[Senate Hearing 109-133]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-133

    OSHA AND SMALL BUSINESS: IMPROVING THE RELATIONSHIP FOR WORKERS

=======================================================================

                                HEARING

                               BEFORE THE

            SUBCOMMITTEE ON EMPLOYMENT AND WORKPLACE SAFETY

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                                   ON



   EXAMINING WAYS TO IMPROVE THE RELATIONSHIP BETWEEN OSHA AND SMALL 
BUSINESS, FOCUSING ON OSHA RULES AND REGULATIONS TO PROTECT THE HEALTH 
                 AND SAFETY OF SMALL BUSINESS EMPLOYEES

                               __________

                              MAY 10, 2005

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions

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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                   MICHAEL B. ENZI, Wyoming, Chairman

JUDD GREGG, New Hampshire            EDWARD M. KENNEDY, Massachusetts
BILL FRIST, Tennessee                CHRISTOPHER J. DODD, Connecticut
LAMAR ALEXANDER, Tennessee           TOM HARKIN, Iowa
RICHARD BURR, North Carolina         BARBARA A. MIKULSKI, Maryland
JOHNNY ISAKSON, Georgia              JAMES M. JEFFORDS (I), Vermont
MIKE DeWINE, Ohio                    JEFF BINGAMAN, New Mexico
JOHN ENSIGN, Nevada                  PATTY MURRAY, Washington
ORRIN G. HATCH, Utah                 JACK REED, Rhode Island
JEFF SESSIONS, Alabama               HILLARY RODHAM CLINTON, New York
PAT ROBERTS, Kansas

               Katherine Brunett McGuire, Staff Director

      J. Michael Myers, Minority Staff Director and Chief Counsel

                                 ______

            Subcommittee on Employment and Workplace Safety

                    JOHNNY ISAKSON, Georgia Chairman

LAMAR ALEXANDER, Tennessee           PATTY MURRAY, Washington
RICHARD BURR, North Carolina         CHRISTOPHER J. DODD, Connecticut
JOHN ENSIGN, Nevada                  TOM HARKIN, Iowa
PAT ROBERTS, Kansas                  BARBARA A. MIKULSKI, Maryland
MICHAEL B. ENZI, Wyoming (ex         JAMES M. JEFFORDS (I), Vermont
officio)                             EDWARD M. KENNEDY, Massachusetts 
                                     (ex officio)

                       Glee Smith, Staff Director

                William Kamela, Minority Staff Director

                                  (ii)






                            C O N T E N T S

                               __________

                               STATEMENTS

                         TUESDAY, MAY 10, 2005

                                                                   Page
Isakson, Hon. Johnny, Chairman, Subcommittee on Employment and 
  Workplace Safety, opening statement............................     1
Enzi, Hon. Michael B., Chairman, Committee on Health, Education, 
  Labor, and Pensions, opening statement.........................     3
Murray, Hon. Patty, a U.S. Senator from the State of Washington, 
  opening statement..............................................     4
Norwood, Hon. Charles, a U.S. Congressman from the State of 
  Georgia, opening statement.....................................     7
Dodd, Jerrold, General Manager, Dayton United Metal Spinners, 
  Dayton, OH; Roy Swindall, Masonry Arts, Bessemer, AL; Arthur 
  Sapper, OSHA Practice Group, McDermott, Will and Emery, 
  Washington, D.C.; and Lynn Rhinehart, Associate General 
  Counsel, AFL-CIO...............................................    11
    Prepared statement of:
        Jerrold Dodd.............................................    14
        Roy Swindall.............................................    18
        Arthur Sapper............................................    22
        Lynn Rhinehart...........................................    32

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    Questions of Senator Enzi to Mr. Sapper......................     4
    Tom Howley, Academy of General Dentistry (AGD)...............    45

                                 (iii)

  

 
    OSHA AND SMALL BUSINESS: IMPROVING THE RELATIONSHIP FOR WORKERS

                              ----------                              


                         TUESDAY, MAY 10, 2005

                                       U.S. Senate,
Subcommittee on Employment and Workplace Safety, Committee 
                 on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:08 p.m., in 
room SD-430, Dirksen Senate Office Building, Senator Johnny 
Isakson (chairman of the subcommittee) presiding.
    Present: Senators Isakson, Enzi, and Murray.
    Senator Isakson. The committee will come to order.
    Ranking Member Murray is on the way and, in the interest of 
your time, we will make our opening statements as chairman, 
subcommittee chairman and full committee chairman. And as soon 
as Ms. Murray comes we will recognize her for her opening 
statement. I will begin.

                  Opening Statement of Senator Isakson

    Senator Isakson. I wish everybody a good afternoon. I would 
like to welcome everyone to the first hearing of the 
Subcommittee on Employment and Workplace Safety. I look forward 
to working with Senator Murray, Chairman Enzi, ranking member 
Kennedy on all the important issues under our jurisdiction.
    Today specifically, we are looking at the Occupational 
Safety and Health Administration and its relationship with 
small businesses. I want to welcome Representative Congressman 
Charlie Norwood from the State of Georgia, my home State, and a 
gentleman with whom I served in the United States House of 
Representatives on the same committee dealing with this issue. 
I appreciate his leadership that he has provided and we will 
hear from him shortly.
    Having run a business for 22 years before coming to the 
Congress of the United States, I am familiar with a myriad of 
government regulations that small businesses, unquestionably 
the biggest employer of economic growth in this country, face 
daily.
    Among those regulatory burdens are those imposed by OSHA. 
Fortunately for small businesses and their employees, Secretary 
Elaine Chao has consistently adopted an effective proactive 
approach to workplace safety emphasizing compliance, assistance 
and cooperative approaches to small employers in addition to 
strong, fair and effective enforcement. This approach has 
indisputably produced results as both the rates of workplace 
fatalities, four deaths per 100,000 workers, and the injury and 
illness rate, five per 100,000 workers, are the lowest level in 
OSHA's 32 year history.
    In light of these successes, we in Congress must continue 
to work with OSHA and small employers to find ways for them to 
cooperate to keep the workplace safe.
    To this effect I anticipate hearing from Mr. Swindal who 
will discuss his thoughts on how workplace safety can be 
improved through voluntary cross-training and education, 
especially if OSHA personnel have a better understanding of the 
businesses they are regulating and inspecting.
    Accordingly, small employers tell me they are often unable 
to fight a questionable case that is brought before them 
because of time and cost, and too often are forced to settle 
questionable cases with OSHA. Mr. Dodd will testify to cases 
such as that.
    The appeals process for questionable citations goes like 
this: A small business's case will first be heard before an 
administrative law judge. If unsuccessful, the case can be 
taken to the Occupational Safety and Health Review Commission, 
a supposedly independent agency created by Congress. The sole 
function of the commission is to carry out adjudicative 
functions under the OSH Act. Unfortunately, frequent absences 
on the commission make timely adjudication of citations rare.
    If still dissatisfied, an employer can appeal an OSHRC 
decision to an appropriate U.S. Court of Appeals by any person 
adversely affected or aggrieved. However, once in the Appeals 
Court, the courts must defer to OSHA's judgment, making OSHA 
the judge and jury on its own actions. Essentially, the courts 
must defer to OSHA interpretations of its own regulations, 
which as Mr. Sapper will describe, is inconsistent with 
legislative history of the act.
    All of this litigation is extremely costly, but let us 
suppose that a small employer actually fights and is victorious 
over OSHA in court. Under current law, that company may recoup 
its attorney's fee if and only if OSHA cannot show that the 
action was ``substantially justified.''
    This threshold is far too low. If a smaller employer is 
able to go through a process heavily slanted against him or her 
and prevail against OSHA he or she could receive full 
reimbursement of attorney's fees, backed by the Solicitor of 
Labor's office--a group of lawyers so large that if it were a 
private law firm it would rank as one of the largest law firms 
in the country.
    On a personal note, I would like to add this. I have toured 
lots of companies. And to mention a few specifically, in recent 
years in my own district, the Coca-Cola Company and UPS. The 
thing that impressed me on the tours of both of those were the 
first thing I saw after the corporate logo were signs that 
focused on safety in the workplace.
    The investment that I have seen by those companies in their 
company and in their employees is always safety-oriented, 
whether it is loading, whether it is ergonomics, whether it is 
awareness, whether it is hard hat requirements, whatever it 
might be.
    The American workplace that is not safe is the most 
expensive thing an employer can have. All of us want a safe 
workplace and all of us want a regulatory environment that 
induces safety but does not overly burden a company that 
otherwise would try its dead level best anyway to be sure it 
had the safest workplace possible.
    With that said, I would like to introduce our distinguished 
chairman for his opening statement, Chairman Enzi.

                   Opening Statement of Senator Enzi

    The Chairman. Thank you, Mr. Chairman. I appreciate your 
holding this as your first hearing of the subcommittee covering 
small business and OSHA. I want to express my appreciation for 
all of the hard work and leadership that you provide on the 
committee as a whole and your diligence in attending 
everything.
    I know that you have been working in these areas of 
employment and workplace safety for a long time and have a real 
grasp of the information, besides the diligence that you have 
done in doing the tours.
    I reflect back on my start on this. I am an accountant. And 
I had a client that was an oil well servicing company and I did 
some numbers on it. And I went to the boss and I said you know, 
you could really save a lot of money if you had a safety 
program here. And he said okay, do it.
    And I looked like the telephone guy. I said no, no, I do 
not do safety, I just recommend safety. He said well, you 
already know more about it than anybody in my company, so go 
ahead and do it.
    So I did some safety programs and built quite an interest 
in it and know that safety programs do make a difference. I 
also know that businessmen recognize that safety programs make 
a difference and the only way they can work this thing harder 
is if they had better information, more understandable 
information. That is one of the difficulties that we have.
    Improving workplace safety and the way the procedures and 
regulations under the Occupational Safety and Health Act have 
been administered are issues of longstanding concern. The 
relationship between OSHA employers and employees should be one 
of mutual assistance, guidance and support. OSHA, the business 
community and employees should not be adversaries. All sides 
want the same thing and that is a safe workplace. That common 
goal should bring them together, not push them apart.
    That is why OSHA must recognize that small businesses have 
unique safety and health issues and they need to be helped not 
hindered in an effort to make their workplace safer. OSHA has 
already begun to address the needs of small businesses.
    I look forward to the additional efforts they can make to 
increase the level of dialogue and ensure the lines of 
communication and trust and understanding are kept open between 
them and the employers of this country.
    Workplace safety is just as important for the small 
employer as it is for the large employer. The importance of a 
worker's health and safety has nothing to do with the size of 
an employer's workplace or the annual payroll.
    Still, as we examine these issues, we must keep in mind the 
fact that all government regulations, no matter how necessary 
or useful, do impose a burden on those businesses that are 
regulated. And the weight of that burden is often directly 
proportional to the size of the business. This is a reality we 
have to consider whenever we assess the fairness and practical 
effect of any system of regulation and enforcement.
    Employers have to read through and implement over 1,000 
pages of highly technical safety regulations. Too often 
employers are left on their own to try and understand and 
comply with all of these regulations. It is hard enough for 
large employers who have an in-house staff of safety experts. 
For the small employer, whose safety expert is also the human 
resources manager, accountant and systems administrator--and 
probably waits on customers, too--the task is nearly 
impossible. We are talking about employers who want to do the 
right thing, who want to comply with the law and protect their 
workers. They just need help doing so, more help than OSHA can 
currently give them.
    We need a system that encourages these good faith employers 
to find out how to achieve safety voluntarily. The fact is that 
enforcement alone cannot ensure the safety of America's 
workforce. I want to prevent the accident in the first place. 
Although inspection and enforcement must be a part of any 
comprehensive regulatory system, we understand that we will 
never be able to rely on them alone. Inspections and fines by 
themselves will never lead the way to a safer workplace. The 
overwhelming majority of employers who are committed to 
ensuring the health and safety of their employees need more 
help not more headaches.
    That is why we must continue to encourage cooperation, 
foster the exchange of ideas and increase the level of trust 
between the regulators and the regulated community. If we do, 
we will advance the cause of workplace safety.
    Today's hearing continues that discussion about what is 
involved in achieving greater safety and health for our most 
important resource, our great American workers.
    Thank you Mr. Chairman.

               Questions of Senator Enzi to Arthur Sapper

    Question 1. Currently, under the Equal Access to Justice Act, small 
businesses can't recover costs of litigation if OSHA can show the 
action it brought was substantially justified even when the company 
successfully challenged the citation. In your experience, is it 
difficult for the agency to be able to show substantial justification? 
Should this standard be changed? If so, how should it be changed?
    If an employer that believes he was incorrectly cited nonetheless 
does not contest the citation for financial reasons what are the 
potential future effects of that citation?
    Question 2. As you may be aware, there have been legislative 
proposals to exempt employers that are cited for non-willful violations 
from any monetary fine if they correct the violation within 72 hours. 
Do you believe such a proposal, if enacted, would have any positive 
effects on improving workplace safety?

    Senator Isakson. Thank you, Mr. Chairman. Senator Murray.

                  Opening Statement of Senator Murray

    Senator Murray. Mr. Chairman, let me personally welcome you 
to the HELP Committee. I am looking forward to working with you 
on a bipartisan basis to strengthen the safety and health 
protections that America's workers depend on.
    As the Ranking Member of the Subcommittee on Employment and 
Workplace Safety, I worked closely with our chairman, Senator 
Enzi, who is here as well. I look forward to working with you 
to develop an equally productive partnership.
    I want to thank you for calling this hearing today to 
discuss how OSHA can do a better job of working with small 
businesses to protect the health and safety of their workers.
    Like you, Mr. Chairman, I do recognize that small 
businesses are engines for our economy. They create jobs and 
economic development and we want them to be strong, productive 
and safe. We need to ensure that health and safety standards do 
not unfairly burden small businesses while at the same time 
ensure that all workers are safe, no matter how many people 
their company employs. We all recognize that there are costs to 
these regulations. But when workers are killed or injured on 
the job, there is also a high cost to businesses, to 
communities and families and we need to be mindful of that.
    Several Members of Congress have suggested changes to OSHA 
and before Congress looks at those changes we need to 
understand the context today. We need to examine how safe 
America's workers are and how effective OSHA is.
    And frankly, the statistics are troubling. Each day more 
than 12,800 workers are killed or injured on the job. Think 
about that. More than 12,000 are killed or injured every day. 
Those are not just numbers. That is someone's mom or dad. It is 
the family breadwinner. It is someone whose life will never be 
the same.
    To me, that really says we need to do a much better job of 
protecting workers and enforcing our laws on workplace health 
and safety.
    So how is OSHA doing today? As I look at the staff levels 
and enforcement history and penalty assessments, frankly the 
picture is not very encouraging. First, OSHA does not have 
enough inspectors to protect American workers. At its current 
staffing and inspection levels it would take OSHA 108 years to 
inspect each job site in America just once. Think about that. 
We have got more than 12,000 Americans being killed or injured 
every day. And at this rate OSHA will not even reach every 
workplace until the year 2113.
    That inadequate level of staffing does not give me a lot of 
confidence that American workers are adequately protected. I 
would hope that any OSHA reform proposal would increase the 
number of inspectors to catch up on this tremendous backlog 
because it is killing and crippling American workers every day.
    Beyond staffing, OSHA has among the weakest enforcement 
capabilities of any Government Agency. For the past few years, 
I have worked on legislation relating to asbestos so I have 
looked closely at how OSHA has enforced asbestos regulations. 
As you may know, exposure to asbestos in the workplace skills 
some 10,000 Americans every year. Over the last 30 years OSHA 
has had a very poor track record of enforcing asbestos 
regulations in the workplace.
    Auto repair workers, particularly our brake mechanics, are 
extremely vulnerable. The EPA is in the process of reexamining 
its Gold Book Guidance for brake mechanics. If the EPA decides 
to change or eliminate that guidance, then OSHA will need to 
issue and promote new guidelines quickly so that auto mechanics 
are alerted to the dangers of asbestos exposure and can take 
the appropriate precautions.
    OSHA's history of enforcement is not encouraging so it 
would not make sense to further weaken OSHA's ability to 
protect America's workers.
    Beyond staffing and enforcement, OSHA financial penalties 
are often much smaller than similar penalties at comparable 
Government Agencies such as the Employment Standards 
Administration, the Equal Employment Opportunity Commission and 
the Mine Safety and Health Administration. For example, OSHA's 
penalty for a serious violation, one that poses a substantial 
risk of death or serious harm, is less than $900. I would 
expect that any OSHA reform bill would revise the penalty 
formula so it truly serves as a deterrent rather than just the 
cost of doing business.
    So when I look at today's context, more than 12,000 workers 
killed or injured on the job every day, an agency that has too 
few inspectors, inadequate enforcement and weak penalties, it 
is not hard for me to suggest new ways to improve the agency so 
we can better protect America's workers.
    I am troubled by some of the proposals I have seen so far 
because to me they appear to move in the wrong direction. I 
realize the purpose of today's hearing is not to review any 
particular piece of legislation, but I do want to take this 
opportunity to raise some serious concerns about some of the 
bills I have seen because I think we all agree with their 
stated goal to alleviate some real-time burdens without 
sacrificing health and safety.
    But when I look at these bills, it is clear to me they 
would seriously undermine and weaken enforcement of the job 
safety law and will drain resources away from OSHA, an agency 
that is chronically underfunded.
    For instance, requiring OSHA to pay the legal costs for 
most small private sector employers, regardless of whether the 
action was substantially justified, will have a very chilling 
effect on both OSHA enforcement and OSHA standard setting.
    Today small businesses can already recover litigation costs 
if the Government position was not substantially justified. 
That protection is already available through the Equal Access 
to Justice Act. Changing the law only as it applies to OSHA 
treats the enforcement of work and safety protections 
differently than the enforcement of all other laws. That sends 
the wrong message in our country where, as I said, 12,000 
workers are killed or injured every day.
    It is also worth remembering that smaller businesses have a 
higher rate of deadly job injuries than businesses with more 
than 100 workers. In fact, according to the Congressional 
Budget Office, employers with fewer than 100 employees 
constitute 70 percent of OSHA's case load. Most of the small 
employers cited are construction-related terms--half of all 
occupational deaths in the construction industry occur in small 
employer companies. Hampering OSHA's enforcement ability in 
these establishments would be devastating to workers, resulting 
in even higher rates of worker fatalities and injuries and 
illness.
    In addition, these bills would undermine the power of the 
Secretary of Labor to interpret and enforce our Nation's job 
safety law. We should not be expanding the size of the role of 
an outside commission that hears only a small portion of the 
enforcement cases brought by the Secretary and really lacks the 
comparable knowledge, experience and expertise.
    So if we are going to reform OSHA, we need to understand 
the facts today and make sure any legislation moves us in the 
right direction to a safer and healthier workplace.
    Mr. Chairman, you have my commitment to work with you on a 
bipartisan basis to adopt solutions to worker health and safety 
that experts around the years have spent years developing. One 
example is the global system for classifying and labeling 
chemicals. We have a real opportunity to forge a bipartisan 
consensus on those kinds of health and safety issues, and I 
hope this subcommittee will move quickly to adopt a uniform 
approach on chemical safety and to correct the current failings 
of the Material Safety Data Sheets.
    This approach will be crucial to the ongoing economic 
success of any business or industry, especially small 
businesses, that are becoming increasingly frustrated with the 
confusing and misleading safety information that they receive.
    So again, Mr. Chairman, I look forward to working with you 
as we move forward on the critical issue of workplace health 
and safety.
    Thank you, Mr. Chairman.
    Senator Isakson. Thank you very much, Senator Murray.
    Senator Isakson. Before I introduce the witnesses, it is a 
real personal pleasure for me to introduce Congressman Charlie 
Norwood, with whom I worked in the United States House for 6 
years and for years before that in the State of Georgia. He has 
been a tireless worker on behalf of workplace safety issues, 
issues directly engaged in dealing with OSHA, and has been a 
real leader on the Committee on Education and the Workforce in 
the House of Representatives.
    Congressman Norwood, we are delighted to have you today and 
we would recognize you for any remarks you would like to make.

