Beveridge & Diamond
 

Eighth Circuit Upholds OSHA’s Multi-Employer Citation Policy in Summit Contractors

Beveridge & Diamond, P.C., March 9, 2009

A vexing issue for employers in the area of occupational safety and health is what regulatory obligations, if any, they may owe to the employees of other employers.  Putting it differently, the issue is to what extent they may be cited for the unsafe practices of employees of other employers.  The Occupational Safety and Health Administration (“OSHA”) has addressed this issue in its Multi-Employer Citation Policy.1  In 2007, the Occupational Safety and Health Review Commission (“OSHRC”) held that policy to be invalid to the extent that it seeks to hold a general contractor liable for violation of the construction industry standards by a subcontractor’s employees where the general contractor did not create the hazard and its own employees are not exposed to the hazard, but it has contractual authority over the subcontractor (and therefore presumably has power to control the subcontractor so as to make it comply with the standards; in terms of the Multi-Employer Citation Policy, it is a “controlling employer”).2  OSHA appealed that decision almost two years ago.

In a much-anticipated decision, on February 26, 2009, the U.S. Court of Appeals for the Eight Circuit held in Solis v. Summit Contractors, Inc. that OSHA regulations do not preclude OSHA from issuing citations to a general contractor in that situation.3  The majority’s opinion upholds OSHA’s Multi-Employer Citation Policy, making it clear that controlling employers can be liable for OSHA violations at their places of employment regardless of whether or not they created the hazard or their own employees are exposed to the hazard.4  The majority acknowledged that its holding places a large burden on general contractors to have knowledge of all of the regulatory requirements affecting its worksite and to monitor all of the employees of the worksite, but suggested that any concerns about the Multi-Employer Citation Policy should be addressed by Congress or OSHA itself.5 

1.        Facts and Prior Decisions

In June 2003, an OSHA Compliance Safety and Health Officer (“CSHO”) inspected the construction site of a college dormitory in Little Rock, Arkansas.  Summit Contractors, Inc. (“Summit”) was the general contractor at this site, supplying a project superintendent and three assistant superintendents.  During the inspection, the CSHO observed employees of Summit’s subcontractor, All Phase Construction, Inc. (“All Phase”), working on scaffolds without fall protection or guardrails in violation of 29 C.F.R. § 1926.451(g)(1)(vii).  The CSHO issued a citation to Summit for this violation (as well as to All Phase), even though Summit’s employees were never exposed to the hazard created by the scaffold violation. 

In the terms of the Multi-Employer Citation Policy, the CSHO regarded Summit as a “controlling employer”, a term which the policy defines as:

An employer who has general supervisory authority over the worksite, including the power to correct safety and health violations itself or require others to correct them.

The policy explains:

Control can be established by contract or, in the absence of explicit contractual provisions, by the exercise of control in practice  ....

A controlling employer must exercise reasonable care to prevent and detect violations on the site.  The extent of the measures that a controlling employer must implement to satisfy this duty of reasonable care is less than what is required of an employer with respect to protecting its own employees.  This means that the controlling employer is not normally required to inspect for hazards as frequently or to have the same level of knowledge of the applicable standards or of trade expertise as the employer it has hired.

The Multi-Employer Citation Policy gives an example similar to the facts in Summit Contractors.  In the example, a controlling employer observes a subcontractor violate OSHA’s fall protections standards, points out the violations to the subcontractor, but takes no further actions.  According to the example, the controlling employer “failed to take reasonable steps” to require the subcontractor to correct the hazards “since it lacked a graduated system of enforcement.  A citation to [the controlling employer] for the fall protection violations is appropriate.”

Summit contested the citation before an Administrative Law Judge (“ALJ”) on the basis that 29 C.F.R. § 1910.12(a), the regulation prescribing occupational safety and health standards for construction work, only places a duty on an employer to protect its own employees and not those of a subcontractor.  Section 1910.12(a) provides in relevant part that:

Each 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.

The ALJ rejected Summit’s argument and upheld the citation.  OSHRC vacated the citation (2-1) on the basis that § 1910.12(a) only requires an employer to protect “his” own employees and thereby precludes application of the Multi-Employer Citation Policy where, as here, an employer did not create the hazard and its employees are not exposed to the hazard.

