On May 22, California’s Division of Occupational Safety and Health (DOSH, but generally referred to as “Cal/OSHA”) issued its latest revised discussion draft of a regulatory standard mandating workplace violence prevention (WVP) steps for employers in “general industry” (potential 8 CCR 3343). This draft revives an effort that began in 2017, when the California Occupational Safety and Health Standards Board (OSHSB) responded to a schoolteacher’s petition that the state enact a WVP standard for educational settings by agreeing to consider one for all settings not covered by its standard for WVP in healthcare settings (which I wrote about HERE). The remainder of this note discusses the latest draft.Read More
Audit, Compliance and Risk Blog
During the COIVD-19 pandemic, there have been many reports of angry arguments between people who don’t want to wear masks or practice social distance and retail staff members trying to enforce local requirements. Some of these confrontations escalate to violence. The US Centers for Disease Control and Prevention (CDC) provide formal guidelines to retail businesses, offering ways for protecting workers by “Limiting Workplace Violence Associated with COVID-19 Prevention Policies in Retail and Services Businesses.” The remainder of this note describes CDC’s latest guidance.Read More
If it’s true that “there’s safety in numbers,” it’s just as true that employees working in isolation risk more severe consequences from most incidents. Worker protection laws have long recognized this truism in industrial settings where medical emergencies, accidents, or even “bad air” can be fatal to a lone worker who could readily be rescued by co-workers were any present. In recent years, worker protection agencies in most Canadian provinces have adopted requirements to protect “workers working alone or in isolation.” The movement has spread to the United States, including a special focus on hotel workers. Because of these trends, now is a good time to review requirements and compliance programs.Read More
As we approach the winter holidays, retailers everywhere are planning their biggest cycles of annual sales. One doesn’t have to be a grinch to notice that these events can introduce additional hazards for retail employees – and for others who may be shopping. It’s therefore a good time to review guidance for managing these hazards, which was promulgated by the Occupational Safety and Health Administration (OSHA) in 2012. This guidance followed a national review after a highly-publicized incident during which a worker at a Long Island Walmart was trampled to death by a crowd mobbing the store’s Black Friday (day after Thanksgiving) sales event in 2008. OSHA determined that Walmart should have anticipated crowd-related hazards, and fined the company for a violation of the Employer’s General Duty Clause (I wrote about this here)Read More
Although an ever-expanding range of laws prohibit workplace harassment, the Court of Appeal for Ontario has now ruled that harassment is not a free-standing common law tort in that province. This ruling reverses a trial court ruling by the by the provincial Superior Court of Justice that shocked employment law in 2017. This ruling returns workplace harassment to the realm of statutory and regulatory requirements and prohibitions, which certainly isn’t unambiguous, but at least offers more structured frames of reference. The case is Merrifield v. Canada (Attorney General), and it litigates a complaint between a member of the Royal Canadian Mounted Police (RCMP) and his employers.Read More
In the last few years, and particularly with the advent of the #MeToo movement, some employers may have seen a rise in the number of harassment complaints in the workplace, including sexual harassment complaints. Employers under federal jurisdiction have been affected as well.
However, the current legal framework surrounding harassment and violence in federally regulated workplaces is fragmented. The results of many public consultations have shown that this framework is not currently designed to adequately address occurrences of sexual harassment and sexual violence.
In that context, in the past 18 months, significant changes have been proposed to the current legislation to address workplace harassment situations.
On March 4, 2019, the U.S. Occupational Safety and Health Review Commission (Commission) issued its first affirmation of a citation and penalty issued by the Occupational Safety and Health Administration (OSHA) to punish a health care provider under the Employer’s General Duty Clause for failing to take adequate steps to prevent workplace violence. OSHA has issued citations under this Clause since 2012, but this is the first time that the Commission has confirmed one of these citations on appeal.Read More
But there are many other potential risks that could result in lawsuits against corporate directors and officers (D&O). These include an ensuing drop in stock price after an incident, mishandling of personal information, effects of the opioid crisis, sexual harassment allegations, and pollution risk created by the use and disposal of dangerous chemicals used in manufacturing. Even liability suits for mass shootings in the workplace can find their way to directors and officers.
Insurance designed to protect corporate directors and officers has been on the market for almost a century, but it was not until the scandals of Enron and WorldCom in the early 2000s that many executives became more aware of the need for liability protection. While we all remember those two bankruptcies, many may not recall that directors of WorldCom had to contribute their personal assets to settle the D&O claims that ensued.
Today, the risk factors motivating the purchase of additional D&O insurance are compelling, but the type of coverage purchased has a material impact on the limits available to protect directors from liability. As corporate officers reevaluate their current D&O coverage, it is important to thoroughly understand the type of coverage purchased and to quantify a board’s potential risk or “claim severity.”
Understanding and Quantifying D&O RiskIn 2017, 9% of public companies in the United States faced securities class actions—an all-time high. These are highly correlated with ensuing D&O claims, and the risks facing every company continue to grow. A U.S. Supreme Court ruling late last year, for example, now enables litigants to pursue class action suits regarding initial public offerings in state courts, which are commonly perceived to be more sympathetic to plaintiffs. These suits are also generally more expensive to defend because they cannot be consolidated and must be negotiated or litigated case by case.
Despite this increase in risk and liability exposure, the market for D&O insurance continues to be soft, with low premiums relative to the potential exposure. There continues to be ample competition for this business, preventing any meaningful increase in pricing. As such, this is a good time for companies to purchase additional coverage as pricing may be at a low point, especially in the excess layers. That said, not all D&O coverages are alike. An understanding of the coverages and their differences is essential for decision-makers looking to evaluate risk mitigation options.
Differences In D&O Coverage
With the introduction of the Private Securities Litigation Reform Act (PSLRA) in 1995, there followed a change in D&O coverage available in the marketplace. PSLRA is a federal law enacted in response to the perceived increase in frivolous class action suits alleging securities fraud under the Securities Act of 1933 and the Securities Exchange Act of 1934. The key features of PSLRA are:Read More
The Occupational Safety and Health Administration (OSHA) requires employers to prepare and maintain records of occupational injuries and illnesses (I&I Logs) as they occur. OSHA also requires employers to post an annual I&I Summary in each “establishment” within their workplace by February 1, summarizing that workplace’s I&Is during the previous calendar year. In states that administer federal standards within state-run programs, employers follow the comparable state requirements. Establishments with 250 or more workers must file electronic summaries by March 2.Read More
Sexual harassment in Canadian workplaces can trigger a variety of laws and regulations:Read More