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Oregon has yet to collect any money from businesses fined for flouting COVID-19 safety rules

By Jamie Goldberg, oregonlive.com
Published: April 26, 2021, 7:54am

State workplace safety officials have issued at least 20 citations to Oregon businesses for flagrantly violating COVID-19 safety restrictions since the start of the pandemic last March, collectively fining those businesses more than $400,000.

But the state has yet to collect any of that money.

The 20 citations were issued to 15 businesses that willfully defied COVID-19 safety standards, with two businesses receiving multiple citations for repeated violations. The businesses had appealed 16 of the 20 citations as of April 8 and the state anticipates the other four will be appealed as well.

Of those that have appealed, only one has reached a settlement with the state so far. Kozy Kitchen in North Bend, which was issued an $8,900 fine last June for opening for indoor dining against state health restrictions, reached an agreement to have its violation downgraded from “willful” to “serious” and its fine reduced to $4,000 – less than half the original penalty. Oregon is waiting for payment.

The other appeals could take months to resolve, or longer. Aaron Corvin, a spokesperson for the Oregon Occupational Safety and Health administration (Oregon OSHA), said the appeals process can last up to two years.

That means businesses the state believes committed the most egregious COVID-19 safety violations will be able to delay fines until long after the pandemic is over and could end up paying significantly reduced penalties after their appeals are resolved.

The situation illustrates the limitations of applying Oregon’s standard workplace safety rules to the extraordinary circumstances created by the pandemic. While Oregon OSHA tells businesses they must remedy violations during the appeals process, the agency has little power to force those businesses into compliance and the state has been unwilling to pursue criminal charges against repeated violators.

Many businesses have continued to defy state COVID-19 health restrictions while appealing their citations, or have publicly solicited donations to fight their penalties.

Oregon OSHA says even if businesses are delaying fines through appeals, and some remain hell-bent on breaking the rules, the threat of a fine is enough to get most businesses to comply. But that logic is frustrating to worker rights advocates.

“We’re talking about a pandemic that has resulted in 103 workplace-related deaths in Oregon,” said Jess Giannettino Villatoro, political director for Oregon AFL-CIO, one of the state’s largest labor groups. “There should be a stronger way to hold bad actors accountable.”

THE APPEALS PROCESS

Safety officials visited Gold Miner Restaurant in Grants Pass earlier this year after receiving multiple complaints from patrons and a request from Josephine County Public Health. They found that the restaurant wasn’t requiring that employees wear masks and had remained open for indoor dining in violation of state regulations in force at the time.

Nancie Bowers, the restaurant’s owner, told officials during the inspection that she knew she was violating state rules, according to Oregon OSHA. Multiple calls to the restaurant seeking comment went unanswered.

On April 6, Oregon OSHA levied a nearly $18,000 fine against the restaurant.

Bowers hasn’t officially informed the state whether she will appeal, but a day after the citation was issued she launched a GoFundMe campaign, asking supporters to donate money to help the restaurant fight the fine. The campaign has raised more than $6,700 so far.

“I believe they have no right to close my business and allow others to be open,” Bowers wrote. “We practice high standards to protect our employees and customers.”

“We are gonna give them a good fight,” she added.

When Oregon OSHA hands down a willful violation, it knows it is likely in for a time-intensive and sometimes costly fight.

Oregon OSHA administrator Michael Wood said even before the pandemic, the vast majority of businesses that received willful violations appealed because those violations come with larger fines and employers generally want to avoid having them become a permanent part of their record. If anything, employers have been even more keen to appeal willful COVID-19 safety violations.

“In every one of these cases, in particular, we’re likely to see an appeal because, frankly, almost without exception, we’re dealing with employers who have made a conscious decision that they aren’t going to submit to our requirements,” Wood said. “That makes it unlikely they would step away without appealing, even compared to the norm.”

As of April 8, the state had issued 125 citations to businesses for violating COVID-19 safety standards.

Nearly 75% of employers who have received fines for non-willful COVID-19-related violations have already paid. In the vast majority of those cases, fines were under $1,000. Oregon has a history of handing out fines for non-willful violations that are significantly smaller than the national average, according to annual reports from the U.S. Department of Labor.

On the other hand, employers cited for intentionally flouting COVID-19 safety standards have received fines of between $8,900 and $126,749, and almost invariably appealed.

After an appeal, Oregon OSHA will try to negotiate an agreement with the employer during an informal settlement conference. If the two sides can’t reach a settlement, the case will go on to the Workers’ Compensation Board where an administrative law judge will rule on the appeal.

The state and the employer often end up spending more on legal fees than the initial fine when a case goes that far, Wood said. But the burden falls on Oregon OSHA in those cases to prove that the penalties were appropriate.

That means the agency has an incentive to negotiate lesser penalties or violations during those initial conferences if they aren’t convinced they will prevail in front of an administrative law judge.

