Hensel Phelps Construction Co.

Plain-English summary

Hensel Phelps was the general contractor for an Austin library project where a subcontractor's employees worked beside an unprotected excavation wall more than 12 feet deep. The stipulated record established the trench violation, Hensel Phelps's control over site safety, its knowledge of the condition, and its authority to stop the subcontractor's work. The judge concluded that Commission precedent would hold Hensel Phelps liable as a controlling employer. He nevertheless applied then-controlling Fifth Circuit precedent stating that OSHA standards protected only an employer's own employees. Because no Hensel Phelps employee was exposed, the citation was vacated. The Commission later reviewed this decision and remanded the case, after which the citation was affirmed in a supplemental ALJ decision.

Decision snapshot

• Cited standard(s): 29 C.F.R. § 1926.652(a)(1)
• Outcome: Controlling-employer trench citation vacated under then-applied Fifth Circuit precedent; later reviewed and remanded by the Commission.
• Key point: This original decision turned solely on circuit precedent limiting OSHA liability to an employer's own exposed employees, despite findings of control and knowledge.

Full text (OSHRC public release)



HENSEL PHELPS CONSTRUCTION CO., Docket No. 15-1638

UNITED STATES OF AMERICA

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

S ECRETARY OF LABOR ,

Complainan t,

v.

HENSEL PHELPS
CONSTRUCTION CO. ,

Respondent.

DOCKET NO. 15-1638

Appearances:

Michael D. Schoen , Esq.,
Office of the Solicitor, U.S. Department of Labor,
Dallas, Texas

For Complainant

Michael V. Abcarian, Fisher & Phillips, LLC, Dallas, Texas

For Respondent

Before: Administrative Law Judge
Brian A. Duncan

DECISION AND ORDER

Procedural History

This
matter
is before the Occupational Safety and Health Review Commission (“Commission”) pursuant to Section 10(c) of the Occupational Safety and Health Act of 1970, 29 U.S.C. §
651
et seq .
(“the Act”). On
March 4, 2015, the Occupational Safety and Health Administration (“OSHA”)
inspected
a
Hensel Phelps Construction Company
(“Respondent”)
jobsite located at
100 West Avenue,
in Austin, Texas. (Stip. 1). As a result of that inspection, OSHA issued a
Citation and Notification of Penalty
(“Citation”)
to Respondent alleging one willful violation
of the Act with a proposed penalty of $70,000.00.
(Stips. 104, 107).

Respondent timely contested the Citation.
(Stip. 105).

Stipulations

Pursuant to Commission Rule 61, 29 C.F.R. §2200.61, the parties fully stipulated
to
the facts of this case and
each
separately
moved for a decision
based
upon
the stipulated
record. The parties’
Joint Stipulations of Fact and Procedure ,
which contains one-hundred-thirty (130) stipulations, was
filed on Ja nuary 12, 2017. Each party’s dispositive motion was filed on February 17, 2017.

Jurisdiction

Jurisdiction is conferred upon the Commission pursuant to Section 10(c) of the Act. Respondent was
an employer
engaged in a business
and industry
affecting
interstate commerce
within t he meaning of Section
3(5) of the Act , 29 U.S.C. §
652(5).
(Stips . 109, 110).

See also
Slingluff v. OSHRC , 425 F.3d 861 (10 th
Cir. 2005).

Background

On
March 4, 2015, the OSHA
Area Office
in Austin, Texas
received a
complaint
concerning a
construction
jobsite
for
the
new Austin Central Public Library
(“library project”). (Stips.
11, 88). The complaint alleged
that
employees of
CVI
Development, LLC (“CVI”)
were working in hazardous conditions at the Seaholm Substation East Screen Wall. (Stip. 88).

In response, OSHA Compliance Safety and Health Officer
Greg Halter
(“CSHO Halter”) was dispatched to the worksite to conduct an inspection.
(Stip. 102).

The inspection revealed
that, on March 4, 2015,
CVI
employees
Olivarel Nativadad, 1

Pedro Sanchez, and Karl Daniels (who was also the owner and President of CVI)
were
working next to an excavated wall, an area referred to as
the
Seaholm Substation East Screen Wall,
which
measured approximately twelve feet, six inches (12' 6") in depth by one hundred fifty feet (150') in length.
(Stips.
10,
37-39,
76,
78-80; Exs. 5-8).

