Union Drilling

Plain-English summary

Union Drilling supplied workers to CNG Transmission for a natural-gas well flow-back operation. Two night-shift workers were later found inside a frac tank and were determined to have died from asphyxiation, after which OSHA cited Union and CNG separately. The judge focused on which company controlled the work and the work environment. Union selected and paid the workers, but it had no supervisor at the site, gave no instructions about the flow-back operation, and billed CNG for their time. CNG directed the workers' tasks, controlled the well site, and decided how the piping and tank operation would be handled. The judge held that Union was not the workers' employer for purposes of the OSH Act and dismissed the Secretary's case; the decision does not identify the specific cited standards or proposed penalties.

Decision snapshot

• Cited standard(s): No specific OSHA standard is identified in this decision.
• Outcome: Vacated. The Secretary's case against Union was dismissed because Union was not the cited workers' employer under the OSH Act.
• Key point: Supplying and paying workers does not establish OSH Act employer status when another company controls their work and the work environment.

Full text (OSHRC public release)

/iih
. UNITED S~~7ES Of AMERICA
OCCUPATIONAL SAFETY AND HEALTH REVIEW C~MM~~~iON
One Lafayette Cents
1120 20th Street, N.W. - 9th Floor
Washington, DC 20036-3419

    SECRETARY OF LABOR
                Complainant
          v.                                                       OSHRC DOCKET
                                                                   NO. 93-0154
    UNION DRILLING
                  Respondent.


                             NOTICE OF DOCKEIWG
                   OF ADMINIsTRATlvE    LAW JUDGE’S DECISION
         The Administrative Law Judge’s Report in the above referenced case was
    docketed with the Commission on February 9,1994. The decision of the Judge
    will become a final order of the Commission on March 11, 1994 unla a        --
    Commission member directs review of the decision on or before that ti.   ANY-’
    PARTY DESIRING REVIEW OF THE JUDGE’S DECISION BY THE
    COMMISSION MUST FILE A PETITION FOR DISCRETIONARY REVIEW.
    Any such tition should be received by the Executive Secretary on or Wre
    March 1, p”
              994 in order to rmit &iclent time for its review. See
    Commission Rule 91, 29 c?.F.R. 2200.91.
       All further pleadings or communications regarding this case shall be
    addressed to:
                           Executive Secretary
                           Occupational Safety and Health
                            ReWew Commission
                           1120 20th St. N.W., Suite 980
                           Washington, D.C. 20036-3419
    Petitioning parties shall also mail a copy to:
                           Daniel J. h&k, Esq.
                           Counsel for Re ‘onal Trial Liti ation
                           Office of the SoT ‘&or, U.S. Dck
                           Room MOO4
                           200 Constitution Avenue, N.W.
                           Washington, D.C. 20210
   If a Direction for Review is issued by the Commission, then the Counsel for
   Regional Trial Litigation will represent the Department of Labor. Any party
   havmg questions about review nghts may contact the Commission’s Executive
   Secretary or call (202) 606-5400.
                                          FOR THE COMMISSION


   Date: February 9, 1994                 Ray H. Darling, Jr.
                                          Executive Secretary

D&mNO. 93-0154
NOTICE IS GIVEN TO THE FOLIDNG:

Daniel J. Mid, Esq.
Counsel for Re ‘od Trial Iiti tion
of&e of the soLE l
citor, U.S. DCE
Room S4004
200 Constitution Ave., N.W.
Washington, D.C. 20210

Marshall H. Harris, Esq.
Re ‘onal Solicitor
O&e of the Solicitor U.S. DOL
14480 Gatewa Build&g
3535 Market dtreet
Philadelphia, PA 19104

Ha es C. Stover, Esqyire
K&pat&k & L&chart
1500 Oliver Buil ’
?!a 5379
Pittsburgh, PA 15

Nancy J. Spies
Admmistrative Law Jud Q
Occupational Safety an cf Health
Review Commission
1365 Peachtree St., N. E.
Suite 240
Atlanta, GA 30309 3119

