On September 15, 2021, a divided panel of the Ninth Circuit Court of Appeals decided…
Lawsuit Prevention for Employers
WHEN LIGHTNING STRIKES: GUARDING AGAINST SURPRISE ENFORCEMENT INSPECTIONS
Employers Must be Prepared to Demand a Warrant Without Granting Consent to Inspect
Three state agencies are combining forces to conduct early-morning, surprise inspections of small to medium-sized employers. The Labor Commissioner, Cal OSHA and the Employment Development Department (“EDD”), under the auspices of the Bureau of Field Enforcement, (“BOFE”) are targeting small to medium-sized employers for unannounced inspections designed to reveal labor law violations.
As a consequence, unwary employers are confronting multiple labor citations from all three agencies involving hundreds of thousands of dollars.
In one recent case, a North Bay woodworking shop was recently confronted with just such a visit by a total of six government representatives, who arrived in the workplace before 9 a.m. After being informed that the owner had not yet arrived at work, the agency representatives announced that they had “the legal right” to conduct an inspection, and immediately began interrogating the workers present, and touring the facility, “red tagging” machines, and otherwise accumulating incriminating evidence. This business had never previously experienced government citations of any kind.
When the owner arrived half an hour later, the agents demanded voluminous employment records, on the spot.
These “visitors” had neither a written inspection warrant, nor the consent of the owner before commencing the inspection, as normally required by law.
The owner was cooperative, and immediately complied with the demand for documents. That did not prevent the “visitors” from issuing citations totaling almost half a million dollars, before they left the same day. They also issued a stop work order, which prevented the employer’s wood workers from performing any labor, while requiring the employer to continue their wages, uninterrupted, for up to 10 days. The agents informed the employer, and the workers, that the employer’s violation of the stop work order would subject him to possible incarceration and further monetary penalties.
The stop work order placed the employer in the untenable position of breaching several pending contracts which required him to complete installations in accordance with demanding and inflexible construction schedules. This subjected him to multiple lawsuits and could have destroyed the excellent business reputation he had earned over almost 25 years.
This, in combination with the citations he received the day of the “raid,” have brought this small business to the brink of bankruptcy, due to the expense of constructing a legal defense to what appears to be a flagrantly unlawful exercise of the government’s vast enforcement powers.
The moral of the story: “nice guys finish last.”
This nightmare could have been minimized, or entirely avoided, if the employer had instructed its employees, in advance, that no one was authorized to speak with any government representative, with the sole exception of the employer. Ideally, this restriction would have been specified in the employee handbook. The visitors should have been invited to wait in the reception area for the authorized spokesperson, but not allowed to “tour” or wander around the facility.
Second, once the owner arrived, he should have demanded a written administrative inspection warrant. This document, if authentic, includes the purpose and scope of the inspection, which is necessary in order to ensure that the inspection observes the limitations specified in the warrant itself.
Third, even if a written warrant is presented, the employer should make it clear that he/she is not granting consent to the inspection, and further demand that the would-be inspectors make a written record of the employers refuse to grant consent.
Fourth, the employer should request the opportunity to have the warrant reviewed for legal sufficiency by a court of competent jurisdiction, before the inspection is commenced. At this point, at the latest, the employer should contact legal counsel without delay.
Employers, beware. There is no business that is immune from a surprise inspection such as the one described above. Now is the time to prepare for it.
Jay G. Putnam is a Petaluma labor lawyer who has specialized in representing California employers for over three decades. His practice is devoted to preventing lawsuits against his clients, without sacrificing workplace authority or management prerogatives.
While no one can guarantee a future free of lawsuits, Putnam has compiled a remarkable record of success: Not one employer-client has been sued in 36 years with his system of precautions in place.
For those clients who have arrived with pending lawsuits, Putnam has established an excellent track record of success as well.
You are invited to visit Mr. Putnam’s website, where you will find in-depth discussion of the most common mistakes made by California employers, and how to avoid them. www.jaygputnam.com/articles-by-jay-g-putnam/