Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 1 of 37 PageID 1

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS

TEXO ABC/AGC, INC.,
ASSOCIATED BUILDERS AND
CONTRACTORS, INC.,
NATIONAL ASSOCIATION OF
MANUFACTURERS,
AMERICAN FUEL & PETROCHEMICAL
MANUFACTURERS,
GREAT AMERICAN INSURANCE
COMPANY,
ATLANTIC PRECAST CONCRETE, INC.,
OWEN STEEL COMPANY, and
OXFORD PROPERTY MANAGEMENT LLC,
CIVIL ACTION NO. 3:16-CV-1998
v.

PLAINTIFFS,

THOMAS E. PEREZ, SECRETARY OF
LABOR, UNITED STATES DEPARTMENT OF
LABOR, in his official capacity,
DAVID MICHAELS, ASSISTANT
SECRETARY OF LABOR, OCCUPATIONAL
SAFETY AND HEALTH ADMINISTRATION,
in his official capacity, and
UNITED STATES DEPARTMENT OF LABOR,
OCCUPATIONAL SAFETY AND HEALTH
ADMINISTRATION,
DEFENDANTS.

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 2 of 37 PageID 2

COME NOW, Plaintiffs, TEXO ABC/AGC, Inc. (“TEXO”), Associated Builders and
Contractors, Inc. (“ABC”), the National Association of Manufacturers (“the NAM”), American
Fuel & Petrochemical Manufacturers (“AFPM”), the Great American Insurance Company
(“Great American”), Atlantic Precast Concrete, Inc. (“Atlantic Precast Concrete”), Owen Steel
Company (“Owen Steel”), and Oxford Property Management (“Oxford”), by and through their
undersigned counsel, and for their Complaint against the Defendants, herein state as follows:
Nature of the Action
1. Plaintiffs seek a declaratory judgment finding that Subparagraphs 1904.35(b)(1)(i), (iii),
and (iv) of the final rule issued by the Occupational Safety and Health Administration
(“OSHA”), titled “Improve Tracking Workplace Injuries and Illnesses”, 81 Fed. Reg.
29,624 (May 12, 2016), as revised at 81 Fed. Reg. 31,854 (May 20, 2016), hereinafter
referred to as “the New Rule,” are unlawful to the extent that they prohibit or otherwise
limit incident-based employer safety incentive programs and/or routine mandatory postaccident drug testing programs.
2. Incident-based safety incentive programs and routine, mandatory post-accident drug
testing programs (collectively the “Safety Programs”) help employers to promote
workplace safety, which is supposed to be OSHA’s primary mission also. Instead, out of
a misguided zeal to improve accuracy of reporting on workplace injuries (albeit with no
evidence that injuries are not already being accurately reported), OSHA has lost sight of
the importance of reducing the number and severity of injuries themselves.
3. Plaintiffs assert that the challenged provisions are unlawful and must be vacated because
they exceed OSHA’s statutory authority; because they were adopted without observance
of the procedures required by law; and because the challenged provisions, and their

2

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 3 of 37 PageID 3

underlying findings and conclusions, are arbitrary, capricious, an abuse of discretion,
and otherwise not in accordance with law.
Summary of Claims
4. Subparagraphs 1904.35(b)(1)(i), (iii), and (iv) of the New Rule are not in accordance
with law because they exceed the statutory authority Congress granted to OSHA under
the Occupational Safety and Health Act (“OSH Act”), 29 U.S.C. § 651 et seq. (1970) in
the following ways:
a.

Congress specified in Section 11(c) of the Act an exclusive mechanism for

protecting workers who are allegedly subject to discrimination or retaliation in
connection with reporting work-related injuries or illnesses, and Congress expressly
declined to delegate authority to OSHA to independently regulate outside Section
11(c)’s exclusive mechanism;
b.

In promulgating the New Rule, OSHA did not provide interested parties with

legally adequate notice of its intent to adopt a rule that would ban or limit the Safety
Programs and therefore failed to comply with Section 4 of the Administrative Procedure
Act (“APA”), 5 U.S.C. § 553;
c.

OSHA did not sufficiently demonstrate that Subparagraphs 1904.35(b)(1)(i),

(iii), and (iv) of the New Rule are reasonably necessary or appropriate for ensuring
accurate injury and illness reporting, enforcement of the OSH Act, or for developing
information on the causes and prevention of occupational accidents and illnesses, and
therefore failed to comply with Section 8(c)(1) of the OSH Act; and,
d.

OSHA failed to demonstrate that Subparagraphs 1904.35(b)(1)(i), (iii), and (iv)

of the New Rule do not, directly or indirectly, impose an unreasonable burden on
employers as required by Section 8(d) of the OSH Act.
3

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

e.

Page 4 of 37 PageID 4

The New Rule violates Section 4(b)(4) of the Act by “affecting” state workers

compensation laws that require and/or encourage incident-based safety incentive
programs and/or post-accident drug testing programs.
5. The New Rule is also arbitrary, capricious, and an abuse of discretion, or otherwise not
in accordance with law under Section 10(e) of the APA, 5 U.S.C. § 706(2)(A) for the
following reasons:
a.

OSHA has relied on factors which Congress did not intend it to consider, entirely

failed to consider important aspects of the problem, offered an explanation for its
decision that runs counter to the evidence before the agency, and is so implausible that it
cannot be ascribed to a difference in view or the product of agency expertise. Motor
Vehicle Mfrs. Assn. of U.S. v. State Farm Automobile Mutual Ins., 463 U.S. 29, 43
(1983). In addition, OSHA has failed to display awareness that it is changing its position
nor shown that there are any good reasons for the new policy; nor has OSHA taken
cognizance that its longstanding policies “may have engendered serious reliance
interests that must be taken into account.” Encino Motorcars, LLC v. Navarro, __ S. Ct.
__ (June 20, 2016). Finally, OSHA has failed to explain numerous inconsistencies in its
New Rule. Id. More specifically:
b.

There is no reliable evidence to support OSHA’s assertion that any category of

safety incentive programs or post-accident drug testing programs lead to materially
inaccurate reporting or underreporting of workplace injuries and illnesses;
c.

OSHA failed to consider how an OSHA rule prohibiting or otherwise limiting

these longstanding types of safety programs would impact workplace safety and health;

4

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

d.

Page 5 of 37 PageID 5

OSHA failed to consider strong available evidence demonstrating that the widely

used safety programs improperly characterized as “retaliatory” in the New Rule, do in
fact significantly reduce work-related injuries, illnesses, and deaths in a manner
consistent with the OSH Act’s ultimate goal of assuring “safe and healthful working
conditions for working men and women;”
e.

OSHA also failed to consider strong available evidence that any prohibition or

other limitation on the safety programs improperly characterized as “retaliatory” in the
New Rule will result in a significant increase in work-related injuries, illnesses, and
deaths;
f.

OSHA failed to demonstrate that the unquantified and speculative benefits of the

purported increase in recordkeeping accuracy through more complete employee
reporting outweigh the benefits to workplace safety and health (a reduction in serious
incidents) provided by the safety programs improperly characterized as “retaliatory” in
the new Rule;
g.

OSHA failed to consider any of the record evidence submitted by Plaintiffs and

others demonstrating the value of these safety incentives and post-accident drug testing
to workplace safety and health;
h.

