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OSHA’S Ability to Cite General Contractors or Host Employers for Subcontractors' Construction Violations Now Seriously in Doubt

By Stephen C. Yohay and Elizabeth M. Walsh, Thelen Reid Brown Raysman & Steiner, LLP

May 1, 2007

The Occupational Safety and Health Administration's (OSHA) authority to issue citations to general contractors or host employers for subcontractors’ violations under OSHA’s “Multi-Employer Citation Policy” has been called into serious question by the decision of a divided Occupational Safety and Health Review Commission (OSHRC) (Secretary of Labor v. Summit Contractors Inc., OSHRC, No. 03-1622, 4/27/07).

The Multi-Employer Citation Policy

OSHA’s current Multi-Employer Citation Policy is described in OSHA's Field Inspection Reference Manual (CPL 2.103) (http://www.osha.gov/Firm_osha_data/100004.html), which provides that although employers may not have employees of their own exposed to a safety hazard, they still may be cited for a safety or health violation if such employers create the hazard, if they control the work site, or if they have the authority to correct the hazard to which another’s employee is exposed.

The citation in question arose from certain scaffolding violations committed by a masonry subcontractor on a construction site in Little Rock, Arkansas. In addition to citing the subcontractor for the violations, however, OSHA also cited Summit, the project’s general contractor, on the basis that, as general contractor, Summit was the “controlling employer.” No Summit employees were exposed to the hazard created by the violations.

The Summit Decision

In vacating the citation issued to general contractor Summit, OSHRC Chairman W. Scott Railton and Commissioner Horace A. Thompson III agreed in separate opinions that OSHA’s Multi-Employer Citation Policy is invalid in the construction context when applied against a "controlling employer" who neither creates nor has employees exposed to the cited safety hazard.

The two majority Commissioners premised their decision on 29 C.F.R. Section 1910.12(a), a regulation promulgated by OSHA in 1971. Under the plain terms of Section 1910.12(a), an employer engaged in what is defined as “construction work” may be cited only for a violation of construction standards that exposes "his employees" to the prohibited hazard. Section 1910.12(a) states among other requirements that "[e]ach 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." Section 1910.12(b) defines “construction work” as “work for construction, alteration, and/or repair, including painting and decorating.”

In his lead opinion, OSHRC Chairman Railton noted that OSHA's inconsistent application of the Multi-Employer Citation Policy was a factor in his decision. "It seems to me that the checkered history of the multi-employer doctrine as expressed in the Secretary's ever-changing compliance guidelines... taken in contrast with a regulation [Section 1910.12(a)] which has not been amended since 1971, results in the latter trumping whatever reliance the Commission can place on the varying nature of the policy," the Chairman wrote. Coincidentally, the decision was issued on the last day of Mr. Railton’s term as a Commissioner. No successor has yet been nominated.

Commissioner Thompson wrote separately that Section 1910.12(a) was clearly intended to be a limit on OSHA's powers. "It was intended to limit the Secretary's discretion to impose under the OSH Act the duty under the [Construction Safety Act] of prime (general) contractors at construction sites," the Commissioner noted.

In dissent, Commissioner Thomasina V. Rogers asserted that the majority had "reversed over thirty years of Commission precedent."

The Summit decision’s application only to “Construction Work”

It is important to understand that the Summit decision does not affect OSHA’s authority to continue issuing citations under its Multi-Employer Citation Policy where employers are not engaged in what is defined as “Construction Work” under Section 1910.12(b), but rather are engaged in “General Industry” work that is subject to the various standards in 29 C.F.R. Part 1910. Such work typically involves work for maintenance purposes, even if performed by construction contractors. The key is the nature of the work being performed, not the nature of the employer performing it.

This also means that where a contractor is performing work directly for an owner, such as in an electric power plant outage, a chemical plant “turnaround,” or as a resident contractor in an industrial facility, the Multi-Employer Citation Policy still may be applied to cite host employers if the contractor’s work is not “construction work.”

The reason for this result is that the decision is premised exclusively on an interpretation of Section 1910.12(a), which applies to “Construction Work,” and not upon an examination of OSHA’s basic authority under the Occupational Safety and Health Act to issue multi-employer citations. OSHA’s authority to issue such citations has been upheld by several federal courts of appeals.

Questions created by the Summit decision

It is expected that OSHA will appeal the Summit decision. OSHA appears to have the choice of filing its appeal in the United States Court of Appeals for the Eighth Circuit in St. Louis, since the case arose in that circuit, or in the Eleventh Circuit in Atlanta, since Summit has is principal place of business within that circuit.

While an appeal is pending, it is unclear what will happen with citation contest cases that are pending before OSHRC Administrative Law Judges, where the citation involves “Construction Work” and is premised on the Multi-Employer Citation Policy. It can be expected that many such cited employers will request that such citations now be vacated.

Another question is whether OSHA will now change its enforcement policy, and forbear from issuing such citations while an appeal is pending. This does not seem likely. Often, OSHA regards only decisions of a Court of Appeals, rather than OSHRC, as establishing binding precedent. This may be especially so where, as here, Mr. Railton’s term as a Commissioner has expired and no successor has yet been named.

The decision also is not binding on states, such as California, that have their own state plans for regulating occupational safety and health. Many state agencies that adjudicate state-issued citations follow the precedent of federal OSHRC, but generally, such adherence is not required. Similarly, state OSHA enforcement agencies are not required to follow federal enforcement policies, and frequently do not do so.

The decision also does not affect other legal principles that influence the relative obligations of contractors on a construction site as to safety and health issues, such as state tort law, building codes, voluntary consensus codes and standards, contract terms, or insurance considerations. It is questionable, therefore, whether the decision, even if affirmed, will have a practical effect on the extent to which general contractors seek to direct, influence or control OSHA compliance and safety performance by subcontractors.

Nonetheless, if affirmed, the decision represents a significant change in OSHA’s enforcement authority in construction, and could have a significant impact in cases where citations are issued following serious accidents. For example, OSHA citations often are used in state court damage actions or other collateral litigation as evidence of a contractor’s failure to meet a recognized duty of care, and significant OSHA citations can affect the settlement value of collateral claims.

If you would like to discuss this article/report, feel free to contact Stephen Yohay in our firm’s Washington, D.C. Office at (202) 508-4390 or at syohay@thelen.com, Elizabeth Walsh at (202) 508-4272 or ewalsh@thelen.com, or your regular contact at the firm.

Below are links to the authors' bios, and to Thelen Reid's comprehensive website of construction-related links.