Photo courtesy of Austin Central Library, Austin, Texas.
Photo courtesy of Austin Central Library, Austin, Texas. 
Photo courtesy of Austin Central Library, Austin, Texas.
Soon, contractors performing work on multi-employer job sites in Louisiana, Mississippi and Texas will learn whether they could face Occupational Safety and Health Administration (OSHA) liability even if their employees are not exposed to a safety hazard that violates an OSHA standard.
At press time, the 5th U.S. Circuit Court of Appeals, which hears appellate cases arising in Louisiana, Mississippi and Texas, is considering Acosta v. Hensel Phelps Construction Company. The case concerns an OSHA citation issued in Austin, Texas, where an administrative law judge (ALJ) vacated an OSHA citation issued to a general contractor who witnessed a subcontractor's employees violating OSHA standards.
Only in the three states that fall under the jurisdiction of the 5th U.S. Circuit Court of Appeals is there case law stating OSHA does not have authority to cite employers whose own employees are not exposed to a safety hazard. This may change when a decision in Acosta v. Hensel Phelps Construction Company is issued. Other U.S. Circuit Courts of Appeal in different regions have upheld OSHA's authority to issue citations to employers whose own employees were not exposed to hazards in violation of an OSHA standard.
A bit of history
OSHA's multi-employer citation policy originated before the Occupational Safety and Health (OSH) Act was signed into law by President Richard Nixon in December 1970. Before the OSH Act, the Department of Labor (DOL) had promulgated health and safety standards for federally funded and federally assisted construction sites under the Construction Safety Act of 1969.
As part of the 1970 statute establishing OSHA, Congress granted OSHA the authority to adopt pre-existing federal standards, including standards issued under the Construction Safety Act, without notice-and-comment rulemaking for a period of two years.
In May 1971, DOL adopted pre-existing construction standards as OSHA standards in 29 C.F.R. 1910.12(a), which provided: "The standards prescribed in part 1926 of this chapter are adopted as occupational safety and health standards under section 6 of the Act and shall apply, according to the provisions thereof, to every employment and place of employment of every employee engaged in construction work. Each employer shall protect the employment and places of employment of each of his employees engaged in construction work by complying with the appropriate standards prescribed in this paragraph."
On May 20, 1971, OSHA published its first Field Operations Manual, which included a multi-employer policy. Per this policy, OSHA could cite employers that either exposed their own employees to hazardous conditions or created a hazardous condition endangering other employees.
Initially, the Occupational Safety and Health Review Commission (OSHRC) narrowly construed OSHA's multi-employer policy. In two 1973 decisions, City Wide Tuckpointing Service Company and Gilles & Cotting Inc., OSHRC ruled OSHA could not issue a citation to a contractor who created a hazard but whose own employees were not exposed to or affected by the hazard. In the case of Gilles & Cotting Inc., a scaffold used by a subcontractor collapsed, resulting in the death of two subcontractor employees. OSHA issued a citation to Gilles & Cotting "because as general contractor it had control of the job site."
OSHRC rejected OSHA's position, stating Congress intended that obligations under the OSH Act were "predicated upon the existence of an employment relationship" because the statute creating OSHA imposed duties only on "each employer." OSHRC ruled an employer is responsible for the safety and health of only its own employees. Because only the subcontractor's employees were affected by the scaffold violation, OSHRC vacated the citation against Gilles & Cotting. There were more OSHRC decisions in 1974 reaffirming the City Wide and Gilles decisions. OSHRC maintained in those cases "that the intent of the OSH Act is to place responsibility for maintaining safe working conditions upon those employers who have endangered their own employees." In 1974, after OSHRC issued its City Wide and Gilles decisions, OSHA altered its Field Operations Manual so the multi-employer work site policy applied only to the exposing employer.
