MLB Industries, Inc.

Plain-English summary

MLB supplied three union laborers to Crown Zellerbach for emergency concrete-floor removal work at Crown’s construction project. The workers used no fall protection, and one fell about 14 feet when the concrete beneath him gave way and later died from his injuries. The judge treated MLB as the employer, affirmed a repeated personal-protective-equipment violation, and assessed $1,540. The Commission emphasized control of the work environment when identifying the responsible employer under the Act. Crown selected and supervised the work, supplied the tools, controlled the site, and was best positioned to provide safety measures, while MLB mainly supplied labor and handled payroll. The Commission therefore held that Crown, not MLB, was the employer for the cited work and vacated the citation.

Decision snapshot

• Cited standard(s): 29 C.F.R. § 1926.28(a)
• Outcome: Repeated citation and $1,540 penalty vacated as to MLB.
• Key point: For loaned workers, control over the work and the ability to abate hazards carry greater weight than payroll or the workers’ usual employer relationship.

Full text (OSHRC public release)

Docket No. 83-0231

SECRETARY OF LABOR,

Complainant,

v.

MLB INDUSTRIES, INC.,

Respondent.

OSHRC Docket No. 83-0231

DECISION

Before:  BUCKLEY, Chairman; RADER and WALL, Commissioners.

BY THE COMMISSION:

This case is before the Occupational Safety and
Health Review Commission under 29 U.S.C. � 661(i), section 12(j) of the Occupational
Safety and Health Act of 1970, 29 U.S.C. �� 651-678 ("the Act").  The
Commission is an adjudicatory agency, independent of the Department of Labor and the
Occupational Safety and Health Administration.  It was established to resolve
disputes arising out of enforcement actions brought by the Secretary of Labor
("Secretary") under the Act and has no regulatory functions.  See
section 10(c) of the Act, 29 U.S.C. � 659(c).

Administrative Law Judge Jerome C. Ditore found
that Respondent, MLB Industries, Inc. ("MLB"), had failed to comply with 29
C.F.R. � 1926.28(a)[[1]] in that three employees were not using safety belts when they
were exposed to a potential fall of 14 feet. The issue on review is whether the judge
correctly found that MLB was the employer of these employees for purposes of the Act.
[[2]]

I.

Crown Zellerbach ("Crown") was the
owner of and a general contractor at a construction project in South Glens Falls Mills,
New York.  On February 28, 1983, MLB was completing some work at a warehouse in the
construction project pursuant to a contract with Crown.  On that day, Craig Dexter,
project engineer for Crown, contacted George Bromley, project manager for MLB.  
Dexter said that he had an "emergency," and asked Bromley if he could supply
manpower to remove sections of a floor at the "IP" building, which was located
about one-quarter mile from the warehouse.  According to Bromley, Dexter stated that
he would tell the workers what to do, would furnish the tools needed, and would supervise
the work.  Nothing else was discussed between Dexter and Bromley.

At the time of Dexter's request, MLB had a
contract with the local union and therefore had access to union labor, but Crown did not.
  Thus, according to MLB's vice president of operations, MLB served as a
"conduit for labor" for Crown and had done so on at least two previous
occasions.  On those occasions there were no purchase orders; MLB would supply the
laborers, pay them, and bill Crown after the work was completed.  During the previous
transactions, Dexter and others from Crown had told Bromley that they did not want
supervision, just manpower.  Bromley further testified that, on these occasions, MLB
was not directed or expected to provide safety equipment or safety precautions.

At approximately noon on February 28, Bromley met Paul Stafford at the warehouse, where
Stafford had been performing some work for MLB.  Bromley told Stafford that he was to
break out some concrete and that Dexter would tell him what to do and would supply the
necessary tools.  Bromley took Stafford to the IP building site, where he introduced
Stafford to Dexter.  Bromley then telephoned Peter Ingleston, a laborer, and sent him
to meet Stafford at the IP building site.

At about 12:30 p.m. on February 28, Dexter took
Stafford and Ingleston to the location where they would do the work.  Dexter showed
them approximately six or seven sections of the concrete floor that had to be removed, and
told them how the sections had to be chopped out.  Dexter told the workers to use the
tools that were there, which consisted of jackhammers and a compressor. Dexter also told
the labors to wear the hard hats, safety glasses, and ear plugs that the laborers had
brought with them to the worksite, instructions that were consistent with the arrangements
MLB and Crown had made.  Dexter did not mention the use of fall protection.

