SECRETARY OF LABOR,
Complainant,

v.

MLB INDUSTRIES, INC.,
Respondent.

OSHRC Docket No. 83-0231

DECISION

Before:  BUCKLEY, Chairman; RADER and WALL, Commissioners.

BY THE COMMISSION:

This case is before the Occupational Safety and Health Review Commission under 29 U.S.C. 661(i), section 12(j) of the Occupational Safety and Health Act of 1970, 29 U.S.C. 651-678 ("the Act").  The Commission is an adjudicatory agency, independent of the Department of Labor and the Occupational Safety and Health Administration.  It was established to resolve disputes arising out of enforcement actions brought by the Secretary of Labor ("Secretary") under the Act and has no regulatory functions.  See section 10(c) of the Act, 29 U.S.C. 659(c).

Administrative Law Judge Jerome C. Ditore found that Respondent, MLB Industries, Inc. ("MLB"), had failed to comply with 29 C.F.R. 1926.28(a)[[1]] in that three employees were not using safety belts when they were exposed to a potential fall of 14 feet. The issue on review is whether the judge correctly found that MLB was the employer of these employees for purposes of the Act. [[2]]

I.

Crown Zellerbach ("Crown") was the owner of and a general contractor at a construction project in South Glens Falls Mills, New York.  On February 28, 1983, MLB was completing some work at a warehouse in the construction project pursuant to a contract with Crown.  On that day, Craig Dexter, project engineer for Crown, contacted George Bromley, project manager for MLB.   Dexter said that he had an "emergency," and asked Bromley if he could supply manpower to remove sections of a floor at the "IP" building, which was located about one-quarter mile from the warehouse.  According to Bromley, Dexter stated that he would tell the workers what to do, would furnish the tools needed, and would supervise the work.  Nothing else was discussed between Dexter and Bromley.

At the time of Dexter's request, MLB had a contract with the local union and therefore had access to union labor, but Crown did not.   Thus, according to MLB's vice president of operations, MLB served as a "conduit for labor" for Crown and had done so on at least two previous occasions.  On those occasions there were no purchase orders; MLB would supply the laborers, pay them, and bill Crown after the work was completed.  During the previous transactions, Dexter and others from Crown had told Bromley that they did not want supervision, just manpower.  Bromley further testified that, on these occasions, MLB was not directed or expected to provide safety equipment or safety precautions.

At approximately noon on February 28, Bromley met Paul Stafford at the warehouse, where Stafford had been performing some work for MLB.  Bromley told Stafford that he was to break out some concrete and that Dexter would tell him what to do and would supply the necessary tools.  Bromley took Stafford to the IP building site, where he introduced Stafford to Dexter.  Bromley then telephoned Peter Ingleston, a laborer, and sent him to meet Stafford at the IP building site.

At about 12:30 p.m. on February 28, Dexter took Stafford and Ingleston to the location where they would do the work.  Dexter showed them approximately six or seven sections of the concrete floor that had to be removed, and told them how the sections had to be chopped out.  Dexter told the workers to use the tools that were there, which consisted of jackhammers and a compressor. Dexter also told the labors to wear the hard hats, safety glasses, and ear plugs that the laborers had brought with them to the worksite, instructions that were consistent with the arrangements MLB and Crown had made.  Dexter did not mention the use of fall protection.

Stafford and Ingleston worked about 3 1/2 hours that afternoon and cut out two sections of the floor.  While they were working, Dexter was in the area two or three times.  During one of these times, Stafford told Dexter that one of the jackhammers was not working properly.  Dexter told Stafford to "go get a hammer from someplace."  Stafford obtained a jackhammer from MLB's trailer at another job.

When Stafford and Ingleston returned to the worksite at about 7:00 a.m. on March 1, they were joined by Bob Fletcher, another laborer supplied by MLB.  Dexter briefly spoke to the workers at the beginning of the work day.  Dexter also was in the area two other times that morning, for a total of about 5 to 10 minutes.  On one of these occasions, Dexter indicated that he planned to send the employers who were working below to lunch, so that the laborers could continue working without endangering other employees with falling debris.

