Contractor Safety: Know the Legal Risks . . . And Manage Them

1. Contractor Safety: Know the Legal Risks . . . And Manage Them Adele L. Abrams, Esq., CMSP, REA Law Office of Adele L. Abrams P.C. 4740 Corridor Place, Suite D Beltsville, MD 20705 301-595-3520 safetylawyer@aol.com

2. Contractor Risk Management Why is risk management critical? Tort liability considerations OSHA citations in multi-employer worksites Worker�s compensation issues Loss prevention

3. Contractor Risk Management:�Employee� Definitions IRS �20-Factor� Test for Contractors includes consideration of: Instructions/Training Whether Services Rendered Personally Whether Location Specified Continuing Relationship Set Hours of Work Method of Payment

4. Contractor Risk Management:�Employee Definitions� IRS Test (continued) Whether tools and materials provided �Services available to general public or multiple employers Right to Discharge or to Terminate Relationship OSHA can use these factors to analyze the relationship between worker and supervisor

5. Contractor Risk Management:OSHA Concerns OSHA has Multi-Employer Policy � Agency will cite employers in any of four categories: Controlling Employer Creating Employer Exposing Employer Correcting Employer

6. Contractor Risk Management:OSHA Multi-Employer Test Controlling Employer: �General supervisory authority over the worksite� Includes the power to correct safety and health violations or require others to correct them. Control can be established by contract or by exercise of control in practice. Controlling employer must exercise reasonable care to prevent/detect violations. Creating Employer: Party causing a hazardous condition that violates an OSHA standard. Employer is citable even if the only exposed employees are those of other employers. Example: A host employer whose workplace has airborne chemical levels exceed PEL because worksite lacks adequate control measures.

7. Contractor Risk Management: OSHA Multi-Employer Test Exposing Employer: One whose own employees are exposed to the hazard. Exposing employer can be cited if fails to ask the creating/controlling employer to correct the hazard; inform its employees of the hazard; and/or take reasonable alternative protective measures and remove its employees from the hazardous area. If exposing employer did not create the condition, it can still be cited if � it knew of the hazardous condition or failed to exercise reasonable diligence to discover the condition; and it failed to take steps consistent with its authority to protect its employees.

8. Contractor Risk Management: OSHA Multi-Employer Test Correcting Employer: �Engaged in a common undertaking on the same worksite, as the exposing employer and is responsible for correcting a hazard." Usually occurs where an employer is given the responsibility of installing and/or maintaining particular safety/health equipment or devices. Controlling and correcting employers often are a single entity. Applicability of �controlling employer� designation may be linked to the contractual arrangements between employers and contractors. Controlling employer's level of "reasonable care" will depend in part on whether it "enforces the other employer's compliance with safety/health requirements with an effective graduated system of enforcement and follow-up inspections."

9. Summit Contractors Case OSHRC ruling held that, on construction sites, only the EXPOSING or CREATING employer can be cited per 29 CFR 1910.12. In 2/09, US Ct. of Appeals (8th Cir.) overturned and held OSHA had authority to hold general contractors liable for subcontractor violations. While case was pending, some state-plan OSHA programs codified the multi-ER doctrine in state laws

10. MSHA Contractor Policy MSHA�s Program Policy Manual: Enforcement action against a production-operator for a violation(s) involving an independent contractor is normally appropriate in any of the following situations: when the production-operator has contributed by either an act or by an omission to the occurrence of a violation in the course of an independent contractor's work; when the production-operator has contributed by either an act or omission to the continued existence of a violation committed by an independent contractor; when the production-operator's miners are exposed to the hazard; or when the production-operator has control over the condition that needs abatement. In addition, the production-operator may be required to assure continued compliance with standards and regulations applicable to an independent contractor at the mine.

11. Twentymile Coal � MSHA Rules U.S. Court of Appeals, DC Circuit, reversed FMSHRC on July 7, 2006, in Secretary of Labor v. Twentymile Coal Company et al. Court backed MSHA�s position that the agency has unreviewable discretion to cite the production-operator, the independent contractor or both for a contractor�s safety violations. Subsequent, similar holding in US Court of Appeals, 4th Circuit case. Under holding, mine operator has a duty to inspect contractor�s mobile equipment for safety defects, or else ensure that the contractor has done so and to ensure that equipment brought to the mine site is defect-free.

12. Contractor Training MSHA/OSHA standards that require development of written programs, certifications, or specific employee training or competency should be carefully reviewed -- they may contain requirements that have multi-employer worksite ramifications with respect to coordination of the various employers� training programs and procedures. MSHA has little case law clarifying training needed for different types of contractors (esp. under Part 46) Regs distinguish between �miners� and �non-miners� but � Critical issues � exposure to �mine hazards� (undefined), �frequency� of presence (unclear), how to compute when contractor works at multiple sites MSHA is not giving full recognition to exemptions for customers, vendors, delivery workers, and over-the-road commercial truckers.

