D.C. Circuit: OSHA Can Fine General Contractors for Sub’s Safety Violations

A Dec. 14, 2011, ruling from the U.S. Court of Appeals for the D.C. Circuit greatly expanded a general contractor’s exposure for a subcontractor’s safety violations when working on a multi-employer construction site. While the multi-employer worksite liability doctrine has been applied in other jurisdictions, this case, Summit Contractors, Inc. v. Secretary of Labor and Occupational Safety and Health Review Commission, No. 10-1329 (D.C. Cir. 2011), marks the first time the doctrine has been applied in this circuit.

In affirming the ruling of the administrative law judge and of the Occupational Safety and Health Review Commission, the court upheld the ability of the Occupational Safety and Health Administration (OSHA) to cite an “upstream” contractor for “downstream” safety violations that expose downstream – but not “upstream”  — employees to a safety hazard.

In this case, Summit, the general contractor at an apartment complex construction site in Pennsylvania, had only two employees working on-site. Summit provided its subcontractor with two pieces of electrical equipment that lacked mandatory ground-fault circuit interrupter (GFCI) protection. The equipment was used by a second-tier framing subcontractor.

OSHA cited Summit for a serious violation, even though Summit’s employees did not use the equipment and were not exposed to the equipment. OSHA’s position was that Summit failed to protect a lower tier subcontractor’s employees from the electrical hazards created by the use of equipment without GFCI protection.

Summit argued that it did not expose its own employees to the equipment or the risk, and thus was not liable. The ALJ and the OSHRC found Summit liable pursuant to the multi-employer worksite liability doctrine.

The circuit court affirmed the decision, expressly expanding the multi-employer liability doctrine to the District of Columbia. Also, the court held that Summit had the actual or constructive knowledge required to incur a violation under the Occupational Safety and Health Act. Actual or constructive knowledge is satisfied if the employer “either knew, or with the exercise of reasonable diligence could have known, of the violative conditions, and a supervisor’s knowledge is imputed to the company.”

The court held that Summit could have known of the GFCI conditions using reasonable diligence. The court cited to Summit’s agreement with its subcontractor and noted that Summit’s supervisor ordered the equipment but did not ask about GFCI protection and did not check the equipment when delivered to the site.

General contractors should take note: In the District, they are now responsible for ensuring subcontractors’ compliance with safety standards, and cannot rely on subcontract risk-shifting provisions to shield them from OSHA penalties. They are well advised to consider taking a more hands-on role with respect to a subcontractor’s compliance with safety regulations. They should also review their contracts to determine whether they can require subcontractors to make them whole for fines or penalties assessed.

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