Universal Constr. v. Occupational Safe. & Health, 98-9519

• Decision Date: 28 June 1999
• Docket Number: No. 98-9519,98-9519
• Citation: 182 F.3d 726
• Parties: (10th Cir. 1999) UNIVERSAL CONSTRUCTION COMPANY, INC., PETITIONER, v. OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION, RESPONDENT
• Court: U.S. Court of Appeals — Tenth Circuit

Page 726

182 F.3d 726 (10th Cir. 1999)

UNIVERSAL CONSTRUCTION COMPANY, INC., PETITIONER, v. OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION, RESPONDENT.

No. 98-9519

U.S. Court of Appeals, Tenth Circuit

June 28, 1999

APPEAL FROM OCCUPATIONAL SAFETY HEALTH REVIEW COMMISSION (No. OSHRC 97-1946)

Roy Bash (William E. Quirk and Michael J. Elston with him on the brief), Shughart Thomson & Kilroy, P.C., of Kansas City, Missouri, for the petitioner.

Bruce Justh, Counsel for Appellate Litigation, (Marvin Krislov, Deputy Solicitor for National Operations, and Joseph M. Woodward, Associate Solicitor for Occupational Safety and Health, with him on the brief), U.S. Department of Labor, of Washington, D.C., for the respondent.

Before Kelly, McWILLIAMS, and Briscoe, Circuit Judges.

Briscoe, Circuit Judge.

Petitioner Universal Construction Company appeals a final order of the Occupational Safety and Health Review Commission affirming the imposition of a penalty against Universal under the "multi-employer worksite" doctrine, based on a subcontractor's violation of construction safety standards. We affirm.

The parties have stipulated to certain facts. Universal is a general contractor engaged in the construction business. In December 1996, Universal contracted with UMB Bank to construct a branch bank office in Independence, Missouri, and shortly thereafter, subcontracted with A. Zahner Sheetmetal Company to perform portions of the project.

On October 6, 1997, an Occupational Safety and Health Administration compliance officer visited the project worksite and observed a Zahner employee violate two OSHA construction safety standards. An employee working in an aerial lift failed to wear and attach a safety belt to the lift basket, in violation of 29 C.F.R. § 1926.453(b)(2)(v), and the employee climbed out of the lift basket onto a building roof, in violation of 29 C.F.R. § 1926.453(b)(2)(iv). Universal's field manager and foreman were at the jobsite and in a position to observe the violations. They had authority to correct the hazards or to direct Zahner's foreman to correct the hazards, but neither did so. It is not disputed that Zahner created the hazards and only Zahner employees were exposed to the hazards.

On October 16, 1997, Universal was cited for a serious violation based on the October 6 incidents and a $1,500 penalty was imposed.¹ The citation was justified by Universal's ability to control the hazardous conditions that led to the violations. On March 18, 1998, an administrative law Judge upheld the citation, concluding Universal was properly cited under the multi-employer doctrine because it controlled the worksite and had authority to direct a subcontractor to abate any hazardous conditions created by the subcontractor. Universal timely filed for discretionary review by the Commission, but the Commission opted not to review the case and the ALJ's decision became final on April 27, 1988. On appeal, Universal challenges the validity of the Commission's "multi-employer" theory of liability. We have jurisdiction under 29 U.S.C. § 660(a) because Universal's principal place of business is in Kansas City, Kansas.

Multi-Employer Doctrine

The multi-employer doctrine provides that an employer who controls or creates a worksite safety hazard may be liable under the Occupational Safety and Health Act even if the employees threatened by the hazard are solely employees of another employer. The doctrine has its genesis in the construction industry where numerous employers, often subcontractors, work in the same general area, and where hazards created by one employer often pose dangers to employees of other employers. The Secretary has imposed liability under the doctrine since the 1970's and has steadfastly maintained the doctrine is supported by the language and spirit of the Act. The Secretary's interpretation has been accepted in one form or another in at least five circuits, and rejected outright in only one. See United States v. Pitt-Des Moines, Inc., 168 F.3d 976 (7th Cir. 1999); R.P. Carbone Constr. Co. v. Occupational Safety & Health Review Comm'n, 166 F.3d 815 (6th Cir. 1998); Beatty Equip. Leasing, Inc. v. Secretary of Labor, 577 F.2d 534 (9th Cir. 1978); Marshall v. Knutson Constr. Co., 566 F.2d 596 (8th Cir. 1977); Brennan v. Occupational Safety & Health Review Comm'n, 513 F.2d 1032 (2d Cir. 1975); but see Southeast Contractors, Inc. v. Dunlop, 512 F.2d 675 (5th Cir. 1975). We have not had occasion to expressly consider the validity of the doctrine, although we have cited it approvingly in a similar context. See Havens Steel Co. v. Occupational Safety & Health Review Comm'n, 738 F.2d 397, 400 (10th Cir. 1984). We now join the majority of circuits and adopt the multi-employer doctrine.

