One of the most long-standing and vexing issues under the Occupational Safety and Health (OSH) Act has been that of allocating responsibility for violations on multiemployer worksites. The problem is not limited to the construction industry, for OSHA applies the principles of multiemployer liability under the OSH Act to the industrial workplace, as well.
The principles of multiemployer responsibility do not actually appear in the OSH Act. Also, they are not stated in the text of any OSHA standard.
Rather, the binding principles have been articulated in case law, in the form of decisions issued by the Occupational Safety and Health Review Commission (OSHRC) and the U.S. Circuit Courts of Appeals. Based on these decisions, OSHA has issued guidance to its compliance staff on how to implement these principles in inspections and citations. That guidance is the unofficial Multi-Employer Compliance Directive No. CPL 2-0.124 (Dec. 10, 1999).
Now, however, in issuing a revised construction safety rule on steel erection, OSHA has taken steps that seem intended to elevate the compliance directive to the level of a legally binding standard. The point may seem esoteric, but the practical consequences of OSHA's action could be substantial for many employers. This article examines the potential implication of this development and calls upon the new administration to give attention to the issues.
Steel Erection Standard
On Jan. 18, OSHA adopted a new rule revising its 20-year-old steel erection standards (66 Federal Register 5196). The rule is codified at 29 CFR 1926 Subpart R and is to take effect July 18.
The revised standard sets forth performance-oriented requirements to protect workers from steel-erection hazards such as hoisting, working under loads, landing, placing decking, column stability, double connections, placing steel joists and fall protection. The Steel Erection Negotiated Rulemaking Advisory Committee, comprised of industry, OSHA and organized labor representatives in the steel erection industry, played a central role in developing the revised standard. It is the first OSHA rule promulgated under the little-used federal Negotiated Rulemaking Act.
Multiemployer Citation Policy
Included in the revised standard are particular duties for what are termed "controlling employers." The term "controlling contractor" is defined broadly to mean "a prime contractor, general contractor, construction manager, owner acting as the general contractor or any other legal entity that has overall responsibility for the construction of the project -- its planning, quality and completion" (66 Fed. Reg. 5266).
The duties imposed upon controlling contractors include, among many other things, ensuring that the steel erector is provided with certain written specifications as to structural components, taking responsibility for site layout, protection of others from objects falling from the steel erection area, and taking responsibility for perimeter safety cables erected by steel erectors if used by other trades.
In addition to imposing specific duties for controlling contractors on steel erection projects, OSHA has stated in the preamble a point that is of broad significance to all employers on construction sites. In explaining that controlling contractors are responsible for perimeter cables, OSHA stated further:
"The extent of the controlling contractor's responsibility for complying with this provision would be determined in accordance with the agency's multiemployer policy; that policy applies to all controlling employers, irrespective of the type of construction" (66 Fed. Reg. 5245, emphasis added).
OSHA similarly stated: "In setting out particular duties of controlling employers, it was not OSHA's intent to eliminate their responsibilities under the multiemployer doctrine" (66 Fed. Reg. 5202).
The preamble cites OSHA's Multi-Employer Compliance Directive. It seems apparent, therefore, that in promulgating the revised steel erection standard, the agency has attempted to bootstrap its informal multiemployer citation policy into a set of principles having the binding effect of a standard.
In the directive, OSHA sets forth an analytical scheme for determining which of multiple employers on a jobsite are to be cited when employees of one or more employers are exposed. The policy generally places primary responsibility for compliance on the superior entity on a jobsite, such as the owner, construction manager or general contractor. As such, the policy produces what some perceive as a counterintuitive result - that the more attention a "controlling" employer gives to a subcontractor's work in the interest of safety and employee protection, the more likely it is that the controlling employer will be exposed to liability if the contractor makes an error.1
Judicial Challenges
As of this writing, several industry organizations have challenged specific provisions of the steel erection rule. Those challenges, however, do not address the multiemployer issue.
Petitions for review of the standard have been filed by the Steel Coalition, Resilient Floor Covering Institute (RFCI) and Steel Joist Institute (SJI).2 The Steel Coalition and RFCI have challenged the slip resistance standard and test methodology for skeletal steel. Their petitions allege that OSHA used an unreliable system, using questionable science, to determine slip resistance in structural steel.
SJI also has separately challenged the portion of the standard that ma dates that certain steel joists be manufactured to OSHA's specifications. SJI argues that the agency exceeded its authority in requiring manufacturers to change product engineering and design, and to install new manufacturing processes.
