Adele L. Abrams, Esq., CMSP Law Office of Adele L. Abrams PC

www.safety-law.com

Why is risk management critical? Tort liability considerations MSHA/OSHA citations in multi-employer worksites Worker’s compensation issues Loss prevention ◦ Contractors are disproportionately represented in fatality

cases! ◦ Issues involving contingent workers or misclassification

currently under DOL scrutiny.

Multi-Employer Worksites – in both general industry and construction, OSHA can issue penalties to both “primary employer” and contractor (the “Nuke ‘em all” approach)

Civil penalties can reach $70,000 per violation (more under “egregious” penalty process)

OSHA is also a criminal statute – up to 6 mo. in prison for willful violations that result in death

MSHA/OSHA citations can be introduced in some state tort actions to prove “negligence per se.”

Agencies work cooperatively with Plaintiff’s attorneys to share information and establish “fault”

This simplifies a plaintiff's burden of proof on “duty” and "breach" elements of negligence case.

Negligence per se allows the plaintiff to prove the defendant’s “breach” of a duty of care by showing simply that the defendant violated a statute or regulation that ◦ (a) covers the class of activities giving rise to plaintiff's injuries,

and ◦ (b) was designed to protect the class of persons to which plaintiff

belongs.

Instructions/Training Whether Services Rendered Personally Whether Location Specified Continuing Relationship Set Hours of Work Method of Payment Whether tools and materials provided Services available to general public or multiple employers Right to Discharge or to Terminate Relationship

OSHA has Multi-Employer Policy – Agency will cite employers in any of four categories:

1. Controlling Employer 2. Creating Employer 3. Exposing Employer 4. Correcting Employer

Controlling Employer: “General supervisory

authority over the worksite” Includes the power to

correct safety and health violations or require others to correct them.

Control can be established by contract or by exercise of control in practice.

Creating Employer: Party causing a

hazardous condition that violates an OSHA standard.

Employer is citable even if the only exposed employees are those of other employers.

Exposing Employer: One whose own employees are exposed to the hazard.

Exposing employer can be cited if fails to (1)ask the creating/controlling

employer to correct the hazard;

(2)inform its employees of the hazard; and/or

(3)take reasonable alternative protective measures and remove its employees from the hazardous area.

Correcting Employer: “Engaged in a common

undertaking on the same worksite, as the exposing employer and is responsible for correcting a hazard."

Usually occurs where an employer is given the responsibility of installing and/or maintaining particular safety/health equipment or devices.

Controlling and correcting employers often are a single entity.

MSHA's policy is to issue citations and, where appropriate, orders to independent contractors for violations of applicable provisions of the Act, standards or regulations. This policy is based on the Mine Act's definition of an "operator," which includes "independent contractors performing services or construction" at mines.

MSHA's enforcement policy regarding independent contractors does not change production-operators' basic compliance responsibilities. This includes assuring compliance by independent contractors with the Act and with applicable standards and regulations.

Both independent contractors and production-operators are responsible for compliance with all applicable provisions of the Act, standards and regulations.

Maximum penalties are $242,000 per citation

MSHA’s Program Policy Manual: Enforcement action against a production-operator for a violation(s) involving an independent contractor is normally appropriate in any of the following situations: (1)when the production-operator has contributed by either an act or

by an omission to the occurrence of a violation in the course of an independent contractor's work;

(2)when the production-operator has contributed by either an act or omission to the continued existence of a violation committed by an independent contractor;

(3)when the production-operator's miners are exposed to the hazard; or

(4)when the production-operator has control over the condition that needs abatement. In addition, the production-operator may be required to assure continued compliance with standards and regulations applicable to an independent contractor at the mine.

U.S. Court of Appeals, DC Circuit, reversed FMSHRC on July 7, 2006, in Secretary of Labor v. Twentymile Coal Company et al.

Court backed MSHA’s position that the agency has unreviewable discretion to cite the production-operator, the independent contractor or both for a contractor’s safety violations. ◦ Subsequent, similar holding in US Court of Appeals, 4th

Circuit case. Under holding, mine operator has a duty to inspect

contractor’s mobile equipment for safety defects, or else ensure that the contractor has done so and to ensure that equipment brought to the mine site is defect-free.

The Act imposes strict liability on mine operators for violations regardless of fault, even if the violation was committed by an independent contractor, such as A&T. Intern. Union, United Mine Workers v. FMSHRC, 840 F.2d 77, 83-84 (D.C. Cir. 1988); Extra Energy, Inc., 20 FMSHRC 1, 5-6 (Jan. 1997).

