Universal Construction Co. v. Occupational Safety & Health Review Commission

F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
JUN 28 1999
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT

UNIVERSAL CONSTRUCTION
COMPANY, INC.,

Petitioner,

v. No. 98-9519

OCCUPATIONAL SAFETY AND
HEALTH REVIEW COMMISSION,

Respondent.

APPEAL FROM
OCCUPATIONAL SAFETY HEALTH REVIEW COMMISSION
(No. OSHRC 97-1946)

Roy Bash (William E. Quirk and Michael J. Elston with him on the brief),
Shughart Thomson & Kilroy, P.C., of Kansas City, Missouri, for the petitioner.

Bruce Justh, Counsel for Appellate Litigation, (Marvin Krislov, Deputy Solicitor
for National Operations, and Joseph M. Woodward, Associate Solicitor for
Occupational Safety and Health, with him on the brief), U.S. Department of
Labor, of Washington, D.C., for the respondent.

Before KELLY, McWILLIAMS, and BRISCOE, Circuit Judges.

BRISCOE, Circuit Judge.
 Petitioner Universal Construction Company appeals a final order of the

Occupational Safety and Health Review Commission affirming the imposition of

a penalty against Universal under the “multi-employer worksite” doctrine, based

on a subcontractor’s violation of construction safety standards. We affirm.

The parties have stipulated to certain facts. Universal is a general

contractor engaged in the construction business. In December 1996, Universal

contracted with UMB Bank to construct a branch bank office in Independence,

Missouri, and shortly thereafter, subcontracted with A. Zahner Sheetmetal

Company to perform portions of the project.

On October 6, 1997, an Occupational Safety and Health Administration

compliance officer visited the project worksite and observed a Zahner employee

violate two OSHA construction safety standards. An employee working in an

aerial lift failed to wear and attach a safety belt to the lift basket, in violation of

29 C.F.R. § 1926.453(b)(2)(v), and the employee climbed out of the lift basket

onto a building roof, in violation of 29 C.F.R. § 1926.453(b)(2)(iv). Universal’s

field manager and foreman were at the jobsite and in a position to observe the

violations. They had authority to correct the hazards or to direct Zahner’s

foreman to correct the hazards, but neither did so. It is not disputed that Zahner

created the hazards and only Zahner employees were exposed to the hazards.

On October 16, 1997, Universal was cited for a serious violation based on

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the October 6 incidents and a $1,500 penalty was imposed. 1
The citation was

justified by Universal’s ability to control the hazardous conditions that led to the

violations. On March 18, 1998, an administrative law judge upheld the citation,

concluding Universal was properly cited under the multi-employer doctrine

because it controlled the worksite and had authority to direct a subcontractor to

abate any hazardous conditions created by the subcontractor. Universal timely

filed for discretionary review by the Commission, but the Commission opted not

to review the case and the ALJ’s decision became final on April 27, 1988. On

appeal, Universal challenges the validity of the Commission’s “multi-employer”

theory of liability. We have jurisdiction under 29 U.S.C. § 660(a) because

Universal’s principal place of business is in Kansas City, Kansas.

Multi-Employer Doctrine

The multi-employer doctrine provides that an employer who controls or

creates a worksite safety hazard may be liable under the Occupational Safety and

Health Act even if the employees threatened by the hazard are solely employees

of another employer. The doctrine has its genesis in the construction industry

where numerous employers, often subcontractors, work in the same general area,

and where hazards created by one employer often pose dangers to employees of

1
A serious violation exists “if there is a substantial probability that death
or serious physical harm could result from” an existing condition. 29 U.S.C. §
666(k).

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other employers. The Secretary has imposed liability under the doctrine since the

1970’s and has steadfastly maintained the doctrine is supported by the language

and spirit of the Act. The Secretary’s interpretation has been accepted in one

form or another in at least five circuits, and rejected outright in only one. See

United States v. Pitt-Des Moines, Inc. , 168 F.3d 976 (7th Cir. 1999); R.P.

