Homes by Bill Simms, Inc.

Plain-English summary

Homes by Bill Simms was a residential general contractor in Springboro, Ohio, that built custom homes using subcontractors. During an August 1999 inspection of three of its home sites, OSHA saw subcontractor employees committing scaffold and fall protection violations and issued Simms a seven-item serious citation. Simms had only six employees, none of whom performed construction work, and the subcontractors created all the hazards. The question was whether Simms was a "controlling employer" liable for its subcontractors' violations under the multi-employer worksite doctrine. Judge Simko applied Sixth Circuit law and OSHA's multi-employer citation policy and found Simms lacked both the contractual and the actual control needed for liability. Simms set no schedules, made no safety inspections, and only visited a site when a subcontractor called. The judge held Simms rebutted the presumption of control and vacated all seven items with no penalties.

Decision snapshot

• Cited standard(s): 29 C.F.R. § 1926.20(b)(1); 29 C.F.R. § 1926.20(b)(2); 29 C.F.R. § 1926.451(a)(3); 29 C.F.R. § 1926.451(g)(1); 29 C.F.R. § 1926.454(a); 29 C.F.R. § 1926.501(b)(13); 29 C.F.R. § 1926.503(a)(2)
• Outcome: All seven serious items vacated; no penalties assessed. Simms held not liable as a controlling employer.
• Key point: A residential general contractor that performs no construction work and exercises no real control over its subcontractors can rebut the presumption of control and avoid liability under the multi-employer worksite doctrine.

Full text (OSHRC public release)

Secretary of Labor, :
Complainant, :
:
v. : OSHRC Docket No. 99-1713
:
Homes by Bill Simms, Inc., : EZ
Respondent. :

Appearances:

      Patrick L. Depace, Esquire                           Gary W. Auman, Esquire
           Office of the Solicitor                             Dunlevey, Mahan & Furry
           U. S. Department of Labor                           Dayton, Ohio
           Cleveland, Ohio                                         For Respondent
               For Complainant

Before: Administrative Law Judge Stephen J. Simko, Jr.

                                       DECISION AND ORDER

      Homes By Bill Simms, Inc. (Simms), contests a seven-item citation issued by the

Secretary on September 1, 1999. The Secretary issued the citation following an inspection
conducted by Occupational Safety and Health Administration (OSHA) Compliance Officer
Sam Merrick on August 23 and 24, 1999, at three of Simms’ residential construction sites in
Springboro, Ohio.
The Secretary alleges Simms committed serious violations of the following construction
standards:
Item 1: § 1926.20(b)(1) for failure to initiate and maintain an accident prevention
program;
Item 2: § 1926.20(b)(2) for failure to have a designated competent person make frequent
and regular inspections of the worksite;

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   Item 3: § 1926.451(a)(3) for failure to erect, dismantle, or alter scaffolds under the

supervision of competent persons;
Item 4: § 1926.451(g)(1) for failure to ensure that employees on scaffolds more than 10
feet above a lower level were protected from falling;
Item 5: § 1926.454(a) for failure to train employees in scaffold hazards;
Item 6: § 1926.501(b)(13) for failure to protect employees engaged in residential
construction from fall hazards; and
Item 7: § 1926.503(a)(2) for failure to ensure that each employee has been trained, as
necessary, by a competent person.
The Review Commission designated this case as an E-Z Trial case. Simms stipulated to
jurisdiction and coverage (Stipulations 1 & 2). A hearing was held in this matter on January 14,
2000. Simms asserts that it lacked sufficient control over its subcontractors to be held liable
under the multi-employer worksite doctrine. Simms also asserts that it lacked knowledge of the
existence of any violations committed by its subcontractors’ employees. The parties have filed
post-hearing briefs. For the reasons set out below, items 1 through 7 are vacated.
Background
The parties agreed to eleven stipulations which establish the following (Stipulations 4
through 11):
Simms is a contractor in residential construction. Simms had contracted with several
subcontractors to construct houses in the Stone Ridge subdivision in Springboro, Ohio. On
August 22 and 23, 1999, OSHA Compliance Officer Sam Merrick inspected Simms’ worksite
in the Stone Ridge subdivision and observed the subcontractors’ employees committing several
violations of OSHA’s construction standards. The subcontractors created all of the hazardous
conditions observed by Merrick. The contracts between Simms and its subcontractors
governing their work at the Stone Ridge subdivision do not assign responsibility for safety on
the worksite.
At the hearing, more details emerged regarding Simms’ business operations. Simms
employed six people at the time of the inspection, four of them being family members. The
president of the company is Bill Simms. One of his sons, Michael, is the vice-president and his