00116037409:03
SECIXETARY OFIABOR,
Comphinan~

          v.                                     OSHRC Docket No. 93-154
                                           0
                                           0

UNION DRILLING, 0
a0
ReJpondent. :
0

  Anita E3vewright, mpire
    ofrk of the soudtor
    u. so Departmeatof I&or
                 PeIhqhmia
      Philaclelphirr,
          Rx GxllplahM

Before: Administrative Law Judge Nancy J. Spies

                          DECISION AND ORDEl&


  On November 30,1992, the Secretary issued Union Drilling (union) two citations

resulting from an inspection conducted by Occupational Safety and Health Administration
(OSHA) Co*p&ce Of6cer Andrew Berestecky. BerestecQ began his inspection on
June 4, 1992, in response to a report of the deaths of two employees at a worksite in
Hopwood, Pennsylvania,on June 2,1992 Unionaontested the citations at a hearing held
in Pittsburgh, Pennsylvania,on June 3 and 4,1993.
 In 1990CNG began preparing an old gas field in Hopwocx!,Penns@an&for the
underground storage of natural gas pr. 13,57). CNGwould hire one of severalcolntractors
it dealt with to redrill a we& Afttr the redrillingwas completed, the wcffwouldundergo a
two-step %acing” process in which the same operation is repeated twict, Fmcing is
performedby forcing a mixture of water, nitrogeq hydrochloric acid, * 8nd o&er
materials into the well so that the mixture fractures the rock strata and creates the storage
area (Tr. 11-13,M-48)?
In 1991CNGhired Delta Drilling to redrilla well referred to as UW l(B (Tr. 17,46).
After Delta Driflinghad redrilled UW 103,CNG hired HaliiiiiurtonSmices to perform the
fracing (Tr. 12). Halburton Se&es provided alI of the chemMs used in the &acing
puxess rr. 14). After the i&i@ liqtid was pumped into the well UIlcIcrpr%ur~, the Wto
was capped. It was then necessaryto recover the frac fluid in the Tow-bacX’operation.
The tic fluid,which had been contained under pressure underground, wan piped into a
“flow-back”tank (also referredto as the “blow-back”tank). The flow-backtank contained
a bafne to bhmt the impact of the returning tic fluid mked with sand under pressure pr.
49-51). The flow-backtank was partially open at the top (Exh. C-2). The fix fluid was

• Becausemuchof the evidencerelevantto Union%casewas ideWzalwith that of CNG%case,the fkst
  portionof the hearinggenerateda transcripthatwdsDodd
  in bothcasts. The transuiptdtationsarcbtmd
  in the transaiptlab&dTM lYansmMonCbrporatio~~~
  2
  then piped into a nearby SOMwrcl ‘%a~” (or ‘WDCC~ tank (IW c2; Tr. 21). Abe

                               DANGER
                             DONOTENTER
                        'IHISTANKMAYCONTAIN
                             FATAL VAPORS
  

  On top of the frac tank were two openings a manhole cover used to enter the tank
  in order to clean it out, and a smaller opening QTr.69). The manhok was appmximafely
  19 by 21 inches, and the smaller opening was 1 or 2 inches in diameter m. 37,268). A
  ladder descended from the top manhole into the frac tank (Exh. C-5; Tr. 74). ‘lb tap
  manhole is above the elevated section of the tank’s bottom. The smaller opening is above
  the lower section of the floor (Tr. 52).
  On June 2,1992,the second phase of the fixing process began at UW 103 (Tr. 254).
  The first phase had been completedthe week before (‘I’r.124). James Simons, a production
  specialistfor CNG, coordinatedthe semnd phase of the king process at UW 103. He was
  not invohted in the first phase @r. 11, w).
  Generally, CNG used its uwn people to petiorm the fbw&ack operation, but Simons
  explainedCNG was “under such a heavy workload that year that [it] did not have the
  people, so [CNGJ contratied outside help to do that work”(Tr. 18). Brian Sheppard, an
  engineer for CNG, called Arthur Dennis Chidester (Sheppard referred to him as “Dan”),
  a drilling superintendent for Union, in July 1991 (Tr. 327-328). Union had done some
  drillingfor CNG in the past (Tr. 328). Sheppard told Chidester that CNG “needed
  personnel to help rig up the flow line and then monitor the fluw back for the flow back
  operation” (Tr. 329).