  STATEMENT OF THE HON. CHARLES NORWOOD, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Mr. Norwood. Thank you, Mr. Chairman.
    Mr. Chairman and Ranking Member Senator Murray, we really 
appreciate the opportunity to come and spend a few minutes with 
you on this what I consider a very important issue.
    My background in this is pretty simple. I have had to deal 
with OSHA most of my adult life, as a dentist. And I have had 
to deal with OSHA the last 11 years as being a member of the 
Education and Workforce Committee, the last 6 years being the 
chairman who had authorization over OSHA. So I am pleased to be 
here to be part of this gathering.
    I do thank you, Mr. Chairman, for holding this hearing to 
explore a relationship between American small businesses and 
OSHA. As you all know, it is critically important, this 
relationship, in order to enhance workplace safety and health, 
and to allow the American small businesses to grow and prosper. 
That is really what this is all about.
    To me, that is what these bills are all about, the 
relationship between the worker and their safety and health and 
the relationship between the small business owner and OSHA 
itself just simply have to be improved in order to solve the 
problem, for example, of not having enough inspectors. You will 
never have enough inspectors to inspect every small business. 
The only hope we have is being a consultant with small 
businesses, having small businesses come to us and seeking help 
in how to have a safer and healthier workplace.
    This is part of what I see these bills doing. These are 
twin goals that I have sought to achieve for the past 4 years 
as Chairman of the Workforce Protection Subcommittee in the 
other body. And I am pleased to report to you that indeed I 
believe we are making progress on both fronts.
    Mr. Chairman, the GAO reported to Congress last year that 
the American workforce is safer today than any other period in 
modern times. Workplace related injuries and fatalities are on 
the decline and employer cooperation with OSHA is on the rise. 
That is, in my view, what this is all about. That is what we 
should shoot for.
    As the GAO study suggests, this is in large part due to the 
expansion of the voluntary compliance strategy that the 
administration has fought hard to strengthen and expand. And 
Secretary Chao is to be commended, in my mind, for her hard 
work in this regard.
    While the administration has taken strides to reverse the 
old gotcha enforcement policies of the past--and I know about 
those gotcha programs enforcement firsthand--I believe that 
American small businesses deserve additional protection in 
order to level the playing field when they are dealing with 
this Federal Agency. Gotcha enforcement does not increase 
workplace safety and health and it does not promote economic 
growth.
    However, I believe that the gotcha enforcement strategy is 
still alive and well in too many OSHA field offices across this 
country. At no other time is this more evident than when a 
hard-working small business owner attempts to appeal an OSHA 
citation.
    Mr. Chairman, for too many employers, the systems for 
appealing an OSHA citation is simply unfair and unjust. 
Fairness is all the American small businessman is asking for 
but fairness is not what the Government promotes due to 
burdensome regulatory policy for the appeal of OSHA citations.
    In the 109th Congress I introduced four bills that will 
level this playing field and restore fairness for small 
American businesses. And I believe fully in my heart, and our 
committee in the House believes, that this will in no way hurt 
the employer in terms of health and safety.
    These four bills make commonsense reforms to OSHA and they 
do not reduce health and safety standards in any way, shape or 
form. In any forum I would debate that.
    My first bill resolves the conflict between OSHA and 
Federal Rules of Civil Procedure rule 60(b) as it pertains to 
the unfairly enforced 15-day contest of citation period. It 
simply provides that a small employer gets his day in court 
when a response to a citation is delayed for a mistake or good 
reason.
    As Chairman Enzi pointed out, not every small business can 
have a safety director on their payroll. Sometimes the same guy 
is at the front desk or on the counter selling a product is the 
same guy who is the safety inspector. And maybe they get a 
citation. And maybe it drops in the back seat of their car and 
they do not find it for 3 weeks later. But they ought to have, 
if for good reason or for a mistake, they ought to have their 
day in court.
    The second bill increases the Occupational Safety and 
Health Commission from three to five members. This is not hard. 
We hope to solve the quorum problem that has left this 
commission unable to function almost two-thirds of its entire 
existence. That is not satisfactory if you have a citation laid 
on you by the Federal Government that it can be very 
destructive if you cannot come to a end. Sometimes you simply 
pay the fine rather than having that hang over your head. This 
problem effectively denies an employer or can deny an employer 
a day in court.
    The third measures ensures that legal deference is given to 
OSHRC. This simply restores congressional intent. Look at the 
history. OSHA was signed by Richard Nixon. It almost did not 
get through until they came up with this independent commission 
that was truly an arbitrator and independent of OSHA citations. 
It would never have passed and been signed had that not been 
put in there. Now what we have done is we have simply taken 
that way.
    Finally, the last bill provides attorneys' fees to small 
employers who prevail in litigation against OSHA. In testimony 
before my subcommittee, we repeatedly heard that small 
businesses settled with OSHA rather than challenging an unjust 
citation. They do this because it is cheaper to settle than pay 
an attorney to fight, no matter how strong you may believe that 
you are innocent.
    Mr. Chairman, that is simply an unfair choice for a small 
businessman or a small businesswoman. The owner should not have 
to make these kind of choices.
    By introducing this legislation, I hope to put an end to 
the loose conundrum for small employers and force OSHA to think 
very, very carefully, to think twice before they issue a 
frivolous citation or an unjust citation or issue a citation by 
an incompetent inspector. They need to think about that. We are 
not trying to not get the citations issued. What we are trying 
to do is make them think twice before they force a small 
business owner into this kind of situation.
    Mr. Chairman, it really comes down to this. These four OSHA 
bills will prevent small employers from deciding to pay an 
unfair OSHA fine or making an investment in his company. It 
comes down to that. They are modest. They are simple. They are 
straightforward. They will improve the relationship between 
employers and the Federal Government, which is what we must 
have if we want a healthier, safer workplace. And very likely, 
in my belief at least, it will lead to that.
    I thank my friend from Georgia, Chairman Isakson, for 
exploring these policies today and let us start thinking about 
them. I have thought about them so long I am tired of thinking 
about them. I would like to get this done.
    I especially appreciate this opportunity to testify before 
this distinguished committee. I actually look forward to the 
testimony of some of the other witnesses.
    Mr. Chairman, with that I yield back the balance of my 
time.
    Senator Isakson. Thank you very much, Dr. Norwood. And on a 
personal note, I personally, and I am sure the members of the 
committee commend you on your miraculous recovery. You are 
doing great and we are very proud of you and proud that you are 
here today.
    Mr. Norwood. Thank you, sir. So am I.
    Senator Isakson. If the witnesses will assume their place 
at the table, I will introduce them all at once and then we 
will hear the testimony in the order of the introduction.
    First with us today is Mr. Jerrold Dodd. Mr. Dodd has been 
General Manager and Chief Operating Officer of Dayton United 
Metal Spinners in Dayton, OH for the last 12 years. Mr. Dodd 
has been in manufacturing for over 35 years. Before that he 
served his country from 1964 to 1970 in the United States 
Marine Corps as an E-5 platoon sergeant.
    After his service he started out as a welder while 
attending college at night, eventually earning a bachelors of 
science degree in manufacturing engineering. Most importantly, 
he did all this while raising three children with his wife of 
39 years.
    Mr. Dodd will discuss his experiences with OSHA and any 
suggestion he has to improve OSHA's inspection and adjudication 
process.
    Second, we have Mr. Roy Swindal. Mr. Swindal is President 
of Masonry Arts, Inc., a specialty contractor company which 
installs exterior brick skin components. Mr. Swindal 
apprenticed as a bricklayer in high school and college and 
later worked with his father as a journeyman bricklayer and 
foreman. He opened his own shop, Masonry Arts, in 1979 and has 
seen it grow into a nationally recognized company.
    He will discuss his own experience with OSHA regulations 
and inspections and suggest methods to encourage trust and 
cooperation between a small business and OSHA to ultimately 
make the workforce safer in a joint effort between both 
parties.
    Third, we are pleased to welcome Mr. Arthur Sapper, a 
graduate of Georgetown University Law Center and the State 
University of New York at Buffalo. Mr. Sapper is a partner in 
the law firm McDermott, Will and Emery. Mr. Sapper's practice 
focuses on all areas of occupational safety and health law, 
including inspections, litigation, rulemaking, counseling and 
lobbying.
    He litigates regularly before the Occupational Safety and 
Health Review Commission, the Federal Appellate Courts and 
various administrative bodies. Prior to joining the firm, Mr. 
Sapper held the position of Deputy General Counsel of the 
Occupational Safety and Health Review Commission.
    We are also very happy to have Ms. Lynn Rhinehart with us 
today. Ms. Rhinehart is an Associate General Counsel for the 
AFL-CIO, a position she has held since 1996. Ms. Rhinehart is a 
former staff member of this subcommittee, serving as a staffer 
to former Senator Howard Metzenbaum.
    Among her current responsibilities is the coordination of 
the Federation's legal work on occupational safety and health 
issues. Ms. Rhinehart graduated magna cum laude from Georgetown 
University Law Center in 1994, which means she is a whole lot 
smarter than I am. Following graduation, she clerked for 2 
years in the Honorable Joyce Hens Green of the United Sates 
District Court for the District of Columbia.
    She is here today to share her views of the AFL-CIO and 
proposed OSHA reform legislation.
    Finally, I would like to add that we asked Mr. Earl Ohman, 
former general counsel of the Occupational Safety Health Review 
Commission to testify today but he was unable to do so due to a 
family commitment. He has agreed to submit testimony for the 
record, for which we thank him very much for his cooperation 
and for his willingness.
    [The statement of Mr. Ohman not available at time of 
print:]
    Senator Isakson. I would ask each of the members to try and 
stay as close to 5 minutes as they can so we can get in the 
testimony and all the questions for the panel.
    I recognize Mr. Dodd.

  STATEMENTS OF JERROLD DODD, GENERAL MANAGER, DAYTON UNITED 
    METAL SPINNERS, DAYTON, OH; ROY SWINDAL, MASONRY ARTS, 
 BESSEMER, AL; ARTHUR SAPPER, OSHA PRACTICE GROUP, McDERMOTT, 
 WILL AND EMERY, WASHINGTON, DC; AND LYNN RHINEHART, ASSOCIATE 
                    GENERAL COUNSEL, AFL-CIO

    Mr. Dodd. Thank you and good afternoon, Mr. Chairman, 
members of the subcommittee.
    I am Jerrold Dodd, General Manager, Chief Operating 
Officer, Human Resources Manager. I am all of those above, as 
you have heard before. I am the safety officer of Dayton United 
Metal Spinners Company.
    I am pleased to have the opportunity to testify on behalf 
of the National Association of Manufacturers on ways to improve 
the relationship between OSHA and small businesses that benefit 
not only employees but their employers and their workers.
    As you are aware, the NAM is the Nation's largest 
industrial trade association, representing large and small 
manufacturers in every industrial sector and in all 50 States.
    NAM's mission is to enhance the competitiveness of 
manufacturers and improve American living standards by shaping 
legislative and regulatory environment conducive to U.S. 
economic growth.
    In light of our dedication to that mission, the NAM 
commends the chairman and ranking Democrat for your efforts on 
this subcommittee to improve this relationship between small 
business and OSHA.
    Thank you for allowing me the time to tell you about what 
is unfortunately a very troublesome episode from my company's 
own history with OSHA.
    First off, Dayton United Metal Spinners has been in 
business for 57 years. My brother and his wife bought the 
company back in 1993, but they left the running of the business 
in my hands. We are a manufacturer of quality metal spun 
products in a safe and family atmosphere. We are small, under 
20 workers, but each of the jobs in our plant is a good job 
which is valuable to the workers and their families.
    The reason I am here today is to relate a firsthand 
experience of what I believe to be an OSHA injustice. I think 
the small business OSHA due process reforms, when passed, will 
certainly be a step in the right direction to correct some of 
the unfavorable OSHA conditions small businesses confront and 
maybe even prevent what I experienced from happening in the 
future.
    On or about September 10th of 2004, one of my punch press 
employees severed the tips of two fingers. We packed the 
fingers on ice, called the emergency squad and had him flown to 
an amputee specialist at the Jewish Hospital in Louisville, 
Kentucky. The fingers were saved, reattached. He came back to 
work for light duty within 3 months.
    Approximately 1 week after the accident an investigator for 
the Cincinnati, OH OSHA office stopped in. She started asking a 
few questions about what happened, when by sheer coincidence 
the injured worker stopped with his girlfriend. He came into my 
office so I told the investigator that she was welcome to ask 
him what happened.
    It was at this moment that the injured worker told the OSHA 
investigator in front of me, his girlfriend, and my 
administrative assistant, that the accident was his fault. He 
told the investigator he was trying to set the punch press up 
while it was still running and he knew better. He told the 
investigator--he admitted his mistake, his mistake, and he said 
he was trained otherwise.
    The investigator took him out in the parking lot and spoke 
with him. A little while later she came back in and said she 
wanted to take some pictures and talk to some more employees.
    The injured worker came back to my office and told me that 
while outside alone with the investigator she told him never to 
admit wrongdoing in front of your employer and that he had 
grounds for a major lawsuit. The investigator also told him 
that he may not have a worker's compensation claim if he 
admitted wrongdoing and he would have to pay for all of the 
medical expenses himself.
    I asked the injured worker if he would sign an affidavit to 
that effect and he later did just that. He also stated again he 
told the investigator the accident was his own fault. The 
machine should have been locked out. He failed to do that. He 
was also upset that an OSHA investigator would even tell him to 
sue the company and he should never admit to wrongdoing.
    My story does not stop there. The OSHA investigator also 
spoke outside to an employee who was working at a machine 
behind the injured worker at the time of the accident. The 
repeated investigation of this employee was just short of 
harassment. The employee, after being repeatedly asked the same 
questions with the tape recorder being selectively turned off 
and on, said the investigator made her feel like she was lying 
and that the company was being attacked for wrongdoing. The 
investigator asked the second employee for her home phone 
number and address so she could contact her away from the 
plant. I also have a signed affidavit from this employee 
stating exactly what happened during the OSHA interview.
    Needless to say, the manner and scope of questioning by the 
OSHA investigator left not only my employees but me very upset. 
I wrote a letter to the regional director of OSHA in Chicago 
expressing my displeasure. To my chagrin, this letter seemed to 
provoke the agency even further and resulted in another visit 
from the first investigator with her superior, an OSHA Area 
Director.
    In the meantime I had to hire an attorney from Dunlevey, 
Mahan and Fury to represent me. Remember, this entire chain of 
events was caused by an employee forgetting to follow safe 
operational procedures.
    When the second visit occurred, it became more an 
interrogation of me than an investigation of what happened with 
the worker and the severed finger. The OSHA investigator was 
vindicated by her superior and all of a sudden then I was the 
bad guy.
    I explained that I wanted no part of an interrogation, 
called my attorney, put him on the phone with the Area Director 
and they left.
    Some time passed, but when I next heard from OSHA, it was 
in the form of a notice that I had been fined $17,000. Of 
course, small companies such as mine have little option but to 
pay an attorney to try to negotiate a lesser fine, despite 
having to pay the eventual fine and the attorney's fees. This 
is less than having an attorney fight the charges which would 
cost even more. To date I have paid over $8,000 in attorney's 
fees which got my fine reduced to $3,500.
    The incident gets worse. In addition to the above, this 
injury got me kicked out of my BWC group, which I was in for 
having a good safety record. My projected BWC premiums are now 
going to run between $45,000 and $50,000 a year, compared to 
the $15,000 I pay now.
    All of this expense is for something that an employee 
admitted was his fault. With the shrinking manufacturing work 
my company sees each year, this is all money that I cannot 
afford to pay.
    Instead of understanding and help from OSHA, I get fined, 
thrown out of a group, and faced with possibly closing my doors 
if the money keeps flowing out for the wrong reasons.
    We have worked very hard at writing safety and operational 
procedures that have allowed us to be audited and found 
compliant to AS9000 standards, necessary in our industry. We 
train all of our employees in these safety and operational 
procedures and spend large sums of money to keep our equipment 
safe.
    If I were to make a recommendation or two, I would first 
suggest that OSHA investigators be retrained to get out of the 
employer always guilty first, then the employee mindset. They 
should be more of a help in showing employers what needs fixing 
and give the employer time to make the repairs. Fines should be 
a last option. There should be absolutely--they should be 
absolutely prohibited from giving legal advice or suggesting 
legal remedies to any employees that they interview.
    It is next to impossible for a person running a small 
business to know everything there is to know in the OSHA 
standards manual. Investigators need to recognize that, look at 
what safety devices the company already has in place, what 
training exists for employees and take these into 
consideration.
    Manufacturing in the United States is under assault like 
never before. I believe that providers of jobs in this Nation 
are taxed, sued and regulated to death by what are largely 
unintended consequences of government action. I do not think 
our competitors have these same issues to contend with.
    All people like me ask of lawmakers like the ones on this 
subcommittee is to keep a perspective of what each new law and 
regulation means to people trying to make a living in the rest 
of the country. For a long time there has been a Dayton United 
Metal Spinners Company and we would like to keep it that way 
for a long time. But when the Government comes knocking on your 
door, they see retribution and condemnation as its role in what 
amounted to a worker failing to do his job properly.
    The NAM and its members are working to extend this great 
American economy. We want to lower the costs of production that 
hamstring us against the world competitors that are taking away 
so much of our national wealth. This subcommittee can play its 
part by examining new methods for agencies like OSHA to employ 
when reaching out to employers and workers.
    No one wants an unsafe workplace. I live and work with my 
employees and see them around town. Do I want to alienate them 
and drive them away and see harm done to them? No. I am not 
that kind of a person and my company is not that kind of a 
company.
    This experience with OSHA shows how sometimes its 
inspectors can stray from their mission of safety and health 
and get out of control. Legislation that would allow small 
businesses to have their attorneys' fees reimbursed when they 
successfully defend a citation would be a step in the right 
direction to help small manufacturers like myself in dealing 
with these unruly situations.
    I invite you to visit your local manufacturing companies to 
see firsthand what they are making. The American manufacturer 
wants to work. Let us keep it that way. Thank you again for 
this opportunity and I look forward to answering any questions 
that you may have.
    [The prepared statement of Mr. Dodd follows:]