2.        Majority and Dissenting Opinions

In the 2-1 Eighth Circuit decision vacating the OSHRC order, Judge Gruender wrote for the majority that the plain language of  § 1910.12(a) “does not preclude an employer’s duty to protect the place of employment, including others who work at the place of employment, so long as the employer also has employees at that place of employment.”6  The court closely examined the plain language and grammatical construction of  § 1910.12(a) and emphasized that  it unambiguously places a duty on an employer to protect (1) “his employees” and (2) “the places of employment where the employer actually has employees.”7  The court rejected OSHRC’s and Summit’s interpretation of § 1910.12(a), explaining that the duty to protect “places of employment” would be superfluous and redundant if it only required the employer to protect his own employees at their places of employment.8   

In addition, the majority emphasized that, even if 29 C.F.R. § 1910.12(a) were ambiguous, the court would defer to OSHA’s interpretation that the provision does not preclude application of the Multi-Employer Citation Policy to controlling employers.9  The court rejected on two grounds Summit’s argument that, because the Secretary has not had a consistent Multi-Employer Citation Policy since enacting § 1910.12(a) in 1971, the Secretary’s interpretation of § 1910.12(a) was not entitled to deference.  First, the court explained that OSHA has never interpreted § 1910.12(a) as limiting an employer’s responsibility to its own employees.10  Second, the court explained that it was irrelevant that OSHA altered the Multi-Employer Citation Policy over time in response to OSHRC and court decisions because those alterations “do not provide insight into the Secretary’s interpretation of § 1910.12(a).”11   

Further, the court rejected each of  Summit’s alternative arguments.  First, it rejected the argument that the Multi-Employer Citation Policy is based on an expansive definition of “employer” and “employee” in violation of the Supreme Court’s reliance on the common law definition of the term “employee” in Nationwide Mutual Insurance v. Darden, 503 U.S. 318, 322–25 (1992).  The court rejected this argument on the basis that § 1910.12(a) and the Multi-Employer Citation Policy do not impose liability on the basis of an employer-employee relationship.12  Second, the court rejected the argument that the OSHA does not have statutory authority for the Multi-Employer Citation Policy, because the Eight Circuit held in Marshall v. Knutson Constr. Co., 566 F.2d 596. 599 (8th Cir. 1977), that Section 5(a)(2) of the Occupational Safety and Health Act of 1970 (“OSH Act”), 29 U.S.C. § 654(a)(2), provides statutory authority for the policy.13  Third, the court rejected the argument that the Multi-Employer Citation Policy violates Section 4(b)(4) of the OSH Act, 29 U.S.C. § 653(b)(4), because it increases employer’s liability at common law, on the basis that the policy does not create a private cause of action or preempt state law.  Id. at 21.

Finally, the court acknowledged the policy implications of its decision.   The court explained that:

It is uncertain what potential benefits are gained in citing both a subcontractor and a general contractor for a single OSHA violation when the general contractor had informed the subcontractor of the violation on prior occasions.14

The court further explained that the “policy places an enormous responsibility on a general contractor to monitor all employees and all aspects of a worksite.”15  Nevertheless, the court explained that these concerns should be addressed by Congress or OSHA itself.16 

Judge Beam dissented, holding that § 1910.12(a) does not authorize the Multi-Employer Citation Policy where the general contractor did not create the hazard and its employees are not exposed to the hazard, and that the policy implications of the Multi-Employer Citation Policy “should serve as an interpretative guide to a logical reading of § 1910.12(a).”17 

3.        Discussion

The issue addressed in Summit Contractors, the significance of § 1910.12(a) in limiting the scope of the Multi-Employer Citation Policy as applied to the construction standards of Part 1926, has been awaiting judicial review for years.  That regulation’s language closely resembles that of the General Duty Clause, Section 5(a)(1) of the OSH Act, 29 U.S.C. § 654(a)(1), which OSHA concedes operates to preclude citation of employers for hazards to which their own employees are not exposed.  Section 5(a)(1) provides that each employer--

shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.  [Emphasis added.]

Section 5(a)(2), sometimes called the Specific Duty Clause, lacks the highlighted language.  It provides that each employer--

shall comply with occupational safety and health standards promulgated under this Act.

Almost all courts have agreed with OSHA’s position that Section 5(a)(2) does allow citation of employers for violations that create hazards to the employees of other employers, the one exception being the Fifth Circuit.18  However, there has long been a debate about whether with § 1910.12(a) OSHA voluntarily limited its authority under Section 5(a)(2) in the construction context where an employer’s own employees are not exposed, as § 1910.12(a) reads in part:

Each 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 [i.e., Part 1926].  [Emphasis added.]

The D.C. Circuit has twice questioned the viability of the Multi-Employer Citation Policy in light of § 1910.12(a) where the controlling employer did not create the hazard and its employees are not exposed to the hazard.  In both cases, however, the issue was not directly presented for decision.19  Only a state court, construing the state counterpart to § 1910.12(a), has ruled that its words permit citation of a controlling employer under these circumstances.20

Both opinions in Solis v. Summit Contractors engaged in an extended grammatical exegesis of § 1910.12.  The majority concluded:

Hence, grammatically reconstructed, the language of the regulation requires: (1) that an employer shall protect the employment of each of his employees (“part (1)”) and (2) that an employer shall protect the places of employment of each of his employees (“part (2)”).

Because the term “of each of his employees” limits the term “employment,” part (1) provides that an employer shall protect only the employment of his employees.  Stated differently, part (1) provides that an employer shall protect only his employees.  However, this is not the end of the analysis.  In part (2), the term “of each of his employees” limits the term “places of employment” such that the employer shall protect the places of employment where the employer actually has employees.  Unlike part (1), part (2) of the regulation does not limit the employer's duty to protect only the employer's own employees.  Therefore, the plain language of part (2) does not preclude an employer's duty to protect the place of employment, including others who work at the place of employment, so long as the employer also has employees at that place of employment .... 

