Following a 2020 fire that resulted in several employee fatalities, the North Carolina Occupational Safety and Health Administration (NCOSHA) issued a series of citations and penalties to the employer involved in that accident. Instead of simply contesting the citations, that employer took the unusual step of suing NCOSHA in federal court. The lawsuit alleges that the agency incentivizes safety inspectors to issue citations in violation of the federal OSH Act. The lawsuit claims that NCOSHA uses the number of citations issued by the inspectors as a factor in their performance reviews.

In response to the lawsuit, NCOSHA filed a motion to dismiss the claims against the Labor Commissioner and NCOSHA director based on sovereign immunity. Sovereign immunity is a doctrine that in some cases prohibits lawsuits against public officials based on their exercise of their duties. Last week, the Fourth Circuit Court of Appeals rejected this motion, meaning that the substantive lawsuit will continue. The court said that the lawsuit could continue because it does not seek to dismiss the previous citations, only to prevent NCOSHA from continuing the alleged current incentive program.

If this lawsuit is ultimately successful, it could expose state OSHA programs such as the one in North Carolina to lawsuits from employers claiming that the agency is not complying with federal law in terms of its implementation of its state enforcement program. In addition to the incentives claims, these suits could challenge a wide range of procedural and substantive decisions by state OSHA agencies.