Manufacturing company Lloyd Industries and its owner, William Lloyd, have been ordered to pay $1 million in lost wages and punitive damages to two former employees who were fired in retaliation for their participation in a federal safety investigation, the Department of Labor announced.

A federal judge in the U.S. District Court for the Eastern District of Pennsylvania awarded the lost wages and punitive damages to the two former employees after a jury on April 2, 2019, determined Lloyd Industries and its owner illegally fired the employees for participating in a 2014 inspection by the Department of Labor’s Occupational Safety and Health Administration (OSHA). The inspection followed an incident in which one of the employees’ coworkers suffered the amputation of three fingers.

The company fired one of the employees after OSHA began an onsite investigation. It fired the second employee shortly after OSHA issued citations and assessed Lloyd Industries with penalties.

The retaliatory acts violated Section 11(c) of the Occupational Safety and Health Act (OSH Act). The court’s award of $500,000 in punitive damages is the largest punitive award ever under Section 11(c) of the OSH Act. According to the DOL, the court justified the award due to the defendants’ “deliberative flouting of the act.”

In addition to damages, the judge awarded the former employees $547,399 in front and back pay, prejudgment interest, and additional amounts to compensate for the adverse tax consequences of their receiving a large, one-time payment. The judge also ordered Lloyd Industries and its owner to immediately post an anti-retaliation notice at the plant and never again violate Section 11(c) of the OSH Act.

The compliance warning here is not to wrongfully terminate an employee’s rights to speak out. “The court recognized that all employees have a federally protected right to speak out against unsafe and unhealthy working conditions, to participate in U.S. Department of Labor investigations, and to be compensated if they are terminated in retaliation for exercising those rights,” said Regional Solicitor Oscar Hampton. “The significant punitive damages sends a strong message to this employer and others that deliberately violating these laws will not be tolerated.”

 

Jaclyn Jaeger is an editor with Compliance Week and has written on a wide variety of topics, including ethics and compliance, risk management, legal, enforcement, technology, and more.

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