To give some independent meaning to the term “place of employment” would require the employer to protect others who work at that place of employment so long as the employer also has employees at that place of employment.  Therefore, we reject Summit's interpretation and conclude that § 1910.12(a) is unambiguous in that it does not preclude OSHA from issuing citations to employers for violations when their own employees are not exposed to any hazards related to the violations.21

This difference in wording arguably distinguishes § 1910.12(a) from the General Duty Clause, which requires an employer to provide “to his employees employment and places of employment”, i.e., the obligation even with respect to places of employment is limited “to his employees.”

The dissent disagreed with the majority’s interpretation, stating:

This statement is epiphytic -- it draws no nourishment from the words of § 1910.12(a).  The issue here is, of course, not what duty an employer may decide to impose upon himself but rather what an employer is required to do to avoid an OSHA sanction.  Part (2) unambiguously requires Summit to protect the places of employment of Summit's employees engaged in construction work for Summit.  Nothing more, nothing less.22

An issue which the majority did not resolve, because not raised by the parties directly, concerned whether OSHA could lawfully apply the Multi-Employer Citation Policy without first adopting it through rulemaking.  The majority observed that:

This argument may have some merit ....  Therefore, the Secretary may be required to submit its multi-employer worksite policy to the informal rulemaking process, unless the multi-employer worksite policy is an interpretive rule or a statement of policy.  However, we decline to consider this issue because it was raised to this court by the amici and not by the parties.23

The state appeals court in Weekley Homes considered the same issue and concluded that the Multi-Employer Citation Policy is an interpretive rule exempt from the need for promulgation through rulemaking, noting that it does not impose sanctions for failure to comply with the policy, but only describes who can be cited.24

That state court opinion also addressed the concern about excessive burden being placed on a general contractor who does not create a hazard and whose employees are not exposed to the hazard.  Adopting the approach of the Safety and Health Review Board of North Carolina, it limited the general contractor’s obligations:

However, as stated in Romeo Guest, the duty is a reasonable duty and the general contractor is only liable for violations that its subcontractor may create if it could reasonably have been expected to detect the violation by inspecting the job site.25

If the court had upheld the OSHRC decision and concluded that § 1910.12(a) does limit the scope of the Multi-Employer Citation Policy, OSHA would only have needed to revise that regulation through informal rulemaking under the Administrative Procedure Act.  While such a rulemaking might have disrupted enforcement for a period of time, the Obama Administration would likely regard such a rulemaking as a priority.

Summit Contractors has until April 13, 2009 to file for reconsideration en banc (a possibility since the decision was not unanimous), or until May 27, 2009 to file a petition for certiorari with the Supreme Court.  If the latter course is taken, it could cite the dicta in the two D.C. Circuit decisions as suggestive of a conflict between the circuits. 

* * * * *

For more information, contact Mark Duvall at 202-789-6090, mduvall@bdlaw.com, or Maddie Kadas at 512-391-8010, mkadas@bdlaw.com.  This article was prepared with the assistance of Jayni Lanham.


1 OSHA Directive CPL 2-0124 (1999), available at http://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=DIRECTIVES&p_id=2024.

2 Summit Contractors, Inc., OSHRC Docket No. 03-1622, 21 BNA OSHC 2020 (2007).

3 No. 07-2191, 8th Cir. Feb. 26, 2009, 2009 U.S. App, LEXIS 3755.

4 Summit Contractors, Slip Op. at 14. 

5 Id. at 21–22.

6 Id. at 14.

7 Id. 

8 Id. at 14–15.

9 Id. at 15.

10 Id. at 16–17.

11 Id. at 17–18.

12 Id. at 19.

13 Id. at 20.

14 Id. at 21–22.

15 Id. at 22. 

16 Id.

17 Id. at 29.

18 See Melerine v. Avondale Shipyards, Inc., 659 F.2d 706, 710-11 (5th Cir. 1981).

19 See Anthony Crane Rental, Inc. v. Reich, 70 F.3d  1298, 1306 (D.C. Cir. 1995); IBP, Inc. v. Herman, 144 F.3d 861, 865-66 (D.C. Cir. 1998).

20 Comm’r of Labor v. Weekley Homes, L.P., 169 N.C. App. 17, 26–28, 609 S.E.2d 407, 414-15 (N.C. Ct. App. 2005).

21 Summit Contractors, Slip op. at 21-24 (footnote and citations omitted).

22 Id. at 41–42 (footnote omitted).

23 Id. at 29–30 (citations omitted).

24 Weekley Homes, L.P., 169 N.C. App. at 30, 609 S.E.2d at 416.

25 Id., 169 N.C. App. at 28, 609 S.E. 2d at 415 (citation omitted).

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