New Way of Promoting Worker Safety?

When we think of efforts to promote worker safety, we think of investigations by the Occupational Safety and Health Administration (OSHA) and resulting fines. The settlement of a lawsuit in Ohio filed against Cintas Corp. calls attention to a possible new way of taking action about safety issues in the workplace.

Cintas was sued by a group of its own shareholders after the company was fined millions of dollars by OSHA, including $2.7 million in connection with an employee’s horrific death. The company had received a lot of bad publicity for safety problems in addition to the OSHA enforcement, so shareholders sued the Cintas’ board of directors for “conscious failure to cause the company to comply with” safety laws and regulations.

The settlement of the case didn’t involve the payment of any money to shareholders (except $425,000 in attorneys fees), but it did require the company to take affirmative steps to promote greater safety: filing regular written safety reports with the board; having a safety officer attend shareholder meetings; implementing a 24-hour telephone hotline for employees to report safety concerns; meeting these guidelines for a three-year period; being subject to the court’s intervention if the guidelines aren’t met.

Cintas admitted no liability in settling the shareholder lawsuit but said it reached a settlement to avoid the mounting costs connected with defending the lawsuit. Shareholder lawsuits are usually used to allege fraud or financial impropriety, and they can be extremely expensive. Employers should take note of this case as another way pressure can be brought to bear to promote worker safety and legal compliance.