and serious safety violations.”

According to OSHA, it’s OSHA investigation found:

• On Jan. 6, 2016, a 22-year-old male temporary worker employed by the staffing agency, Employers Overload, suffered multiple lacerations and a fractured right elbow, while removing scrap from a blanking press after operating machine parts caught his arm because safety light curtains were not operating correctly. OSHA’s investigation found a supervisor had identified the safety issue two hours prior to the injury, and failed to place the equipment out of service. The injured worker had been on the job just six months.
• On Feb. 18, 2016, a full-time 58-year-old Sunfield employee had to undergo surgical amputation of his right arm above the elbow after his arm was crushed as he removed scrap on a robotic press line. Investigators again found that the machine’s danger zone did not have adequate safe guards to prevent employees from coming in contact with operating machine parts. He had been on the job for just a year.
• Prior to these inspections, Sunfield had an extensive history of OSHA violations. Since 1997, 16 of 20 inspections conducted found multiple violations. In total, the agency has issued 118 citations that have addressed numerous machine hazards similar to those cited today and resulted in 90 serious, eight willful and five repeated violations to the company, which has repeatedly assured OSHA that it would address the unsafe conditions.

“Sunfield made and broke countless promises to improve safety conditions and eliminate serious hazards on the factory floor. The company also ignored its own corporate safety manuals and its safety manager’s warnings that workers lacked the training to protect themselves. And still, the company risked the safety and well-being of its employees as they operated dangerous and powerful industrial machines,” said Dr. David Michaels, assistant secretary of labor of Occupational Safety and Health.

“Sunfield has shown a total disregard for its workers, the kind rarely seen since the darkest days of the past when callous industrialists ruled and put profits before human suffering and common decency,” Michaels added. “This has to stop. We hope that today’s action brings an end to these conditions and convinces this employer that their behavior is intolerable.”

OSHA found that the company did not take the necessary steps to protect its workers from being injured by moving machine parts. It did not prevent machines from unintentionally starting when workers were performing service and maintenance such as clearing scrap, and also failed to provide adequate safety mechanisms such as guards, locking devices and other procedures to prevent contact with those moving parts. These types of violations are among the most frequently cited by OSHA and often result in death or permanent disability.

The agency also found multiple electrical safety violations including lack of personal protective equipment, workers exposed to “live” electrical parts, and use of damaged equipment. 

Three agencies, Atrium Personnel and iforce of Heath, as well as Employers Overload of Newark have been cited by OSHA for failing to provide lockout/tagout training for affected employees and for failing to provide mechanical power press safe operation training prior to sending temporary employees to the site. Each company faces proposed penalties of $7,000.

The company has 15 business days from receipt of its citations and penalties to comply, request an informal conference with OSHA’s area director, or contest the findings before the independent Occupational Safety and Health Review Commission.   

While Sunfield ponders the appeal of its sanctions, other employers using temporary or other contract labor and those providing them should seize the opportunity to mitigate their own exposures to OSHA exposures for failure to manage safety responsibilities to its own temporary or other contract workers.  Management of these and other risks is made even more critical as a result if impending OSHA penalty increases slated to take effect August 1, 2016 when the Department of Labor’s “Federal Civil Penalties Inflation Adjustment Act Catch-Up Adjustments” increases for inflation the  DOL’s OSHA and other penalties.  Under these adjustments, OSHA’s maximum penalties, which have not been raised since 1990, will increase by 78 percent. The top penalty for serious violations will rise from $7,000 to $12,471. The maximum penalty for willful or repeated violations will increase from $70,000 to $124,709.

About The Author

Cynthia Marcotte Stamer is a noted Texas-based management lawyer and consultant, author, lecture and policy advocate, recognized for her nearly 30-years of cutting edge management work as among the “Top Rated Labor & Employment Lawyers in Texas” by LexisNexis® Martindale-Hubbell® and as among the “Best Lawyers In Dallas” for her work in the field of “Tax: Erisa & Employee Benefits” and “Health Care” by D Magazine.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, a Fellow in the American College of Employee Benefit Counsel, past Chair and current committee Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, a former ABA Joint Committee on Employee Benefits Council Representative and , Ms. Stamer helps management manage.

Ms. Stamer’s legal and management consulting work throughout her nearly 30-year career has focused on helping organizations and their management use the law and process to manage people, process, compliance, operations and risk. Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer helps public and private, domestic and international businesses, governments, and other organizations and their leaders manage their employees, vendors and suppliers, and other workforce members, customers and other’ performance, compliance, compensation and benefits, operations, risks and liabilities, as well as to prevent, stabilize and cleanup workforce and other legal and operational crises large and small that arise in the course of operations.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. She supports her clients both on a real time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.

