Risks of Involvement in Contractor Safety

If a subcontractor has a history of non-compliance, there will be a greater need for more frequent inspections by the controlling employer.

MOST businesses of any size use contractors. Some large facilities use contractors on a regular, some even on a daily, basis for such things as maintenance. Most companies continue to be concerned about the best way to balance two desirable goals: (1) running a safe operation and (2) not becoming liable for the negligence of the contractors they hire.

The general rule is that an owner does not owe any duty to ensure that an independent contractor performs its work in a safe manner.1 But if a company exerts too much control over the details of how the contractor performs its work, it may become liable for the acts or omissions of the contractor.2 Above all, companies recognize that in addition to the duty they have to their own employees, other invitees, and even the general public outside the plant fence, they have a strong economic interest in seeing that the contractor's activities do not cause damage to the facility or its ongoing business operations.

So, for all the right reasons, companies want to make sure that contractors work safely. At the same time, because contractors have been hired for their expertise and ability to do the work, companies see no reason why they should be liable for the acts of those contractors.

Control Over Safety
A recurring issue for companies then, is how much influence they can exert over contractors in the area of safety without being held to have exercised such operational control as to make themselves liable for the acts of those contractors? While all of the cases in this area of the law are very fact-specific, the following have been found to be acceptable, i.e., not amounting to operational control sufficient to subject companies to liability for acts of their contractors.3:

* Requiring a contractor to comply with all of the company's safety rules and regulations and all applicable federal and state laws.4
* Issuing safe work permits.5
* Having a company representative present at the work to tell the independent contractor's employees if they were doing "something wrong" and to remind them to do the job in a safe manner.6
* Having or exercising the right to order work to start or stop, to inspect progress of the work, or to receive reports.7
* Regular attendance of an owner's representative at contractor's safety meetings.8

While the requirements of these bulleted points have been considered individually, it seems logical that as more of these requirements are lumped together in any single situation, the greater would be the risk of a court's finding sufficient control over the work of the contractor to justify making the company liable for the acts of that contractor.

Retained Control
While a company may not become responsible in a general legal sense for requiring a contractor to adhere to or follow its safety rules and policies, cases suggest there is a caveat to this general rule. And the caveat seems to be that where an employer exercises supervisory control or requires a contractor to observe its workplace safety guidelines, the employer's duty of reasonable care is commensurate with the control it retains over the independent contractor.9 In what is referred to in Hoechst, 967 S.W. 2d at 357, as a "narrow duty of care," the Court opined that Celanese owed the contractor's employees a duty that any safety requirements and procedures it promulgated "did not unreasonably increase, rather than decrease, the probability and severity of injury." Hoechst, 967 S.W. 2d at 358. As Redinger makes clear, where the employer retains some control over the manner in which an independent contractor's work is to be performed but does not retain the degree of control that would subject him to general responsibility for the acts of the independent contractor, the employer will be liable for failing to exercise reasonable care in the supervision which is retained.10 Insofar as the safety requirements and procedures are concerned, this results in the Hoechst requirement that the safety procedures not unreasonably increase the probability and severity of injury.11

The Court's language, "not unreasonably increase, rather than decrease the probability and severity of injury," raises a question. It is quite common to have the argument made in a lawsuit that there was a safer procedure that could have been followed, which might have prevented an accident or lessened the severity of an injury. A literal application of the Court's language, however, would suggest that only where the procedure that was followed would unreasonably increase the probability and severity of injury, could there be a finding of negligence.

Somewhat similar language is used by the California court in Hooker v. Department of Transportatio, 115 Cal. Rptr. 2d 853, 855 (2002). There, the court refers to a tort of negligent exercise of retained control set forth in Restatement (Second) of Torts, sect. 414, and states:

"We conclude that a hirer of an independent contractor is not liable to an employee of the contractor merely because the hirer retained control over safety conditions at a worksite, but that a hirer is liable to an employee of a contractor insofar as a hirer's exercise of retained control affirmatively contributed to the employee's injuries." (emphasis supplied) The Court goes on to say:

" . . . (I)f a hirer does retain control over safety conditions at a worksite and negligently exercises that control in a manner that affirmatively contributes to an employee's injuries, it is only fair to impose liability on the hirer." 115 Cal. Rptr. 2d 853, 865.

