Grading and Excavation Contractor

OSHA’s Multi-Employer Policy: The Tide May Be Turning

By Daniel C. Brown

It happens every day at construction sites around the country. A subcontractor’s employee is involved in an accident. OSHA arrives, conducts an inspection, and finds that the subcontractor violated the OSHA regulations and is wholly at fault for the accident.

“What happens next is often a surprise, but it shouldn’t be,” says Jim Curtis, a Chicago lawyer specializing in OSHA and workplace safety law. “OSHA issues citations to both the subcontractor and the general contractor and claims the general is a ‘controlling employer’ under OSHA’s multi-employer policy—and therefore is equally as liable for the OSHA violation as the subcontractor.” Curtis is a partner at Seyfarth Shaw LLP in Chicago.

Even worse, the general contractor’s citation can be classified as “repeat”—with a significantly higher penalty—if there have been prior accidents on unrelated jobs involving unrelated subcontractors. To compound the problem, OSHA often does little or no actual investigation into whether the general contractor, in fact, meets the elements of a “controlling employer” under OSHA’s multi-employer policy, rather simply assuming that all general contractors are controlling employers and leaving it to the general contractor to prove otherwise—after the citations have been issued. It’s a lot like a guilty-until-proven-innocent approach to OSHA enforcement.

Throughout the 1980s and 1990s, courts often allowed OSHA to pursue this vague policy of sweeping the general contractor in along with the subcontractor, and general contractors did not seriously challenge this practice. However, in response to bigger penalties and more stringent OSHA enforcement, many general contractors are now challenging this policy, and the tide may be turning against OSHA on this issue.

Recently, the Occupational Safety and Health Review Commission ruled against OSHA’s controlling-employer theory of liability as it relates to general contractors. In Secretary of Labor v. Summit Contractors, the general contractor was cited for the fall-protection violations of one of its subcontractors under OSHA’s controlling-employer theory of liability. The Review Commission found that the Occupational Safety and Health Act did not enforce OSHA’s controlling employer theory against general contractors like Summit and vacated the citation.

In a recent decision out of Philadelphia, Curtis says a contract manager was found not to be a controlling employer following a trenching accident, despite contractual language giving it broad general authority over the work site. Likewise, in Virginia, an appellate court ruled that portions of the OSHA’s multi-employer policy were unconstitutional. Similar attacks are being successfully mounted by general contractors and contract managers throughout the country.

OSHA, however, has appealed the Summit decision to federal circuit court and has said that it plans to continue its policy of holding general contractors liable for subcontractors’ violations as controlling employers—despite the Summit ruling. Therefore, employers should continue to understand how controlling employer liability arises so that controlling employer citations can be avoided.

According to OSHA’s multi-employer policy, the terms of the contract with the subcontractor and the actual practice at the work site should drive the multi-employer analysis. Unfortunately, general contractors often use outdated form or boilerplate contracts without analyzing how that language will play out in the event of an OSHA inspection. After the accident, general contractors are often surprised to discover that their American Institute of Architects contract (or similar contract) makes them ultimately responsible for job-site safety and, therefore, arguably a “controlling employer.”

Likewise, regardless of the actual contractual language, if the general contractor’s field supervisor has, in fact, been directing the manner of the subcontractor’s work, the general contractor will be tagged with controlling employer liability “in practice.” When OSHA arrives to conduct a multi-employer inspection of a work site, the compliance officer will invariably ask who is “responsible” for the work site.

In layman’s terms, the general contractor may be ultimately responsible for completing the project, but not responsible for how subcontractors go about their daily work. However, if the field supervisor responds in the affirmative to the “Who is responsible?” question, he just bought the general contractor controlling employer liability for the work site, regardless of the facts. That’s why an ounce of prevention training for your field supervisors to properly anticipate and respond to such questions will go a long way in preventing misplaced OSHA citations in the first place.

Curtis says the lesson for contractors in all of this is simple. First, make sure the language in your subcontracts concerning safety is consistent with your business goals. If you do not intend to oversee your subcontractor’s safety compliance, don’t allow that language to creep into your contracts.

In fact, you may want to state in the contract that the general contractor is not responsible for safety and does not have the authority to direct the subcontractor’s employees regarding safety compliance. Second, make sure your field supervisors understand their limits at the work site and act consistently with those limits.

Finally, if there is an accident and you receive a “controlling employer” citation, seriously consider contesting that citation rather than simply accepting the fine. Remember, the courts are increasingly questioning OSHA’s use of the multi-employer policy and the controlling employer designation, requiring that the government actually prove its case.

You can contact Jim Curtis by mail at Seyfarth Shaw LLP, 131 S. Dearborn Street, Suite 2400, Chicago, IL, 60603, by phone at (312) 460-5815, or by e-mail at jcurtis@seyfarth.com.

Daniel C. Brown owns TechniComm, a communications business in Illinois.

GEC - January 2008

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