OSHA prejudged the essential issues related to the safety programs improperly

characterized as “retaliatory” in the new Rule; relied on non-safety related factors
Congress did not intend it to consider, and ignored all available evidence contradicting
its biased assertion that the safety incentives and post-accident drug testing somehow
lead to materially inaccurate reporting or underreporting of workplace injuries or
illnesses; and,

5

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

i.

Page 6 of 37 PageID 6

OSHA failed to conduct legally required regulatory impact analyses weighing

the full costs associated with the regulation, including increased worker injuries and
illnesses and corresponding costs, against the benefit of the New Rule’s purported effect
of improving recordkeeping accuracy and therefore failed to fulfill its obligations under
the Regulatory Flexibility Act and Executive Order 12866.
Parties
6. Plaintiff TEXO is a non-profit trade association of hundreds of construction industry
employers and related firms operating in North Texas and around the country.
Headquartered in this judicial district at 11101 N Stemmons Fwy, Dallas, TX 75229,
TEXO is a separately incorporated affiliate of the national construction industry trade
association Plaintiff Associated Builders and Contractors, Inc., which represents nearly
21,000 member contractors and related firms throughout the country, from its
headquarters in Washington, D.C. TEXO, ABC and their members take very seriously
their obligation to provide safe workplaces for their employees. To achieve that
objective, many of TEXO’s and ABC’s members rely on incident-based safety incentive
programs and routine, mandatory post-accident drug testing and safety incentive
programs, of the type that the new Rule declares for the first time to be unlawfully
“retaliatory,” to maintain safe workplaces.

TEXO’s and ABC’s members will be

irreparably harmed in their ability to reduce workplace injuries and illnesses by the new
rule for the reasons stated in greater detail below.
7. Plaintiff the NAM, headquartered in Washington, D.C., is the largest manufacturing
association in the United States.

It is a national not-for-profit trade association

representing small and large manufacturers in every industrial sector and in all 50 states.
Manufacturing employs nearly 12 million men and women, contributes more than $2.17
6

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 7 of 37 PageID 7

trillion to the U.S. economy annually, has the largest economic impact of any major
sector, and accounts for three-quarters of private-sector research and development. The
NAM is the powerful voice of the manufacturing community and the leading advocate
for a policy agenda that helps manufacturers compete in the global economy and create
jobs across the United States. Many manufacturers rely on incident-based safety
incentive programs and/or routine, mandatory post-accident drug testing programs to
reduce the number of injuries in their workplaces, and many such manufacturers will be
harmed in their ability to reduce injuries and illnesses by the New Rule for the reasons
stated in greater detail below.
8. Plaintiff AFPM, headquartered in Washington, D.C., is a national trade association of
approximately 400 companies, including virtually all U.S. refiners and petrochemical
manufacturers. AFPM represents high-tech American manufacturers of nearly the entire
U.S. supply of gasoline, diesel, jet fuel, and home heating oil. AFPM members employ
thousands of individuals to use high-tech machinery to manufacture petrochemicals used
in a wide variety of products, including plastic, medicines and medical devices,
cosmetics, televisions and radios, computers, solar power panels, and parts used in every
mode of transportation. Many AFPM members rely on incident-based safety incentive
programs and/or routine, mandatory post-accident drug testing programs to reduce the
number of injuries in their workplaces. Many such AFPM members will be irreparably
harmed in their ability to reduce workplace injuries and illnesses by the New Rule for
the reasons stated in greater detail below.
9. TEXO, ABC, NAM, and AFPM, as trade associations representing thousands of
employers in Texas and around the country, each have standing to bring this action on

7

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 8 of 37 PageID 8

behalf of their members under the three-part test of Hunt v. Washington State Apple
Advertising Commission, 432 U.S. 333, 343 (1977), because (1) Plaintiffs’ members
would otherwise have standing to sue in their own right; (2) the interests at stake in this
case are germane to Plaintiffs’ organizational purposes; and (3) neither the claims
asserted nor the relief requested requires the participation of Plaintiffs’ individual
members.
10. Plaintiff Great American is incorporated under the laws of the State of Ohio and has its
principal place of business in Cincinnati, Ohio. Great American through its Strategic
Comp Division (“Strategic Comp”) has provided workers compensation insurance to
more than 1,000 companies over the past 23 years and has gained a reputation in the
insurance market as having expertise in working with employers to implement
comprehensive workplace safety and health programs that prevent workplace accidents,
improve safety cultures, and significantly reduce the costs of work-related injuries,
illnesses, and deaths. Great American specifically assists its insureds in implementing
incident-based safety incentive programs of the types that are for the first time
improperly declared to be “retaliatory” under the New Rule. Great American’s ability to
provide such insurance and assist its insureds in implementing safety programs
preventing workplace injuries will be seriously jeopardized by the New Rule’s
unprecedented prohibition against such programs.
11. Plaintiff Atlantic Precast Concrete is incorporated under the laws of the State of
Pennsylvania and has its principal place of business in Tullytown, Pennsylvania.
Atlantic Precast Concrete purchases workers’ compensation insurance from Great
American through Strategic Comp and relies significantly on an incident-based safety

8

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 9 of 37 PageID 9

incentive program, of the type declared to be “retaliatory” under the New Rule, to
reduce its incidents of workplace injuries. Atlantic Precast Concrete also relies on a
routine, mandatory post-accident drug testing program, of a type again prohibited by the
new Rule, to reduce the incidents of workplace injuries.
12. Plaintiff Owen Steel is incorporated under the laws of Delaware and has its principal
place of business in Columbia, South Carolina.

Owen Steel purchases workers’

compensation insurance from Great American through Strategic Comp and relies
significantly on an incident-based safety incentive program, of the type declared to be
“retaliatory” under the New Rule, to reduce its incidents of workplace injuries. Owen
Steel also relies on a routine, mandatory post-accident drug testing program, of a type
again prohibited by the new Rule, to reduce the incidents of workplace injuries.
13. Plaintiff Oxford is incorporated under the laws of the State of Minnesota and has its
principal place of business in Rochester, Minnesota. Oxford purchases workers’
compensation insurance from Great American through Strategic Comp and relies
significantly on an incident-based safety incentive program, of the type declared to be
“retaliatory” under the new Rule, to reduce its incidents of workplace injuries. Oxford
also relies on a routine, mandatory post-accident drug testing program, of a type again
prohibited by the new Rule, to reduce the incidents of workplace injuries.
14. Thomas E. Perez is the Secretary of the United States Department of Labor (the
“Secretary”). The Department of Labor (“DOL”) published the New Rule in the Federal
Register and is responsible for its enforcement. Secretary Perez is sued in his official
capacity and the relief sought extends to all of his successors and all DOL employees,
officers, and agents.

