Last summer, my pro bono representation of a group of University of Pennsylvania graduate students caused a bit of a brou-hah-hah among the SWJ‘s leading the unionization of Penn’s graduate schools.  (It also garnered me the most gracious complement ever from the American Federation for Teachers, who sent out a mass email calling me a “destructive force.”  I cannot thank the AFT enough for that comment it has been great for marketing.)

Late yesterday, it was learned that the AFT had withdrawn its petition to organize the graduate students at Penn.  News comes on the heals of similar actions at Boston College and Yale.  As much as I would like to think it was because of my “destructive force” abilities as a lawyer, alas, I had nothing to do with it.  The withdraws are a strategic attempt by the unions to prevent the National Labor Relations Board from overturning the Obama-era Columbia University decision that granted graduate students the right to organize.  By withdrawing the petitions, the unions hope to prevent an appeal which would offer the NLRB the opportunity to overturn Columbia University.  The unions appear to be content to play the long game and hope the current Republican majority make up of the Board changes in five years in which case they could continue unionization efforts of graduate students using the intact Columbia University precedent.  It is an interesting tactic and we will see how it plays out.  Of course, the NLRB can still its little used rule making authority to sua sponte overturn Columbia U.

There is a common misconception that all Philadelphia Public Works projects must be performed pursuant to a project labor agreement with various members of the Building and Construction Trades Council.  This common misconception is even shared by the current Mayoral administration, who I saw in a recent court filing testified under oath that “project labor agreements are required for all construction projects in Philadelphia with a value of at least five million dollars.”  (As is discussed below this is flat out false.)

No one has yet to step forward to challenge Philadelphia’s project labor agreement scheme.  However, if someone did, I think the challenge would be successful for three reasons.  First, contrary to the Mayor’s representative’s statement, there is no requirement that all projects in excess of $5 million be subject to a project labor agreement.  Second, Philadelphia’s project labor agreement excludes signatories to collective bargaining agreements with the United Steel Workers (USW) from participating,which violates public bid laws. Third, the exclusion of the USW, also gives rise to a challenge that federal labor law preempts the project labor agreement.

A. Background on the Philadelphia PLA.

Under a project labor agreement (PLA), a contractor wishing to perform work on a project agrees to be bound by the terms and conditions of employment established by the public owner and certain construction unions.  Each PLA varies, but typically PLA’s will require a contractor’s employees to become members of a union – if they are already not members – in order to work on a project or will require a contractor to hire labor from a union hiring hall.  PLA’s are controversial because they exclude non-union contractors from performing work on a project subject to a PLA, unless of course that contractor agrees to become “union” for purposes of that project. For reasons beyond this blog post, a merit shop contractor would be crazy to do that.

The “Philadelphia PLA” that Mayor Kenney believes is required for all public projects over $5 million was instituted by Mayor Nutter through a 2011 Executive Order (Executive Order No. 15-11, Public Works Project Labor Agreements).

B. The Language of the Philadelphia PLA.

Few people, including the current Administration, have apparently actually read the Executive Order.  If they did, they would realize that not only does it not require PLA’s it expressly states that they are not required.  This subject is made clear in Section 3(c) of the Executive Order:

What it does require are certain prerequisites before a public project is subject to a PLA.  Prerequisites that the current Administration and the one before it have ignored.

According to the Executive Order before any project is subject to a PLA, it must be reviewed to determine if a PLA would be appropriate for that particular project.  The review must be performed by the City Agency procuring the contract and a written finding concerning the appropriateness of a PLA must be forwarded to the Mayor’s Office.

 

 

My understanding is that these City Agency evaluations backed by a written finding have never been done for any project in Philadelphia subject to a PLA.  (However, if anyone has seen such a finding, please forward it to me.)

