UNITED STATES OF AMERICA
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
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SECRETARY
OF LABOR, |
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Complainant, |
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v. |
OSHRC
DOCKET NO. 7390 |
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GORDON CONSTRUCTION COMPANY, |
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Respondent. |
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August 10, 1976
Before BARNAKO, Chairman; MORAN and CLEARY,
Commissioners.
OPINION BY: CLEARY, Commissioner:
On
April 2, 1975, Administrative Law Judge Harold A. Kennedy issued his decision
vacating two citations issued to respondent Gordon Construction Company for
violations of section 5(a)(2) of the Occupational Safety and Health Act of
1970, 29 U.S.C. § 651 et seq., [hereinafter cited as “the Act”].[1] The citations were vacated
on the ground that respondent was not the “employer” of the employees allegedly
exposed to the violations.
Pursuant
to section 12(j) of the Act I granted the petition for review filed by the
Secretary. It raised the following issues:
(1)
Whether the Administrative Law Judge erred in finding that respondent, under
the circumstances of this case, was not an “employer” within the meaning of the
Act?
(2)
If so, whether respondent violated the Act as alleged in the citation.
For
the reasons given below, we reverse and remand.
Respondent
is a contractor engaged in excavating and trenching. In February 1974,
respondent was hired by the North Little Rock, Arkansas, Sewer Department to
assist in digging trenches for the replacement of sewer lines. Respondent was
hired because of its expertise in digging through solid rock. According to an
oral agreement, respondent was to receive costs plus ten percent overhead.
Respondent was to provide the department with men and equipment. It assigned
three employees, a backhoe operator and two laborers, to the job. Respondent
maintained employee records; paid the employees; and was responsible for their
workmens’ compensation coverage. When questioned by the compliance officer,
these employees identified themselves as employees of respondent.
Mr.
Wilson, the backhoe operator, was assigned by respondent to head the crew
assigned to the worksite. In that capacity he was responsible for maintaining
respondent’s records, including a tabulation of hours worked by himself and the
two laborers. It was from these records that respondent charged the sewer
department for the labor of the employees.
Although
the project was under the supervision and control of the city engineer, Mr.
Kimbrough, Mr. Wilson exercised authority to direct the laborers to perform
specific tasks incidental to their job. Also, Mr. Kimbrough was often absent
from the jobsite, and in his absence Mr. Wilson exercised broad supervisory
authority. Indeed, when approached by the compliance officers, Mr. Wilson
indicated that he was the person in charge.
In
his decision Judge Kennedy concluded that, although the three employees
considered themselves to be in respondent’s employ and were paid by respondent,
they “looked ... to the sewer department’s field engineer ... as the person in
complete charge of their work activities ....” On the basis of this finding he
concluded that respondent was not the employer of the three workers for
purposes of the Act. No other findings or conclusions were made, and the
citation was vacated.
The
question of whether an employment relationship exists is answered by
considering all the facts in light of the Act’s purpose. The common law
definition of “employer” as determined by the so-called “control test” is a
term of tort law evolved for the purpose of determining a superior’s liability
for the acts of his subordinates. Brennan v. Gilles & Cotting, Inc.,
503 F.2d 1255, 1261 (4th Cir. 1974). The scope of the common law definition of
“employer” is related to the tort doctrine of respondeat superior and does not
take into account the purpose of the Act. It is, therefore, not suitable for
determining liability under the Act. Frohlick Crane Service, Inc. v.
O.S.H.R.C., 521 F.2d 628, 631 (10th Cir. 1975); Brennan v. Gilles &
Cotting, Inc., supra. Instead, we must define employment relationships on a
case by case basis, considering both the economic realities of the situation
and the remedial purposes intended by Congress. Brennan v. Gilles &
Cotting, Inc., supra; Dayton Tire & Rubber Co., 1974-75 CCH OSHD
para. 19,246, 2 BNA OSHC 1528 (No. 2719, 1975), petition for review docketed,
75-1316, D.C. Cir., March 27, 1975.
The
Commission has considered the following in identifying an “employer” for
purposes of the Act: (1) the person whom the employees consider to be their
employer; (2) who pays employees’ wages; and (3) who is responsible for
controlling employees’ activities. Weicker Transfer and Storage Co.,
1974-75 CCH OSHD para. 19,215, 2 BNA OSHC 1493 (Nos. 1362 and 1373, 1975); Bayside
Pipe Coaters, Inc., 1974-75 CCH OSHD para. 18,677, 2 BNA OSHC 1206 (No.
1953, 1974). As stated, the employees considered themselves to be employed by
respondent. Respondent assigned them to the job, maintained their employee
records, and carried their workmens’ compensation insurance. Furthermore,
respondent retained the power to remove the employees from the worksite.
Respondent also paid the employees’ wages.