9

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 10 of 37 PageID 10

15. David Michaels, Ph.D., is the Assistant Secretary for the Occupational Safety and Health
Administration of the United States Department of Labor. The New Rule was published
in the Federal Register under Dr. Michaels’ authority, and Dr. Michaels and OSHA are
responsible for its enforcement. Assistant Secretary Michaels is sued in his official
capacity, and the relief sought extends to all his successors and to all employees,
officers, and agents of OSHA.
16. OSHA is a federal agency within DOL charged with implementing health and safety
regulations under the OSH Act, 29 U.S.C. § 651 et seq. (1970).
Jurisdiction and Venue
17. This Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C. § 1331
(federal question) because the Plaintiffs’ causes of action arise under and allege
violations of federal law, including: the OSH Act, 29 U.S.C. § 651 et seq. (1970); the
APA, 5 U.S.C. §§ 701-706 (APA jurisdiction to review agency actions); and the
Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202 (declaratory and injunctive relief).
18. This Court has authority to grant declaratory and injunctive relief pursuant to 28 U.S.C.
§§ 2201-02 and the provisions of the APA, 5 U.S.C. §§ 701-06.
19. Venue is properly vested in this Court pursuant to 28 U.S.C. § 1391(e) because one or
more of the Plaintiffs are based in Dallas, Texas, within the judicial district of this Court

10

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 11 of 37 PageID 11

Factual Background
OSHA’s Statutory Authority To Promulgate Injury and Illness Recordkeeping
Regulations, But Not Anti-Retaliation Regulations
20. OSHA is authorized to adopt injury and illness recordkeeping requirements by Sections
8 and 24 of the OSH Act, which provide:
[Section 8(c)(1):] Each employer shall make, keep and preserve, and
make available to the [OSHA] … such records regarding his
activities relating to this Act as [OSHA] … may prescribe by
regulation as necessary or appropriate for the enforcement of this Act
or for developing information regarding the causes and prevention of
occupational accidents and illnesses . . .
[Section 8(c)(2):] [OSHA shall] prescribe regulations requiring
employers to maintain accurate records of and to make periodic
reports on, work-related deaths, injuries and illnesses …
[Section 8(d):] Any information obtained by the [OSHA] under this
Act shall be obtained with a minimum burden upon employers,
especially small employers.
[Section 24(a):] [OSHA] … shall develop and maintain an effective
program of collection, compilation, and analysis of occupational
safety and health statistics… and … compile accurate statistics on
work injuries and illnesses which shall include all disabling, serious,
or significant injuries and illnesses . . ."
21. Section 11(c) of the OSH Act states, in relevant part, that “[n]o person shall discharge or
in any manner discriminate against any employee because such employee has filed any
complaint or instituted or caused to be instituted any proceeding under or related to this
Act . . . .” 29 U.S.C. § 660(c). OSHA acknowledges in the Preamble to the New Rule
that “Section 11(c) only authorizes the Secretary to take action against an employer for
retaliating against an employee for reporting a work-related illness or injury if the

11

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 12 of 37 PageID 12

employee files a complaint with OSHA within 30 days of the retaliation. 29 U.S.C.
660(c).” 81 Fed. Reg. 29,671. Neither Section 11(c) nor any other provision of the OSH
Act grants the Secretary (OSHA) the authority to adopt substantive anti-discrimination
or anti-retaliation rules for any other purpose.
22. The legislative history of the OSH Act makes clear that Congress considered, and
rejected, administrative enforcement of the antidiscrimination provision of the kind now
included in the New Rule. The final Conference Report stated:
The Senate bill[1] provided for administrative action to obtain relief
for an employee discriminated against for asserting rights under this
Act, including reinstatement with back pay. The House bill[2]

1

Section 10(f) of S. 2193 contained the following language:
10(f).-This subsection prohibits discharge or discrimination against an employee
because of the exercise by the employee, on behalf of himself or others, of any rights
under this act. Any employee who believes he has been discharged or discriminated
against by any person in violation of this subsection may apply to the Secretary for a
review of such discrimination. The Secretary shall investigate and provide the
opportunity for a public hearing on the record and in accordance with title 5, United
States Code 554 (Administrative Procedure Act). If the Secretary finds a violation, lie
shall issue a decision and order requiring the person committing the violation to take
such affirmative action as may be appropriate to abate the violation, including but not
limited to, rehiring or reinstatement with back pay. Judicial review of proceedings under
this subsection may be obtained pursuant to subsection 10(d) or (e) of this section.

See Legislative History of the Occupational Safety and Health Act of 1970 (S. 2193, P.L. 91596), U.S. Government Printing Office, pg. 180 (1971).
2

Section 15(d)(6) of H.R. 19200 contained the following language:
Any person who discharges or in any other manner discriminates against any
employee because such employee has filed a complaint or instituted or caused to
be instituted any proceeding under or related to this Act, or has testified or is
about to testify in any such proceeding, shall be assessed a civil penalty by the
Commission of up to $10,000. Such person may also be subject to a fine of not
more than $10,000 or imprisonment of a period not to exceed ten years, or both.

Section 15(f) of H.R. 16785 contained the following language:
12

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 13 of 37 PageID 13

contained no provision for obtaining such administrative relief;
rather it provided civil and criminal penalties for employers who
discriminate against employees in such cases. With respect to the
first matter, the House receded with an amendment making specific
jurisdiction of the district courts for proceedings brought by the
Secretary to restrain violations and other appropriate relief. With
respect to the second matter dealing with civil and criminal penalties
for employers, the House receded.
Conference Report No. 91-1765 (December 16, 1970), 91st Cong., 2d Sess. (1970),
reprinted in Subcommittee on Labor and Public Welfare, Legislative History of the
Occupational Safety and Health Act of 1970 (Committee Print 1971) at 1192. 3
23. In other words, Congress explicitly withheld from OSHA the authority to initiate
enforcement actions or issue citations for unlawful discriminatory conduct or retaliation
prohibited by Section 11(c); and it implicitly withheld from OSHA the authority to
prescribe substantive anti-discrimination rules.
24. Through its approach to unlawful discrimination in Section 11(c) in the OSH Act,
Congress clearly established the exclusive remedy for unlawful discrimination under the
OSH Act – an employee complaint made within 30 days of the allegedly unlawful
(f) Any person who discriminates against any employee because of any action
such employee has taken on behalf of himself or others, to secure the protection
afforded by this Act shall be fined not more than $1,000 or imprisoned not more
than one year, or both.
3

This interpretation is acknowledged and confirmed in the following quote from Occupational
Safety and Health Law, ABA Section of Labor and Employment Law, Randy S. Rabinowitz,
Editor-in-Chief (2nd ed. 2002):
The Senate bill authorized administrative action to obtain relief for an employee
discriminated against for asserting rights under the statute, including
reinstatement with back pay. The House measure, however, called for criminal
and civil penalties against employers who discriminated against employees in
such circumstances. The conferees compromised; requiring that the Secretary
seek relief (reinstatement with back pay) but that this be done in the district
courts, not through administrative process. [footnote omitted.]
13

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 14 of 37 PageID 14

discriminatory action of the employer. Congress further determined the elements that
OSHA (or the complaining employee if OSHA declined to pursue the case) would have
to establish to prove a cause of action for discrimination.
25. Thus, the OSH Act does not permit OSHA to adopt regulations that go beyond a
mandate to employ due diligence to keep accurate records of work-related injuries. If an
employer fails to perform that obligation, the employer is subject to citation, and OSHA
has clearly demonstrated the ability to discover violations of those requirements and
impose substantial sanctions. The OSH Act does not provide OSHA with the authority
to arbitrarily determine that the applicable legal mechanism for preventing
discriminatory or retaliatory conduct will no longer be the one Congress fashioned as
part of a balanced compromise following extensive legislative action, but instead one
that OSHA determines 45 years later is more appropriate.
OSHA’s Injury and Illness Recordkeeping Regulations Prior To The New Rule
26. OSHA’s Injury and Illness Recordkeeping and Reporting Rule, codified in 29 C.F.R.
Part 1904, hereinafter “the current Recordkeeping Rule,” establishes broadly applicable
requirements for the identification, recording, and reporting, to OSHA and the Bureau of
Labor Statistics (“BLS”), of all work-related injuries and illnesses other than minor
conditions that do not require more than first aid treatment.
27. OSHA’s Recordkeeping Rule generally applies to all employers in most industries,
including, for example, manufacturing, construction, and transportation, with
establishments that employ ten or more employees at any time during the calendar year.
28. OSHA has explained the purpose of the Recordkeeping Rule as follows:
Injury and illness statistics are used by OSHA … to help direct its
programs and measure its own performance. Inspectors also use the
14

