Supreme Court Limits OSHA’s Ability to Seek Civil Penalties with Six-Month Statute of Limitations

May 3, 2013- A recent US Supreme Court decision affirmed the six-month statute of limitations on alleged Occupational Safety and Health Act violations.

In a rare unanimous decision issued on Feb. 27, the Court held in Gabelli v. Securities and Exchange Commission (SEC) that the SEC could not take advantage of the discovery rule to expand the limitations period for civil penalty claims beyond that set by statute. The SEC argued that its penalty claim accrued when it discovered the misconduct, not when the misconduct occurred. The Court disagreed, finding that such a discovery rule, used in private actions for damages, does not apply to government actions for penalties.

This ruling impacts all cases in which the government is seeking civil penalties against private parties, including the Occupational Safety and Health Administration’s (OSHA) claim that recordkeeping violations are tolled, or suspended, until an OSHA investigator discovers them, which often occurs during the investigation of an unrelated workplace accident.

The decision means that employers can raise a limitations defense to any claim by OSHA that violations occurred more than six months prior. The six-month time limit applies to all violations, not just recordkeeping ones.

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