Stafford and Ingleston worked about 3 1/2 hours
that afternoon and cut out two sections of the floor.  While they were working,
Dexter was in the area two or three times.  During one of these times, Stafford told
Dexter that one of the jackhammers was not working properly.  Dexter told Stafford to
"go get a hammer from someplace."  Stafford obtained a jackhammer from
MLB's trailer at another job.

When Stafford and Ingleston returned to the
worksite at about 7:00 a.m. on March 1, they were joined by Bob Fletcher, another laborer
supplied by MLB.  Dexter briefly spoke to the workers at the beginning of the work
day.  Dexter also was in the area two other times that morning, for a total of about
5 to 10 minutes.  On one of these occasions, Dexter indicated that he planned to send
the employers who were working below to lunch, so that the laborers could continue working
without endangering other employees with falling debris.

At approximately 11:55 a.m., while Ingleston and
Fletcher were cutting out a section of the floor with jackhammers, the concrete on which
Fletcher was standing gave way.  Fletcher fell approximately 14 feet to the basement
and later died of his injuries.

The concrete floor that the employees were
working on had been poured in an arch form to give it support, but the floor did not
contain rebars or other reinforcement.  Stafford testified that he had been told
that, if the arch of the floor was cut, the floor would be weakened and would be unsafe.
 Stafford believed that he was told this before the accident, but he could not recall
who had told him this.  The three employees had not used safety belts or lifelines,
nor had they been provided with any other type of fall protection.  Both Stafford and
Ingleston, as well as the compliance officer, testified that safety belts and lifelines
could have been used by the laborers, since there were beams nearby where the lines could
have been attached.

At the time of the accident, Stafford had worked
for MLB for 14 or 15 years.  However, Stafford did not consider MLB to be his
employer for the work at the IP building, since MLB did not supervise the work, but rather
"we were listening" to Dexter of Crown. Ingleston, on the other hand, considered
MLB to be his employer for this work, because Bromley had told him to go to the worksite
and MLB had been his employer for the past three years.

There was conflicting testimony about Stafford's
status on this job.  Stafford testified that, although his job title was "labor
foreman" and he was paid at a foreman's pay rate, he did not act as a foreman for the
concrete removal work.  Both Stafford and Ingleston considered Dexter to be the
foreman in charge of the project.  However, the compliance officer testified that,
during the inspection, Stafford was identified as a foreman by an MLB safety supervisor,
and that Stafford himself said he was a foreman.  Ingleston also stated that Stafford
was "a foreman over there," and that he "gets stuff set up for us."

Stafford testified that he believed that Crown
could have thrown him off the worksite if Crown thought that his work was unsatisfactory.
 He stated, however, that Crown would have to notify Bromley or "Mr.
M.L.B.," because "they are the ones that sent me there."  Bromley
testified that he could have laid off Stafford, Ingleston or Fletcher from the job at the
IP building.

MLB paid the three employees for their work at
the IP building and sent Crown a bill, totaling $577, for the work.  That amount
equaled the employees' wages, payments for the employees' pension, welfare, taxes, and
insurance, and a 10% markup for handling the payroll.

II.

In determining whether MLB was the employer
responsible for the safety of the employees performing the work at issue, Judge Ditore
considered the following five factors:

1.  Whom the employee considers to be his
or her employer;

2.  Who pays the employee's wages;

3.  Who is responsible for controlling the employee's activities;

4.  Who has the power as opposed to the responsibility to control the employee; and

5.  Who has the power to fire the employee or to modify the employee's employment
conditions.

The judge observed that in Del-Mont
Construction Co ., 81 OSAHRC 35/E11, 9 BNA OSHC 1703, 1981 CCH OSHD � 25,324 (No.
76-4899, 1981), the Commission considered these five factors in determining
employer-employee relationships.