                                        3
  
                                                                            .
  

  Chidester for a two-m crew. Chidester asked Sheppard if b
  twcwnan crews so that the personnel could be rotated and the
  1their benefits actbe. She@ard agreed to this arrangement (Tr.
  330-331).
  Union a&g& Mike Phipps, A. Harw Dqyk, GeorgeBurkbmmer, BobD&sscm,
  and Herb Sias to the UW 103 site? Davissonand Sias were on the day crew, and Phipm
  DoyleandB urthammtrwere on the nightcrew @r. 17). Priorto tbis assignme~&
  neither
  Davisson nor Sii had ever done any flow-backwo& (Tr. 128,171).
  Sias testifiedthat Davisson, who was his supervisorat Union, asked him if he wanted
  the assignment. Sias told him that he had never done flow-backwork lx- Da&son
  assured Sigsthat the crew they were relievingwouldtell them what to do when they arrived
  at the site pr. 171). When they arrived at UW 103, Union employees Dqic and Mike
  Phipps explained to Davisson and Sias that thq had to monitor the tank ew and
  measure the depth of the frac fluid in the frac tank every two hours pr. lml73). One &
  the crew, whomSias remembers as Doyle,told Sias and Davisson how they were mearuring
  the fmc f!uicL He said that they were going into the tank through the top marble.
  Davisson never went into the frac tank. He went down the ladder the first day vr. 126).
  Sias went down through the manhole once or twice (Tr. 173, 189490) but then told
  Davisson,7 don’t like the idea of going down in here” (Tr. 173). Sias and Ibisson began
  measuring from the smaller opening by dropping the weighted end of a 16foot steel tape
  measure to the floor of the tank (Tr. 127,173). A fluid level gauge on the wheelytank was
  inoperabk vr. 29,34,2(M)). Having discoveredthis method of measuring the level of the
  &ac fluid, Davissonand Sias demonstrated it to the night crew on June 2,1992, and warned
  them not to go duwn into the wheely tank vr. 180481).
  mr thatday, Simonsand the Union crew detected a leak in the flow-backtank.
  Simons decided to recotigure the piping and, between 5:OOp.m. and 530 p,~ll,tdirected

     the nightcrewfor the firstnightof the !hcing pfooess
  

  • Apparently, aMsted of Doyle andPhipp Thenat
    nightDoykwas pairedwith Bur-.

                                      4                        .
    

    Tbe~~whichhad~~whenthefracfluidwerprwins~~the
    flw-backta&nowflOwtdintothehctftnlt Sb,whostoodo~tapdtbe~tanltafter
    the rccotip~ stated that the frac tantt began pulsatin& TbC tUlkwg(cjust-the sides
    [~re]goinginaadoutafitandthetopthesameway.... Itwasjurtmovhgbackand
    forth, the metal on the sides of the tank. The top was just movingba& and forth- (Tr.
    162)0
    TheaewconfigurationalsocausedtheliquidtofoamuptothetopofthefractanL
    (Tr. 133,141-142).Sias and Davissonasked Simons to get some de-r for the frac tar&
    Halliiiurton delivered several antainers of the defoamer as Davisson and Sias wwc being
    relieved by Doyk and B&hammer ur. 36,141,177).
    Davissun and Sias reported to work on the morning of June 3,1992, at 7rOOISJL
    They saw no sign of Doyle and Burkhammer whom they were supposed to relies pr. 145,
    181). The manhole cover was open. The foam was still a foot or two from the top & tht
    tic tank (Tr. 161,181). The measuring tape had been stuck in the small opcnjng on top
    of the tank. Sias and Davissonstarted pumping the frac fluid out of the bat tank to see if
    the missing men were in there. Eventual@,the bodies of Doyie and Burkhammer were
    found at the bottom of the ladder inside the frac tank (Tr. 145,200). The cause of death
    was later determined to be asphyxiation(Tr. 295).