In 1975, two federal courts began to question these OSHRC decisions. In Brennan v. OSHRC, the 2nd U.S. Circuit Court of Appeals, which hears cases arising in Connecticut, New York and Vermont, rejected OSHRC's interpretation and said OSHA could issue citations based on controlling employer and creating employer citation policies. The 7th U.S. Circuit Court of Appeals, which hears cases from Illinois, Indiana and Wisconsin, in a footnote in its 1975 decision in Anning-Johnson Company v. OSHRC stated: "[A]lthough it is not necessary for a decision in the present case … we are not at all sure that a general contractor, who has no employees of his own exposed to a cited violation is necessarily excused from liability under the [OSH] Act."
In 1976, OSHRC changed its position. In its decisions in Anning-Johnson Co. and Grossman Steel & Aluminum Corp., OSHRC said a contractor who has either created a hazard or controls a hazardous condition has a duty to comply with OSHA standards even if the contractor's own employees are not exposed to the hazard. In 1981, OSHA amended its multi-employer citation policy, creating four categories of employers it currently identifies:
OSHA's current multi-employer citation policy has been in effect since Dec. 10, 1999. Although primarily aimed at construction work sites, OSHA's multi-employer citation policy applies to all industries where more than one employer may be liable for a hazardous condition that violates an OSHA standard. If an employer fits within any one or more of the four categories listed, the employer will be cited if OSHA finds the employer's actions were insufficient to meet its OSHA obligations.
Challenges
Contractors have challenged OSHA's multi-employer citation policy, particularly when no employee of the cited contractor was exposed to a safety hazard.
In April 2007 in the case Secretary of Labor v. Summit Contractors, OSHRC ruled against OSHA, saying OSHA did not have authority to issue citations to a controlling construction employer that had no employees exposed to the hazard.
In the case, Summit Contractors was the general contractor overseeing construction of a college dormitory in Little Rock, Ark. Summit Contractors subcontracted the entire job and had only four employees (its project superintendent and three assistant superintendents) at the job site. All Phase Construction Inc. was the masonry subcontractor. Summit Contractors' project superintendent saw All Phase Construction employees working on scaffolds without guardrails and fall protection. The Summit Contractors superintendent warned All Phase Construction to correct the problem. An OSHA compliance officer also saw All Phase Construction employees working without fall protection. No Summit Contractors employees were exposed to a hazard. OSHA cited Summit Contractors as the controlling employer because it had the ability to prevent or abate the hazard created through reasonable exercise of its supervisory authority.
Summit Contractors contested the citation on the grounds OSHA regulations required a construction employer to protect only its own employees, relying on the language in 29 C.F.R. 1910.12(a). The OSHRC ALJ assigned to the case rejected Summit Contractors' arguments, but OSHRC, in a 2-to-1 decision, overruled its ALJ.
OSHRC vacated the ALJ's decision based on what it called the "plain language" in 29 C.F.R. 1910.12(a) requiring each employer to protect the employment and places of employment of "his employees" and what it referred to as OSHA's "checkered history in multi-employer worksite liability characterized by inconsistent application and explanation."
The OSHRC majority ruled the reference to "his employees" in the construction standard means an employer engaged in construction work is responsible only for his (or her) own employees. Because the decision was based on OSHA's construction standards, the decision applied only to the construction industry. The OSHRC decision was a significant blow to OSHA's multi-employer citation policy for construction work sites. OSHA appealed the decision to the 8th U.S. Circuit Court of Appeals, which hears cases originating in Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota and South Dakota.
In a lengthy and oft-cited decision handed down in February 2009, the 8th U.S. Circuit Court of Appeals reversed OSHRC's decision and upheld OSHA's multi-employer policy, allowing citations to be issued to general contractors on construction sites they controlled for hazards created by subcontractors even if no general contractor employees were exposed to a safety hazard.
The court stated the references to "employment" and "places of employment" in §1910.12(a) should not be construed as redundant and allowed OSHA to protect employees of other contractors at a construction work site. The court concluded OSHRC had exceeded its discretion when determining OSHA's controlling employer citation policy conflicted with §1910.12(a). However, it should be noted the court stated in its opinion the term "places of employment" in §1910.12(a) "limits the employer's duty to worksites where he has employees."
