In a case of first impression, the Occupational Safety and Health Review Commission has established a three-part test for employers claiming third-party safety and health audits protected from disclosure by the attorney-client privilege. Applying underlying legal principles of privilege to the technical area of safety and health assessments, the Commission has set forth steps that all employers need to consider taking before conducting any safety and health audits of their operations. The case, Secretary of Labor v. Delek Refining, Ltd., OSHRC No. 09-0844, was decided on July 11, 2011.

Process Safety Management Audit Report

In Delek, the company had contracted with a third party, the Process Safety and Reliability Group, Inc. (PSRG), to conduct an audit of its process safety management (PSM) program and, in the company’s view, to assist counsel to the company in assessing technical issues associated with compliance with the PSM standard. After an investigation by OSHA into an explosion and fire at a Delek facility, OSHA issued citations against the company and litigation ensued. During discovery, the Secretary of Labor issued a subpoena to PSRG requesting a copy of the audit report. Delek moved to quash the subpoena, claiming that the report was protected by the attorney-client privilege. The Administrative Law Judge (ALJ) denied Delek’s motion to quash, and the company sought review of the denial with the Commission.

Three-Part Test

The Commission articulated three prerequisites that must be met for the privilege to attach to third-party reports:

  1. The company must have provided information to the third party, rather than the third party providing its own information. “Thus, the privilege will not apply where the attorney consults the third party to obtain information the client did not have . . . or employs the third party to gather data through studies and observations of the physical conditions at a client’s site, rather than through client confidences."
  2. The company must have sought legal advice as opposed to some other kind of advice.
  3. In order to provide legal advice, the attorneys needed the services of the third party to translate technical or complex information.

The Commission did not rule on whether the report at issue in Delek met this test, it instead remanded that question to the ALJ “to review the report in camera and reconsider, in accordance with the principles discussed …, the extent to which the attorney-client privilege may be applicable.”

The test articulated leaves many open questions for employers, particularly regarding what constitutes “legal advice” in the course of a safety and health audit. In addition, because the case dealt only with attorney-client privilege, the Commission did not address whether any other privileges could have applied to the report, such as the work product doctrine that protects from disclosure documents that “are prepared in anticipation of litigation or for trial.” Notwithstanding this, Delek provides a framework for employers to consider when deciding whether, and how, to perform safety and health audits of their facilities.