Agricultural Retailers Association v. United States Department of Labor

In 1992, the Occupational Safety and Health Administration (OSHA), part of the United States Department of Labor (defendant), issued the Process Safety Management Standard (PSM standard) to protect the safety of individuals working with or near highly hazardous chemicals. The standard exempted retail facilities, which OSHA defined as establishments in which more than half of the income was derived from direct sales to end users (50 percent test), from its requirements. The stated rationale for the exemption was that chemicals in retail settings tended to be in small-volume containers or packages and, therefore, presented minimal risk. In April 2013, a chemical explosion at a Texas fertilizer plant killed 15 people and injured many others. Although the company stored large quantities of a highly hazardous chemical, the company was exempt from the PSM standard because more than 50 percent of its sales were to bulk end users, including large commercial farmers. After the Texas explosion, OSHA issued a Memorandum on Process Safety Management of Highly Hazardous Chemicals and Application of the Retail Exemption (memorandum), which narrowed the scope of the retail exemption so that the PSM standard’s requirements would apply to many previously exempt facilities like the Texas plant. The memorandum rescinded all prior policy documents, letters of interpretation, and memoranda pertaining to the retail exemption or the 50 percent test and specified that retail facilities would instead be defined as organizations that sell merchandise in small quantities to the general public. OSHA did not follow the notice-and-comment procedures set forth in the Occupational Safety and Health Act (act) when issuing the memorandum. The Agricultural Retailers Association (association) (plaintiff) filed a petition for review challenging OSHA’s narrowed definition of retail facility.