SLC 2015: When OSHA Comes Knocking at a Multi-Employer Job Site

Edwin Foulke, a partner at Fisher & Phillips, LLP, opened his session at the Safety Leadership Conference's Construction Track with this quote from Yogi Berra: "If you don't know where you are going, you might wind up someplace else."

"If we don't know where we're going because we don't have a plan or goals, people are going to be hurt or killed," said Foulke in his session, titled, "Legal and Practical Issues in Handling Multi-Employer Safety and OSHA Inspection Issues."

Foulke said that having an effective safety and health program is vital for several reasons:

It is morally the right thing.
It is the law.
It allows your employees to go home each night safely to their family and loved ones.
It keeps you from having to do the worst job any person would possibly have to do.
It is essential for a company to reduce injuries and reduce costs to be profitable and competitive in today’s marketplace.

"At best," said Foulke, "you will have a fair safety program if you only comply with OSHA standards." Much more is needed, he added, including engaging not only the workforce in safety, but the C-suite as well.

Foulke noted that most CEOs have an MBA, "But there is no MBA program in the U.S. that has a safety course in it. I used to ask CEOs and presidents, 'What is your cost to injure an employee?' Most would give me workers' comp costs. That's about 60 percent of the total cost. That told me they didn't understand the true cost."

Employers need to be concerned about legal liability on multi-employer job sites for several reasons, said Foulke. OSHA continues aggressive enforcement, including more inspectors, higher penalties and unfriendly press releases. In addition, more employers are being placed in the Severe Violators Enforcement Program (SVEP), as many as 800-900 companies at this point.

Being called out in a national press release and/or being added to the SVEP are things that the clients of construction contractors take note of. "They might decide they don't want to do business with you," he told the audience.

According to Foulke: the following circumstances would be reviewed as a possible SVEP case:

A fatality or catastrophe situation with willful or repeat violations.
Industry operations or processes that expose employees to the most severe occupational hazards and those identified as “high-emphasis hazards.”
Exposing employees to hazards related to the potential release of a highly hazardous chemical.
All egregious enforcement actions.

OSHA also has placed increased focus on whistleblowers, with a push to find more “cause” determinations. The agency also has started accepting on-line whistleblower complaint applications, a move that has increased the number of whistleblower complaints.

Foulke noted that when he was assistant secretary of labor, 5-7 percent of whistleblower complaints were found to have cause. Now that number is closer to 20 percent, he added.

So what does all this mean for construction contractors at multi-employer job sites? It means there is a greater chance that complaints will be investigated by OSHA, that companies that are cited will be skewered in a press release and that companies could end up in the SVEP.

OSHA's Multi-Employer Citation Process

According to Foulke, more than one employer at a multi-employer job site can be cited and, in fact, it's happening more and more. He said part of the performance review for area administrators is the number of citations coming out of their office. In the case of multi-employer job sites, that could mean that one OSHA inspector could site two employers for essentially the same hazards.

The process to determine if more than one employer should be cited at a single job site is two-fold, said Foulke. OSHA looks at (1) the category of employer (creating, exposing, correcting, controlling – with multiple roles possible for a single employer) and (2) did the employer meet obligations for that category.

Creating – “The employer that caused a hazardous condition that violates an OSHA standard.” Employers must not create violations/hazards. The "creating" employer is citable even if only employees of other employers are exposed.

Exposing – If the exposing employer does not have authority to correct hazard, that emploer must ask creating or controlling employer to correct; inform employees of hazard; take reasonable alternative protective measures: must remove employees if there is imminent danger.

Controlling employer – There are several factors that determine how often the "controlling" employer inspects the job site:

Project scale
Nature/pace of work, changing hazards
How much known about subcontractor
More frequent inspections for unknown or previously non-compliant subcontractor
Less frequent inspections for subcontractor with strong safety and health efforts

And several factors to evaluate whether or not reasonable care has been taken by the controlling employer:

Periodic inspections, frequent enough to catch unsafe situations or hazards
An effective system to correct hazards
Effective, graduated enforcement of safety rules

There are several types of controlling employer. Some are established by contract. Sometimes there is a combination of contract rights. Does the employer have responsibility for dispute resolution, schedules or sequencing? Does the contrlling employer "control" without explicit contractual authority?

Several OSHA regulations have rules for multi employers, including: Hazard communication 1910.1200, lockout/tagout 1910.147, permit-required confined spaces 1910.146 and process safety management 1910.119.

In order to avoid trouble with OSHA, Foulke suggests all employers:

Establish work rules designed to ensure safe work and to avoid OSHA violations.
Communicate the work rules to employees.
Train the employees as needed.
Take appropriate steps to discover violations.
Effectively enforce the rules and practices when violations are discovered; and
Document the above actions.

"And if you do self-audits or third-party audits, you'd darn well better correct everything you find," said Foulke. The results and corrective actions (or lack of corrective actions) of those audits are discoverable by OSHA, he noted. "If you have not corrected those violations, you've established you knew about the violation and you've established it's willful and you've basically done their work for them."