Carbone Constr. Co. v. Occupational Safety & Health Review Comm’n , 166 F.3d

815 (6th Cir. 1998); Beatty Equip. Leasing, Inc. v. Secretary of Labor , 577 F.2d

534 (9th Cir. 1978); Marshall v. Knutson Constr. Co. , 566 F.2d 596 (8th Cir.

1977); Brennan v. Occupational Safety & Health Review Comm’n , 513 F.2d 1032

(2d Cir. 1975); but see Southeast Contractors, Inc. v. Dunlop , 512 F.2d 675 (5th

Cir. 1975). We have not had occasion to expressly consider the validity of the

doctrine, although we have cited it approvingly in a similar context. See Havens

Steel Co. v. Occupational Safety & Health Review Comm’n , 738 F.2d 397, 400

(10th Cir. 1984). We now join the majority of circuits and adopt the multi-

employer doctrine.

The Secretary pins statutory authorization for the multi-employer doctrine

on 29 U.S.C. § 654(a)(2). Section 654(a) delineates the duties of employers:

(a) Each employer --
(1) shall 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;
(2) shall comply with occupational safety and health standards

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 promulgated under this chapter.

The Secretary construes § 654(a)(1) & (2) as imposing two distinct duties. First,

(a)(1) requires employers to protect their own employees from hazards in the

workplace. The employer’s duty under (a)(1) flows only to its employees, as

indicated by the language specifically limiting the employer’s obligation to

maintain a hazard-free workplace to “his employees.” Second, (a)(2) requires

employers to comply with the Act’s safety standards. Unlike (a)(1), it does not

limit its compliance directive to the employer’s own employees, but requires

employers to implement the Act’s safety standards for the benefit of all

employees in a given workplace, even employees of another employer. OSHA

issues citations based on the multi-employer doctrine under (a)(2). Universal

contends the language of § 654(a) may not reasonably be read as authorizing the

Secretary to impose liability outside the employer-employee relationship. 2

We review an agency’s interpretation of its enabling statute in accordance

with the decision in Chevron, U.S.A., Inc. v. Natural Resources Defense Council,

Inc. , 467 U.S. 837 (1984). First, we determine if the statute is unambiguous on

2
Universal also contends the Secretary could not lawfully apply the
doctrine without first adopting it through rule making. This position clearly is
incorrect. The decision to proceed by rule or adjudication is generally within the
informed discretion of the agency. Nunez-Pena v. INS , 956 F.2d 223, 225 (10th
Cir. 1992). Moreover, the principle here is not new, but has existed and has been
applied for over twenty years.

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its face. Marshall v. Chater , 75 F.3d 1421, 1428 (10th Cir. 1996). If Congress

has directly spoken to the issue, and its intent is clear, we must give effect to its

intent. Id. If the statute does not address the specific issue at hand or is

ambiguous, we next determine if the agency’s interpretation is based on a

permissible construction of the statute. Id. If so, we will defer to the agency’s

interpretation. Id. An agency’s interpretation of a specific statutory provision is

entitled to deference and will be upheld if it is reasonable and consistently

applied and does not frustrate the policy sought to be implemented by Congress.

See New Mexico Dep’t of Human Servs. v. Department of Health & Human

Servs. Health Care Fin. Admin , 4 F.3d 882, 884-85 (10th Cir. 1993). In applying

these standards, we bear in mind that the Occupational Health and Safety Act is

remedial legislation designed to protect employees from workplace dangers, and

therefore must be liberally construed. See Whirlpool Corp. v. Marshall , 445 U.S.

1, 11, 13 (1980); Clarkson Constr. Co. v. Occupational Safety & Health Review

Comm’n , 531 F.2d 451, 458 (10th Cir. 1976).

While broad, the language of § 654(a)(2) is ambiguous and does not clearly

compel the conclusion that Congress did or did not intend to permit the Secretary

to impose liability for hazards that an employer controlled but did not create and

which did not threaten the employer’s employees. It may be, as the Secretary

asserts, that (a)(2) was intended to create a specific duty requiring an employer to

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comply with OSHA safety standards for the good of all employees -- even those

employed by others -- at a common worksite. If so, however, it is plausible that

Congress would have chosen more direct phrasing to implement such a scheme.