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 15 of 37 PageID 15

data during inspections to help direct their efforts to the hazards that
are hurting workers. The records are also used by employers and
employees to implement safety and health programs at individual
workplaces. Analysis of the data is a widely recognized method for
discovering workplace safety and health problems and for tracking
progress in solving those problems. The records provide the base
data for the BLS Annual Survey of Occupational Injuries and
Illnesses, the Nation's primary source of occupational injury and
illness data.
See 29 C.F.R. 1904.0 Purpose Frequently Asked Questions, Question 0-1,
https://www.osha.gov/recordkeeping/entryfaq.html. OSHA is, therefore, using injury
and illness data to identify and respond to national workplace safety trends, rather than
localized or individualized trends, and allocate resources to develop new regulations,
training, or emphasis programs. For those uses, the impact of under-reporting would be
negligible and there are available safeguards against under-reporting, which OSHA
chose to ignore in the New Rule.
OSHA’s Revision of the Recordkeeping Rule
A. The Rulemaking
29. On November 8, 2013, OSHA published a Notice of Proposed Rulemaking (“NPRM”)
titled “Improve Tracking of Workplace Injuries and Illnesses,” 78 Fed. Reg. 67,254
(Nov. 8, 2013)(“NPRM”). The NPRM proposed modifications to OSHA’s
Recordkeeping Rule that would require approximately 400,000 employers to
electronically submit injury and illness recordkeeping data to OSHA. In previous years,
OSHA had collected only a portion of this data, in hard copy, from approximately
80,000 employers. This is what OSHA meant by the phrase “Improve Tracking.”
30. There was no mention in the NPRM of any concerns regarding employer policies or
programs that might discourage employees from reporting injuries and illnesses, much

15

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 16 of 37 PageID 16

less an explicit reference to employer safety incentive programs or routine mandatory
post-incident testing.
31. Nevertheless, on August 14, 2014, OSHA issued a Supplemental Notice of Proposed
Rulemaking (“Supplemental NPRM”) to the Federal Register on August 14, 2014 at 79
Fed. Reg. 47,605 (Aug. 14, 2014), asserting the unsubstantiated concern that the
underlying proposal “could promote an increase in workplace policies and procedures
that deter or discourage employees from reporting work related injuries and illnesses.”
More specifically, OSHA purported to identify two basic categories of employer policies
or procedures that it asserted presented this concern: (1) “unreasonable requirements for
reporting injuries and illnesses”; and (2) “retaliating against employees who report
injuries and illnesses,” which OSHA clarified to mean situations where “an employer
disciplines or takes [other] adverse action against an employee for reporting an injury or
illness.”
32. OSHA then concluded the Supplemental NPRM by stating that it was “considering
adding provisions [to the proposed rule] that will make it a violation for an employer to
discourage employee reporting in these ways.” In other words, under the misleading title
of “Improve Tracking of Workplace Injuries and Illnesses,” OSHA issued a
supplemental notice of proposed rulemaking indicating that it was considering adopting
a new recordkeeping provision allegedly designed to address alleged retaliatory conduct
by employers, which has nothing to do with improving the tracking of workplace
injuries and illnesses.
B. The Final Rule
33. OSHA’s Final New Rule was issued on May 12, 2016, 81 Fed. Reg. 29,624 and revised
at 81 Fed. Reg. 31,854 on May 20, 2016. In the Preamble to the Final Rule, OSHA
16

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 17 of 37 PageID 17

stated that the New Rule has two primary objectives: (1) improve the tracking and
reporting of work-related injuries and illnesses, and (2) forbid discrimination or
retaliation against an employee for reporting a work-related injury. See 81 Fed. Reg.
29,663, 29,670.
34. In the part of the New Rule that is most pertinent to this Complaint, OSHA added what
it described as the anti-discrimination and anti-retaliation provisions in Sections
1904.35, titled “Employee involvement.” Revised Section 1904.35(b) states:
(b) Implementation—(1) What must I do to make sure that
employees report work-related injuries and illnesses to me?
(i) You must establish a reasonable procedure for employees to
report work-related injuries and illnesses promptly and
accurately. A procedure is not reasonable if it would deter or
discourage a reasonable employee from accurately reporting a
workplace injury or illness;
(ii) You must inform each employee of your procedure for reporting
work-related injuries and illnesses;
(iii) You must inform each employee that: (A) Employees have the
right to report work-related injuries and illnesses; and (B) Employers
are prohibited from discharging or in any manner discriminating
against employees for reporting work-related injuries or illnesses;
and
(iv) You must not discharge or in any manner discriminate
against any employee for reporting a work-related injury or
illness. [emphasis added].
35. In its Preamble discussion of the New Rule, OSHA further stated that incident-based
employer safety incentive programs, which are designed to promote safety through a
procedure of offering rewards to employees who have avoided workplace accidents
through use of safe work practices and behaviors, somehow violate the New Rule.
Thus, according to OSHA,

17

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 18 of 37 PageID 18

It is a violation of paragraph (b)(1)(iv) for an employer to take
adverse action against an employee for reporting a work-related
injury or illness, whether or not such adverse action was part of an
incentive program. Therefore, it is a violation for an employer to use
an incentive program to take adverse action, including denying a
benefit, because an employee reports a work-related injury or illness,
such as disqualifying the employee for a monetary bonus or any
other action that would discourage or deter a reasonable employee
from reporting the work-related injury or illness.
81 Fed. Reg. at 29,674.
If an employer retaliates against an employee for reporting a workrelated illness or injury by denying a bonus to a group of employees,
feasible means of abatement could include revising the bonus policy
to correct its retaliatory effect and providing the bonus retroactively
to all of the employees who would have received it absent the
retaliation.
81 Fed. Reg. at 29,671.
36. In the Preamble to the new Rule, OSHA also stated that the well settled practice of
routine mandatory post-incident testing would also violate the new Rule:
[D]rug testing policies should limit post-incident testing to situations
in which employee drug use is likely to have contributed to the
incident, and for which the drug test can accurately identify
impairment caused by drug use. [4] For example, it would likely not
be reasonable to drug-test an employee who reports a bee sting, a
repetitive strain injury, or an injury caused by a lack of machine
guarding or a machine or tool malfunction. Such a policy is likely
only to deter reporting without contributing to the employer’s
understanding of why the injury occurred, or in any other way
4

Although the language in the Preamble to OSHA’s Final Rule focuses solely on “automatic
post-injury drug testing,” OSHA has consistently identified alcohol as a “socially acceptable
drug” and addressed alcohol as a factor in its drug-free workplace program initiatives. See e.g.,
Drug Free Workplace Alliance, OSHA,
https://www.osha.gov/dcsp/alliances/drug_free/drug_free.html#!1B(identifying issues related to
drug and alcohol use in the workplace). See also, Letter from John B. Miles to Patrick J.
Robinson, Safety Coordinator, Starline Mfg. Co., (May 2, 1998), available at
https://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=INTERPRETATIONS&
p_id=22577. Concerns over testing policies throughout this rulemaking have also consistently
pointed to “drug and alcohol testing,” not simply “drug testing.” OSHA’s Final Rule can
therefore be read as applying to both post-incident drug testing and post-incident alcohol
testing.
18

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 19 of 37 PageID 19

contributing to workplace safety. Employers need not specifically
suspect drug use before testing, but there should be a reasonable
possibility that drug use by the reporting employee was a
contributing factor to the reported injury or illness in order for an
employer to require drug testing. In addition, drug testing that is
designed in a way that may be perceived as punitive or embarrassing
to the employee is likely to deter injury reporting.
81 Fed. Reg. 29,673.

