Let's assume you are a residential roofing contractor who hires subcontractors for your jobs. If an employee of a subcontractor is injured on a job site and the injury is a result of an Occupational Safety and Health Administration (OSHA) violation, could you face liability in a potential civil suit brought by the injured employee even if the subcontractor was responsible for OSHA compliance? Or could the subcontractor's employee seek to recover additional dollars in a civil action for negligence if workers' compensation benefits are not the exclusive remedy available to the injured employee? If you are cited by OSHA and found to be a controlling employer, the citations might be used as evidence against you in a lawsuit.
For example, consider a situation where a roofing contractor ("Roof Co.") is hired to perform reroofing work on a two-story residence in Wisconsin. Roof Co. subcontracts 100 percent of the work to Subcontractor Sam. The subcontract agreement requires Subcontractor Sam to abide by Roof Co.'s safety manual and states safety violations are grounds for termination. At the job site, Roof Co.'s involvement includes daily visits by the Roof Co. superintendent during which he delivers materials. He also monitors quality control of the work being done by Subcontractor Sam's crew and ensures the work adheres to Wisconsin's building codes.
Roof Co.'s superintendent also is responsible for checking for OSHA or safety violations he observes and directing Subcontractor Sam to correct any violations. In addition, it is Roof Co.'s business practice to periodically send its safety director to job sites even when none of Roof Co.'s employees are performing work. A few days into the project, one of Subcontractor Sam's employees ("Isaac") falls from the roof onto the pavement below. Isaac suffers a severe head laceration and is knocked unconscious. He is rushed to the hospital by ambulance, and, luckily, his injuries are limited to broken bones and a concussion. Roof Co. investigates the incident.
Roof Co.'s superintendent had visited the job site twice the day of the accident. Roof Co. directs its superintendent to write a post-incident report in which the superintendent states when he left the job site two hours before Isaac fell, all members of Subcontractor Sam's crew were wearing safety lines attached to anchors.
The matter is reported to OSHA as the law requires when an employee is hospitalized, and OSHA finds no evidence proper fall protection was in place. OSHA also interviews the four other members of Subcontractor Sam's crew who provide inconsistent stories of when, how or whether they were tied-off.
After completing its investigation, OSHA cites Subcontractor Sam for failure to have employees properly tied-off at all times. OSHA also cites Roof Co. as a controlling employer under OSHA's multi-employer citation policy, alleging Roof Co. had the authority to prevent an OSHA safety violation and ensure fall protection was in place but failed to do so. The fine assigned to Roof Co. is $7,500. In the meantime, Isaac's family reaches out to Subcontractor Sam and Roof Co. about paying for Isaac's mounting medical bills and lost income. Roof Co. is tempted to pay the OSHA penalty to quickly put the matter to rest. However, doing so would be a mistake without first examining the legal consequences.
In most circumstances, workers' compensation benefits will constitute the exclusive legal remedy against a direct employer for on-the-job injuries. Workers' compensation laws provide that an employee will recover monetary compensation for injuries sustained while working regardless of who caused the injury.
The workers' compensation benefit typically is much less than what a worker might be able to recover through a negligence lawsuit. However, a negligence lawsuit can drag on for years during which time the injured employee would go without compensation for medical bills or lost wages. So in exchange for a guaranteed and (comparatively quick) award of money via a claim on a workers' compensation policy, an employee gives up the right to bring a negligence lawsuit against his or her employer.
By providing workers' compensation benefits, the employer receives immunity from future lawsuits regardless of whether the employer's actions or its failure to act caused or contributed to the employee's injuries. This is known as the exclusive remedy doctrine. Employers literally pay for this immunity by paying workers' compensation insurance premiums. Employers also give up the right to deny recovery of workers' compensation benefits to an employee who may have caused or contributed to his or her own injuries.
In the example scenario, what happens if Subcontractor Sam doesn't have workers' compensation insurance? In all but five states (Alabama, California, Delaware, Iowa and Maine), the law requires Roof Co., as the upstream contractor, to provide workers' compensation benefits to its subcontractor's injured employee. This is known as the statutory employer doctrine.
In the event an injured worker does not have access to workers' compensation benefits from his or her direct employer, the worker is entitled to recover from benefits provided by the statutory employer. But note that even though Roof Co. will pay for Subcontractor Sam's workers' compensation benefits, it may not get the benefit of immunity.
In nine states (Illinois, Massachusetts, Minnesota, Montana, New Jersey, New York, Washington, West Virginia and Wisconsin), a contractor who might be deemed by OSHA to be a controlling employer will not be immune from a personal injury negligence suit even if the injured worker collects workers' compensation benefits paid by the contractor as a statutory employer.
In Arizona, Arkansas, Connecticut, the District of Columbia, Florida, Hawaii, Indiana, Michigan, New Mexico, North Carolina, Ohio, Oregon, Texas and Wyoming, only those employers that pay for the benefits a worker receives will be entitled to immunity.