The interpretation urged by Universal fares no better under plain language

scrutiny. Subsection (2) on its face does not limit an employer’s duty to comply

with safety standards only to the employer’s employees. Nor is there any patently

compelling reason to assume merely because liability under (a)(1) is limited to

situations where an employer’s own employees are exposed to hazards, liability

under (a)(2) is likewise limited. Where language appears in one section of a

statute but not in another section, we assume the omission was intentional. See

Bates v. United States , 118 S. Ct. 285, 290 (1997).

The Seventh Circuit recognized the dilemma in attempting to resolve this

issue based solely on the plain language of the Act and its legislative history

when it acknowledged nearly twenty-five years ago that “Congress apparently

gave little thought to the unique relationship which arises when employees of a

number of different employers work in and around the same job site and are

subject to the hazards which may exist at that site.” Anning-Johnson Co. v.

United States Occupational Safety and Health Review Comm’n , 516 F.2d 1081,

1087 n.14 (7th Cir. 1975). Given the ambiguities of the statute, we are not

prepared to conclude the plain language of the statute alone or its nonexistent

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legislative history on this issue permits us to accept or reject the multi-employer

doctrine.

Because § 654(a)(2) is ambiguous regarding this issue, we consider if the

agency’s interpretation is based on a permissible construction of the statute and

does not frustrate the policy underlying the Act. In this respect, the ambiguity of

(a)(2) and, in particular, the omission from (a)(2) of any language expressly

limiting an employer’s liability only to its employees, militate in favor of the

Secretary’s interpretation. “The use of the words ‘his employees’ in describing

the duties of Section 654(a)(1) and the conspicuous absence of any limiting

language in Section 654(a)(2), certainly indicate that a broader class was meant to

be protected by the latter.” Pitt-Des Moines , 168 F.3d at 983.

In addition, the Secretary’s interpretation furthers rather than frustrates the

policy underlying the Act. The Act was designed “to assure so far as possible

every working man and woman in the Nation safe and healthful working

conditions.” 29 U.S.C. § 651. To achieve this end, Congress focused primarily

on “making places of employment, rather than specific employees, safe from work

related hazards.” Pitt-Des Moines , 168 F.3d at 983; see Brennan , 513 F.2d at

1038 (“It was the intention of Congress to encourage reduction of safety hazards

to employees at their places of employment.”). It is the combination of the

broader language of § 654(a)(2) and the remedial goal of ensuring safer

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workplaces that has “led courts to conclude that the multi-employer doctrine is

fully consistent with the Act.” Pitt-Des Moines , 168 F.3d at 983; see Brennan ,

513 F.2d at 1038. We agree that the multi-employer doctrine is consistent with

the language of § 654(a)(2) and the purpose of the Act.

The multi-employer doctrine is particularly applicable to multi-employer

construction worksites, and in fact has been limited in application to that context.

See American Petroleum Inst. v. OSHA , 581 F.2d 493, 508 (5th Cir. 1978). The

nature of construction requires that subcontractors work in close proximity with

one another and with the general contractor at the same worksite. “In this

situation, a hazard created and controlled by one employer can affect the safety of

employees of other employers on the site.” Bratton Corp. v. Occupational Safety

& Health Review Comm’n , 590 F.2d 273, 276 n.5 (8th Cir. 1979). Rules of craft

jurisdiction, however, may limit one subcontractor’s ability to abate hazards

posed to its own employees that were created by another subcontractor or a

general contractor. See , e.g. , IBP, Inc. v. Herman , 144 F.3d 861, 864 (D.C. Cir.

1998); Zemon Concrete Corp. v. Occupational Safety & Health Review Comm’n ,

683 F.2d 176, 181 (7th Cir. 1982). To alleviate these hazards and ensure

compliance with safety standards, the general rule regarding multi-employer

construction worksites is that employers will be liable under § 654(a)(2) for

hazards the employer either created or controlled, regardless of whose employees

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are threatened by the hazard. Thus, a subcontractor that creates a hazard may be

cited under (a)(2) even if its own employees are not threatened. See id. at 180;

Bratton , 590 F.2d at 276; Beatty , 577 F.2d at 537; Brennan , 513 F.2d at 1038; see

also Havens , 738 F.2d at 400. Similarly, a general contractor, which often will

not have created the hazard but will be in control of the worksite and have

authority to abate the hazard, may be cited under (a)(2) if it unreasonably fails to

correct a hazard it created or unreasonably fails to direct a subcontractor to

correct a hazard created by the subcontractor. See Carbone , 166 F.3d at 818;

Marshall , 566 F.2d at 599.

