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California's legislative progress.

THERE WERE TWO PRImary pieces of legislation enacted over the last few years in California whose principles on corporate criminal liability may soon find their way into other states. The first was California Senate Bill 198 (SB-198), enacted in October 1989, which states that "Every employer shall establish, implement, and maintain an effective injury and illness program." The "California Corporate Criminal Liability Act," which became fully effective as of January 1991, holds that a corporation or manager can be held liable for not reporting a known but concealed danger to Cal-OSHA and informing any employees who could be exposed.

In a report presented by Dennis Brooks, managing general partner at Comp Management Associates in Long Beach, California, SB-198 is said to direct "Cal-OSHA for the first time to police injury prevention efforts." SB198 was enacted ostensibly to reduce the increasing number of disabling injuries and soaring workers' compensation costs, though Mr. Brooks finds that fraud and exaggerated claims, accounting for an estimated 20 to 60 percent of workers' compensation costs, were not given due consideration in the reasoning behind the bill. Mr. Brooks further warns out-ofstate attendees that if increased workers' compensation litigation "is happening in California today, it will be happening in your state in the near future."

The injury and illness prevention program is required to be in written form and shall, among other things, identify the person or persons with authority and responsibility for implementing it. The program must also include a system for ensuring employee compliance with safe and healthy work practices, a health and safety training program, inspection routines, compliance procedures and record keeping.

Furthermore, the program must provide for a system for communicating with affected employees in a form readily understandable regarding related occupational health and safety matters. Mr: Brooks cautions that employees sometimes find those official corporate communication memos and posters to be belittling and thus counter productive: "Like the picture of the guy sticking his finger in an electrical socket, employees think that this is how management sees them. So be careful. Bring in specialists if you have to," Mr. Brooks suggests.

"Communication and proper reporting of accidents are the big key to SB-198," states Jerry N. Crowel, vice president/corporate insurance manager for Home Savings of America. His organization sees to it that key people are bilingual and utilizes highly visual posters that show his firm's "commitment to health and safety."

Under the California Corporate Criminal Liability Act, "employees" for whose health and safety corporate management is liable include all those working for or in the business entity; thus, employees of contractors and outside consultants must also be warned.

The liability act carries corporate penalties of up to $1 million, personal liabilities of up to $25,000 and imprisonment of up to three years. Fred Macksoud, deputy district attorney for the Environmental Crimes, OSHA Division of the Los Angeles County District Attorney's Office, stressed that his office looks for jail time and community service first when going after violators. "Fines are not what we are after and are furthest back in our minds." For those employers operating outside of California, Mr, Macksoud reports that prosecutors from other states have been asking his and other county offices' advice on procedures and techniques.
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Title Annotation:criminal liability of corporations for violations of occupational safety and health regulations
Author:Kurland, Orin M.
Publication:Risk Management
Date:May 1, 1992
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