May 2, 2007
This week, the federal Occupational Safety and Health Review Commission handed employers a stunning victory by eliminating liability for "controlling contractors" under OSHA's multi-employer worksite citation policy. For years, OSHA has applied the policy to cite general contractors and homebuilders for their subcontractors' OSHA violations.
The case, Secretary of Labor v. Summit Contractors, Inc., involved a general building contractor in Jacksonville, Florida. In June 2003, OSHA inspected Summit's construction site and found employees of Summit's subcontractor unprotected from falls while working on a scaffold. None of the exposed workers was employed by
Summit. Under the multi-employer worksite policy, OSHA issued a citation to the subcontractor as the "exposing contractor" and to Summit as the "controlling contractor." Summit contested its citation, claiming OSHA's multiemployer
worksite policy was unenforceable under OSHA's own regulations. On appeal, the federal Occupational Safety and Health Review Commission in Washington, D.C. agreed, vacating the citation in a 2-1 decision.
The Commission's decision hinged on its interpretation of a federal regulation, 29 C.F.R.
§ 1910.12(a), which in 1971 adopted OSHA's Part 1926 construction standards. As interpreted by two members of the Commission, Scott Railton and Horace Thompson, this regulation requires a contractor to comply with applicable OSHA standards only as to its own employees. The regulation does not allow OSHA to cite a general contractor, homebuilder, or other contractor for a hazard when their own employees are not exposed. The Commission concluded OSHA had no legal authority to cite Summit Contractors under its multi-employer worksite policy because its employees were not exposed to the faulty scaffold.
In a strong dissent, Commissioner Thomasina Rogers countered that the majority "reversed over 30 years of Commission precedent" and deprived OSHA of a very important tool to hold accountable those in the best position to ensure safety on construction worksites-general contractors and homebuilders.
The Summit Contractors case is a significant reversal for the Review Commission, which for over 30 years upheld OSHA's multi-employer worksite policy. Most federal circuit courts also have enforced the policy, and it remains to be seen what the courts will decide if OSHA appeals this decision, which is a strong possibility.
The Summit Contractors decision is welcome news for employers, but there are some important considerations to remember:
1) For now, the decision only applies to construction employers subject to OSHA's construction standards, not to general industry employers. The Commission did not address the validity of OSHA's multi-employer worksite policy as applied to general industry employers who can also be cited for the OSHA violations of its contractors or other employers working in their facilities. Until further challenges are made, general industry employers should understand that OSHA's multi-employer worksite policy still applies to them.
2) General contractors and other contractors still can be cited if their employees are exposed to hazards created by themselves or other contractors. All employers should remember to protect their employees from hazards, regardless of who created them.
3) The decision applies in states where federal OSHA governs, such as Colorado. The decision may or may not apply in states that administer their own OSHA "state-plan" programs, such as Arizona. California, for example, has its own multi-employer law, which is not affected by the Summit decision.
The fight is not over. OSHA may appeal the decision to the federal circuit courts or choose to amend the regulation on which the Commission relied. An amendment to the regulation in question could reestablish the multi-employer policy. OSHA could choose to keep enforcing the multi-employer worksite policy or back off until the dust settles. It is too early to tell what direction OSHA will take. Stay tuned for further developments.
Contractors should assess how the Summit decision impacts their health and safety programs. Although the case has significantly reduced the risk of OSHA liability for general contractors and homebuilders, most contractors will continue to find that effective monitoring of subcontractor safety and health compliance, for example through safety inspections or regular safety meetings, is an essential part of their safety and health programs and should not be changed. Contractors with pending multi-employer citations or those facing multi-employer OSHA inspections should seek legal counsel as to the impact of Summit.
Who We Are
Rodney Smith, Chuck Newcom and Patrick Miller are part of Sherman and Howard's Labor & Employment Law Department practicing in the areas of occupational safety and health law. We have a combined total of over 50 years experience representing employers in matters related to issues arising under both the OSHA and the MSHA. We routinely appear before the federal Occupational Safety and Health Review Commission, the federal Mine Safety and Health Review Commission, and state occupational safety and health boards.
If you have any questions regarding your obligations under Section 11(c) of the Act, or have any OSHA related inquiries, please feel free to contact one of our attorneys.
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