Moreover, the written recommendation that the City Agency makes must go further than simply saying “we think a PLA is good.”  The Executive Order requires the Agency to “describe how it will benefit and enhance the interests of the City on the basis of costs, efficiency, quality, safety, and/or timeliness” and “shall specifically address” a number of other factors, including, safety, costs, dispute resolution, the need to skilled labor, and “the opportunity to provide significant employment opportunities for qualified City residents, including minority males and women, and for women – and minority owned businesses.”  Basically, the exact opposite of the demographics of the unions in Philadelphia.

Once an Agency makes this written determination, the Mayor’s Office is supposed to review it and consult with the Agency.  The City is also required establish a PLA “Advisory Committee” which is supposed “monitor and evaluate” PLA’s and “make periodic evaluations to the Mayor regarding the use of [PLA’s].”  To my knowledge this Advisory Committee does not exist.

C. Challenge Pursuant to Public Bid Laws.

Because Philadelphia is not following its own law before instituting PLA’s, any project that is advertised as being the subject of a PLA is susceptible to a challenge. If a provision in bidding specifications denies the public the benefit of a fair and just competitive process, a taxpayer may bring a challenge.

D.  The USW Issue.

The model PLA which is attached to the Executive Order states that the collective bargaining agreements of members of the Philadelphia Building and Construction Trades Council (BCTC) shall govern, notwithstanding the provisions of Local or International Agreements which may differ.  Not every union is a member of the BCTC.  Notably, the USW is not.  Despite the name, the USW does not only represent steelworkers.  In fact, they represent construction workers of varying trades.

A contractor signed with the USW wishing to bid on a Philadelphia Public Works project, finds itself in an irreconcilable predicament.  If it agrees to the PLA, it will be in violation of its collective bargaining agreement with the USW which already governs the terms and conditions of its employees’ employment.  Therefore, it cannot agree to be bound to another union’s agreement.  Thus, Philadelphia PLA has the effect of excluding contractors who have CBA’s with the USW.

Pennsylvania public bid laws state that a public agency cannot exclude bidders from bidding on a project by “imposing conditions on one prospective bidder, which are not imposed upon all.”  Requiring a a signatory to the USW to breach its CBA with the USW imposes such a condition.

Excluding the USW posses another issue.  Under the National Labor Relations Act, employees have the right to form or be represented by a union.  Under the Act, if the union is properly designated as the employees representative, an employer must deal exclusively with the union.  Therefore, the Philadelphia PLA is in conflict with federal labor law.  Why?  Because a USW member cannot work on a Philadelphia Public Works project and be represented by the union of its chose.  Also, a USW contractor would be forced to ignore the USW as the bargaining agent of its employees in order to work on a Philadelphia project.  If a state or local ordinance has this effect, the Supreme Court has held it is preempted by the National Labor Relations Act.  The Philadelphia PLA appears to have that effect.

 

 

During a recent review of the NLRB dockets, I came across an interesting filing.  The Sheet Metal Contractors Association (SMCA), who is the multi-employer association that bargains with Sheet Metal Workers Local 19.  Local 19 has apparently filed an unfair labor practice charge against it.  The docket is scant on precise details but it appears to be an issue over SMCA refusal to bargain with Local 19’s .  Many collective bargaining agreements expire this year.  If Local 19’s is one of them it would likely expire on April 30.  The union’s charge could indicate problems between Local 19 and the SMCA over the terms of a new agreement.  If an agreement cannot be reached by that date, it could mean Local 19 will strike, which would impact several projects in Philadelphia.  This is worth keeping an eye on.

On construction projects owned by the Commonwealth of Pennsylvania, a contractor may make a claim with the Board of Claims.  But first, you must be aware of two limitations periods that could cause you to waive your claim if they are not met.

