Seyfarth Synopsis: Since it codified the Multi-Employer Worksite Doctrine twenty years ago, OSHA has routinely cited multiple employers at the same worksite for the same violations. The Multi-Employer Worksite Doctrine has allowed OSHA to extend liability to general contractors, host employers, staffing agencies, and anyone else who can be conceivably related to an employee accident or alleged safety hazard.

Now, in Secretary of Labor v. Suncor Energy (U.S.A.) Inc., OSHRC Docket No. 13-0900, the Commission issued a significant decision reining in OSHA’s “scattershot approach” to cite all employers at a worksite. The Commission held that OSHA had misused the doctrine as a form of strict lability against “controlling employers” who had performed their high-level duties with regard to safety. Moving forward, OSHA will be required to hold the controlling employer liable only based on objectively reasonable evidence that the employer failed to meet its more limited duty of care. Further, this decision will help guide employers in how to avoid multi-employer worksite and “controlling employer” liability going forward, and provide some solace that a rigorous safety program and efforts to promote employee safety will not be in vain and be used improperly against the employer by OSHA.

Multi-Employer Worksite Doctrine

With its Multi-Employer Citation Policy in 1999, federal OSHA codified its Multi-Employer Worksite Doctrine which allows the Agency to cite several employers for alleged violation at the same worksite. Multi-employer worksites exist where there are a number of employers at the same worksite. Multi-employer worksites exist in construction and in general industry.

OSHA’s method of enforcement had created a type of “strict liability” for accidents, where any employer with a conceivable role in the worksite will be cited. It is part of the “shoot first, ask questions later” approach that many OSHA compliance officers unfortunately appear to employ instead of conducting a reasonable and appropriate investigation and which the Review Commission criticized.

Moreover, this approach is contrary to the critical element of a federal OSHA citation which requires employer knowledge of the alleged violation: an employer needs to know or should have known of a violative condition to be cited by OSHA. Finally, this overbroad approach leaves employers unable to reasonably determine their compliance responsibilities under the Act. Employers may be deterred from involving themselves at the worksite, conducting inspections, or maintaining a rigorous safety program, for fear of being labeled by inference as an “employer” of any individual who sets foot on a worksite.

Facts of Suncor Case

Suncor operated a massive refinery complex, covering 230 acres and three separate plants. In the fall 2012, Suncor engaged in several capital improvement projects at the refinery. One of the capital projects involved replacing the tubes in a heater, a permit-required confined space. The work on this heater was performed by several third-party specialty contractors, including a company called Mistras.

To perform work inside the heater, Suncor required each contractor first to obtain a “safe work permit” from Suncor’s operations division. The contractor had to initiate and generate the permit on Suncor’s computerized system. The permit was then electronically transferred to Suncor’s operations division, where Suncor’s turnaround coordinator and confined space supervisor would review and approve it.

After obtaining the safe work permit from Suncor and before starting work, a crew from Mistras performed a job safety analysis, which identified a potential fall hazard from an elevated surface and stated the need for fall protection and a harness. The two Mistras employees assigned to examine welds in the area entered the area wearing harnesses, but neither employee used a lanyard, yo-yo, or any other fall-restraining device. A third Mistras employee served as primary confined space attendant. Once inside, one Mistras employee inspected welds from an outrigger platform which did not have guardrails. After approximately two to three hours of work, the employee fell off the platform through a gap between scaffolding and the wall of the heater, landing on the ground 25 feet below. The unfortunate accident resulted in severe injuries to the employee.

Under the fall protection in construction standard, section 1926.451(g)(1), states in relevant part: “Each employee on a scaffold more than 10 feet (3.1 m) above a lower level shall be protected from falling to that lower level.” OSHA issued a Citation under this regulation to Suncor, alleging that the “the Company did not ensure that [Mistras’s] employees were protected from falling while working on a tubular welded system scaffold.”

The Secretary asserted that Suncor was liable under the Multi-Employer Worksite Doctrine as a “controlling employer” at the refinery because it had general supervisory authority over its contractors and controlled their access to the inside of tube area through its permit system. Accordingly, the Judge found that Suncor violated the Act by failing to ensure that the Mistras employee wore fall protection. To reach that conclusion, the Judge reasoned that Suncor failed to exercise reasonable care because it did not make use of various opportunities “to become aware of [the violative condition] and prevent the accident[],” and therefore “should have known of the violative condition.”

Commission’s Reversal and Decision

Suncor challenged the decision, alleging that the Secretary failed to establish that Suncor had constructive knowledge of the violative condition as a controlling employer on a multi-employer worksite. The Commission ruled that the Judge’s approach had been misguided, focusing on whether Suncor knew of the lack of guard rails on the platform rather than whether Mistras was using fall protection equipment, the focus of the regulation. The Commission performed an analysis of whether the controlling employer has met its duty to exercise reasonable care, analyzing several factors related to the alleged violative condition itself and those that related to the employer’s duty to monitor or inspect.

The Commission found no basis to conclude that Suncor should have known of the Mistras employee’s failure to use personal fall protection. The Commission examined Suncor’s duty given its “secondary safety role” as a host employer and in light of objective factors—the nature of the work, the scale of the project, and the safety history and experience of the contractors involved. The Judge found that Suncor could rely on Mistras to perform job safety analysis and determine where fall protection is needed, and then require its employees to use the fall protection they wear. The Commission merely required Suncor to “exercise reasonable care” as the host employer, which meant that it was not obligated to inspect inside every confined space on its worksite and do an independent analysis before assigning work to contractors.

The Commission excoriated the Secretary of labor’s “scattershot approach” with this citation, citing the host employer where it had a rigorous safety program in place. Further, the Commission made clear that the host employer is “not required to inspect the worksite as intensively as an employer whose own employees are exposed.” The Commission explained that applying the Multi-Employer Worksite Doctrine to Suncor was not fair. The decision states: “to in effect hold controlling employers strictly liable for the safety shortcomings of their contractors is both unfair and counter-productive.” (emphasis added). Finally, the Commission explained that the citation “should not have been issued in the first place” and that the Secretary’s choice to litigate “diverted resources away” from employee safety and health.

Employer Takeaways

The Commission’s message in this case is pointed and important — host employers who maintain a rigorous safety and health program will not be held to the same duty of care and inquiry as their specialty subcontractors. Host employers (and general contractors) will not be required to independently assess and supervise all third party contractor work. The Commission’s ruling thereby provides cover for employers to do the things that help improve employee safety — their use of a safety program and review of third party work will not make them strictly liability for any violations of that third party contractor.

Employers should take an active approach to safety and enforce a rigorous program that protects employees. Employers should craft their agreements with subcontractors or independent contractors carefully, to minimize their OSHA and tort liabilities. If OSHA opens an inspection on a multi-employer worksite, employers should promptly contact outside counsel to preserve privileges, defend the inspection, and prevent the issuance of OSHA citations.