Appeals court rules contractors can be cited for hazardous conditions at multi-employer worksites

New Orleans — OSHA can issue citations to general contractors who fail to control hazardous conditions at multi-employer worksites, even if those conditions do not directly affect their own employees, the U.S. Court of Appeals for the 5th Circuit ruled Nov. 26.

In its decision, the court states that the landscape has changed since the 5th Circuit ruled in 1981 that “OSHA regulations protect only an employer’s own employees” in Melerine v. Avondale Shipyards, Inc. Brian Duncan, administrative law judge for the Occupational Safety and Health Review Commission’s Denver regional office, used that decision as precedent in April 2017 when he decided that Hensel Phelps Construction Co. could not be held liable for OSHA violations from one of its subcontractors. The Department of Labor appealed that decision.

The appeals court stated that because of the Chevron deference, which comes from the 1984 U.S. Supreme Court case Chevron USA, Inc. v. Natural Resources Defense Council, Inc., that the 1981 5th Circuit decision no longer is valid. The 5th Circuit covers Louisiana, Texas and Mississippi.

In the Chevron decision, the Supreme Court ruled that courts should defer to an agency’s interpretations of its own statutes as long as that interpretation is reasonable and Congress has not addressed the particular issue clearly.

According to the 5th Circuit’s published decision, Phelps Construction’s subcontractor, Haynes Eaglin Watters, hired another company, CVI Development, for “demolition, excavation and other work” in 2014 at a library construction site in Austin, TX. A CVI excavation project did not have a protective system (e.g., sloping), and a “nearly vertical wall” of soil was stacked about 12 feet high.

When CVI attempted to have its employees work elsewhere on the construction site during a rainy morning in March 2015, a City of Austin inspector and a Phelps Construction area superintendent told CVI owner Karl Daniels that his workers had to go back to the excavation site.

On the same day, the OSHA area office in Austin received a complaint of hazardous working conditions. The inspector saw three CVI employees working “at the base of an unprotected wall of excavated soil” in full view of the city inspector, Phelps Construction superintendents and HEW personnel.

OSHA fined Phelps Construction $70,000 for one willful citation because it was the “controlling employer” under OSHA’s Multi-Employer Citation Policy, which went into effect in December 1999. “A controlling employer” is one that has “general supervisory authority” over a worksite, including the power to correct safety violations or compel others to correct them.

CVI was fined $18,000 for one serious and one willful violation.