  1.  The six month limitation period.

The first limitations period that you need to be aware of is the six month limitations period.  Under the Procurment Code, a contractor must first file a claim with the contracting officer within six months of the claim accruing.  The Commonwealth Court has said that a claim accrues when (1) you are first able to litigate your claim, e.g., “when the amount due under the claim is known and the claimant is capable of preparing a concise and specific written statement detailing the injury,” and (2) the owner affirmatively and unequivocally notified you that it will pay you. Wayne Knorr, Inc. v. Dep’t of Transp., 973 A.2d 1061, 1087–88 (Pa.Cmwlth. 2009).

Thus, once you put in a claim for payment and the Commonwealth affirmatively denies your claim, you have six months to file a claim with the contracting officer contesting the refusal to pay.  If you do not make a claim with the contracting officer within six months, you waive your claim plain and simple.

 2.  The 15/135 day limitations period.

Like I said, but wait there’s more.  Once you make your claim with the contracting officer, he or she has 120 days to make a decision on the claim.  Once the claim is denied, you have 15 days from the mailing date of the denial to make a claim with the Board of Claims.  However, the code also says that the claim must be made within 135 days of first making the claim with the contracting officer.   For example, if you make a claim on June 1 and you receive no decision from the contracting officer and no extensions have been agreed to, then you must make your claim with the Board of Claims by November 6.  You cannot sleep on your claim with the contracting officer.

Again, if any of these deadlines are missed you are deemed to have waived your claim and even meritorious compensable claims will be dismissed.

Ah yes, retainage, what could represent your profit on a project and something frequently abused by owners on private and public projects alike.  Fortunately, Pennsylvania law offers public works contractors some protection from retainage abuse.  The Public Prompt Payment Act dictates when retainage can be withheld and when it must be released.  Agencies that fail to follow the Prompt Payment Act’s retainage rules can end up owing you interest, penalty, and attorneys fees.

The Prompt Payment Act’s Retainage Provisions

The Prompt Payment Act deals with retainage in two sections: 3921 and 3941.  Section 3921, 62 Pa.C.S.A. 3921, authorizes a government agency to withhold retainage.  But, in general, it limits the amount of retainage withheld to 10%, which is industry standard.  However, Section 3921 states that at 50% completion, the government agency must release 50% of the retainage withheld and retainage must be reduced to 5%.   There are a two caveats.  First, in order to receive the retainage reduction, there must not be a reason to hold retainage at 10%.  Second, where the Department of General Services (DGS) is the owner, retainage is capped at 6% and must be reduced to 3% at 50% completion.

Section 3941, 62 Pa.C.S.A. 3941, the project’s architect or engineer must make a final inspection of the work within 30 days of your final payment request.  If the work is found to be substantially complete, the government agency is required to make payment within forty-five days.  If the architect or engineer finds certain work is incomplete, it must identify that work in detail and the government agency may withhold 1.5 times the amount to complete that work.  The architect and engineer must also identify the estimated cost to complete the work.

The Prompt Payment Act’s Retainage Penalties

Under Section 3941(b), 10% interest is tacked on to retainage that is not paid within forty-five days of substantial completion.  Under Section 3935, if the government agency is found to have withheld retainage in bad faith, it may be liable for a additional interest at 1% per month and reasonable attorneys fees.

Payment of Retainage to Subcontractors

The Prompt Payment Act contains an important provision regarding payment of retainage to subcontractors.  Prime contractors are required to pay retainage to subcontractors within twenty days of receiving retainage from the owner.  Therefore, if you are a subcontractor and have not received at least a 50% retainage reduction and you know the project is more than 50% complete, you need to start asking questions of the prime contractor.

 

Much of the Eastern United States is just now emerging from a historic two week cold snap.  In much of the Northeast and Mid-Atlantic, the temperature stayed below freezing for 15 days straight.  Cities recorded the lowest temperatures in a quarter century.  Winter Storm Grayson reeked havoc along the Eastern Coast bringing snow to places like Charleston and a crippling blizzard to Boston.

