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Director and Officer Liability under OSHA

Employers have a general duty under the Occupational Safety and Health Act (OSHA) to provide a workplace free from “recognized” hazards. A violation of this duty can lead to criminal sanctions in addition to civil penalties. An employer can also be exposed to liability under occupational safety and health regulations promulgated by the Secretary of the Department of Labor. Directors and high-level executive officers must act to reduce or eliminate workplace dangers or risk OSHA liability.

OSHA provides for criminal sanctions when (1) the employer’s willful violation of a standard, rule, order, or regulation has caused the death of an employee, (2) when the employer falsely represents its compliance with OSHA, or (3) when a person gives advance notice of an OSHA inspection. There have been few criminal prosecutions for OSHA violations.

OSHA imposes liability on an “employer.” An “employer” is defined as “a person engaged in a business affecting commerce who has employees . . .” A “person” is defined as “one or more individuals, partnerships, associations, corporations, business trusts, legal representatives, or any organized group of persons.” The OSHA Review Commission has declined to recognize a corporate officer as an employer; however, at least one federal district court concluded that the question of whether a corporate officer was an “employer” under OSHA was one of fact for the jury.

A federal district court in New Jersey found that “an officer’s or director’s role in a corporate entity (particularly a small one) may be so pervasive and total that the officer or director is in fact the corporation and is therefore an employer” under OSHA. The court acknowledged that if an employee’s role was not substantial enough to raise him to the level of an employer, he could not be charged as a principal or an aider and abettor. The Seventh Circuit Court of Appeals has indicated that an officer or director may fit the definition of an OSHA employer under the appropriate fact scenario and held liable as either a principal or an aider and abettor.

A director or officer who conducts corporate business before the corporation is formed or continues to conduct corporate business after the corporation is dissolved may qualify as an OSHA employer. Thus, the individual director or officer could be exposed to personal liability for violating OSHA provisions.

Most courts recognize that OSHA did not preempt the field of workplace safety. In fact, at least 20 states and two territories have the Secretary of Labor’s approval of their own workplace safety plans. Even though corporate officers and directors may not qualify as “employers” in some jurisdictions and under certain fact circumstances, they may nonetheless be held personally liable for breaches of fiduciary duty and other claims independent of OSHA.

Copyright 2011 LexisNexis, a division of Reed Elsevier Inc.