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other son, Alex, visits jobsites when called by the subcontractors. Bill Simms’ wife Elizabeth
helps with the paperwork. An “office lady” helps with the payroll and office duties. Another
employee, no longer with the company at the time of the hearing, “answered phones and kind of
ran errands and stuff” for Simms (Tr. 81-82). None of Simms’ employees engage in any of the
construction work or perform any labor on the construction site (Tr. 106).
Simms builds custom homes, generally completing fifteen to twenty homes a year (Tr.
79, 83). In most instances, the customer has his or her own lot and blueprints with design
specifications already complete. Occasionally, Simms will arrange for the customer to meet
with an architect to design the house (Tr. 79-80).
Simms contacts the needed subcontractors, who submit bids for the project. It selects
the subcontractors based on availability and price (Tr. 84, 87). Simms applies for the initial
building permit. The subcontractors obtain all further permits required throughout the
construction of the house. Simms supplies the materials needed for the construction of the
house (Tr. 87).
On August 23, 1999, Compliance Officer Merrick was driving on Route 73 when he
noticed a residential house under construction. Merrick observed a man working on the roof
who was not using fall protection. He initiated an inspection during which he discovered that
the man on the roof was an employee of D & R Construction, the exterior work subcontractor
contracted by Simms for that house (Tr. 11-12). During his inspection, the compliance officer
noticed another Simms house under construction nearby. Sam Rosengarten Construction was
the subcontractor working on that house. Merrick observed Rosengarten’s employees
committing several violations of OSHA’s scaffolding standards (Tr. 16).
Merrick contacted Simms by telephone that day and arranged to meet with the
contractor. On August 24, 1999, Merrick met with Bill and Alex Simms in the Stone Ridge
subdivision. During the meeting, Merrick observed a third Simms home under construction.
He and Alex Simms drove over to the house and met with David Wise, of David Wise
Construction, who was the subcontractor for that house. Merrick observed Wise’s employees
committing violations of several safety standards (Tr. 24-30).

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   As a result of Merrick’s inspection, the Secretary issued the instant citation. The

Secretary also issued citations to each of the three subcontractors encountered by Merrick
during his inspection of the homes being built by Simms (Tr. 68).
The Citation
The Secretary has the burden of proving her case by a preponderance of the evidence.
In order to establish a violation of an occupational safety or health
standard, the Secretary has the burden of proving: (a) the applicability of the
cited standard, (b) the employer’s noncompliance with the standard’s terms, (c)
employee access to the violative conditions, and (d) the employer’s actual or
constructive knowledge of the violation (i.e., the employer either knew or, with
the exercise of reasonable diligence could have known, of the violative
conditions).

Atlantic Battery Co., 16 BNA OSHC 2131, 2138 (No. 90-1747, 1994).
In order to establish that a violation is “serious” under §17(k) of the Act, the Secretary
must establish that there is a substantial probability of death or serious physical harm that could
result from the cited condition. In determining substantial probability, the Secretary must show
that an accident is possible and the result of the accident would likely be death or serious
physical harm. The likelihood of the accident is not an issue. Spancrete Northeast, Inc., 15
BNA OSHC 1020, 1024 (No. 86-521, 1991).
Simms concedes that the cited standards apply to the cited conditions and that its
subcontractors committed the violations as alleged by Merrick (Stipulations 9 & 11). Simms
argues that it lacked the requisite supervisory authority over its subcontractors to render it liable
under the multi-employer worksite doctrine. The Secretary counters that Simms had the
requisite supervisory authority over its subcontractors; Simms merely chose not to exercise its
authority.
Multi-Employer Worksite Doctrine
The Review Commission first articulated the multi-employer worksite doctrine in the
companion cases of Anning-Johnson Co., 4 BNA OSHC 1193 (No. 3694 & 4409, 1976), and
Grossman Steel & Aluminum Corp., 4 BNA OSHC 1185 (No. 1275, 1976). In Grossman Steel,
the Commission stated (4 BNA OSHC at 1188):

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    The general contractor is well situated to obtain abatement of hazards, either
    through its own resources or through its supervisory role with respect to other
    contractors. . . . Thus, we will hold the general contractors responsible for
    violations it could reasonably have been expected to prevent or abate by reason
    of its supervisory capacity.

