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OSH Act doesn’t preempt DA’s claims that safety violations were also unfair business practices, false advertising

By Nicole D. Prysby, J.D.

The federal OSH Act did not preempt a state district attorney’s unfair competition law (UCL) and fair advertising law (FAL) claims against an employer, held the California Supreme Court. The claims were based on safety violations at a facility that resulted in the death of two employees. The court found that the federal OSH Act and state OSH laws are intended to work cooperatively. For example, when a state standard is approved by the U.S. Secretary of Labor, it “preempts” the federal standard. And nothing in the federal law indicates that Congress intended to prohibit a state from enforcing its safety standards through supplemental means (Solus Industrial Innovations, LLC v. Superior Court of Orange County, February 8, 2018, Cantil-Sakauye, T.).

Background. The Orange County District Attorney brought an action against the employer, a plastic manufacturer, for violations of California’s UCL and FAL, based on a violation of state occupational safety and health standards. In 2007, the employer installed a water heater at its Orange County facility. The water heater was intended for residential use and in 2009, it exploded, killing two employees.

The state Division of Occupational Safety and Health charged the employer with multiple violations of state safety regulations and a district attorney also filed criminal and civil charges. One of the charges was that the employer’s failure to comply with workplace safety standards amounted to an unlawful business practice under the state unfair competition law. Another was that the claims the employer made, asserting that it was in compliance with all workplace safety standards, were false and misleading, in violation of the state fair advertising law. The employer argued and the Court of Appeal agreed that the UCL and FAL claims were preempted by the federal OSH Act.

Implied preemption of UCL and FAL claims. First, the court found that the field preempted by the federal OSH Act is narrow. The federal act states that where there is no standard, there is no preemption. Therefore, the federal authority does not occupy the entire field; states may apply their own standards wherever there is no federal standard. And even when a federal standard exists, states may assume responsibility for development and enforcement of state standards, if the state gets a state plan approved. An approved state plan preempts federal standards. The federal OSH Act encourages states to assume responsibility for administration and enforcement of safety laws; viewing the law as a whole, the preempted field does not encompass all means of enforcement not specifically included in the state’s plan.

The OSH Act’s savings clause also indicates a narrow field of implied preemption. For example, even where federal standards exist, the federal law does not preempt state workers’ compensation actions, tort claims, or criminal prosecutions, even where based on duties established by state safety standards. In other words, the federal and state safety schemes are meant to be cooperative, not exclusively federal.

The court then determined that the UCL and FAL claims did not fall within the narrow field of preemption. Actions under the UCL and FAL are to be the remedies for economic damages, not the means of enforcing the state safety laws. To the extent they provide any enforcement of safety standards, it is only as a supplement. California’s UCL proscribes any unlawful business practice; it borrows violations of other laws and treats them as unlawful practices that are independently actionable under the UCL. The UCL and FAL claims in this case were based on the standards set forth in California’s approved state safety plan. Because approved state standards preempt federal standards, there was no duty on employers subject to federal preemption. In addition, the federal law provides that state enforcement of safety standards must be “at least as effective” as required under the federal OSH Act. It does not prohibit enforcement that is more than adequate or pursued through mechanisms other than those set forth through a state’s plan. Therefore, Congress did not intend to preclude supplemental enforcement of approved standards.

The court also discussed obstacle preemption. The principal goal of the federal OSH Act is to address the problem of varying state protections of employee safety by supplying a minimum level of protection; a federal floor of minimum necessary safeguards. Federal approval of the California plan indicates that the goal has been met in the state. Additional enforcement mechanisms are not an obstacle to achieving a minimum level of worker protection. Nor do the claims obstruct the federal law’s purpose of encouraging the states to assume responsibility for administration and enforcement of their safety laws. In addition, Congress explicitly recognized the continuing applicability of state law in the field in the federal OSH Act’s savings clause. Therefore, there is no evidence that Congress intended to displace state authority over unfair competition and consumer claims that are premised on state OSHA standards.

Express preemption of UCL and FAL claims. For similar reasons, the court concluded that there was no express preemption of the UCL and FAL claims. When a state obtains approval for its safety standards, the state law preempts federal law. And with respect to enforcement, the federal OSH Act requires enforcement mechanisms at least as effective as those under federal law, but does not indicate that state cannot supplement enforcement of federally-approved standards by means of unfair business practice claims. Furthermore, a state with an approved plan may implement modifications or additions to the plan without prior approval by federal OSHA.