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Penalties for workplace safety violations get extra cuts in Arizona

Penalties for workplace safety violations get extra cuts in Arizona

Phoenix roofers labored 20 feet above the ground without guardrails or fall-protection gear. In Tempe, workers were exposed to hazardous chemicals, including chlorine gas, without an adequate safety plan. An untrained Mesa worker was injured using a machine that didn’t guard human limbs from moving parts.

After all three workplace safety violations this year, officials from the cited businesses showed up at an Industrial Commission of Arizona meeting, asked for a reduction in the penalties proposed by occupational safety inspectors — and got it.

Now, federal officials are scrutinizing the unusual practices of the governor-appointed commission.

In Arizona, civil penalties imposed for hazardous working conditions aren’t only subject to reductions during settlement conferences or formal appeals with employers. Unlike in all other states, penalties here can also undergo an early round of cuts that are largely unaccounted for because they happen before the penalties are even issued.

A Star investigation found the Industrial Commission routinely reduces the penalties recommended by inspectors at the Arizona Division of Occupational Safety and Health, or ADOSH. The commission reviews ADOSH penalties that exceed $2,500 and its cuts often appear to lack clear justification, a federal OSHA official said.

The Star analysis of Industrial Commission meeting minutes found the 139 penalty proposals reviewed between January and the end of November were reduced by a total of more than $186,000. Commissioners voted to reduce ADOSH’s recommended penalties in more than half of the cases they reviewed this year, the Star analysis shows.

Arizona is one of 26 states with a state-level occupational safety and health enforcement program, which must be at least as effective as federal OSHA or risk takeover. The Industrial Commission oversees ADOSH and other labor-related programs.

In response to questions about the Industrial Commission’s practices, including from the Star, federal OSHA officials began monitoring the commission’s meetings in July.

“We want to make sure these people who are so knowledgeable and trained are the ones that are the real decision-makers in ADOSH cases,” said Zach Barnett, area director for federal OSHA in Arizona. “It will be ongoing monitoring until I’m comfortable with the decisions that are being made and how they’re being made.”

On Dec. 9, federal OSHA officials also sent a formal complaint to Industrial Commission director James Ashley about the commission’s practice of reducing penalties and reclassifying safety violations, Barnett said. Ashley has 30 days to respond to the complaint, which won’t be made public until it’s closed, Barnett said.

Commission Chairman Dale Schultz said he understands federal OSHA’s concerns, but he defended the commission’s performance, which he said prioritizes improving workplace safety, not necessarily issuing the highest penalties.

“We are working very hard with (federal OSHA) to make sure we are in compliance with the expectations of the state plan,” he said. “But we also feel a very strong responsibility to make sure we are focused on our objective, which is making all workplaces safer.”

Occupational safety experts say that even without the commission’s intervention, ADOSH penalties are too low to be effective.

Arizona’s average final penalty for serious violations in fiscal year 2015 was $960, about 40 percent lower than the national average of $1,598, according to an April report from the labor advocacy group AFL-CIO. The average penalty for workplace incidents in which someone was killed was $2,759 — 70 percent lower than the national average of $9,271.

Congress voted last year to increase maximum OSHA penalties to account for inflation, the first such increase since 1990. Arizona is in the process of updating its maximum penalties, which may require approval from the Legislature, Barnett said.

Without any real threat to their bottom line, unscrupulous employers have little incentive to invest in training, procedures and equipment that put worker safety over profits, said Terry Stobbe, associate professor of public health at the University of Arizona. He teaches industrial hygiene, industrial safety and ergonomics.

Penalties are supposed to have a deterrent effect, but “the reality is, they’re so small it’s a joke,” Stobbe said. “ADOSH has a huge responsibility and they’re not living up to it.”


State plans have flexibility in how they operate, including how penalties are reviewed, said Bill Warren, ADOSH director. Legislation that created OSHA encourages state plans to be “laboratories for safety,” so long as they meet federal OSHA’s standards, he said.

Still, experts say it’s unusual for a review commission to alter penalties before they are issued to employers.

“This sounds very unique to me,” said Celeste Monforton, lecturer at George Washington University’s department of environmental and occupational health, and a former OSHA policy analyst.

ADOSH’s recommended penalties already reflect reductions that federal OSHA allows based on an employer’s safety history, company size and “good faith” efforts to abate safety violations quickly. Penalties can be reduced further during informal settlements or formal appeals between ADOSH and employers.

Peter Dooley, a Tucson-based senior project coordinator for the National Council for Occupational Safety and Health, said ADOSH inspectors have better insight into appropriate penalties than Industrial Commission members who review them later.

Commissioners are “so far removed from what’s happening at that workplace,” he said. “To me, that seems like a process fraught with problems.”

