Chamber of Commerce of U.S. v. U.S. Dept. of Labor

• Citation: 174 F.3d 206
• Decision Date: 09 April 1999
• Docket Number: No. 98-1036,98-1036
• Parties: 18 O.S.H. Cas. (BNA) 1673 CHAMBER OF COMMERCE OF THE UNITED STATES, National Association of Manufacturers, American Trucking Associations, Inc., and Food Marketing Institute, Petitioners, v. UNITED STATES DEPARTMENT OF LABOR, Occupational Safety & Health Administration, and Alexis M. Herman, Secretary, United States Department of Labor, Respondents. Food Distributors International, et al., Intervenors.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

Page 206

174 F.3d 206

18 O.S.H. Cas. (BNA) 1673

CHAMBER OF COMMERCE OF THE UNITED STATES, National Association of Manufacturers, American Trucking Associations, Inc., and Food Marketing Institute, Petitioners, v. UNITED STATES DEPARTMENT OF LABOR, Occupational Safety &amp Health Administration, and Alexis M. Herman Secretary, United States Department of Labor, Respondents Food Distributors International, et al., Intervenors.

No. 98-1036.

United States Court of Appeals District of Columbia Circuit.

Argued Dec. 3, 1998.

Decided April 9, 1999.

On Petition for Review of an Order of the Occupational Safety and Health Administration.

Baruch A. Fellner argued the cause for petitioners. With him on the briefs were William J. Kilberg, Eugene Scalia, Stephen A. Bokat, Janice S. Amundson, Daniel R. Barney, Lynda S. Mounts, George Green, and Peter A. Susser.

Bruce Justh, Assistant Counsel for Appellate Litigation, U.S. Department of Labor, argued the cause for respondents. With him on the brief were Joseph M. Woodward, Associate Solicitor for Occupational Safety and Health, and Barbara Werthmann, Counsel for Appellate Litigation.

Before: SILBERMAN, GINSBURG and SENTELLE, Circuit Judges.

Opinion for the Court filed by Circuit Judge GINSBURG.

Dissenting opinion filed by Circuit Judge SILBERMAN.

GINSBURG, Circuit Judge:

The Occupational Safety and Health Administration, part of the United States Department of Labor, issued a "Directive" pursuant to which each employer in selected industries will be inspected unless it adopts a comprehensive safety and health program designed to meet standards that in some respects exceed those required by law. The Chamber of Commerce objects to the Directive on the grounds that prior notice and an opportunity to comment were required by the Administrative Procedure Act, and that the envisioned inspections will violate the Fourth Amendment to the Constitution of the United States. Because we agree with the Chamber that the agency issued the Directive in violation of the APA, we do not reach the constitutional issue.

I. Background

According to the OSHA, the Directive, which establishes the "OSHA High Injury/Illness Rate Targeting and Cooperative Compliance Program," represents a new, cooperative approach to the problem of worker safety at some 12,500 relatively dangerous workplaces. The Directive first provides that each of these sites will be placed on a so-called "primary inspection list" and subjected to a comprehensive inspection before the end of 1999. (But for the Directive, the OSHA might have searched some of the sites, but it does not claim that it would have searched all of them). The Directive next provides that the agency will remove a workplace from the primary inspection list, and reduce by 70 to 90 percent the probability that it will be inspected, if the employer participates in the agency's "Cooperative Compliance Program."

Participation in the CCP obligates the employer to satisfy eight requirements. An employer must agree, for example, to "[i]dentify and correct hazards" and to "[w]ork toward a significant reduction of injuries and illnesses." Most important is the requirement that the employer implement a "comprehensive safety and health program" (CSHP) that meets the standard established in the OSHA's 1989 Safety and Health Program Management Guidelines.

The Directive spells out what is entailed. Most of the requirements are procedural. A CSHP, for example, should include regular, employer-conducted inspections of the workplace, investigations of "near-miss" incidents, and a means by which employees can complain of unsafe practices and circumstances without fear of reprisal. An adequate CSHP should also, however, address specific substantive problems associated with "ergonomics, materials handling, bloodborne pathogens, confined space, [and] hazard communication." Although many aspects of a CSHP are, not surprisingly, directed toward the prevention or correction of violations of the Occupational Safety and Health Act, 29 U.S.C. §§ 651-678, the Directive makes clear that compliance with the Act is not in itself sufficient for participation in the new CCP: "An effective [CSHP] looks beyond specific requirements of law to address all hazards. It will seek to prevent injuries and illnesses whether or not compliance is at issue." Further to this point, an acceptable CSHP also obligates the employer to be generally in compliance with applicable "voluntary standards," "industry practices," and even "suppliers' safety recommendations."