37. By thus asserting that post-accident drug testing must be limited to those tests which can
accurately identify impairment caused by drug use, OSHA has effectively prohibited all
post-accident drug testing. This is so because, aside from alcohol tests, there are no
generally recognized and accepted drug tests showing actual impairment that are
available at this time. This scientific conclusion was recently reaffirmed by the National
Highway Traffic Safety Administration (NHTSA), which conducted a peer reviewed
panel evaluation of the state of current scientific knowledge in the area of drugs and
human performance for 16 commonly abused drugs selected for evaluation. NHTSA
found that impairment testing was not available or scientifically accurate for these
drugs.

http://www.nhtsa.gov/people/injury/research/job185drugs/technical-page.htm.

Nevertheless, the U.S. Department of Transportation has declared that post-accident
testing for such drugs increases workplace safety, and hence should be required,
regardless of whether on-the-job impairment can be shown. See, e.g., 49 C.F.R. Part
382.
38. OSHA has identified no basis for asserting that “it would likely not be reasonable to
drug-test an employee who reports a bee sting, a repetitive strain injury, or an injury
caused by a lack of machine guarding or a machine or tool malfunction.” In reality, the
impaired judgment resulting from drug use could contribute to or exacerbate any of the
19

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 20 of 37 PageID 20

injuries described by OSHA as “likely not reasonable to drug-test” under the New Rule.
Further, OSHA failed to provide any analysis of: (1) how employers would be in a
position to determine there was a reasonable possibility that drug use by the injured
employee was a contributing factor to the reported injury or illness; (2) the cost of
finding and training personnel qualified to perform those tasks; (3) the cost of
implementing such a system; (4) the impact on employee morale of having the worksite
under the oversight or surveillance of such personnel and (5) the problems created by
having a program that gives supervisors and others the discretion to require drug and
alcohol testing.
39. OSHA noted in the Preamble to the New Rule that otherwise prohibited mandatory postincident testing would be permitted if required by state or federal law, or regulation,
particularly if such law or regulation arises from a workers’ compensation law. 81 Fed.
Reg. at 29,673. OSHA rationalized that these testing programs would be permissible
because compliance with such a requirement demonstrates that “the employer’s motive
would not be retaliatory…” Significantly, Section 4(b)(4) of the OSH Act prohibits
OSHA from superseding or “affecting” workers’ compensation laws.

29 U.S.C. §

653(b)(4). For drug and alcohol testing programs that are not required by another law,
OSHA implies that any such program would, by OSHA’s definition, be retaliatory
without citing any basis for that conclusion. Furthermore, OSHA makes no claim that
the presence of federal or state drug and alcohol testing requirements will not result in
systemic underreporting of workplace injuries.
The Record Evidence That Incident-based Safety Incentive Programs Reduce
Workplace Injuries And Illnesses.

20

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 21 of 37 PageID 21

40. Properly designed incident-based employer safety incentive programs are the most
effective tool getting employees and supervisors immediately invested in workplace
safety. Through these programs, employees are continuously motivated to improve their
environment and to look out for their safety and the safety of others, and to eliminate
unsafe behaviors. The result is a dramatic decrease in accident frequency and severity.
Without these incident-based safety incentive programs, Plaintiffs have found that
culture change is much more slow and difficult and seldom leads to the same dramatic
reductions in serious accidents.
41. Incident-based employer safety incentive programs are designed to invest a company’s
employees, including supervisors, in workplace safety. They motivate supervisors and
non-management employees to improve their work-place environment and to engage in
a mutually supportive approach to workplace safety in which employees “watch each
other’s backs” to eliminate unsafe behaviors. By encouraging all employees, including
supervisors, to improve workplace safety, incident-based safety incentive programs
jump start a change in culture that results in a prompt and sustained decrease in accident
frequency and severity.
42. A 2012 GAO report reviewed a number of studies evaluating incident-based employer
safety incentive programs and found that three of those studies concluded that such
incentive programs reduced injuries. See United States Government Accountability
Office Report to Congressional Requesters on Workplace Safety and Health, GAO-12329 (April 2012) (“2012 GAO Report”).
43. In data submitted to OSHA during the present rulemaking, Plaintiff Great American
showed that the incidence of indemnity claims (i.e., serious claims that cause an

21

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 22 of 37 PageID 22

employee to either lose time from work, have a permanent impairment, or both) made by
its insureds fell 39% in their first year in the Strategic Comp insurance program. Most
of these companies implemented an incident-based safety incentive program during that
first year. See Strategic Comp’s Comments to OSHA Docket No. OSHA-2013-0023,
available at www.regulations.gov.
44. Additionally, evidence was presented to OSHA demonstrating that, over the last five
years, insureds’ accident costs were 39% less than predicted by the National Council of
Compensation Insurance (“NCCI”) actuaries. The data also showed that insureds had
58% fewer catastrophic claims than actuarially predicted.
45. Many employers, including members of the Plaintiff associations and specifically
Plaintiffs Atlantic Precast Concrete, Oxford, and Owens Steel, have implemented
comprehensive incident-based safety incentive programs that encourage worker
participation and interest in workplace safety. If these safety incentive programs are
eliminated by implementation of Section 1904.35(b)(1) as they must be according to
OSHA’s statements in the New Rule, then Plaintiffs’ workplace safety will be
significantly jeopardized and workplace injuries and illnesses will significantly increase
in both frequency and severity, causing irreparable harm to the Plaintiffs’ members and
insureds, and their employees. The elimination of these safety programs will also cause
Plaintiffs to experience a significantly higher number and a significantly greater severity
of workers compensation claims, resulting in significantly increased premiums to the
Plaintiff insureds, and potentially eliminating the ability of insurers such as Great
American to write worker compensation policies for certain high risk businesses.

22

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 23 of 37 PageID 23

The Federal Government and Many States Have Recognized the Value of Routine
Mandatory Post-Incident Testing in Addressing Substance Abuse, Which is a Major
Threat to Workplace Safety and Health in the U.S.
46. The United States Department of Health and Human Services (DHHS) reported in 2014
that “most illicit drug users were employed. Of the 22.4 million current users aged 18 or
older in 2013, 15.4 million (68.9 percent) were employed either full-time or part-time.”
U.S. Dep’t of Health and Human Services, Substance Abuse and Mental Health Services
Administration, Center for Behavioral and Health Statistics and Quality, Results from
the 2013 National Survey on Drug Use and Health: Summary of National Findings,
Highlights, at 2 (Sep. 25, 2014).

Among full-time employed adults, 9.5 % were

substance-dependent while 9.3% of part-time employed adults were substancedependent. Id. at 88.
47. DHHS reported that the situation for alcohol abusers is increasingly dire.