    Simms correctly observes in its post-hearing brief that “the application of the

multi-employer worksite doctrine is still evolving” (Simms’ Brief, p. 8). A jurisdictional split
exists with regard to the application of the multi-employer worksite doctrine. See IBP, Inc. v.
Herman, 144 F. 3d 861, 866, fn. 3 (D. C. Cir. 1998).
The Sixth Circuit Court of Appeals, within whose jurisdiction this case arises, held in
R.. P. Carbone v. OSHRC, 166 F. 3d 815, 818 (6th Cir. 1998):
There is a presumption that a general contractor has sufficient control over its
subcontractors to require them to comply with safety standards. Secretary of
Labor v. Gil Haugan, 1979 WL 8537, 2 (O.S.H.R.C.). Thus, a general
contractor is liable for violations it should reasonably have detected and abated,
even when its own workers were not exposed to the violations. Secretary of
Labor v. Knutson Construction Co., 1976 WL 61722, 3 (O.S.H.R.C.).

    The Review Commission addressed the issue of “sufficient control” in Fleming

Construction Inc., 18 BNA OSHC 1708 (No. 91-0017, 1999).1 In Fleming, the Review
Commission decided that a construction manager for a building construction project was not
liable for OSHA violations committed by employees of the project’s steel erection
subcontractor. The Commission held that Fleming was not engaged in construction work
within the meaning of § 1910.12. After determining that Fleming had overall contractual
authority for all aspects of the project management, the Review Commission found that
Fleming lacked authority to specifically direct or control the actual performance of the
construction work.
The Review Commission stated (Fleming, 18 BNA OSHC at 1712-1713):
We agree with Fleming that its contractual authority lacks those indicia of
direction or control on which the Commission has relied in those cases in which

   1
      Fleming does not directly address the multi-employer worksite doctrine, but its

discussion of contractor liability resulting from supervisory authority over the worksite is
relevant to the application of that doctrine.

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   the Commission has found the construction standards applicable . . . . [T]here is
   no evidence that Fleming would prescribe safety measures for the worksite or
   examine safety programs for either content or substantive adequacy in the course
   of performing its contractual obligations to inspect the work and to “coordinate”
   the safety programs of the trade contractors . . . . Moreover, Fleming was not
   empowered to compel compliance by contractors even in those areas for which it
   had contractual responsibility.

   The record establishes that Simms, like Fleming, lacked “those indicia of direction or

control” that would demonstrate Simms had supervisory authority over the construction of the
houses. It is helpful to analyze the record within the guidelines set out in an OSHA Directive,
CPL 2-0.124 (“Multi-Employer Citation Policy”), issued by the Secretary on December 12,
1999. While OSHA CPLs and other directives are not binding on the Commission, the
Commission has looked to them in the past as aids in interpreting standards. Drexel Chemical
Company, 17 BNA OSHC 1908, 1910, fn. 3 (No. 94-1460, 1997). It is noted that the Secretary
issued CPL 2-0.124 after she issued the citation to Simms in September 1999. The CPL is used
here only because it provides a useful framework within which to examine the extent of Simms’
authority on the Stone Ridge subdivision worksites.
The CPL sets out a two-step process to determine whether an employer should be cited
under the multi-employer worksite policy. The first step is to determine whether the employer
in question was a creating, exposing, correcting, or controlling employer. Only if the employer
falls into one of these categories can it be cited under the policy. Step two is to determine
whether the employer met its obligations with respect to OSHA requirements. CPL 2-0.124, ¶
X.A.1 and 2.
The Secretary has stipulated that Simms was not a creating or exposing employer.
Although the Secretary contends that Simms had the authority to correct hazards on the
worksites, Simms does not fit the definition of a correcting employer within the meaning of the
CPL. Paragraph X.D.1 of the CPL defines “correcting employer” as:
An employer who is engaged in a common undertaking, on the same worksite,
as the exposing employer and is responsible for correcting a hazard. This
usually occurs where an employer is given the responsibility of installing and/or
maintaining particular safety/health equipment or devices.

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   Simms did not install or maintain any safety or health equipment or devices, nor

perform any other physical labor on the worksites.
The CPL lists four types of control that result in a controlling employer categorization:
(a) control established by contract, (b) control established by a combination of other contract
rights, (c) architects and engineers, and (d) control without explicit contractual authority. CPL
2-0.123, ¶ X.E.5.a-d. Simms did not exercise any of these types of control.
Control Established by Contract
The CPL provides (Paragraph X.E.5.a, emphasis in original):
In this case, the Employer Has a Specific Contract Right to Control Safety:
To be a controlling employer, the employer must itself be able to prevent or
correct a violation or to require another employer to prevent or correct the
violation. One source of this ability is explicit contract authority. This can take
the form of a specific contract right to require another employer to adhere to
safety and health requirements and to correct violations the controlling employer
discovers.

