Hughes Gen. Contractors, Inc. v. Utah Labor Comm'n

• Decision Date: 31 January 2014
• Docket Number: No. 20120426.,20120426.
• Citation: 322 P.3d 712,753 Utah Adv. Rep. 21
• Parties: HUGHES GENERAL CONTRACTORS, INC. a Utah Corporation, Petitioner, v. UTAH LABOR COMMISSION, Occupational Safety and Health Division, Respondent.
• Court: Utah Supreme Court

322 P.3d 712

753 Utah Adv. Rep. 21

HUGHES GENERAL CONTRACTORS, INC. a Utah Corporation, Petitioner,

v.UTAH LABOR COMMISSION, Occupational Safety and Health Division, Respondent.

No. 20120426.

Supreme Court of Utah.

Jan. 31, 2014.

Joseph D McAllister, North Salt Lake, Clark B. Fetzer, John W. Mann, Salt Lake City, for petitioner.

Sean D. Reyes, Att'y Gen., Brent A. Burnett, Ronald V. Ludlow, Asst. Att'ys Gen., Salt Lake City, for respondent.

Justice LEE, opinion of the Court:

¶ 1 In this case we are asked to determine the viability of the so-called multi-employer worksite doctrine under the Utah Occupational Safety and Health Act (UOSHA). The doctrine makes a general contractor responsible for the occupational safety of all workers on a worksite—even those who are not the contractor's employees. Federal OSHA regulations adopt this doctrine, and federal courts have upheld it as consistent with the governing federal statute. But for us this is a matter of first impression.

¶ 2 We reject the multi-employer worksite doctrine as incompatible with the governing Utah statute, Utah Code section 34A–6–201(1). Specifically, we hold that the responsibility for ensuring occupational safety under the governing statute is limited to an employer's responsibility to its employees. And because the cited contractor in this case was not an employer of the workers in question, we reverse the citation and penalty at issue.

I

¶ 3 This case arises out of a construction project at Parowan High School overseen by Hughes General Contractors. The project involved over 100 subcontractors, including B.A. Robinson, which performed masonry work. During the course of this project, Hughes was cited by the Utah Occupational Safety and Health Division for a range of workplace safety violations. The violation at issue here concerned improper use and erection of scaffolding in connection with masonry work performed by B.A. Robinson.

¶ 4 UOSH cited and fined both Hughes and B.A. Robinson for this violation. As to Hughes, the citation was based on its failure to inspect and take corrective action, as required by Utah Administrative Code rule 614–1–5(D)(3). In determining that Hughes was responsible for safety conditions for B.A. Robinson's employees, the UOSH compliance officer invoked the multi-employer worksite doctrine. Specifically, the officer concluded that Hughes was responsible as a controlling employer under Utah Code section 34A–6–201, in that it had general supervisory authority over the worksite.

¶ 5 Hughes contested the citation, challenging the legal viability of the multi-employer worksite doctrine and the factual basis for the alleged violation. The citation was upheld by an Administrative Law Judge, whose decision was affirmed on appeal to the Labor Commission's Appeals Board. Both the ALJ and the Appeals Board upheld the multi-employer worksite doctrine. The Appeals Board based its decision on the notion that the governing Utah statute, section 34A–6–201, “mirrors its federal counterpart, which was interpreted in Universal Construction Co. v. Occupational Safety and Health Review Commission, 182 F.3d 726 (10th Cir.1999),” to endorse the principle that “a general contractor [is] liable for the safety violations of a subcontractor under the multi-employer worksite doctrine.”

¶ 6 Hughes sought review in the Utah Court of Appeals pursuant to Utah Code section 78A–4–103(2)(a)(i)(A), which then certified the case to this court. The issues presented are questions of law, concerning the viability of the multi-employer worksite doctrine under UOSHA. Specifically, Hughes seeks reversal on the grounds that “the agency has erroneously interpreted or applied the law” and “the agency has acted beyond the jurisdiction conferred by any statute” in so doing. Utah Code § 63G–4–403(4)(d), (b). Those arguments present questions of law subject to review for correctness. Utah Chapter of the Sierra Club v. Air Quality Bd., 2009 UT 76, ¶ 13, 226 P.3d 719;see Murray v. Utah Labor Comm'n, 2013 UT 38, ¶ 24, 308 P.3d 461.

II

¶ 7 The multi-employer worksite doctrine has been repeatedly challenged and upheld under federal law. See infra 20. But we have never had occasion to consider it as a matter of Utah law, and the state law issue is distinct.