DHHS

reported that “[a]mong adults in 2013, most binge and health alcohol users were
employed. Among 58.5 million adults who were binge drinkers, 44.5 million (76.1%)
were employed either full-time or part-time. Among the 16.2 million adults who were
heavy drinkers, 12.4 million (76.0 %) were employed.” Id. at 41.
48. Alcohol abuse has also been linked to workplace injuries and workplace safety. For
instance, Dawson showed a positive relationship between drinking five or more drinks
daily in the past year and having an on-the-job injury among respondents. See Dawson,
D.A., Heavy drinking and the risk of occupational injury, Accident Analysis and
Prevention 26(5):655–665 (1994). Similarly, researchers who examined rates of
drinking in the past 30 days and self-reported injuries while working for pay among high
school–aged workers in Texas found that the likelihood of occupational injuries
substantially increased in relative proportion to the amount of alcohol consumed on a
23

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 24 of 37 PageID 24

regular basis. See Shipp, et al., Substance Use and Occupational Injuries Among High
School Students in South Texas, American Journal of Drug and Alcohol Abuse, Vol. 31,
No. 2, pp. 253–265 (2005). Heavy drinkers therefore had the highest likelihood of
occupational injuries. Id. The National Council on Alcoholism and Drug Dependence
(“NCADD”) also reported in 2015 that (1) workers with alcohol problems were “2.7
times more likely” than those without drinking problems to have injury-related
absences; (2) “35% of patients with an occupational injury” that report to a hospital
emergency department were at-risk drinkers; (3) breathalyzer tests used on emergency
room patients injured at work detected alcohol 16% of the time; (4) a survey of
workplace fatalities has demonstrated that 11% of the victims had been drinking; and (5)
“one-fifth of workers and managers across a wide range of industries and company sizes
report that a coworker’s on-or off-the-job- drinking jeopardized their own productivity
and

safety.”

Drugs

and

Alcohol

in

the

Workplace,

NCADD,

https://www.ncadd.org/about-addiction/addiction-update/drugs-and-alcohol-in-theworkplace. (last modified Apr. 26, 2015).
49. Many states have workers’ compensation premium reduction statutes that encourage
post-accident and post-injury drug testing. For example, Minnesota’s Workers
Compensation Act, which permits employers to conduct drug and alcohol testing in four
limited circumstances (1) pre-employment, (2) routine physical examination testing, (3)
random, and (4) on a reasonable suspicious basis, provides employers with a discount on
workers' compensation premiums for implementing and maintaining drug free
workplaces in compliance with the Act. See Minn. Stat. Ann. § 176.0001 et seq.; Minn.
Stat. Ann. § 181.950 et seq. Notably, even though Minnesota’s workers compensation

24

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 25 of 37 PageID 25

and drug and alcohol testing laws limit an employers’ right to conduct testing to only
specific employment scenarios or upon a reasonable suspicious basis, reasonable
suspicion testing under Minnesota’s Drug and Alcohol Testing in the Workplace Act
explicitly includes situations wherein an employee “has sustained a personal injury,” or
“has caused another employee to sustain a personal injury.” Minn. Stat. Ann. § 181.950
et seq.
50. Some states also require routine post-accident and post-injury drug testing in certain job
classifications or for certain types of workplace accidents. For example, Alabama’s
Workers Compensation statute requires post-accident testing when an employee has
caused or contributed to an on-the-job injury that resulted in lost time. See Ala. Code §§
25-5-330 et seq. (2012).
51. A number of states have further developed model drug free workplace programs for
employers to use, which incorporate mandatory, routine post-accident and post-injury
drug testing. For example, Ohio’s Bureau of Workers Compensation has provided
guidance to employers titled “Drug Free Safety Program Guide,” which advises
employers to conduct post-accident alcohol and or/other drug testing of any employees
who have caused or contributed to an accident. See Drug Free Safety Program (DFSP)
information,

BWC,

https://www.bwc.ohio.gov/employer/programs/dfspinfo/dfspdescription.asp (last visited
Jun. 3, 2016).
There is No Scientific Data in the Record Showing that Incident-Based Safety
Incentive Programs or Routine, Mandatory, Post-Incident Testing Programs
Result in Significant Under-Reporting of Injuries

25

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 26 of 37 PageID 26

52. Not long before issuing the Supplemental NPRM leading to the New Rule, OSHA for
the first time asserted that some types of employer safety incentive programs may have
the effect of “discouraging workers from reporting an injury or illness.” See Revised
VPP Policy Memorandum #5: Further Improvements to the Voluntary Protection
Programs

(VPP),

OSHA,

(Aug.

https://www.osha.gov/dcsp/vpp/policy_memo5.html

14,

[hereinafter

2014),

“VPP

Memo”];

Memorandum on Employer Safety Incentive and Disincentive Policies and Practices,
Deputy

Assistant

Secretary

Richard

E.

Fairfax,

(Mar.

12,

2012),

https://www.osha.gov/as/opa/whistleblowermemo.html [hereinafter “Fairfax Memo”].
However, none of these assertions have ever been directly, or even indirectly, supported
by data or studies showing that incident-based safety incentive programs actually result
in underreporting or inaccurate reporting of workplace injuries and illnesses. Instead,
OSHA has merely asserted that “there are better ways to encourage safe work practices”
and that the agency has received anecdotal reports of employees being discouraged by
these types of programs. See generally, Fairfax Memo supra at ¶¶ 3-4.
53. In the one reported decision where OSHA claimed that an incentive program
discouraged reporting, that contention was rejected because OSHA’s evidence was not
credible. See Secretary v. Trico Tech. Corp., OSHRC Docket No. 9100110 (1993). For
instance, while one witness testified, “he was afraid to report injuries,” he did in fact
report a hernia. Id.
54. A 2009 ERG report on an audit of OSHA recordkeeping in 2006 also found that
[t]he percent of establishments classified with accurate
recordkeeping (at-or-above the 95 percent threshold) is above 96
percent for both total recordable and DART injury and illness cases.
Based on 95 percent confidence intervals for the two estimates, the
26

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 27 of 37 PageID 27

percentages of 98.34 percent for total recordable cases and 27
percent for DART cases are not statistically different. Overall, the
universe estimates for this year are consistent with the level of
accuracy observed for employer injury and illness recordkeeping
over previous years of the audit program.
OSHA Data Initiative Collection Quality Control: Analysis of Audits on CY 2006 Employer
Injury and Illness Recordkeeping, Final Report, ERG (November 25, 2009).
55. In 2009, OSHA implemented a Recordkeeping National Emphasis Program (“NEP”)
instructing OSHA inspectors to conduct recordkeeping audits and interview employees,
supervisors, and medical personnel to determine, among other things, whether company
incentives or disciplinary programs discouraged employees from reporting work-related
injuries. See OSHA Directive No. 10-02, CPL 02, Injury and Illness Recordkeeping
National Emphasis Program, February 19, 2010 (“NEP”). The program began in 2010
and continued for two years.
56. The NEP resulted in 550 federal and state recordkeeping inspections. Analysis of
OSHA's National Emphasis Program on Injury and Illness Recordkeeping, ERG, pg. 3
(Nov. 1, 2013). A report on the NEP showed that almost three times as many of the
interviewed workers felt that incentive programs encouraged reporting than those who
felt they discouraged it. Id. The vast majority of workers felt that such programs neither
encouraged nor discouraged reporting. Id. Notably, the analysis of the NEP program did
not conclude that incentives caused under-reporting. OSHA also did not cite the NEP –
the only study they have conducted on the topic – as support for the New Rule or as
demonstrating that incentive and/or drug testing programs deter the reporting of
workplace injuries.