At approximately 11:55 a.m., while Ingleston and Fletcher were cutting out a section of the floor with jackhammers, the concrete on which Fletcher was standing gave way.  Fletcher fell approximately 14 feet to the basement and later died of his injuries.

The concrete floor that the employees were working on had been poured in an arch form to give it support, but the floor did not contain rebars or other reinforcement.  Stafford testified that he had been told that, if the arch of the floor was cut, the floor would be weakened and would be unsafe.  Stafford believed that he was told this before the accident, but he could not recall who had told him this.  The three employees had not used safety belts or lifelines, nor had they been provided with any other type of fall protection.  Both Stafford and Ingleston, as well as the compliance officer, testified that safety belts and lifelines could have been used by the laborers, since there were beams nearby where the lines could have been attached.

At the time of the accident, Stafford had worked for MLB for 14 or 15 years.  However, Stafford did not consider MLB to be his employer for the work at the IP building, since MLB did not supervise the work, but rather "we were listening" to Dexter of Crown. Ingleston, on the other hand, considered MLB to be his employer for this work, because Bromley had told him to go to the worksite and MLB had been his employer for the past three years.

There was conflicting testimony about Stafford's status on this job.  Stafford testified that, although his job title was "labor foreman" and he was paid at a foreman's pay rate, he did not act as a foreman for the concrete removal work.  Both Stafford and Ingleston considered Dexter to be the foreman in charge of the project.  However, the compliance officer testified that, during the inspection, Stafford was identified as a foreman by an MLB safety supervisor, and that Stafford himself said he was a foreman.  Ingleston also stated that Stafford was "a foreman over there," and that he "gets stuff set up for us."

Stafford testified that he believed that Crown could have thrown him off the worksite if Crown thought that his work was unsatisfactory.  He stated, however, that Crown would have to notify Bromley or "Mr. M.L.B.," because "they are the ones that sent me there."  Bromley testified that he could have laid off Stafford, Ingleston or Fletcher from the job at the IP building.

MLB paid the three employees for their work at the IP building and sent Crown a bill, totaling $577, for the work.  That amount equaled the employees' wages, payments for the employees' pension, welfare, taxes, and insurance, and a 10% markup for handling the payroll.

II.

In determining whether MLB was the employer responsible for the safety of the employees performing the work at issue, Judge Ditore considered the following five factors:

1.  Whom the employee considers to be his or her employer;
2.  Who pays the employee's wages;
3.  Who is responsible for controlling the employee's activities;
4.  Who has the power as opposed to the responsibility to control the employee; and
5.  Who has the power to fire the employee or to modify the employee's employment conditions.

The judge observed that in Del-Mont Construction Co., 81 OSAHRC 35/E11, 9 BNA OSHC 1703, 1981 CCH OSHD 25,324 (No. 76-4899, 1981), the Commission considered these five factors in determining employer-employee relationships.

The judge found that Stafford, Ingleston, and Fletcher were employees of MLB, not Crown.  The judge found that MLB paid the employees' wages, had the ability and the power to control the employees, and could fire them or otherwise modify their working conditions.  The judge also noted that Ingleston believed he was MLB's employee, while Stafford considered himself to be an employee of Crown.  However, the judge found that Stafford, despite his belief, was MLB's labor foreman on the job and directed the activities of the other two employees.  In the judge's view, the supervisory role of Dexter of Crown was limited, since he left the employees under Stafford's supervision to do the job after telling them what to do.  The judge concluded that MLB was responsible for the safety on the jobsite and for the cited violation.  The judge found that MLB had committed a repeated violation of section 1926.28(a) and assessed a penalty of $1,540.

MLB contends that the key factor in identifying employment relationships under the Act is the degree of control and supervision exerted by the alleged employer.  MLB asserts that the laborers were under the control and supervision of Crown.  The Secretary contends that the judge properly applied the five-factor test for determining employment relationships under the Act and correctly held that the workers remained employees of MLB.