Mine operators have the overall compliance responsibility for insuring that independent contractors comply with the standards and regulations applicable to the work being performed by them in the operator’s mine. Brock v. Cathedral Bluffs Shale Oil Co., 796 F.2d 533, 538 (D.C. Cir. 1986); Mingo Logan Coal Co., 19 FMSHRC 246, 250 (Feb. 1997)

A labor broker is an independent contractor “when their employees’ or subcontractors’ work is ‘essential and closely related to the extraction process and [it] had a sufficient presence at the mine.” Secretary of Labor v. Bulk Transportation Services, (1991).

Respondent’s degree of control over the mine or its employees does not alter the independent contractor status. Joy Technologies, Inc. v. Secretary of Labor, 99 F.3d 991 (1996).

The fact that another operator at the mine may have more authority over employees or equipment prevent the agency from looking to multiple entities fitting the definition of an “operator” under the Mine Act. Secretary of Labor, Mine Safety and Health Administration (MSHA) v. Old Ben Coal Co., (1979).

Ames Construction, Inc. (FMSHRC 2011)(appeal pending in USCA DC Cir): Ames was contractor to Kennecott (mine operator) and Orton was delivery driver – case involved unloading supplies from Orton truck.

Although FMSHRC found ALJ erred in finding Orton was a subcontractor of Ames, it affirmed citation under 56.9201 after Orton driver was killed by materials falling off truck ◦ ALJ held Ames was “strictly liable” because Orton’s trucker was under

control of Ames. ◦ Commission upheld citation because Ames was a “operator” under the Act,

See 30 U.S.C. § 802(d) (definition of operator regulated under the Act includes “independent contractors”) Ames was cited for an unsafe condition that occurred in connection with

unloading - an activity for which it had supervisory responsibility. ◦ Commission held that the lack of contract between Orton and Ames was

immaterial to the issue of strict liability. ◦ FMSHRC considered the site-specific project safety plan detailing the

safety requirements imposed on Ames by Kennecott, and found “the ability to stop unsafe work implies supervisory authority.”

Allgeier Martin & Associates (ALJ Miller 2011): Alleged failure to provide appropriate training to contractors (surveyors) at UG limestone mine. MSHA alleged 40 hr needed. For 17 years, Allgeier had worked at the mine, receiving only hazard training.

ALJ upheld citation, finding “the basis for requiring the comprehensive training is not based upon the job title but on the activities done” and that they had “stepped outside” the limited role of surveyor by operating a pickup truck and manlift themselves while UG surveying and preparing maps.

She added: “someone who is exposed every day for five days, I find to be regularly exposed to the hazards of the roof in the underground mine and the hazards of using … equipment.” ◦ ALJ Miller added: “Normally, I would assess a penalty of at least a

thousand dollars in a training violation, probably more.” (NOTE: penalty proposed was $112 – she doubled it)

MSHA v. Carmeuse Lime, Inc., 29 FMSHRC 266 (2007) : Contractor received Part 46 training from 3rd party trainer instead f Part 48; Carmeuse was unaware of this and had received copies of 5000-23 forms and had done site specific training ◦ ALJ Hodgdon upheld training citations against Carmeuse under

Twentymile Coal theory of unreviewable discretion, and strict liability, although he reduced negligence from high to low. Liability imposed even though ALJ acknowledged “Carmeuse had

taken reasonable steps to ensure that [the contractor’s] employees were properly trained.”

◦ MSHA/OSHA standards that require development of written programs, certifications, or specific employee training or competency should be carefully reviewed -- they may contain requirements that have multi-employer worksite ramifications with respect to coordination of the various employers’ training programs and procedures.

◦ MSHA has little case law clarifying training needed for different types of contractors (esp. under Part 46) Regs distinguish between “miners” and “non-miners” but … Critical issues – exposure to “mine hazards” (undefined), “frequency” of

presence (unclear), how to compute when contractor works at multiple sites

MSHA is not giving full recognition to exemptions for customers, vendors, delivery workers, and over-the-road commercial truckers. SE District claims that outside drivers who are loaded in the pit

require 24 hr of new miner training in addition to SSHT. Recent letter also claims state employees who “sample” must have 24 hrs.