27

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 28 of 37 PageID 28

57. In its 2012 report, the GAO identified six studies assessing the effect of safety incentive
programs. GAO found that only two of those studies “analyzed the potential effect on
workers’ reporting of injuries and illnesses, but they concluded that there was no
relationship between the programs and injury and illness reporting.” See 2012 GAO
Report.
58. Nevertheless, in its 2014 Supplemental NPRM, OSHA asked commenters, “[a]re you
aware of any studies or reports on practices that discourage injury and illness reporting?
If so, please provide them.” 79 Fed. Reg. 47607 (Aug. 14, 2014). Plaintiff Great
American through Strategic Comp submitted data to OSHA that shows the incidentbased safety incentive programs implemented by its insureds do not impact the reporting
of workplace accidents or injuries. According to the data, the ratio of indemnity claims
to total claims was reduced by 17% among first year insureds. If safety incentives
caused under-reporting, Strategic Comp would have expected to find evidence in their
data that their insureds were suppressing the smaller (i.e., more easily suppressible)
claims, thereby inflating the ratio of indemnity to overall claims. The data shows the
exact opposite, and the decrease in the ratio is evidence that the reporting has become
more robust. Other data showed that 94% of indemnity claims were reported within two
weeks of the accident date, which is better than the industry average of 82%, and which
indicates that claims are not being ignored until they become so serious that they cannot
be hidden but are being promptly reported.
59. Many of the categories of recordable injuries or illnesses covered by OSHA’s
Recordkeeping Rule would be difficult or nearly impossible for an employee to hide
from his/her employer due to the injury’s nature, the likelihood of witnesses to the

28

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 29 of 37 PageID 29

accident or incident that caused the injury, and/or the involvement of medical
professionals.

The universal availability of workers’ compensation benefits, which

cover lost wages and indemnify the worker for all medical expenses without deductibles
or co-pays, also militates in favor of informing the employer of most of the recordable
injuries. To ensure employers are made aware of work-related injuries and illnesses,
most employers have instituted workplace policies requiring employees to report workrelated injuries and illnesses and appropriately discipline employees for failing to report
such incidents. Finally, laws such as mail and wire fraud discourage medical
professionals as well as workers from hiding the true nature of an injury because false
communications with the employer or the employee’s insurance company would form
the basis of criminal liability.
60. The New Rule is also inconsistent in allowing routine mandatory post-incident testing in
instances where an individual (typically a supervisor) without any forensics or law
enforcement training has determined there is “a reasonable possibility that drug use by
the reporting employee was a contributing factor to the reported injury or illness.”
OSHA failed to provide any analysis of (1) how employers, as distinguished from
forensics experts or trained police forces, would be in a position to make the “reasonable
possibility” determinations, (2) the cost of finding and training personnel qualified to
perform those tasks, (3) the cost of implementing such a system, (4) the impact on
employee morale of having the worksite under the oversight or surveillance of such
personnel, and (5) the problems created by placing such discretionary authority in the
hands of supervisors and other personnel.

29

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 30 of 37 PageID 30

OSHA’s Failure to Perform the Required Regulatory Analyses to Assess the
Impact of the Final Rule on Workplace Safety and Health
61. OSHA did not provide any evidence that the implementation of safety incentive
programs and routine mandatory post-incident testing of injured employees when not
required by federal or state law was retaliatory or otherwise adversely impacted
workplace safety. In particular, OSHA failed to distinguish between the anecdotal
impact of such programs on employee reporting of injuries, and the injuries themselves.
As to safety incentive programs, OSHA cited no study connecting such programs to
reduced reporting of injuries and cited no study refuting the clear evidence that safety
incentive programs reduce the number of workplace injuries.
62. With regard to drug testing, OSHA cited perceived invasions of privacy as the reason
why employees purportedly chose not to report workplace injuries or illnesses. See 81
Fed. Reg. 29,663. OSHA claimed that requiring automatic post-accident drug and
alcohol testing “is often perceived as an invasion of privacy, so if an injury or illness is
very unlikely to have been caused by employee drug use, or if the method of drug
testing does not identify impairment but only use at some time in the recent past,
requiring the employee to be drug tested may inappropriately deter reporting.” 81 Fed.
Reg. at 29,673.

However, protecting worker privacy in this context is not within

OSHA’s authority and therefore does not provide a rationale for the New Rule. Even if
OSHA were authorized to protect workers’ privacy in this fashion, it would be arbitrary
and capricious and a clear abuse of discretion to allow speculative considerations of
employee privacy to outweigh the prevention of injuries, illnesses, and deaths. OSHA’s
apparent prohibition in the New Rule against routine mandatory post-incident testing of

30

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 31 of 37 PageID 31

any employee who gets injured on the job, unless mandated by federal or state law, was
made without any assessment of the relative costs and benefits of those practices. As
discussed above, there is a substantial body of proof that drug testing practices prevent
injuries, illnesses and deaths.
63. Section 8(c)(1) of the OSH Act required OSHA to weigh the value of incident-based
safety incentive programs and routine, mandatory post-accident drug testing in terms of
lives and limbs saved by preventing future workplace incidents against the speculative
costs of that testing on the accuracy of OSHA recordkeeping. OSHA was also required
to assign a value to the speculative and quite possibly de minimis reduction in the
accuracy of injury and illness records that would result if the safety programs were
permitted.
64. In other words, OSHA was required to determine that the number of individuals who
would not report accidents or injuries was significant enough to affect the accuracy of
the required reports. OSHA was further required to determine that the alleged
improvement in the accuracy of recordkeeping justifies the sacrifice in lives and limbs
from work-related incidents that clearly will result from banning the incident-based
safety incentive programs and drug testing and allowing substance abuse to go
undetected. Instead of carrying out this essential analysis, as required by the OSH Act,
OSHA merely declared that the impact of its New Rule on safety and health is
irrelevant, while focusing instead on recordkeeping accuracy at the expense of
workplace safety.
COUNT ONE
(The Final Rule is Unlawful because it Exceeds OSHA’s Statutory Authority)
65. Paragraphs 1 through 64 are incorporated by reference as if set forth fully herein.
31

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 32 of 37 PageID 32

66. Congressional delegation of rulemaking authority to an administrative agency is
delimited by the literal language of its enabling statute. See Chevron U.S.A., Inc. v.
Natural Resources Defense Council, 467 U.S. 837 (1984).