Any Industrial Commission penalty reductions, and changes in the severity of citations imposed, are supposed to be based on doubt concerning “legal sufficiency” for the proposed citations or concern about whether the ADOSH inspection was conducted properly, Barnett said. The commission’s reductions don’t appear to be limited to those situations, he said.


The Industrial Commission invites employers to attend its public meetings and make a case for why their penalties and citations should be reduced. Those discussions could be problematic, too, said OSHA’s Barnett.

“I don’t believe it’s appropriate for it to evolve into some sort of extra-judicial proceeding,” he said. “It is unique that cases would be aired publicly and discussed publicly prior to the issuance” of penalties.

During their June 14 meeting, commissioners reviewed ADOSH’s proposed citations for Sedona-based Hale’s Roofing, where untrained laborers were working on a 23-foot roof without fall-protection gear. The company also didn’t provide an enclosed chute to safely drop roof debris into a ground-level dumpster.

At the meeting, commissioner Robin Orchard asked “whether a serious citation would impact a company’s ability to acquire contracts,” meeting minutes show. After a company representative “commented on the impact of a serious violation,” the commission deleted Hale’s Roofing’s two serious citations and changed a third from serious to non-serious. The recommended penalty was cut from $3,500 to $1,250.

Commission spokesman Bob Charles said the reduction was based on the company’s “immediate abatement” of the violations. He noted employees chose not to use fall-protection gear provided by the company.

Schultz, the commission’s chairman, said engaging with employers advances workplace safety, and workers who attend Industrial Commission meetings are welcome to share their side of the story, too.

But employees would be unlikely to publicly oppose their boss, said Monforton, the former OSHA analyst.

“Most of them are not represented by a union,” she said. “The situation is set up very much to hear the point of view of the employer. It seems very one-sided to me.”

The Industrial Commission’s efforts to include Arizona businesses in penalty reviews has won praise from some employers.

Roofing companies can struggle to persuade workers to comply with safety protocol, such as using fall-protection gear when working above 6 feet, said Ray Byrne, co-owner of American Roofing LLC in Phoenix.

Since 2015 American Roofing has spent $250,000 on safety equipment and training and has fired dozens of employees for misconduct, Byrne said. But the company still gets cited by ADOSH for the actions of employees.

Earlier this year, commissioners reduced the penalty for American Roofing’s most recent fall-protection violations from the $44,000 recommended by ADOSH to $7,000. Commissioners also downgraded the severity of ADOSH’s citations.

“Before, we had no control, no say. The only recourse we had was to take them to court,” Byrne said. “I can’t speak highly enough of what the commission has done.”


Declining injury rates in Arizona show the commission’s strategy is working, chairman Schultz said.

Workplace injuries or illnesses in the state have declined fairly steadily from a rate of 4.9 per 100 full-time workers in 2005 to a rate of 3.1 in 2015, U.S. Bureau of Labor Statistics data show. The national average in 2015 was 3.0 workplace injuries per 100 workers.

“Frankly, we don’t think about how much we’re reducing a penalty or how often we are reducing those penalties,” Schultz said. “We believe what we’re doing is the right answer and is effective.”

The data trend for workplace fatalities in Arizona is less linear: The latest BLS data show workplace deaths declined from 3.4 per 100,000 workers in 2008 to 2.3 four years later. In 2014, the rate rose to 3.1 deaths per 100,000 workers, then dropped back to 2.4 last year.

Local worker advocates say declining injury rates don’t guarantee workplaces are getting safer.

Some companies don’t report all injuries, and some discourage workers from reporting, said Eleazar Castellanos of the nonprofit Southside Worker Center, which helps ensure fair pay and safe conditions for day laborers. Castellanos also trains workers so they can speak up if conditions are hazardous.

“For those employers who don’t care about the workers, they only want to do the job and that’s it — whatever it takes,” he said.


Workers at Flambeau Inc., a plastics manufacturer in Phoenix, faced aggressive production quotas and were trained to reach inside active molding machines to remove pieces of plastic that got stuck in the mold cavity, a 2015 ADOSH accident investigation found.

Using the safety door would have kept workers’ limbs safe, but it would also stop the machine and waste valuable time — about 10 seconds per part, one supervisor told ADOSH. So workers reached under the safety door more than 400 times per shift, the report said.

The practice came to light last year with the permanent disfigurement of an 18-year-old Phoenix high school senior who was working the second shift at Flambeau to help support his family.

On March 31, 2015, he reached into the mold cavity to remove a piece of plastic and the machine closed on him, crushing his right hand and driving a metal pin through it. His hand was also burned by hot plastic and he had to undergo multiple surgeries.

The teenager declined to comment on the accident. But during last year’s mandatory accident investigation, he told ADOSH he knew the work was hazardous, but he was afraid he’d lose his job if he objected. Two employees also told ADOSH they’d complained to superiors about unsafe practices, with no response.