The judge found that Stafford, Ingleston, and
Fletcher were employees of MLB, not Crown.  The judge found that MLB paid the
employees' wages, had the ability and the power to control the employees, and could fire
them or otherwise modify their working conditions.  The judge also noted that
Ingleston believed he was MLB's employee, while Stafford considered himself to be an
employee of Crown.  However, the judge found that Stafford, despite his belief, was
MLB's labor foreman on the job and directed the activities of the other two employees.
 In the judge's view, the supervisory role of Dexter of Crown was limited, since he
left the employees under Stafford's supervision to do the job after telling them what to
do.  The judge concluded that MLB was responsible for the safety on the jobsite and
for the cited violation.  The judge found that MLB had committed a repeated violation
of section 1926.28(a) and assessed a penalty of $1,540.

MLB contends that the key factor in identifying
employment relationships under the Act is the degree of control and supervision exerted by
the alleged employer.  MLB asserts that the laborers were under the control and
supervision of Crown.  The Secretary contends that the judge properly applied the
five-factor test for determining employment relationships under the Act and correctly held
that the workers remained employees of MLB.

III.

This case involves the circumstances under which
a particular company can be considered an "employer" under the Act so as to be
held responsible for the safety of its employees. [[3]]  The Supreme Court has held,
in the context of other statutes, that it is inappropriate to use varying state common law
definitions of an employee and employer in construing federal legislation.  United
States v. Silk , 331 U.S. 704 (1974).  Instead of looking at narrow common law
definitions, the Supreme Court has looked to the purpose of the statute involved in
deciding how employment relationships should be defined.  NLRB v. Hearst
Publications, Inc ., 322 U.S. 111, 124 (1944) (the meaning of the term
"employee" under the National Labor Relations Act is to be determined primarily
from the history, terms, and purposes of the legislation).  Further, the United
States courts of appeals that have addressed the issue under the Act have held that
employment relationships should be determined by reference to the Act's purpose and
policy. Clarkson Construction Co. v. OSHRC , 531 F.2d 451, 457-58 (10th Cir. 1976); Frohlick
Crane Service, Inc. v. OSHRC , 521 F.2d 628, 631-32 (10th Cir. 1975); Brennan v.
Gilles & Cotting, Inc ., 504 F.2d 1255, 1261 (4th Cir. 1974).

The express purpose of the Act is to
"assure so far as possible every working man and woman in the Nation safe and
healthful working conditions."  29 U.S.C. � 651(b).  To effectuate this
purpose it is appropriate for the Commission, in considering whether an employment
relationship exists, to place primary reliance upon who has control over the work
environment such that abatement of the hazards can be obtained.[[4]]  This approach
is consistent with the above-cited Supreme Court and courts of appeals opinions.  It
is also in keeping with the Commission's analysis in the analogous situation of the
multi-employer construction worksite, where the Commission has concluded that the Act's
purpose is best served if an employer's duty to comply with OSHA standards is based upon
whether it created or controlled the cited hazard.[[5]]

As the judge stated in his decision, the
Commission has generally considered five factors in determining employer-employee
relationships.  Del-Mont Construction Co ., supra ; Sam Hall &
Sons, Inc. , 80 OSAHRC 106/A2, 8 BNA OSHC 2176, 1980 CCH OSHD � 24,927 (No. 76-4988,
1980); Acchione & Canuso, Inc ., 80 OSAHRC 5/B4, 7 BNA OSHC 2128, 1980 CCH OSHD
� 24,174 (No. 16180, 1980). [[6]]  Three of these factors -- who is responsible for
controlling the employee's activities, who has the power to control the employee, and who
has the power to fire the employee or to modify the employee's employment condition -- are
related to the issue of who controls the work environment and employees.  Since these
factors give effect to the remedial purpose of the Act, they should be given particular
emphasis in determining who is an employer under the Act.  The other two factors
involve the employees' belief as to who is their employer and the determination of who
pays the laborers' wages.  Although these latter two factors have some bearing on the
employment relationship, they are not directly related to the issue of control, and should
normally be accorded less emphasis in determining the employment relationship under the
Act.

Although we continue to evaluate those factors
set forth in Del-Mont in order to determine who is the responsible employer under
the Act, we note that the Commission has never considered any list of factors to be all
inclusive.  Moreover, in determining the employment relationship, each situation must
be examined on a case-by-case basis and all relevant factors considered.  See Griffin
& Brand of McAllen, Inc ., supra .