¶ 8 The governing Utah statute, Utah Code section 34A–6–201, is not a mirror-image of its federal counterpart, 29 U.S.C. § 654(a). Under federal law, moreover, the doctrine finds support in an express federal regulation, 29 C.F.R. § 1926.16(c), a provision afforded deference by the courts under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Our Utah regulations have not incorporated the federal provision to which the federal courts have deferred in upholding the multi-employer worksite doctrine. And in any event our law affords no deference to federal regulations on questions of law. See infra ¶ 25.

¶ 9 We thus address the legality of the multi-employer worksite doctrine on a clean slate under Utah law. And we hold that the governing state OSHA provision forecloses it. In so ruling, we distinguish the federal cases relied on by the ALJ, the Appeals Board, and the Labor Commission, and we also dismiss the policy basis advanced in support of the doctrine. And we reverse the citation and penalty against Hughes, as it was based on a legal ground that we now repudiate.

A

¶ 10 The governing UOSHA provision imposes responsibilities for occupational safety on an “employer.” It requires that “[e]ach employer ... furnish each of the employer's employees employment and a place of employment free from recognized hazards that are causing or are likely to cause death or physical harm to the employer's employees and comply with the standards promulgated under this chapter.” UTAH CODE § 34A–6–201(1).

¶ 11 The question presented concerns the scope of these responsibilities. The Utah Labor Commission interpreted this provision to extend broadly to anyone with supervisory control over a particular worksite. Hughes contests this “multi-employer” approach, insisting that the safety responsibilities prescribed by this provision extend only to a single employer as concerning its own employees.

¶ 12 We read the statute as Hughes does. First, the text and structure of this provision are singularly focused on the employment relationship. Thus, the sole subject of the single sentence comprising this provision—the term identifying the persons to whom the prescribed occupational safety responsibilities run—is “[e]ach employer.” Id. So the duty to furnish a workplace free from recognized hazards is one that runs only to “[e]ach employer.” Id. And the same goes for the duty to “comply with the standards promulgated under this chapter.” Id. Under the clear text of the statute, this obligation also runs only to employers.

¶ 13 “Employer,” moreover, is defined in terms that contemplate a traditional employment relationship—and that accordingly forecloses the multi-employer worksite principle applied below. By statute, an “employer” is “a person ... having one or more workers or operatives regularly employed in the same business, or in or about the same establishment, under any contract of hire.” Id.§ 34A–6–103(1)(f)(iii) (emphasis added). So an employer is one who engages employees under a contract of hire. And “employee,” in turn, is defined in a similarly circular manner. An “employee” is “any person suffered or permitted to work by an employer.” Id.§ 34A–6–103(1)(e) (emphasis added).

¶ 14 The circular terminology of the statutory definitions drives home a key to its meaning. By defining “employer” as one who engages an employee, and “employee” as one who works for an employer, the legislature conveyed its acceptance of a term of art with a widely shared meaning. See Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323, 112 S.Ct. 1344, 117 L.Ed.2d 581 (1992) (appealing to the common-law meaning of the term “employee” when faced with a circular statutory definition); Kelson v. Salt Lake Cnty., 784 P.2d 1152, 1156 (Utah 1989) (interpreting the term “heirs” in wrongful death statute to incorporate the term of art meaning of the term under the Probate Code).

¶ 15 The legal term-of-art understanding of the employment relationship focuses on the employer's “right to control the employee.” Glover ex rel. Dyson v. Boy Scouts of Am., 923 P.2d 1383, 1386 (Utah 1996). Thus, the relevant control is not over the premises of a worksite, but regarding the terms and conditions of employment. In identifying factors of relevance to the inquiry into the right to control, our cases have looked to the existence of “covenants or agreements ... concerning the right of direction and control over the employee,” the “right to hire and fire,” the “method of payment (i.e., wages versus payment for a completed job or project),” and “the furnishing of equipment.” Id. at 1385–86.

¶ 16 This concept of employment forecloses the “multi-employer” construct that was the basis for the UOSHA citation against Hughes. Hughes had no employment relationship in connection with the safety violation involving B.A. Robinson's masonry work. The scaffolding problems in question involved workers engaged under the control of B.A. Robinson, not Hughes. As the sole employer involved in the masonry work and the scaffolding it required, only B.A. Robinson had the statutory responsibility to provide a workplace free of recognized hazards and to comply with standards promulgated under UOSHA.

¶ 17 Hughes was not an “employer” in connection with the work done by B.A. Robinson's workers. It had none of the rights of control identified in our cases—as to hiring and firing, method of payment, etc. Instead it had only general supervisory authority over the worksite. That did not render it an employer subject to sanctions for failure to comply with UOSHA.

¶ 18 The “multi-employer” construct is a misnomer—an attempt to...