                   Prepared Statement of Jerrold Dodd

    Good afternoon, Mr. Chairman and members of the subcommittee. I am 
Jerrold Dodd, General Manager and Chief Operating Officer of Dayton 
United Metal Spinners, Inc. I am pleased to have the opportunity to 
testify on behalf of the National Association of Manufacturers (NAM) on 
ways to improve the relationship between OSHA and small businesses that 
benefit not only employers, but their workers.
    As you are aware, the NAM is the Nation's largest industrial trade 
association representing small and large manufacturers in every 
industrial sector and in all 50 States. The NAM's mission is to enhance 
the competitiveness of manufacturers and improve American living 
standards by shaping a legislative and regulatory environment conducive 
to U.S. economic growth. In light of our dedication to that mission, 
the NAM commends the Chairman and ranking Democrat for your efforts on 
this subcommittee to improve this important relationship between small 
business and OSHA.
    Thank you for allowing me the time to tell you about what is 
unfortunately a very troublesome episode from my company's own history 
with OSHA.
    First off, Dayton United Metal Spinners has been in business for 57 
years. My brother and his wife bought the company in 1993, but have 
left the running of the company in my hands. We have a proud history of 
producing high-quality metal spinning products in a safe, family 
atmosphere. We are small, with under 20 workers, but each of the jobs 
at our plant is a good job; valuable to the workers and their families.
    The reason I am here today is to relate a first-hand experience of 
what I believe to be an OSHA injustice. I think the Small Business OSHA 
Due Process Reforms, when passed, will certainly be a step in the right 
direction to correct some of the unfavorable OSHA conditions small 
businesses confront and maybe even prevent what I experienced from 
happening in the future.
    On or about September 10, 2004, one of my punch-press employees 
severed the tips of two fingers. We packed the fingers on ice, called 
the emergency squad and had him flown to an amputee specialist at the 
Jewish Hospital in Louisville, Kentucky. The fingers were saved, 
reattached, and he came back to light duty within 3 months. 
Approximately 1 week after the accident, an investigator from the 
Cincinnati, Ohio, OSHA office stopped in. She started asking a few 
questions about what happened, when by sheer coincidence the injured 
worker stopped in with his girlfriend. He came into my office, so I 
told the investigator that she was welcome to ask him what happened.
    It was at this moment that the injured worker told the OSHA 
investigator in front of me, his girlfriend, and my administrative 
assistant, that the accident was his fault. He told the investigator 
that he was trying to set up the punch press while it was still turned 
on. He admitted this was a mistake--his mistake--and said he was 
trained otherwise.
    The investigator then took him out in the parking lot and spoke 
with him. A little while later she came back in and said she wanted to 
take some pictures and speak with some other employees. The injured 
worker came back into my office and told me that while outside alone 
with the investigator she told him to never admit wrongdoing in front 
of his employer and that he had grounds for a ``major'' lawsuit. The 
investigator also told him that he may not have a workers' compensation 
claim if he admitted wrongdoing and he would have to pay for all the 
expenses himself.
    I asked the injured worker if he would sign an affidavit to that 
effect and he later did just so. He also stated again that he told the 
investigator the accident was his own fault. The machine should have 
been locked out and he failed to do that. He was also upset that an 
OSHA investigator would even tell him that he could sue the company and 
should never admit to wrongdoing.
    My story does not stop there.
    The OSHA investigator also spoke outside to an employee who was 
working at a machine behind the injured worker at the time of the 
incident. The repeated investigation of this employee was just short of 
harassment. The employee, after being repeatedly asked the same 
questions with a tape recorder being selectively turned on and off, 
said the investigator made her feel like she was lying and that the 
company was being attacked for wrongdoing. The investigator also asked 
this second employee for her home phone and address so she could 
contact her away from the factory. I also have a signed affidavit from 
this employee stating exactly what happened during the OSHA interview.
    Needless to say, the manner and scope of the questioning by the 
OSHA investigator left not only my employees, but me very upset. Later, 
I wrote a letter to the Regional Director of OSHA in Chicago expressing 
my displeasure.
    To my chagrin, this letter seemed to provoke the agency further and 
resulted in another visit from the first investigator and her superior, 
an OSHA Area Director. In the meantime, I had to hire Mr. Gary Auman of 
Dunlevey, Mahan and Fury, to represent me. Remember, this entire chain 
of events was caused by an employee forgetting to follow safe 
operational procedures.
    When this second visit occurred it became more of an interrogation 
of me than an investigation of what happened with the worker and his 
severed fingers. The OSHA investigator was vindicated by her superior, 
and all of a sudden I was the bad guy.
    I explained that I wanted no part of an interrogation, called Mr. 
Auman, put him on the phone with the Area Director, and they left.
    Some time passed, but when I next heard from OSHA it was in the 
form of a notice that I had been fined $17,000. Of course, small 
companies, such as mine, have no option but to pay an attorney to try 
and negotiate a lesser fine, despite then having to pay the eventual 
fine and attorney's fees.
    To date, I have paid over $8,000 in such fees and got my fine 
reduced to $3,500.
    This incident gets worse. In addition to the above, this injury got 
me kicked out of my BWC group, which I was in for having a good safety 
record. My projected BWC premiums are now going to run between $45,000 
and $50,000 a year versus the $15,000 I used to pay.
    All this expense is for something that an employee admitted was his 
fault. With the shrinking manufacturing work my company sees each year; 
this is all money that I can't afford to pay.
    Instead of understanding and help from OSHA, I got fined, thrown 
out of a group rating, and possibly faced with closing my doors if the 
money keeps flowing out the door for the wrong reasons.
    We have worked very hard on writing safety and operational 
procedures that have allowed us to be audited and found compliant to 
meet the AS9000 standards necessary in our industry. We train all of 
our employees in these safety and operational procedures and spend 
large sums to keep our equipment safe.
    If I were to make a recommendation or two, I would first suggest 
that OSHA investigators be re-trained to get out of the ``employer 
always guilty first, then the employee'' mindset. They should be more 
of a help in showing employers what needs fixing, and then give the 
employer time to make repairs. Fines should be a last option. They 
should also be absolutely prohibited from giving legal advice or 
suggesting legal remedies to any employees they interview.
    It is next to impossible for a person running a small business to 
know everything there is to know in the OSHA standards manual. 
Investigators need to recognize that, look at what safety devices the 
company already has in place, what training exists for employees, and 
take these into consideration.
    Manufacturing in the United States is under assault like never 
before. I believe that providers of jobs in this nation are taxed, sued 
and regulated to death by what are largely unintended consequences of 
government action. I don't think our competitors have these same issues 
to contend with.
    All people like me ask of lawmakers like the ones on this 
subcommittee is to keep a perspective on what each new law and 
regulation means to people trying to make a living in the rest of the 
country. For a long time there has been a company called Dayton United 
Metal Spinners, and we'd like to keep it that way for a long time to 
come. But, when the government comes knocking on the door, like they 
did in my case, and only sees retribution and condemnation as its role 
in what amounted to a worker failing to do his job properly, then I 
just don't know what to think about the future.
    The NAM and its members are working to extend this great American 
economy to a new century of growth and opportunity. We want to lower 
the costs of production that hamstring us against the world competitors 
that are taking away so much of our national wealth. This subcommittee 
can play its part by examining new methods for agencies like OSHA to 
employ when reaching out to employers and workers. No one wants an 
unsafe workplace. I live and work with my employees and see them around 
town. Do I want to alienate them, drive them away and see harm done to 
them from my own incompetence? No way. I'm not that kind of person and 
my company is not that kind of business.
    This experience with OSHA shows how sometimes its inspectors can 
stray from their mission of safety and health and get out of control. 
Legislation that would allow small businesses to have their attorneys' 
fees reimbursed when they successfully defend a citation would be a 
step in the right direction to help small manufacturers like myself in 
dealing with these unruly situations.
    I invite all of you to visit your own local manufacturing companies 
and see firsthand what they're making. The American manufacturer wants 
to work, let's keep it that way for a long, long time.
    Thank you again for this opportunity and I look forward to 
answering any questions you may have.

    Senator Isakson. Thank you, Mr. Dodd. Your testimony was 
very informative, albeit slightly a little long. So I would 
tell the other members if they will watch the red light and try 
and sum up when it is on, that would be greatly appreciated. 
Mr. Swindal.
    Mr. Swindal. Chairman Isakson, members of the subcommittee, 
thank you for the opportunity to testify before you today on 
small employer concerns with rules and regulations promulgated 
and enforced by the Occupational Safety and Health 
Administration, OSHA.
    I own a masonry construction business in Birmingham, AL. We 
do a variety of masonry, stone and blast-resistant construction 
in the United States.
    As I am sure most of you are aware, OSHA has a variety of 
programs in place to exchange ideas with trade associations 
about best practices which their member companies have a place 
to protect employees on the job and improve upon the 
effectiveness of standards impacting their industries.
    The Mason Contractors Association of America has an 
alliance with OSHA which focuses on scaffolding, fall 
protection, wall bracing and forklift safety issues. Our 
director of engineering, with the help of several others in the 
industry, has written a handbook on wall bracing which OSHA 
actually refers to for guidance.
    These alliances are, in our view, invaluable because they 
allow us to share ideas with OSHA on how we can better protect 
health and safety of our workers. I commend OSHA for the 
resources they dedicate to this important effort.
    The Mason Contractors Association would like to expand on 
this concept through our existing alliance. In essence, take it 
one step further and allow qualified safety personnel from our 
industry to train OSHA compliance officers and agency personnel 
responsible for writing, interpreting and enforcing health and 
safety standards, primarily those impacting construction 
including masonry and other specialty trades.
    We have had some initial conversations with OSHA about this 
and they seem very willing to work with us to establish what we 
like to call a ``Training Exchange Program.'' We have also 
asked the agency to add a masonry specific course to its 
curriculum at the OSHA Training Institute and again have 
someone with broad experience from our industry assist in 
teaching OSHA officials about the practical applications, some 
of the standards they write and enforce that are specific to 
our specialty trade.
    By way of example, 2 years ago in Florida and Massachusetts 
two companies were cited for leaving materials on the 
scaffolding at the end of the work day. The materials are left 
on scaffolding for a number of reasons. First and foremost, it 
would be impractical to remove part of a pallet of bricks from 
the scaffolding without creating some very precarious and 
potentially life-threatening problems.
    Moreover, many of these materials remain so the masons can 
simply pick up their tools the next morning and go to work. 
OSHA's strict interpretation of this standard would have forced 
contractors to bring laborers on the site an hour prior to the 
start of a work day and pay them overtime to remove the 
materials at the end of the workday, this requiring materials 
to be handled two or more times and opening the door for 
possible injury. This simply made no sense.
    A group of contractors met with the Directorate of 
Construction of OSHA to explain to them that they were actually 
creating more safety problems. OSHA ultimately issued a 
different interpretation to allow contractors to leave 
materials on the scaffolding without being cited.
    But it is this type of situation which could easily be 
avoided if we as contractors were allowed to offer very 
detailed training guidance to agency officials, most of whom 
have very little hands-on experience. While it may be the case 
that only the larger mason contractors would have the resources 
to make this training exchange program work, every mason 
contract construction company small and large would ultimately 
benefit. Our goal here is information sharing and the 
resolution of interpretations and/or citations in a 
nonconfrontational fashion. The number one goal of any 
contractor is the health and safety of its employees.
    If our industry is allowed to work more cooperatively with 
OSHA to help avoid the issuance of these certain citations due 
to the lack of understanding about a particular provisions' 
applications, we will do a great service to the industry, the 
OSHA officials and the Administrative Law Judges who are 
already overwhelmed with work. It simply makes sense to have 
this type of collaborative structure in place. The contractors 
and their employees will feel less threatened if they know OSHA 
has more knowledge and insight into the specifics of the trade. 
And the OSHA officials should be grateful for the knowledge 
they gain about an industry that contributes a tremendous 
amount of jobs and economic stability to our country.
    Remember, there are literally millions of construction 
workers in this country today.
    Again, thank you for the opportunity to present these ideas 
to you and I would be glad to answer any questions. Thank you 
very much.
    [The prepared statement of Mr. Swindal follows:]

                   Prepared Statement of Roy Swindal

    Chairman Isakson, members of the subcommittee, thank you for the 
opportunity to testify before you today on small employer concerns with 
rules and regulations promulgated and enforced by the Occupational 
Safety and Health Administration (OSHA).
    I own a mason contracting business in Bessemer, Alabama. I do a 
variety of masonry work throughout the country.
    As I'm sure most of you are aware, OSHA has a variety of programs 
in place to exchange ideas with trade associations about ``best 
practices'' which their member companies have in place to protect 
employees on the job and improve upon the effectiveness of standards 
impacting their industries. The Mason Contractors Association of 
America has an Alliance with OSHA which focuses on scaffolding, fall 
protection, wall bracing and forklift safety issues. Our Director of 
Engineering, with the help of several others in industry, has written a 
handbook on wall bracing which OSHA actually refers to for guidance on 
wall bracing issues. These Alliances are, in our view, invaluable 
because they allow us to share ideas with OSHA on how we can better 
protect the health and safety of our workers. I commend OSHA for the 
resources they dedicate to this important effort.
    The Mason Contractors Association would like to expand on this 
concept through our existing Alliance--in essence take it one step 
further--and allow qualified safety personnel from our industry to 
train OSHA Compliance officers and agency personnel responsible for 
writing, interpreting and enforcing health and safety standards, 
primarily those impacting construction and masonry. We have had some 
initial conversations with OSHA about this and they seem very willing 
to work with us to establish what we like to call a ``Training Exchange 
Program.'' We have also asked the Agency to add a masonry specific 
course to its curriculum at the OSHA Training Institute and, again, 
have someone with broad experience from our industry assist in teaching 
OSHA officials about the practical applications of some of the 
standards they write and enforce such as scaffolding, fall protection, 
the overhand bricklaying exemption and other issues specific to our 
specialty trade.
    By way of example, 2 years ago contractors in Florida and 
Massachusetts were cited for leaving materials on the scaffolding at 
the end of the work shift. The materials are left there for a number of 
reasons. First and foremost, it would be impossible to remove part of a 
pallet of bricks from the scaffolding without creating some very 
precarious and life-threatening problems. Moreover, many of these 
materials remain so the masons can simply pick up where they left off 
the previous day. OSHA's strict interpretation of this standard would 
have forced contractors to bring laborers on the job site an hour prior 
to the start of a shift and pay them overtime to remove the materials 
at the end of the shift. This simply made no sense and we met with the 
Directorate of Construction at OSHA to explain to them that they were 
actually creating more safety problems. OSHA ultimately issued a 
different interpretation to allow contractors to leave materials on the 
scaffolding without being cited. But it is this type of situation which 
could easily be avoided if we as contractors were allowed to offer very 
detailed training and guidance to agency officials, most of whom have 
very little hands-on construction experience.
    While it may be the case that only the larger mason contractors 
would have the resources to make this Training Exchange Program work, 
every mason contracting company, small and large, would ultimately 
benefit. Our goal here is information sharing and the resolution of 
interpretations and/or citations in a non-confrontational fashion. The 
number one goal of any contractor is the health and safety of their 
workforce. If our industry is allowed to work more cooperatively with 
OSHA to help avoid the issuance of certain citations due to a lack of 
understanding about a particular provisions application, we will do a 
great service to the industry, the OSHA officials and the 
Administrative Law Judges who are already overwhelmed with work. It 
simply makes sense to have this type of collaborative structure in 
place. The contractors and their employees will feel less threatened if 
they know OSHA has more knowledge and insight into the specifics of 
their trade. And the OSHA officials should be grateful for the 
knowledge they gain about an industry that contributes a tremendous 
amount of jobs and economic stability to our country.
    Again, thank you for the opportunity to present these ideas to you 
today. I'd be happy to answer any questions.

