A.C. Castle Constr. Co. v. Acosta

Decision Date07 February 2018
Docket NumberNo. 17-1537,17-1537
Parties A.C. CASTLE CONSTRUCTION CO., INC. Petitioner, v. R. Alexander ACOSTA, Secretary of Labor; U.S. Department of Labor, Respondents.
CourtU.S. Court of Appeals — First Circuit

James F. Laboe, with whom Orr & Reno, P.A. was on brief, Concord, NH, for petitioner.

Amy S. Tryon, Senior Attorney, U.S. Department of Labor, with whom Nicholas C. Geale, Acting Solicitor of Labor, Ann S. Rosenthal, Associate Solicitor for Occupational Safety and Health, and Charles F. James, Counsel for Appellate Litigation, were on brief, for respondents.

Before Torruella, Lipez, and Kayatta, Circuit Judges.

KAYATTA, Circuit Judge.

General contractor A.C. Castle Construction Co., Inc. appeals fines imposed by the Occupational Safety and Health Administration ("OSHA") for violations related to an accident at a construction worksite in Massachusetts. A.C. Castle argues, among other things, that OSHA wrongly held it responsible for the acts and omissions of a subcontractor. For the reasons below, we affirm.

I.

Two roofers fell over twenty feet and sustained serious injuries at a residential construction site in Wenham, Massachusetts on October 2, 2014, when a spruce board used for scaffolding snapped in half. OSHA inspectors promptly investigated the worksite and the two employers involved: A.C. Castle, the general contractor, and Provencher Home Improvements ("PHI"), the sole proprietorship of Daryl Provencher and the only subcontractor on the job. The Secretary of Labor, charged with enforcing the Occupational Safety and Health Act of 1970, 29 U.S.C. §§ 651 – 678 (the "OSH Act"), subsequently cited both A.C. Castle and PHI under the OSH Act. The Secretary proffered two alternative theories for citing both companies, rather than just the roofing subcontractor PHI: first, that under Occupational Safety and Health Review Commission ("Commission") precedent, the two companies constituted a single employer; and, second, that under the common law agency test set forth by the United States Supreme Court in Darden, Daryl Provencher was a supervisory employee of A.C. Castle. See Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 112 S.Ct. 1344, 117 L.Ed.2d 581 (1992). Under either legal test, the constructive or actual knowledge that Provencher possessed of the worksite violations would be imputed to A.C. Castle. See Empire Roofing Co. Se., 25 BNA OSHC 2221, 2222 (No. 13-1034, 2016) ; Cent. Soya de P.R., Inc. v. Sec'y of Labor, 653 F.2d 38, 40 (1st Cir. 1981).

A.C. Castle and Provencher challenged the citations. Following a three-day testimonial hearing, the Administrative Law Judge ("ALJ") determined that Provencher and A.C. Castle "acted as a single employer in the worksite" and that Provencher "was a supervisory employee working for A.C. Castle." In so ruling, the ALJ did not rest on her finding that Provencher was an employee of A.C. Castle as an independent and sufficient basis upon which to justify the citation of A.C. Castle. Instead, she relied on that finding to provide support for the conclusion that A.C. Castle and PHI could be treated as a single employer. The ALJ also rejected A.C. Castle's argument that it did not have fair notice that it would be treated as a single employer with PHI. Regarding the substance of the citations, the ALJ found that A.C. Castle willfully failed to ensure that the scaffolding was adequate to support the intended load, and assessed penalties totaling $173,500. The claims against Provencher were dismissed as moot because of his death after the hearing but before the ALJ ruled. After the Commission declined A.C. Castle's petition for review, A.C. Castle filed this appeal.

II.

The citations of A.C. Castle hinged on a finding that A.C. Castle was "the employer of the affected workers at the site." Allstate Painting & Contracting Co., 21 BNA OSHC 1033 (Nos. 97-1631 & 97-1722, 2005) ; see also 29 U.S.C. § 658(a). The ALJ reached this finding after properly placing the burden of proof on the Secretary. See Allstate, 21 BNA OSHC 1033. In now challenging that finding on appeal, A.C. Castle raises three issues: (1) whether substantial evidence supports the ALJ's conclusion that Provencher was a supervisory employee of A.C. Castle, (2) whether the ALJ erred in treating A.C. Castle and PHI as a single employer, and (3) whether the Secretary of Labor violated A.C. Castle's right to fair notice in treating PHI and A.C. Castle as a single employer where before it had not. We address these issues in turn.

A.

