The Multiemployer Worksite Doctrine: United States of America v. Pitt-Des Moines Inc., Seventh Circuit Court of Appeals, No. 98-1767, Feb. 18, 1999

Date: Apr 01, 1999

The Occupational Safety and Health Act (OSH Act) requires employers to comply with all safety and health standards adopted under the Act, and also provides for misdemeanor criminal penalties when an employee is killed as a result of a willful violation of an Occupational Safety and Health Administration (OSHA) standard. In the early days of the Act's enforcement, OSHA determined that penalizing individual subcontractors on construction job sites was an inefficient method of leveraging its enforcement activities, and that often, the employer who was held liable was not responsible for creating or changing the conditions that violated the standard. Indeed, with strict labor rules on many construction sites, it was a violation of the contract for one tradesman to perform a task that was reserved to another trade under the terms of the labor agreement. For example, it was impossible for a painter to correct an electrical hazard. In response, OSHA developed the multi-employer work site doctrine.

The Agency's position is that any of three employers can be liable for and OHSA citation: the controlling employer; the employer who creates the hazard; and the employer whose employees are exposed to the hazard. An employer defense to such a charge is that it took all reasonable steps to correct the hazard. The IBP case discussed in the ____ issue of Compliance Magazine addressed the question of how far the host employer's liability extends in general industry. There, IBP hired a contractor to clean its meat-packing plant, and had inspectors on site for quality control. An employee of the contractor failed to lockout a machine while cleaning it and was killed. The accident occurred in spite of clear and repeated instructions to the contractor from IBP to conform to the lockout/tagout rule, as IBP's inspectors had observed clear violations on a number of occasions. The Occupational Safety and Health Review Commission (OSHRC) ruled that IBP had not taken all reasonable steps to control the contractors compliance behavior, since it could have canceled the contract. The appellate court rejected that approach, saying that was like using a howtizer to kill a flea. IBP had taken reasonable steps; the statute clearly could be enforced against the contractor, and that had been done. OSHA could not hold IBP liable under these circumstances any further.

Pitt-Des Moines (PDM) was a steel erection contractor in Chicago under contract on a large post office project. PDM subcontracted part of the steel erection work to MA Steel, and both companies hired steel workers from the local union. As is often the practice, two crews were involved, the first "raising" the framework and temporarily connecting the steel members together. The second crew completes the assembly process by adding additional bolts and welding each connection to make it permanent. OSHA's standard on steel erection at the time, the connection rule, required that two bolts brought up wrench tight be used to secure the members during raising. The general contractor on the site, Hyman/Power, hired PDM, and the Postal Service hired an additional contractor, Turner/Ozanne (T/O), as its on-site representative. T/O's representative observed that the steelworkers were not using two bolts to secure the structure, and reported it to Hyman, who in turn passed the report on to the General Manager of PDM, along with a copy of the connection rule.

The standard required the hoist line to remain attached until the members are secured with at least two bolts, "or the equivalent at each connection point." PDM responded by saying that it used stronger bolts than the regulations anticipated, and that PDM considered this to be equivalent to the two bolt standard. In the aftermath of the accident, the investigation revealed that a particular kind of connection, a seat angle, failed, causing the entire structure to fall, and killing several ironworkers in the ensuing fall. OSHA charged PDM with willfully violating the standard, and the civil citation was upheld. The Department of Justice prosecuted PDM for criminal violation of the OSH Act on a referral from OSHA, arguing that PDM was liable under the multi-employer work site doctrine under the criminal provisions of the statute as well as for the OSHA citation. The Court of Appeals upheld the conviction of the company after a jury trial.

PDM defended on the basis that it could not be liable for a criminal violation for a fatality of another employer's employee, and that the ironworkers were employees of MA Steel, not PDM. The government asserted that the duty to comply with safety and health standards is not limited like the general duty in section 5(a)(1) to protection of the employer's own employees. Adopting the rationale of other circuit courts, the Court held that PDM, as an employer engaged in a "common undertaking," was liable for violations of standards that result in the death of any employee on the job who works as part of that "common undertaking." This language, taken from a Second Circuit decision, recognized that employees incidentally on the site might not be protected by the Act from the actions of an on-site employer, but in this case, the employee was part of the site work force, "belonged on the site and regularly worked within the zone of danger created by any unsafe" conditions created by PDM's activities in erecting the steel framework.

The decision clearly holds employers in the construction industry liable to the full extent of the OSH Act. Whether it applies to situations outside the construction industry or to situations where an non-construction industry employer acts as its own general contractor is unclear. One distinction between IBP and this case may give employers some guidance. IBP's representatives were on the site solely for the purpose of assuring quality, not to direct the activities of the contractor. In this situation, IBP was more like the T/O representative, and having taken steps specified by the contract to bring the instances of non-compliance to the attention of the contractor, it discharged any duty it may have had to the employees as an employer on the site. The statute is not intended to eliminate all occupational accidents, but to insure good faith efforts to balance safety and health against the need to function "without undue interference." Reasonable steps must be taken, but having done so, the liability for an OSHA violation will not fall on the employer who has taken those steps.

Finally, the government's approach leaves one important responsible party unaffected. The employees who raised the structure were experienced ironworkers. More than anyone else, they should have known this rule and its importance, for it was their own safety at stake. The employees, whomever they worked for, were ultimately responsible for using two bolts instead of one. The current system leaves the discipline of the employee to the employer. If these employees knew of the standard and the dangers involved, were they not also criminally negligent in their actions?

This article appeared in Compliance Magazine (April 1999) and it is reprinted with permission of Compliance Magazine. Copyright © 2001 by IHS Publishing Group. All rights reserved.

For further information about this article, please contact David G. Sarvadi at 202-434-4249 or by e-mail at sarvadi@khlaw.com.