United States: OSHA's Multi-Employer Worksite Liability Doctrine Upheld Yet Again - General Contractors Continue To Be Held Liable Even If Their Own Employees Are Not Exposed To Hazard

Last Updated: January 25 2012
Article by Gina A. Fonte and Deborah S. Griffin

Gina A. Fonte is an Assocate and Deborah Griffin, Senior Counsel in our Boston office

On December 14, 2011, the United States Court of Appeals for the District of Columbia (D.C. Circuit Court) upheld a citation issued against a general contractor on the basis of the multi-employer worksite liability doctrine, joining a growing majority of jurisdictions that have considered and enforced the doctrine. The multi-employer worksite liability doctrine provides that an employer, including a general contractor, who creates or controls a worksite safety hazard, may be liable for violations of the Occupational Safety and Health Act (OSH Act) even if the employees exposed to the hazard are solely employees of a different employer. Under this doctrine, general contractors on a construction site may be held responsible for ensuring their subcontractors' compliance with safety standards if it can be shown that the general contractor could reasonably be expected to prevent or detect and abate the violative condition by reason of its supervisory capacity and control over the worksite.

The Occupational Safety and Health Administration (OSHA) cited Summit Contractors, Inc. alleging that Summit failed to provide ground-fault circuit interrupter protection on equipment it rented for use at a multi-employer construction worksite. According to OSHA, Summit was liable as both a controlling and creating employer for the exposure of a lower tier subcontractor's employees to the deficient equipment even though none of its own employees were ever exposed to the hazard. Summit first contested the citation before an administrative law judge (ALJ) and lost. It then requested a further review by the full Occupational Safety and Health Review Commission (OSHRC), which affirmed the citation and ruled that Summit was both a "controlling employer" because of its authority over the worksite in general and over the electrical equipment in particular, and a "creating employer" because of the condition of the noncompliant equipment. On appeal, the D.C. Circuit Court, in a brief opinion, affirmed the citation on the facts and rejected Summit's challenges to the multi-employer worksite liability doctrine holding that imposition of multi-employer liability was within OSHA's authority. Summit Contractors, Inc. v. Secretary of Labor and Occupational Safety and Health Review Commission, No. 10-1329 (D.C. December 14, 2011) ("Summit Contractors").

The Summit Contractors decision is significant because the D.C. Circuit Court joins a growing number of jurisdictions, including the Sixth, Seventh, Eighth and Tenth Circuits, which have recently upheld general contractors' liability under the multi-employer worksite liability doctrine. Increasingly, general contractors are facing OSH Act liability for their failure to ensure overall worksite safety and to require subcontractors to comply with safety standards. As discussed below, Summit Contractors suggests general contractors may not be shielded from liability by contractual provisions delegating responsibility for worksite safety entirely to their subcontractors. Summit Contractors and other similar decisions make clear that OSHA can and will continue to hold general contractors responsible for OSH Act violations under the multi-employer liability worksite doctrine even if none of the general contractor's own employees were exposed to the cited hazard.

Background

Summit was the general contractor on a 90-unit complex construction project located in the city of Lebanon in Pennsylvania (the "project"). Summit had only two of its own employees at the project, a general superintendent and his assistant, neither of whom performed physical labor at the project. Rather, they performed general superintendent duties, including overall project management, supervision and coordination of work. Summit subcontracted the framing work to Springhill Construction, which in turn subcontracted with Mendoza Framing to do the actual framing at the project. Springhill had only one employee at the project, a superintendent, while Mendoza had 10 to 12 employees on site, including its company owner.

On May 15, 2005, following an OSHA inspection, OSHA issued Summit a one-item serious citation for $1,225 alleging a violation of 29 C.F.R. § 1926.404(b)(1)(ii), dealing with protection of receptacles with ground fault circuit interrupters. The cited equipment was owned by Cleveland Brothers Equipment Rental, an equipment leasing company located in Pennsylvania. Summit's superintendent had leased the equipment for use at the project, but, at the time of renting the equipment, did not specify ground fault circuit interrupter (GFCI) capability because he assumed that the equipment would come equipped with GFCI protection as had been the case in the past. Summit's superintendent also had contacted the leasing company to obtain operating instructions when Mendoza's employees were unable to get the electrical equipment to work. He also ordered the GFCI protection following OSHA's citation.

