ISNetworld’s OSHA Ratings Can Be Problematic for Subcontractors

If you’re a subcontractor or supplier that provides goods and services to large companies and contractors, particularly in the energy sector, you have probably heard of ISNetworld. ISN is an online staffing platform that allows its subscribing “hiring clients” to locate and hire subscriber suppliers and subcontractors. ISN aggregates various data about the subcontractors and suppliers who sign up (both voluntarily submitted and publicly available information), vets and verifies the data, and then produces certifications and ratings used by the hiring clients.

HSEQ Ratings Impacted by OSHA Citations

A major factor in these ratings is a category ISN calls “Health, Safety, Environmental and Quality.” As ISN explains on its website:

“ISN’s Health, Safety, Environmental and Quality (HSEQ) Review and Verification Services (RAVS) Team facilitates the collection of relevant documents during the contractor pre-qualification process to assist in evaluating workplace and environmental safety compliance. Once these documents are collected in ISNetworld, our experienced team of subject-matter experts reviews them against Hiring Client and/or industry standards.”

Based on ISN’s review process, each subcontractor and supplier is scored based on loss history, workplace injuries, and the number of Occupational Safety and Health Administration (OSHA) citations received during the prior three years. ISN’s ratings methodology is particularly sensitive to OSHA citations – for example, if a company suffers a work-related fatality, it may lose 10 points off its score, but if there’s a related OSHA citation from the incident, there can be an additional 25-point rating reduction. A subcontractor or supplier with multiple OSHA citations can quickly find itself tagged with a business-killing rating and completely prevented from acquiring contracts through ISN’s platform.

The ratings are often unfair because an OSHA citation can be contested by the employer with an opportunity to appeal decisions all the way to the US Court of Appeals. ISN’s disclosure that a company was “cited” may be factually accurate, but the underlying noncompliance is merely an allegation until a final finding by OSHA (which might not happen until years later if the appeals process drags on). In the meantime, the subcontractor’s rating has taken a significant hit.

Strategies for Dealing with a Low HSEQ Rating

There are a few ways Pappas Grubbs Price PC’s OSHA lawyers can help a subcontractor or supplier manage a low ISN rating:

1.      Fight the OSHA Citation

If a subcontractor or supplier is cited by OSHA, there are various avenues for contesting the citation:

Informal Conference with the OSHA Area Director

These conferences can sometimes result in a negotiated penalty reduction, an extension of abatement dates, or a deletion or reclassification of violations.

Hearing before Administrative Law Judge

A formal petition to contest a citation is initially resolved in a hearing before an ALJ for the Occupational Safety and Health Review Commission. The citation contest functions similarly to federal court litigation with discovery and a mini-trial before the ALJ, including witnesses and cross examination. (In cases lacking complex issues, a more streamlined, simplified process is also available.)

About 40% of all contested citations result in all or some of the violations being vacated.

Appeal to the Review Commission

An employer receiving an unfavorable result from the ALJ can appeal the decision to the full Review Commission, but the Commission’s obligation to review ALJ decisions is discretionary – it isn’t required to entertain all appeals.

Appeal to US Court of Appeals

Final orders from the OSHA Review Commission are appealable to the US Court of Appeals in the federal circuit where the employer is domiciled.

2.      Modify the Citation’s Text

SWP’s OSHA lawyers can sometimes negotiate the precise language of the OSHA citation so that ISN may not be consider the citation associated with the related work-related fatality or injury. In other words, if we successfully decouple the citation from the underlying incident by changing the text, the subcontractor’s ISN rating will suffer a smaller reduction.

3.      Reduce the Citation’s Severity

Similar to our efforts to negotiate the citation’s language, SWP’s OSHA lawyers can sometimes convince OSHA to reduce the severity category it assigns to a subcontractor’s citation. For example, a “de minimus” citation will affect a subcontractor’s ISN rating less than a “Serious” violation.

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For more information about the OSHA practice of Pappas Grubbs Price, visit our website, or contact Steven Grubbs, Amanda Flanagan, Joe Garnett, or Alma Aguirre to discuss your matter.