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Battle lines drawn in multiemployer case

Posted On: Aug. 5, 2018 12:00 AM CST

Battle lines drawn in multiemployer case

Federal workplace safety regulators persist in their efforts to hold multiple employers on a worksite responsible for safety violations even as an appeals court prepares to review a decision that could affect the policy.

The U.S. Occupational Safety and Health Administration, still without a confirmed assistant secretary, has not deviated from the more aggressive enforcement path forged under the Obama administration, including with regard to citing multiple employers on a worksite in the event of a fatality or serious injury, experts say.

“I have not seen any change in the way OSHA’s implementing the multiemployer worksite policy with the change in administrations, (which is) different from what we’ve seen with the National Labor Relations Board and other governmental agencies where leadership has changed and the decision-makers have somewhat changed from the Obama administration to the Trump administration,” said Joseph Spitzzeri, Chicago-based shareholder with Johnson & Bell Ltd. and co-chair of the firm’s construction and employment groups.

In 1999, OSHA issued a multiemployer citation policy directive clarifying conditions under which it may cite creating, exposing, correcting and controlling employers. The creating employer creates a hazard that violates an OSHA standard, the exposing employer exposes its employees to a hazard it caused or one caused by another employer, the correcting employer has responsibility for fixing the hazard, and the controlling employer has general supervisory authority over the entire worksite, meaning the employer is able to correct violations or have them corrected.

The 5th U.S. Circuit Court of Appeals in New Orleans, which oversees cases originating out of Louisiana, Mississippi and Texas, is scheduled to hear oral arguments in a key case involving OSHA’s use of the multiemployer doctrine on Aug. 8 in Secretary of Labor v. Hensel Phelps Construction Co. Hensel Phelps was the general contractor on a Texas library project and was hit with a willful citation and a proposed $70,000 penalty by OSHA, but challenged its liability as a controlling employer.

An administrative law judge of the Occupational Safety and Health Review Commission ruled that the Occupational Safety and Health Act and regulations implemented under the statute require the protection of an employer’s own employees from workplace hazards and vacated the citation — a decision being appealed by the Trump administration.

The law judge based the decision on a 1981 ruling by the 5th Circuit called Melerine v. Avondale Shipyards Inc., which held that the OSH Act and its safety standards protect only an employer’s own employees, but that decision involved a subcontractor employee’s negligence action against higher-level contractors, lawyers note.

“It wasn’t an OSHA case and it wasn’t referencing the multiemployer doctrine at all,” said Raymond Perez, of counsel and a labor and employment attorney in the Atlanta office of Jackson Lewis P.C. “Certainly, the Department of Labor does not want a rogue circuit to undermine this multiemployer citation policy that they’ve had for decades.”

The 5th Circuit is known to be an employer-friendly jurisdiction.

“It’s always easier to practice in the 5th Circuit than the 9th Circuit,” said Carrie Hoffman, a Dallas-based partner with Foley & Lardner L.L.P. “It’s hard to imagine the 5th Circuit is going to reverse itself. I understand why Hensel Phelps is interested in pushing this issue forward in the 5th Circuit. I don’t know if it would be worth it in any other.”

The 2nd, 6th and 9th circuits have upheld OSHA’s multiemployer citation policy.

“I haven’t seen another circuit court that would invalidate the multiemployer worksite doctrine,” said Mark Kittaka, a Columbus, Ohio-based partner with Barnes & Thornburg L.L.P. and administrator of its labor and employment law department. “For the vast majority of the country, it’s going to be business as usual for OSHA multiemployer worksite issues.”

In California, for example, regulators with the California Department of Industrial Relations – Division of Occupational Safety & Health have been “more aggressive” in their enforcement of the state’s multiemployer citation policy than federal OSHA, and there is no case similar to Hensel Phelps on the horizon in the 9th Circuit that would challenge that authority, said Lisa Prince, a partner focusing on Cal/OSHA regulatory defense with Walter & Prince L.L.P. in Los Angeles.

OSHA’s stance on the multiemployer worksite doctrine could change once a new head is confirmed, but President Donald Trump’s nominee, Scott Mugno, said during a confirmation hearing that the agency’s doctrine “seems to have worked very well over the decades.”

“This has certainly been their position for a long time, and the change of administration ... doesn’t really change their overall enforcement strategy,” Mr. Perez said.