The parties’ stipulations
are sufficient to prove the
prima facie
elements necessary to establish the cited violation.
See
Discussion
infra . Therefore, the
sole
remaining
issue is whether Respondent, as the General Contractor on the jobsite, can be found liable for the Citation based upon CVI employees’ exposure to the violative condition,
under OSHA’s “controlling employer” enforcement policy.

Respondent entered into a contract with the City of Austin to build the library back in 2010. (Stip. 11; Ex. 1). Respondent
subcontracted with Haynes
Eaglin Watters, LLC (“HEW”)
in
2014
to complete certain foundation and screen wall work on the Seaholm Substation East Screen Wall.
(Stips. 4, 29; Ex. 2). HEW
then subcontracted with CVI
to complete all demolition, excavation and haul-off, backfill and drain, and site concrete (foundation & retaining walls) work as required for the Seaholm Substation East Screen Wall.
(Stip. 35; Ex. 3).

Respondent had overall construction management
authority on
the library
project.
(Stip. 28). Respondent supervised the library work through
various
on-site
management personnel, including superintendents, project engineers,
and project manager(s).
(Stips. 13-21, 24, 26). Many of Respondent’s
management personnel
at this jobsite
had extensive OSHA training, education, and experience (Stips. 22, 23, 25, 27).

In
December 2014, Respondent submitted an
Excavation Safety Plan
to the City of Austin, which was
prepared by HEW.
(Stip. 43). All relevant construction documents
(including the ROCIP Project Safety Manual, HP’s Excavation Safety Plan and HP’s Accident Prevention Plan)
specified a requirement at the
Seaholm
Substation East Screen Wall
to include an excavation
slope of 1.5 (horizontal) to 1 (vertical), as well as
5 feet of level ground before
reaching the security fence surrounding the Seaholm Substation East Screen Wall work area.
(Stip. 44).

In February
2015,
after another subcontractor was brought in to resolve
unforeseen underground structure
and asbestos
issues,
CVI began
to lay
out
footings for the Seaholm Substation East Screen Wall.
(Stips.
45-56). CVI
quickly
determined that the wall footings were
not going to fit the jobsite
in accordance with construction drawings and requirements identified by Respondent’s engineers. CVI
notified HEW
of this problem, who in turn notified Respondent.
(Stip. 57). Respondent’s
management personnel visited and observed the Seaholm Substation East Screen Wall site
to evaluate the
issue.
(Stip. 59). The City of Austin ultimately agreed that the planned
Seaholm Substation East Screen Wall
could be moved
nine inches
(9”), so as to be
constructed immediately next to vertical
excavation
faces
consisting of soil,
and
unknown
fragments of
brick, metal, wood and
concrete.
(Stip.
61,
62; Exs. 5, 6, 7, 8).

On
the morning of March 4, 2015, CVI owner Karl Daniels
sent his
employees to work at another location on the library project (a
different work area
-
unrelated to the Seaholm Substation East Screen Wall),
while he awaited instructions from
Respondent
and/or HEW
concerning the
work to be performed at the Seaholm Substation East Screen Wall.
(Stip. 63). A City of Austin Inspector observed the CVI employees working at the other
area,
and told CVI owner Karl Daniels that
the only place CVI employees should be working at that time was at the utility pole location within the Seaholm Substation East Screen Wall.
(Stips. 64-66). The City of Austin Inspector followed up these instructions in an email stating the same to
various
members of Respondent’s project management team
and HEW management personnel. (Stips. 67-70; Ex. 4).

The Court notes that
in
the email communications
on this topic, CVI owner Karl Daniels expressed safety concerns about his employees working on the Seaholm Substation East Screen Wall that day. (Ex. 4). Mr. Daniels wrote to three HEW managers: “If the ‘urgency’ is due to the exposed electrical pole not being properly shored then CVI is concerned about working in said area. Please correct me if I am wrong, but CVI has been provided direction from Ash from Hensel Phelps [Respondent] to proceed with placing rebar for the walls discussed, however placing rebar in the mud and rain is unorthodox and very dangerous.” (Stips. 32-34, 68; Ex. 4, p.1-2).

After sending the March 4 th e-mail, the City of Austin Inspector
returned to Mr. Daniels and told him that
he had his notice about what CVI employees were expected to be doing and where—i.e., working only on the Seaholm Substation East Screen Wall, and at no other
area of the library project
until needed reinforcement and related work around the small transmission pole at the Seaholm Substation East Screen Wall had been fully addressed.
(Stip. 69).