The record cold snap also impacted the construction industry.  Delivery delays, the inability to apply weather sensitive applications (like cast in place concrete), and the unavailability of labor are just a few things that extreme weather can cause on a construction project.  If they happen at the wrong time, delays can destroy project schedules and make previous delays even worse. Delays cost money and can mean the difference between a profitable project from both the owner and contractors perspective.

In order to determine what relief you are entitled to because of the Little Ice Age’s impacts to your project, you need to determine three things.  First, is the delay compensable. Second, is the delay excusable.  Third, is the delay critical.

Is it compensable?

Many contractors contain so called “no damages for delay” clauses that limit a contractor’s right to recover for project delays to an extension of time only.  That means a contractor will be entitled to relief from the agreed upon substantial completion date but is not entitled to additional money for the delay.  There are exceptions to no damages for delay clause, as I discussed in this blog post, back in the day.  But, you need to prove those exceptions first.

Is it excusable?

Weather related delay are rooted in the common law rule of impracticability or impossibility of performance.  This means that the weather delays are only compensable when they are so unusual that neither party could have reasonably anticipated them at the time of contract.  Of course, it is reasonable to assume that one should expect cold weather in the Northeast during the winter.  However, what about extreme cold weather for two weeks, like we just had.  Better yet, what about the extreme cold in the Southeastern Conference portion of the United States?

Where weather related delays often become an issue is when they compound other delays.  For example, a general contractor may have anticipated cold weather in the winter when it agreed to the schedule.  However, it did not anticipate that other project delays would cause its ready mix contractor to have to pour in the winter rather than the fall, as it was anticipated.  In that situation, the delay because an issue both for the general contractor and the subcontractor.

Is it critical?

From the prime contractor’s perspective, the delay must be on the critical path for it to matter. For example, a delay by an interior painting contractor will probably not impact the schedule to a large extent.  However, a contractor whose completion is critical to multiple follow trades, like a structural steel contractor, is almost certainly on the critical path.

What about notice?

Assuming the delay is excusable and it is critical, you need to assure that you are giving proper notice to your counter party.  Even if your contract contains a no damages for delay clause, you still want to seek an extension of time to avoid a liquidated damage claim.  Many contract, however, require you to give notice within a certain amount of time of first learning about the delay.  That means if the weather has impacted your schedule and you believe you will require additional time to perform YOU NEED TO GIVE WRITTEN NOTICE IMMEDIATELY.  Otherwise, you will end up waiving your right to claim additional time or additional compensation.

 

The strategy to avoid union salts is rather simple.  But, simplicity does not mean easy.  The process requires discipline.  A salt is a paid union organizer that attempts to gain employment with a non-union employer for the purpose of either (a) organizing the employers workforce or (b) bringing a costly unfair labor practice charge for discriminatory hiring practices.

A “covert salt” is someone who conceals his union affiliation in order to gain employment with a non-union employer for the purpose of starting a union organizing campaign.  Actually, conceal is an understatement.  Covert salts actively lie to gain employment with a non-union employer.  Covert salts apply for jobs under false names, social security numbers, and use bogus resumes.

An “overt salt” is someone who proudly announces his union affiliation for the opposite reason.  He hopes you do not hire him because of his union affiliation.  The National Labor Relations Act prohibits employers from refusing to hire someone because of his or her union affiliation or sympathizes.  Unions count on novice employers to make the mistake of believing that they can refuse to hire a union member if they are a non-union employer.  Even if the person applying for the job stated purpose is to organize your company, you cannot refuse to hire them on that basis.  If the National Labor Relations Board determines that you discriminated against an individual based on his union affiliation, it can order you to hire the individual and worse order you to pay the individual (who is also being compensated handsomely by the union) the salary you would have paid him if you had hired him.

Believe it or not, the Supreme Court has declared the practice of salting legal.

However, while the deck is certainly stacked in favor of the unions, employers can still avoid union salts.  But again, it takes discipline.  Why is discipline so important in avoiding union salts? Because the steps you take to avoid union salts must be uniformly applied.  Otherwise, a practice deployed only against a suspected salt will be evidence of your intent to discriminate.