While it may not be entirely clear what circumstances would come within California's "affirmatively contribute" language or Texas's "unreasonably increase" language, it is clear that the owner's liability is being premised on its own negligence, not the negligence of a contractor's employee imputed to the owner. That seems only fair in that the owner's acts are within its control.

Also unclear is what would be the outcome in a situation where a contractor is required to follow an owner?s safety requirements, and the bulk of the work, i.e., the details of the work, may be governed by those procedures.12 Such a situation could occur where a relatively simple piece of electrical equipment is to be replaced, or perhaps a valve. It may well be, in the case of an owner with a detailed lockout/tagout procedure, that most of the actual work will be governed by the details of the procedure. In that situation, in the event of an accident in the course of the work, it would no doubt be alleged that the owner specified how the work was to be done. It that case, it seems somewhat likely that the owner would be held liable for the acts of the contractor, even though the contract may provide that the contractor is in charge of the details of the work and even though the facts of the situation otherwise conform to the contract. In any event, this would seem to be another situation where, at worst, an owner's liability would be premised on the inadequacy of its lockout/tagout procedure, i.e., its own negligence.

The Occupational Safety and Health Administration is not concerned with tort liability and naturally takes a slightly different view of things.13 OSHA's view is generally expressed in its Multi-Employer Citation Policy, Directive CPL 2-0.124. This policy was created for the typical construction situation, where there may be a general contractor and a number of subcontractors on the same site. OSHA now applies this policy to other situations, as well, such as those where an owner may hire a contractor to maintain its equipment or facility.

OSHA starts from the proposition that each employer has the requirement to furnish each of its employers a place of employment that is free from recognized hazards causing or likely to cause death or serious physical harm to its employees. This language is found in what is referred to as the General Duty Clause of the Occupational Safety and Health Act.14

The multi-employer citation policy describes four categories of employers for purposes of the policy: creating, exposing, correcting, or controlling. The category names are self-explanatory. A creating employer is one who has created a hazard. An exposing employer is one whose employees are exposed to a hazard, no matter who may have created it. A correcting employer is one who is responsible for correcting the hazard. This will generally be the premises owner or a general contractor, but it could be a subcontractor given responsibility for correcting certain hazards such as damaged guardrails or safety barriers. The controlling employer is one who has general supervisory authority over the worksite. Depending on the type of site involved, this could be the premises owner or a general contractor.15

Under the multi-employer citation policy, once a determination is made as to the type of employer, the second step is to determine whether the employer's actions, i.e., his response to the hazard, were sufficient to meet his obligations. To say it another way, was the response of the employer reasonable?

It seems obvious the two biggest factors are these: (1) did the employer take immediate steps to protect his employees from the hazard (this could mean removing them from the area of the hazard, providing protective gear, or something else), and (2) did the employer bring the hazard to the attention of an employer who had the responsibility to correct the hazard.

Except for the creating employer who will be cited if anyone's employees are exposed to the hazard, OSHA's decision on the other categories of employers will depend upon OSHA's view of the reasonableness of their actions.16

There are certain lessons we can take away from OSHA's discussion in the Multi-Employer Citation Policy17:

* The extent of the measures that a controlling employer must take to satisfy its duty to exercise reasonable care to prevent and detect violations is less than what is required of an employer with respect to protecting its own employees.
* Just as in tort law, control can be established by contract or, in the absence of explicit contractual provisions, by the exercise of control in practice.
* If a contractor/subcontractor has a history of non-compliance, there will be a greater need for more frequent inspections by the controlling employer. If the compliance history isn't know, greater inspection frequency will be needed for a controlling employer's actions to be considered reasonable by OSHA.
* OSHA considers an "effective, graduated system of enforcement" to enforce the other employer's compliance with safety and health requirements to be a factor in evaluating whether a controlling employer has exercised reasonable care.

One can retain some influence over safety and exercise a certain degree of control over the safety procedures to be followed by contractors without assuming responsibility for all of the contractor's acts. However, where the negligent act of the contractor is directly related to the control of the owner over safety, an owner may be liable. This simply reinforces what owners already know: Safety requirements must be well thought-out, regularly reviewed, and updated as appropriate.

