Court Rules in Favor of OSHA’s Multi-Employer Citation Policy

On November 26, 2018, the Fifth Circuit Court of Appeals in Acosta v Hensel Phelps Construction Co. ruled that the “Secretary of Labor has the authority under the Occupational Safety and Health Act to issue citations to controlling employers at multi-employer worksites for violations of the act’s standards”.  The three-judge panel for the Fifth Circuit, which covers Louisiana, Mississippi, and Texas, stated that the landscape has changed since its ruling in 1981 that “OSHA regulations protect only an employer’s own employees” in Melerine v. Avondale Shipyards, Inc.  


The facts of this significant case reveal that Hensel Phelps entered into a contract with the City of Austin to build a new public library.  Hensel Phelps, as the general contractor, maintained control over the worksite through the presence of on-site management personnel.   CVI Development, LLC, was a sub-contractor that was hired to complete excavation and other work on the site.  As the excavation progressed, a nearly vertical wall measuring approximately 12 feet of “Type C” soil, the least stable soil type under OSHA’s soil classification system, developed without protective systems.  Neither the General nor Sub-contractors put in place soil protective systems such as sloping or trenching to protect employees from the hazard of cave-ins as mandated by OSHA regulations.


On March 4, 2015, a rainy day, CVI was assigned to install reinforcing rods (“rebar”) at the base of the wall in preparation for pouring concrete footings.  Because of the combination of the rainy weather and the instability of the excavation wall, the owner of CVI sent its employees to another work area. However, both the City of Austin inspector and the superintendent on the worksite for Hensel Phelps told the CVI owner to send his employees back to the excavation site and perform the work.  Shortly thereafter, responding to a complaint, an OSHA compliance officer inspected the site and found 3 employees of CVI exposed to cave-in hazards.  OSHA cited both CVI and Hensel Phelps for willful violations of 29 C.F.R. 1926.652(a)(1). OSHA issued the citation against Hensel Phelps pursuant to its multi-employer citation policy finding it had supervisory authority as a controlling employer over the worksite with authority to correct safety and health violations.


Hensel Phelps timely contested the citation.  The Fifth Circuit Court of Appeals, relying upon the United States Supreme Court case of Chevron USA, Inc. v. Natural Resources Defense Council, Inc., found that OSHA’s multi-employer policy is a reasonable interpretation of applicable statutory law.  Therefore, the court gave deference to OSHA in this case and affirmed the citation against the general contractor, Hensel Phelps.  Therefore, the court upheld OSHA’s multi-employer citation policy finding Hensel Phelps liable for violation of safety regulations even though it had no employees exposed to the cave-in hazard.


Employers should be aware that OSHA can issue citations to general contractors who fail to control hazardous conditions at multi-employer worksites, even if those conditions do not directly affect their own employees.  Please contact a member of our Labor & Employment Section with questions or concerns.


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