  1. Show no animus towards unions.

First and foremost, if a overt salt applies for a job position and they are remotely qualified, you should interview him.  However, the person conducting the interview cannot show any animosity towards the union whatsoever.  A good initial interviewer would be someone that has the personality of drywall.  Union salts are trained professionals.  The will attempt to bait the interviewer into making a comment that proves your company has an animus towards organized labor.  The person performing the initial interview should be trained to keep it boring as heck.  Ask basic questions about employment history, skill level, desire salary, ect.  Any questions posed to the interviewer about unions should be met with a blank stare or vague reply.  By simply granting the covert salt an interview, you have significantly undercut the unions ability to bring a unfair labor practice charge against you.

    2.  Keep accurate records of ALL interviews.

The point is critical.  Why?  Because if the union files an unfair labor practice charge against your firm, you will be given an opportunity to convince the NLRB investigating office that the charge is meritless. If the agent agrees, no complaint will be filed.

It is important to keep records of all interviews not just interviews of overt salts because you need to be able to show uniform application of the interview process.  Employers may even consider the bold step on audio or video recording interviews.  However, before doing this you should confirm what your individual state law is on audio and video recording.  Some states require consent for the person being recorded.  (Stating that you record all interviews could be enough to scare away salts.)

It is also important to keep records of subsequent interaction with the overt salt.  Typical overt salts do not actually want to work for your firm.  Instead, they exist solely to trigger an unfair labor practice charge against you based on your alleged discrimination against them.  Knowing this, you can use some reverse psychology by actually offering the overt salt a job.  Usually, the overt salt offered a position will not call your office back.  However, that will not deter the union from filing an unfair labor practice charge anyway. But, armed with records that you attempted to contact the salt and the boring interview where you showed no emotion concerning unions, it becomes almost impossible for the union to have a valid salting charge.

3. Follow up with references.

For those not bold enough to offer the salt a job, then employment must be denied on some neutral basis.  Salts often fabricate resumes and employment history.  Therefore, you need to call each reference and alleged former employer and ask about the salt.  Of course, when performing this task, do not forget about step 2.  Make sure to keep records of your contact with former employers.  Also, this policy must be implemented with ALL applicants.  You cannot simply chose to call former employers of suspected union salts.  If the union salt’s references do not pan out or do not reply to your inquires (both highly likely) you can legally deny the salt employment because of your neutral policy of employing only those with positive feedback from former employers.  Again discipline is key, the policy has to be applied consistently and with every applicant.

 4.   Institute a dishonesty policy.

For those without the ability to conduct adequate reference checks on each applicant, a dishonesty policy provides another avenue to prevent the employment of a covert salt that lies.  This policy should be in writing and state that false information supplied to the employer on an application is grounds for immediate termination.  It should be disclosed to the applicant at the time of the interview.  I recommend having the applicant sign an acknowledgment of the policy.  However, it does not end with simply having a policy.  Remember the rule of uniformity.  The policy cannot only be invoked against overt salts.  Anyone who provides knowingly false information on an application has to be terminated and you need to be able to establish that you have terminated other based on this policy.

There are only a few of the steps you can take to prevent union salts from causing havoc.  Of course, I am not going to give away all of my countermeasures in this blog post.  But these are start.

 

Yes. There seems to be common misconception that a contractor, subcontractor, or supplier, has six months from its last day of work on the project to file a mechanics lien.  I frequently see mechanics liens whereby the claimant states “Claimants last day of work on the project was X.”  However, Section 1502 (49 P.S. Section 1502) of the Pennsylvania Mechanics Lien is clear that a lien must be filed within six month of “the completion of his work.”  Under the Lien Law, “completion of the work” is a defined term and means “means performance of the last of the labor or delivery of the last of the materials required by the terms of the claimant’s contract or agreement, whichever last occurs.”