Thus, it appeared at press time that unless other construction interests intervene in the litigation and attempt to address the multiemployer issue, the point will remain unchallenged under this standard. This raises important questions as to the future of OSHA's multiemployer citation policy.
Why the Multiemployer Concern?
While the preamble to the standard seeks to incorporate the multiemployer citation policy, the requirement to adhere to it is not contained in the text of the standard. One interpretation of this choice by OSHA is that the obligations of a controlling employer are limited to those stated in the regulatory text of the standard.
Indeed, this argument could be extended to cases involving standards other than steel erection. The point would be that, given the opportunity to define the responsibilities of a controlling contractor in a standard that is the product of notice-and-comment rulemaking, OSHA chose not to incorporate the broad multiemployer principles in the regulatory text, thus excluding such obligations by implication.
It is to be anticipated, however, that in steel erection enforcement proceedings, OSHA will almost surely assert that the "controlling contractor" provisions of the standard are properly interpreted to incorporate the multiemployer policy by reference and that such an interpretation is entitled to deference by the Review Commission and the courts. OSHA may rely on the U.S. Supreme Court's decision in Martin v. OSHRC (CF&I Steel) to support such a deference claim. In that case, the Supreme Court held unanimously that the Review Commission and the courts are to defer to OSHA's reasonable interpretations of its standards (499 U.S. 144 [1991]).
Given the broad statement of the applicability of the policy to all construction worksites, OSHA likely will argue further that deference is due to its multiemployer citation policy even as to alleged violations of standards other than steel erection, now that the policy has acquired the added dignity of incorporation by reference in the preamble to a final standard. This is where the potential far-reaching implication of OSHA's action may be seen.
The significance of allowing OSHA to add weight to a potential claim of deference can best be appreciated by a brief review of how multiemployer liability principles have evolved under the OSH Act. As noted, the statute does not provide for multiemployer liability. First, under the general duty clause of the act, which applies to hazards not addressed by specific OSHA standards, an employer is responsible only for hazards to which his employees are exposed. This is because that section of the act requires an employer to provide a safe workplace only to "his" employees and not to the employees of other employers.
Under Section 5(a)(2) of the OSH Act, however, employers are required to comply with the requirements of OSHA standards. That provision also does not contain an affirmative requirement for employers to protect employees of other employers from hazards proscribed by standards. The 5th Circuit Court of Appeals agreed with this reading of the act and held that "the class protected by OSHA regulations comprises only employers' own employees" (Melerine v. Avondale Shipyards Inc., 659 F. 2nd 706, 712, 5th Circuit, 1981).
The 5th Circuit's view, however, has not prevailed. Initially, the Review Commission held in Martin Iron Works Inc. (2 BNA OSHC 1063, Review Commission, 1974) that employers are liable only for conditions to which their employees are exposed. The 2nd Circuit held in the construction context that the act imposes extra-employment liability if an employer is "engaged in a common undertaking" with other construction contractors, was "in control of an area and responsible for its maintenance," and had "created" and "controlled" the violative conditions (Brennan v. OSHRC [Underhill Construction Corp.], 513 F. 2nd 1032, 1038, 2nd Circuit, 1975).
The Review Commission soon reconsidered its view in light of Underhill and held that it would impose liability on employers on multiemployer construction sites who "create" violations or "control" them, even if their employees are not exposed (Grossman Steel & Aluminum Corp., 4 BNA OSHC 1185, 1188 [Review Commission, 1976] and Anning-Johnson Co., 4 BNA OSHC 1193, 1199 [Review Commission, 1976]). The commission later applied its doctrine to nonconstruction sites at which several employers were engaged in a common undertaking (Harvey Workover Inc., 7 BNA OSHC 1687 [Review Commission, 1979], several employers working on a boat).
Subsequent decisions have adhered basically to this analysis. In Marshall v. Knutson Construction Co. (566 F. 2nd 596, 599 [8th Circuit, 1977]), the 8th Circuit held that "the duty of a general contractor is not limited to the protection of his own employees, but extends to the protection of all employees engaged at the worksite." In IBP v. Herman (144 F. 3rd 861 [D.C. Circuit, 1998]),# the U.S. Court of Appeals acknowledged the weakness of the statutory underpinning of multiemployer liability, but declined to overturn the doctrine. Most recently, in Universal Construction Co. Inc. v. OSHRC, the 10th Circuit applied the doctrine in a construction environment (182 F. 3rd 726 [10th Circuit, 1999]).
