An Open Letter to Governor Schwarzenegger: Veto AB 2774

Governor Arnold Schwarzenegger

State Capitol Building
Sacramento, CA 95814

Re: Veto AB 2774

Dear Governor Schwarzenegger;

Assembly Bill 2774 by Assemblyman Swanson is before you for signature. While the provisions of the bill which seek to foster early communication between employers and the Division of Occupational Safety and Health have merit, the overall effect of the bill will be grave for California’s employers, especially small employers. As attorneys with over 30 years experience representing California employers in Cal/OSHA matters, we urge you to veto this bill.

The Proposed Change to DOSH’s Burden of Proof Will Compel Litigation

This bill seeks to change the Division’s burden of proof as to “serious” violations of safety orders from a “substantial probability” of serious injury, to a “realistic possibility” standard. This change will inevitably lead to an increase in litigation over exactly what this phrase means, for while the current standard of proof is well understood in the legal and OSHA communities, we have never heard of a “realistic possibility” standard. You should be aware that no other state in the nation, nor Fed/OSHA itself, has adopted this standard. Does California really want to lead the way down this road?

DOSH hopes by adopting this standard to placate Fed/OSHA’s concerns that we do not issue enough “serious” citations. But changing the standard of proof for Serious citations creates an illogical dual system of standards between proof of Serious – classified citations and all other classifications.

Moreover, this provision is based upon the false premise that issuing more Serious citations will reduce accident and illness rates in California. Certainly, it is likely that this change will lead to more Serious citations being issued, as anyone with any experience in Hollywood knows, anything conceivable can be made to seem to be a “realistic possiblity.”

This approach only serves as further proof of our belief that the Division’s goal has shifted from fostering workplace safety to mere regulatory compliance.

Making All Cal/OSHA Inspectors Experts Will Not Reduce Litigation

This bill provides that every DOSH safety inspector shall be “deemed competent to offer testimony to establish each element of a serious violation,” as well as “custom and practice” in

the workplace. This will create another illogical divide between citations of different classifications.

More importantly to the appeals process, this provision will compel employers to offer expert witness testimony to counter this presumptive expertise. The result will be longer appeal hearings, which in turn will raise the costs of the appellate process not just for employers, but for the Division and the Appeals Board as well.

AB 2774 Is Blow To California’s Efforts To Recover From The Recession

AB 2774 is based on anecdotal and agenda-driven arguments, not any quantified evidence of pervasive misconduct by California’s employers. The fact is that California’s industrial accident rates continue to decline.

The further impetus of this bill is Fed/OSHA’s threat to penalize California if our number of citations classified as Serious does not increase. This bit of bullying is nothing less than the OSHA equivalent of ticket quotas which Californians abhor. It also conveniently ignores the fact that in California the cost of a Serious citation is over three times higher than one issued by Fed/ OSHA. Under the federal scheme, a Serious citation carries a maximum penalty of $7,000.00. In California, the maximum is $25,000.00, and Accident-related serious citations start at $18,000.00, with little variance allowed for the size of the employer.

The Senate Appropriations Committee estimates that in the long term this bill will reduce appeal costs. We do not believe this will be true unless employers conclude that the deck is overwhelmingly stacked against them and give up.

We believe instead that the number of appeals will increase as employers, large and small, seek clarification of what “substantial probability” means, and relief from the opinions of inspectors who will be “deemed” experts in safety, industrial hygiene and medical issues as a result of this bill.

This bill is a bad idea at an even worse time. With unemployment over 12% and small employers struggling to survive as the economy sputters, this is not the time to increase their burden. It also is not the time to tell foreign companies that there is one more reason not to do business in California.

Please veto this poorly conceived bill.

Yours very truly, WALTER & PRINCE LLP

Fred Walter