Current case
In the Acosta v. Hensel Phelps Construction Company case, Hensel Phelps Construction Co., Denver, contracted with the city of Austin, Texas, in 2010 to build a new central public library in downtown Austin. Hensel Phelps Construction contracted with Haynes Eaglin Watters LLC, Austin, in 2014 to complete certain foundation and screen wall work. Haynes Eaglin Watters, in turn, subcontracted with CVI Development LLC, Austin, to complete all demolition work, excavation and haul-off, backfilling and drainage and build the concrete foundation and retaining walls.
Hensel Phelps Construction had overall construction management authority and supervised the construction through on-site management personnel, including superintendents, project engineers and project managers. Hensel Phelps Construction personnel had extensive OSHA training, education and experience. The work site included an excavation. On one side of the excavation, there was a vertical wall of excavated soil about 12 1/2 feet high and 150 feet long. The wall was not properly sloped or otherwise protected from cave-in hazards, a condition that existed for several days. The excavated soil was Type C, the least stable under OSHA's soil classification system. OSHA regulations require use of protective systems, such as sloping or benching, to protect employees against cave-ins.
CVI Development was assigned to work on footings in the excavation at the base of the excavated wall of soil. On the morning of March 4, 2015, CVI Development's owner, Karl Daniels, sent his employees to work in another area while he was awaiting instructions from Haynes Eaglin Watters and/or Hensel Phelps Construction regarding the excavation area.
Meanwhile, a City of Austin inspector saw CVI Development employees at the other location and told Daniels CVI Development should only be working at the excavation site. The City of Austin inspector also reported to Hensel Phelps Construction's area superintendent that CVI Development was working at the other location. By email, the Hensel Phelps Construction area superintendent instructed CVI Development to return to the excavation area and to not do any other work until the excavation work was completed.
It was raining intermittently, and Daniels expressed concern about working in the excavation area because "placing rebar in the mud and rain is unorthodox and very dangerous." Haynes Eaglin Watters responded with an email stating: "Thank you for proceeding per the HEW, HP and City of Austin request." Daniels removed his employees from the other work area and sent them to the excavation area to install rebar.
On that same day, the OSHA Area Office in Austin received a complaint of hazardous conditions at the Austin library excavation area. OSHA conducted an inspection. The OSHA compliance officer saw three CVI Development employees working next to the exposed face of the 12-foot-high soil wall that was not properly sloped or otherwise protected from cave-in hazards, violating OSHA standards. Hensel Phelps Construction's project superintendent and area superintendent along with Haynes Eaglin Watters' project superintendent and City of Austin inspector were present at the wall within full view of the CVI Development employees working there.
OSHA cited CVI Development and Hensel Phelps Construction for willfully violating the applicable OSHA standard by exposing employees to a cave-in hazard from an unprotected excavation. OSHA issued a willful citation to Hensel Phelps Construction with a proposed penalty of $70,000 and cited Hensel Phelps Construction as a "controlling employer" because it had "general supervisory authority over the worksite, including the power to correct safety and health violations itself or require others to correct them."
Based on the facts, there was no question an OSHA violation had occurred. With regard to liability, the only issue was whether a general contractor on the job site can be found liable based on the sub-subcontractor's employees' exposure to the violative condition under OSHA's controlling employer multi-employer citation policy. The case was heard by OSHRC ALJ Brian A. Duncan. Duncan readily acknowledged the uncontested facts established Hensel Phelps Construction would be liable as a "controlling employer" that has a duty pursuant to OSHA's multi-employer citation policy to act reasonably to prevent or detect and abate violations even when the affected employees are those of another employer.
Nevertheless, in issuing his April 17, 2017, decision, Duncan vacated the citation against Hensel Phelps Construction based on the 5th U.S. Circuit Court of Appeals' 1981 decision in Melerine v. Avondale Shipyards Inc., which was a civil negligence suit brought against a general contractor by a subcontractor's injured employee.
