Fifth Circuit Strikes Down OSHA Mental Illness Recordkeeping Rule: What Employers Should Know

A federal appeals court ruled July 21 that OSHA does not have the authority to require employers to record work-related mental illnesses that employees report.

The U.S. Court of Appeals for the Fifth Circuit vacated OSHA’s regulation and the citation OSHA issued against Exxon under that requirement. The court held that OSHA lacked congressional authority under the Occupational Safety and Health Act (OSH Act) to regulate mental illness in the workplace. It found that although OSHA’s reading of the statute “may be plausible,” that “the best reading of the statute is narrower: that ‘illnesses,’ as used there, refers to physical, and not mental, work-related ailments and conditions.”

Background on the Rule and the Case

Since 2001, OSHA has held that “[m]ental illness will not be considered work-related,” and therefore will not be recordable, “unless the employee voluntarily provides the employer with an opinion from a physician or other licensed health care professional with appropriate training and experience (psychiatrist, psychologist, psychiatric nurse practitioner, etc.) stating that the employee has a mental illness that is work-related.”

This case arose from a fire and explosion at Exxon’s Baytown, Texas, refinery in December 2021. Three employees who responded to the incident received mental illness diagnoses. Exxon declined to record them, arguing that the diagnosing professionals did not satisfy the rule’s qualification criteria. Exxon challenged the OSHA citation. The administrative law judge dismissed the citations for two employees and affirmed a $691 citation for the third. Exxon then appealed that remaining citation, arguing that the underlying recordkeeping mandate exceeded OSHA’s authority.

The Fifth Circuit’s Holding

OSHA anchored its claimed authority to require employers to record work-related mental illness in Section 8(c)(2) of the OSH Act. It directs the Secretary of Labor, in cooperation with the Secretary of Health and Human Services, to “prescribe regulations requiring employers to maintain accurate records of, and to make periodic reports on, work-related deaths, injuries and illnesses other than minor injuries requiring only first aid treatment and which do not involve medical treatment, loss of consciousness, restriction of work or motion, or transfer to another job.” (emphasis added).

Relying on that, OSHA promulgated the rule at issue.

The Fifth Circuit relied on the U.S. Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo, which held that courts must “independently identify and respect such delegations of authority, police the outer statutory boundaries of those delegations, and ensure that agencies exercise their discretion consistent with the APA.” As the court explained, “[d]oing so requires using ‘all relevant interpretive tools’ to determine the ‘best’ reading of a statute; a merely ‘permissible’ reading is not enough.” 

The Fifth Circuit’s analysis turned on the meaning of the word “illnesses,” which the court noted the statute leaves undefined. As the court explained, “to ascertain the best reading of that term, we examine its statutory context, consider dictionary definitions contemporaneous with the Act’s enactment, and generally appraise the statutory delegation of power from Congress to OSHA.”

Applying that framework, the court found that “illnesses” could plausibly encompass either physical or mental diagnoses, or both. But it concluded that the statutory context, in which Congress paired “illnesses” with “injuries” and distinguished both from “work-related deaths” while excluding “minor injuries requiring only first aid,” supported a narrower reading limited to physical, not mental, workplace harms.

What This Means for Employers

• • Confirm your jurisdiction before changing practices. The decision binds only employers in Texas, Louisiana and Mississippi, the states within the Fifth Circuit. Employers with multistate operations should keep recording employee-reported mental illnesses everywhere else unless and until another court or the Supreme Court follows suit.
  • Monitor OSHA response and consult counsel before revising recordkeeping practices in the Fifth Circuit. OSHA may seek rehearing or Supreme Court review, and a disagreement among other circuits on the same question could accelerate that review, so employers should confirm their position is defensible before acting on the ruling.

This decision underscores the continuing impact of Loper Bright on agency rulemaking authority and signals that OSHA’s recordkeeping requirements could face further scrutiny. Employers should treat this as a developing area of law rather than a settled resolution, and should work closely with counsel to calibrate their compliance approach.

Contact Erin Malone or any member of Phelps’ Labor and Employment team with questions or for advice and guidance.