A total of 1,629 Oregon OSHA violations were resolved through the appeals process over the last three years, with 43% amended on appeal and 12% rescinded, according to Oregon OSHA data. Oregon collected 64% of the total value of penalties issued over the past three years due to a portion of fines being reduced on appeal. Businesses can also work out payment plans once their appeals are resolved.

When safety officials inspected Kozy Kitchen in North Bend on May 14, 2020, they found the restaurant open for indoor dining against state health regulations and observed employees without face masks failing to maintain social distance, according to field notes.

According to the notes, restaurant owner Dave Grover told Oregon OSHA officials that he was aware he was violating state rules but refused two requests from the officials to shut down for the remainder of the day. Grover didn’t respond to a request for comment.

The result of the inspection prompted Oregon OSHA to issue Kozy Kitchen a willful violation and a fine of $8,900 for remaining open for indoor dining.

After a settlement conference, Wood said, he signed off on an agreement that would downgrade the violation to serious and reduce the restaurant’s fine by more than half.

In coming to the settlement, he said the agency considered the timing of the fine – Gov. Kate Brown allowed restaurants to reopen for indoor dining shortly after Oregon OSHA inspected Kozy Kitchen – and the fact that a $4,000 fine still seemed substantial for a small restaurant with five employees.

Wood, though, insists that the settlement with Kozy Kitchen won’t serve as a baseline for other businesses that flouted COVID-19 safety standards, especially those that have been fined multiple times for repeated violations.

“Most of the employers we’re citing, we know aren’t going to come into compliance simply because we cited them,” Wood said. “We’ve had ongoing activity with them and that certainly makes the possibility of a settlement a good deal less likely.”

FLOUTING SAFETY STANDARDS

But even if violators could pay substantial fines in future, those fines aren’t forcing them into compliance now when workers and patrons are most at risk of contracting COVID-19.

When the governor mandated that gyms close in November with COVID-19 cases rising throughout the state, Salem-based gym chain Courthouse Club Fitness refused.

That prompted Oregon OSHA to fine the gym $90,000 for operating four facilities in defiance of state regulations. The gym appealed the fine and continued operating, calling the state’s regulations unreasonable. Many other businesses have complained about the state’s revolving and what they see as arbitrary COVID-19 safety standards, although the vast majority appear to have complied with the rules.

“I repeat my pledge to support any reasonable request to help in the fight against covid,” owner John Miller wrote in a since-deleted Facebook post. “Voluntarily bankrupting a business my members depend on for their health, and 300 employees depend on for a living, is not reasonable.”

In January, Oregon OSHA issued the gym a second fine of $126,749 for continuing to defy Brown’s mandates, by far the largest fine it has issued for a coronavirus violation. Again, the gym appealed.

No other steps were taken to ensure the gym complied. Brown has since allowed gyms to reopen.

“There’s folks that seem to think we have the authority to put padlocks on doors. We don’t,” Wood said. “All we can really do is increase the penalty. There is a lot of room to increase the penalties.”

Kevista Coffee in Bend was fined $8,900 by Oregon OSHA last July after the state alleged it willfully failed to require face coverings. Like Courthouse Club Fitness, the coffee shop appealed and continued to defy state rules.

Between Dec. 30 and Jan. 5, five people complained to Oregon OSHA that the cafe wasn’t requiring masks or physical distancing. One complaint noted that the coffee shop was soliciting donations to help in its fight against Oregon OSHA, according to state records.

The agency levied a second fine of $27,470 against the coffee shop last month for opening up against state regulations in December. Owners Kevin and Krista Lauinger have not yet told the state if they will appeal the second fine. They did not respond to a request for comment.

Oregon OSHA adopted a temporary COVID-19 rule in November meant to strengthen its ability to enforce COVID-19 safety standards, but beyond issuing fines and citations the agency has little power to force businesses into compliance. And other state agencies haven’t stepped in.

Liz Merah, a spokesperson for the governor, said in January that businesses that violated the state’s COVID-19 safety standards could be charged with Class C misdemeanors, but also acknowledged the state hadn’t taken that approach to force businesses into compliance, instead relying on an education-first approach.

Still, Wood said he believes the threat of fines from Oregon OSHA are effective in encouraging most employers to adhere to safety guidelines.

“I do believe that our penalties and awareness of them have an effect on other employers who may be wavering in their decision to follow the closure orders and to require the use of facial coverings,” Wood said. “The penalty serves a purpose both to try to address the future behavior of that particular employer, but it’s also intended to address the behavior of other employers.”

But Kate Suisman, an attorney at the Northwest Workers’ Justice Project, which supports low-wage and immigrant workers, said employees aren’t seeing businesses held accountable when they flout safety regulations. She said the workers she supports feel disillusioned with the system and that has made them less willing to speak up about safety violations.

“Workers know the whole system isn’t going to bring them satisfaction,” Suisman said. “What they want is for their employer to change their practices, but workers have given up on that during the pandemic.”

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