            Who Was the “Em~bver” for m             of the Act?
    

    uOnly an ‘employer’may be cited for a violation of the Act.” Vii Czonc Co., 15
    BNA OSHC 1782,1783,1992 CCH OSHD f 29,775 (No. 88-1745,1992). Section 3(S) of
    the Act defines an uempbyer” as “a person engaged in a business affectingcommerce who
    has employees.” Section 3(4) of the Act defines a “personWas uone or more individuals,
    partnerships, associations, corporations, business trusts, legal representatives, or any
    organized group of per~ns.~ Section 3(6) defines uemployeen as “an employee of an
    employer who is employed in a business of his employees which aff&ts commerce.”
     Last year the &nmission reiterated its %c~nOmicrcalilics testn formulated to
    determine whether an empbyment relationship exists between employees and the a,U@
    employer. In Lwm& cabinet Company, 15 BNA OSHC 1635,1637,1992 CCH 06HD
    T 29,775 (No. 884012,1992), the Commissionstated that it bad “ansidered a nubcr Of
    factors” when making the determination, in&d&
    1) Whom do the workers consider their empbycr?

  2) Who pays the workers’wages?

  3) Who has the responsibility to control the workers?

       Does the alleged cmplqer have the power to c0ntrOl the
       worktnt
  
       Does the alleged emplayer have the power to fire, hire, or
       modify the employment condition Ofthe workers?
  

  6) Does the workers’ability to increase their income depend on
  efficiencyrather than initiative, judgment, and foresight?

  7) How are the workers’wages established?

  Van &Km-MM, 13 BNA OSHC at 2158, 1989 CCH OSHD at
  p. 37,780(quoting GK@ & Bmnd, 6 BNA OSHC at 1703,1978CCH OSHD
  at pp. 27,6OO=Ol).”

  In an earkr case, MU I-M k, I2 BNA OSHC 1525,198!5 CCH OSHD
  127,408 at p. 35,570(No. 83.231,1985),the bnmission emphasized that the primary hm
  to be considered in determining whether an employment relationship exists is contrc&

                                     6
  

  l

  InVi,alsodecidedlastyear,thecommwsK, l n addressadareant SupremeCoti
  decision whichaccordedwith CommissionprcccdcntqardingthcpIimacydtheheof
  controlin analy&g an emplqmcnt relationsbipz
  The Supreme Court recentlybeld that the term “emplqec~ in a feQeral
  statute should be interpretedunder common law pGncipks, u&ss the
  particularstatutespcc&aUyindicatcsotherwbe,NarzOrrwltlcMiilirstaraa
  cd v. Drudot, 112 s.Cto1344,1348(19%2).sat Loomij ciabikt ca, l5 WA
  OSHC 1635,1637 (No. 8&2Ol2,1992). The court noted that all aspectsaf
  the relationship are relevant, but that the central inquiry is 8s R&wsz

       In determining whether a hiredpartyis an empm un&r tk
       general commonlaw of agerq we considerthe hisiugparty’r
       righttooontroltbemannctandmeansbywhichtbepoductir
       accomplished. Among the other facton relevantto thisinquiry
       are the skill require the sour= of tbc ins-n-               and
       tools; the location of the work the durationof the rcWcmship
       between the parties;whetherthe hiringpartyhas the rightto
       assign additional projects to the hired p8;rty;the extent of the
       hired party’sdiscretionover when and how long to work the
       method of payment; the hired party%role in hiring and paying
       assistants; whether the work is part of the regular business of
       thehiringparty;whethertbehiringparty~inb~,the
       provision of employee benefits;and the tax treatmentof the
       hiredparty.
  