Brian LeBlanc is the owner and sole manager of A.C. Castle, which has its principal place of business at LeBlanc's home in Danvers, Massachusetts. A.C. Castle normally operates as a general contractor and claimed no direct employees of its own at the time of the OSHA investigation. LeBlanc was friends with Provencher, who was the sole proprietor of PHI, a construction subcontracting company based at Provencher's home in Beverly, Massachusetts. LeBlanc and Provencher had been friends for over thirty years at the time of the OSHA investigation. In 2015, ninety-five percent of Provencher's income came from A.C. Castle. Provencher estimated that generally around seventy-five percent of his projects came from A.C. Castle, as he occasionally performed work for other general contractors.

The ALJ found that Provencher was employed by A.C. Castle as a supervisor of the workers on the Wenham job site. In reaching this conclusion, the ALJ applied the common law agency test set forth by the Supreme Court in Darden. See Darden, 503 U.S. at 324–24, 112 S.Ct. 1344. A.C. Castle argues that the record lacks substantial evidence to support the ALJ's conclusion in applying that test, as evidenced by the ALJ's failure to consider many of the Darden factors, and an undue reliance on facts that are typical of the relationship between a general contractor and a subcontractor.

Darden's test is as follows:

In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party's right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party's discretion over when and how long to work; the method of payment; the hired party's role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party.

Darden, 503 U.S. at 323–24, 112 S.Ct. 1344 (internal quotation marks and citation omitted).

In applying this multifactor test,

[A]ll of the incidents of the relationship must be assessed and weighed with no one factor being decisive. However, in most situations, the extent to which the hiring party controls the manner and means by which the worker completes her tasks will be the most important factor in the analysis.

Alberty–Vélez v. Corporación de P.R. Para La Difusión Pública, 361 F.3d 1, 7 (1st Cir. 2004) (internal quotation marks and citations omitted).

The ALJ properly focused on the most important factor, control, finding that LeBlanc "exercised an unusual amount of control over Mr. Provencher's actions, atypical of a traditional contractor/subcontractor relationship." In expanding on this finding, the ALJ also looked at the source of instruments and tools, the assignment of work, the length of the relationship, and the hiring of other workers. Specifically, the ALJ stated:

Mr. LeBlanc and Mr. Provencher had a thirty-year working relationship. Mr. LeBlanc scheduled the roofing projects and told Mr. Provencher in what order they were to be done, which necessarily determined the location of the work. Mr. LeBlanc arranged for the building materials to be delivered to the worksites and provided the dump truck .... He also arranged for the only safety training provided to the roofing crew and provided Mr. Provencher with a copy of A.C. Castle's safety program and instructed him to implement it. Mr. LeBlanc told Mr. Provencher when he needed to hire more employees to complete the contracted roofing projects on time. Mr. Provencher paid the roofing crew members on Fridays, after he received payment from Mr. LeBlanc. Mr. Provencher did not have a business license and could not bid on projects; he was dependent on A.C. Castle for the great majority of his work. Mr. LeBlanc conducted spot inspections on Mr. Provencher's worksites and instructed him to abate specific safety infractions.

LeBlanc also appears to have directed Provencher to double up the spruce planks sold at the hardware store when used as scaffolding (a direction ignored on the day of the accident). LeBlanc gave Provencher (who had no credit cards or money on hand) interest-free loans to purchase equipment and materials, which LeBlanc docked in $500 increments from amounts otherwise due to Provencher. LeBlanc influenced when that equipment needed to be replaced. For example, he told Provencher he "probably need[ed] new ladders" and then loaned the funds to buy them. LeBlanc also let Provencher purchase materials on A.C. Castle's account at the local hardware store, where A.C. Castle received a discount. Provencher could not complete purchases on A.C. Castle's account without the clerk first calling LeBlanc for authorization. A.C. Castle also provided tee-shirts and sweatshirts with A.C. Castle's logo for Provencher and other PHI workers to wear.

LeBlanc was also involved in the hiring and firing of PHI's workers. On several occasions when PHI needed to hire workers, LeBlanc placed ads in the newspaper on Provencher's behalf because, without a credit card, Provencher could not do so himself. Provencher would inform LeBlanc when he had...

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    ...as employees or contractors under the common law agency test applicable to this prosecution.7 See, e.g., A.C. Castle Constr. Co., Inc. v. Acosta, 882 F.3d 34, 39 (1st Cir. 2018). However, a worker may be an employee even if his employer does not afford him all the treatment to which employe......
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    ...See Florida v. Harden, 938 So. 2d 480, 493 (Fla. 2006); Ball, supra note 127, at 37. 161. See A.C. Castle Constr. Co. v. Acosta, 882 F.3d 34, 39 (1st Cir. 2018) (quoting Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323 (1992)). For a list of relevant factors, none of which are disposit......
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