Deference Is Not Appropriate
It is not difficult to understand why, from an enforcement viewpoint, OSHA would desire to shore up its legal position on the multiemployer citation policy by being able to point to a final rule, rather than case law alone. As noted, the force of the argument is augmented when OSHA asks the Review Commission and the courts to defer to a standard rather than an informal enforcement policy.
It would be wrong, however, for deference to be afforded or even augmented simply because OSHA refers to the multiemployer policy in the preamble to the revised steel erection standard. First, as noted, the policy is not included in the text of the standard. Thus, it does not have the force of law. Second, the obligations of the "controlling employer" under the standard are stated with specificity and relate only to particular aspects of steel erection work. There is nothing in the language of the standard per se that reasonably supports an interpretation that incorporates the broad principles of the multiemployer citation policy.
Third, the proposed steel erection standard and its preamble published in the Federal Register did not suggest that the final rule would incorporate the multiemployer policy by reference. It is seriously questionable, therefore, whether employers had notice that the final rule could include such sweeping requirements.
Fourth, the revised steel erection standard simply ignores an OSHA regulation that has remained effective since the early days of the OSH Act. Thus, 29 CFR 1910.12(a), Construction Work, states plainly: "... 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" (emphasis added).
The language "each of his employees" tracks the language of the act's general duty clause, which has been interpreted uniformly to impose no liability upon an employer for the hazards to which other employer's employees are exposed. This is no small point, for such a regulation has the force of law, just as does a standard. It remains a mystery to these authors how OSHA, the Review Commission (at times) and most courts have simply run roughshod over this legally binding regulation as if it did not exist.
Finally, in the preamble to the steel erection standard, OSHA rejects arguments offered by general contractors during the rulemaking proceeding that they ought not be held responsible for the work of specialty contractors that they engage. This argument was consistent with the Review Commission's decision in Sasser Electric Co. (11 BNA OSHC 2133 [Review Commission, 1984]),# where the commission recognized that, unless a general contractor was aware of a specific hazard, it is legitimate for a general contractor or other employer in a comparable position on a jobsite to rely on the expertise of a specialty contractor.
This is an eminently practical and reasonable principle. It is not reasonable for OSHA to require general contractors, owners or construction managers to oversee the work of the many specialty contractors that may be engaged, sometimes simultaneously, on a complex construction project. As Prof. Mark Rothstein has stated in his treatise on OSHA law, "It is unrealistic to assume that because a general contractor has nominal authority over a vast construction site with numerous subcontractors it is in a position to abate all the violations created by subcontractors" (M. Rothstein, Occupational Safety and Health Law at 232 [1998]).
Conclusion
On its face, the steel erection standard may appear to be of concern only to those who supply and consume steel erection services. Implications of the standard for multiemployer liability, however, may be much greater. Considering the manner in which OSHA injected the broad principles of its multiemployer policy into the otherwise relative specific obligations of a controlling employer under the standard, it is hoped that the new administration at OSHA and the Department of Labor will revisit this aspect of the standard.
Because the multiemployer policy is not included in the text of the standard, additional rulemaking procedures would not be required to make clear that the standard is not intended to codify or otherwise dignify that policy, and should not be so interpreted. All that would be required would be appropriate language in an OSHA Compliance Directive, or even an internal direction from the federal OSHA office to field enforcement personnel.
If OSHA desires to codify its controversial multiemployer citation policy, it should do so directly and forth-rightly by proposing a standard and inviting public comment and testimony on the issue. Should OSHA proceed in this direction, it would have no choice but to directly propose revocation of 29 CFR 1910.l2(a) and accept comment on that proposal. Otherwise, that regulation stands as legally binding. The issue is too important to employers and employees alike to be dealt with via the "backdoor" route as in the steel erection standard.
Footnotes
1. In this article, we address multiemployer responsibility from the perspective of legal liability under federal OSHA. We do not address other potential liability issues, such as third-party liability when accidents occur. We do not address the legitimate debate over whether, from a safety and health viewpoint, it is best for controlling employers to work closely with contractors or subcontractors, or adopt a "hands-off" approach.
2. The cases have been consolidated for consideration before the U.S. Court of Appeals for the District of Columbia Circuit.
Stephen C. Yohay is a partner and James F. Laboe an associate in the OSHA Practice Group at the Washington, D.C., law firm of Arent, Fox, Kintner, Plotkin & Kahn. Both are contributing editors to Occupational Hazards.