   The Secretary stipulated that Simms had no specific contract rights to control safety

(Stipulation #10).
Control Established by a Combination of Other Contract Rights
Paragraph X.E.5.b of the CPL provides:
Where there is no explicit contract provision granting the right to control safety,
or where the contract says the employer does not have such a right, an employer
may still be a controlling employer. The ability of an employer to control safety
in this circumstance can result from a combination of contractual rights that,
together, give it broad responsibility at the site involving almost all aspects of
the job. Its responsibility is broad enough so that its contractual authority
necessarily involves safety. The authority to resolve disputes between
subcontractors, set schedules and determine construction sequencing are
particularly significant because they are likely to affect safety.

   Simms’ contracts with its subcontractors do not give Simms broad responsibility over

the residential sites. When Simms accepts a subcontractor’s bid for a project, the bid form is
accepted as the contract to do the work. Nothing in the contracts addresses dispute resolution,
schedules, or construction sequencing (Exhs. R-2 and R-3). Michael Simms testified that

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Simms does not set a deadline for completion of the work “[b]ecause we don’t have control
over our subcontractors to give any kind of time frame on completing the house . . . .” (Tr. 80).
The CPL gives examples of different situations in illustration of its guidelines.
Example 10 states (Paragraph X.E.5.b(2)):
Employer ML’s contractual authority is limited to reporting on subcontractor’s
contract compliance to owner/developer O and making contract payments.
Although it reports on the extent to which the subcontractors are complying with
safety and health infractions to O, ML does not exercise any control over safety
at the site.

      Analysis: Step 1: ML is not a controlling employer because these contractual
      rights are insufficient to confer control over the subcontractors and ML did not
      exercise control over safety. Reporting safety and health infractions to another
      entity does not, by itself (or in combination with these very limited contract
      rights) constitute an exercise of control over safety.

      Simms makes “progress reports,” which Michael Simms described as his father or his

brother going to a worksite in response to a telephone call from a subcontractor for a specific
purpose (Tr. 82). When a subcontractor finishes its work on a project, Simms submits a draw
request to the financial institution handling the homeowner’s loan. The financial institution
sends out an inspector to look at the subcontractor’s work, and the homeowner must sign an
affidavit stating that the work is complete (Tr. 108). Simms makes no safety inspections and
does not report on safety compliance to any other entity.
Simms’ contractual authority is not broad enough to encompass worksite safety. The
company’s contract rights are limited and do not include aspects of the worksite likely to affect
safety.
Architects and Engineers
Paragraph. X.E.5.c provides:
Architects, engineers, and other entities are controlling employers only if the
breadth of their involvement in a construction project is sufficient to bring them
within the parameters discussed above [in the section regarding control
established by a combination of other contract rights].

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   This section is essentially the same as the previous section, addressing control

established by a combination of other contract rights, applied to architects and engineers. As
discussed in the previous section, Simms lacks the breadth of involvement in its projects
sufficient to categorize it as a controlling employer.
Control Without Explicit Contractual Authority
The final type of control considered by the CPL is that exercised without explicit
contractual authority (Paragraph X.E.5.d):
Even where an employer has no explicit contract rights with respect to safety, an
employer can still be a controlling employer if, in actual practice, it exercises
broad control over subcontractors at the site[.]

   The record establishes that Simms exercises limited control over its subcontractors.

Subcontractors sometimes contract the work to another subcontractor without Simms’
knowledge or approval (Tr. 100). Simms does not perform random inspections of its worksites
and only appears at a worksite when summoned by a subcontractor. Simms has no knowledge
as to which subcontractor will be on a site on any given day, or what the subcontractor will be
doing (Tr. 103). Once Simms arranges for the subcontractors to build a house, its role is
limited to responding to subcontractors’ specific questions and submitting draw requests.
When at a worksite, Simms does not check to see that the work is consistent with the design
specifications (Tr. 118). Simms’ approval is not required for a subcontractor to receive
payment (Tr. 119-120).
Simms generally visits its worksites once or twice a week (Tr. 117). It is not a
continual, or even a daily, presence on its sites, and its visits are never related to safety. Simms
does not coordinate the sequencing or the progress of the work. No supervisory relationship
exists between Simms and the subcontractors. Given its limited role at its worksites, Simms
could not have reasonably detected and abated safety violations. Simms has rebutted the
presumption that it had sufficient control over its subcontractors to require them to comply with
OSHA safety standards.
The Secretary has failed to establish that Simms was liable for the safety violations
committed by its subcontractors under the multi-employer worksite doctrine. All items of the

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citation are vacated.
FINDINGS OF FACT AND
CONCLUSIONS OF LAW

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

accordance with Federal Rule of Civil Procedure 52(a).
ORDER
Based upon the foregoing decision, it is hereby ORDERED:
Items 1 through 7 of Citation No. 1 are vacated, and no penalties are assessed.

                                                /s/

                                         STEPHEN J. SIMKO, JR.
                                         Judge

Date: February 17, 2000

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