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Willful OSHA citation against general contractor vacated

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An administrative law judge of the U.S. Occupational Safety and Health Review Commission vacated a willful violation issued against a general contractor after finding the employer could not be held liable as a “controlling employer.”

The U.S. Occupational Safety and Health Administration cited Greeley, Colorado-based Hensel Phelps Construction Co. on May 4, 2015, for one willful violation with a proposed $70,000 penalty after inspecting its Austin, Texas-based jobsite following a complaint about hazardous working conditions on a new library project, according to a decision released on Thursday. OSHA found that each employee in an excavation was not protected from cave-ins by an adequate protective system designed to an OSHA standard outlining requirements for protective systems.

Hensel Phelps contested the citation, and both parties stipulated that the necessary elements existed to establish the cited violation, according to the decision. The sole remaining issue was whether Hensel Phelps as the general contractor on the jobsite could be found liable for the citation based on the exposure of subcontractor employees under OSHA’s “controlling employer” enforcement policy.

The company argued that the policy was invalidated and unenforceable per a 1981 decision by the 5th U.S. Circuit Court of Appeals in New Orleans, which ruled that the Occupational Safety and Health Act and regulations implemented under the statute serve to protect an employer’s own employees from workplace hazards. In that decision in Melerine v. Avondale Shipyards Inc., which involved a subcontractor employee’s negligence action against higher-level contractors, the court stated: “OSHA regulations protect only an employer’s own employees.” The 5th Circuit concluded that the referenced OSHA regulations did not create or define any duty on behalf of a higher-level contractor to the employees of a subcontractor.

The administrative law judge followed the 5th Circuit precedent in vacating the citation against Hensel Phelps.

“In this case, it is undisputed that the employees working in the unprotected excavation, exposed to the hazardous condition, were not employed by (Hensel Phelps),” the judge stated. “In addition, there is no evidence in the record that any of (Hensel Phelps) own employees were exposed to the hazardous condition. Accordingly, applying 5th Circuit precedent, (Hensel Phelps) cannot be liable for a violation of the act based solely upon a subcontractor’s employees’ exposure to the condition.”

The commission has adopted the administrative law judge’s decision as a final order as of June 1 and the department now has 60 days to ask the 5th Circuit to review the ruling.

Michael Abcarian, regional managing partner with Fisher & Phillips L.L.P. in Dallas and attorney for the employer, noted that the decision “followed the correct law, the controlling law of the 5th Circuit,” which covers Texas, Louisiana and Mississippi. While the department may believe the precedent is either incorrect or doesn’t apply for technical reasons, it would have to ask the 5th Circuit to review the decision to overcome that 1981 precedent.

“Our view is very clear,” he said. “There’s no wiggle room at all.”

If the decision is unchallenged and remains the law, general contractors and other employers in those three states who would fall in the controlling employer category could argue they are not liable per the Hensel Phelps decision, he said.