Challenge to OSHA Multiemployer Citation Policy ‘Without Merit,' D.C. Circuit Holds

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By David Schwartz  

A contractor's challenge of an Occupational Safety and Health Administration citation for improperly protected electrical equipment lacks merit, a federal appeals court ruled Dec. 14, rejecting claims that OSHA's multiemployer citation policy was invalid (Summit Contractors Inc. v. Secretary of Labor, D.C. Cir., No. 10-1329, 12/14/11).

The two-and-a-half-page unpublished opinion by the U.S. Court of Appeals for the District of Columbia Circuit comes nine days after the sides faced off in oral arguments before the court (41 OSHR 1057, 12/8/11).

The case stemmed from a 2005 OSHA inspection of work at an apartment complex in Lebanon, Pa., where a compliance officer discovered a piece of electrical equipment that lacked proper grounding protection. The secretary of labor cited Summit Contractors Inc. for the violation, even though the subcontractors at the site did all work related to the unprotected piece of equipment.

The Occupational Safety and Health Review Commission affirmed the citation in 2010 (40 OSHR 725, 8/26/10; 23 OSHC 1196), leading to Summit's appeal to the D.C. Circuit.

Baruch A. Fellner, a partner with Gibson, Dunn & Crutcher LLP in Washington, D.C., told BNA Dec. 14, the decision was properly decided.

“It breaks no new ground in its upholding of OSHA's multiemployer citation policy,” he said.

Summit's Three Arguments

In its ruling, the court said Summit put forward three arguments.

First, Summit raised a procedural challenge to OSHA's multiemployer citation policy, which allows the agency to cite an employer even when none of its own employees are exposed to the hazard, in certain circumstances. Summit argued that in enacting the policy, OSHA violated the Administrative Procedure Act by not subjecting it to formal rulemaking with a notice-and-comment period beforehand.

The court dismissed this argument for two reasons. First, it said, this was an agency document that only explained how the agency would enforce an existing rule, and therefore was not subject to the Administrative Procedure Act. Second, the court continued, neither the administrative law judge nor the commission itself relied on the citation policy when they imposed liability on Summit. Rather, the court said, “they rested on longstanding Commission precedent holding general contractors liable in similar circumstances.”

Common Law Challenge

Summit's second argument was that the multiemployer citation policy violates Section 4(b)(4) of the Occupational Safety and Health Act, which states that nothing in the act should be construed to affect the common law duties or liabilities of employers. By requiring a general contractor to enforce its subcontractors' compliance with OSHA standards, the general contractor's liability under the common law is increased, the court said in its characterization of Summit's argument.

The court said this argument was “no defense” against the Summit citation. The increased liability that Summit discussed would only arise if a court subsequently took action under state law, a scenario the appeals court described as “hypothetical.” Section 4(b)(4), the court added, only states that the OSH Act cannot be used to increase or diminish common law rights, duties and liabilities of employees or employers.

Fellner called the Section 4(b)(4) issue a “kitchen sink” argument. In other words, it was a case of the employer throwing everything but the kitchen sink at the court to bolster its argument. But, he added, this argument was “a bridge too far.”

Reasonable Diligence

Finally, the court continued, Summit argued that the secretary of labor did not prove that Summit knew of the violation.

“Substantial evidence supports the Commission's finding that Summit could have known of the violative condition with the exercise of reasonable diligence,” the court said.

It said that a Summit supervisor had ordered the equipment but neither requested that it have the proper grounding nor checked the equipment for that grounding when it arrived, “even though doing so would have taken only a few seconds and required no specialized expertise.”

Fellner said the contractor's “direct involvement with the electrical equipment at issue made it very difficult for it to successfully argue the absence of constructive knowledge of the violation.”

In response to Summit's argument that the supervisor assumed reasonably that the equipment would be in compliance based on prior dealings with the supplier, the court noted that the only evidence presented addressing this issue showed that only six out of 18 pieces of this electrical equipment sent by the supplier had contained the proper ground protection.

Finally, the court noted that the secretary of labor had argued that Summit was barred by collateral estoppel from raising these challenges. This bar, the secretary had argued, arose because another case involving Summit in the Eighth Circuit had already dismissed Summit's arguments (Solis v. Summit Contractors Inc., 22 OSHC 1496 (8th Cir., 2009).

Since it went ahead and rejected Summit's challenges, the court concluded, it did not need to address the collateral-estoppel argument.

The case is available at