OSHA/MSHA standards requiring coordination of programs and training include --

The hazard communication standard

Confined space standard Lockout/tagout standard

Process safety

management Asbestos standards Hazardous waste

operations and emergency response

Steel erection Air contaminant

standards (e.g., lead, benzene and “Z” Tables)

Statutory Employer Law Overview Worker’s Compensation is an exclusive legal remedy

for workplace injuries/illnesses incurred by employees (with some exceptions).

State statutory employer laws may extend coverage to contractors/subs and bar tort actions if WC is provided.

1. The nature of the business of the alleged principal; 2. Whether the work was specialized; 3. Whether the contract work was routine, customary, ordinary, or

usual; 4. Whether the alleged principal customarily used his own employees

to perform the work, or whether he contracted out all or most of such work;

5. Whether the alleged principal had the equipment and personnel capable of performing the contract work;

6. Whether those in similar businesses normally contract out this type of work or whether they have their own employees perform the work;

7. Whether the direct employer of the claimant was an independent business enterprise who insured his own workers and included that cost in the contract; and

8. Whether the principal was engaged in the contract work at the time of the incident

Negligent supervision and negligent training cases presume that an employer is subject to liability for negligent acts of its supervisors and/or trainers where it knows or should have known that its employee's conduct would subject third parties to an unreasonable risk of harm.

It is critical to document the training given to contract workers, training directions provided to outside contractors, and to determine the line of supervision appropriate to each part of a particular project and each work area.

Liability exposure can be minimized by prequalifying contractors and reviewing their safety “track record”

The following steps are critical to ensuring a safe multi-employer worksite: ◦ Knowledge of the particular worksite’s practices and

procedures, ◦ A diligent evaluation of the safety programs, practices

and track record of the general contractor and all subcontractors involved in a project,

◦ A company-wide policy for contractor utilization, written contracts that implement the policies and provide for enforcement, and,

◦ Procedural guidelines for use in contractor selection, orientation, auditing and contract enforcement.

Other considerations – ◦ OSHA 300 Log (or MSHA 7000-1 forms) and

Worker’s Comp EMR ◦ Technical/professional certifications of contractor

personnel (licenses, permits, bonding) ◦ Corporate involvement in trade organizations and

professional safety organizations; and ◦ Verification of references.

Terms and conditions in the contract should clearly state that all laws and regulations will be complied with. Some pertaining to safety are: ◦ Applicable provisions of 30 CFR Parts 1-199. ◦ Applicable provisions of 29 CFR, Part 1910 and/or

1926. ◦ State and local regulations pertaining to personnel

safety that apply to the work or service the contractor is providing. (i.e.- DOT, MUTCD, DEP, etc.) ◦ ANSI A10.33 (S&H Management Programs for Multi-

Employer Worksites)

Ensure that all required training to “qualify” contractor employees has been provided and completed prior to the start of work (preferably by outside trainer)

Provide MSHA-required Part 46/48 site-specific hazard

training on hazards unique to mine site

Provide orientation to mine-specific requirements and ensure that they understand the mine’s systems

Contractor should be responsible for furnishing all tools and equipment needed for the contracted work activity. Use of Company tools and equipment by Contractor should not be allowed except when no practical alternative exists. Any use of Company tools and equipment should be properly documented

Contractor should be responsible for maintaining good housekeeping at all of its work areas

Contractor should conduct the mandated workplace examinations each shift for its unique active work areas and notify host employer/general contractor if there are any area hazards that need correction (e.g., unsafe highwalls, deficient berms, missing guards)

Contractors should notify host employer immediately if any “accident” occurs, as mine operators and OSHA regulated employers may have dual obligation to notify MSHA/OSHA under 30 CFR 50.10 and 29 CFR 1904.

Host employer/GC should intercede if its personnel observe any safety hazards that pose an imminent danger; for less serious violations, they should immediately notify contractor’s crew supervisor and request “cease,” “correct” or “leave.”

Failure to forge a safety partnership prior to initiation of work, and a lack of clear role delineation and legal responsibilities and status can mean disaster for the Mine (production) operator, host employer or “GC”; complicates worker’s compensation and insurance claims, and may subject the employer and its agents to criminal prosecution.

Contractor Risk Management is critical to workplace safety and to legal liability reduction.

Prequalification of contractors can help weed out “bad actors” and minimize exposure to citations and third party tort litigation.

Coordination of safety efforts is key to protecting all persons at an employer’s workplace.

Adele L. Abrams, Esq., CMSP safetylawyer@aol.com

301-595-3520