Fifth Circuit Reverses Course after 37 Years; Holds OSHA Has Authority to Enforce Multi-Employer Citation PolicyOn November 26, 2018, the Fifth Circuit released its opinion in Acosta v. Hensel Phelps Construction Co., which held that despite prior rulings to the contrary, OSHA is authorized to issue citations against contractors for safety violations regardless if the employer actually employs the employee(s) exposed to the hazard.

Under OSHA’s multi-employer worksite policy, an employer who causes a hazardous condition, often referred to as the “creating employer” or a general contractor or other employer having control over a worksite who should have detected and prevented a violation through the reasonable exercise of its supervisory authority, often referred to as a “controlling employer” may be cited for a violation, whether or not its own employees were exposed to the hazard. Generally, this gives compliance officer’s authority to issue citations to general contractors responsible for safety violations of subcontractors and others not employed by the general contractor.

However, in 1981, the Fifth Circuit held that OSHA’s multi-employer worksite policy was unenforceable in Texas, Louisiana and Mississippi because an employer can only receive a citation for safety violations that expose its own employees to the hazard. Fast forward thirty-seven years – the Fifth Circuit was given the opportunity to confirm this holding but decided to side with seven other circuit courts and ruled that OSHA has the authority “to issue a citation to a general contractor at a multi-employer construction worksite who controls a hazardous condition at that worksite, even if the condition affects another employer’s employees.”

The factual background of the case helps set the stage for the Fifth Circuit’s decision. Hensel Phelps was hired as the general contractor to build a public library in Austin, Texas. Hensel Phelps subcontracted portions of the work, including the excavation on the project. The regional OSHA office received complaints about safety issues for the project, so a compliance officer conducted an inspection at the worksite. The compliance officer found subcontractor employees working next to an excavated wall without proper sloping or other protections from cave-in hazards. The compliance officer reported that Hensel Phelps knew of this practice and directed subcontractors to continue work regardless. This investigation prompted OSHA to issue citations for violations of the cave-in protections under the general trenching and excavation rules. Hensel Phelps received a willful citation from OSHA under OSHA’s multi-employer worksite policy even though Hensel Phelps employees were not exposed to the hazard. Under the multi-employer worksite rule, OSHA could issue citations to more than one employer for a hazardous condition regardless if the employer actually employs the employee(s) exposed to the hazard.

Hensel Phelps appealed the citation to the Occupational Safety and Health Review Commission (the “Commission”). The Commission found that Hensel Phelps had sufficient control and authority over the jobsite including the sub-subcontractor and the employees working in the cited condition. The Commission pointed out that normally, the citation would be affirmed under applicable Commission case law. However, the Commission acknowledged that the project was located in the geographical jurisdiction of the Fifth Circuit which did not recognize the multi-employer worksite rule. Thus, the Commission ordered that Hensel Phelps could not be liable for an OSHA violation based solely upon a subcontractor’s employees’ exposure to the dangerous condition.

OSHA, through the Secretary of Labor’s office, appealed the Commission’s decision to the Fifth Circuit Court of Appeals in an attempt to overturn the Fifth Circuit’s prior rulings. On November 26, 2018, the Fifth Circuit issued an opinion in the case reversing 37 years of precedent. Specifically, the Fifth Circuit indicated that its prior decision in 1981 was obsolete and given changes in the law (mainly due to US Supreme Court decisions), the courts should defer to the Secretary of Labor’s interpretation of the statutes it enforces.

Contractors operating in the region should be mindful of this change in the law as it affects risk management and safety issues on almost all construction projects. OSHA officers will likely be briefed on the change and ready to apply it to each job site they visit. While contractors should always be mindful of safety on the job, they should pay particular attention to ensure that all subcontractors on a job site are following the contractor’s safety protocols.