OSHA Continues Pursuit of Corporate-Wide Settlements with Dollar Tree Enforcement Action
Kelley Drye Client Advisory
Last month, the Occupational Safety and Health Administration (“OSHA”) announced a settlement agreement resolving all citations issued nationwide against Dollar Tree locations.1 The enforcement action reflects a continuation of OSHA’s aggressive pursuit of corporate-wide settlement agreements addressing multiple facilities and locations. These high-profile settlements are aimed at maximizing OSHA’s enforcement resources and leveraging compliance more broadly through the publicity generated by pursuing such “headline cases.”
Elements of the Settlement AgreementOver the last few years, thirteen inspections of Dollar Tree locations resulted in a number of citations involving blocked emergency exits, obstructed access to exit routes and electrical equipment, and improper material storage. Under the agreement, Dollar Tree will pay $825,000 in penalties and will institute a comprehensive corporate health and safety program, among other things. OSHA’s Dallas, Philadelphia, Denver, and Boston Regional Offices were all involved in negotiating the settlement, as the Director of Enforcement Programs and the Division of the Solicitor’s Office.
The health and safety program to be developed by Dollar Tree will cover issues including management commitment, employee participation, hazard identification and control, education and training for employees and multi-level managers, and program evaluation. In terms of employee outreach, Dollar Tree also has agreed to publish a corporate newsletter on health and safety issues, and will encourage employees to use a new toll-free number to anonymously report safety and health issues. The settlement agreement also specifies monitoring provisions, including allowing a third party to audit 50 facilities over a two-year period, internal inspections of a cross-section of stores, and OSHA compliance inspections.
Dollar Tree agreed to institute several engineering and management control practices that specifically address the hazards particular to their facilities. These include prohibiting stacking and storing of materials and equipment in a way that blocks exits or electrical equipment, implementing a procedure to allow managers to request storage containers for the safe storage of that material, requiring routes to exits and electrical equipment to be at least 28 inches wide, and reviewing delivery, unloading, and personnel systems to ensure merchandise and materials are safely stored.
Trends in OSHA EnforcementOSHA head David Michaels has explained that health and safety programs are likely to become a regular component of future OSHA settlements, and OSHA recently has sought feedback on guidance for those programs that focus on corporation-wide safety efforts. The agency also increasingly is emphasizing settlement agreements that resolve all violations against a single company, where appropriate, as a means of securing broader compliance obligations. Here, the violations found across Dollar Tree’s facilities were similar. Additionally, OSHA can issue a repeat violation when a similar violation has previously been cited at other facilities owned by the same company.
OSHA recently settled for $100,000 the last of four cases brought against clothing retailer Forever 21 for citations relating to product hazards. However, OSHA’s legal authority to enter into those enterprise-wide corporate settlements previously has been challenged. In a 2013 case against Delta Elevator Service, an administrative law judge questioned whether that sort of relief was envisioned under “other appropriate relief” allowed under the OSH Act—the clause through which OSHA can develop multi-facility settlements. Despite this admonition, OSHA continues to look to broader agreements both to settle more citations and to obtain greater compliance obligations.