03/24/2004
CONTACT: Michelle Dimarob (202) 554-9000
The NFIB Legal Foundation, along with a coalition of like-minded industry groups, filed a brief today with the Occupational Safety and Health Review Commission (OSHRC) urging OSHRC not to pile additional liability on the backs of small-business owners.
On January 14, 2004, in response to issues pending in four cases before the Commission, OSHRC invited friend-of-the court briefs on two important issues raised by those cases, whether, contrary to current law: (1) individuals can be held personally liable for violations of the Occupational Safety and Health (OSH) Act and (2) OSHRC can authorize successor liability for a repeat violation of the OSH Act.
For decades, a corporation has been considered separate and distinct from its owners or shareholders. Legitimate corporations provide small-business owners with personal liability protections that are vital to encouraging entrepreneurship.
"The purpose of the OSH Act is to encourage the goal of 'safe and healthful working conditions for men and women,'" said NFIB Legal Foundation Executive Director Karen Harned. "Threatening small-business owners with pecuniary fines, imprisonment and increased liability will not create a safer work environment. Rather than expanding personal liability to small-business owners, OSHA should provide business with the tools and information they need to protect their employees."
In its brief, the NFIB Legal Foundation argues that: (1) OSHRC should not change existing law and create personal liability for small business owners; (2) "piercing the corporate veil" to create personal liability should only be imposed on small-business owners in very limited circumstances, such as fraud; and (3) successor liability should only be imposed when there is a final order against the same employer or its alter ego for a substantially similar violation.
OSH Act penalties can range from $10,000 to $20,000 and six months to a year in jail.
"As creators of the majority of the nation's jobs, small employers are the backbone of America's economy," Harned said. "If OSHRC were to eliminate the important protections that the corporate structure provides, it would substantially increase the risks and costs associated with starting a business."
The Associated Builders & Contractors, Associated General Contractors of America, and the U.S. Chamber of Commerce are also named on the brief.
The NFIB Legal Foundation is a 501(c)(3) public interest law firm created to protect the rights of America's small-business owners by providing advisory material on legal issues and by ensuring that the voice of small business is heard in the nation's courts. The National Federation of Independent Business (NFIB) represents the consensus views of its 600,000 members in Washington and all 50 state capitals.