OSHA’s rulemaking

authority is prescribed within the confines of the OSH Act, which establishes the limited
rulemaking power within which OSHA must operate. No such delegation of authority
can be presumed by the agency. State of Texas v. U.S. Dept. of Interior, 497 F. 3d 491,
502 (2007).
67. In promulgating Subparagraphs 1904.35(b)(1)(i), (iii), and (iv) of the Final Rule, OSHA
has ignored the boundaries of the authority Congress delegated it in the OSH Act; and
invalidly seeks and exercises authority Congress explicitly refused to grant Defendants.
68. Such action exceeds the OSHA’s statutory authority and is therefore contrary to law and
invalid.
COUNT TWO
(Violation of the APA – Failure to Follow Required Procedures)
69. Paragraphs 1 through 68 are incorporated by reference as if set forth fully herein.
70. The New Rule is final agency action for purposes of 5 U.S.C. § 706(2)(A).
71. Section 4 of the APA generally requires substantive regulations, such as OSHA’s New
Rule, to provide adequate notice to interested parties and permit sufficient time for
comment consistent with the notice and comment provisions of the APA. 5 U.S.C. §
553.
72. OSHA’s regulation of the Safety Program Components through Subparagraphs
1904.35(b)(1)(i), (iii), and (iv) of the Final Rule is unlawful because OSHA failed to
provide interested parties with legally adequate notice of its intent to adopt a rule that

32

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 33 of 37 PageID 33

would for the first time prohibit incident-based safety incentive programs and/or routine,
mandatory post-accident drug testing.
COUNT THREE
(Violation of the OSH Act- Failure to Conduct Required Regulatory Analysis)
73. Paragraphs 1 through 72 are incorporated by reference as if set forth fully herein.
74. Section 8(c)(1) provides that any recordkeeping prescribed by regulation must be
necessary or appropriate for the enforcement of the OSH Act or for developing
information regarding the causes and prevention of occupational accidents and illnesses.
75. OSHA’s regulation of the Safety Program Components through Subparagraphs
1904.35(b)(1)(i), (iii), and (iv) of the Final Rule is unlawful because OSHA failed to
demonstrate that those provisions are reasonably necessary or appropriate for the
enforcement of the OSH Act or for developing information regarding the causes and
prevention of occupational accidents and illnesses as required by Section 8(c)(1) of the
OSH Act.
76. In addition, under Section 8(c)(1) and 8(d) of the OSH Act, OSHA is prevented from
enacting recordkeeping regulations that directly, or indirectly, impose unreasonable
burdens on employers. See OSH Act Section 8(d), 29 U.S.C. 657(d) (1970); U.S. Senate
Labor and Public Welfare Committee Report on the Occupational Safety and Health Act
of 1970, (P.L. 91-596), No. 91-1282, 5193-51.
77. OSHA’s regulation of the Safety Programs through Subparagraphs 1904.35(b)(1)(i),
(iii), and (iv) of the New Rule is unlawful because OSHA failed to demonstrate that
those provisions did not, directly or indirectly, impose unreasonable burdens on
employers as required by Section 8(c)(1) and 8(d) of the OSH Act.

33

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 34 of 37 PageID 34

COUNT FOUR
(Violation of the OSH Act- Interference With State Workers Compensation Laws)
78. Paragraphs 1 through 77 are incorporated by reference as if set forth fully herein.
79. Section 4(b)(4) of the OSHA Act prohibits OSHA from “affecting” workers
compensation laws. As noted above, many state workers compensation laws either
require or encourage employers to routinely conduct post-accident drug testing. The
New Rule interferes with, and clearly “affects” state workers compensation laws by
prohibiting or otherwise limiting routine, post-incident drug testing programs that are
encouraged by such laws.
COUNT FIVE
(Violation of the APA – Arbitrary and Capricious)
80. Paragraphs 1 through 79 are incorporated by reference as if set forth fully herein.
81. The New Rule is final agency action for purposes of 5 U.S.C. § 706(2)(A).
82. The APA requires a reviewing court to “hold unlawful and set aside agency action,
findings, and conclusions” that are “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A).
83. The New Rule is arbitrary, capricious, and an abuse of discretion because it is without
any basis in fact in that there is no reliable evidence to support OSHA’s assertion that
safety incentive programs or post-accident drug testing programs lead to materially
inaccurate reporting or underreporting.
84. The New Rule is arbitrary, capricious, and an abuse of discretion, because it regulates
programs that are designed to, and effectively do, improve workplace safety which is the

34

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 35 of 37 PageID 35

stated goal of the OSH Act without any consideration of how the revised rule would
impact workplace safety and health.
85. The New Rule is arbitrary, capricious, and an abuse of discretion, because OSHA
enacted the regulation under an improper bias and from a prejudgment of the essential
issues related to Employer Safety Incentive Programs and Routine Mandatory PostIncident Testing Programs thereby ignoring all available evidence contradicting its
assertion that the Safety Programs lead to materially inaccurate reporting or
underreporting of workplace injuries or illnesses.
86. The New Rule is arbitrary and capricious, and an abuse of discretion, because OSHA
failed to conduct required regulatory impact analyses demonstrating that the purported
increase in recordkeeping accuracy and employee reporting outweighs the overall
workplace safety benefits provided from the Safety Program Components.
87. The New Rule also fails adequately to acknowledge or explain OSHA’s reversal of
longstanding policy regarding the enforcement of the Act or to be cognizant that such
longstanding policies have engendered serious reliance interests that must be taken into
account. Encino Motorcars, LLC v. Navarro, __ S.Ct.__ (2016). It is also evident that
OSHA relied on factors which Congress did not intend it to consider; failed to consider
important aspects of the problem; and offered explanations for its New Rule that run
counter to the evidence. See Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v. State Farm
Mut. Auto. Ins. Co., 463 U.S. 29, 41-43 (1983).
Request for Relief
WHEREFORE, Plaintiffs respectfully request that this Court grant them the following
relief:

35

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 36 of 37 PageID 36

88. WHEREFORE, Plaintiffs respectfully request that this Court grant them the following
relief:
a.

A preliminary injunction prohibiting the defendants from implementing

Subparagraphs 1904.35(b)(1)(i), (iii), and (iv) of the New Rule generally, or at least as it
would apply to Employer Safety Incentive Programs and Routine Mandatory PostIncident Testing;
b.

A declaratory judgment and Order that Subparagraphs 1904.35(b)(1)(i), (iii), and

(iv) of the New Rule are unlawful because they are:
c.

in excess of OSHA’s statutory jurisdiction and authority,

d.

not adopted in accordance with OSHA’s statutory authority,

e.

not adopted in accordance with applicable procedural requirements, and

f.

arbitrary, capricious, an abuse of discretion, and otherwise contrary to law;

g.

An Order vacating and setting aside permanently any aspect of Subparagraphs

1904.35(b)(1)(i), (iii), and (iv) of the New Rule generally, or at least as they relate to
incident-based employer safety incentive programs and routine mandatory post-incident
testing;
h.

An Order awarding Plaintiffs their reasonable costs and attorneys’ fees in

connection with this action; and
i.

An Order granting such other and further relief as this Honorable Court deems

just and proper.

36

 Case 3:16-cv-01998-D Document 1 Filed 07/08/16

Page 37 of 37 PageID 37

Respectfully submitted,
/s/ Steven R. McCown
Steven R. McCown
TX Bar 13466500
Maurice Baskin*
DC Bar 248898
Thomas Benjamin Huggett
PA Bar 80538
LITTLER MENDELSON, P.C.
2001 Ross Avenue
Suite 1500, Lock Box 116
Dallas, TX 75201-2931
(214) 880-8100

Dated: July 8, 2016
Of Counsel:
Linda E. Kelly
Patrick N. Forrest
Leland P. Frost
Manufacturers’ Center for Legal Action
733 10th Street, NW, Suite 700
Washington, DC 20001
(202) 637-3000
Counsel for the National
Association of Manufacturers

Attorneys for Plaintiffs

Richard Moskowitz
General Counsel
American Fuel & Petrochemical
Manufacturers
1667 K Street NW, Suite 700
Washington, DC 20006
202.552.8474

*pro hac vice motion pending

Lawrence P. Halprin
Douglas Behr
Keller and Heckman, LLP
1001 G St., N.W.
Suite 500 West
Washington, D.C. 20001
202-434-4177

37