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A federal appeals court has denied a Massachusetts-based general contractor’s petition to review fines related to workplace safety violations by one of its subcontractors.
Beverly, Massachusetts-based A.C. Castle Construction Co. Inc. appealed fines imposed by the U.S. Occupational Safety and Health Administration for violations related to an accident at a construction work site in Wenham, Massachusetts, according to the ruling released Wednesday by the 1st U.S. Circuit Court of Appeals in Boston. A.C. Castle argued that OSHA wrongly held it responsible for the acts and omissions of a subcontractor, which the appeals court rejected in A.C. Castle Construction Co. Inc. v. R. Alexander Acosta, Secretary of Labor, U.S. Department of Labor.
Two roofers fell more than 20 feet and sustained serious injuries at the residential construction site in October 2014, when a spruce board used for scaffolding snapped in half. OSHA inspectors investigated the work site and cited the two employers involved: general contractor A.C. Castle and Provencher Home Improvements, the sole proprietorship of Daryl Provencher and the only subcontractor on the job.
The regulators offered two alternative theories for citing both companies rather than just the roofing subcontractor Provencher Home Improvements: first, that under Occupational Safety and Health Review Commission precedent, the two companies constituted a single employer; and, second, that under a common law agency test set forth by the U.S. Supreme Court in a 1992 case called Nationwide Mut. Ins. Co. v. Darden, that Daryl Provencher was a supervisory employee of A.C. Castle. Under either scenario, the constructive or actual knowledge that Mr. Provencher possessed of the work site violations would be imputed to A.C. Castle.
An administrative law judge of the commission determined that Mr. Provencher and A.C. Castle “acted as a single employer in the worksite” and that Mr. Provencher “was a supervisory employee working for A.C. Castle,” according to the decision. The judge also rejected A.C. Castle’s argument that it did not have fair notice that it would be treated as a single employer with Provencher Home Improvements. The judge found that A.C. Castle willfully failed to ensure that the scaffolding was adequate to support the intended load and assessed penalties totaling $173,500.
The commission denied A.C. Castle’s appeal of the judge’s ruling, which led the company to appeal to the federal court. In its appeal, the company raised three issues: whether substantial evidence supported the judge’s conclusion that Mr. Provencher was a supervisory employee of A.C. Castle, whether the judge erred in treating A.C. Castle and Provencher Home Improvements as a single employer, and whether the Secretary of Labor violated A.C. Castle’s right to fair notice in treating Provencher Home Improvements and A.C. Castle as a single employer where before it had not, according to the decision.
The appeals court determined there was substantial evidence to support the judge’s conclusion, including A.C. Castle Owner Brian LeBlanc’s own representations of the relationship with Mr. Provencher in dealings with regulators and customers, and found “no reason to upset” the judge’s conclusion on the single-employer test, according to the ruling.
The appeals court also rejected A.C. Castle’s argument that it lacked fair notice that OSHA would treat it as the employer of the Provencher Home Improvements’ workers in this instance.
“We are obviously disheartened by the First Circuit’s decision,” James Laboe, a shareholder with Orr & Reno P.A. based in Concord, New Hampshire, who represented A.C. Castle, said via email. “This comes as a big blow to a small contractor who is just trying to make a living. The administrative law judge initially erred in applying the single employer doctrine and the Darden employment test by relying on facts that do not satisfy the elements of those legal tests. As a result, we argued, the First Circuit should have reviewed these core issues de novo. Instead, the First Circuit bypassed our de novo argument and applied the substantial evidence test which made it virtually impossible for AC Castle to overcome. According to prior decisions, the single employer test is satisfied only where two entities have a common location of operations, a tight integration of core corporate functions and are owned by a single person or family. None of these things were true in this case and, as a result, A.C. Castle should not have been considered the employer of his subcontractor and his subcontractor’s employees.”
Mr. Laboe said he has yet to discuss options with A.C. Castle, so he is unsure if they will consider any further action.
The Occupational Safety and Health Review Commission remanded a case involving a 2011 fatality at a steel mill to the chief administrative law judge for further proceedings after a federal appeals court upheld a safety citation against the employer in July.