Where OSHA is concerned, the issue of responsibility for the action that created the hazard is only one step in the process. Even where an employer has no responsibility for the hazard, that employer will be judged by OSHA in light of the actions it takes to remove or protect its employees from the hazard.

1. Restatement (Second) of Torts, 409; Abalos v. Oil Dev. Co., 544 S.W. 2d 627 (Tex. 1976); Redinger v. Living Inc., 689 S.W.2d 415 (Tex. 1985). However, as one court notes, there are now so many exceptions to the rule that the rule is primarily important as a preamble to the catalog of the exceptions. Privette v. Superior Court, 5 Cal. 4th 689, 854 P. 2d 721 (1993).

2. Restatement (Second) of Torts, sect. 414.

3. This paper generally uses the terms "owner" or "company" to describe entities occupying the same general position insofar as its relationship with its contractors or subcontractors is concerned. The cases use a variety of terms. The Hoechst case uses the term employer; the Hooker case uses the term hirer; the Redinger case uses the term general contractor. The primary consideration is the element of control.

4. Dow Chemical Co. v. Bright, 89 S.W. 3d 602 (Tex. 2002); LeJeune v. Shell Oil Co., 950 F. 2d 267 (5th Cir. 1992).

5. Dow Chemical Co. v. Bright, 89 S.W.3d 602 (Tex. 2002); Koch Refining Co. v. Chapa, 11 S.W. 3d 153 (Tex. 1999).

6. Koch Refining Co. v. Chapa, 11 S.W.3d. 153 (Tex. 1999).

7. Redinger v. Living, Inc., 689 S.W. 2d 415 (Tex. 1985). See also the case of Grammer v. Patterson Services, Inc., 860 F.2d 639 (5th Cir. 1988), construing Louisiana law, where the facts could be viewed as indicating the hiring employer was exercising operational control over a stress test being conducted by the contractor on a joint of pipe. The hiring employer's representative had instructed the contractor to "maximize torque" and remove weepholes in the pipe. The court, however, construed the facts to indicate the hiring employer had simply made a "hapless use of language," finding the hiring employer by its instructions was simply indicating it wished to have a less stringent test performed.

8. Thomas v. Burlington Resources Oil and Gas Company, No. 99-3904 (E.D. La. 2000).

9. Hoechst-Celanese Corp. v. Mendez, 967 S.W. 2d. 354 (Tex. 1998); Lee Lewis Constr. v. Harrison, 70 S.W. 3d 778 (Tex. 2001); Williams v. Martin Marietta Alumina, Inc., 817 F.2d 1030 (3rd. Cir. 1987); Fry v. Diamond Const. Inc., 659 A. 2d 241 (D.C. App. 1995); Redinger.

10. It should be noted there is a lack of universal agreement over those encompassed within the definition of "others" in Sect. 414 of the Restatement. Specifically, not all agree the term should include the employees of an independent contractor. See the discussion in the concurring opinion of Justice Hecht in Lee Lewis Constr. v. Harrison, 70 S.W. 3d 778 (Tex. 2001). Although Texas has found liability to the employees of the independent contractor, the Lee case suggests that issue will receive additional scrutiny at some point in the future. In that survivor's action, the Texas Supreme Court left in place a verdict holding a general contractor liable in the death of a subcontractor's employee. The employee fell to his death from a bosun's chair while not using an independent lifeline that would have stopped his fall. The general contractor's duty to the subcontractor's employee was based on the finding that the general contractor had retained the right to control fall-protection systems on the jobsite.
The concurring opinion of Justice Hecht, in which Justice Owen concurs, contains a good discussion of the policy reasons weighing against making the general contractor liable to the employee of a subcontractor on a retained control basis. Justice Hecht's opinion comes down firmly against such liability. Even more interesting is the fact that Chief Justice Phillips, joined by Justice Rodriguez, writes a concurring opinion in this case stating that Justice Hecht's views merit "a thorough reconsideration" of the law in this area. So we have four justices agreeing that, at the very least, the court should take a fresh look at this issue when the right case presents itself.
However, it is also true that since the opinion in Lee, one of the two cases cited by Justice Hecht for the proposition that an employer should not be liable to an independent contractor's employee under the retained control doctrine, the Gass v. Virgin Islands Telephone Corp. case cited in footnote 53, has been overruled by Gass v. Virgin Islands Telephone Corp., 311 F. 3d 237 (3rd. Cir. 2002).
As far as the other case cited by Justice Hecht, Kinney v. CSB Construction Inc., 87 Cal. App. 4th 28 (2001), footnote 52, that case actually says that liability cannot be imposed on a general contractor ". . . based upon a mere failure to require the subcontractor to take safety precautions, where the general contractor's failure is not shown to have affirmatively contributed to the creation or persistence of the hazard causing the plaintiff's injuries." To state it in positive language then, Kinney says a general contractor can be held liable to the subcontractor's employee where the general contractor's failure is shown to have affirmatively contributed to the creation or persistence of the hazard causing the employee's injuries.