III.

This case involves the circumstances under which a particular company can be considered an "employer" under the Act so as to be held responsible for the safety of its employees. [[3]]  The Supreme Court has held, in the context of other statutes, that it is inappropriate to use varying state common law definitions of an employee and employer in construing federal legislation.  United States v. Silk, 331 U.S. 704 (1974).  Instead of looking at narrow common law definitions, the Supreme Court has looked to the purpose of the statute involved in deciding how employment relationships should be defined.  NLRB v. Hearst Publications, Inc., 322 U.S. 111, 124 (1944) (the meaning of the term "employee" under the National Labor Relations Act is to be determined primarily from the history, terms, and purposes of the legislation).  Further, the United States courts of appeals that have addressed the issue under the Act have held that employment relationships should be determined by reference to the Act's purpose and policy. Clarkson Construction Co. v. OSHRC, 531 F.2d 451, 457-58 (10th Cir. 1976); Frohlick Crane Service, Inc. v. OSHRC, 521 F.2d 628, 631-32 (10th Cir. 1975); Brennan v. Gilles & Cotting, Inc., 504 F.2d 1255, 1261 (4th Cir. 1974).

The express purpose of the Act is to "assure so far as possible every working man and woman in the Nation safe and healthful working conditions."  29 U.S.C. 651(b).  To effectuate this purpose it is appropriate for the Commission, in considering whether an employment relationship exists, to place primary reliance upon who has control over the work environment such that abatement of the hazards can be obtained.[[4]]  This approach is consistent with the above-cited Supreme Court and courts of appeals opinions.  It is also in keeping with the Commission's analysis in the analogous situation of the multi-employer construction worksite, where the Commission has concluded that the Act's purpose is best served if an employer's duty to comply with OSHA standards is based upon whether it created or controlled the cited hazard.[[5]]

As the judge stated in his decision, the Commission has generally considered five factors in determining employer-employee relationships.  Del-Mont Construction Co., supra; Sam Hall & Sons, Inc., 80 OSAHRC 106/A2, 8 BNA OSHC 2176, 1980 CCH OSHD 24,927 (No. 76-4988, 1980); Acchione & Canuso, Inc., 80 OSAHRC 5/B4, 7 BNA OSHC 2128, 1980 CCH OSHD 24,174 (No. 16180, 1980). [[6]]  Three of these factors -- who is responsible for controlling the employee's activities, who has the power to control the employee, and who has the power to fire the employee or to modify the employee's employment condition -- are related to the issue of who controls the work environment and employees.  Since these factors give effect to the remedial purpose of the Act, they should be given particular emphasis in determining who is an employer under the Act.  The other two factors involve the employees' belief as to who is their employer and the determination of who pays the laborers' wages.  Although these latter two factors have some bearing on the employment relationship, they are not directly related to the issue of control, and should normally be accorded less emphasis in determining the employment relationship under the Act.

Although we continue to evaluate those factors set forth in Del-Mont in order to determine who is the responsible employer under the Act, we note that the Commission has never considered any list of factors to be all inclusive.  Moreover, in determining the employment relationship, each situation must be examined on a case-by-case basis and all relevant factors considered.  See Griffin & Brand of McAllen, Inc., supra.

Analyzing this case from the standpoint of who had control over the employees and their activities, we conclude that Crown had both the responsibility and the power to control the employees' activities.  Crown's control over the employees' activities was consistent with the arrangements made between Crown and MLB prior to the beginning of the work.  In his request for workers, Dexter, Crown's project engineer, told Bromley, MLB's project engineer, that he would tell the workers what to do, would furnish the tools and would supervise the work.  Further, in other instances when MLB furnished Crown with labor, Bromley was told that Crown did not want supervision, just manpower, and MLB was not directed or expected to provide safety equipment or safety precautions.