The citation alleged that Summit, as general contractor, failed to ensure that Mendoza's employees were properly protected from the electrical hazards created by the use of the equipment without GFCI protection. Summit's superintendent had not inspected the equipment and did not notice whether it had GFCI protection when the equipment initially arrived on site or at any time prior to the OSHA inspection. There was no evidence that any of Summit's own employees ever used the electrical power from the rented equipment or that any of its own employees were ever exposed to the electrical hazard from the equipment at issue. Only the lower-tier framing subcontractor's employees, working for Mendoza, were observed by the OSHA inspector as being exposed.

Analysis

Summit did not dispute that the equipment at issue did not comply with OSH Act standards as described in the citation. Rather, Summit challenged the citation on three grounds. First, Summit argued that, as a general contractor which neither created the hazard nor had its own employees exposed to the hazard, it could not be held liable for the violation. Additionally, Summit challenged the validity of the multi-employer worksite liability doctrine and insisted that it lacked sufficient control of the project to either prevent or abate the violation. Finally, Summit maintained that it had no knowledge of the violation.

General contractors can be held liable for OSH Act violations even if they did not create or expose their own employees to the hazard.

Relying on 29 C.F.R. § 1910.12(a), which provides in relevant part that "[e]ach employer shall protect the employment of each of his employees engaged in construction work by complying with the appropriated standards prescribed in this paragraph ... ," Summit argued at each level of the appeal process that this section of the OSH Act regulations placed safety responsibility on the employer for its own employees engaged in construction work.

The ALJ who first heard the case agreed that Summit had not directly created the hazard at issue and that Summit's two on-site employees were not exposed to the hazard. However, the ALJ rejected Summit's reading of Section 1910.12(a) as too narrow and concluded that Section 1910.12(a) did not prohibit OSHA from imposing on an employer safety responsibility for employees of a different employer. On review, the OSHRC also found that the plain meaning of Section 1910.12(a) did not invalidate the multi-employer worksite citation policy and did not prevent a non-exposing, controlling employer from being cited at a construction site. On further appeal, the D.C. Circuit Court agreed and in its December 14, 2011, opinion affirmed OSHA's authority to enforce the multi-employer worksite liability doctrine against general contractors under the facts of Summit Contractors.

Summit, as the general contractor at the project, had sufficient supervisory capacity and control over the worksite to be held liable.

Both the ALJ as well as the OSHRC1 found that Summit had sufficient authority and control of the worksite to prevent or detect and abate the condition which exposed the subcontractor's employees to electrical hazards. Describing the factors necessary to determine whether a general contractor was a "controlling employer" for purposes of multi-employer worksite responsibility, both the ALJ and the OSHRC stated that the general contractor must be in a position to prevent or correct a violation or to require another employer to prevent or correct the violation, and such control may be in the form of an explicit or implicit contract right.

Considering this standard, Summit argued that its company policy was not to be responsible for the safety of a subcontractor's employees or for any OSHA requirements placed on subcontractors. In support of its position, Summit cited various provisions of its subcontract with Springhill expressly stating that the subcontractor was solely responsible for compliance with all OSHA requirements. The subcontract further provided that Springhill would be responsible for complying with all laws, regulations or rules bearing on the performance of the work. Additionally, Springhill had a duty to hold Summit harmless against any liability, including the assessment of OSHA fines and legal costs.

The ALJ maintained that, regardless of its stated company policy or its written agreements with subcontractors, Summit could not "contract away" its overarching responsibility for worksite safety, or its responsibilities under the OSH Act. Moreover, the record showed that Summit's supervisor was responsible for "overseeing the Project, ordering materials, ordering different subs in a timely fashion" to execute work at the project. According to the ALJ, various provisions in the subcontract also allowed Summit to exert control and veto power over its subcontractors' actions including Summit's ability to:

  • backcharge its subcontractors for various failures to comply with the subcontract provisions
  • hold retainage
  • deny its subcontractors the ability to further subcontract out the work without Summit's prior written consent
  • approve or reject its subcontractors' subcontractor selection at Summit's sole discretion
  • require its subcontractors to keep their work areas clean and orderly subject to Summit's review
  • require its subcontractors to have competent and sufficient supervisory personnel present at the project at all times