Let's assume, for purposes of the example, Subcontractor Sam had workers' compensation insurance and Isaac collects benefits under Subcontractor Sam's policy. Isaac claims the workers' compensation award provides only a fraction of his lost income (because of award caps in Wisconsin) and doesn't provide any money for pain and suffering. Because statutory employers are not entitled to immunity in Wisconsin, Isaac is free to file a negligence lawsuit against Roof Co. for its alleged negligence in causing his injuries.
Roof Co. now is faced with a time-sensitive decision to make. After receiving the OSHA citation, Roof Co. has 15 business days to either contest the citation or pay it. Roof Co. also can choose to have an informal conference with the OSHA Area Office that issued the citation, but the informal conference does not toll the 15-day response period.
Considering the facts, Roof Co. might think the "fault" for Isaac working without fall protection should be on Subcontractor Sam. Maybe Roof Co. believes OSHA was wrong and it should not qualify as a controlling employer. Subcontractor Sam was responsible for supplying all the tools and equipment used at the job, including safety equipment. Then again, it was Roof Co.'s superintendent's job to make sure there were no safety hazards at the job site, and Roof Co. had control over the job site. What Roof Co. might not realize is an OSHA citation is merely an allegation that an employer has violated a cited standard that must be proved by OSHA if the employer contests the citation. However, if Roof Co. pays the citation without contest, it is admitting the allegation is true.
If Roof Co. chooses not to contest the citation, it has acknowledged the company qualifies as a controlling employer and assumes all the duties that come with it under OSHA regulations.
Courts recognize a worker cannot file a civil lawsuit based exclusively on a claim that a contractor violated the Occupational Safety and Health (OSH) Act. Although the OSH Act expressly states an OSHA regulation may not be used to create a right of action in civil law where none otherwise exists, nothing prohibits a plaintiff from using an OSHA regulation—or a violation thereof—as evidence in a civil action suit alleging negligence or arguing the OSHA violation should be considered negligence per se.
OSHA's controlling employer citation policy provides that OSHA may issue citations to general contractors at construction sites who have the ability to prevent or abate hazardous conditions created by subcontractors through the reasonable exercise of supervisory authority regardless of whether the general contractor created the hazard. Insofar as OSHA standards are specifically designed to promote the health and safety of workers and prevent personal injuries on construction sites nationwide, courts in most states will allow evidence of an OSHA standard as some evidence of negligence.
In these states, violating an OSHA regulation is not conclusive on the issue of civil liability (meaning a contractor who pays an OSHA citation without contest will not automatically be found liable in a civil negligence lawsuit). Moreover, how the evidence may be used or what part of the case the evidence may be used for varies among states. Courts in most of the "some evidence" states allow the OSHA standard to be used to establish the standard of care a contractor owes to a subcontractor's employee. Some states also will allow the OSHA violation as some evidence to prove the contractor's actions fell below the duty of care or that the type of injuries sustained by the subcontractor's employee were a reasonable and foreseeable consequence of the contractor's failure to meet the standard of care owed.
In addition to the federal courts and the District of Columbia, 14 states (California, Idaho, Indiana, Iowa, Kentucky, Minnesota, Montana, Nebraska, Nevada, Oklahoma, South Carolina, Tennessee, Washington and Wisconsin) also allow an OSHA violation to be presented as evidence to establish negligence per se.
In the example, this would mean if the violated OSHA regulation or standard specifically was designed to protect against injuries such as those suffered by Isaac, in a negligence suit, Isaac would not have to prove Roof Co. owed him a duty or that it failed to exercise due care. The violation of the OSHA standard in and of itself establishes care was due and Roof Co. failed to exercise the requisite level of care. The only issue left for a jury to decide is causation and damages. In a state where an OSHA violation may establish negligence per se, a contractor such as Roof Co. that does not contest an OSHA citation runs the risk of Isaac using the violation and Roof Co.'s acquiescence to the allegations as evidence of negligence.
To reduce this risk, you ideally should contest OSHA citations provided you have a genuine factual or legal basis to do so. To start, request an informal conference in hopes of persuading OSHA to withdraw the citation. However, a more probable outcome of an informal conference will be the opportunity to settle the citation for either a reduced penalty, a less serious classification and/or having the cited standard changed to one that is less likely to result in a repeat offense, such as a training violation.
To mitigate future liability, it is critical a settlement agreement state an agreement to settle is not an admission that the factual or legal allegations forming the basis of the citation are true. Additionally, the settlement agreement should contain an exculpatory provision that states the settlement agreement and all the information exchanged during negotiations may not be used for any purpose other than in a subsequent OSHA proceeding. However, if you are unable to reach an agreeable settlement, proceed with contesting the citation. Contesting the citation will afford the opportunity to fully investigate the incident, including seeing what evidence OSHA has, which will provide valuable information necessary to best develop a defense and mitigate future liability and exposure.