The Nickel Report

The effects of the regulatory reform initiatives of the Trump Administration are beginning to be felt at the Occupational Safety and Health Administration (OSHA) with the formal action by OSHA to finalize withdrawal of the “Volks Rule” regulation. On May 3, 2017, in response to a CRA resolution of disapproval, OSHA published a final rule removing amendments to OSHA’s recordkeeping regulations from the Code of Federal Regulations.

The so-called “Volks Rule” was issued to allow OSHA to issue citations to employers for failure to record an injury or illness up to six months following the five-year record retention period that would have applied to such record had it been made in the first place. The formal repeal by OSHA was mandated because Congress passed and President Trump signed in early April a Congressional Review Act (CRA) authorization directing that this “midnight rule” (a regulation issued in the waning days of the Obama Administration) be expunged. The Volks Rule is one of 13 regulations that faces the dramatic consequences of the CRA–as a regulation that is wiped out by the CRA cannot be reissued in substantially similar form.

Finalized last December, the Volks Rule sought to reverse the impact of a 2012 decision by the DC Circuit that prohibited OSHA from issuing citations for injury or illness recordkeeping violations outside the OSH Act’s six-month statute of limitations. In interpreting the language of the OSH Act that provides OSHA cannot cite an employer “after the expiration of six months following the occurrence of any violation,” the court’s opinion rebuked OSHA, observing that Congress did not “expressly establish[ ] a statute of limitations only to implicitly encourage the Secretary to ignore it.” OSHA’s core theory in the case was that when a company fails to create or correct a record of a recordable injury, that violation essentially repeats every day until the record is created or corrected. The industry parties took the view that a record can only be “not created” one time, and that the violation begins and ends when that failure occurs, meaning that the time for OSHA to discover and enforce against such a violation begins to run immediately.

Seeking to cast the regulation as a mere clarification of companies’ existing obligations, OSHA claimed its midnight rule was necessary to “clarify that the duty to make and maintain accurate records of work-related injuries and illnesses is an ongoing obligation.” The suggestion that OSHA was “clarifying” its regulations consistent with what it viewed as its authority is somewhat remarkable in that the majority in the case stated that the “[OSH Act] clearly renders the citations untimely, and the Secretary’s argument to the contrary relies on an interpretation that is neither natural nor consistent with our precedents.” Notwithstanding this clear statement of the majority, and having not sought rehearing in the DC Circuit or certiorari to the US Supreme Court, OSHA cited the concurring opinion filed by Judge Garland, which found OSHA’s action contrary to its own regulations but would have held that the statute allows a continuing violation theory. Thus, it is not surprising that critics called OSHA’s rule “an outright power grab” and an attempt to “not only ignore the law” but also usurp the power granted to Congress and “rewrite it” by “unilaterally extending the statute of limitations from 6 months to 5 years” (statement of Rep. Byrne).

Opponents of the CRA resolution argued that rolling back the rule “essentially creates a vast safe harbor for noncompliance and creates the perverse incentive for underreporting” injuries, which in turn “will undermine workplace safety and health” (statement of Rep. Scott). President Trump signed the resolution into law on April 3, 2017. Shortly before signing the resolution, the White House released a statement saying that the administration “strongly supports” passage of the resolution because the “Administration is committed to reducing regulatory burdens on America’s businesses, and this rule imposes costs on employers resulting from continuing recordkeeping obligations.”

While OSHA may no longer issue citations outside the OSH Act’s six-month statute of limitations, employers must still maintain injury and illness records for five years. It is worth noting that this is but one step in the new administration’s effort to address what it views as executive branch overreach by the prior administration. In addition to signing all the CRA resolutions passed by Congress to date, President Trump has issued executive orders, presidential memoranda and notices of reconsideration seeking to review, revoke or revise midnight rules and other regulations and guidance issued by the Obama Administration. We can expect to see evaluation of recent and historic guidance and policies with regard to how existing regulations are implemented.

Being CRA’d–as it has come to be called in Washington–means that OSHA can’t issue a substantially similar rule–and that prohibition applies to the current administration (in which it is not likely to be a problem) or a future administration. The Volks Rule isn’t alone—a dozen other regulations have been CRA’d since President Trump took office, but the window for fast-track Senate action on Obama Administration rules is closing. The next question we suppose is, what is a substantially similar rule, or more to the point–what is a substantially dissimilar rule? That’s the subject of a future blog post.