    Senator Isakson. Mr. Swindal, thank you very much. Mr. 
Sapper.
    Mr. Sapper. Thank you, Mr. Chairman.
    My name is Art Sapper. I am a partner in the OSHA practice 
group of the law firm of McDermott, Will and Emery here in 
Washington. I represent today the Chamber of Commerce of the 
United States.
    I have been practicing OSHA law for 31 years, both in the 
government and out. I also taught a course at Georgetown in 
OSHA law. And I would like to focus my remarks today on the 
problem that really amounts to an underlying pathology in the 
current enforcement of the OSHA Act, and that is judicial 
deference to OSHA instead of the Review Commission.
    That deference was required indeed by a U.S. Supreme Court 
case. The U.S. Supreme Court held, in a case called CF&I Steel, 
that if OSHA's interpretation is merely reasonable it wins, 
even if the Review Commission and even if a court thinks OSHA's 
interpretation is wrong. They do not have to be right. So OSHA 
is awarded a home run, you might say, even if it, in fact, hit 
only a foul ball.
    The correctness of the Review Commission interpretation is 
literally irrelevant. Why is it important? Because it was the 
Review Commission that Congress established in 1970 as the 
oversight agency over OSHA, to look over OSHA citations 
carefully. Yet it does not matter if the Review Commission has 
an opinion on the matter any more. OSHA wins if it is 
reasonable, even if everybody thinks it is wrong, including the 
court, including the Review Commission.
    Now OSHA is essentially a prosecuting agency. And like all 
prosecuting agencies, it is supposed to do its job with zeal. 
It would not be doing its job if it did not do it with zeal. 
But when you have an agency that is supposed to act like that, 
you must have an oversight body over it. You must have a body 
that can say that OSHA is wrong, not merely that its lawyers 
can cobble together an argument that sounds reasonable, which 
is the case now. But for all practical purposes, there is no 
such oversight today because of that U.S. Supreme Court 
decision.
    What are the bad effects of this? First of all, it 
undermines rulemaking. You see, deference kicks in only if the 
standard is ambiguous. So if you are an OSHA rule writer, you 
are going to write ambiguities into your standards. That way 
you avoid all of the hard work that goes into making hard 
policy decisions on the public record and with evidence. You 
can just write the standards to be ambiguous and settle the 
policy issue through the back door later through 
interpretation. And as long as you cobble together a reasonable 
sounding interpretation, you are going to win.
    And that is exactly what happened in the American Cyanamid 
case. There a major policy decision was never made in 
rulemaking. After the hazard communication standard was 
adopted, there was an internal controversy within OSHA over 
whether or not to impose something called target organ 
labeling.
    It is not important what it is. Let us just say when you 
read the OSHA standard when it was adopted it was not there. 
The only thing that was there was a vague allusion to it in an 
appendix to the standard. The Review Commission said it is not 
there. So that if the label said do not breath this stuff, that 
is bad. It must say it causes lung damage. OK, it is a policy 
decision. But it was never made in rulemaking.
    When it was challenged, the Review Commission said it is 
not there. The Sixth Circuit reversed, saying it does not 
matter if it is not there. OSHA's interpretation is reasonable 
so we are going to require millions of product labels to be 
rewritten based on a policy decision that was never actually 
made in rulemaking.
    Another problem with deference. It makes for some really 
far out interpretations. Remember, I said the Agency is 
supposed to enforce the act with zeal? Well, it does. And that 
is the problem sometimes.
    I once had a client, who happened to be a small employer 
but it could have been a large one, that was not guilty of an 
OSHA violation. This we knew to a dead certainty. It received a 
citation. We went to the OSHA supervisor in charge of the case 
and we said we would like you to withdraw this. Why? Because my 
client did not know of the violation. He did not know of it and 
he could not have known of it with the exercise of reasonable 
diligence.
    Now if that sounds familiar to people in this room, that is 
because that has been the case law under the OSHA Act for over 
a quarter of a century. The commission and the courts all agree 
that that is a requirement that OSHA must satisfy before it can 
issue a citation.
    This supervisor, a man I have known personally for many 
years, and who has had many years of experience in OSHA law, 
was unaware of the case law. Why? Because the OSHA field manual 
does not inform him of it because OSHA has never acceded to all 
of this case law. Why? Because its lawyers believe that they 
can cobble together a reasonable sounding argument that says 
that all this case law is wrong. So they do not tell their 
inspectors about it, they do not tell their supervisors about 
it. We asked this gentleman to withdraw the citation based on 
this case law. He did not know about it. He was not going to 
take my word for it so he, logically, refused.
    Now my client happened to be a small employer. He could not 
afford to fight this case. So he had to confess to a wrong he 
did not commit. He paid the citation. Yes, right, we got the 
penalty reduced. But he had to admit to something that he did 
not do wrong, all because this supervisor was never informed of 
this case law. And the reason that he was not informed of it is 
because of judicial deference to OSHA.
    OSHA does not have to accede to any court decision if it 
thinks it can come back with a merely reasonable counter 
argument.
    Now there is absolutely no doubt that Congress never 
intended this. It is not even arguable. On the floor the U.S. 
Senate, Senator Javits assured the Senate that the Review 
Commission would decide cases ``without record regard to the 
view of OSHA''. And in fact, it was that assurance that assured 
the passage of the Javits compromise. And that compromise 
permitted the passage of the OSHA Act. Without it, we would 
have no OSHA today.
    Unfortunately, through fate, the lawyers brief to the U.S. 
Supreme Court in the CF&I Steel case did not bring that up to 
the U.S. Supreme Court. It was not there. I do not blame the 
U.S. Supreme Court for coming out nine to zero against the 
employer. It just was not there. But we know today that it is. 
We know today that the Senate was assured that the role of the 
commission would be an important one, that it oversee OSHA, 
that it could say when OSHA is wrong.
    Finally, another problem I would like to bring to your 
attention about judicial deference is that yes, the U.S. 
Supreme Court doctrine says that OSHA can be reversed if it is 
unreasonable. Well, try and prove that OSHA is unreasonable. A 
small attorney who does not have a lot of experience with OSHA 
is simply not going to be able to do it. Not that I don't have 
a lot of respect for my colleagues in smaller towns and cities 
or in large towns who do not specialize in OSHA, but they do 
not specialize in OSHA. Even I have had tremendous difficulty 
trying to prove that OSHA is unreasonable, even when it is.
    For example, I have had one case pending before the Review 
Commission where OSHA's interpretation is just crazy. It has 
been pending there for 10\1/2\ years by the way, at least.
    The interpretation, by the way, is that whenever a 
maintenance mechanic has to work on a piece of equipment he has 
to have been trained on how to lock out that very piece of 
equipment before he works on it. It sounds reasonable at first 
glance. Then you realize that there are tens of thousands of 
machines in a large manufacturing plant. It would seem crazy, 
therefore, it would seem enough to have trained him on general 
lockout skills that he can then apply to each machine as he 
comes across them. But that issue is now pending before the 
Review Commission and the Review Commission is not free to 
decide whether OSHA is right or wrong.
    So there is an underlying pathology. It makes for arrogance 
and not just ignorance on the part of the OSHA inspectors. And 
the Review Commission was established, Mr. Chairman, to make 
sure that that is cabined, that zeal is controlled.
    I thank the chairman for his time.
    [The prepared statement of Mr. Sapper follows:]

                 Prepared Statement of Arthur G. Sapper

    Mr. Chairman, and members of the subcommittee, I am pleased to be 
testifying before you this afternoon. I am a member of the OSHA 
Practice Group of the law firm of McDermott Will & Emery LLP.
    I am testifying today on behalf of the U.S. Chamber of Commerce. I 
am a member of the Chamber's Labor Relations Committee and its OSHA 
Policy Subcommittee.
    For 31 years, I have been deeply involved in OSHA law. For 12 of 
those years, I served in the Government. I spent over 10 years at the 
Occupational Safety and Health Review Commission, where I became Deputy 
General Counsel. I also spent 2 years at the Federal Mine Safety and 
Health Review Commission as its Special Counsel. For over 17 years, I 
have advised employers regarding their obligations under the 
Occupational Safety and Health Act of 1970, 29 U.S.C.  651-678, and I 
have litigated some of the groundbreaking cases under the statute. I 
have written and lectured on OSHA law. I have helped to co-author 
treatises on the OSH Act, including the well known American Bar 
Association treatise, OCCUPATIONAL SAFETY AND HEALTH LAW (2d ed. 2002). 
I was for 9 years an adjunct professor at Georgetown University Law 
Center, where I taught a graduate course in OSHA law.
    Many of the U.S. Chamber's members are small-and medium-size 
companies. The burden of OSHA enforcement falls with special weight 
upon them, for they can rarely afford to defend themselves against OSHA 
charges. Unfair aspects of OSHA enforcement--and there are unfair 
aspects--make it especially difficult for them to assert their rights 
and often deprives them of a fair hearing entirely.
    We therefore encourage the subcommittee to favorably report several 
bills amending the Occupational Safety and Health Act that we hope will 
be introduced shortly. These are moderate and limited bills. They are 
narrowly targeted at some of the worst problems with OSHA enforcement. 
They do not affect OSHA's ability to adopt standards. They do not 
affect OSHA's inspection authority. They do not diminish the 
obligations of any employer or diminish workplace safety. They do not 
take away any power that Congress in 1970 intended that OSHA have. Yet, 
they will make important improvements in the OSH Act. They will restore 
balance to OSHA's enforcement of the act, and give small businesses a 
fair chance to plead their case. They will enhance public respect for 
the fairness of OSHA enforcement, which is essential if the act is to 
be effective.

 A PATHOLOGY IN THE ENFORCEMENT OF THE OCCUPATIONAL SAFETY AND HEALTH 
                                  ACT

    Mr. Chairman, there is a pathology in the enforcement of the OSH 
Act. It causes courts to issue wrong decisions. It undermines the 
rulemaking process. It lets OSHA's prosecutorial zeal go unchecked. It 
encourages arrogance in OSHA's attitude toward employers. It 
effectively strips from many employers a fair opportunity to assert 
their rights. And it betrays a promise made to the United States Senate 
in 1970, when the OSH Act was passed.
    That pathology is the emasculation of the agency that Congress 
established to be a check on OSHA's excesses--the Occupational Safety 
and Health Review Commission.
    That emasculation occurred in Martin v. OSHRC (CF&I Steel Corp.), 
499 U.S. 144 (1991), where the Supreme Court held that an OSHA 
interpretation of an ambiguous regulation must be upheld if the 
interpretation is merely ``reasonable''--even if the court believes 
that the interpretation is wrong. The decision awards OSHA a home run 
even if the Review Commission and a court think that OSHA has hit only 
a foul ball. Some courts have even extended that decision to require 
deference to OSHA even when OSHA interprets the OSH Act, as opposed to 
OSHA's own standards. As I shall show later, this course of decisions 
is contrary to known congressional intent and to a pledge made directly 
to the United States Senate.
    I can hardly exaggerate the adverse effects of this decision on the 
fairness of enforcement under the OSH Act.
    As I have said, the decision emasculates the Review Commission as a 
check on OSHA. Now, OSHA is supposed to enforce the law with zeal. But 
zeal comes with a price--it can cause enforcement officials to get 
carried away. It can cause OSHA enforcement officials to resort to 
wrong legal interpretations merely because their lawyers can make them 
sound reasonable. Zeal needs to be held in check and overseen by 
persons chosen for their impartiality. That is why the commission was 
created--to serve as an impartial check on prosecutorial over-
zealousness. But the Review Commission can no longer do that.
    Chief Justice John Marshall once said that the duty of the courts 
is ``to say what the law is.'' The Review Commission may no longer say 
what the law is. It may say only whether OSHA's lawyers are 
reasonable--not right--when they say what the law is. This disability 
prevents the Review Commission--the body that Congress established to 
act as a check on OSHA--from doing its job. The Commission cannot 
restrain over-zealous enforcement officials if it must follow legal 
interpretations because they are merely defensible, and ignore whether 
they are wrong. That is the nub of the issue.

                             SOME EXAMPLES

    The following are just a few examples of the unfortunate 
consequences of judicial deference to OSHA:
     Depriving small employers of their day in court. A clear 
example of the destructiveness of deference to OSHA is the Second 
Circuit's decision in Chao v. Russell P. Le Frois Builder, Inc., 291 
F.3d 219 (2d Cir. 2002). There, OSHA's lawyers had devised an absurdly 
hyper-technical argument that the Review Commission could not relieve 
even deserving employers from merely procedural defaults. The court 
held that it was required by CF&I Steel to follow that interpretation. 
(See the fuller description of the case below.)
     Telling the public to ignore the commission. In 1995, OSHA 
issued an interpretation letter (Letter to L. Kreh from R. Whitmore 
(April 4, 1995) \1\) that told an employer to ignore a Review 
Commission decision. OSHA did not appeal the decision. Instead, it just 
ignored it and, worse, told the public to ignore it too. This is the 
kind of the arrogance that the CF&I Steel decision breeds.
---------------------------------------------------------------------------
    \1\ The letter can be found at http://www.google.com
---------------------------------------------------------------------------
     Imposing target organ labeling without rulemaking. In 
Martin v. American Cyanamid Co., 5 F.3d 140, 16 BNA OSHC 1369 (6th Cir. 
1993), rev'g 15 BNA OSHC 1497 (Rev. Comm'n 1992), the issue was whether 
millions of product labels had to be re-written. OSHA decided--after 
the rulemaking was over and after internal disagreement--that labels on 
chemical containers must state the bodily organs they affect. So, ``Do 
Not Inhale'' was no longer good enough; only ``Causes Lung Damage'' 
would do. Neither the standard nor its legislative history said that 
OSHA was right, and OSHA could point to only an ambiguous statement in 
an appendix to the standard. The Review Commission held that OSHA's 
interpretation was wrong. A court of appeals upheld OSHA's 
interpretation, however, not because it was right, but because it was 
merely ``reasonable.'' OSHA thus used deference to avoid rulemaking 
requirements, to evade scrutiny by the Office of Management and Budget 
under the Paperwork Reduction Act, and to force millions of perfectly 
sensible product labels to be re-written.
     Machine-specific lockout training. OSHA has interpreted 
its lockout standard (29 C.F.R.  1910.147) to require that maintenance 
employees be trained on how to lock out every machine they service. Do 
the words of the standard clearly require such machine-specific 
training? No. Did OSHA decide in rulemaking that it should be required? 
No. Would such a requirement be massively expensive? Yes. Would 
employees remember such training? No. Is such a requirement 
unreasonable? Yes, but it is very expensive to prove it. We were 
counsel to a large industrial corporation that received a citation 
requiring machine-specific training. To our client, the expense of 
litigating the issue would have been too high and, given CF&I Steel, 
the probability of success too uncertain, to justify litigation. This 
employer was thus forced to admit violations it did not commit.
     Chemical-specific hazard training. OSHA has taken the 
position that when employees are given chemical safety training, the 
employees must be told the name of every plant chemical and the hazard 
it presents. This is an absurd interpretation. For example, if you run 
a gasoline refinery, which has literally thousands of different 
flammable liquids, you must have a trainer uselessly recite to 
employees a mind-numbing list of the name of each flammable liquid. To 
challenge this view, a coalition of seven major trade associations had 
to finance and file an amicus curiae brief documenting in detail the 
error in that interpretation. That substantial effort was driven by the 
effect of the CF&I Steel decision. Ordinary employers--even large 
employers--simply cannot afford to mount such an effort. And so they 
forgo their rights.
    These are just a few examples of the destructiveness of judicial 
deference to OSHA. What cannot be cited to the Senate are the thousands 
of cases that are never brought because this destructive doctrine makes 
it too expensive and, frankly, fruitless for employers to seek justice 
in the first place.

                         EFFECTS ON RULEMAKING

    The CF&I Steel decision has also had the perverse effect of 
rewarding OSHA for writing ambiguities into its standards. The reason 
for this is that, under CF&I Steel, ambiguity enhances OSHA's 
litigating position. If a standard is ambiguous, OSHA need only put 
forth a ``reasonable'' interpretation and it will win. This permits 
OSHA to resolve major policy issues through ``interpretation'' and 
without rulemaking. That is why key provisions of the ill-fated 
ergonomics standard, for example, repeatedly used the ambiguous words 
``reasonable'' or ``reasonably'' to describe the employer's duty.\2\
---------------------------------------------------------------------------
    \2\ See 29 C.F.R.  1910.900(j)(iv), (s)(2), and (z), published in 
65 Fed. Reg. 68261 (2000).
---------------------------------------------------------------------------
    The decision also encourages OSHA to evade congressionally imposed 
requirements for OSHA standards, such as proving ``feasibility'' and 
``significant risk.'' It encourages OSHA to evade congressional 
oversight, to evade oversight by the Office of Management and Budget 
under the Paperwork Reduction Act, and to evade the requirements of the 
Small Business Regulatory Enforcement Fairness Act. This is precisely 
what happened in American Cyanamid, for example. There, OSHA was able 
to impose a major policy decision without rulemaking and without 
scrutiny by the Office of Management and Budget under the Paperwork 
Reduction Act.
    The CF&I Steel decision has also caused OSHA to develop at least 
two non-rulemaking avenues for making new rules--interpretation letters 
and compliance directives. Especially since the CF&I Steel decision, 
the interpretation letter culture has flourished in the OSHA field. The 
issuance of such letters is often featured in occupational safety and 
health journals \3\ and newletters.\4\ OSHA's abortive ``home office'' 
policy was announced in an interpretation letter.\5\ OSHA's lawyers 
cite such letters against employers when they favor their litigating 
position.\6\ Similarly, OSHA has taken to announcing major policies in 
compliance directives, such as its policy on multi-employer 
worksites.\7\ As the home-office debacle shows, this secret law-making 
process encourages loose thinking and irresponsible decisions. Instead 
of OSHA regulating through rulemaking, where public comment must be 
considered and other protections (such as those in the Regulatory 
Flexibility Act) must be provided, OSHA issues interpretations based 
merely on internal discussions. The result is rules made without 
rulemaking.
---------------------------------------------------------------------------
    \3\ E.g., Bureau of National Affairs, Occupational Safety and 
Health Reporter: Currents Reports, Index to Vol. 33, Nos. 1-38 (Jan. 
2--Sept. 25, 2003) (listing 15 stories in 9 months).
    \4\ E.g., AcuTech, Acusafe News ``Insider: Update to OSHA Changes 
on PSM Interpretation'' (January 2000) (Attachment T).
    \5\ See ``OSHA's Policy Concerning Employees Working At Home,'' 
Hearings before the Committee On Education and the Workforce, 
Subcommittee on Oversight and Investigations, United States House Of 
Representatives (Jan. 28, 2000). News reports about the controversy 
were broadcast on, for example, CNN Headline News on January 5, 2000. 
The letter was withdrawn. See Letter from Richard E. Fairfax to T. 
Trahan (November 15, 1999).
    \6\ E.g., Beaver Plant Operations, Inc., 18 BNA OSHC 1972, 1974 n.6 
(No.97-152, 1999).
    \7\ OSHA Directive CPL 2-0.124, Multi-Employer Citation Policy 
(December 10, 1999) .
---------------------------------------------------------------------------
               EFFECTS ON ENFORCEMENT AND SMALL EMPLOYERS