Analyzing this case from the standpoint of who
had control over the employees and their activities, we conclude that Crown had both the
responsibility and the power to control the employees' activities.  Crown's control
over the employees' activities was consistent with the arrangements made between Crown and
MLB prior to the beginning of the work.  In his request for workers, Dexter, Crown's
project engineer, told Bromley, MLB's project engineer, that he would tell the workers
what to do, would furnish the tools and would supervise the work.  Further, in other
instances when MLB furnished Crown with labor, Bromley was told that Crown did not want
supervision, just manpower, and MLB was not directed or expected to provide safety
equipment or safety precautions.

Crown owned the construction project and was the
general contractor responsible for the work at the IP building.  When the employees
arrived at the site, Dexter showed them the sections of concrete floor that had to be
removed and told them how the work was to be done.  He also told the employees to use
the tools that Crown had provided at the worksite, and to wear their hard hats, safety
glasses, and ear plugs.[[7]]  Although no MLB supervisor was in the area,[[8]] Dexter
of Crown periodically checked the progress of the work.  Thus, the circumstances
under which the work was performed lead to the conclusion that Crown had the power to
direct the employees' activities and to insure the work was done safely.

The judge found that Dexter's role was a
"limited one," and that control of the employees' activities was left to
Stafford as MLB's foreman at the jobsite.  We conclude that these findings are not
supported by a preponderance of the evidence.  Both Stafford and Ingleston testified
that they considered Dexter to be in charge of the project.  Additionally, as
discussed above, Crown did not request supervision from MLB for the work.  Although
Stafford's job title was "laborer foreman" and he was paid at a foreman's pay
rate, he testified that he did not act as a foreman on this job.[[9]]  Further, there
is no evidence that Stafford had disciplinary authority, instructed the other workers in
safety, enforced safety rules, or in any other respects acted as their supervisor on this
job. Cf . Daniel International Corp. v. OSHRC , 683 F.2d 361 (11th Cir. 1982)
("leadman" at construction site is not a supervisor for purposes of employer's
defense of isolated employee misconduct).  Rather, Dexter's role in explaining the
work to the employees, instructing that they wear hard hats, safety glasses, and ear
plugs, determining when employees were to take lunch breaks, and checking the progress of
the work establishes that he was the supervisor in charge of the work.

In contrast to Crown's direct control over the
employees' activities through Dexter's supervision, MLB's power to control the employees
and to modify their working conditions was largely indirect or theoretical.  Although
MLB selected and contacted the employees about the job, there was no showing that MLB's
initial contact with the employees had an impact upon how they performed their work or
their safety.[[10]]  Although MLB may have had the authority to withdraw the laborers
from the worksite, to fire them, and to assign other laborers to do the work, MLB was not
performing any work at the IP building and did not take any role in determining how the
concrete floor was to be removed.  Further there is no indication that MLB knew of
any circumstances that would have required it to take action with respect to the workers'
employment, either for safety purposes or for any other reason.  Therefore, MLB did
not have sufficient control of the work environment or employee's activities to support a
finding that it was an employer under the Act.

The other factors that have been considered by
the Commission in determining employer-employee relationships do not support a finding
that MLB was the employer of the employees in this case.  With respect to who the
employees considered their employer to be, we note that Stafford considered Crown to be
the employer based upon Dexter's role in supervising the work.  However, Ingleston
considered MLB to be his employer because MLB had been his regular employer for three
years and Bromley had contacted him about the work.  Thus, the evidence is
inconclusive with respect to whom the employees considered their employer.

With respect to who paid the employees' wages,
it is clear that, although the initial payment of the wages was made by MLB, Crown was
billed and ultimately responsible for payment.  MLB was merely serving as a
"conduit for labor" for Crown, since MLB had a contract with the local union but
Crown did not.  MLB billed Crown for the employees' wages, their benefits, and a 10%
markup for handling the payroll.  Thus, while MLB technically paid the workers, it
appears that it assumed this responsibility primarily as a matter of convenience and that
it was Crown who actually was responsible for the cost.  Accordingly, we do not
consider this payment of the employees to be significant in determining who was their
employer.

Having reviewed the circumstances surrounding
the employment relationship in this case, we conclude that Crown, not MLB, was the
employer of the three employees for purposes of the cited violation. [[11]]  In
reaching this conclusion, we attach particular importance to the fact that Crown assumed
responsibility for the employees' activities, had control of the worksite, and provided
the supervision of the work.  Therefore, Crown was in a better position than MLB to
assure the safety of the workers in removing sections of the concrete floor.[[12]]

Accordingly, the citation in this case is
vacated.

