Assume a general contractor has engaged a subcontractor to erect structural beams on a multi-million dollar shopping mall construction project. One day, while none of general contractor’s employees are on the worksite, an inspector from the Department of Labor’s Occupational Safety and Health Administration (“OSHA”) shows up and identifies numerous safety hazards and violations caused by the subcontractor. The inspector then cites both general contractor and the subcontractor for the violations.

Can this actually happen on a worksite?

When it comes to OSHA, it is crucial for general contractors to be aware of what happens when their subcontractors violate OSHA policies while on their worksite. Although OSHA health and safety rules generally apply to the relationship between employer and employee, OSHA has successfully issued citations to general contractors for the safety violations of its subcontractors on a particular project site. Understanding the rules and taking the right steps to protect yourself will keep you from being one of those unfortunate general contractors.

Rules Applicable when Determining Whether a General Contractor is Liable for a Subcontractor’s OSHA Violation

Under the OSHA Multi-Employer Citation Policy (CPL 2-0.124), OSHA may cite multiple employers (i.e., a general contractor and subcontractor) on a single worksite even if the violation was created solely by a subcontractor. In 2009, the Eighth Circuit Court of Appeals made it clear that OSHA has the authority under its Multi-Employer Citation Policy to cite general contractors for hazards on their construction sites that were created by subcontractors. (Solis v. Summit Contractors, Inc., No. 07-2191m 8th Cir. Feb. 26, 2009).

To determine liability for safety violations on a multi-employer jobsite, OSHA follows a two step analysis.  The first step involves the threshold question of whether an employer may be accountable for a particular violation. If the threshold question in step one is satisfied, the second step involves OSHA determining whether the employer’s actions are sufficient to satisfy its obligations under the particular circumstances. In the explanation below, we view the tests from the perspective of the general contractor.

In the first step, OSHA will determine whether the general contractor meets the requirements to be one of the four employer types with potential accountability for the violation. Specifically, OSHA looks at whether the general contractor is: (1) the Creating Employer (the employer that created the violation); (2) the Exposing Employer (any employer whose employees were exposed to the violation); (3) the Correcting Employer (any employer responsible for correcting the violation on the jobsite); or (4) the Controlling Employer (any employer responsible for controlling the work on the jobsite). As noted above, in the second step, OSHA will determine whether the general contractor’s actions were sufficient to satisfy its obligations. The extent of actions required by the general contractor varies based on which “employer type” applies.  It is possible that a general contractor could be determined to be more than one employer type in any particular case.  

This article is focused on avoiding liability as a general contractor for the violations of a subcontractor, therefore the information provided herein will first explain when a general contractor will be deemed to be a “Controlling Employer” for purposes of a violation committed by its subcontractor and then the requirements and obligations of a “Controlling Employer.”

Factors for Determining whether a General Contractor is a “Controlling Employer”

As the name suggests, a controlling employer is one that has authority to supervise the worksite, such as the authority to correct violations itself or require others to correct them. This authority can be conferred by the parties’ contractual provisions or through a course of practice at the worksite. For example, assume the contract between the general contractor and the subcontractor that explicitly requires the general contractor to correct safety hazards upon reasonable notice. In this instance, the general contractor would be liable for any hazardous conditions caused by the subcontractor if they did not correct them upon reasonable notice.

Moreover, if the contract can be interpreted to confer broad authority and responsibility on the general contractor, such that the general contractor could be deemed a controlling employer. For example, if the contract provides that the general contractor is responsible for maintaining the worksite, including the right to direct all personnel on the worksite (which necessarily includes the subcontractor and its employees) and resolve disputes between all employees, this responsibility could be interpreted as granting the general contractor the right to direct the actions of the subcontractor on matters of safety.  As a result, the general contractor could be deemed a “controlling employer” and would therefore be liable for hazardous conditions created by the subcontractor if they were not corrected upon reasonable notice.

Even in the absence of the type of contractual authority or responsibility described above, a general contractor can be deemed to have the requisite authority for purposes of OSHA liability if, in actual practice, the general contractor exercises controlling authority over matters affecting safety and thus effectively assumes the role of Controlling Employer.  

Obligations of a Controlling Employer

Thankfully, even if a general contractor is found to be a Controlling Employer, this finding does not necessarily mean that a general contractor will be jointly liable for any violations committed by its subcontractor. Under the Multi-Employer Citation Policy, a Controlling Employer is obligated to exercise reasonable care to prevent and detect violations on the site. This standard is lower than that which is applied to an employer with respect to its own employees; however, whether a Controlling Employer has exercised reasonable care depends on the circumstances. Therefore, in determining whether reasonable care was exercised by the Controlling Employer, OSHA will consider the following five factors:

1. The scale of the project;
2. The nature and pace of the work, including how frequently the hazardous conditions change;
3. How much the Controlling Employer knows about the safety history and expertise of the subcontractor;
4. Whether the subcontractor has a history of non-compliance (in which case the Controlling Employer will be expected to conduct more frequent inspections), or if the subcontractor’s history is unknown (in which case the Controlling Employer is expected to conduct more frequent inspections the beginning of the project);
5. Whether the Controlling Employer is familiar with the subcontractor’s safety and health policies and if the subcontractor has shown a consistently high level of compliance with OSHA requirements.

OSHA will also consider whether the Controlling Employer confirmed that the subcontractor promptly corrected hazards identified during the Controlling Employer’s inspection and whether the Controlling Employer enforces the subcontractor’s compliance with safety and health requirements with an effective, graduated system of enforcement and follow-up inspections.

Suggestions for Compliance

General contractors can avoid liability as a Controlling Employer in a number of ways. Some of these things can be accomplished before the project even begins.  For example, general contractors should review their subcontractor agreements to make sure they are not unnecessarily assuming obligations to monitor the safety practices of their subcontractors. Similarly, general contractors should do their due diligence prior to engaging subcontractors to ensure such subcontractors have their own safety practices in place. General contractors should also review their contracts with subcontractors to make sure the subcontractor has an affirmative obligations to implement its own safety policies and practices. In general, the more comprehensive the subcontractor safety commitments are set forth in contracts, the more likely a general contractor’s reliance on a subcontractor’s own safety practices will be deemed reasonable.  Finally, general contractors may incorporate indemnity clauses specifically tailored to address situations in which a general contractor is cited for a subcontractor’s OSHA non-compliance. Incorporating an indemnity provision that targets OSHA violations could assist general contractors in recovering any penalties assessed by OSHA against the general contractor for a subcontractor’s safety violations. Once the project has begun, general contractors should conduct regular inspections of the worksite to identify areas of concern or potential violations and establish a practice of following up with the subcontractor to ensure the appropriate corrective action has been taken.

Conclusion

This article is meant to provide a general overview of a general contractor’s potential liability for its subcontractors OSHA violations pursuant to the OSHA Multi-Employer Citation Policy (CPL 2-0.124). For further guidance on this potential liability and the steps a general contractor can take to mitigate the risk, please do not hesitate to contact one of the members of Koley Jessen’s Construction Industry Practice area or Employment group with any questions.

_{This content is made available for educational purposes only and to give you general information and a general understanding of the law, not to provide specific legal advice. By using this content, you understand there is no attorney-client relationship between you and the publisher. The content should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.}