  112 S.Ct.at 1348 (quotingcammuni?, fart?MtiveNm4Mkma v.R&l,490
  U.S. 734 751-752(1989)(footnotesomitted)). Thus, the central inquiryunder
  both tests is the question of whetherthe alleged employerhas the rightto
  control the work invoh&. S&eLoomis, 15 BNA OSHC at 1638

Viqpa ChzneCb, 15 BNA OSHCat 1784.
In the present case, CNG contacted Union and requested the ampany to send over
some emplayees to monitor the fixing process. After Union did so, its invobement with

                                       7

Union sqmvisom were not present at the site, nor did they ever instruct the
emplayeesonwhattheyweretodoorhowtodoit. WhcnM~askdSiarifhewan~
to work on the UW 103well,Sias stated, Y have nem done that bef-” Dwiwn replied,
“We will show you when you get there. The gy you are relkving will explain to you what
you are doing and tell you what to do” (Tr. 171). The crewthatDavissonand Sias rtlkvled
had been instructed by James Simons, CNG’s production specialist, who test@&, 7 told
them at what point we should be opening the valve up to begin process of the fkw w
and we also discus& the measurements of the tank”p’. 19).
Sias test&d that he considered CNG pcrsunnclto be the supdso~ afthe projea
Simonsgave the crew instructionson how to petionn the work Simons and motbcr CNG
supewisur,Dave Taylor, would ask to see the logbook that the employees kept. A Sias
stated, “If m are drilling a well for a certain company, when the guy ash you to do
something, you do what he tells you or you try to. We consider that’s who we are working
for” (Tr. 176).
Davissonand Siaswere instructed by CNG to change the choke (Tr. 176177): “rhey
told us what size choke to put in We knocked the line apart and put a choke in iC’ On
June 2,1992,when the flow-backtank was leaking,,it was Simonswho ordered Davissonand
Sias to reconfigure the pipe so that the frac fluid floweddirectly into the frac tank (Tr. 67,
177). When a&d if it was llcctssary to call Union to request permission to allow the
employees to recon@ure the pipe, Simons replied, “No” vr. 67).
Applyingthe Supreme Court’s employment test cited in Dan&n, qzvq it is apparent
that CNG was an emplqer of the mews leased from Union for purposes of the Act. AII of
the witnessestestified that the flow-backoperation did not require a highlyskiIledworlcforce.
Davisson stated that he did not consider the work that he was asked to do diBult or
.
8 Ir,
d&cctlyintothcwhcclytank CNGinfimmdU nbnwhattimethewuxkerswerM0report
to the jobsite (Tr. 7W3). When the job wasaxnpkted, CNG eithertold the employeeson
the site not to return or called Union, whi&evcr was easier (‘FL72). The flow-back
operation is part of the regular business of CNG and, o&inarQ, CNG used their own
employees to flow back the wells duringthe &acingprocess vr. 18).
Under both the Supreme court’s and the Cbmi&on’s formulationsof their
employment tests, in which the most significantfactor is whether the dkgd employer bau
the rightto controlthe workinvoh~ed,CNGwas an emplaytt of the employeesbased ibn
Union. CNG controlled the UW 103 well and controlled the employeeoyecs’
pcSormancc af
their work. The only instructions and orders the employees received were from CNG
personnel. CNG is an employer of the empluyeeswithin the meaningof the Act.
The Secretarycontends that Union was also an employer of the employees for
purposes of the Act becauseUnion c~ntinuedtop8y the employeesand controltheirwork
assignments. In MLB,qvvz, the Commissionheld that, althoughwho paysthe employees’
wages “has some bearing on the employmentrelationship, [it is] not directly relatedto the
issue of control, and should normally be accorded less emphasis in cietcrmi&g the
employmentrelationshipunderthe Act? ML& 15&SCCH OSHD at p. 3&!5la
A&B is instructiveon a numberof pointspertain@ to the presentw In ML&
Crown was the OwIlcr of and general contractor at a construct$onsite. MLB was a
subcontractor completing some work for Crown. One day Dexter, the project engineer for
Crown, contacted Bromky, the project manager for u, and “askedBroml9 if he could
supply manpower to remove sections of a floor at the ‘IP’buildingZ’ML& 1985CCH at
p. 35,508. Bromky assigned two MLB employeesto go to the IP building. Dexter met them