FOR THE COMMISSION

Ray H. Darling, Jr.

Executive Secretary

DATED:  October 31, 1985

WALL, Commissioner, concurring:

I concur with the majority opinion in that the
indicia of employer/employee relationships should be viewed consistently with the intent
of the statute rather than to track "employee" analysis derived from other
statutes, and that the indicia of employment should be analyzed in the context of the
facts of each case.  However, I would absolve MLB of responsibility for safety in
this case, and assign it to Crown irrespective of which company was the
"employer" of the three laborers.  Even if these employees were those of
MLB under any construction of the term employer, then these employees were
"loaned" to Crown.  In my view, the paramount consideration under the
Occupational Safety and Health Act is who had control of the workplace, and under the
facts of this case it would clearly reside in Crown.  While it would not always be
appropriate to assign safety responsibility to the "loanee employer" as opposed
to the "loaner employer"[[13]] as is brought out in the majority opinion,
Crown's project engineer told Bromley, MLB's project engineer, that he would tell the
workers what to do, would furnish the tools and would supervise the work.  Further,
in other instances when MLB furnished Crown with labor, Bromley was told that Crown did
not want supervision, just manpower, and MLB was not directed or expected to provide
safety equipment or safety precautions.  When the employees arrived at the site,
Dexter showed them the sections of concrete floor that had to be removed, and told the
employees what tools to use and what protective devices to wear.  The situs was
Crown's workplace.  No MLB supervisor was in the area, and MLB cannot reasonably be
held accountable for the employees' safety in these circumstances.  Notwithstanding
the employer/employee relationship, Crown should have been held responsible for the safety
of the employees, and, in fact, was the only employer in a position to provide for safety.
  Accordingly, I concur.

FOOTNOTES:

[[1]] The standard provides:

� 1926.28 Personal protective equipment .

(a) The employer is responsible for requiring
the wearing of appropriate personal protective equipment in all operations where there is
an exposure to hazardous conditions or where this part indicates the need for using such
equipment to reduce the hazards to the employees.

[[2]] MLB does not argue on review that
�1926.28(a) was not violated; MLB only argues that it should not be held responsible for
the violation.

[[3]] The Act defines the term
"employer" as "a person engaged in a business affecting commerce who has
employees, but does not include the United States or any State or political subdivision of
a State."  29 U.S.C. � 652(5).  However, the Act does not set forth
criteria for determining under what circumstances a "person" shall be considered
the employer of particular employees.

[[4]] The Tenth Circuit has observed that
"[i]n order to accomplish [the Act's] purpose, it is necessary to look to an employer
who controls the working environment.  Whether the employer controlling work
environment (sic) is also the employer for wage or tort purposes should not be a governing
factor."  Clarkson Construction Co. v. OSHRC , supra at 458,
quoting James E. Roberts Co ., 74 OSAHRC 21/B6, 1 BNA OSHC 1684, 1973-74 CCH OSHD �
17,659 (No. 103 & 118, 1974) (Commissioner Cleary, dissenting).

[[5]] In such cases, the Commission has held
that a general contractor at a construction site, by reason of its general supervisory
authority, may be responsible for hazardous conditions to which a subcontractor's
employees have access.  Further, a subcontractor who did not create or control
hazards to which its employees are exposed may defend against the Secretary's charge by
showing that it took realistic measures to protect its employees.  Lewis &
Lambert Metal Contractors, Inc. , 84 OSAHRC __/___ , 12 BNA OSHC 1026, 1984 CCH OSHD �
26,294 (No. 80-5295, 1984); Grossman Steel & Aluminum Corp. , 76 OSAHRC 54/D6, 4
BNA OSHC 1185, 1975-76 CCH OSHD � 20,691 (No. 12775, 1976); see also De
Trae Enterprises v. OSHRC , 645 F.2d 103 (2d Cir. 1981) (per curiam); Anning-Johnson
v. OSHRC , 165 F.2d 1981, 1988 (7th Cir. 1975); Brennan v. Underhill Construction
Corp ., 513 F.2d 1032 (2d Cir. 1975)

[[6]] In earlier cases, the Commission
considered the following three factors in identifying an "employer" for purposes
of the Act: (1) the person whom the employees consider to be their employer; (2) who pays
the employees' wages; and (3) who is responsible for controlling employees' activities.
  See , e.g ., Gordon Construction Co. , 4 BNA OSHC 1581, 1976-77
CCH OSHD � 20,968 (No. 7390, 1976).  See also Griffin & Brand
of McAllen Inc. , 78 OSAHRC 48/C13, 6 BNA 1702, 1978 CCH OSHD � 22,829 (No. 14801,
1978) (seven-factor test applied to determine whether workers were employees of the
respondent or were independent contractors).

