Regulated Industry Successfully Challenges New OSHA Process Safety Management Enforcement Policies

by BakerHostetler
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On September 23, 2016, the D.C. Court of Appeals ruled that the Occupational Safety and Health Administration (OSHA) wrongfully adopted new safety requirements for fertilizer dealers who have to comply with the Process Safety Management Standard. Specifically, OSHA improperly issued a memorandum redefining the “retail facility” exemption and did not allow fertilizer dealers to comment on the new rules.

OSHA has promulgated a Process Safety Management (PSM) standard that implements certain requirements for employers to protect the safety of those who work with or near highly hazardous chemicals, and help prevent unexpected releases of such chemicals. Traditionally, retail establishments do not have to comply with the PSM standard because hazardous chemicals are present only in small volumes in such instances.

Following a 2013 explosion at a West Texas Fertilizer facility that left 15 people dead after a large amount of ammonium nitrate caught fire, OSHA issued an enforcement memorandum expanding the scope of the PSM standard to cover more retail establishments, including agricultural dealers who sell anhydrous ammonia to farmers. Yet OSHA did this without requesting comments from the public or industry.

Working with legal counsel, the Agricultural Retailers Association (ARA) and The Fertilizer Institute organized a successful lawsuit challenging the new rule. The D.C. Court of Appeals ruled that OSHA violated the Occupational Safety and Health Act when it issued the enforcement memorandum, finding that OSHA had engaged in rulemaking, and was thus bound to solicit comments from the public and industry. As a result of the successful lawsuit, ag retailers do not have to comply with the PSM standard until OSHA receives comments from the public and industry regarding the proposed changes to the PSM standard, which could take several years to finalize.

Commenting on the decision, Harold Cooper, chairman of the ARA, said that “[a]s an industry, ag retailers tend to be complacent about regulations that come our way. We keep our heads down and do what’s required,” he said. “But this rule would have limited farmers’ and retailers’ options through an agency’s improper regulatory overreach. Thankfully, ARA was uniquely prepared and positioned to defend our industry. They gave us a vehicle to fight and win this battle.”

The court’s ruling will make it more difficult in the future for OSHA to issue de facto standards without undertaking proper rulemaking procedures and soliciting comments from the public. Companies should proactively work with skilled legal counsel who can assist on rulemaking processes that impact workplace health and safety.

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