Well known for her extensive work with health care, insurance and other highly regulated entities on corporate compliance, internal controls and risk management, her clients range from highly regulated entities like employers, contractors and their employee benefit plans, their sponsors, management, administrators, insurers, fiduciaries and advisors, technology and data service providers, health care, managed care and insurance, financial services, government contractors and government entities, as well as retail, manufacturing, construction, consulting and a host of other domestic and international businesses of all types and sizes. Common engagements include internal and external workforce hiring, management, training, performance management, compliance and administration, discipline and termination, and other aspects of workforce management including employment and outsourced services contracting and enforcement, sentencing guidelines and other compliance plan, policy and program development, administration, and defense, performance management, wage and hour and other compensation and benefits, reengineering and other change management, internal controls, compliance and risk management, communications and training, worker classification, tax and payroll, investigations, crisis preparedness and response, government relations, safety, government contracting and audits, litigation and other enforcement, and other concerns.

Ms. Stamer uses her deep and highly specialized health, insurance, labor and employment and other knowledge and experience to help employers and other employee benefit plan sponsors; health, pension and other employee benefit plans, their fiduciaries, administrators and service providers, insurers, and others design legally compliant, effective compensation, health and other welfare benefit and insurance, severance, pension and deferred compensation, private exchanges, cafeteria plan and other employee benefit, fringe benefit, salary and hourly compensation, bonus and other incentive compensation and related programs, products and arrangements. She is particularly recognized for her leading edge work, thought leadership and knowledgeable advice and representation on the design, documentation, administration, regulation and defense of a diverse range of self-insured and insured health and welfare benefit plans including private exchange and other health benefit choices, health care reimbursement and other “defined contribution” limited benefit, 24-hour and other occupational and non-occupational injury and accident, expat and medical tourism, onsite medical, wellness and other medical plans and insurance benefit programs as well as a diverse range of other qualified and nonqualified retirement and deferred compensation, severance and other employee benefits and compensation, insurance and savings plans, programs, products, services and activities. As a key element of this work, Ms. Stamer works closely with employer and other plan sponsors, insurance and financial services companies, plan fiduciaries, administrators, and vendors and others to design, administer and defend effective legally defensible employee benefits and compensation practices, programs, products and technology. She also continuously helps employers, insurers, administrative and other service providers, their officers, directors and others to manage fiduciary and other risks of sponsorship or involvement with these and other benefit and compensation arrangements and to defend and mitigate liability and other risks from benefit and liability claims including fiduciary, benefit and other claims, audits, and litigation brought by the Labor Department, IRS, HHS, participants and beneficiaries, service providers, and others. She also assists debtors, creditors, bankruptcy trustees and others assess, manage and resolve labor and employment, employee benefits and insurance, payroll and other compensation related concerns arising from reductions in force or other terminations, mergers, acquisitions, bankruptcies and other business transactions including extensive experience with multiple, high-profile large scale bankruptcies resulting in ERISA, tax, corporate and securities and other litigation or enforcement actions.

Ms. Stamer also is deeply involved in helping to influence the Affordable Care Act and other health care, pension, social security, workforce, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations. She both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally. A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas, Ms. Stamer annually leads the Joint Committee on Employee Benefits (JCEB) HHS Office of Civil Rights agency meeting and other JCEB agency meetings. She also works as a policy advisor and advocate to many business, professional and civic organizations.

Author of the thousands of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer also is a highly sought out speaker and industry thought leader known for empowering audiences and readers. Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, Modern Healthcare, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications. Ms. Stamer also regularly serves on the faculty and planning committees for symposia of LexisNexis, the American Bar Association, ALIABA, the Society of Employee Benefits Administrators, the American Law Institute, ISSA, HIMMs, and many other prominent educational and training organizations and conducts training and speaks on these and other management, compliance and public policy concerns.

Ms. Stamer also is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer serves on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and as an editorial advisor and contributing author of many other publications. Her leadership involvements with the American Bar Association (ABA) include year’s serving many years as a Joint Committee on Employee Benefits Council representative; ABA RPTE Section current Practice Management Vice Chair and Substantive Groups & Committees Committee Member, RPTE Employee Benefits & Other Compensation Committee Past Group Chair and Diversity Award Recipient, current Defined Contribution Plans Committee Co-Chair, and past Welfare Benefit Plans Committee Chair Co-Chair; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; current Vice Chair of the ABA TIPS Employee Benefit Committee; International Section Life Sciences Committee Policy Vice Chair; and a speaker, contributing author, comment chair and contributor to numerous Labor, Tax, RPTE, Health Law, TIPS, International and other Section publications, programs and task forces. Other selected service involvements of note include Vice President of the North Texas Healthcare Compliance Professionals Association; past EO Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former Southwest Benefits Association Board of Directors member, Continuing Education Chair and Treasurer; former Texas Association of Business BACPAC Committee Member, Executive Committee member, Regional Chair and Dallas Chapter Chair; former Society of Human Resources Region 4 Chair and Consultants Forum Board Member and Dallas HR Public Policy Committee Chair; former National Board Member and Dallas Chapter President of Web Network of Benefit Professionals; former Dallas Business League President and others. For additional information about Ms. Stamer, see CynthiaStamer.com or contact Ms. Stamer via email here or via telephone to (469) 767-8872.

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