Fifth Circuit Reverses Course on General Contractors, Rules They Are Subject to OSHA “Controlling Employer” Citation Doctrine

 

For the past 37 years, general contractors within the Fifth Circuit states of Texas, Louisiana, and Mississippi have been able to rest relatively easily when it comes to OSHA citations against them for worksite hazards that endanger other employers’ (i.e., subcontractors’) employees.  That is because even if an OSHA investigation resulted in the agency citing the GC pursuant to OSHA’s “controlling employer” doctrine, 1981 precedent from the federal Fifth Circuit Court of Appeals would ultimately get the GC off the hook because the Court held that the Secretary of Labor did not have the authority to issue and enforce such a citation.  Unfortunately for Fifth Circuit GCs, that 1981 precedent – known as Melerine – no longer rules the day.

In late November, the Fifth Circuit reconsidered its Melerine decision in an appeal by the Secretary of Labor seeking to effectively overrule the Fifth Circuit’s precedent and bring the Fifth in line with every other Circuit Court that had considered whether the Secretary (through OSHA) had the authority to cite and penalize general contractors for worksite hazards that pose a threat to or injure employees of other employers.  This authority had long been recognized elsewhere in the country, but not in the Fifth Circuit, making the Fifth a safe haven for GCs in terms of reduced liability for OSHA violations.  Recognizing its status as an outlier and citing intervening Supreme Court decisions over the past 37 years that it said warranted looking at OSHA’s authority anew, the Fifth Circuit held that the Secretary of Labor’s interpretation of the governing regulations was reasonable and, under the Supreme Court’s case law, entitled to deference from the federal courts.  As a result, the Court ruled that OSHA in fact does have the authority to cite a general contractor for worksite hazards under its “control” at a multi-employer worksite even if those hazards only endanger or injure employees who are not employed by the general contractor.

The importance of the Fifth Circuit’s recent ruling – Acosta v. Hensel Phelps Construction Co. – cannot be overstated when it comes to general contractors in the construction industry in Texas.  Going forward, OSHA inspectors now have the unquestioned authority to cite GCs for basically any hazardous condition on the worksite based on the “controlling employer” doctrine – the theory that the general contractor is the entity with the most control over the entire worksite and the best ability to identify hazards and to ensure that they are remedied promptly and effectively.  All GCs who do work in Texas, Louisiana, or Mississippi will want to make sure their foremen, superintendents, and safety personnel are aware of this sea change in the way OSHA will be viewing jobsite hazards.

If you have questions about your company’s responsibilities and potential liabilities under the Occupational Safety and Health Act, Cokinos | Young’s Board Certified Labor & Employment Law Specialists J. Shannon Gatlin and M. Wilson Stoker, as well as the employment law team at Cokinos | Young, have experience dealing with OSHA and have assisted numerous clients in reducing their exposure for workplace hazards and injuries.

About the Author:  J. Shannon Gatlin is Senior Counsel in the Houston office of Cokinos | Young.  Mr. Gatlin has been Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization since 2014, and has practiced labor and employment law on behalf of companies nationwide since 2009.  Mr. Gatlin also spent one year as a Briefing Attorney for the Texas 14th Court of Appeals.