                                       9

wear. ThegwmejoincdIatcrbyathirdlMDemployee. S~nt&asectionoftbe

hisdeath. Ii

the three empe The timmission reved the judge’s&&ion, holdingthat Cnnvn,
and not MB, was the emplr for purple of liability:
Analybgthiscasefinmthestandpointofwhohadcontroloverthe
employees and their activities, we conclude that Cruwn had both the
respons~~ty and the puwer to control the empQecs’ activities Crown’s
control over the employees’activi~ was consistent with the mments
madebetween~~andMLBpriortothebeginnineoftheworlt Inhir
request for workers, Dexter, Crown’s project engineer, told Bromley, MLB’s
project engineer, that he would tell the workers what to do, would fbmibhthe
tools and would supervise the work

Id at p. 3SJlO.
The Commission’sdixussion of MIJ3’s role is p&cularly applicable to the rok of
Union in the present case:
In contrastto Crown’sdirectcontrol over the employees’activities through
Dexter’s supetiion, A&B’spower to control the employees and to modify
their working conditions was largely indirect or theoretical. Although ML6
sekctcd and contacted the employees about the job, there was no showing
that MID’s initial contact with the employees had an impact upon how they
perfomd their work or their safety.

  Although MLB may have had the authority to withdrz~w     the laborers from the
  worksite, to fire them, and to assign other laborers to do the WC& MIB was
  not perf6rming any work at the IP building and did not take any rok in
  determining huw the concrete floor was to be removed. Further there is no
  indication that MIB knew of any circumstances that would have rquired it
  to take action with respect to the workers’ employment, either for safety
  purposes or for any other reason, Therefore, hK8 did not have sufkient
  control of the work environment or employee’s activitiesto support a finding
  that it was an employer under the Act.

Ii at p. 35,511.

                                          10

Like ML& Unicm’scontrol of its emplv working on the UW 103 project was

involvementwith the &acingprocess and no control over the work environment.
The Secreta@ strongest argument againstUnion is that Union paidthe employees*
wages. As noted previously,however, who pays the empkqws’ wages ir of much less
sipifkance than who controls the work environment. Simons test54 that the empm
‘there paid by UnionDrilling. Union, in tum, wouldbill CNG for theirtime”(Tr. 71). The
Commissionaddressesa similar situation in ML&
With reqmzt to who paid the empluyees’wages, it is clear that, althoughthe
initialpaymentofthewageswasmadebyMLB,croWnwasbkdaad
ultimateIyresponsible for payment MIB ww merely serving as a %mduitfor
labof’ far &wn, since MLB had a contract with the local uajoo but Crown
did not. MB billed Crown for the empluyees’wages, their benefita, and a
10% markup for handling the payroll. Thus, while MLB technicaIly paia the
workers,it appears that it assumed this respcmsrbilityphariiy as a matterof
convenience and that it was Crown who actually was responsl%le for the a~&
Accordiagly,we do not consider MIS’s payment of the employees to be
sign&ant in determining who was their employer.

Id at p. 35911.
Based upon the economic realities test formulated by the Commissionand echoed
by the Supreme Court in Dorden, m, it is concluded that Union w not an emplayer of
the employees at issue for purposes of the Act. Union did not have the necessq control -.
over either the work environment or the employees.

                          FINDINGS OF FACI’
                       AND C0NCLLJSIONSOF LAW


  The foregoing decision constitutes the findings of fact and conclusions of law in

accordance with FederalRule of Civil Procedure 52(a).

                                      11

Based upon the foregoing decision, it is hereby ORDERED=
~ttheScxretaq?scaseagaimtUnionisdismissed.

                           NANCY J. SPIES
                           Judee

Date: January 31, 1994