This distinction is significant because it means a contractor, subcontractor, or supplier must complete all of the scope of work in its contract before it files a mechanics lien.  This also means that a contractor, subcontractor, or supplier must continue to work even if it is not being paid in order to maintain its lien rights.

The Superior Court has spoken on the issue and made this very clear.  In Philadelphia Const. Servs., LLC v. Domb, 2006 PA Super 184, ¶ 18, 903 A.2d 1262, 1268 (Pa. Super. Ct. 2006) (full disclosure I represented the owner-appellant in this case and argued that a contractor needed to complete all of its work before it filed a mechanics lien), the Court held that a contractor must complete its work in order to perfect its mechanics lien rights, even if the contractor is not getting paid.  As the Court held, the Lien Law “mandates an aggrieved subcontractor must serve preliminary notice prior to “completion of the work” and then finish the job so they can perfect the lien within four months of “completion of the work.””  The Court recognized that “such a mandate may seem fundamentally unfair because it forces a subcontractor to render full performance even when the other party already has breached the contract in order to be afforded the remedy of a mechanics’ lien.”  However, the Court also recognized the uniqueness of a mechanics lien, calling it an “extraordinary remedy” and, therefore, opined that the result was reasonable.

The takeaway?  From an owner’s perspective, if a contractor or subcontractor walks off a job because of non-payment (as was the case in Philadelphia Construction Services) and file a lien, preliminary objections should successfully strike the lien.  From the contractor’s perspective, you have to make the Hobbesian choice of working for free to perfect your mechanics lien rights or walking off the job and pursuing an ordinary breach of contract claim.

 

A recent New York Times article about the unionization of digital media companies like Vox, (the now defunct) Gawker, and Thrillist provides important lessons for companies concerned about unionization, not just those in the digital media niche.

Employers should pay attention to the demographics of these firms.  Their employees are young and college educated.  Given those demographics, the move towards unionization is not surprising.  A Pew Poll found that at least 55% of so called millennials are receptive to unions. If one employee’s comments from the article are any indication, the employees have taken the union bait hook, line, and sinker.  The employee is quoted as saying she supported the union because it will bring “transparency on pay, having a decent pay scale that allows a ladder of sustainability where you can support yourself on such an income, and having due process and a guarantee of severance in the case of layoffs.”  The article also notes that the employees at these firms sounded a common (yet false) refrain when it comes to unionization – the belief that it would lead to better wages, benefits, and job stability.

Notice how the employee described what the union could offer.  Words like “transparency,” and “sustainability,” are the buzz words of a generation and show up in any marketing effort tailored towards millennials.  Union organizers know that the generally held ideals of this generation present fertile ground for their message.  As your workforce skews younger, how do you counteract an organizing message to a ground that is predisposed to receive it favorably?  By simply telling the truth.  The union cannot delivery on what they are promising.  There is no easier place to start then the claim that unionization will lead to job security and better wages.

   1. Job stability and security.

I have no idea why these employees think that having a collective bargaining agreement will make it less likely that they will be laid off.  If anyone knows of a CBA, that prohibits layoffs send it to me.  Sure, there are certain agreements that contain grievance provisions that an employee can invoke if they believe they have be wrongfully terminated, but in the interim they are still laid off.  Ditto with the guarantee of severance upon layoffs.

    2.   Unionization does not lead to better wages and benefits.

Unionization will lead to a pay raise is a tried and true organizers tactic.  The truth is that unionization can result in better, worse, or the same wages and benefits. A successful union vote guarantees only one thing – negotiating.  It does not result in the employer signing a CBA.  Employees erroneously think that their current wage and benefit package is the floor from which these negotiations begin.  This is false.  The truth is that at the bargaining table the parties are working from a clean slate.  Those negotiations can lead to wages and benefits that are better, worse, or the same as what employees currently have.  Furthermore, during negotiations, wages and benefits frozen.

