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Published: Fall, 2007; Vol 9, Num 3

 

OSHA Enforcement Threatened: 

Review Commission Frees General Contractors
Of Liability for Safety Violations of Subs

“A construction project is a constantly changing jobsite with a variety of subcontractors, each with a different set of safety concerns,” says LIUNA General President Terence M. O’Sullivan, explaining why LIUNA, via the National Construction Alliance (NCA), has joined an amicus brief in the matter of Secretary of Labor v. Summit Contractors, Inc. “Precisely because of all this change, someone, usually a general contractor, has to be in charge. If the project’s going to be successful, the general contractor must set the tempo and tone in every aspect of the project, including safety performance. That’s why we insist that this decision be overturned. We cannot go back to the days when no one had overall responsibility for safety on construction sites.”

Alternate description

LIUNA General President Terry O'Sullivan

That floodgate was opened on April 27, when the Occupational Safety and Health Review Commission (OSHRC) ruled that OSHA may not issue citations to the “controlling” (usually a general) contractor on a multi-employer worksite when that contractor did not create nor expose its own employees to the hazards of subs. The decision struck a blow to OSHA’s long-established enforcement policy, setting conditions for irresponsible general contractors to look the other way while their subs cut corners in on-the-job safety and health.

The OSHRC hears appeals from employers whose citations by OSHA inspectors were upheld by an administrative law judge. Reflecting the significance of the Summit appeal, the OSHRC, for the first time in nine years, heard oral arguments in the case. OSHA reacted immediately to the decision, announcing it would appeal to the 8th Circuit Court of Appeals. In August, the National Construction Alliance and the Building and Construction Trades Department (BCTD) of the AFL-CIO joined the appeal.

Background

The overturned OSHA enforcement practice was delineated in 1999 in the Multi-Employer Citation Policy (CPL 2-0.124) which clarified but did not substantially modify earlier OSHA inspection procedures. Under the policy, when a hazard violation is found on a multi-employer site, the inspector is required to follow a two-step citation policy. The first step involves determining if any of the employers on the site are responsible for “creating” the hazard, “exposing” workers to the hazard, “correcting” the hazard or “controlling” health and safety violations on the site. If any employer fits any of these definitions, a second step is used to see if it has met its duties within its specific category.

The OSHA practice mirrors an even longer-standing “best practice” standard (A10.33 – Safety and Health Program Requirements for Multi-Employer Projects) developed by the American National Standards Institute (ANSI). The ANSI standard assigns responsibility to the general contractor (referred to as the Project Constructor) for “a Safety and Health Program specific for the scope of work to be performed,” including “a description of the responsibilities and authority of all levels of supervision.”

With Summit, however, the OSHRC reversed 24 years of rulings that followed this best practice logic, deciding instead that one of OSHA’s own regulations blocked it from citing generals for the safety failures of subs.

Consequences

While the Summit decision does not diminish OSHA’s ability to cite subcontractors when it finds violations in their work, it clearly prevents the agency from demanding that general contractors monitor subcontractor safety under threat of possible fines for negligent supervision. This has been an important OSHA tactic because the agency does not have enough compliance officers to inspect all the nation’s construction sites. Without the pressure exerted by concerned generals, some subcontractors may feel it is worth taking their chances on the unlikely possibility of an OSHA site inspection.

Moreover, it is widely accepted throughout the construction industry that the standards of any project are set by the top leadership. If general contractors no longer assert themselves on safety issues, respect for safety at the subcontractor level could falter.

Even if Summit is upheld, however, other factors will continue to encourage owners and general contractors to ensure that comprehensive safety and health programs are implemented on their jobsites. 

One factor is insurance and underwriting procedures that will continue to support uniform, high-quality safety management in most situations. Most large projects are under owner controlled insurance programs (OCIPs) in which the owner demands strong top-down safety management. Even on non-OCIP projects, it is doubtful that underwriters will shift from the profitable practice of insuring whole projects, so insurers will continue to dictate safety performance standards through their policies and riders. In addition, general contractors usually require subcontractors to carry their own insurance coverage, thus driving them to adopt strong safety requirements in order to sustain reasonable premium costs. 

“Insurers support across-the-board safety programs for a reason,” says O’Sullivan. “But it’s not enough to define procedures, screen subs and select them based on past performance. You also have to manage the situation to ensure consistency across the site and through all phases of the project. Safety isn’t past performance; it’s actual performance…and that has to be monitored.”

That is where the ANSI best practice standard comes into play. Overall responsibility for safety and health clearly is assigned to the general contractor, and the best pre-qualify their subs based on past safety performance. Some even visit subs’ jobsites to check performance before hiring, not wanting to rely on written safety programs or self-reported injury rates, which can be unreliable. Even after hiring, subs will find their performance monitored through regular site safety meetings and inspections by the general and the owners. Companies that strive for excellence both in safety and in cost management will continue to adhere to the best practice standard even as OSHA adjusts its enforcement program. 

Appeal Process

Generally, OSHA does not consider an OSHRC decision binding if the agency is appealing to the federal courts. Thus, for the time being, contractors can expect OSHA to continue its established enforcement policy. 

The case is headed for the 8th Circuit Court of Appeals which has previously upheld aspects of the established policy, as has the 10th Circuit Court. Some other circuit courts have also leaned that way. Only the 5th Circuit (Texas, Louisiana and Mississippi) has ruled against the policy. Because of the conflict, however, whatever the decision in the 8th Circuit, an appeal to the Supreme Court is ultimately likely.

[By Steve Clark]