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The general rule that that employees of an independent contractor that are injured in the workplace cannot sue the party that hired the contractor to do the work applies even when the party that hired the contractor failed to comply with workplace safety requirements that were statutorily imposed by CAL-OSHA.   US Airways hired an independent contractor to maintain and repair its luggage conveyor at the San Francisco International Airport.  It did not direct the work and did not have its own employees participate in the work.  The conveyor lacked certain safety guards required by applicable regulations and, while inspecting the conveyor,   one of the contractor’s workers got his arm caught in its moving parts.  After workers’ compensation insurance of the contractor paid benefits for the injury, the insurer sued US Airways, claiming the airline caused the injury.  The trial court granted summary judgment because it found no evidence that the airline affirmatively attributed to the accident.  This was reversed by the intermediate court of appeal — holding that under CAL-OSHA, the airline had a nondelegable duty to ensure that the conveyor had safety guards, and that it was a question of fact to be determined by a jury whether the failure to perform that duty “affirmatively contributed” to the injury.   But this was reversed by the California Supreme Court which affirmed the summary judgment for the airline on the basis that the airline can indeed delegate to the contractor its tort law duty, if any, that it had to ensure workplace safety for the contractor’s employees.  Seabright Insurance Company v. US Airways, Inc., 258 P.3d 737 (CAL 2011).

In reaching its decision here, the Supreme Court of California did a thorough review of case precedent from various courts of appeal of California as well as previous California Supreme Court decisions, beginning with the case of Privette v. Superior Court, concerning delegation of responsibility to an independent contractor.  In particular, the court discussed the interplay of workers’ compensation and the limitation upon suits that can be brought by employees against their employers, and how the same principles can apply when bringing suit against the one that hired the independent contractor that employed the work since “the hirer of an independent contractor generally has  … ‘no right of control as to the mode of doing the work contracted for….’ ”.

The court explained that in a previous holding (Hooker v. Department of Transportation), it held that the hirer of the independent contractor cannot be found liable “merely because [it] retained the ability to exercise control over safety at the worksite,” but that it is fair to make the hirer liable if it “exercised the control that was retained in a manner that affirmatively contributed to the injury of the contractor’s employee.”   The court also cited a decision in the case of Kinsman v. Unocal Corp., where it held that if the injured party is the contractor’s employee, and therefore entitled to workers’ compensation benefits, policy concerns regarding allowing the hirer to escape liability for bystanders who are injured by the contractor’s negligence do not apply.  Thus under the Kinsman decision, “a hirer is presumed to delegate to an independent contractor the duty to provide the contractor’s employees with a safe working environment.”

The outcome of this case is so important, and the reasoning of the court is so well presented that rather than attempting to paraphrase or explain it, it is perhaps best to quote from the decision at length as follows:

The Privette line of decisions discussed above establishes that an independent contractor’s hirer presumptively delegates to that contractor its tort law duty to provide a safe workplace for the contractor’s employees. At issue here is whether the hirer can be liable to the contractor’s employees for workplace injuries allegedly resulting from the hirer’s failure to comply with safety requirements of Cal–OSHA and its regulations. That raises the question whether the tort law duty, if any, to comply with Cal–OSHA and its regulations for the benefit of an independent contractor’s employees is nondelegable, an issue we discuss below.

Before hiring independent contractor Aubry, defendant US Airways owed its own employees a duty to provide a safe workplace. We do not suggest that defendant could delegate that preexisting duty to Aubry (such that defendant could avoid liability if the conveyor had injured defendant’s own employee). But under the definition of “employer” that applies to California’s workplace safety laws (see § 6304), the employees of an independent contractor like Aubry are not considered to be the hirer’s own employees, and the issue here is whether defendant US Airways implicitly delegated to contractor Aubry the tort law duty, if any, that it had to ensure workplace safety for Aubry’s employees. The latter duty did not predate defendant’s contract with Aubry; rather, it arose out of the contract. Any tort law duty US Airways owed to Aubry’s employees only existed because of the work (maintenance and repair of the conveyor) that Aubry was performing for the airline, and therefore it did not fall within the nondelegable duties doctrine.

The policy favoring delegation in this case is bolstered by the same factors we considered persuasive in Privette (citation omitted) [which],noted that the cost of workers’ compensation insurance for an independent contractor’s employees is presumably included in the contract price the hirer pays to the contractor, and therefore the hirer indirectly pays for that insurance. Privette further noted that workers’ compensation guarantees compensation for injured workers, “spreads the risk created by the performance of dangerous work to those who … benefit from such work,” and “encourages industrial safety.” (citation omitted).  Also, in light of the limitation that the workers’ compensation law places on the independent contractor’s liability (shielding the latter from tort liability), it would be unfair to permit the injured employee to obtain full tort damages from the hirer of the independent contractor—damages that would be unavailable to employees who did not happen to work for a hired contractor. This inequity would be even greater when, as is true here, the independent contractor had sole control over the means of performing the work. (Citation omitted)  In sum, we see no reason to limit our holding in Privette simply because the tort law duty, if any, that the hirer owes happens to be one based on a statute or regulation.

 Accordingly, plaintiffs here cannot recover in tort from defendant US Airways on a theory that employee Verdon’s workplace injury resulted from defendant’s breach of what plaintiffs describe as a nondelegable duty under Cal–OSHA regulations to provide safety guards on the conveyor.

 As determined by the court, the key to a hirer of an independent contractor successfully delegating worksite safety responsibility to an independent contractor (including duties imposed by the hirer by requirements such as state OSHA regulations), is that the hirer does not exercise control over the independent contractor’s work.

About the author: Article written by J. Kent Holland, Jr.,  a construction lawyer located in Tysons Corner, Virginia,  with a national practice (formerly with Wickwire Gavin, P.C. and now with Construction Risk Counsel, PLLC) representing design professionals, contractors and project owners.  He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects.  He is publisher of ConstructionRisk.com Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932.  This article is published in ConstructionRisk.com Report, Vol. 14, No.4 (April 2012).

Copyright 2012, ConstructionRisk.com, LLC