    But worst of all is the disrespect that these decisions breed for 
the commission and even the courts. I will give you an example of how 
this attitude deprives employers of their legal rights. For over a 
quarter century, the commission has held that a violation cannot be 
found unless OSHA shows that the employer knew or should have known of 
the violative condition.\8\ The courts have accepted this holding.\9\ 
One would think that OSHA would, therefore, educate its employees and 
compliance officials on this principle and that it would be reflected 
in OSHA's Field Information Reference Manual but neither is the case.
---------------------------------------------------------------------------
    \8\ E.g., Pride Oil Well Service, 15 OSHC 1809, 1814 (OSHRC 1992); 
Southwestern Acoustics & Specialty, Inc., 5 OSHC 1091 (OSHRC 1977).
    \9\ N.Y. State Elec. & Gas Corp. v. Sec'y of Labor, 88 F.3d 98, 105 
(2d Cir. 1996); Carlisle Equip. Co. v. Sec'y of Labor, 24 F.3d 790 (6th 
Cir. 1994); Pennsylvania Power & Light Co. v. OSHRC, 737 F.2d 350 (3d 
Cir. 1984); Capital Elec. Line Builders v. Marshall, 678 F.2d 128 (10th 
Cir. 1982); Ocean Elec. Corp. v. Sec'y of Labor, 594 F.2d 396 (4th Cir. 
1979); Dunlop v. Rockwell Int'l, 540 F.2d 1283, 1289-92 (6th Cir. 
1976); Horne Plumbing & Heating Co. v. OSHRC, 528 F.2d 564 (5th Cir. 
1976); Brennan v. OSHRC (Alsea Lumber), 511 F.2d 1139 (9th Cir. 1975).
---------------------------------------------------------------------------
    I have had settlement conferences with both long time and new area 
directors who give me blank stares when I mention the knowledge 
principle. Their unawareness means that the company will have to 
contest the citation and then spend time and money fighting charges 
that should never have been made. Small and medium size employers can't 
afford to do that, and even large employers often find the prospect too 
expensive, and so they must accept unjustified citations. The result is 
occasional justice for large employers and no justice for small ones. I 
have had to tell small employers and medium-size employers who were 
innocent of any violation, ``Yes, you are right, OSHA is wrong, but you 
can't afford to prove it.''
    The decision also encourages in OSHA a palpable arrogance. A safety 
expert I once knew complained to me shortly after the CF&I Steel 
decision came out that OSHA had suddenly become arrogant in its 
behavior. As a great legal scholar once said, ``There is nothing so 
calculated to make officials and other men disdainful of the rights of 
their fellow men, as the absence of accountability.'' \10\
---------------------------------------------------------------------------
    \10\ Leon Green, Public Destruction of Private Reputation--A 
Remedy?, 38 Minn. L. Rev. 567, 572-73 (1954), quoted in David W. 
Robertson, The Legal Philosophy of Leon Green, 56 Tex. L. Rev. 393, 436 
(1978).
---------------------------------------------------------------------------
   it wasn't supposed to be this way: the promise made to the senate
    The great irony is that it was not supposed to be this way. This we 
know for certain. The legislative history of the compromise that 
permitted the passage of the OSH Act indisputably proves this.
    In 1970, the act almost did not pass. Many feared that, if all 
functions under the Act were placed in the U.S. Labor Department, that 
Agency would become too powerful and the confidence of employers in the 
fairness of the act would be shattered.\11\ Proponents of giving all 
powers to the Labor Department argued that a departmental appeals board 
(i.e., a board established by Cabinet agencies to adjudicate cases 
brought by an enforcement bureau) would afford sufficient oversight and 
independence.\12\ Such boards decided cases de novo and their views 
were given deference by the courts.\13\ But distrust of internal 
appeals boards was widespread, and a veto was threatened by the 
President.\14\ To permit the passage of the act, a compromise was 
agreed upon: An independent Review Commission would be established as a 
check on prosecutorial excess. \15\
---------------------------------------------------------------------------
    \11\ S. Rep. No. 1282, 91st Cong., 2d Sess. 55 (1970), reprinted in 
Senate Subcommittee on Labor, Legislative History of The Occupational 
Safety and Health Act of 1970, 92d Cong., 1st Sess. at 141, 194 (Comm. 
Print. 1971) (debate ``so bitter as to jeopardize seriously the 
prospects for enactment . . . ). See also the pointed remarks by 
Senators Dominick and Smith appended to the Senate Report at 61-64, 
Leg. Hist. at 200-03.
    \12\ S. Rep. at 15, Leg. Hist. at 155.
    \13\ For example, the Federal Coal Mine Health and Safety Act of 
1969, 30 U.S.C.  801 et seq. (1976), gave all administrative functions 
to the Department of the Interior. That department established an 
enforcement arm, the Mining Enforcement Safety Administration (MESA), 
and an adjudication arm, the Interior Board of Mine Operation Appeals 
(IBMA). The IBMA reviewed questions of law de novo, without deference 
to MESA (see, e.g., Eastern Associated Coal Corp., 7 IBMA 133, 1976-77 
CCH OSHD 21,373 (1976) (en banc); 1 Coal Law & Regulation,  
1.04[9][b][iii], p.1-49 (T. Biddle ed. 1990) (``Of course, the Board 
could independently decide questions of law.'')), and its views were 
given deference by courts. Zeigler Coal Co. v. Kleppe, 536 F.2d 398, 
409 (D.C. Cir. 1976) (IBMA's view ``must be given some significant 
weight''). (MESA was later transferred to the Labor Department and 
became MSHA after the Federal Mine Safety and Health Act of 1977 was 
passed; the IBMA's functions were transferred to the newly-created 
Federal Mine Safety and Health Review Commission.)
    \14\ American Bar Association, Occupational Safety and Health Law 
32-33 (2d ed. 2002).
    \15\ Id.; Judson MacLaury, The Job Safety Law of 1970: Its Passage 
Was Perilous, Monthly Lab. Rev. 22-23 (March 1981).
---------------------------------------------------------------------------
    The legislative history directly addresses whether the Review 
Commission would defer to OSHA. The author of the compromise, Senator 
Jacob Javits, whom even the Labor Department's own historian has stated 
``played a major role in the passage of the act,'' \16\ specifically 
assured the Senate that the commission would decide cases ``without 
regard to'' OSHA. He stated that adjudication would be conducted by 
``an autonomous, independent commission which, without regard to the 
Secretary, can find for or against him on the basis of individual 
complaints.'' \17\ On the strength of that assurance, Senator Holland 
immediately declared his support, stating that ``that kind of 
independent enforcement is required.'' \18\ On the heels of that 
remark, the Senate passed the OSH Act. These remarks appear to be the 
only legislative history that directly addresses the deference issue. 
They indisputably show that the U.S. Senate and the Congress intended 
that the commission not defer to OSHA.
---------------------------------------------------------------------------
    \16\ Judson MacLaury, ``The Occupational Safety and Health 
Administration: A History of its First 13, 1971-1984,'' available at 
http://www.dol.gov/asp/programs/history/mono-
osha13introtoc.htm#jud,esp. Chapter 1, ``George Guenther 
Administration, 1971-1973: A Closely Watched Start-Up'' (http://
www.dol.gov/asp/programs/history/osha13guenther.htm) (Javits ``a New 
York Republican who had played a major role in the passage of the 
Act'').
    \17\ Leg. Hist. at 463 (remarks of Senator Javits).
    \18\ Id. at 463; see also id. at 193-94, 200-03, 380-94, 479.
---------------------------------------------------------------------------
    Deference to OSHA is, of course, contrary to congressional intent, 
for the commission cannot both decide cases ``without regard to'' OSHA 
and also defer to its views. Moreover, deference makes the commission 
even more subservient than the department appeals boards that Congress 
in 1970 specifically rejected as insufficiently independent.
    So why did the CF&I Steel decision come out the other way? 
Unfortunately, the employer's brief in that case did not bring Senator 
Javits's floor statement to the Supreme Court's attention. The 
employer's brief did not quote or cite the remark and, apparently as a 
result, the Court did not discuss it. The employer, CF&I Steel, was 
then in bankruptcy, used a sole practitioner with almost no OSHA 
experience, and apparently could not afford the cost of thorough legal 
research.\19\ The remark was briefly mentioned in only an amicus curiae 
brief and apparently overlooked. Thus, one cannot blame the Supreme 
Court for this misstep. The Senate should, however, cure it.
---------------------------------------------------------------------------
    \19\ That CF&I Steel was then in bankruptcy is shown by United 
States v. Reorganized CF&I Fabricators of Utah, Inc., 518 U.S. 213 
(1996). That it was represented by a small practitioner is shown by the 
legal directory at http://pview.findlaw.com/view/2222453	1?noconfirm=0. 
That this small practitioner had not previously litigated OSHA cases 
can be shown by a Westlaw or Lexis search of the commission's cases.
---------------------------------------------------------------------------
    We urge the Senate to redeem the promise made to its members by 
Senator Javits by restoring the Review Commission's proper place under 
the OSH Act.

                          THE VACANCY PROBLEM

    Another bill before the committee would expand the Review 
Commission from three to five members. This is a much-needed reform, 
and we most respectfully urge that it be passed.
    For over two thirds of its existence, the commission has been so 
paralyzed by frequent vacancies that it has been unable to do its job. 
At the moment, the commission has only two members, which nearly always 
results in paralysis. Unfortunately, that is common. For about half its 
existence, the commission has had two or fewer members and, for over a 
third of that time, it has had only two members. For 20 percent of that 
time, it lacked even a quorum of two. Between 1996 and 1999, it had a 
full complement for only a third of the time. So cases sit, often for 
many years, and the backlog mounts as new cases come in. One large and 
important case has been pending before the Commissioners for 11 years.
    This endemic problem has greatly damaged public respect for the 
commission and prevented it from doing what Congress expected--decide 
cases expeditiously and keep a watch on OSHA's excesses. This would be 
far less likely to happen if the OSHRC had five members. As I mentioned 
above, I have served at both the OSHRC and its counterpart under the 
Mine Safety Act, the Federal Mine Safety and Health Review Commission 
(FMSHRC), which has five members. The difference between the two 
agencies is like night and day. A major reason for this is that the 
FMSHRC has five members while the OSHRC has only three. Because it has 
five members, the FMSHRC has enjoyed a much more stable membership than 
the OSHRC. The FMSHRC can usually be assured of having at least a 
quorum of three to decide cases. The OSHRC cannot.
    We respectfully urge the Congress to expand the commission to five 
members.

         ATTORNEYS' FEES--LEVELING THE PLAYING FIELD JUST A BIT

    The bill on attorneys' fees is a modest step in the right 
direction. It would award attorneys' fees and expenses to the very 
smallest employers if they win. It applies to employers with not more 
than 100 employees and a net worth of not more than $7 million and 
applies only to OSHA.
    The Equal Access to Justice Act (EAJA) has not succeeded in 
protecting small employers from erroneous OSHA prosecutions. The 
principle reason is that, under the EAJA, even if an employer wins, 
OSHA does not have to pay the employer's attorneys' fees unless OSHA's 
position was not ``substantially justified.'' That is far too easy a 
target for OSHA to hit. OSHA's specialized lawyers can almost always 
come up with a plausible justification for the prosecution, and that is 
in practice all that they need to show. And it is difficult and 
expensive to prove that OSHA's position was not ``substantially 
justified'' even if it was. Even if a small employer proves that he or 
she is innocent and OSHA should not have brought the case, that 
employer must still start another proceeding, incurring even more 
expenses, to prove that OSHA's position was not ``substantially 
justified.'' This is a formidable deterrent to seeking fees, 
particularly since OSHA can meet this test relatively easily.
    The bill will help solve this problem, and somewhat re-open the 
door to the courthouse for small employers. To be sure, the bill's 
effect will be modest, as it covers only the smallest of the small 
employers covered under the EAJA, which applies to employers of 500 
employees and not more than $7 million. Few small employers will want 
to gamble on winning in court. Few will beat OSHA's specialized 
attorneys. Nearly all will continue to settle at the informal 
conference stage, to which this provision does not apply. Nevertheless, 
the prospect of having to pay attorneys' fees and expenses should 
encourage OSHA and its lawyers to be sure of their legal ground before 
prosecuting a small employer. It will force them to focus on employers 
that truly deserve their attention. That will assuredly be a good 
thing.
    Now some will argue that this provision will ``chill'' legitimate 
enforcement by OSHA, because the expenses will be paid from OSHA's 
budget. However, the Congressional Budget Office estimated the cost of 
a previous version of this legislation to OSHA at about only 3 million 
dollars per year. This seems to be a small price to pay to make OSHA 
think twice about the strength of its case before going after the small 
employer and to inject a little justice into a system that grinds up 
small employers in litigation costs and effectively denies them the 
opportunity to vindicate themselves.

      GIVING SMALL EMPLOYERS A NEEDED BREAK FROM DEFAULT JUDGMENTS

    Right now, the case law under the OSH Act deprives employers--and 
especially small employers--of the same right to seek relief from a 
default judgment possessed by nearly every other litigant in the 
Nation. If a small employer fails to file an answer to a complaint on 
time in almost any other court, that court has the power to relieve the 
small employer of the default, and give him a day in court. But that is 
not true under the OSH Act. According to a recent decision by the U.S. 
Court of Appeals for the Second Circuit, which I will soon describe, an 
employer flatly loses its opportunity to defend itself before the 
Occupational Safety and Health Review Commission, and will be deemed 
guilty, if it misses a rigid 15 working day deadline to file a notice 
contesting an OSHA citation, even if the employer had a good excuse for 
missing that deadline. The employer is out of luck and the Government 
wins without even proving its case.
    Although OSHA recently announced that it would no longer urge this 
interpretation, administrations change and there is no guarantee that a 
future OSHA will adhere to this course. Accordingly, a bill to cure 
this problem permanently is needed.
the facts of the le frois case--an undisputed case of excusable neglect
    Take the case of Russell P. Le Frois Builder, Inc. OSHA issued 
citations and $11,265 in proposed penalties to that company by 
certified mail. A secretary for the company got the envelope from the 
post office, and put it with the day's other mail on the front seat of 
her car. The envelope with the OSHA citation apparently slipped behind 
the seat, where it was found after the 15 working day contest deadline 
expired. The company had used the same mail pickup system for 18 years 
and had not previously had a problem with it. Le Frois promptly filed a 
notice of contest, and asked the independent Occupational Safety and 
Health Review Commission for ``a chance to tell our side and to defend 
ourselves.'' The commission excused the lateness of the notice of 
contest, finding this to be a case of excusable neglect.
    OSHA agreed that the Le Frois case involved excusable neglect. But 
OSHA appealed anyway to the U.S. Court of Appeals for the Second 
Circuit--and won, with one judge dissenting. Chao v. Russell P. Le 
Frois Builder, Inc., 291F.3d 219 (2d Cir. 2002). OSHA convinced the 
court that the Review Commission lacked the power to relieve an 
employer from a default on the ground of excusable neglect.

              THE UPSHOT--EXCUSABLE NEGLECT IS IRRELEVANT

    The Review Commission thus stands nearly alone among the courts of 
the Nation in lacking the power to relieve an employer of a procedural 
default caused by neglect that is excusable. If this result makes no 
sense, that is because sense has nothing to do with it. OSHA's 
litigation position and the decision of the Second Circuit turn instead 
on a hyper-technical reading of the OSH Act and judicial deference to 
OSHA. The decision holds that Section 12(g) in which Congress ordered 
the commission to apply court rules, including a rule permitting relief 
from default judgments--was overridden by Section 10(c) of the OSH Act, 
which makes uncontested citations final and not subject to review.
    I will spare the subcommittee my technical analysis of the matter. 
Suffice it to say that the bill would do away with this unequal result 
and put employers on the same footing as nearly every other litigant in 
the Nation: They will have the right to ask for relief from a default 
judgment and, after explaining, have a reasonable opportunity to obtain 
that relief. This bill would permit the commission to grant relief in 
rather narrow circumstances--when the default is due to ``mistake, 
inadvertence, surprise, or excusable neglect.'' That language is taken 
directly from Federal Rule of Civil Procedure 60(b), which has long 
been interpreted by the commission and the courts to permit relief if 
there is a legitimate reason.
    For that reason, the change brought about by this bill will be 
modest. Under the bill, comparatively few employers will qualify for 
relief from default. The effect on OSHA's enforcement program will be 
small. But small employers will notice it. They will know that under 
the OSH Act they can at least have a shot at justice. Why is a shot at 
justice important? Because the consequences of being unable to appeal 
an OSHA citation can be severe and far-reaching. They include:
     Payment of proposed penalties. Penalties can range up to 
$7000 for ``serious'' and non-serious violations, from $0 to $70,000 
for each ``repeated'' violation, and $5000 to $70,000 for each 
``willful'' violation.
     Inclusion of the citation on the employer's ``history of 
previous violations,'' which raises subsequent penalties, and which is 
available to the public to see on the Web.
     Exposure to subsequent ``repeated'' or ``willful'' 
violations, even if the subsequent violation occurred at a different 
workplace or years later.\20\
---------------------------------------------------------------------------
    \20\ See Potlatch Corp., 7 BNA OSHC 1061, 1064 (OSHRC 1979) (no 
time or location limit on ``repeated'' violations).
---------------------------------------------------------------------------
     Disqualification in some jurisdictions from bidding on 
public construction contracts. E.g., Cal. Gov't Code  
14661(d)(2)(B)(vi)(II).
     Use of the citation against the employer in civil 
litigation.\21\
---------------------------------------------------------------------------
    \21\ E.g., Felden v. Ashland Chemical Co., 631 N.E.2d 689 (Ohio 
App. 1993) (admitting OSHA citation); Industrial Tile v. Stewart, 388 
So.2d 171 (Al. 1980) (same).
---------------------------------------------------------------------------
     A requirement to abate the cited condition. This might 
require that a factory be rebuilt or a construction method be 
abandoned. It might require that a machine be modified to meet 
specifications in an inapplicable standard. See, e.g., Losli, Inc., 1 
BNA OSHC 1734 (OSHRC 1974), where a failure to contest a citation meant 
that a metal shear had to be modified to meet inapplicable 
specifications for power presses--a nonsensical result.
    Moreover, there is more than one way that small employers can 
innocently fail to timely contest a citation, aside from losing a mail 
envelope. For example, a notice of contest sent to the wrong agency--to 
the Review Commission rather than OSHA--is ineffective.\22\
---------------------------------------------------------------------------
    \22\ See Fitchburg Foundry, 7 BNA OSHC 1516 (OSHRC 1979) ( 10(a) 
requires notice of contest to be sent to ``the Secretary'').
---------------------------------------------------------------------------
    Legislation to permanently fix this problem should be introduced.
    Thank you for permitting me to participate in this afternoon's 
panel. I look forward to answering any questions that you may have.