In the Melerine case, the injured employee argued the general contractor's conduct was negligent because its safety practices violated OSHA standards. In its decision, the 5th U.S. Circuit Court of Appeals stated OSHA did not have the authority to issue citations to employers whose own employees were not exposed to a hazard because "OSHA regulations protect only an employer's own employees." The Melerine decision was consistent with a 1975 5th U.S. Circuit Court of Appeals decision, Southeast Contractors Inc. v. Dunlop, which included language indicating an employer is not responsible for violations to which its own employees were not exposed and a contractor is not responsible for the acts of his or her subcontractors or his or her subcontractors' employees.
Duncan cited the doctrine where it is likely an OSHRC decision would be appealed to a particular circuit court of appeals; OSHRC generally applies the precedent of that circuit when deciding the case even if it differs from OSHRC's precedent. Because the violation took place in Texas within the boundaries of the 5th U.S. Circuit Court of Appeals, Duncan ruled the 5th U.S. Circuit Court of Appeals precedent of the Melerine case foreclosed citation of a general contractor whose own workers were not exposed. Regardless of OSHA policy or OSHRC precedent, Duncan concluded an employer within the 5th U.S. Circuit Court of Appeals cannot be held in violation of the OSH Act when the employees exposed to the hazard were employees of a different employer.
OSHA requested OSHRC to grant discretionary review of Duncan's decision, but OSHRC declined, apparently preferring the case be directly reviewed by the appeals court. As a result, the ALJ decision became a final order June 1, 2017. OSHA had 60 days to appeal and did so. Legal briefs have been filed, and the case is pending.
In its brief to the appeals court, OSHA asserts the OSH Act and OSHA regulations grant OSHA the authority to issue citations to employers that control hazards on multi-employer construction sites as other circuits have recognized. OSHA argues the 5th U.S. Circuit Court of Appeals' 1981 decision in the Melerine case should not be deemed controlling precedent regarding the issue of OSHA's multi-employer policy because it was a negligence suit in which OSHA was not a party and the court did not have the benefit of OSHA's participation in the case.
In addition, OSHA points to U.S. Supreme Court decisions issued after the Melerine case that support the view OSHA has the authority to render authoritative interpretations of its regulations as a necessary adjunct of its powers to promulgate and enforce national health and safety standards. These cases hold that as long as an agency's interpretation is reasonable, a reviewing court should defer to it. OSHA argues its interpretation of §1910.12(a) is reasonable because it has been consistently applied and furthers the purposes of the OSH Act.
What's next?
Given the U.S. Circuit Courts of Appeals for the 2nd, 6th, 7th, 8th, 9th, 10th and D.C. Circuits have upheld OSHA's multi-employer policy and the U.S. Supreme Court has said OSHA's interpretation of its own regulations should be afforded deference as long as it is reasonable, it is more than likely the 5th U.S. Circuit Court of Appeals will join other circuits upholding OSHA's multi-employer citation policy. Construction employers operating in Louisiana, Mississippi and Texas would then be subject to the same controlling employer citation policy as contractors in other states.
As a controlling employer, a contractor must exercise reasonable care to prevent and detect violations on construction sites. The duty is less than what is required of an employer to protect its own employees and will be evaluated on a case-by-case basis depending on such factors as project scale, nature and pace of the work, how much the controlling employer knows about the safety history and safety practices of the subcontractor, and whether the controlling employer has implemented an effective system for promptly correcting hazards.
More frequent inspections will be expected at the beginning of a project if the controlling employer has not previously worked with the subcontractor, knows the subcontractor has a history of noncompliance or does not know the subcontractor's compliance history. Less frequent inspections are needed to meet the reasonable care standard when the controlling employer sees the subcontractor has implemented an effective safety and health program and consistently complies with OSHA standards.
The outcome in cases where OSHA issues a citation based on the contractor being the controlling employer will be determined by evaluating the steps the contractor took to avoid the hazard. If you retain subcontractors and meet OSHA's definition of a controlling employer, you will want to be sure to implement procedures to show you have exercised reasonable care to prevent and detect violations at construction sites even if your employees are not exposed to a safety hazard.
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