[[7]] Bromley testified that this instruction concerning the wearing of safety equipment
was consistent with the arrangements made between MLB and Crown.

[[8]] The workers for the most part worked without any supervisors in the area.  
However, even if these laborers had been Crown's regular employees, Crown's supervisors
might have concluded that, because of the employees' experience and the repetitious nature
of the work, a constant supervisory presence in the area was not necessary. 
Therefore, the inference that MLB was responsible for these employees cannot be drawn from
the fact that Crown did not maintain a constant supervisory presence.

[[9]] According to the compliance officer,
during the inspection Stafford was identified as a foreman by an MLB safety supervisor,
and Stafford himself said he was a foreman.  Ingleston also stated that Stafford was
"a foreman over there" and that he "gets stuff' set up for us."  
However, it is unclear whether this testimony concerning Stafford's role as a foreman
referred to the particular work at the IP building or to Stafford's work during his usual
employment by MLB.  Accordingly, we find the testimony by the compliance officer and
by Ingleston is insufficient to establish that Stafford acted in a supervisory role and
thus had control over the employees' work activities and safety.

[[10]] Ingleston and Stafford only were told by
Bromley that they would be breaking out some concrete, and they were given no other
instructions about how the work would be performed.  In addition, Stafford was told
that Dexter, Crown's project engineer, would tell him what to do.

[[11]] The circumstances of this case are
different from Del-Mont Construction Co ., supra , where the Commission found
that the cited company (Del-Mont) was the employer for purposes of the Act.  Del-Mont
had loaned employees to another company (Betz) for performance of valve installation work
in a sewer system.  Unlike this case, where Dexter of Crown told Bromley that he
would tell the workers what to do and would supervise the work, in Del-Mont there
was no discussion prior to the start of the work with respect to who would control the
workers' activities.  Further, in Del-Mont , Betz's supervisor at the worksite
did not consider himself to be the supervisor of the loaned employees and did no more than
show the employees the location of the work, while in this case Dexter of Crown acted as
the supervisor of the loaned employees.  Finally, while Del-Mont like MLB did not
have any supervisors present at the worksite, Del-Mont took a more active role than MLB
with respect to the work being performed. Del-Mont supplied all of the equipment needed
for the work, one of the leased employees reported to Del-Mont's president on the second
day of the job and discussed the work with him, and Betz's supervisor asked Del-Mont's
president for permission to use the employees on a second manhole.

This case can also be distinguished from Sam
Hall & Sons, Inc ., supra ; Acchione & Canuso, Inc ., supra ;
and Gordon Construction Co ., supra .  In those cases, the
companies that borrowed the employees' services did not have the expertise to supervise
the leased employees' work and did not supervise the employees with respect to how their
work was performed.  In this case, Dexter of Crown was the supervisor in charge of
the work, and there was no showing that Crown did not possess sufficient expertise to
supervise the work.  Rather, the evidence indicates that Dexter was familiar with the
work since he was project engineer for the general contractor at the construction site,
and he told the employees how the floor sections were to be removed.

[[12]] We also reject the conclusion that, under the circumstances of this case, both MLB
and Crown should be considered the employer of the laborers for purposes of the Act.
  As the Seventh Circuit observed in Anning-Johnson Co. v. OSHRC , duplicative
liability does not necessarily promote the purposes of the Act, since "[p]lacing
responsibility in more than one place is . . . likely to cause confusion and disruption in
normal working relationships on a construction site . . . [and] might in effect prove to
be counterproductive."  516 F.2d at 1089.

[[13]] For example, when loaned employees have expertise in a field not possessed by the
loanee employer, or where the loanee employer has no reason to supervise the employees, e.g .,
employees delivering construction materials to a project.