Federal agency says state was wrong to drop Amazon fines in worker’s death

Correction: An earlier version of this story incorrectly said the federal Occupational Safety and Health Administration concluded that Indiana OSHA Director Julie Alexander inappropriately “coached” Amazon on how to prove employee misconduct and get the complaint dismissed. OSHA did not find evidence that the conversation was a premeditated effort to help the company. We apologize for the error.

A federal investigation into how the Indiana Occupational Safety and Health Administration reviewed an Amazon employee’s death in 2017 has found that the state agency should not have dismissed the safety violations.

A story published last year by Reveal, which is part of the not-for-profit Center for Investigative Reporting, highlighted how IOSHA absolved the online retail giant of any accountability in a maintenance worker’s death at the same time the state was bidding for Amazon’s coveted HQ2 project.

In September 2017, 59-year-old Phillip Lee Terry died on the job at the Amazon warehouse in Plainfield after a 1,200-pound piece of equipment dropped and crushed him.

IOSHA was sent to investigate the death, and safety inspector John Stallone issued four safety citations for a total fine of $28,000.

Amazon appealed the citations, arguing the death was a result of employee misconduct, and IOSHA dropped the fines.

Stallone alleged that top state officials, including IOSHA Director Julie Alexander, Indiana Labor Commissioner Rick Ruble and Gov. Eric Holcomb, dismissed the charges because of the state’s desire to win the HQ2 project.

Stallone shared with Reveal audio recordings from a phone call between Amazon officials and Alexander in which she can be heard giving advice to the company on how to get the fines removed.

Stallone, who is no longer working for the state, also alleged that he was called into a meeting with Ruble and Holcomb, and they brought up the Amazon deal and said it would mean a lot to the state to land the headquarters.

Holcomb has repeatedly denied that meeting ever happened and even took the unusual step of issuing cease-and-desist letters to Reveal and the IndyStar, which published a portion of the Reveal article. Holcomb has also said he believes that IOSHA handled the case correctly.

A recent letter from the federal OSHA says otherwise.

The letter is a response to a complaint to the federal agency from Stallone about how IOSHA handled the Amazon employee death investigation. It  says that the conversation between Alexander and Amazon officials was “unnecessary and premature.” It also says Amazon did not prove all of the criteria to establish employee misconduct occurred in the case.

The federal agency did not conclude that Alexander inappropriately “coached” Amazon on how to prove employee misconduct and get the complaint dismissed, and it did not find evidence that the conversation was a premeditated effort to help the company.

“During the course of a settlement discussion, it is not unusual to discuss affirmative defenses; however it is typically and more appropriately done in response to the defense being raised by the employer,” the letter said. “In this case, it was determined that the merits of the violations had not been discussed, nor had employee misconduct been raised by Amazon during the informal conference.”

The letter says state officials should review the agency’s informal conference procedures to make sure that defenses companies can use, such as alleging employee misconduct, are not discussed unless first mentioned by the company.

The federal investigation determined that Amazon did provide IOSHA with enough proof that Terry had been properly trained and that there were methods in place to discover when an employee wasn’t following that training.

But the letter says Amazon did not provide proof that a specific hazardous energy-control procedures had been established and did not offer enough evidence to show that the company was disciplining employees when they didn’t follow the safety protocols.

The letter says Amazon provided 25 examples of when employees were reprimanded for safety violations from 2016 to 2018, but none of those examples occurred at the Plainfield facility and only one was from a warehouse in Indiana.

“Indiana OSHA should have pursued evidence of enforcement of safety rules at the facility in question,” the letter says.

The federal agency recommended that IOSHA ensure adequate evidence is provided in the future before deleting safety violations and fines.

Indiana Department of Labor spokesperson Stephanie McFarland confirmed the agency received the letter, which is dated April 22, on Monday.

“We have received the report and are evaluating it to determine our response,” the department said in a statement. “We will share our remarks through federal OSHA’s proper channels and established process.”

The state has 30 days from the date of receipt to respond.

A spokesperson for Holcomb referred IBJ to McFarland’s statement.

The letter also addressed several other unrelated complaints Stallone made about how IOSHA investigated other workplace situations.

Stallone alleged that a safety inspector was not properly trained on industrial hygiene hazards before investigating a situation potentially involving a poor exhaust system, causing employees to get sick at Rush Truck Center in Indianapolis in November 2017. The letter said regardless of who is assigned, the investigation should be thoroughly documented, but that did not occur in this case, so it’s unclear whether the exhaust system was properly evaluated.

Another allegation involved the state not conducting programmed planned inspections of workplaces. The letter said IOSHA has not adopted all of the industry guidelines related to targeting programs, and recommended that the state “ensure that programmed planned inspections are utilized as part of a comprehensive enforcement approach.”