Flambeau did not contest ADOSH’s two “willful” violations, meaning the employer knowingly violated a legal requirement or showed indifference to worker safety. Still, in an informal settlement, ADOSH agreed to reduce Flambeau’s penalty from $95,000 to $77,500 after the company fired two managers and installed a guard on the machine.

“Employer respectfully requested a reduction in penalty,” an ADOSH document reads. Flambeau officials did not respond to repeated requests for comment.


Many employers have come to expect they can negotiate for deeper cuts or downgraded citations during settlement negotiations with regulators hoping to avoid a lengthy appeal if employers quickly fix dangerous conditions, said Katie Tracy, policy analyst at D.C.-based Center for Progressive Reform.

Deleting or downgrading a citation’s severity makes a company’s violation history look cleaner than it is, helping repeat offenders avoid detection, Tracy said.

Of the 10 highest penalties issued by ADOSH between 2010 and 2015, Arizona workplace safety officials reduced penalties by an average of 61 percent, either through informal settlements or formal courtroom proceedings, a Star analysis shows. Overall, ADOSH initial penalties were reduced by an average of 25 percent during that time.

The reductions don’t reflect Industrial Commission pre-issuance discounts.

Through settlement negotiations, ADOSH officials can secure concessions from employers such as safety training and new equipment, said Warren, ADOSH director. Penalty reductions mean a company can devote more money to bolstering safety, he said.

In one of the most dramatic reductions in recent years, Kitchell Contractors of Arizona’s initial penalty of $140,000 was reduced to $14,000 in a formal settlement after a 2010 fatal accident.

Kitchell employee Samuel Monge-Garcia was run over by a 30,000-pound forklift when working on his knees on a job site at Phoenix Children’s Hospital. He was in a roadway without the protection of barricades, traffic cones or a spotter.

ADOSH initially cited Kitchell with two willful violations: one for failing to provide a safe workplace and a second for failing to provide protective equipment for employees (another employee was working in a roadway without a reflective vest). In a formal settlement, ADOSH agreed to downgrade the first willful violation to serious and delete the second, reducing the penalty by 90 percent.

Kitchell president and CEO Jim Swanson said the company believes every accident is avoidable. Still, Kitchell has a “fiduciary and legal responsibility” to defend itself, he said in an email. Kitchell shared new information during the appeal that countered ADOSH’s findings and led to a reduced penalty, he said.

“The monetary penalties assessed by ADOSH are not a deterrent in the grand scheme, because the cost of any accident — not only physically but also psychologically — always far exceeds any penalty that could be issued,” he said.


A longtime employee of Western Precooling Systems in Yuma, José Mata knew something was wrong with the ammonia condenser, which was shaking in the truck bed on which it was mounted. As Mata moved to shut it off, the overpressurized condenser exploded, sending liquid ammonia into the air.

Mata, 56, said he reacted automatically: He closed his eyes, held his breath and fled the ammonia cloud engulfing him.

Ammonia burns like fire, and immediately freezes any tissue it encounters. The chemical froze Mata’s shirt to his skin, and when his co-workers removed his clothes, the skin was pulled from his arms.

Mata suffered burns over 42 percent of his body: second-degree burns on his face and third-degree burns elsewhere. He underwent five surgeries and lost his sense of smell and taste. His family has sought therapy to cope with the accident and its aftermath, he said.

An ADOSH inspection found a web of factors caused the accident, among them: The condenser wasn’t properly connected to a diffusion system that would have relieved growing pressure, and the last safety review was conducted before that condenser was on site. Someone had capped the openings on a pressure-relief system, which would have diffused growing pressure.

ADOSH issued an initial penalty of $69,300 to Western Precooling after the December 2011 accident. In a formal settlement agreement, that was reduced to $25,300 and one willful violation was downgraded to serious.

After two years of recovery, Mata is back at Western Precooling. He said the accident made a big impact on the company, which got new equipment, improved safety protocol and added more eye-wash water stations.

Mata doesn’t blame his employer, but he faults ADOSH for not visiting often enough, even after the accident. An OSHA inspection database shows ADOSH hasn’t returned to Western Precooling’s Arizona sites since the 2011 accident.

The AFL-CIO report found that, based on the number of safety and health inspectors in Arizona, it would take 128 years for the state’s OSHA plan to inspect every workplace once.

“Every year they should check on things, check on the improvements, and not only at my company,” Mata said. “I hear about tragedies where people get killed, they pay (a penalty) and three months later, it’s back to the same deal.”

Star reporter Tony Davis contributed to this report. Contact reporter Emily Bregel at or 573-4233. On Twitter: @EmilyBregel

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