    Senator Isakson. Thank you, Mr. Sapper. Ms. Rhinehart.
    Ms. Rhinehart. Thank you, Mr. Chairman, Mr. Chairman and 
Senator Murray.
    I appreciate the opportunity to testify this afternoon on 
measures to improve safety and health protections for America's 
workers, and particularly workers at small businesses. Clearly, 
a lot of work remains to be done.
    I appreciate the opening comments of the Senators and the 
panelists. I think it is clear that we all agree and support 
job creation in America. We all want to see increased 
employment and see our economy grow. We also all support 
workplace safety to protect America's workers. The question is 
how we get there.
    The fact is that there is much work that still needs to be 
done. We have serious safety and health problems in America's 
workplaces.
    Senator Murray recounted these statistics better than I can 
and so I will be very brief in summarizing just a couple. Each 
day 15 workers die on the job, over 5,500 a year. That is not 
counting the tens of thousands of workers who die from 
occupational diseases like cancer caused by asbestos, benzene 
and other substances. There are more than 12,000 workers a day 
who are injured on the job, more than 4 million workers each 
year. That is the population of many small towns in America who 
get injured on the job every day of every year in this country.
    The cost of these injuries, according to data produced by 
the Liberty Mutual Insurance Company, is more than $1 billion a 
week. Not $1 billion a year, $1 billion a week. So it is an 
extremely expensive cost to our Nation, to workers, to their 
families. The fact is that prevention of these injuries and 
illnesses is good for workers. It is good for families. And it 
is good for the bottom line.
    Now there are many well-meaning good employers out there 
doing the right thing, trying to protect their workforce and 
paying attention to job safety issues. But we would not have 4 
million injuries in America today and 50,000 to 60,000 workers 
being killed and dying from occupational disease in this 
country if everybody was doing the right thing. So clearly, 
there are problems that still need to be addressed.
    One of the problems is that we have a job safety agency 
that is chronically underfunded and has just an enormous job to 
do with very limited resources. OSHA gets about $450 million a 
year to protect the health and safety of more than 100 million 
workers at more than 8 million worksites. Federal OSHA has less 
than 1,000 inspectors. There are about 2,000 inspectors 
nationwide, if you count Federal, OSHA and State plans. As 
Senator Murray pointed out, this is enough inspectors to 
inspect each workplace in America once every 108 years.
    In some States, there are even fewer than average 
inspectors. Like for example, Georgia only has 33 inspectors to 
cover 220,000 businesses. And so inspectors there can only get 
to workplaces once every 158 years. Other States like 
Washington State are actually better than the average. 
Washington State has 119 inspectors to cover about the same 
number of workplaces as exist in Georgia. There, inspectors can 
get to workplaces on average once every 33 years. Better, still 
not great. It is clearly a very under-resourced Agency.
    So given the fact that OSHA cannot get to workplaces all 
that often, you would expect to find significant penalties when 
they do get to the workplace and find that an employer has been 
violating the job safety law. You would expect significant 
penalties. But that is simply not the case. The average penalty 
for violating the OSHA law is only $955. It is less, it is $872 
on average, for series violations of the law which are 
violations that pose a substantial risk of death or serious 
injury to workers.
    And criminal enforcement under the OSHA law, in comparison 
to environmental laws for example, is virtually nonexistent. 
And that is because the criminal provisions in the OSHA law are 
such that an employer can only be prosecuted for a willful 
violation of the law if a worker dies. If a worker is injured 
or put at great risk, that is not enough. A worker actually has 
to die. And in that instance, the penalty is a misdemeanor, 6 
months in jail. You can go to jail for longer for harassing a 
wild burro on Federal lands than you can for willfully killing 
a worker in this country. And that is just not right.
    So in our view, the law needs to be strengthened, not 
weakened, and much more needs to be done to protect workers in 
this country.
    I would like to make a couple of points about safety and 
health as it pertains to small business in particular. I think 
we all would agree that small does not necessarily mean safe, 
that there are serious hazards that exist in small businesses, 
particularly in certain industries like, for example, 
construction.
    According to the Bureau of Labor Statistics, in the 
construction sector firms with fewer than 20 employees are 38 
percent of the workforce but have 55 percent of the fatalities. 
There are other studies that have been done around the country. 
For example, in Texas a study of Hispanic construction workers 
showing the same sort of disproportionate fatality rate as 
small construction employers.
    There are a number of measures in place in law and by OSHA 
to assist small employers in complying with the law. There is a 
$53 million per year compliance assistance program that is 
directly targeted to small employers. That is four times the 
annual budget that OSHA has to set job safety standards. Four 
times that budget goes to assist small employers in complying 
with the law. Last year about 31,000 employers, all small 
employers, received assistance through that program.
    Small employers get up to 60 percent penalty reduction when 
they are cited by OSHA. Very small employers, employers with 
fewer than 10 employees, are exempt through an appropriations 
rider from regular job safety inspections.
    And there are other laws like SBREFA and the Regulatory 
Flexibility Act and alphabet soup of regulatory oversight laws 
that direct the Agency to pay particular attention to the 
concerns of small business.
    We agree that consultation and outreach to small business 
is appropriate but we also think that we need strong 
enforcement of the law as a deterrent to get employers to focus 
on protecting the safety and health of their workers. It is not 
one or the other. We really do need both.
    I see I am running short on time but I would like to spend 
just a minute talking for a few minutes about a small employer 
by the name of Eric Ho.
    Senator Isakson. 2 minutes, is that good?
    Ms. Rhinehart. I can do that. I can do this in 2 minutes. 
Thank you, Mr. Chairman.
    Senator Isakson. Even two-and-a-half, you are so nice.
    Ms. Rhinehart. I appreciate it, Mr. Chairman.
    I would like to talk for a couple of minutes about Eric Ho, 
a small employer, and how that sad story relates to the issues 
that we are talking about today and the legislation introduced 
in the House of Representatives.
    Eric Ho is a small employer in Houston, Texas. He hired 11 
undocumented workers from Mexico to do building renovation work 
at a facility in Texas. They were scraping and removing 
material that contained asbestos. As you know, asbestos causes 
cancer, lung disease and a range of other disorders.
    Eric Ho knew there was asbestos and he knew his workers 
were being exposed. He provided them no training. He provided 
them no respirators, none at all.
    The city inspector of Houston inspected the workplace and 
he saw dust and he saw that workers were not provided 
respirators. That inspector issued a stop work order and told 
Eric Ho to stop the job until he got a proper workforce and 
inspector on site.
    Eric Ho did not stop the job. Instead, he had the work done 
at night, under cover of darkness. He locked the gates and had 
workers work behind locked gates with no water, one portable 
toilet, to get the job done. No respirators, no training or 
other safety equipment.
    OSHA inspected and cited Eric Ho for 11 willful violations 
of its asbestos training standard and its asbestos respirator 
standard. One violation per employee who was not provided a 
respirator or training. Eric Ho admitted he did not provide the 
respirators or training but he took his case to the 
Occupational Safety and Health Review Commission which threw 
out 10 out of the 11 citations, saying that OSHA only had 
authority to cite him once for violating a training standard 
and once for violating the respirator standard, even though 11 
workers needed a respirator to protect them from the asbestos 
and 11 workers needed training to be protected on the job.
    Incidentally, Eric Ho was also criminally convicted for 
violating the Clean Air Act and letting asbestos into the air 
but he could not be prosecuted under the OSHA law because the 
workers did not die, they were just put in harm's way. So he 
was criminally convicted under the environmental laws but 
succeeds before the Review Commission in getting 10 out of his 
11 citations thrown out.
    What does all that have to do with the price of milk and 
what we are talking about here today? Two things. First, one of 
the measures introduced in the House of Representatives, HR 
742, would give employers like Eric Ho their attorney's fees. 
Because he was able to get 10 out of 11 of those citations 
thrown out at the Review Commission, he would have taxpayers 
pay his attorney's fees for fighting his case. So that bill 
would reward rogue employers like Eric Ho and give them their 
attorneys' fees at the end of the day. We think that is just an 
outrageous use of public funds and taxpayer funds, especially 
when you are talking about an agency that does not have enough 
money to the job as it is.
    Second, the Eric Ho case relates very much to the deference 
bill, the bill that Mr. Sapper was talking about, that would 
shift the deference from the Secretary of Labor to the 
Occupational Safety and Health Review Commission.
    Why is that? Well, because the issue in the Ho case was 
whether or not the respirator and training standards were 
standards that imposed obligations to individual employees, 
whether or not the standards meant that each employee got a 
respirator or whether just employees as a whole got 
respirators. The Secretary of Labor interpreted the rules to 
say each employee, the rule means each employee gets a 
respirator. The Review Commission engaged in exactly the kind 
of second-guessing that the U.S. Supreme Court said it should 
not and it said no, the rule only allows one citation and it 
threw out all but one of those citations against Eric Ho.
    HR 741, the bill in the House of Representatives, would 
open the door to more decisions like Ho, by giving the Review 
Commission the authority to make decisions like that. And to 
give deference to decisions like that, we believe, places 
deference and authority in the wrong place. The deference 
should go to the policymaker, the rulemaker, not to the 
adjudicator.
    We think that the legislation moves things in the wrong 
direction and we would prefer measures that would actually 
strengthen the job safety law, not divert resources away from 
OSHA and the important work it needs to do.
    Thank you, Mr. Chairman, and thank you for the additional 
couple of minutes.
    [The prepared statement of Ms. Rhinehart follows:]

                  Prepared Statement of Lynn Rhinehart

    Mr. Chairman and members of the subcommittee, thank you for the 
opportunity to testify today about the need to improve safety and 
health protections for the millions of workers employed by small 
businesses. My testimony will address several legislative proposals 
(H.R. 739, 740, 741, and 742) that have been advanced and promoted on 
grounds that they will assist small businesses in their efforts to 
comply with the requirements of the Occupational Safety and Health Act. 
This testimony is submitted on behalf of the 13 million working men and 
women represented by the 57 national and international unions that 
comprise the AFL-CIO.
    The Occupational Safety and Health Act (OSH Act), as written and as 
administered by the Occupational Safety and Health Administration 
(OSHA), already includes numerous measures to assist small businesses 
in complying with the law. In our view, the pending legislative 
proposals are either unnecessary or counterproductive. The bills will 
drain resources away from an agency that is chronically underfunded and 
struggling to fulfill its statutory mandate. And the bills will do 
nothing to address the serious job safety hazards faced by American 
workers.
    Two weeks ago, on Workers Memorial Day (April 28), the AFL-CIO 
released a report, entitled, ``Death on the Job: The Toll of Neglect,'' 
that details the astounding number of deaths and injuries occurring in 
workplaces across the United States, and the numerous shortcomings in 
our Nation's efforts to deal with this serious problem. Each year, 
millions of workers are injured or made ill by job hazards. According 
to the Bureau of Labor Statistics, each day, 15 workers die on the job. 
The number would be far higher if deaths from occupational diseases 
such as cancer and black lung disease were included.
    At its current budget levels, OSHA's enforcement reach is severely 
limited. There are at most 2,138 Federal and State OSHA inspectors 
responsible for enforcing the law at approximately 8 million 
workplaces. In fiscal year 2004, 861 Federal OSHA inspectors conducted 
39,246 inspections, and the inspectors in State OSHA agencies conducted 
58,675 inspections. At its current staffing and inspection levels, it 
would take OSHA 108 years to inspect each jobsite in America just once.
    The penalties assessed by OSHA for violations of the law are 
exceedingly modest. In fiscal year 2004, OSHA assessed a total of $82.6 
million in penalties against employers for 86,475 violations of the 
law, for an average penalty of just $955. The average penalty for a 
serious violation of the Occupational Safety and Health Act--defined as 
a hazard posing a ``substantial probability that death or serious 
physical harm could result,'' 29 U.S.C.  666(k)--is just $872.
    Serious safety and health hazards exist at workplaces across the 
United States, in businesses large and small. Just because a business 
is small does not mean it is safer. To the contrary, small firms, 
particularly in high hazard industries like construction, are very 
dangerous.
    The Bureau of Labor Statistics' fatality data--which, unlike injury 
data, is based upon a government census, and not employer self-
reports--shows that in high risk industries such as construction, small 
firms account for a disproportionately high percentage of fatal 
injuries. For example, according to BLS, firms with fewer than 20 
employees employed 38.2 percent of the construction workforce, but 
accounted for 55.5 percent of all construction fatalities. (BLS, 2002 
Census of Fatal Occupational Injuries).
    Similarly, a study of Hispanic construction workers in Texas found 
that 40 percent of fatalities among these workers occurred in 
establishments of less than 10 employees. (Fabrega and Starkey, Fatal 
Occupational Injuries among Hispanic Construction Workers of Texas, 
1997 to 1999, Human and Ecological Risk Assessment, 2001; 7:1869-1883). 
And a study of fatalities among teenage construction workers found a 
similar result. Sixty three percent of the teenage construction 
fatalities investigated by OSHA from 1984-1998 occurred at firms with 
fewer than 11 employees. (Suruda et al., Fatal Injuries to Teenage 
Construction Workers in the U.S., American Journal of Industrial 
Medicine, 2003, 44:510-514).
    Clearly, small businesses have their share of workplace hazards, 
particularly in high risk industries. Workers employed at these firms 
need the full protection of the job safety law.
    It is important to point out that OSHA, and the OSH Act, already 
include special provisions designed to assist small employers and 
provide them special relief in enforcement proceedings. First, for more 
than 25 years, through a rider in the annual OSHA appropriations bill, 
employers with 10 or fewer employees in ``safer'' industries have been 
exempt from OSHA general schedule inspections. This exemption covers 
the majority of small businesses in this country. These firms are only 
subject to inspections in the event of a fatality or complaint from 
employees alleging serious hazards.
    Second, the OSH Act itself directs that the size of the employer 
must be taken into account in setting penalties, along with the 
seriousness of the violation, the employer's compliance history, and 
the employer's good faith. 29 U.S.C.  666(j). OSHA has established 
specific enforcement policies taking these statutory mandates into 
account. Under OSHA's policy, the smallest employers--those with 25 or 
fewer employees--are entitled to an automatic 60 percent reduction in 
the amount of the assessed penalty. The percentage reduction decreases 
as the size of the employer increases. (Field Inspection Reference 
Manual, Ch. IV.C.2.c.) Penalties may be further reduced in any post-
citation settlement, and they also may be reduced by the Occupational 
Safety and Health Review Commission (OSHRC), which considers the size 
of the employer when establishing a final penalty amount.
    Third, for decades OSHA has had a small business compliance 
assistance program. This program, administered through grants to the 
States, is currently funded at more than $53 million in the fiscal year 
2005 budget--more than 10 percent of OSHA's entire budget. This is 
nearly four times more than the agency spends developing workplace 
safety standards. According to OSHA, in fiscal year 2004, there were 
31,334 consultation assistance visits conducted under this program, all 
of which, pursuant to OSHA's policies, were conducted at business 
establishments with fewer than 250 employees.
    The AFL-CIO believes that these measures appropriately address the 
particular issues and needs of small employers, and they should be 
continued. We do not support the additional measures contained in H.R. 
739, 740, 741, and 742. It is important to point out that only one of 
these bills--H.R. 742--specifically applies only to employers with less 
than 100 employees. The other bills apply to all employers covered by 
the OSH Act. These bills would chill enforcement of the law and divert 
much-needed resources from enforcement and standard-setting, at a time 
when the injury, fatality, and enforcement statistics all show that 
more, not less, enforcement of the job safety law is needed to protect 
American workers.
    Our views on each of the bills are set forth below.

