June 2017 Haak Law LLC Client Letter

Dear Clients and Friends:

I'm writing this month about risks posed by "vigilante" safety enforcement given that OSHA may decrease traditional enforcement efforts in the face of potential budget cuts proposed by the Trump Administration.

Earlier in May, I gave two presentations (one to the Ohio Chemistry Technology Council, and one to the Northern Ohio and McKinley Chapters of the ASSE) in which I warned of the dangers of the "enforcement vacuum" that would be created if OSHA is perceived to be enforcing less. In addition to the risk of increased whistleblower complaints, I also spoke about possible vigilante enforcement by unions and other non-governmental entities. Now it seems that Tesla, Inc. is finding out first-hand what vigilante enforcement might look like.

The Financial Times reported last week that Tesla faces increased scrutiny from the non-union workforce at its assembly plant in Fremont, California over "unsafe" conditions and higher than industry average recordable injury rates. From the outside looking in, it seems that employee concerns may have been (at least partially) bootstrapped by union organizers and a California-based non-governmental occupational safety organization known as Worksafe. Their goals? To drive employees to unionize and/or to "shame" Tesla into improving employee safety by threatening the company's brand image.

Worksafe notes in its 11 page Analysis of Tesla Injury Rates: 2014-2017 that the company's recordable injury rate is nearly double that of the automobile manufacturing industry as a whole. Included in Worksafe's analysis are two case studies of recent employee injuries. The case studies are artfully worded to cast Tesla in a negative light. Therein lies the biggest risk companies face from vigilante-ism in an OSHA enforcement vacuum – negative publicity and reputational damage.

No company pines for or relishes an OSHA inspection or citation. That being said, OSHA inspections and citations are at least somewhat knowable and predictable. Vigilante enforcement carries with it a different set of risks at potentially a much higher cost. So what can companies do to prepare and defend against these new risks? Preparations should include:

1. Focus on employee outreach efforts.

2. Hear and respond to safety concerns before they escalate.

3. Drive employee engagement in safety.

4. Encourage safety concern reporting provide meaningful feedback.

5. "Pump the brakes" on potential "optics" issues.

6. Carefully review all discipline that could be tied to safety concerns in any way.

7. Document everything!

8. Contact me at whh@haaklawllc to help you see around corners!

Thanks.

Bill