Crown owned the construction project and was the general contractor responsible for the work at the IP building.  When the employees arrived at the site, Dexter showed them the sections of concrete floor that had to be removed and told them how the work was to be done.  He also told the employees to use the tools that Crown had provided at the worksite, and to wear their hard hats, safety glasses, and ear plugs.[[7]]  Although no MLB supervisor was in the area,[[8]] Dexter of Crown periodically checked the progress of the work.  Thus, the circumstances under which the work was performed lead to the conclusion that Crown had the power to direct the employees' activities and to insure the work was done safely.

The judge found that Dexter's role was a "limited one," and that control of the employees' activities was left to Stafford as MLB's foreman at the jobsite.  We conclude that these findings are not supported by a preponderance of the evidence.  Both Stafford and Ingleston testified that they considered Dexter to be in charge of the project.  Additionally, as discussed above, Crown did not request supervision from MLB for the work.  Although Stafford's job title was "laborer foreman" and he was paid at a foreman's pay rate, he testified that he did not act as a foreman on this job.[[9]]  Further, there is no evidence that Stafford had disciplinary authority, instructed the other workers in safety, enforced safety rules, or in any other respects acted as their supervisor on this job. Cf. Daniel International Corp. v. OSHRC, 683 F.2d 361 (11th Cir. 1982) ("leadman" at construction site is not a supervisor for purposes of employer's defense of isolated employee misconduct).  Rather, Dexter's role in explaining the work to the employees, instructing that they wear hard hats, safety glasses, and ear plugs, determining when employees were to take lunch breaks, and checking the progress of the work establishes that he was the supervisor in charge of the work.

In contrast to Crown's direct control over the employees' activities through Dexter's supervision, MLB's power to control the employees and to modify their working conditions was largely indirect or theoretical.  Although MLB selected and contacted the employees about the job, there was no showing that MLB's initial contact with the employees had an impact upon how they performed their work or their safety.[[10]]  Although MLB may have had the authority to withdraw the laborers from the worksite, to fire them, and to assign other laborers to do the work, MLB was not performing any work at the IP building and did not take any role in determining how the concrete floor was to be removed.  Further there is no indication that MLB knew of any circumstances that would have required it to take action with respect to the workers' employment, either for safety purposes or for any other reason.  Therefore, MLB did not have sufficient control of the work environment or employee's activities to support a finding that it was an employer under the Act.

The other factors that have been considered by the Commission in determining employer-employee relationships do not support a finding that MLB was the employer of the employees in this case.  With respect to who the employees considered their employer to be, we note that Stafford considered Crown to be the employer based upon Dexter's role in supervising the work.  However, Ingleston considered MLB to be his employer because MLB had been his regular employer for three years and Bromley had contacted him about the work.  Thus, the evidence is inconclusive with respect to whom the employees considered their employer.

With respect to who paid the employees' wages, it is clear that, although the initial payment of the wages was made by MLB, Crown was billed and ultimately responsible for payment.  MLB was merely serving as a "conduit for labor" for Crown, since MLB had a contract with the local union but Crown did not.  MLB billed Crown for the employees' wages, their benefits, and a 10% markup for handling the payroll.  Thus, while MLB technically paid the workers, it appears that it assumed this responsibility primarily as a matter of convenience and that it was Crown who actually was responsible for the cost.  Accordingly, we do not consider this payment of the employees to be significant in determining who was their employer.

Having reviewed the circumstances surrounding the employment relationship in this case, we conclude that Crown, not MLB, was the employer of the three employees for purposes of the cited violation. [[11]]  In reaching this conclusion, we attach particular importance to the fact that Crown assumed responsibility for the employees' activities, had control of the worksite, and provided the supervision of the work.  Therefore, Crown was in a better position than MLB to assure the safety of the workers in removing sections of the concrete floor.[[12]]

Accordingly, the citation in this case is vacated.