We disagree with Universal that the multi-employer doctrine unfairly

burdens general contractors. A subcontractor whose employees are threatened by

a hazard created and controlled by another subcontractor has only two options:

request the offending subcontractor to abate the hazard or request the general

contractor to correct or direct correction of the condition. 3
Bratton , 590 F.2d at

277. As a practical matter, the general contractor may be the only on-site person

with authority to compel compliance with OSHA safety standards. See Anning-

3
The complaining subcontractor, of course, remains responsible for taking
reasonable steps to protect its employees from hazards it neither controlled nor
created. These steps may include directing its employees to avoid the area if
practical or ensuring employee safety by alternative measures. See generally
Dun-Par Engineered Form Co. v. Marshall , 676 F.2d 1333, 1335-36 (10th Cir.
1982).

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Johnson , 516 F.2d at 1088 (“On a multi-employer construction site, it is the

general contractor who contractually controls the worksite.”). “General

contractors normally have the responsibility and the means to assure that other

contractors fulfill their obligations with respect to employee safety where those

obligations affect the construction worksite.” Marshall , 566 F.2d at 599.

“Accordingly, [it is reasonable and consistent with the purpose of the Act to] hold

a general contractor responsible under § 654(a)(2) for safety standard violations

which it could reasonably have been expected to prevent or abate by reason of its

supervisory capacity.” Id. (citation omitted); see Carbone , 166 F.3d at 818. The

general contractor’s duty in this regard is not limited to protecting its own

employees from hazards, but extends to protection of all worksite employees. Id. ;

Marshall , 566 F.2d at 599.

Of the courts to consider the multi-employer doctrine, only the Fifth Circuit

has rejected it. See Melerine v. Avondale Shipyards, Inc. , 659 F.2d 706 (5th Cir.

1981); Horn v. C.L. Osborn Contracting Co. , 591 F.2d 318 (5th Cir. 1979);

Southeast Contractors, Inc. v. Dunlop , 512 F.2d 675 (5th Cir. 1975). None of

these cases persuasively explain the basis for rejection of the doctrine. In fact,

Dunlop , on which subsequent cases were based, is a one-paragraph opinion in

which the court merely agreed with “the well-reasoned dissent of Chairman

Moran . . . that a contractor is not responsible for the acts of his subcontractors or

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their employees.” 512 F.2d at 675. In Clarkson , we rejected the core of Dunlop

and also implicitly endorsed the multi-employer doctrine. In Clarkson , a

subcontractor’s employee was driving a dump truck in reverse along the shoulder

of a highway (considered to be the worksite) and the truck struck and killed a

worker. In violation of safety standards, the truck was not equipped with reverse

signal alarms and there was no lookout posted. The general contractor, rather

than the subcontractor, was cited for OSHA violations. We rejected the

contention that the general contractor could not be cited because it was not

“using” the truck as required by the applicable standard.

We are unable to overlook the fact that the truck driver who
ran over and killed the employee was serving the objects and
purposes of Clarkson.
....
. . . In order to accomplish [the broad remedial] purpose [of
the Act], it is necessary to look to an employer who controls the
working environment. . . .
So, then, even though the employee in question was an
employee of Advance, he was nevertheless under the direction and,
more important, control of Clarkson, the general contractor.

Id. at 457-58. Clarkson therefore constitutes a rejection of Dunlop and

subsequent Fifth Circuit cases rejecting the doctrine, as well as an endorsement of

the rationale -- control -- on which a general contractor’s liability is based under

the multi-employer doctrine.

As Universal notes, the D.C. Circuit has neither accepted nor rejected the

doctrine, and has specifically avoided ruling on the issue. See IBP , 144 F.3d at

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865-66; Anthony Crane Rental, Inc. v. Reich , 70 F.3d 1298, 1306 (D.C. Cir.

