Robert J. O’Hara, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s New York office, was quoted in Corporate Counsel, in “Shareholder Sues Dollar General After OSHA Assesses $15M in Safety Fines and Says Chain 'Puts Profits Over People,'” by Chris O’Malley. (Read the full version – subscription required.)

Following is an excerpt:

Assessed more than $15 million in workplace safety violations since 2017, low-cost retailer Dollar General and its board now face a shareholder lawsuit alleging breach of fiduciary duty and a waste of corporate assets.

The suit filed last month in U.S. District Court for the Middle District of Tennessee by shareholder Brent Conforti cites a “sustained failure of the Dollar General board members to implement and maintain an effective system of internal controls.” …

Last month, the Occupational Safety and Health Administration announced it had fined Goodlettsville, Tennessee-based Dollar General another $387,000 for safety inspection failures in Florida and Alabama.

They violations included unsafe stacking of boxes and for placing merchandise in storerooms in front of exit routes. OSHA said 180 inspections resulted in $15 million in fines against Dollar General since 2017 for “willful, repeat and serious” workplace safety violations. …

The lawsuit cites several instances where national media reports about the company’s safety record dinged the company’s stock price. For example, following an employee walkout in May the stock fell $2.34, “wiping out more than $500 million of investors’ and the company’s wealth.”

Robert O’Hara, an attorney specializing in employment law and compliance at Epstein Becker Green in New York, said once a company finds itself on OSHA’s radar it generally stays there until the company has proven it has made necessary improvements.

“A smart organization is going to sit back and take stock and figure out what the heck is going on,” said O’Hara, who is not involved in the case. “Your fiduciary duty is to make sure you are compliant.”

O’Hara said that in his experience boards have taken safety issues seriously, given the financial and reputational harm that can occur, along with implications for employee recruitment and retention.

Companies should assess whether employee handbooks and training are adequate, he recommends. At the same time, companies need an alerting or reporting system to capture and document concerns.  There should also be protections for whistleblowers, which regulators have been keen to see, O’Hara said.

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