Tempel Grain incident provides interesting example of penalty reductions

If a large OSHA penalty is later significantly reduced in a settlement, does the penalty have any effect as a deterrent?

That’s something I wondered in light of the Tempel Grain Elevators settlement. announced Aug. 5. OSHA originally cited the company $1.6 million for violations related to the death a 17-year-old employee killed in a grain engulfment.

However, the fine was later reduced to $50,000 – less than 4 percent of the original fine – in a settlement (.pdf file) with prosecutors who had filed criminal charges against the company.

Considering the horrific incident that led to the original fine, this reduction – at first glance – appears to be a slap in the face to supporters of strong enforcement. But OSHA had reasons for the reduction.

“Factors included in OSHA’s decision to accept the large reduction in the civil penalty amount were the company’s limited financial resources and the significant restitution amount being paid to Cody Rigsby’s family,” an OSHA spokesperson wrote in an email to me about the settlement.

The restitution to the victim’s family comes to $500,000. Additionally, the spokesperson pointed out that by pleading guilty, the company agrees to several requirements:

• Retain a safety and health manager to develop and implement a companywide safety and health program
• Provide OSHA with a complete list of the company’s grain elevator facilities
• Have a third party conduct a comprehensive safety audit of the company’s facilities

Violating these or other aspects of the plea agreement sets the company up for a potential $500,000 criminal fine.

So, the company isn’t exactly getting off the hook. And it would appear that by agreeing to reduce the penalty, OSHA is helping to ensure this company vastly improves its workplace safety.

On the other hand, such a great reduction in a penalty amount could weaken the administration’s argument for higher penalties. If the agency is going to turn around and reduce penalties to this extent, what good would it do to increase the cap on the amount of OSHA fines?

The opinions expressed in "Washington Wire" do not necessarily reflect those of the National Safety Council or affiliated local Chapters.