Millennials have been exposed to anti-free market drivel since grad school.  So, employers cannot wait until a petition for election is being circulated to start telling their employees the truth.

 

The United States Court of Appeals for the 5th Circuit has been asked to review OSHA’s twenty year old “controlling employer” policy.  As many contractors are surprised to learn, under OSHA’s controlling employer policy, you can be given an OSHA citation even when your own employee is not exposed to the alleged hazard.

A.  The Controlling Employer Policy

OSHA’s current controlling employer policy has been effective since 1999.  That policy applies to multi-employer worksites, which means virtually all construction sites.  Under the policy, OSHA can cite the creating, exposing, correcting, or controlling employer.  A creating employer is one who creates the hazard to which workers are exposed.  The exposing employer is one who permits his employees to be exposed to the hazard, whether it created the hazard or not.  The correcting employer is one who is responsible with correcting known hazards. Finally, the controlling employer is one “who has general supervisory authority over the worksite, including the power to correct safety and health violations itself or require others to correct them.”  Most general contractors and CM’s are controlling employers.

Under OSHA’s policy, a contractor’s OSHA safety obligations hinges on whether it is a creating, exposing, correcting, or  controlling employer.  The creating, exposing, and correcting contractors obligations are fairly straightforward.  However, the controlling contractors obligations are more nuisanced.

If an employer creates a hazardous condition, it must immediately and effective steps to keep everyone away from the hazard and notify the party responsible for correcting the hazard.  If the creating employer is also responsible for correcting the hazard, then it should immediately take steps to correct it all while creating folks away from the hazard.  Pretty basic.

If the employer is the exposing employer, then a normal OSHA citation analysis applies.  The employer will be cited for exposing its employees to the hazard and OSHA must show that (a) the employer knew or should have known of the condition; (b) that the specified OSHA standard applies; and (c) that the employees were actually exposed to the hazard.

If the employer is the correcting employer, then, as common sense would suggest, it should correct hazards that are made known to it.  Also, the correcting employer should regularly inspect the site to make itself aware of hazards that it could correct.

The controlling employers duties are more subjective.  OSHA admits that the controlling employer’s “duty of reasonable care is less than what is required of an employer with respect to protecting its own employees.”  OSHA lists several factors evaluating whether a controlling employer exercised reasonable care.  The one constant is that a controlling employer should take some form of affirmative steps to (a) make itself aware of hazards and (b) enforce a policy to make sure known hazards are corrected.  In other words, the controlling employer cannot make controlling OSHA violations someone else’s problem.  This attitude is more prevalent than you think.

What should the controlling employer do?  Walk the site at regular intervals to inspect for obvious hazards, engage subcontractors with a strong record of safety, maintaining a worksite safety policy and enforce it.  In other words, just having a manual is not enough.

These steps really make all the difference. I recently navigated my client through an OSHA investigation which resulted in OSHA declining to issue a citation.  As much as I would like to say that my legal acumen saved the day, it was really what my client did long before my involvement, which is to credit. It regularly walked the site, it pointed out obvious hazards, it maintained a safety manual and program which it followed, and it hired subcontractors with strong safety records.  We were able to present all of this to OSHA during the investigation and it is what made the difference.

B.  Criticism of the Policy

The chief criticism of the policy is that it extends beyond the Congressional mandate that OSHA cite employers who expose employees to hazards.  Therefore, OSHA lacks the authority to cite a contractor when those exposed to the hazard are employed by someone else.  In 2007, in Sect. of Labor v. Summit Contractors, Inc., the OSHRC struct down the controlling employer policy. However, the 8th Circuit Court of Appeals overturned that decision and reinstated the controlling employer policy.  Now, the 5th Circuit is asked to review the policy.

C.  Takeaways

The bottom line is that every contractor on a construction site needs to be vigilant about safety in order to avoid ending up in OSHA’s cross-hairs.  Even if your employees are far from the hazard, the best approach is that if you see something say something and of course document it in writing.