H.R. 742, The Occupational Safety and Health Small Employer Access to 
                    Justice Act

    H.R. 742 would require taxpayers to pay the attorneys' fees and 
legal costs for ``small'' employers (defined as employers with 100 or 
fewer employees and up to $7 million net worth) who prevail in any 
administrative or judicial proceeding brought by OSHA or any challenge 
to an OSHA standard, regardless of whether OSHA's action was 
substantially justified. This bill would drain resources away from OSHA 
and further weaken OSHA enforcement at a time when it needs to be 
strengthened, not curtailed.
    Under the age-old American Rule, each party to litigation pays its 
own expenses. This is true not only in private litigation but also in 
cases in which the Government acts as public prosecutor to enforce 
consumer protection laws, environmental laws, safety and health laws, 
and labor laws.
    The Equal Access to Justice Act (EAJA) provides a limited exception 
to the American Rule. Under EAJA, organizations with no more than 500 
employees and a net worth of no more than $7 million, can recover their 
fees and costs if they prevail in administrative or judicial 
proceedings against the Federal Government, but only if they meet two 
conditions. First, an award is proper under EAJA only if the agency's 
position was not substantially justified. Second, an award can only be 
made if there are no special circumstances that would make the award 
unjust. 5 U.S.C.  504.
    H.R. 742 would create a special exception from the American Rule, 
and from EAJA, for legal proceedings under the OSH Act. Employers that 
prevailed in administrative or judicial proceedings under the OSH Act 
would be entitled to fees and costs from OSHA without having to show 
that the Government's position lacked substantial justification and 
that there are no special circumstances that would make an award 
unjust.
    There is no credible reason for carving out this exception either 
to the American Rule or to EAJA. By subjecting OSHA to the payment of 
attorneys' fees and costs every time the agency loses a case to an 
employer falling within the bill's definition, the bill would seriously 
weaken OSHA's effectiveness.
    When Congress enacted EAJA, it considered and rejected automatic 
awards to prevailing parties precisely because such an ``approach did 
not account for the reasonable and legitimate exercise of government 
functions and, therefore, might have a chilling effect on proper 
government enforcement efforts.'' GAO, ``Equal Access to Justice Act: 
Its Use in Selected Agencies,'' Jan. 14, 1998, at 9. Instead, Congress 
crafted EAJA's limited exceptions ``to insure that the Government is 
not deterred from advancing in good faith the novel but credible 
extensions and interpretations of the law that often underlie vigorous 
enforcement efforts.'' H.R. Rep. No. 1418, 96th Cong., 2d Sess. at 11.
    H.R. 742's reach is broad. Notwithstanding the label ``small 
employer'' in the title, the bill would apply to all employers with not 
more than 100 employees and a net worth of not more than $7 million. 
Data from the Census Bureau show that establishments with fewer than 
100 employees make up 98 percent of all private sector establishments. 
(U.S. Census Bureau, Statistics about Business Size, 2001). Excluding 
businesses with no employees (i.e., self-employed individuals), 
establishments with fewer than 100 employees still comprise 86 percent 
of all private sector business establishments. Id. These firms employ 
fully 36 percent of all employees, or nearly 41 million workers. Id.
    In contrast, Congress traditionally defines ``small business'' for 
the purpose of establishing coverage under a range of other employment-
related laws by imposing a far smaller ceiling on the size of the 
workforce. The Age Discrimination in Employment Act, for example, 
applies to employers who have 20 or more employees. 29 U.S.C.  630(b). 
Title VII of the Civil Rights Act, 42 U.S.C.  2000e(b), covers 
employers with 15 or more employees. But the vast majority of private 
sector establishments would fall within the employee threshold for 
coverage established by H.R. 742.
    H.R. 742 would provide a monetary incentive for more employers to 
challenge OSHA citations, to spare no expense, and to drag out 
litigation of the case, because at the end of the day they could 
recover their attorneys' fees and costs if they prevailed.
    The bill would allow even the worst employers--ones with repeated 
and egregious violations--to recover fees if they prevailed on a 
particular violation. Take for example Eric Ho, who was cited for 11 
willful violations of OSHA's respirator and training standards after he 
exposed his immigrant workforce to asbestos by requiring them to 
perform building renovation work behind locked gates at night without 
any respirators or training. Eric Ho was criminally convicted of 
violating the Clean Air Act. But he succeeded in persuading the 
Occupational Safety and Health Commission to throw out 10 of the 11 
willful OSHA violations, on grounds that OSHA was not allowed to cite 
Ho for each employee exposed to asbestos hazards, but could only issue 
one citation. Secretary of Labor v. Ho, Nos. 98-1645 & 98-1646 (OSHRC, 
Sept. 29, 2003). H.R. 742 would require taxpayers to pay the attorneys 
fees and costs of rogue employers like Eric Ho.
    EAJA currently provides for fee awards if the Government's position 
is not ``substantially justified.'' EAJA thus penalizes--and deters--
the filing of insubstantial complaints. No rational public policy would 
be furthered by discouraging OSHA from issuing citations that are 
substantially justified but as to which the government ultimately is 
unable to carry its burden of proof. Rather, the inevitable result of 
such a rule, which would penalize the government every time it loses, 
would be to chill the issuance of meritorious citations in close cases 
on behalf of employees exposed to unsafe working conditions.
    It is important to point out that H.R. 742 is not limited to 
enforcement proceedings initiated by OSHA. By its terms, H.R. 742 
applies to any administrative or judicial proceeding, meaning that 
qualifying employers could recover their attorneys' fees and costs for 
successfully challenging an OSHA standard or regulation in court. While 
OSHA has been quite successful in defending its rules and standards, 
this provision will create a huge financial incentive for businesses to 
fight OSHA's rules even more routinely and aggressively, given the 
possibility of recovering their attorneys' fees and costs at the end. 
As a result, OSHA will be even more reluctant to issue much-needed 
workplace safety rules to protect workers.
    H.R. 742 will drain resources away from an agency that has 
perpetually struggled to do its job with the limited resources 
available to it. As estimated by the Congressional Budget Office, this 
bill would cost $7 million in fiscal year 2005 and $44 million total 
for fiscal year 2005-2009, which must come out of OSHA's budget. This 
would require Congress to appropriate additional money to OSHA's budget 
to cover the cost of the bill or to cut OSHA's enforcement budget or 
reduce compliance assistance to small business. Passage of this bill 
would further reduce the resources available for implementing and 
enforcing the OSH Act, to the detriment of working men and women who 
depend on OSHA to protect their safety and health on the job.

H.R. 741, The Occupational Safety and Health Independent Review of OSHA 
                    Citations Act

    H.R. 741 is a misdirected piece of legislation that would undermine 
the Secretary of Labor's authority to interpret and enforce the job 
safety law. The bill flies in the face of Supreme Court precedent and 
longstanding administrative law principles. The bill should be 
rejected.
    H.R. 741 would overturn the Supreme Court's unanimous decision in 
Martin v. Occupational Safety and Health Review Commission, 499 U.S. 
144 (1991). Martin v OSHRC dealt with the question of which agency's 
interpretation of an OSHA rule should be given deference--the Secretary 
of Labor's, or OSHRC's. After reviewing the language, structure, and 
legislative history of the OSH Act, the Court unanimously ruled that 
the Secretary of Labor, and not OSHRC, should be given deference.
    The Court's decision in Martin v. OSHRC was in keeping with well-
established precedent giving deference to administrative agencies that 
are given authority by Congress to adopt and implement regulations. 499 
U.S. at 150-151 (citing precedent). In Martin v. OSHRC, the Court 
elaborated on the important reasons for this rule.
    First, the Court pointed out that the Secretary of Labor ``enjoys 
readily identifiable structural advantages over the commission in 
rendering authoritative interpretations of OSH Act regulations. Because 
the Secretary promulgates these standards, the Secretary is in a better 
position than is the commission to reconstruct the purpose of the 
regulations in question.'' 499 U.S. at 152. By contrast, OSHRC does not 
promulgate occupational safety and health standards and has no such 
expertise.
    Second, the Court pointed out that ``by virtue of the Secretary's 
statutory role as enforcer, the Secretary comes into contact with a 
much greater number of regulatory problems than does the commission, 
which encounters only those regulatory episodes resulting in contested 
citations.'' 499 U.S. at 152. This experience makes it ``more likely 
[that the Secretary will] develop the expertise relevant to assessing 
the effect of a particular regulatory interpretation.'' Id. By 
contrast, OSHRC sees only a small slice of the enforcement cases 
brought by the Secretary. Employers seek review of less than 10 percent 
of all cases before the commission, and only a fraction of these cases 
are heard by the full commission. As a consequence, the commission does 
not have the same breadth and depth of knowledge and experience as the 
Secretary of Labor.
    It is also important to note that under Martin v. OSHRC and related 
cases, the Secretary of Labor still has the burden of showing that her 
interpretation is reasonable. Where the commission or a reviewing court 
believes the Secretary's interpretation is not reasonable--for example, 
where the Secretary has advanced conflicting or inconsistent 
interpretations--no deference is given to the Secretary's view. Thus, 
the Secretary does not have unbridled discretion; there is a very real 
and substantial check on her authority built into the system.
    H.R. 741 would turn this well-established system upside down and 
say that the Review Commission, not the Secretary, should get the final 
say on the meaning of the Secretary's regulations. This defies 
longstanding precedent and common sense. As the Court in Martin 
recognized, the Secretary of Labor, as the policymaking entity that 
promulgates and enforces workplace safety standards, is in a far 
superior position to interpret the meaning of her own regulations, and 
to have those interpretations respected so long as reasonable. Policy 
decisions like the interpretation of workplace safety standards should 
be left with the policymaking body, not given to an adjudicative body 
that lacks comparable knowledge, experience, and expertise.

H.R. 739, The Occupational Safety and Health Small Business Day in 
                    Court Act

    Under the OSH Act, an employer has 15 days in which to challenge an 
OSHA citation. 29 U.S.C.  659(a). If the employer does not file a 
notice of contest with OSHRC by that deadline, the OSHA citation 
becomes a final order of the commission, enforceable against the 
employer. Id.
    H.R. 739 would excuse employers from the OSH Act's 15 day deadline 
if the employer can show that its failure to meet the deadline was 
caused by ``mistake, inadvertence, surprise, or excusable neglect.''
    The intent of the bill, according to its proponents, is to 
incorporate into the OSH Act provisions for obtaining relief from a 
final judgment similar to those provided by Rule 60(b) of the Federal 
Rules of Civil Procedure (FRCP).
    The bill is unnecessary. The Commission has always taken the 
position that Rule 60(b) applies to commission proceedings and that the 
Commission has the authority to provide relief from a final judgment 
when the employer has made the requisite showing under Rule 60(b). See, 
e.g., Secretary of Labor v. Branciforte Builders, Inc., 9 OSHC 2113 
(1981). The courts of appeals have generally agreed that Rule 60(b) 
applies to commission proceedings and that OSHRC has authority to 
provide relief from a final judgment where appropriate under that rule. 
See, e.g., Marshall v. Monroe & Sons, Inc., 615 F.2d 1156 (6th Cir. 
1980); J.I. Hass Company v. Marshall, 9 OSHC 1712 (3d Cir. 1981); Avon 
Contractors, 372 F.3d 171 (3d Cir. 2004).
    Proponents of the legislation argue that the bill is needed because 
of a contrary court ruling in Chao v. Russell P. LeFrois Builder, Inc., 
291 F.3d 219 (2d Cir. 2002). But that decision is both an anomaly and 
irrelevant, given that the Solicitor of Labor has now issued a 
memorandum stating that the Department of Labor will no longer seek to 
prohibit employers from making a claim for relief under Rule 60(b). See 
Memorandum to Regional Solicitors, et al., from the Solicitor of Labor 
(Dec. 13, 2004).
    The bill is also inappropriately one-sided. It excuses employers 
from missing their 15 day deadline but does not provide the same relief 
to employees or their representatives who seek to exercise their 
statutory rights to challenge the period for abatement in a citation. 
Fairness and reason dictate that both employers and employees should be 
afforded the same relief if Congress were to adopt this measure.
    Finally, it is important to point out that the legislation, while 
purporting to incorporate the provisions of FRCP 60(b), does not 
actually track the language of that rule. Rule 60(b) includes important 
safeguards and limitations, including that the motion for relief under 
Rule 60(b) must be made within a reasonable time, and in any event not 
more than 1 year after the judgment was entered. Rule 60(b) also 
specifies that a motion made under the section does not affect the 
finality of a judgment or suspend its operations. Particularly in a 
circumstance where, as here, the judgment at issue is one that requires 
employers to address workplace safety hazards, Rule 60(b)'s safeguards 
and limitations should apply. Parties should be required to make their 
motion for relief within 1 year, and the motion should not affect the 
employer's obligation to abate the hazard while the employer is seeking 
relief from the judgment.

H.R. 740, The Occupational Safety and Health Review Commission 
                    Efficiency Act

    H.R. 740 expands the number of members on the Occupational Safety 
and Health Review Commission (OSHRC) from three to five, and mandates 
that all members have legal training.
    In our view, the bill is unnecessary and inappropriate in a time of 
severe budgetary constraints. The commission's modest caseload does not 
warrant a 40 percent expansion in the number of Commissioners. 
Moreover, the fact is that the commission's perpetual case backlog has 
persisted regardless of whether the commission is fully staffed or 
lacks a quorum. It would appear that factors other than the size of the 
commission or the lack of a quorum affect the commission's ability to 
issue decisions.
    And it is no coincidence that Republican Members of Congress are 
pushing to expand the number of seats on the commission at a time when 
a Republican president would fill the seats.
    Proponents cite to the Federal Mine Safety and Health Review 
Commission as an analogous agency with five Commissioners, not three. 
However, it is also the case that the FMSHRC has more responsibilities, 
and hears more cases, than OSHRC. For example, miners and their 
representatives are permitted to bring cases before the FMSHRC alleging 
retaliation for exercising their rights under the mine safety law, and 
the FMSHRC hears and decides these cases. The OSH Act has no comparable 
provision, and OSHRC has no comparable role.
    Expansion of the Commission, and restricting the eligibility of 
individuals to serve as Commissioners, are unnecessary and unwarranted 
proposals that should be rejected.
    In sum, the AFL-CIO urges the subcommittee to explore ways of 
strengthening the OSH Act and its enforcement in order to address the 
high injury and fatality levels that persist in American workplaces 
today. Passage of H.R. 739, 740, 741, and 742 will do nothing to 
advance this goal; to the contrary, they will deprive OSHA of the 
resources and authority they need to do the job.

