OSHA has long held the opinion that general contractors may be held liable for subcontractor’s OSHA violations and the Eighth Circuit Court of Appeals, overseeing the Midwest, has agreed since 2009. To combat this risk, general contractors would be well served to incorporate targeted indemnity provisions into their subcontracts that require subcontractors to pay for all claims and costs associated with subcontractor caused OSHA violations.
OSHA’s Multi-Employer Policy
OSHA’s Multi-Employer Policy, a/k/a OSHA Instruction CPL 02-00-124, allows OSHA to cite multiple employers at a single worksite for creating a hazard, or for failing to prevent or correct a hazard, even if their own workers are not exposed to the hazard. A ‘‘controlling’’ or ‘‘correcting’’ employer is liable for hazards that it did not take ‘‘reasonable care’’ to detect and prevent.
The case that brought this issue to a head in the Midwest is Solis v. Summit Contractors, Inc. which involved Summit Contractors oversight of a college dormitory construction project in Arkansas. Summit had only four employees on the job and utilized subcontractors for the vast majority of the work on the project. OSHA stopped by for an inspection and noticed a subcontractor’s workers on defective scaffolding who were not wearing fall protection. OSHA issued Summit a citation for this safety violation as the “controlling employer.” The case wound its way through the court system, with the Eighth Circuit Court of Appeals holding that OSHA was permitted to rely on the multi-employer worksite doctrine to cite general contractors for the safety violations of its subcontractors.
The Takeaway for General Contractors
General contractors facing increased risk of being cited for their subcontractor’s misconduct can take a few steps to minimize their liability. General contractors may incorporate indemnity clauses specifically tailored to address situations in which a general contractor is cited for a subcontractor’s OSHA non-compliance. Here is a sample clause:
Subcontractor shall defend, indemnify and hold harmless General Contractor from and against all claims, penalties, fines, losses, judgments, liabilities, settlements, costs and expenses, including but not limited to attorney’s fees, arising out of, relating to, or incurred in connection with the breach or violation of any occupational safety and health administration (“OSHA”) laws, rules, or regulations by Subcontractor, any of Subcontractor’s subcontractors, anyone directly or indirectly employed by them or anyone for whose acts any of them may be liable.
Incorporating an indemnity provision that targets OSHA violations should assist general contractors in recovering any penalties assessed by OSHA against the general contractor for a subcontractor’s safety violations.