- The Washington Times - Wednesday, January 29, 2003

A theme of President Bush's Waco economics forum was his administration's desire to strengthen the hand of small business in regulatory disputes with federal agencies, especially the Occupational Safety and Health Administration.

Accordingly, Bush officials stressed the softening of burdensome OSHA regulations that differentially impact small business. Yet the Small Business Administration and White House Office of Management and Budget's Office of Information and Regulatory Affairs (OIRA) have remained silent in significant small business disputes over OSHA enforcement.

For one example, although the SBA's Advocacy Office recently successfully appealed a Commerce Department decision that would have adversely affected a significant number of small businesses involved in shark fishing, the SBA made no appearance in the case of Russell P. Le Frois, of Henrietta, New York, against OSHA.

Mr. Le Frois, a small business owner who failed to file a timely notice of contest of an OSHA citation because his secretary had let the company's certified mail fall beneath her car's passenger seat, took immediate action after being notified of the citation, initiating a new mail procedure to prevent losing its mail again. The Occupational Safety and Health Review Commission, the independent agency that adjudicates contested cases between employers and OSHA, ruled that this was excusable neglect under Federal Rule of Civil Procedure 60(b).

The commission would grant Mr. Le Frois his "day in court" before a Review Commission judge for a decision on the merits of the citation.

But OSHA appealed the decision to the U.S. 2nd Circuit Court of Appeals that recently agreed with OSHA that the Review Commission lacks jurisdiction to grant any employer relief under Rule 60(b) for failing to file a timely notice of contest.

A modicum of legal assistance to Mr. Le Frois could have led to a less onerous ruling by the court. For example, an alternative argument (applying the U.S. Supreme Court's 1993 Pioneer decision) would allow employers cited by the federal government to have their cases decided on the merits when the federal agency, in this case OSHA, would not be prejudiced.

Indeed, the U.S. 3rd Circuit Court of Appeals has affirmed the commission's jurisdiction in 60(b) cases.

Loss of small business owners' opportunities to contest OSHA's citations under Rule 60(b) would be costly to small business. Citations and proposed penalties will be automatically affirmed. And any future OSHA citations likely will be subject to multiple penalties.

Opportunities remain for the SBA Advocacy Office to weigh in on this issue. A non-2nd-Circuit 60(b) case, Villa Marina Yacht Harbor, will provide the Review Commission an opportunity to re-examine this issue.

But don't hold your breath. While think tanks such as the D.C.-based Institute for Justice business, and labor organizations have filed friend-of-the-court briefs in disputed OSHA cases, the SBA Office of Advocacy has never done so.

For another example, President George W. Bush's OIRA administrator sends "prompt" letters to federal agencies, including OSHA, to hasten the issuance of new, and modify burdensome, federal regulations. Yet the OSHA Review Commission's "E-Z Trial" program deemed onerous by an independent survey of stakeholders remains in its original form. Ostensibly designed for small businesses facing allegations of violating OSHA workplace rules, E-Z Trial imposes mandatory assignment on many small companies without offering them a choice of conventional proceedings.

The Indiana University's Conflict Resolution Institute's survey of E-Z Trial participants in disputed OSHA cases including workers, labor union representatives, OSHA attorneys and Review Commission judges found that more than 87 percent of survey respondents believe E-Z Trial should not be mandatorily imposed on employers. Certain cases "are too complex or require discovery process that is limited or altogether absent in E-Z Trial." Furthermore, respondents request that objective referral criteria be devised for cases eligible for E-Z Trial assignment, rather than leaving it to the subjective decision of the Commission's chief administrative law judge. Indeed, three Review Commission respondents, two of them judges, report "the appropriate cases were not being referred to the program." The Indiana researchers recommend that the commission reconsider E-Z trail case referral criteria.

Completed in May 2001, at a taxpayers' cost of $19,000, OSHA Commission administrators have yet to act on this peer-reviewed report. Despite notifications of the Indiana University E-Z Trial report, and congressional hearings sparked by employer complaints, OIRA has failed to prompt the Review Commission to modify the E-Z Trial program. Why haven't the SBA's Advocacy Office and its National Ombudsman weighed in on this issue?

Do these Offices lack resources to adequately track OSHA enforcement? Perhaps they are unaware that, unlike the EPA where rulemaking and enforcement take place under the same roof, OSHA regulatory policy applies a "split-enforcement model," with rulemaking undertaken by OSHA and adjudication of disputes between employers and OSHA by the independent Review Commission. (U.S. mine safety and health regulatory policy similarly employs a split-enforcement model.)

Whatever the reason, the result is inadequate assistance to U.S. small businesses.


Velma Montoya is a former member of the Occupational Safety and Health Review Commission.

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