Companies Avoid OSHA Penalties After Workplace Deaths

By CHRIS HAMBY, The Center For Public Integrity— The temperature outside barely reached double digits on the morning of Jan. 15, 2009, and, inside the Crucible Specialty Metals steel mill in Syracuse, N.Y., it was bitterly cold.

Ice coated the equipment, forcing employees to use torches to free the machines so they could start their work.

Danger was everywhere, federal records show.

OSHA failed to collect fines in 1 of 10 worker fatality cases since 2001.

OSHA failed to collect fines in 1 of 10 worker fatality cases since 2001.

Equipment was old and in disrepair. Molten steel snaked through the building, and, at any moment, could snag and twist out of control, burning anything in its path.

Shafts driving the machines that compress the steel spun at high speeds with no guards to shield employees working nearby. Sometimes, workers said, the torches backfired and burned them.

This was Jack Grobsmithʼs domain.

Heʼd worked at Crucible for more than 35 years and had ascended to the position of head roller. He adjusted the equipment and made sure the steel bars came out just the right size.

Around the factory, he was known as a jokester with a purpose — showing up at events in character as Crucibella, donning a dress, lipstick and ʻ60s-era Easter hat to preach about safety.

That frigid January morning, Grobsmith went to one of the stands that compresses steel to hook up a water hose. Next to him, two rotating shafts driven by a 900-horse-power motor spun at 240 revolutions per minute.

Grobsmith struggled with the hose, which was covered in grease, then slipped on ice coating the area.

The shafts pulled him in, crushed his body and shot him out the other side.

Grobsmithʼs assistant roller and longtime friend Rocky Saccone ran over.

“It just happened so fast,” recalled Saccone, who retired a few months later. “We pulled him out, and that was it.”

The federal Occupational Safety and Health Administration cited Crucible for more than 70 violations and levied almost $250,000 in fines — high numbers for an agency with relatively little power to impose harsh penalties.

What almost no one outside of OSHA has known until now: The agency never collected a penny for Grobsmithʼs death because it failed to file paperwork in time after Crucible filed for bankruptcy.

The companyʼs bankruptcy case drew significant media coverage because of the economic impact on the community.

Yet OSHA, which has an office based in Syracuse, said in a written statement to the Center for Public Integrity that it didnʼt learn Crucible was in bankruptcy until March 2010. By then, it was too late to file as a creditor and try to collect. OSHA said collection would have been difficult even if it had filed.

A private equity firm bought the companyʼs assets and reopened the mill — calling it Crucible Industries — with most of the same management. The penalty simply disappeared.

OSHA never told Grobsmithʼs wife, Sue. After hearing the news from a reporter, more than three- and-a-half years after her husbandʼs death, she fanned herself with her hands.

“Iʼm blown away by the fact that Crucible never paid any fines,” she said several moments later. “OSHA doesnʼt feel the need to bring that out?”

Crucible has not responded to repeated requests for comment.

The events in Syracuse are part of the largely untold story of what happens after a workplace death has faded from memory and OSHA struggles to hold employers accountable.

Though OSHA trumpets announced penalties as evidence of its commitment to forcing companies to follow the law, what actually happens to these penalties is more complicated.

Even after investigating a death and issuing a penalty, federal OSHA or the state agencies it oversees have failed to collect any of the original fine in one of every 10 cases since 2001, the Center found. In many other cases, regulators have settled for a fraction of the penalty initially imposed.

Overall, the federal and state agencies have collected at least 40% of the monetary penalties initially assessed after workplace inspections, forgoing $1.3 billion in the process, a Center data analysis found.

Most overdue debts end up at a private collection agency under contract with the Treasury Department.

Yet a Center analysis of Treasury Department data found that only about 12% of OSHA debts have been collected in recent years. The penalties OSHA is allowed by law to impose are significantly lower than those assessed by many other enforcement agencies, providing little incentive for the government or collection agencies to prioritize them.

Both OSHA and the Treasury Department can ask the Justice Department to take an employer to court, but data show relatively little money has been collected this way.

Worker advocates say such failures to collect undermine enforcement.

“The penalties matter,” said Peg Seminario, director of safety and health at the AFL-CIO. Not collecting, she said, “basically means that they can violate the law and have very few consequences.”

OSHA does face substantial hurdles.

The agency canʼt force an employer to fix a hazard while a citation is contested, and litigation can drag for years. OSHA sometimes settles by deleting violations and erasing or reducing penalties — accepting, in some cases, company pledges to make safety improvements.

Even when a penalty becomes final, the agency may not be able to collect. Sometimes an employer disappears or convinces the government it doesnʼt have the money.

Other times, an employer goes out of business or declares bankruptcy, then forms a new company and continues similar work — a path that is difficult to track and requires legal heavy lifting to combat, OSHA said in a statement.

In its statement, OSHA said it is doing what it can with the authority it has, but it supports legislation that “would give OSHA the tools to impose appropriate penalties to increase deterrence and save lives.”

Data and cases from across the country show how penalties can wither or disappear, even after workers are needlessly killed.

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