II. Analysis

The Chamber of Commerce petitions for review of the Directive first on the ground that the agency should have conducted a notice and comment rulemaking proceeding prior to issuing it. Before considering the Chamber's argument, however, we must consider the agency's objection that the case is not within the jurisdiction of this court.

A. Jurisdiction

Under the OSH Act, 29 U.S.C. § 655(f), this court has jurisdiction to review a "standard" issued by the OSHA. An OSHA "regulation," however, is subject to review in the district court, pursuant to the Administrative Procedure Act, 5 U.S.C. § 703. See Workplace Health & Safety Council v. Reich, 56 F.3d 1465, 1467 (D.C.Cir.1995). The OSH Act does not define the term "regulation," but describes a "standard" as a rule that "requires conditions, or the adoption or use of one or more practices, means, methods, operations, or processes, reasonably necessary or appropriate to provide safe or healthful employment." 29 U.S.C. § 652(8). The question whether a rule is a "standard," so defined, is to be answered with reference to its "basic function ... rather than the exact nature of the 'practices, means, methods, operations or processes' ... it embodies." Workplace Health, 56 F.3d at 1468 (quoting Louisiana Chemical Ass'n v. Bingham, 657 F.2d 777, 781 (5th Cir.1981)). If the basic function of the rule is to "address[ ] ... a specific and already identified hazard, [and it is] not a purely administrative effort designed to uncover violations of the Act," then the rule is a standard. Id. (quoting Louisiana Chemical, 657 F.2d at 782). If, on the other hand, the rule is "merely a general enforcement or detection procedure," then it is a regulation. Id. In other words, a standard, unlike a regulation, is "aim[ed] toward correction rather than mere inquiry into possible hazards." Id. (quoting Louisiana Chemical, 657 F.2d at 782).

The OSHA argues that the Directive here at issue must be considered a regulation for two reasons. First, it lacks some of the formal attributes of the typical standard. In particular, according to the agency, an employer's participation in the CCP is strictly voluntary; the Directive is not backed by the threat of a legal sanction, and it does not preempt any regulation imposed by a state. Second, we are told, the Directive cannot be a standard because it does not address a "specific and already identified hazard."

Although the proper characterization of the Directive is not without difficulty, we do not think either argument that it is a regulation rather than a standard withstands scrutiny. As to the first, it is true that the Directive does not formally require anything: An employer is not subject to a legal penalty for failing to join the CCP; it will be subject only to a safety inspection for its recalcitrance. Our concern, however, is with the practical effect (the "basic function") of the rule, not its formal characteristics. 56 F.3d at 1468. The Chamber of Commerce asserts, and the agency does not deny, that as a practical matter being subjected to a safety inspection can be quite as onerous for an employer as paying a fine imposed by the OSHA. See Cerro Metal Prods. v. Marshall, 620 F.2d 964, 974 (3d Cir.1980) (comprehensive OSHA "[i]nspections ... frequently extend over several weeks. They necessarily create inconvenience to the employer and a certain amount of lost time for employees who escort the inspector or are otherwise disrupted in their work"). ^* Indeed, one of the agency's objectives, as stated in the Directive, is to "leverage limited OSHA resources" by encouraging employers to adopt a "comprehensive safety and health program." This can only mean that the agency is intentionally using the leverage it has by virtue solely of its power to inspect. The Directive is therefore the practical equivalent of a rule that obliges an employer to comply or to suffer the consequences; the voluntary form of the rule is but a veil for the threat it obscures. For the same reason, it is of no great moment that the Directive purports not to preempt state law, although that is undoubtedly a point of difference between it and a formal OSHA standard. The distinction is not germane to our inquiry because the failure to preempt does not make the Directive, as a practical matter, any more or less a rule that "requires conditions ... necessary ... to provide safe or healthful employment."

The OSHA's second argument is that the Directive does not fit squarely within the definition of the term "standard" that we accepted from the Fifth Circuit in Workplace Health: Insofar, that is, as the Directive is intended to encourage the spread of safety programs that address "all hazards" in the workplace, the OSHA argues it is not a "remedial measure addressed to a specific and already identified hazard." 56 F.3d at 1468. That the Directive must therefore be deemed a regulation, however, does not follow. While the Directive fits the definition of a standard only imperfectly, it fits the definition of a regulation not at all. The Directive is clearly not, for example, "a purely administrative effort designed to uncover violations of the Act." By its terms, it aims to foster safety policies more stringent than any required by the Act or by the regulations implementing the Act, including, as we have seen, "voluntary standards," "industry practices," and "suppliers' safety...