    Senator Isakson. Thank you, Ms. Rhinehart.
    We will do our questions 5 minutes each. And then if there 
is time and there are other questions, we will go to a second 
round. I will start.
    I have to ask Ms. Rhinehart a question. I take every story 
I hear at every committee hearing at face value. You told a 
story with regard to Eric Ho and Mr. Dodd told a story with 
regard to his employee that cut off the ends of I think two 
fingers. Did you hear that story?
    Ms. Rhinehart. I did.
    Senator Isakson. Based on your testimony, what Mr. Ho did 
was outrageous. I think most people would react in that way. Do 
you think the action of OSHA in the case that he talked about, 
of the fingers, was as outrageous?
    Ms. Rhinehart. Mr. Chairman----
    Senator Isakson. That is not a trick question.
    Ms. Rhinehart [continuing].  It is not a trick question but 
it is a hard question because, just as you do not have the 
entire record in the Ho case before you, I do not have the 
entire case.
    Senator Isakson. I would never hold you to it.
    Ms. Rhinehart. I know you would not but I am troubled by 
some of the things that Mr. Dodd said. I am troubled by some of 
the things he said but I would really like to see----
    Senator Isakson. Let me tell you why I asked that, and that 
is a tough question and you are a sweet lady and I probably 
should not have done that to you.
    But I find oftentimes that we sometimes lose sight in these 
hearings of--we get an extreme issue. I would hope your 
situation and the behavior of that OSHA inspector was an 
isolated instance, just like I would hope and pray that the 
Eric Ho's of the world are an isolated situation, but recognize 
we need to be vigilant to see to it that if those people exist 
they are pointed out.
    The ideal in enforcement is for people to respect the law 
for what it is intended to do. Which brings me to my first 
question which I will throw out there.
    I will ask Mr. Swindal, in your experience with OSHA 
directly, or what you have heard, do you feel like that cases 
are made where there is an example that can serve the purpose 
to send notice? Or do you think they are always made based on 
the most merit of the circumstances?
    And I ask that question because Ms. Murray raised a very 
good point, and that is the number of inspectors versus the 
number of workers. The problem is we could not hire enough IRS 
agents or anything else, versus the number of taxpayers, on 
compliance. So there is a lot of example setting in terms of--
which do you think? Do you think it is based on merit, in all 
cases, or sometimes to set the example to get the word out?
    Mr. Swindal. You will hear in town that such and such, that 
we have got inspectors coming around, they are all over, they 
are trying to do this and that. But there may have been a death 
and something very, very serious could have happened in the 
city.
    I have been involved in cases where an OSHA inspector comes 
to the job and the site was ridiculous. It was in terrible 
shape. And we had our people on the site having to follow the 
rules, making sure everything was right, because we know it was 
a dangerous site and we had complained to the general 
contractor.
    I think that what I was talking about earlier, to avoid 
those circumstances where the agents are on this side and the 
contractors are on this side or the manufacturers are on this 
side, the coming together in a situation like I was discussing, 
as a training together to go over situations before we have 
these occur. And to get the smaller firms that are involved in 
construction, that do not have, as you said, the safety 
directors, the people to go out and really help them. They do 
not know the rules. How could you know all the rules if you 
were a small, 15 or 20 man company? You will not.
    Your MSDS books are going to be out of date. They are not 
going to be correct. That is part of it. And it is unfortunate, 
but that is the way it is.
    And I think the partnership that we can create as a company 
here and taking the time with professionals in our business, 
joining with the OSHA team to look at these regulations: one, 
before they are presented; two, to go over some of the 
regulations that are--when there is a series of violations 
occur, and it seems to me there is nothing you can do about it, 
and it does not work, come together, sit down and discuss it 
with the contractor community or the safety director as a team 
as we were discussing earlier.
    That is what we see. It is a problem. As you said, the 
construction industry is absolutely the most unsafe of all the 
work environments. We are doing everything we can to improve 
it. But I go to sleep every night praying that nobody's going 
to get killed the next day because I know they are on their 
own.
    Senator Isakson. Thank you. Ms. Murray.
    Senator Murray. Thank you, Mr. Chairman, and I would agree. 
The statistic that Ms. Rhinehart cited--spending $1 billion a 
week on occupational injuries, is a cost that is hurting all of 
us. And it seems to me that one of our challenges is we do not 
have sufficient funds within the budget to make sure we are 
educating people, that OSHA has what they need, and NIOSH, to 
be able to educate companies so they can follow the regulations 
without being surprised by them.
    And I think that is something that all of us believe we 
should be doing a better job of.
    I do have a question. Ms. Rhinehart, you talked about Eric 
Ho. Was part of the problem that there is not criminal 
liability? And the fact that he could keep doing this for some 
time without facing some kind of criminal--for something as 
egregious as you discussed.
    Ms. Rhinehart. That is exactly one of the problems in the 
Eric Ho case, is that the OSHA Act only allows a criminal 
prosecution in circumstances where a worker died, where an 
employer willfully violates an OSHA rule--which Eric Ho did and 
the commission found he did--and a worker dies.
    Here workers were not killed directly but they were 
poisoned by asbestos.
    Senator Murray. Which we know you may not know about for 30 
years.
    Ms. Rhinehart. Correct. There is no authority under the 
OSHA law for prosecution in that instance. Ironically, there 
is, under the Clean Air Act, for releasing asbestos into the 
air but not for poisoning the workers. In our view, it is a 
serious shortcoming in the law and we would support legislation 
to correct it.
    Senator Murray. Mr. Dodd, the chairman asked Ms. Rhinehart 
one side of it. Let me ask you the other side of it.
    You heard her story about someone who very willfully 
violated the law, really put people at risk knowingly. Do you 
think that for those egregious--not for your case, which can be 
understandable, but for egregious cases should we have criminal 
liabilities within OSHA? It does cost business.
    Mr. Dodd. That is a question, I think, for the courts to 
settle. But if somebody does something like that, yes. People 
like myself, people like Mr. Swindal, I am sure, who have been 
working for a long time, trying to run an honest business and 
provide jobs for people. We do not need people like that. The 
industry does not need people like that. Those are the kind of 
people that hurt the industry.
    So if it was me that was making the decision, if I was in 
charge of that, if I was Senator Isakson and I had the power to 
say that, I would say he needs to be prosecuted. He needs to be 
prosecuted.
    That was more than willful. That was deliberate. If OSHA 
came in and shut the place down and then he climbs over the 
fence and unlocks it and has his workers back in there, then 
that is a criminal action.
    But again, that is not for me to decide.
    Senator Murray. Mr. Dodd talked about some of the things 
that he felt were important for us to look at, training for 
OSHA inspectors, more help to businesses to be able to comply 
with the law. Ms. Rhinehart, would you concur that those are 
some of the things we need to look at? To reduce the number of 
injuries and deaths?
    Ms. Rhinehart. Yes, I would agree that those are good 
suggestions and areas to look at. The only point I would make 
is that you are talking about an agency that has $450 million 
to do its job. Every time you move resources into this area, it 
takes them away from another area like, for example, 
enforcement.
    So it seems to me that some good suggestions have been made 
and that perhaps some additional moneys could be found to 
explore those sort of partnerships.
    Senator Murray. Which would be my final point, and I have 
to go to the floor so I am not going to be able to remain, Mr. 
Chairman. We can all talk about helping our companies 
understand the rules. But if we do not provide the enforcement 
officers out there working with them and the direction to do 
that, then we will be back with egregious cases, injured 
workers and employers frustrated.
    So I think it is an issue that our committee does have to 
look at.
    Thank you, Mr. Chairman.
    Mr. Swindal. Senator Murray, could I ask you one question 
in reference to that?
    I do not think we will--do you actually think that we are 
going to ever have the ability to legislate this to every 
company in the United States? We, as companies, have got to 
take the responsibility along with OSHA to do this.
    Senator Murray. I absolutely think that there are really 
good employers out there who work really hard to comply with 
this. And there are times when they simply do not have the 
knowledge of what they need. How do we get them better 
information? As people who want to make sure everybody has 
fewer injuries, fewer deaths, we all share that same goal. We 
need to educate them.
    That was my point, we cannot just expect this information 
to somehow transform into businesses. We need to help provide 
the resources to make sure it is out there.
    Mr. Dodd. That law that you are talking about, the Ho 
thing, that law could also be used against--again, if Senator 
Isakson had the power to say that he could be criminalized for 
that or punished for that criminally, that same law--if the 
OSHA people have the power, I guess, to say we are going to 
have you arrested for that because you were criminal there, 
again that same law could be used against Roy. It could be used 
against myself, too, as good employers.
    They came in, you had this employee who just nipped off two 
fingers on a punch press. That, to me, is criminal in my mind, 
the inspector's mind. I am going to have to have you two 
arrested and shut your place down.
    Senator Murray. Thank you, Mr. Chairman.
    Senator Isakson. Thank you, Senator Murray. Mr. Chairman.
    The Chairman. Thank you. The accountant in me made me make 
some calculations here. I noticed that we have 861 inspectors 
now, at the Federal level. And so I made some calculations to 
see how many we would have to have in order to get it down to 
one inspection per 5 years.
    It means that we have to add 18,000 inspectors to do the 
job. I do not think anybody is going to consider that a 
reasonable number to increase the budget by. So we are going to 
have to find some other solutions. We are going to have to find 
some cooperative ways where employers and OSHA and employees 
are working together.
    Incidentally, I also did some calculations based on the 
numbers provided in Ms. Rhinehart's testimony. And I can figure 
out a way to get that number down without increasing the 
workforce quite that substantially. Those numbers indicate that 
there is less than one inspection a week done by each of the 
employees. If we increase that to one per day, we bring the 
number down by 80 percent.
    I have got to find out more about what takes so long to do 
the inspections, because again when I was a safety officer, I 
never had anybody inspect me longer than half a day and it was 
at multiple sites. I have got to tell you, I got the violation 
once where we did not have a no smoking sign the right number 
of feet from the rig. Now that is very important. It was 3 feet 
short. And the actual rule of the industry is that it has to be 
outside of the guy lines. And it was well outside the guy 
lines. So people that were within a dangerous distance to the 
rig would know about it. But that took us several weeks to get 
resolved.
    So Mr. Swindal, I really like your program where industries 
do some cross training with the OSHA inspectors so that they 
can learn what the best practices are. These guys have a tough 
job. They go from a dentist's office to a construction site to 
a shoe store to an oil field and that is all different 
practices. So there probably needs to be a little bit of 
specialization which would speed up that process a little bit.
    But you suggested this idea of having safety personnel to 
cross train. How do you think such a program--how can we 
implement such a program?
    Mr. Swindal. The Training Exchange Program which we are 
discussing is very similar to how the mason contractors, as I 
said earlier, we have created a number of manuals, one for 
forklift drivers, one for bracing scaffolding.
    We shared all of that information with OSHA. That was the 
first way that we started to be able to try to work with them. 
And they were very interested in understanding what we are 
trying to do.
    So now what we do is we take, let us say from one of the 
best safety directors of one of the major masonry contractors 
or glazing contractors or concrete forming contractors. And he 
goes and he actually sits down and discusses any new 
regulations or regulations that at the time OSHA is having a 
hard time enforcing or there seems to be a rash of incidents 
about these.
    And they sit down and they discuss what is causing this? 
Why is this happening? And what can we do? Is something wrong 
with the regulation? Is this really a safe/unsafe thing going 
on? Or is it just something that has been on the books and it 
is not of any use at the present time, the way it is being 
interpreted in this particular occasion?
    So I think that would work very well and work with some of 
the people that are in charge of the OSHA--we discussed the 
OSHA training facility they have here. Do some mockups of any 
of the new rules, whether it be for dentistry or whether it be 
for whoever or whatever. But construction, in general, there 
are so many things that can go wrong that are so dangerous. And 
we spend too much time going through those.
    The Chairman. But you are kind of saying that through this 
process of doing the cross-training, you also have the people 
in the industry comparing notes on what the good practices are, 
too.
    Mr. Swindal. Yes.
    The Chairman. Which undoubtedly has some good side 
benefits.
    Mr. Swindal. With all of the trades involved and--this can 
go from manufacture all the way across. It does not just have 
to be for the masonry industry. We looked at it in that manner.
    The Chairman. I noticed in your testimony, too, that you 
have a drug testing program in place.
    Mr. Swindal. Yes, sir.
    The Chairman. You may not realize that in some States 
random drug tests are illegal unless they are based on 
reasonable suspicions of drug use. They cannot be a preventive 
tool applied across the board so that it does not discriminate. 
Clearly that is not the case in Alabama.
    Do you believe that your policy keeps your employees safer 
and has other positive effects?
    Mr. Swindal. The drug policy?
    The Chairman. Yes.
    Mr. Swindal. Yes. As a whole, it is preemployment, number 
one. That stops probably--our HR director said it probably 
stops 50 percent of the problems that we were having without 
it. Our insurance rates have gone down dramatically and our 
injury, lost time injury accidents, have dropped dramatically 
over the last 10 or 15 years that we have been doing this.
    The Chairman. I would agree. I am probably the only one in 
the Senate that is trained to collect urine specimens and do 
saliva tests.
    Mr. Swindal. We have a number of foremen that can do the 
same.
    The Chairman. We found that it affected almost four out of 
five employees that applied for jobs and we were able to cut 
off a lot of accidents in the past that way.
    Ms. Rhinehart, it has been observed in some instances the 
hazardous communications practices and procedures are pretty 
complicated. And we have been trying to work on those MSDS 
sheets for quite a while and get them more reasonable so that 
they actually provide timely information to people in a crisis 
situation. It would be nice if they knew all of that stuff 
beforehand, but they do not even know what all the chemicals 
are before they get to working on it.
    Do you have any suggestions for simplifying that MSDS 
process and some way that we can get that information to the 
workers when it is more meaningful and more useful?
    Ms. Rhinehart. I am wishing I could snap my fingers and 
become Peg Seminario, our Health and Safety Director, who would 
have a very complete answer for you on that.
    But perhaps developing some model MSDS's, OSHA developing 
some models and getting them out to businesses and to small 
business and providing them to workers would be of assistance 
across the board. That is one suggestion.
    The Chairman. Good. We would like to work with you on that 
and other things that you have suggested in the testimony.
    I see that my time is expired. I have some other questions 
but I will submit those in writing.
    Senator Isakson. Thank you, Mr. Chairman.
    Mr. Sapper, you had a comment?
    Mr. Sapper. Mr. Chairman, I just wanted to add something 
about the Ho case and the effect, or I should say the light it 
might shed on the attorney's fees bill. It actually proves the 
opposite of the point that I believe Ms. Rhinehart was trying 
to make.
    Had the attorney's fees bill been law when the Ho case was 
brought, OSHA would have easily seen that 10 out of the 11 
citations were patently weak. They were so weak, in fact, that 
the Review Commission, even under the crippling disability 
imposed by the CF&I Steel case, threw them out. Not only that, 
they were also thrown out by the Fifth Circuit on appeal.
    So had you been an OSHA lawyer looking at the Ho case, as 
egregious as it was, and I agree that it was egregious, you 
would have said to yourself, this guy should be slammed. But if 
we try to do it 11 times, it is going to get thrown out. So you 
would have had your mind concentrated mightily by the thought 
you will end up paying this guy his attorney's fees. So you 
will bring just a straight case, no questionable citation 
items, just a straight case. He would have been slammed. That 
would be the end of it. And he would not have gotten a penny of 
attorney's fees.
    So I think it proves the opposite of the point that she was 
quite eloquently trying to make. But those are the facts.
    Senator Isakson. Well, it proves by my asking that question 
about 15 minutes ago I provoked a lot of responses. But two of 
the responses that I provoked were actually the intent of the 
question and I would like to just tell you what those were.
    If this subcommittee were to try and improve OSHA laws, 
undertaking one side or the other based on Mr. Dodd's case or 
Ms. Rhinehart's example in the Ho case, we would do a great 
disservice. Because both of them are extreme examples. And were 
we to assume all businesses were like Mr. Ho or all OSHA 
inspectors were like the one that inspected you, we would have 
a heap of trouble.
    Fortunately for us, I think both of those cases, both very 
egregious in different ways, should be dealt with as examples 
for either inspectors or businesses to never do that again.
    But in the meantime in the middle, the broad middle, 
wherein I think most all American business is or strives to be, 
we need to work for two things. One is good laws that protect 
the health and welfare and safety of workers. And second is a 
proactive compliance attitude on behalf of business and the 
regulator.
    To that end, I want to, as chairman of the subcommittee, 
commend Mr. Swindal and those that he represents for their best 
practices, recommendations and their offering to OSHA from the 
standpoint of training in the expertise that they have. And 
believe me, high rise skin application is an expertise like 
something you have never seen. I do not know what your rate per 
100 on worker's comp is but--what is it, by the way?
    Mr. Swindal. I do not know right now. We have to be self-
insured with--we are self-insured with a very high deductible.
    Senator Isakson. I would be willing to bet you that after 
payroll, workers comp might be the number two expense in the 
company.
    Mr. Swindal. Besides material, yes.
    Senator Isakson. Which is another thing that, as a business 
person, is so important. And that is that safety is rewarded at 
the bottom line by better premiums, meaning lower premiums. And 
bad practices are punished at the bottom line very severely.
    Did I cut you off, Ms. Rhinehart? I let him say something 
and you had a--I do not know whether you were pointing your 
index finger at me or whether you wanted to be recognized.
    Ms. Rhinehart. I was pointing it at Mr. Sapper.
    Senator Isakson. That was the right answer.
    Ms. Rhinehart. If I could just have a moment to respond.
    Senator Isakson. We have 47 seconds left and then we are 
out of time.
    Ms. Rhinehart. I just wanted to point out that, in fact, 
there was precedent for per employee citations of the sort of 
training and respirator standards that OSHA cited Eric Ho for. 
So in fact, they were relying on precedent, not just going off 
on a lark and citing him for those 11 employees. I would make 
that point.
    I would also say that I just do not think that any of us 
around this table would criticize OSHA for pursuing an employer 
like Eric Ho aggressively. I think we can all agree that 
employers like Eric Ho need to be dealt with and dealt with 
severely. Thank you.
    Senator Isakson. That was my point. Both of those stories 
indicated violators on all sides of this whole equation that 
should have been dealt with and the whole situation would be a 
whole lot better off.
    I want to thank all of our witnesses for testifying today.
    I want to ask unanimous consent that the record be held 
open for 10 days for any additional submission or comment.
    Hearing no objection, so ordered.
    The subcommittee hearing is adjourned.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

                        Statement of Tom Howley
    Subcommittee Chairman Isakson, my name is Dr. Tom Howley and I 
currently serve as President of the Academy of General Dentistry (AGD), 
a national professional association representing over 37,000 general 
dentists.
    Let me begin this testimony by thanking you for your distinguished 
leadership on this committee; for your continued and well-known support 
of the small-business community; for your strong record as an advocate 
for workplace safety; and for your demonstrated support for improving 
the programs and operations of the Occupational Health and Safety 
Administration (OSHA) through the enactment of appropriate reform 
legislation.
    As you may know, a major focus of the Academy of General 
Dentistry's work, is to afford our members the opportunity to hone and 
refine their skills through high-quality continuing education 
opportunities; to promote the highest degree of professionalism 
possible; and to promote excellent standards of patient care. Members 
of the academy also know, from first hand experience, that appropriate 
access to oral health care services is essential to maintaining good 
health--and that a lack of access to adequate oral health care is 
harmful to individuals and families, and is extremely costly to society 
as a whole.
    As trained health care professionals, members of the academy are 
justifiably proud of their long years of training, their special 
expertise, and their commitment to quality health care--but our member 
dentists also wear another hat. As a practical matter, the vast 
majority of the Academy's members practice in a small-business 
environment. Most dentists are small businessmen and women who are the 
principal owners and operators of their individual dental practices. In 
this capacity, they face the same day-to-day challenges faced by any 
small businessman or businesswoman. They must manage their cash flow 
and control expenses. They must hire and retain a skilled workforce. 
They must ensure an accessible and well-equipped facility in which to 
provide their skilled services--and, like other small businessmen and 
women, they must comply with a myriad of rules and regulations--some of 
which, do not always efficiently or fairly address the concerns for 
which they were originally intended.
    One Federal Agency, well known to our members, is the Occupational 
Health and Safety Administration (OSHA). OSHA is primarily concerned 
with workplace and workforce safety issues. Without question, the 
overall mission of OSHA is vital--and it is clearly appropriate for 
this agency and for Members of Congress to be concerned about workplace 
safety issues. As small businessmen and women--who employ on average 
six persons in each dental practice--our members are committed to 
ensuring a safe workplace environment, and invest much of their time 
and energy doing so on a continuous basis.
    In terms of ensuring a safe workplace environment, both for our 
employees and patients, members of the academy and other practicing 
dentists have not always found that interacting with OSHA has been an 
especially constructive or welcome exercise. There have been instances 
where the Agency has gone about its mission in a ham-handed manner--
resulting in unrealistic burdens and unfair enforcement actions being 
visited on our members and other small businessmen and women. To 
address these concerns, we are pleased to add the support of the AGD to 
the large number of business groups, trade and professional 
associations, that have called for the enactment of reasonable OSHA 
reform legislation. Specifically, we are pleased to endorse the 
enactment of four bills (H.R. 739, H.R. 740, H.R. 741 and H.R. 742) 
introduced in the House of Representatives by your colleague from 
Georgia, Representative Charlie Norwood. We are further pleased that 
you are taking a leadership role in addressing the small business 
communities OSHA concerns by holding this hearing today and focusing 
attention on the need for appropriate OSHA reform legislation.
    As you know Mr. Chairman, the reform legislation we seek to 
advance, has broad support within the business community, and will go a 
long way towards addressing legitimate concerns small businessmen and 
women have when it comes to OSHA compliance and enforcement issues. The 
Norwood legislation being discussed today will: (1) Provide the OSHA 
Review Commission with added flexibility when it comes to applying the 
15-day rule for contesting citations or proposed penalties, so that an 
employer would not automatically lose their case on technical grounds--
if for legitimate reasons, they are unable to comply with the 15-day 
deadline for an appeal; (2) Expand from three to five the number of 
members sitting on the OSHA Review Commission in an effort to prevent 
unnecessary delays in adjudicating cases; (3) Establish that the 
independent OSHA Review Commission--rather than OSHA itself--is the 
entity that will be given deference on how to interpret OSHA law by 
appellate courts reviewing the Commission's decisions; and (4) Amend 
the Equal Access to Justice Act (EAJA) to allow, under some 
circumstances, an employer to recover attorney's fees incurred if they 
are successful in defending against OSHA citations. Collectively, these 
proposed reforms will, if enacted, produce a fairer, more balanced, and 
more effective OSHA enforcement environment. Such an environment will 
help assist the small business community in meeting its 
responsibilities under the law and will help ensure a safer workplace 
environment overall.
    Mr. Chairman, we look forward to working with you and other Members 
of the HELP Committee to advance these needed reforms. We commend your 
leadership, the leadership of Representative Norwood in the House--and 
we also commend the fine efforts of the U.S. Chamber of Commerce and 
the OSHA Fairness Coalition in helping to focus attention on the need 
for OSHA reform legislation.
    In conclusion, we thank the subcommittee for this opportunity to 
express the views of the Academy of General Dentistry regarding OSHA.
    For additional information regarding the Academy's views on other 
matters likely to be considered by the 109th Congress, please do not 
hesitate to contact us at the Academy's national office: 211 East 
Chicago Avenue, Suite 900, Chicago, Illinois 60611-1999, (Tel. 312-440-
4300), (www.agd.org).

    [Whereupon, at 3:30 p.m., the subcommittee was adjourned.]

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