Environmental Issues

“The totality of surrounding conditions” is how one dictionary defines environment. With such a broad, fuzzy definition, it is easy to see that the concept of environment covers a big territory. Focusing on the small-business owner, our topics cover environment in these conditions: buying and selling property, OSHA, management standards for environment and smoking in the workplace.

Buying and Selling Property

When a potentially hazardous property is sold, both the buyer and seller have opportunities to protect themselves from liability for cleanup.

What is due diligence?

Once a buyer has a signed and accepted letter of intent, he or she has a period of time to perform due diligence on the business property. At this point, the buyer has a chance to review parts of the business that have previously remained private. One of the areas the buyer will check is to make sure that he or she is clear on the company’s environmental issues.

Owners and operators of properties that have been polluted with hazardous wastes are required by federal law to take care of cleaning them up, even if they were not responsible for the pollution in the first place. That is why a significant part of a pre-purchase due diligence process is ascertaining whether the buyer is going to inherit a hazardous waste cleanup and, if so, to determine the cost (usually enormous) of returning the property to a nonpolluted state.

This is not an easy liability to avoid. One potential defense against a government claim of hazardous waste is that the buyer must show he made a genuine effort to discover a hazardous condition and still did not know about it.

If I am buying or leasing a property for my business, how can I protect myself from the huge costs of cleaning up a polluted site?

At the time you sign a lease or purchase for a property, it is important to take any possible legal steps to avoid assuming responsibility for a hazardous waste liability. For one thing, you can ask the owner or the landlord to indicate what the prior uses for the land were and whether they might have been the kinds of activities which would have caused environmental damage.

You can also request information about any governmental notices regarding the site. An independent inspection, called a Phase I or Phase II environmental audit, is also a possibility.

If I am selling my business property, how can I protect myself from the huge costs of cleanup if the site turns out to be polluted?

To make sure you are safe from claims after the sale, you will want to have a Phase I environmental audit performed. This protects you as a seller, since it attests to a clean condition at the time of the sale. It can support a claim that problems were caused by owners who followed. The audit must be conducted by environmental consultants who specialize in this activity.

What should I do as a seller before the sale of my business property?

If you are a seller who wants to make a quick, clean sale, be prepared to respond to your buyer’s questions regarding environmental liabilities. In the event that problems turn up after the sale, former owners may be held accountable for some of the cost of cleanup. Some danger signals to look for include lead paint, leaking underground storage tanks or asbestos.

There is always the possibility that your buyer will create a hazardous waste problem and then later blame you as the former owner. A Phase I environmental audit, conducted by an outside consultant, can help you prove that the property was clean at the time of the sale.

What if problems turn up during the audit? Then a Phase II environmental audit may be called for. This would provide more information about the problems and some determination as to how a cleanup should be implemented.

At this point, you may decide to reduce the asking price and sell the property “as is.” Ignoring the problem is just not an option, as you will most likely be required to sign a disclosure statement at the closing.


The mission of OSHA—the Occupational Safety and Health Administration—is to make sure that a workplace adheres to certain safety standards. Since there is such a wide range of workplace characteristics, many of OSHA’s standards will not apply to your business. One of your first steps should be to find out which standards are appropriate to your workplace. The most direct way is to contact an OSHA office for help.

Categories of industry standards are organized based on materials used, chemicals used, the layout of the building (for emergencies, fires) and manufacturing operations. For each of the standards that seem to apply to your workplace, check the introduction. This is called scope and application. Scope will provide details to help you decide if the standards really do apply to your situation.

What kind of OSHA standards is my business subject to?

Offices typically are affected by these kinds of standards: walking and working surfaces, material handling and storage, health-related environmental control and fire protection. You are required to implement these standards in your workplace.

Can I get a variance from OSHA standards?

If it is difficult to meet a deadline, you can request an extension, or you can ask for a variance (similar to a zoning variance).

My business can hardly afford to comply with some of the OSHA standards. Where can I get some help?

To help meet OSHA standards, there is some financial help available. Loans to support implementation may be available to help you comply with the standards set by OSHA or standards set by your state.

Does the EPA offer support for my small business?

The Environmental Protection Agency offers a wealth of information and support for small businesses. A detailed document is available that covers EPA’s small business-specific services. It lists state and local resources, compliance support, education and training and can lead you to sources of information about specific environmental concerns (such as asbestos).

What is the ISO, and why should I care?

The International Standard for Organization is responsible for a series of international business standards. Many businesses feel it is essential to meet these standards, often because they are required to do so by potential purchasers of their products.

The ISO 14000 series encourages organizations to manage the environmental impact of their activities. This is an international system which supports environmental responsibility and impacts a company’s ability to participate in international trade. It identifies requirements for environmental management and sets a framework for an organization to control the environmental impact of its activities. Continual improvement is a primary objective.

Documentation for ISO 14000 includes activities such as environmental management systems and audits, labels and product life cycle assessment.

Designating Smoking Areas

It is getting more and more difficult to find a place to light up in the United States, and the workplace is no exception. There might be a state or local law to restrict smoking in your workplace, and even if there is not, there are many good reasons to disallow smoking in your business.

Where should I restrict smoking to in my business?

If smoking is restricted, management’s most common response is to designate a spot for smoking: a specific break room, lobby or other specific part of the building. Even if a separate smoking area is provided, it may still mean that other workers are affected by smoke in the air.

SIDEBAR: The Environmental Protection Agency counsels employers to limit smoking to areas with separate ventilation or to ban smoking altogether.

Do I have to give my employees a smoking break?

Make sure employees know the timing of when they are permitted for a smoke break. Issues can arise at this point because workflow can be interrupted, and nonsmoking employees want to feel that they are receiving equally fair treatment in terms of smokers’ breaks. The Fair Labor Standards Act can come into play in such a situation.

Do I have to identify smoking and nonsmoking areas?

There may be requirements to identify smoking and nonsmoking sections of the workplace, including the use of the international no smoking sign. States and local governments can also require that smoking policies be posted in common areas.