Contractor Safety: Know the Legal Risks . . . And Manage Them

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Contractor Safety Know the Legal Risks . . .
And Manage Them

• Adele L. Abrams, Esq., CMSP, REA
• Law Office of Adele L. Abrams P.C.
• 4740 Corridor Place, Suite D
• Beltsville, MD 20705
• 301-595-3520
• safetylawyer_at_aol.com

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Contractor Risk Management

• Why is risk management critical?
• Tort liability considerations
• OSHA citations in multi-employer worksites
• Workers compensation issues
• Loss prevention

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Contractor Risk ManagementEmployee Definitions

• IRS 20-Factor Test for Contractors includes
  consideration of
• Instructions/Training
• Whether Services Rendered Personally
• Whether Location Specified
• Continuing Relationship
• Set Hours of Work
• Method of Payment

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Contractor Risk ManagementEmployee Definitions

• IRS Test (continued)
• Whether tools and materials provided
•  Services available to general public or multiple
  employers
• Right to Discharge or to Terminate Relationship
• OSHA can use these factors to analyze the
  relationship between worker and supervisor

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Contractor Risk ManagementOSHA Concerns

• OSHA has Multi-Employer Policy Agency will cite
  employers in any of four categories
• Controlling Employer
• Creating Employer
• Exposing Employer
• Correcting Employer

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Contractor Risk ManagementOSHA Multi-Employer
Test

• 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.
• Controlling employer must exercise reasonable
  care to prevent/detect violations.

• 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.
• Example A host employer whose workplace has
  airborne chemical levels exceed PEL because
  worksite lacks adequate control measures.

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Contractor Risk Management OSHA Multi-Employer
Test

• Exposing Employer One whose own employees are
  exposed to the hazard.
• Exposing employer can be cited if fails to
• ask the creating/controlling employer to correct
  the hazard
• inform its employees of the hazard and/or
• take reasonable alternative protective measures
  and remove its employees from the hazardous area.
  

• If exposing employer did not create the
  condition, it can still be cited if
• it knew of the hazardous condition or failed to
  exercise reasonable diligence to discover the
  condition and
• it failed to take steps consistent with its
  authority to protect its employees.

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Contractor Risk Management OSHA Multi-Employer
Test

• 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.

• Applicability of controlling employer
  designation may be linked to the contractual
  arrangements between employers and contractors.
• Controlling employer's level of "reasonable care"
  will depend in part on whether it "enforces the
  other employer's compliance with safety/health
  requirements with an effective graduated system
  of enforcement and follow-up inspections."

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Summit Contractors Case

• OSHRC ruling held that, on construction sites,
  only the EXPOSING or CREATING employer can be
  cited per 29 CFR 1910.12.
• In 2/09, US Ct. of Appeals (8th Cir.) overturned
  and held OSHA had authority to hold general
  contractors liable for subcontractor violations.
• While case was pending, some state-plan OSHA
  programs codified the multi-ER doctrine in state
  laws

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MSHA Contractor Policy

• MSHAs 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
• 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
• when the production-operator has contributed by
  either an act or omission to the continued
  existence of a violation committed by an
  independent contractor
• when the production-operator's miners are exposed
  to the hazard or
• 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.

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Twentymile Coal MSHA Rules

• 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 MSHAs position that the agency has
  unreviewable discretion to cite the
  production-operator, the independent contractor
  or both for a contractors safety violations.
• Subsequent, similar holding in US Court of
  Appeals, 4th Circuit case.
• Under holding, mine operator has a duty to
  inspect contractors 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.

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Contractor Training

• 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.

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Contractor Risk Management

• Process safety management
• Asbestos
• Emergency response
• Steel erection
• Air contaminant standards (e.g., lead, benzene
  and Z Tables)

• MSHA/OSHA standards requiring coordination of
  programs and training include --
• Hazard communication
• Confined spaces
• Lockout/tagout

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Contractor Risk Management

• OSHAs General Duty Clause
• Section 5(a) of the OSH Act requires each
  employer to furnish to each of his employees
  employment and a place of employment which are
  free from recognized hazards that are causing or
  are likely to cause death or serious physical
  harm to his employees. 29 U.S.C. 654 (a)(1).
• GDC citations may be limited to direct employer
  (creating/exposing) violations
• OSHA cannot use egregious penalties for GDC
  violations.

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Contractor Risk Management

• WHY IS THIS IMPORTANT????
• MSHA/OSHA citations can be introduced in some
  state tort actions to prove negligence per se.
• Agencies work cooperatively with Plaintiffs
  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 defendants 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.

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Contractor Risk ManagementTort Liability Issues

• 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.

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Contractor Risk ManagementPrequalification
Criteria

• 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 worksites 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.

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Contractor Risk ManagementPrequalification
Criteria

• Other considerations
• OSHA 300 Log (or MSHA 7000-1 forms) and Workers
  Comp EMR
• Technical/professional certifications of
  contractor personnel (licenses, permits, bonding)
• Corporate involvement in trade organizations and
  professional safety organizations and
• Verification of references.

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Contractor Safety Requirements

• 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.)

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Contractor Orientation

• 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 mines
  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

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On-Site Activities

• 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 mine operator if there are
  any mine-specific hazards that need correction
  (e.g., unsafe highwalls, deficient berms)
• Contractors should notify mine operator
  immediately if any accident occurs, as mine
  operator may have dual obligation to notify MSHA
  under 50.10
• Mine operator should intercede if its personnel
  observe any safety hazards that pose an imminent
  danger for less serious violations, mine
  operator should immediately notify contractors
  crew supervisor and request cease, correct or
  leave

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Contractor Risk ManagementElements of Safety
Partnership

• Provide all necessary information about OSHA/MSHA
  requirements at worksite
• Prequalify contractors to ensure that they have
  sound safety programs and a culture of safety,
• Provide appropriate site-specific training
• Ensure contractors have complied with any
  MSHA/OSHA mandatory training and programmatic
  requirements

• Inform contract workers of health and safety
  hazards
• Ensure that a communications system alerts all
  workers to new hazards, equipment, changes in
  conditions, etc.
• Coordinate emergency procedures before
  commencement of work, including evacuation
  procedures and site security
• Check to prevent contractors from exposing YOUR
  workers to hazards.

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Contractor Risk Management

• IN SHORT
• 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 or GC complicates workers
  compensation and insurance claims, and may
  subject the employer and its agents to criminal
  prosecution.

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Conclusion

• 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 employers workplace.

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• QUESTIONS????
• Adele L. Abrams, Esq., CMSP, REA
• 301-595-3520
• safetylawyer_at_aol.com
• www.safety-law.com