11. Situations where liability is imposed are illustrated by the facts found in Williams v. Martin Marietta Alumina, Inc., 817 F. 2d 1030 (3rd. Cir. 1987) and Fry v. Diamond Const. Inc., 659 A. 2d 241 (D.C. App. 1995). In Williams, Martin Marietta had hired the plaintiff's employer to relocate an oil tank on the roof of its building. Plaintiff was injured when he slipped and fell using a dangerous access from an upper roof to a lower roof, which he claimed he was instructed to use by a Martin Marietta project representative.
In Fry, a subcontractor's employee was injured in a fall from a ladder that had been placed on top of scaffolding. The allegation was that when the scaffolding failed to prove sufficient to allow access to the area of the work, the general contractor told the subcontractor to use a ladder on top of the scaffold.

12. Such a situation is hinted at in Enserch Corp. v. Parker, 794 S.W. 2d 2 (Tex. 1990), in a case involving the deaths of two contractor employees while working on a pipeline. There, the Texas Supreme Court held that one of the factors raising a question whether the owner retained the right to control the contractor's work was the fact that the owner provided a book for the contractor's employees that outlined the procedure to be followed while working on the pipeline.

13. At least in the Tenth Circuit, the Court seems to agree OSHA is not necessarily constrained by tort law. See Frohlick Crane Serv. V. Occup. S. & H.R.C., 521 F. 2d 628 (10th Cir. 1975), where the court declined to consider the argument that a particular employee was a "borrowed" employee under tort law, by saying:
"This is not a tort case. Rather, it is an administrative proceeding brought under remedial legislation designed to provide a safe place to work for every working man and woman in the Nation. The Act should not be given a narrow or technical construction, and on the facts before it the Commission did not err in determining that Frohlick was Lindsey's employer when the standard was violated." 521 F.2d 628, 631-632.

14. 29 U.S.C. 654.

15. An OSHA Standards Interpretation letter dated Dec. 13, 2001, signed by Russell B. Swanson, Director, Directorate of Construction, replying to an inquiry of Ms. Rebecca Cartwright, Safety Resources Company of Ohio, Inc., contains a good discussion of the circumstances OSHA considers to be sufficient to make a construction manager a controlling employer. These interpretation letters can be accessed through OSHA's Web site at www.osha.gov.

16. It should also be recognized that in the case of a controlling employer, such an employer may be cited under OSHA's multi-employer policy even though the controlling employer's employees are not exposed to the hazard. Flint Engineering & Construction Co., 15 BNA OSHC 2052 (No. 90-2873, 1992).

17. While most circuit courts having occasion to consider the multi-employer policy have approved it, the Fifth Circuit is not in agreement, see Melerine v. Avondale Shipyards, Inc., 659 F. 2d 706 (5th. Cir. 1981). The District of Columbia circuit court continues to have its reservations about the policy but has so far not been required to address the matter. See IBP, Inc. v. Herman, 144 F. 3d 861 (D.C. Cir. 1998).

This article appeared in the January 2005 issue of Occupational Health & Safety.

This article originally appeared in the January 2005 issue of Occupational Health & Safety.

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