Lawrence
Harding, Respondent’s Area Superintendent, received the City of Austin Inspector’s
March 4 th
e-mail and forwarded it
to
Jay Herzing,
Respondent’s Project Superintendent; Tracey Robinson, Respondent’s Engineer; Jesus Pena, Respondent’s Engineer;
Troy Saint, HEW Project Superintendent; Clotiel Haynes, HEW President;
Eric McClure, HEW Project Superintendent;
and
HEW Project Superintendent Willie Ibarra,
with the added
message:
“At this time CVI may not continue on any other work in regards to Seaholm substation until the AE [Austin Energy] and COA [City of Austin] concerns of reinforcing bar and concrete placement to the adjacent small transmission pole has been completed.”

(Stips. 24, 26, 70).

As a result of these oral and email communications,
Mr. Daniels pulled CVI employees from work
at
the other, unrelated location, and sent them to prepare the Seaholm Substation East Screen Wall area for rebar installation, which
included, but was not limited to, digging the shear key, framing the pour area, tie-in of steel rebar,
and pouring the footings.
(Stips. 72, 73; Exs. 5,
6). Later that same day,
still
March 4, 2015, as CVI employees were installing rebar next to the unprotected twelve-foot vertical wall, it began
raining intermittently.
(Stip. 75). Respondent’s Area Superintendent Lawrence Harding, Respondent’s Project Superintendent Jay Herzing,
HEW Project Superintendent Willie Ibarra, and the City of Austin Inspector were all
present at the
Seaholm Substation East Screen Wall
while
CVI employees were performing this work.
(Stips. 24,
26,
76, 77, 81; Exs. 5, 6, 7). In other words, CVI employees were working next to the exposed face of a 12-foot high, excavated, vertical, wet, soil wall that was not properly sloped or otherwise protected from cave-in hazards, in full view of Respondent’s management personnel. (Exs. 5, 6).

After OSHA’s
on-site
inspection, Respondent
hired
three
additional subcontractors to slope the wall to a 1.5 to 1 ratio; to
install wire mesh around the large transmission pole; to “shot-crete” the
wire
mesh; and to remove dirt from atop
the horizontal concrete structures. (Stips. 90, 91). Afterward, Respondent
contracted with a registered professional engineer
to issue
a stamped letter approving
CVI employees’ return to the
Seaholm Substation East Screen Wall
to complete the required work. (Stip. 92).

Discussion

To prove
a violation of an OSHA regulation ,
Complainant
must establish
by a preponderance of the evidence
that:

(1) the
cited
standard applie d
to the work ; (2) the employer
failed to comply with the requirements
of th e cited
standard; (3) employees
were exposed or
had access to the
hazard covered by the standard;
and (4) the employer had actual or constructive knowledge of the violati ve condition
( i.e . ,
the employer knew, or with the exercise of reasonable diligence could have known).

Atlantic Battery Co. ,
16 BNA OSHC 2131
(No. 90-1747, 1994).

Citation 1, Item 1

Complainant
alleged
a willful violation of the Act in Citation 1, Item 1
as follows :

29 C.F.R.
1926.652(a ) (1) :

Each employee in an excavation was not protected from cave-ins by an adequate protective system designed in accordance with 29 C.F.R. 1926.652(b) or 1926.652(c).

At the Seaholm Substation East Screen Wall, 100 West Avenue, Austin, TX, 78701, on or about March 4 th , 2015 and at times prior thereto, four (4) workers were installing rebar during intermittent rain in an unprotected excavation approximately twelve feet and six inches (12’6”) deep by one hundred and fifty feet (150’) long, exposing the workers to a cave-in hazard.

The cited standard provides:

Each employee in an excavation shall be protected from cave-ins by an adequate protective system designed in accordance with paragraph (b) or (c) of this section except when:
(i)
Excavations are made entirely in stable rock; or
(ii)
Excavations are less than 5 feet (1.52 m) in depth and examination of the ground by a competent person provides no indication of a potential cave-in.