The Secretary pins statutory authorization for the multi-employer doctrine on 29 U.S.C. § 654(a)(2). Section 654(a) delineates the duties of employers:

(a) Each employer --

(1) shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees;

(2) shall comply with occupational safety and health standards promulgated under this chapter.

The Secretary construes § 654(a)(1) & (2) as imposing two distinct duties. First, (a)(1) requires employers to protect their own employees from hazards in the workplace. The employer's duty under (a)(1) flows only to its employees, as indicated by the language specifically limiting the employer's obligation to maintain a hazard-free workplace to "his employees." Second, (a)(2) requires employers to comply with the Act's safety standards. Unlike (a)(1), it does not limit its compliance directive to the employer's own employees, but requires employers to implement the Act's safety standards for the benefit of all employees in a given workplace, even employees of another employer. OSHA issues citations based on the multi-employer doctrine under (a)(2). Universal contends the language of § 654(a) may not reasonably be read as authorizing the Secretary to impose liability outside the employer-employee relationship.²

We review an agency's interpretation of its enabling statute in accordance with the decision in Chevron, U.S.A., Inc. v. Natural Resources Defense Council Inc., 467 U.S. 837 (1984). First, we determine if the statute is unambiguous on its face. Marshall v. Chater, 75 F.3d 1421, 1428 (10th Cir. 1996). If Congress has directly spoken to the issue, and its intent is clear, we must give effect to its intent. Id. If the statute does not address the specific issue at hand or is ambiguous, we next determine if the agency's interpretation is based on a permissible construction of the statute. Id. If so, we will defer to the agency's interpretation. Id. An agency's interpretation of a specific statutory provision is entitled to deference and will be upheld if it is reasonable and consistently applied and does not frustrate the policy sought to be implemented by Congress. See New Mexico Dep't of Human Servs. v. Department of Health & Human Servs. Health Care Fin. Admin, 4 F.3d 882, 884-85 (10th Cir. 1993). In applying these standards, we bear in mind that the Occupational Health and Safety Act is remedial legislation designed to protect employees from workplace dangers, and therefore must be liberally construed. See Whirlpool Corp. v. Marshall, 445 U.S. 1, 11, 13 (1980); Clarkson Constr. Co. v. Occupational Safety & Health Review Comm'n, 531 F.2d 451, 458 (10th Cir. 1976).

While broad, the language of § 654(a)(2) is ambiguous and does not clearly compel the Conclusion that Congress did or did not intend to permit the Secretary to impose liability for hazards that an employer controlled but did not create and which did not threaten the employer's employees. It may be, as the Secretary asserts, that (a)(2) was intended to create a specific duty requiring an employer to comply with OSHA safety standards for the good of all employees -- even those employed by others -- at a common worksite. If so, however, it is plausible that Congress would have chosen more direct phrasing to implement such a scheme.

The interpretation urged by Universal fares no better under plain language scrutiny. Subsection (2) on its face does not limit an employer's duty to comply with safety standards only to the employer's employees. Nor is there any patently compelling reason to assume merely because liability under (a)(1) is limited to situations where an employer's own employees are exposed to hazards, liability under (a)(2) is likewise limited. Where language appears in one section of a statute but not in another section, we assume the omission was intentional. See Bates v. United States, 118 S. Ct. 285, 290 (1997).

The Seventh Circuit recognized the dilemma in attempting to resolve this issue based solely on the plain language of the Act and its legislative history when it acknowledged nearly twenty-five years ago that "Congress apparently gave little thought to the unique relationship which arises when employees of a number of different employers work in and around the same job site and are subject to the hazards which may exist at that site." Anning-Johnson Co. v. United States Occupational Safety and Health Review Comm'n, 516 F.2d 1081, 1087 n.14 (7th Cir. 1975). Given the ambiguities of the statute, we are not prepared to conclude the plain language of the statute alone or its nonexistent legislative history on this issue permits us to accept or reject the multi-employer doctrine.

Because § 654(a)(2) is ambiguous regarding this issue, we consider if the agency's interpretation is based on a permissible construction of the statute and does not frustrate the policy underlying the Act. In this respect, the ambiguity of (a)(2) and, in particular, the omission from (a)(2) of any language expressly limiting an employer's liability only to its employees, militate in favor...