The Multi-Employer Doctrine: End of the Line or a Chance for a Fresh Start?

The Occupational Safety and Health Review Commission (OSHRC) decision, in a case involving home builder Summit Contractors, held that citing a general contractor solely because it is a so-called “controlling employer” is inconsistent with 29 CFR 1910.12(a), a regulation that governs the application of OSHA’s construction standards in 29 CFR Part 1926. That regulation states, in part, that “Each employer shall protect … each of his employees engaged in construction work by complying with” Part 1926 (emphasis added). The commission held that issuing a citation to a so-called “controlling employer” whose own employees were not exposed to an alleged violation was inconsistent with the phrase “his employees.”

The decision overturns a 1976 OSHRC statement that asserts, “We will hold the general contractor responsible for violations it could reasonably have expected to prevent or abate by reason of its supervisory capacity.” (Grossman Steel & Aluminum Corp., 4 BNA OSHC 1185, 1188, 1975-76 CCH OSHD para. 20,691, p. 24,791 (No. 12775, 1976). That statement was gratuitous – what lawyers call “dictum” – because a general contractor was not involved in that case. Moreover, the commission in Grossman Steel did not discuss what effect 1910.12(a) might have. The parties’ briefs did not – and had no reason to – discuss the regulation, because the case involved a subcontractor whose employees were endangered by a violation. In Summit Contractors, the commission gave effect to the regulation that had been overlooked in 1976.

The Summit Contractors decision also invalidated a significant portion of OSHA’s Multi-Employer Citation Policy, Directive CPL 2-0.124 (1999), particularly paragraphs X.C-X.E, which instructed OSHA compliance personnel to usually cite general contractors as so-called “controlling employers” for work site conditions to which any employer’s employees were exposed.

What Should General Contractors Do Now?

The Summit Contractors decision provides no relief to a general contractor whose own employees have reasonably predictable exposure to a violative condition created by another contractor on the work site. Section 1910.12(a) requires each construction employer, including a general contractor, to protect the workplaces of his employees. Thus, general contractors whose own employees travel all over a work site still may find themselves in the position of identifying hazards endangering their own employees and trying to get other employers to correct them, or trying to prevent their employees from being exposed.

The decision also does not discuss the legal status of OSHA standards in Part 1926 that impose their own multi-employer rules, such as the steel erection standards in Subpart R. For example, 1926.759(b) requires the controlling contractor to “bar other construction processes below steel erection unless overhead protection for the employees below is provided.” Although a strong argument can be made that 1910.12(a) limits this provision to cases in which the controlling employer’s own employees are exposed to the hazards of steel erection work, the commission decision in Summit Contractors does not discuss the issue.

What Summit Contractors does is relieve general contractors of the need to patrol work sites and supervise the behavior of contractors with respect to conditions to which the general contractor’s own employees have no reasonably predictable exposure. This is an important change, because OSHA enforcement policy and prior review commission case law had imposed burdensome and sometimes counterintuitive duties of supervision on general contractors.

For example, in Blount International Ltd. (15 BNA OSHC 1897 [No. 89-1394, 1992]), the commission found a general contractor liable after an electrical contractor failed to install ground-fault circuit interrupters in a panel distribution box. Even though the hazard concededly was latent and hidden from view, the commission affirmed the citation because the general contractor never had tested the electrical box, had no evidence that the electrical contractor had either and presented no evidence of why it thought that the electrical contractor was competent. The unfortunate message that the harsh result in Blount sent to OSHA field enforcement personnel was that if a subcontractor did something wrong, the general contractor was liable too. The word “reasonable” in Grossman Steel got lost.

What Will OSHA Do Now?

OSHA has appealed the decision to the 8th U.S. Circuit Court of Appeals, in which the cited Arkansas work site was located. This is the same court that issued Marshall v. Knutson Construction Co., (566 F.2d 596 [8th Cir. 1977]), a decision that OSHA claims upheld its right to cite general contractors. A problem for OSHA would be that the Knutsen decision did not consider 1910.12(a). The 8th Circuit thus would have to take a fresh look at that issue. If it does, it will find that all four tribunals that have examined 1910.12(a) or a like regulation have held or indicated that it is inconsistent with the controlling employer doctrine. In addition to Summit Contractors, see Anthony Crane Rental Inc. v. Reich, (70 F.3d 1298, 1306-07 [D.C. Cir. 1995]); Secretary of Labor v. Simpson, Gumpertz & Heger Inc., (3 F.3d 1, 4 [1st Cir. 1993]); and Melerine v. Avondale Shipyards Inc., (659 F.2d 706, 712 [5th Cir. Unit A 1981]), concerning an identical maritime regulation.

Another difficulty for OSHA is that its attorneys likely will be unable to explain away the phrase “his employees” in the regulation. OSHRC Chairman W. Scott Railton observed in Summit Contractors that under OSHA’s argument, “the meaning of the regulation would not change even if the words ‘his employees’ were missing.” Commissioner Horace Thompson similarly noted that OSHA’s position “effectively ignore[s] the ‘his employees’ clause” and that even OSHA has conceded that a “semantically identical” phrase in the General Duty Clause is inconsistent with controlling-employer liability. OSHA also may be unable to explain why, at the same time it adopted 1910.12(a), it rejected a regulation (1926.16) that imposed liability on general contractors in federally financed construction. So it is doubtful indeed that further litigation will change the result.

OSHA also may resort to rulemaking. In 1976, OSHA invited public comment on regulations it might adopt, but after Grossman Steel was issued several weeks later, it took no further action on the proposal.

Since then, OSHA has considered multi-employer duties in various rulemakings. The rules that resulted – such as those governing steel erection – always have been more modest and clearer than the amorphous and sometimes harsh rules that OSHRC case law and OSHA’s multi-employer enforcement policy had imposed on general contractors.

This may provide a lesson to OSHA, unions and employers alike: The rules that emerge from rulemaking tend to be more realistic and clearer, and enjoy the perception of greater legitimacy, than those that emerge from litigation.

Arthur G. Sapper is a partner in the OSHA Practice Group of McDermott Will & Emery LLP. In Summit Contractors, Sapper submitted an amicus curiae brief and orally argued for a coalition of trade associations of general contractors.