By Ilana R. Morady, Brent I. Clark, James L. Curtis, Benjamin D. Briggs, Adam R. Young, Patrick D. Joyce, Daniel R. Birnbaum, and Craig B. Simonsen

Seyfarth Synopsis: California Governor Gavin Newsom signed SB 606 into law on September 27, 2021. It creates two new categories of Cal/OSHA violations: “enterprise-wide” and “egregious”. It also provides Cal/OSHA with additional subpoena power during investigations, and expands on Cal/OSHA’s ability to seek an injunction.  The new law will go into effect on January 1, 2022.

Cal/OSHA’s enforcement power is soon-to-be radically increased. SB 606, which was co-authored by Senator Lena Gonzalez and Assemblywoman Lorena Gonzalez — both of whom have significant organized labor backgrounds — was signed by Governor Newsom on September 27, 2021. Although SB 606 does not directly relate to COVID-19, the bill’s co-authors leveraged the pandemic to push and ultimately succeed on these amendments to the Labor Code. When the bill was introduced, Senator Gonzalez announced that that the new legislation would “address the need for stronger enforcement measures to keep workers safe as the COVID-19 pandemic continues.”

Key provisions are as follows:

  • Creates a rebuttable presumption that an employer with multiple worksites has committed an “enterprise-wide” violation if Cal/OSHA determines that either of the following factors “is true”:
    • The employer has a non-compliant written policy or procedure.
    • Cal/OSHA “has evidence of a pattern or practice of the same violation or violations committed by that employer involving more than one of the employer’s worksites.”

This presumption will, among other things, have the effect of creating an enterprise-wide violation for any written policy and procedure violations unless an employer can show that its other worksites have different, compliant written policies and procedures. Appeal of an enterprise-wide violation will stay abatement, but if the violation is affirmed, abatement will be required across all of the employer’s California worksites. Enterprise-wide citations will carry the same penalties as willful or repeated citations, i.e. up to $134,334 per violation.

Federal OSHA has for many years used corporate-wide abatement agreements in negotiations with employers, but AB 606 goes much farther. Cal/OSHA’s ability to issue enterprise-wide citations obviates the need for Cal/OSHA to rely on negotiated settlements to achieve enterprise-wide abatement.

  • Authorizes Cal/OSHA to seek an injunction restraining certain uses or operations of employment if it has grounds to issue a citation. This is a massive expansion of Cal/OSHA enforcement power; currently, Cal/OSHA may only seek an injunction if “the condition of any employment or place of employment or the operation of any machine, device, apparatus, or equipment constitutes a serious menace to the lives or safety of persons about it.”
  • Establishes an “egregious violation” category. Cal/OSHA can issue an egregious violation if it finds that at least one of the following seven criteria “is true:”
    • (1) The employer, intentionally, through conscious, voluntary action or inaction, made no reasonable effort to eliminate the known violation.
    • (2) The violations resulted in worker fatalities, a worksite catastrophe, or a large number of injuries or illnesses. For purposes of this paragraph, “catastrophe” means the inpatient hospitalization, regardless of duration, of three or more employees resulting from an injury, illness, or exposure caused by a workplace hazard or condition.
    • (3) The violations resulted in persistently high rates of worker injuries or illnesses.
    • (4) The employer has an extensive history of prior violations of this part.
    • (5) The employer has intentionally disregarded their health and safety responsibilities.
    • (6) The employer’s conduct, taken as a whole, amounts to clear bad faith in the performance of their duties under this part.
    • (7) The employer has committed a large number of violations so as to undermine significantly the effectiveness of any safety and health program that may be in place.

The framework for issuance of repeat citations is applicable to egregious citations, in that the underlying conduct must have occurred within the past five years. Significantly, each employee exposed to an egregious violation will be considered a separate violation for purposes of the issuance of fines and penalties. This could result in breathtakingly large penalties for employers subject to alleged egregious violations.

  • Authorizes Cal/OSHA to issue a subpoena during inspection “if the employer or the related employer entity fails to promptly provide the requested information, and may enforce the subpoena if the employer or the related employer entity fails to provide the requested information within a reasonable period of time.” Apparently Cal/OSHA has the discretion to determine what constitutes a “reasonable period of time.”

The foregoing changes to the Labor Code are undoubtedly significant for employers in California, and will have the largest impact of companies with multiple locations, for example retailers and construction companies. Perhaps the only silver lining is that the original bill was even more expansive of Cal/OSHA’s authority. It is now more important than ever for California employers to ensure regulatory compliance across all worksites and carefully manage Cal/OSHA inspections.

For more information on this or any related topic, please contact the authors, your Seyfarth attorney, or any member of the Workplace Safety Counseling and Litigation  (OSHA/MSHA) Team.