Further, Summit had the contractual authority to control and direct the work schedule, coordinate the work, and expedite or terminate the subcontractors' work. Concluding that Summit's authority explicitly granted by a combination of subcontract provisions was broad enough to encompass Summit's control over the safety of the project and the sub-subcontractor's employees, the ALJ held Summit responsible for the alleged violation. The ALJ noted that as a general contractor, Summit held a unique position at the project and had the authority, under its subcontracts, to enforce any subcontractor's compliance with the OSH Act requirements. Rejecting Summit's argument that the ultimate responsibility for the equipment's safety at the project rested solely with the leasing company or with Mendoza, the ALJ stated that whatever the responsibility attributable to these parties for ensuring the equipment's safety, such responsibility did not absolve Summit of its own responsibility for safety at the project.

On review, the OSHRC found that Summit was a both a "controlling employer," because of its authority over the worksite in general and over the electrical equipment in particular, and a "creating employer" because it ordered and did not inspect the noncompliant equipment. Agreeing with the factors considered by the ALJ, the OSHRC held that Summit maintained sufficient control over the project and the noncompliant equipment to be found liable for the violation.

General contractors need not have actual knowledge of the violative condition, constructive knowledge is sufficient for liability.

Summit's claim that it had no knowledge of the violation similarly was unpersuasive. While the ALJ agreed that Summit might not have had "actual knowledge" that the electrical equipment was noncompliant, the ALJ found that Summit had "constructive knowledge" because it could have known about the violative condition with the exercise of reasonable diligence. Furthermore, the constructive knowledge of Summit's supervisor could and would be imputed to Summit. Citing the fact that Summit's assistant superintendent made daily walk-throughs and general inspections of the project, the ALJ maintained that an employer "must make reasonable efforts to anticipate the particular hazards to which its employees may be exposed in the course of their scheduled work."

Both the OSHRC and the D.C. Circuit Court found that Summit had constructive knowledge and agreed that under the OSH Act the "knowledge" requirement was satisfied if the general contractor had either actual or constructive knowledge of the violation. Therefore if a general contractor either "knows, or with the exercise of reasonable diligence could have known" of the violative conditions then it may be held liable, and a supervisor's knowledge is imputed to the company. Because Summit could have detected the violation with reasonable effort, it had constructive knowledge and was therefore liable.

Industry Impact

Summit Contractors reflects a growing trend by an increasing number of courts upholding a general contractor's OSH Act liability under the multi-employer worksite liability doctrine. Gradually, more general contractors are being held accountable for general worksite safety and are expected to prevent, detect and abate violative conditions on their worksites by virtue of their supervisory capacity and control over the worksite regardless of whether their own employees are exposed to the hazard. Summit Contractors suggests that general contractors will not be protected from liability by simply contracting away worksite safety responsibility to their subcontractors. In summary, general contractors may be required to do more to ensure worksite safety or face OSH Act liability exposure.

The appeal period in the Summit Contractors' case has not yet run and it is unclear whether Summit will appeal the D.C. Circuit Court's decision to the United States Supreme Court. Even if the case is appealed, review by the U.S. Supreme Court is not guaranteed given the limited number of cases the U.S. Supreme Court hears on a discretionary basis each year. In the event an appeal is made and the U.S. Supreme Court agrees to hear it, we will provide an update.

Footnote

1 Summit did not contest the issue of its supervisory capacity and control of the project on appeal to the D.C. Circuit Court.

www.hklaw.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Gina A. Fonte
 
In association with
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
Accounting and Audit
Anti-trust/Competition Law
Consumer Protection
Corporate/Commercial Law
Criminal Law
Employment and HR
Energy and Natural Resources
Environment
Family and Matrimonial
Finance and Banking
Food, Drugs, Healthcare, Life Sciences
Government, Public Sector
Immigration
Insolvency/Bankruptcy, Re-structuring
Insurance
Intellectual Property
International Law
Law Practice Management
Litigation, Mediation & Arbitration
Media, Telecoms, IT, Entertainment
Privacy
Real Estate and Construction
Strategy
Tax
Transport
Wealth Management
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.