29 C.F.R. § 1926.652(a)(1).

The partie s
stipulated to the
facts
necessary
to establish all of the
prima facie
elements of the
violation. The requirements of
the cited regulation,
29 C.F.R. 1926.652(a)(1), applied
to the work being performed by CVI employees at the
Seaholm Substation
East Screen
Wall excavation site on March 4, 2015.
(Stip. 111). The excavation at the Seaholm Substation East Screen Wall where CVI employees were working
was not protected from the potential hazard of employees being caught in, or under, a cave-in by an
adequate protective system pursuant to
29 CFR 1926.652(a)(1). (Stip. 112). The exposed wall consisted of Type C soil, was greater than
34 degrees (1.5 to 1 slope ratio),
and did not include a protective system that met the requirements of 29 CFR 1926.652(c).

(Stips.
82, 83,
112; Exs. 5, 6). The jobsite had been non-compliant for
at least a few days prior to CSHO
Halter’s arrival
on March 4, 2015.
(Stip. 84). Respondent
also
knew that on March 4, 2015, the CVI employees were performing work on the
Seaholm Substation East Screen Wall, including installation of rebar in areas
next to
the
unprotected,
twelve-foot high,
vertical
soil
wall.
(Stips.
77, 86, 87, 101). The
prima facie
elements of the violation alleged in Citation 1, Item 1 are established.

Therefore,
as stated above,
the sole remaining issue is whether Respondent, as the General Contractor for the library project, can be held liable
for the violation
as a
“controlling employer.”

Complainant argues, based upon the parties’ stipulated facts and Commission case law,
that
Respondent was properly cited for the violation
as a “controlling employer”
under OSHA’s
Multi-Employer Citation Policy.

(Stip. 129; Ex. 9). Respondent argues, based upon the parties’ stipulated facts and 5 th
Circuit case law,
that
OSHA’s “controlling employer” policy
has been invalidated and is
unenforceable. (Stip. 123). The parties have
agreed, however, that should Citation 1, Item 1
be affirmed in this case, it should be reclassified to an other-than-serious violation with a revised penalty amount of $12,471.00. (Stip. 127).

The Commission has held that “[A] n employer who either creates or controls the cited hazard has a duty under § 5(a)(2) of the Act, 29 U.S.C. § 666(a)(2), to protect not only its own employees , but those of other employers ‘ eng aged in the common undertaking.’” McDevitt Street Bovis , 19 BNA OSHC 1108 (97-1918, 2000) (quoting
Anning-Johnson , 4 BNA OSHC 1193, 1199
(No. 3694, 1976) ). “A n employer may be held responsible for the violations of other employers ‘where it could reasonably be expected to prevent or detect and abate the violations due to its supervisory authority and control over the worksite.”’
Summit Contractors,
Inc. , 23 BNA OSHC 1196 (No. 05-0839, 2010) (quoting
McDevitt
at 1109).

The parties agree that a
controlling employer is one who has general supervisory authority over the worksite, including the power to correct safety and health violations itself, or to require that others correct them.
(Stip. 116). A general contractor normally has responsibility to assure that other worksite contractors fulfill their obligations with respect to employee safety matters that affect the entire construction site.
(Stip. 118). A general construction contractor is normally well-situated to obtain abatement of safety hazards, either through its own resources or through its supervisory role with respect to work performed by subcontractors.
(Stip. 119).

Therefore, it is reasonable to expect that a general contractor will take reasonable action to assure compliance by subcontractors with required safety standards insofar as all employees on a construction site are affected.
(Stip. 120).

In this case,
Respondent
had overall construction management
authority on
the
library

project.
(Stip. 28). By virtue of its contract with the City of Austin,
and as
the
jobsite general contractor, Respondent
had authority through its officials and agents to
stop construction work
performed by subcontractors
such as HEW and CVI when
hazardous conditions were found, and to prevent
them from continuing work due to safety concerns.
(Stips. 94, 113). Respondent’s onsite safety managers had actually exercised control over jobsite safety at the library project by stopping subcontractor work
previously,
and
by
removing subcontractor employees from this jobsite. (Stips. 99, 100).

It is
undisputed
that Respondent’s Project Superintendent,
Respondent’s
Area Superintendent,
and
Respondent’s
Safety Manager each walked
portions of the library project
on a daily basis, which occasionally included the
Seaholm Substation East Screen Wall. (Stips. 85, 93, 95-98). Respondent’s Area Superintendent Lawrence Harding and
Respondent’s Project
Superintendent Jay Herzing were actually
present when CVI employees were performing
work
in the unprotected area of the excavation.
(Stips. 24, 26, 76, 77, 81; Exs. 5, 6, 7). It is further undisputed that Respondent knew that
on March 4, 2015,
the work area at the Seaholm Substation East Screen Wall was not properly protected from cave-ins.
(Stips. 77, 86, 87, 101, 114). Despite knowledge of CVI employees working in violative conditions, Respondent failed to
adequately enforce CVI’s compliance with safety and health requirements. (Stip. 115).