FOR THE COMMISSION

Ray H. Darling, Jr.
Executive Secretary

DATED:  October 31, 1985

WALL, Commissioner, concurring:

I concur with the majority opinion in that the indicia of employer/employee relationships should be viewed consistently with the intent of the statute rather than to track "employee" analysis derived from other statutes, and that the indicia of employment should be analyzed in the context of the facts of each case.  However, I would absolve MLB of responsibility for safety in this case, and assign it to Crown irrespective of which company was the "employer" of the three laborers.  Even if these employees were those of MLB under any construction of the term employer, then these employees were "loaned" to Crown.  In my view, the paramount consideration under the Occupational Safety and Health Act is who had control of the workplace, and under the facts of this case it would clearly reside in Crown.  While it would not always be appropriate to assign safety responsibility to the "loanee employer" as opposed to the "loaner employer"[[13]] as is brought out in the majority opinion, Crown's project engineer told Bromley, MLB's project engineer, that he would tell the workers what to do, would furnish the tools and would supervise the work.  Further, in other instances when MLB furnished Crown with labor, Bromley was told that Crown did not want supervision, just manpower, and MLB was not directed or expected to provide safety equipment or safety precautions.  When the employees arrived at the site, Dexter showed them the sections of concrete floor that had to be removed, and told the employees what tools to use and what protective devices to wear.  The situs was Crown's workplace.  No MLB supervisor was in the area, and MLB cannot reasonably be held accountable for the employees' safety in these circumstances.  Notwithstanding the employer/employee relationship, Crown should have been held responsible for the safety of the employees, and, in fact, was the only employer in a position to provide for safety.   Accordingly, I concur.



FOOTNOTES:

[[1]] The standard provides:

1926.28 Personal protective equipment.

(a) The employer is responsible for requiring the wearing of appropriate personal protective equipment in all operations where there is an exposure to hazardous conditions or where this part indicates the need for using such equipment to reduce the hazards to the employees.

[[2]] MLB does not argue on review that 1926.28(a) was not violated; MLB only argues that it should not be held responsible for the violation.

[[3]] The Act defines the term "employer" as "a person engaged in a business affecting commerce who has employees, but does not include the United States or any State or political subdivision of a State."  29 U.S.C. 652(5).  However, the Act does not set forth criteria for determining under what circumstances a "person" shall be considered the employer of particular employees.

[[4]] The Tenth Circuit has observed that "[i]n order to accomplish [the Act's] purpose, it is necessary to look to an employer who controls the working environment.  Whether the employer controlling work environment (sic) is also the employer for wage or tort purposes should not be a governing factor."  Clarkson Construction Co. v. OSHRC, supra at 458, quoting James E. Roberts Co., 74 OSAHRC 21/B6, 1 BNA OSHC 1684, 1973-74 CCH OSHD 17,659 (No. 103 & 118, 1974) (Commissioner Cleary, dissenting).

[[5]] In such cases, the Commission has held that a general contractor at a construction site, by reason of its general supervisory authority, may be responsible for hazardous conditions to which a subcontractor's employees have access.  Further, a subcontractor who did not create or control hazards to which its employees are exposed may defend against the Secretary's charge by showing that it took realistic measures to protect its employees.  Lewis & Lambert Metal Contractors, Inc., 84 OSAHRC __/___ , 12 BNA OSHC 1026, 1984 CCH OSHD 26,294 (No. 80-5295, 1984); Grossman Steel & Aluminum Corp., 76 OSAHRC 54/D6, 4 BNA OSHC 1185, 1975-76 CCH OSHD 20,691 (No. 12775, 1976); see also De Trae Enterprises v. OSHRC, 645 F.2d 103 (2d Cir. 1981) (per curiam); Anning-Johnson v. OSHRC, 165 F.2d 1981, 1988 (7th Cir. 1975); Brennan v. Underhill Construction Corp., 513 F.2d 1032 (2d Cir. 1975)

[[6]] In earlier cases, the Commission considered the following three factors in identifying an "employer" for purposes of the Act: (1) the person whom the employees consider to be their employer; (2) who pays the employees' wages; and (3) who is responsible for controlling employees' activities.   See, e.g., Gordon Construction Co., 4 BNA OSHC 1581, 1976-77 CCH OSHD 20,968 (No. 7390, 1976).  See also Griffin & Brand of McAllen Inc., 78 OSAHRC 48/C13, 6 BNA 1702, 1978 CCH OSHD 22,829 (No. 14801, 1978) (seven-factor test applied to determine whether workers were employees of the respondent or were independent contractors).

