Lessons to Be Learned from Massey Energy’s CEO’s Conviction
Former Massey Energy CEO Don Blankenship is a very lucky man. Yes, he was convicted on a single misdemeanor count of conspiring to willfully violate mine safety standards. And yes, a federal judge in West Virginia just sentenced Blankenship to the maximum that she could: one year in prison and a $250,000 fine. But by taking his case to trial, Blankenship fared much better than three other Massey managers who received sentences ranging from 21 to 42 months. Blankenship was looking at a considerably stiffer sentence than his colleagues had the jury convicted him of either of the felonies for which he was charged. While the United States attorney claimed victory in obtaining Blankenship’s conviction on a single misdemeanor count, most neutral legal observers would agree that it was a loss for the government.
Historically, prosecutions and convictions of managers who have violated MSHA or OSHA standards have not been common, and when those prosecutions have been successful, the penalties have usually been quite minimal under those statutes. The Massey cases demonstrate that government prosecutors are increasingly willing to be more aggressive in developing non-traditional theories where statutory penalties under the regulatory statutes are minimal. Managers who create false records or who lie to governmental inspectors may be charged under 18 U.S.C. § 1001 or under Securities Laws for making false or misleading statements to shareholders. Blankenship, for example, was charged of violating securities law by stating “we [Massey] do not condone any violation of Mine Safety and Health Administrations (MSHA) regulations.”
While there are many lessons to be learned from the Massey prosecutions, I will leave the reader (and any manager responsible for safety in his company) with three pieces of advice concerning your safety program and emergency-response plan: First, have a system in place that assures you always respond to safety issues identified in workplace examinations or that are reported to you by an employee. That does not mean that you have to necessarily do something about each report, but if you disagree with a report (i.e., you don’t think something poses a hazard to workers or is a violation of a regulatory standard), you should document your disagreement, to protect yourself against claims that you willfully disregarded safety violations that were reported to you.
Manager training—especially with respect to how to respond to a governmental investigation—should be a key component of every emergency response plan. In particular, companies should make sure that their managers and supervisors understand the importance of telling the truth and not speculating about what might have happened when questioned by governmental inspectors since a “bad guess” could later be treated as a false statement. Additionally, your managers should understand that they should never destroy evidence or alter records. The emergency-response plan should work in conjunction with your record-retention plan to assure such destruction does not happen. These are issues that are best addressed before there is a major incident, since there is little time in a crisis to talk about these things. Of course, even if you have developed a robust emergency-response program, if you or your managers find yourself in the uncomfortable position of being questioned by a governmental inspector, it is always a good idea to have a witness to the conversation and, often, that person should be a lawyer. It is amazing how often the government inspector’s notes and recollection differ from the person being interviewed, especially when no one else was present during the interview.
Finally, you and your fellow managers need to develop a reputation for “walking-the-walk and talking-the-talk” when it comes to safety. Ask yourself now, if there were an accident tomorrow, what would your subordinates say about your commitment to safety? Will they say “He is always so safety conscious, I don’t know what could have happened?” or “He was always concerned about getting the job done and would make us cut corners.” While you may engage in efforts to encourage production or reduce expenditures, make sure that you do not forget to emphasize the importance of doing these things in a safe manner. In the aftermath of an incident, routine business practices are often looked at in a different light.
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.