1995). The court’s reluctance to adopt the doctrine is premised upon perceived

“tension between the Secretary’s multi-employer theory and the language of the

statute and regulations.” IBP , 144 F.3d at 865. While we concede the multi-

employer doctrine and the language of the Act are not perfectly harmonious, the

broad language and remedial purpose of the Act in combination persuade us that

the Secretary’s interpretation of § 654(a)(2) is consistent with and does not

frustrate the policy of the Act.

Application of Doctrine to Universal

Universal argues if the multi-employer doctrine is a valid exercise of the

Secretary’s authority under the statute, it is unreasonably applied in situations

where, as here, the general contractor has mere contractual control over the

worksite. In support of this argument, Universal again directs our attention to

IBP , where the court ruled the multi-employer doctrine, even if valid, was not

applicable because the general contractor’s only control over the subcontractor

was a contractual provision permitting the general contractor to cancel the

contract or revoke the identification card of a subcontractor’s employee if safety

standards were not followed.

We review the Commission’s findings of fact under a substantial evidence

standard. 29 U.S.C. § 660(a); Interstate Erectors, Inc. v. Occupational Safety &

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Health Review Comm’n , 74 F.3d 223, 226 (10th Cir. 1996). This standard is

satisfied if, after conducting a plenary review of the record, “a reasonable mind”

would consider the evidence adequate to support the conclusion reached. Aylett

v. Secretary of Housing & Urban Dev. , 54 F.3d 1560, 1561 (10th Cir. 1995). We

review the Commission’s legal conclusions to determine if they are arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with law.

Interstate , 74 F.3d at 226. Our review under this standard is a narrow one that

encompasses a wide level of deference to the agency. Maier v. EPA , 114 F.3d

1032, 1039 (10th Cir. 1997).

We need not decide if we would find the limited control afforded the

general contractor in IBP sufficient to permit liability under the multi-employer

doctrine. Unlike IBP , Universal had plenary control and authority over the

worksite and could itself either correct a hazard created by any subcontractor,

even without that subcontractor’s consent, or direct any subcontractor to abate a

hazard and abide by safety standards. See Stipulation ¶¶ 24-27, 31-33.

As noted, a general contractor is responsible under § 654(a)(2) for safety

standard violations it could reasonably have been expected to prevent or abate by

reason of its supervisory capacity, regardless of whether it created the hazard or

whether its employees were exposed to the hazard. Universal does not assert it

could not reasonably have prevented or abated the violations here. Instead, it

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stipulated Universal’s field manager was present at the worksite on October 6 and

in a position to observe the violations, but did not correct the violations or direct

Zahner to correct the violations, despite the field manager’s authority to do so.

See Stipulation ¶¶ 5, 14-17, 31-33. As such, the Commission’s conclusion that

Universal was liable under § 654(a)(2) for the October 6 violations is supported

by substantial evidence and is not arbitrary, capricious, an abuse of discretion, or

otherwise contrary to law. See Interstate , 74 F.3d at 226.

AFFIRMED.

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No. 98-9519, Universal Construction Company., Inc. v. Occupational Safety and

Health Review Commission.

KELLY, Circuit Judge, concurring.

I respectfully concur in the court’s opinion for two reasons. First, our prior

decision in Clarkson Constr. Co. v. Occupational Safety & Health Review

Comm’n , 531 F.2d 451, 456-58 (10th Cir. 1976), is tantamount to the adoption of

a multi-employer doctrine in this circuit, particularly when viewed against the

backdrop of Judge Seth’s dissent, see id. at 459 (Seth, J., dissenting), and we are

bound by circuit precedent. Second, the parties stipulated that (1) Universal’s

field manager and foreman were present at the worksite on the day in question,

(2) they had the authority to direct abatement, and (3) the field manager “was in

position to observe the actions of Zahner’s employees and contractually had the

authority to direct Zahner’s foreman . . . to correct the hazards.” 2 Agency R.,

Joint Stipulation, ¶¶ 5, 6, 14, 15, 31-33. Given these stipulations, it is not

necessary to decide the outer limits of the doctrine.

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