The stipulated record clearly establishes that Respondent had sufficient control and authority over this jobsite, including subcontractor CVI and its employees, to
reasonably be expected to
prevent and/or correct the violation in this case. Respondent’s management employees present at the excavation could have easily prevented the CVI employees from working in the unprotected area along the vertical wall, and/or ordered them to come out of the unprotected area
once Respondent’s management employees observed them. Respondent did neither. Accordingly, Citation 1, Item 1 would be affirmed under applicable Commission case law.
Summit Contractors, Inc. ;
McDevitt Street Bovis ;
Anning-Johnson ,
supra .

However, this
violation occurred at a jobsite in Austin, Texas, which is in the geographical jurisdiction of the U.S. Court of Appeals for the 5 th
Circuit. In 1981, the Fifth Circuit
clearly
ruled that the OSH Act ,
and regulations implemented thereunder ,
serve to protect an employer’s
own
employees from workplace hazards. Melerine v. Avondale Shipyards, Inc ., 659 F.2d 706 (5 th
Cir. 1981). I n
a case involving a subcontractor employee’s negligen ce action against
higher level contractor s ,
the Court
unambiguously
stated, “ OSHA regulations protect only an employer’s own employees.” Id.
at 711 .
On that basis, the Court concluded that the referenced OSHA regulations did not create or
define any duty on behalf of a
higher level contractor to the employee s
of
a
subcontractor. Id.
at 712-13. The 5 th
Circuit
expressly
adopted
the rational e of a former Commission Chairman who wrote [ in pertinent part ] that status
as an employer under the Act “ does not necessarily mean that the [R]espondent is in violation of 29 U.S.C. §654(a)(2) for every failure to comply with a safety standard which occurs within its worksite. For example, an employer cannot be held in violation of that subsection if his employees are not affected by
noncompliance with a standard….”
Id.
at 711.

“In this circuit, therefore, the class protected by OSHA regulations comprises only employers’ own employees.” Id .
at 712.
See also
Southeast Contractors v. Dunlop , 512 F.2d 675
(5 th
Cir. 1975) [A
contrac tor is not responsible for the
OSHA
violative
acts of his subcontractors or their employ ees].

“Where it is highly probable that a Commission decision would be appealed to a particular circuit, the Commission has generally applied the precedent of that circuit in deciding the case – even though it may differ from the Commission’s precedent.”
Kerns Bros. Tree Service , 18 BNA OSHC 2064 ( No. 96-1719,
2000). A nd, a s
articulated by Respondent, “a holding by a court of appeals on a legal question is binding
on the Review Commission in all cases arising within that circuit until and unless the court of appeals or the Supreme Court overturns that holding…”
Smith Steel Casting v. Donovan , 725 F.2d 1032, 1035 (5 th
Cir. 1984).   

I n this case, i t is undisputed that the employees working in
the unprotected excavation,
expo sed to the hazardous condition,
wer e not employed by Respondent. They were employed
by
subcontractor CVI. In addition, there is no
evidence in the record that any of Respondent’s own employees were exposed to the hazardous condition. Accordingly, applying
5 th
Circuit precedent, Respondent cannot be liable for a violation of the Act based
solely upon a subcontractor’s employees’
exposure to the condition. Accordingly, Citation 1, Item 1 must be vacated.

ORDER

Based upon the foregoing Findings of Fact and Conclusions
of Law, it is ORDERED that
Citation 1, Item
1 is VACATED.

SO ORDERED .

/s/
Brian A. Duncan

Judge Brian A. Duncan

U.S. Occupational Safety and Health Review Commission

Date:    April 28, 2017

Denver, Colorado

"

1
The Court notes that the parties’ stipulations spell one of the exposed employees name differently at times. Stipulation No. 10 identifies one of
the exposed employees as “Natividad Olivarez-Vasquez,” while Stipulation No. 79 identifies, presumably the same person, as “Olivarel Nativadad.”