An attempt to prevent OSHA from obtaining records from a company’s workers’ comp insurance carrier has failed.
OSHA investigated Haasbach LLC in Mount Carroll, IL, after the deaths of two teenage workers in July 2010. A third worker, a 20-year-old man, was also seriously injured when all three became trapped in corn more than 30 feet deep in a grain elevator.
The workers were “walking down the corn” to make it flow while machinery used for evacuating the grain was running.
In the course of its investigation, OSHA subpoenaed Grinnell Mutual Reinsurance Co. to present documents concerning inspections it made at the Haasbach facility.
Grinnell argued that it would be irreparably harmed by turning over the requested documents to OSHA because they might find their way into the hands of plaintiffs filing lawsuits against the company.
The insurance company also predicted the subpoena would cause a “chilling effect” by discouraging businesses from allowing insurers to conduct safety inspections if the material could end up in OSHA’s hands.
Federal law says OSHA can “require the attendance and testimony of witnesses and the production of evidence under oath” when conducting inspections and investigations.
A federal court rejected Grinnell’s arguments. It said the insurance company’s claim that it would be irreparably harmed by releasing the information was “unconvincing.”
Regarding the chilling effect on businesses if their insurers would have to release inspection information to OSHA, the court said that problem is a policy decision to be made somewhere other than the federal courts.
The court ruled that OSHA could subpoena the inspection records. However, the insurance company could still claim that certain materials are subject to privilege under federal law. The insurer would have to submit a log of documents it wants to withhold to a federal magistrate who would review the privilege claims.
Despite the controversy over whether OSHA could subpoena the records, the agency fined Haasbach $555,000 for 24 citations.
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(Solis v. Grinnell Mutual Reinsurance Co., U.S. Dist. Crt. N.D. IL, No. 11 C 50014, 5/2/2011)