OSHA fined a general contractor (GC) for violations committed by its subcontractor related to an accident at a construction worksite where two roofers fell over twenty feet and sustained serious injuries when a spruce board used for scaffolding snapped in half. OSHA cited both the GC and its subcontractor. Two alternative theories were raised by OSHA and sustained by an administrative law judge at the Department of Labor and subsequently by the Court of Appeals: (1) the GC and subcontractor constituted a single employer and (2) the individual owner of the subcontractor was a supervisory employee of the GC. A multifactor test was applied to find the subcontractor owner was a supervisory employee of the GC. Further, based on findings of common worksite, interrelated and integrated operations, and common management or supervision, the court agreed that the firms acted as a “single employer.” A.C. Castle Construction Co., Inc. v. Acosta, 882 F.3d 34 (1st Cir. Ct. of Appeals, 2018).
The court applied what is known as the Darden test to determine whether the individual was a supervisory employee. In this regard, the court concluded:
The ALJ properly focused on the most important factor, control, finding that LeBlanc [owner of the GC] “exercised an unusual amount of control over Mr. Provencher’s [owner of the subcontractor] actions, atypical of a traditional contractor/subcontractor relationship.” In expanding on this finding, the ALJ also looked at the source of instruments and tools, the assignment of work, the length of the relationship, and the hiring of other workers. Specifically, the ALJ stated:
Mr. LeBlanc and Mr. Provencher had a thirty-year working relationship. Mr. LeBlanc scheduled the roofing projects and told Mr. Provencher in what order they were to be done, which necessarily determined the location of the work. Mr. LeBlanc arranged for the building materials to be delivered to the worksites and provided the dump truck …. He also arranged for the only safety training provided to the roofing crew and provided Mr. Provencher with a copy of A.C. Castle’s safety program and instructed him to implement it. Mr. LeBlanc told Mr. Provencher when he needed to hire more employees to complete the contracted roofing projects on time. Mr. Provencher paid the roofing crew members on Fridays, after he received payment from Mr. LeBlanc. Mr. Provencher did not have a business license and could not bid on projects; he was dependent on A.C. Castle for the great majority of his work. Mr. LeBlanc conducted spot inspections on Mr. Provencher’s worksites and instructed him to abate specific safety infractions.
LeBlanc also appears to have directed Provencher to double up the spruce planks sold at the hardware store when used as scaffolding (a direction ignored on the day of the accident).
The court cited many other examples of how the subcontractor was treated as an employee supervised by the GC.
Other evidence that the GC controlled the subcontractor owner included the fact that for a worker’s compensation affidavit he signed a form checking a box representing that he was “an employer with employees” instead of checking the box that stated, “I am a general contractor and I have hired the sub-contractors listed on the attached sheet.”
The court also noted that the GC “made sure that his customers understood that all the workers on the project were his employees” and to that end, “he prohibited Provencher from describing himself to the customer as a subcontractor. The court states that the GC’s representations were representations that he controlled Provencher as an employee, not as an independent contractor.
The court states that the ALJ might well have concluded the analysis after correctly determining that Provencher was a supervisory employee. Having gone further, however, and applied the “single employer” test, there was no basis to reverse the decision.
The single employer test treats as a single entity two businesses where there is “a combination of most or all of the following factors: a common worksite, a common president or management, a close interrelation and integration of operations, and a common labor policy”. Without explanation, the Commission reformulated that test to hold that “when … two companies share a common worksite such that the employees of both have access to the same hazardous conditions, have interrelated and integrated operations, and share a common president, management, supervision or ownership, the purposes of the [OSH Act] are best effectuated by the two being treated as one. [citations omitted].”
In this case the ALJ found that the GC and subcontractor shared a common worksite where the accident occurred; that the operations of the two were integrated to a degree well beyond what one would expect to find in the customary relationship between a GC and subcontractor; and that there was common management or supervision.
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. 20, No. 6 (June 2018).
Copyright 2018, ConstructionRisk, LLC