13. Contractor Risk Management MSHA/OSHA standards requiring coordination of programs and training include -- Hazard communication Confined spaces Lockout/tagout Process safety management Asbestos Emergency response Steel erection Air contaminant standards (e.g., lead, benzene and �Z� Tables)

14. Contractor Risk Management OSHA�s �General Duty Clause� Section 5(a) of the OSH Act requires each employer to �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.� 29 U.S.C. � 654 (a)(1). GDC citations may be limited to �direct� employer (creating/exposing) violations OSHA cannot use �egregious� penalties for GDC violations.

15. Contractor Risk Management WHY IS THIS IMPORTANT???? MSHA/OSHA citations can be introduced in some state tort actions to prove �negligence per se.� Agencies work cooperatively with Plaintiff�s attorneys to share information and establish �fault� This simplifies a plaintiff's burden of proof on �duty� and "breach" elements of negligence case. Negligence per se allows the plaintiff to prove the defendant�s �breach� of a duty of care by showing simply that the defendant violated a statute or regulation that (a) covers the class of activities giving rise to plaintiff's injuries, and (b) was designed to protect the class of persons to which plaintiff belongs.

16. Contractor Risk Management:Tort Liability Issues Negligent supervision and negligent training cases presume that an employer is subject to liability for negligent acts of its supervisors and/or trainers where it knows or should have known that its employee's conduct would subject third parties to an unreasonable risk of harm. It is critical to document the training given to contract workers, training directions provided to outside contractors, and to determine the line of supervision appropriate to each part of a particular project and each work area.

17. Contractor Risk Management:Prequalification Criteria Liability exposure can be minimized by prequalifying contractors and reviewing their safety �track record� The following steps are critical to ensuring a safe multi-employer worksite: Knowledge of the particular worksite�s practices and procedures, A diligent evaluation of the safety programs, practices and track record of the general contractor and all subcontractors involved in a project, A company-wide policy for contractor utilization, written contracts that implement the policies and provide for enforcement, and, Procedural guidelines for use in contractor selection, orientation, auditing and contract enforcement.

18. Contractor Risk Management:Prequalification Criteria Other considerations � OSHA 300 Log (or MSHA 7000-1 forms) and Worker�s Comp EMR Technical/professional certifications of contractor personnel (licenses, permits, bonding) Corporate involvement in trade organizations and professional safety organizations; and Verification of references.

19. Contractor Safety Requirements Terms and conditions in the contract should clearly state that all laws and regulations will be complied with. Some pertaining to safety are: Applicable provisions of 30 CFR Parts 1-199. Applicable provisions of 29 CFR, Part 1910 and/or 1926. State and local regulations pertaining to personnel safety that apply to the work or service the contractor is providing. (i.e.- DOT, MUTCD, DEP, etc.)

20. Contractor Orientation Ensure that all required training to �qualify� contractor employees has been provided and completed prior to the start of work (preferably by outside trainer) Provide MSHA-required Part 46/48 site-specific hazard training on hazards unique to mine site Provide orientation to mine-specific requirements and ensure that they understand the mine�s systems Contractor should be responsible for furnishing all tools and equipment needed for the contracted work activity. Use of Company tools and equipment by Contractor should not be allowed except when no practical alternative exists. Any use of Company tools and equipment should be properly documented

21. On-Site Activities Contractor should be responsible for maintaining good housekeeping at all of its work areas Contractor should conduct the mandated workplace examinations each shift for its unique active work areas and notify mine operator if there are any mine-specific hazards that need correction (e.g., unsafe highwalls, deficient berms) Contractors should notify mine operator immediately if any �accident� occurs, as mine operator may have dual obligation to notify MSHA under 50.10 Mine operator should intercede if its personnel observe any safety hazards that pose an imminent danger; for less serious violations, mine operator should immediately notify contractor�s crew supervisor and request �cease,� �correct� or �leave�

22. Contractor Risk Management:Elements of Safety Partnership Provide all necessary information about OSHA/MSHA requirements at worksite Prequalify contractors to ensure that they have sound safety programs and a culture of safety, Provide appropriate site-specific training Ensure contractors have complied with any MSHA/OSHA mandatory training and programmatic requirements Inform contract workers of health and safety hazards Ensure that a communications system alerts all workers to new hazards, equipment, changes in conditions, etc. Coordinate emergency procedures before commencement of work, including evacuation procedures and site security Check to prevent contractors from exposing YOUR workers to hazards.

23. Contractor Risk Management IN SHORT: Failure to forge a safety partnership prior to initiation of work, and a lack of clear role delineation and legal responsibilities and status can mean disaster for the Mine (production) operator or �GC�; complicates worker�s compensation and insurance claims, and may subject the employer and its agents to criminal prosecution.

24. Conclusion Contractor Risk Management is critical to workplace safety and to legal liability reduction. Prequalification of contractors can help weed out �bad actors� and minimize exposure to citations and third party tort litigation. Coordination of safety efforts is key to protecting all persons at an employer�s workplace.

25. QUESTIONS???? Adele L. Abrams, Esq., CMSP, REA 301-595-3520 safetylawyer@aol.com www.safety-law.com