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August 05, 2015
Worker's 'party' status dooms employer's settlement agreement; What went wrong?

Sometimes, the outcome of a Cal/OSHA proceeding is determined by elements other than the facts in the case. The way each party in a case manages procedural factors and technicalities can affect the way things turn out. For example, an employer that files its appeal paperwork after the deadline has passed likely won’t even get a hearing.

The case discussed below, In the Matter of the Appeal of: Newstar Fresh Foods, LLC, didn’t work out how the employer wished because of another kind of misstep. What procedural detail did the employer miss? Keep reading to find out.

Worker petitions for ‘party’ status

On October 22, 2012, Cal/OSHA cited Newstar Fresh Foods, LLC, for multiple violations of Cal/OSHA standards, including the injury and illness prevention (IIPP) standard in General Industry Safety Orders (GISO) Section 3203 and the rules affecting the control of hazardous substances (GISO Section 5141).

Newstar filed timely appeals, and a prehearing conference was scheduled with the Occupational Safety and Health Appeals Board (OSHAB).

In January 2013, the administrative law judge (ALJ) received a petition for intervention filed by California Rural Legal Assistance, Inc., on behalf of a Newstar employee, Catalina Maldonado. California Labor Code Section 354(b) allows affected employees or their authorized representatives to request and receive “party” status in OSHAB hearings.

If your workers receive party status in an appeal, make sure you understand their rights and comply with them scrupulously.

Employees affected by a cited condition can be granted party status if the employer appeals the citation because these employees stand to be harmed by the cited conditions. Their party status makes the employees plaintiffs in the suit, with the same legal rights as Cal/OSHA and the employer.

The ALJ granted Maldonado party status on March 11, 2013. As a party to the appeal, Maldonado had the right to be served with copies of all documents previously filed with OSHAB, participate in the appeal process, and provide input into settlement discussions.

Maldonado, together with representatives from Newstar and Cal/OSHA, attended the prehearing conference in March. Additional hearings were scheduled for May 16 and May 17, 2013.
On May 8, 2013, Cal/OSHA notified the ALJ that it had reached a settlement with Newstar and requested that the hearings be cancelled. The ALJ granted the request.

A doomed settlement

The settlement agreement between Cal/OSHA and Newstar reduced the penalty for violating the IIPP standard from the proposed $9,000 to $3,375 and reduced the penalty for violating the control of hazardous substances standard from the proposed $11,250 to $3,375.

Maldonado submitted objections to the proposed settlement, but on September 4, 2013, the ALJ issued an order approving the settlement agreement over her objections.

Maldonado then filed a petition for reconsideration, which OSHAB granted. Among other things, the worker complained that she was not served all documents and notices to which she was entitled because of her party status, which prevented her from fully participating in settlement discussions. She claimed that OSHAB was required to afford her a hearing.

Newstar admitted it had not served Maldonado with the documents she was entitled to receive. As a result, OSHAB had no choice but to reverse the order approving the settlement agreement. All three parties were ordered back to the drawing board to start over--this time, with Maldonado’s full participation.

Serving all parties

As Newstar discovered, failing to provide employees who have been given party status with the same documents and privileges that Cal/OSHA receives can scuttle a settlement agreement the employer might reach with the agency—and eat up any benefit the employer might have obtained from a penalty reduction or other change in the case.

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