[[7]] Bromley testified that this instruction concerning the wearing of safety equipment was consistent with the arrangements made between MLB and Crown.

[[8]] The workers for the most part worked without any supervisors in the area.   However, even if these laborers had been Crown's regular employees, Crown's supervisors might have concluded that, because of the employees' experience and the repetitious nature of the work, a constant supervisory presence in the area was not necessary.  Therefore, the inference that MLB was responsible for these employees cannot be drawn from the fact that Crown did not maintain a constant supervisory presence.

[[9]] According to the compliance officer, during the inspection Stafford was identified as a foreman by an MLB safety supervisor, and Stafford himself said he was a foreman.  Ingleston also stated that Stafford was "a foreman over there" and that he "gets stuff' set up for us."   However, it is unclear whether this testimony concerning Stafford's role as a foreman referred to the particular work at the IP building or to Stafford's work during his usual employment by MLB.  Accordingly, we find the testimony by the compliance officer and by Ingleston is insufficient to establish that Stafford acted in a supervisory role and thus had control over the employees' work activities and safety.

[[10]] Ingleston and Stafford only were told by Bromley that they would be breaking out some concrete, and they were given no other instructions about how the work would be performed.  In addition, Stafford was told that Dexter, Crown's project engineer, would tell him what to do.

[[11]] The circumstances of this case are different from Del-Mont Construction Co., supra, where the Commission found that the cited company (Del-Mont) was the employer for purposes of the Act.  Del-Mont had loaned employees to another company (Betz) for performance of valve installation work in a sewer system.  Unlike this case, where Dexter of Crown told Bromley that he would tell the workers what to do and would supervise the work, in Del-Mont there was no discussion prior to the start of the work with respect to who would control the workers' activities.  Further, in Del-Mont, Betz's supervisor at the worksite did not consider himself to be the supervisor of the loaned employees and did no more than show the employees the location of the work, while in this case Dexter of Crown acted as the supervisor of the loaned employees.  Finally, while Del-Mont like MLB did not have any supervisors present at the worksite, Del-Mont took a more active role than MLB with respect to the work being performed. Del-Mont supplied all of the equipment needed for the work, one of the leased employees reported to Del-Mont's president on the second day of the job and discussed the work with him, and Betz's supervisor asked Del-Mont's president for permission to use the employees on a second manhole.

This case can also be distinguished from Sam Hall & Sons, Inc., supra; Acchione & Canuso, Inc., supra; and Gordon Construction Co., supra.  In those cases, the companies that borrowed the employees' services did not have the expertise to supervise the leased employees' work and did not supervise the employees with respect to how their work was performed.  In this case, Dexter of Crown was the supervisor in charge of the work, and there was no showing that Crown did not possess sufficient expertise to supervise the work.  Rather, the evidence indicates that Dexter was familiar with the work since he was project engineer for the general contractor at the construction site, and he told the employees how the floor sections were to be removed.

[[12]] We also reject the conclusion that, under the circumstances of this case, both MLB and Crown should be considered the employer of the laborers for purposes of the Act.   As the Seventh Circuit observed in Anning-Johnson Co. v. OSHRC, duplicative liability does not necessarily promote the purposes of the Act, since "[p]lacing responsibility in more than one place is . . . likely to cause confusion and disruption in normal working relationships on a construction site . . . [and] might in effect prove to be counterproductive."  516 F.2d at 1089.

[[13]] For example, when loaned employees have expertise in a field not possessed by the loanee employer, or where the loanee employer has no reason to supervise the employees, e.g., employees delivering construction materials to a project.