Respondent,
however, argues that it was not the “employer” because it lacked control of the
worksite. Although the “control” element is an important factor in determining
whether an employment relationship exists under the Act, it is, by no means,
conclusive. See Brennan v. Gilles & Cotting, Inc., supra. In any
event, the evidence establishes that respondent maintained a significant degree
of control over the employees. Although the worksite was under the supervision
and control of the sewer department, Mr. Wilson directed the laborers in the
performance of tasks related to the operation of the backhoe and the process of
laying pipe. Also, as indicated above, during Mr. Kimbrough’s frequent absences
from the job, Mr. Wilson exercised broader authority.
Furthermore,
respondent was hired specifically because of its experience and expertise in
digging through solid rock. When questioned about the reasons for hiring
respondent, Frank Murphy, the manager of the North Little Rock Sewer
Department, testified:
I contacted Mr. Gordon as I had in the
past about many other jobs, because he had the expertise on dynamite and the
handling of explosives, plus, all the Federal permits to handle the thing.
He also testified as follows:
Under our arrangement, Mr. Gordon
furnished some equipment and some employees. And expertise and many things.
When
an employer is hired for its expertise and that expertise is relied upon, that
employer is responsible for the actions of its employees relevant to its work.
See Frohlick Crank Service, Inc. v. O.S.H.R.C., 521 F.2d 628, 631 (10th
Cir. 1975); Lidstrom, Inc., 1975-76 CCH OSHD para. 20,564 (No. 3433, 1976)
Respondent’s
argument that it had loaned its employees to the sewer department and that,
under the common-law principle of the “borrowed employee,” the department had
become their employer is inapposite. As is the case with the term “employer,”
the term “borrowed employee” is a term of tort law and has no place in an
administrative proceeding brought under remedial legislation designed to
provide a safe place to work for every working man and woman in the Nation. Frohlick
Crane Service, Inc. v. O.S.H.R.C., supra at 631.
The
facts of this case reveal that the prerequisites to an employment relationship
between respondent and the three workers have been satisfied. Although the
“control” element is satisfied only in part, with the sewer department and respondent
sharing different aspects of control over the employees, it is clear that
respondent, for purposes of the Act, is the employer of the backhoe operator
and the two laborers.[2]
Although
a hearing was conducted by the Judge, he made no findings of fact concerning
the alleged violations. Much of the evidence adduced at; the hearing is
contradictory and requires credibility findings which the Judge is best
qualified to make. See Paul L. Heath d/b/a Paul L. Heath Contracting Co.,
1975-76 CCH OSHD para. 20,006, 3 BNA 1550 (No. 5467, 1975). Also, on review
neither party has briefed the issue of whether respondent was in violation of
the Act, and both parties have requested that the case be remanded for findings
in the event the Judge’s decision is reversed.
Finally,
we note that the city sewer department had substantial control over the
worksite. Thus, the situation may be analogous to the control problem commonly
found at multiple employer construction sites. Therefore, respondent may be
able to raise certain defenses available to subcontractors at multiple employer
construction sites. See Anning-Johnson Co., 1975-76 CCH OSHD para.
20,690, 4 BNA OSHC 1193 (Nos. 3694 & 4409, 1976); Grossman Steel &
Aluminum Co., 1975-76 CCH OSHD para. 20,691, 4 BNA OSHC 1185 (No. 12775,
1976). Because these defenses were not available to respondent at the time of
the hearing we will allow them to be raised on remand.[3]
It is ORDERED that the Judge’s decision is reversed
and the case is remanded.
DISSENT BY: MORAN
MORAN, Commissioner, Dissenting:
Judge
Kennedy vacated the citations in this case on the ground that respondent was
not an “employer” within the meaning of the Act and could therefore not be held
accountable for the alleged violations. His decision, which is attached hereto
as Appendix A, is eminently correct and should be affirmed in all respects.
Although
we have held that employment relationships are not to be construed according to
technical concepts of the common law, and that the question of whether such a
relationship exists is to be determined on the facts of each case, we have
nevertheless consistently recognized that control over a worker is an important
consideration in ascertaining such a relationship under the Act. Secretary
v. Gilles & Cotting, Inc., 4 OSAHRC 1080 (1973), remanded on other
grounds sub nom Brennan v. Gilles & Cotting, Inc., 504 F.2d 1255
(4th Cir. 1974). Under the circumstances of this case, where respondent ceded
all supervisory control of the workers to the North Little Rock Sewer Department,
control is the paramount consideration. When a respondent has neither exercised
control over nor retained the right to control a “loaned” employee, and the
lessee has full control over him, the respondent is not an employer with
respect to that employee.
The
pertinent facts of this case are as follows. The North Little Rock Sewer
Department was in the process of digging an excavation for the purpose of
replacing a sewer line when it “went into solid rock.” Although the Sewer
Department had originally undertaken to replace the sewer line with its own men
and equipment, upon hitting the solid rock the Department decided to seek the
aid of respondent, which had the skill and equipment to dig through such rock.
Accordingly, the Department and respondent reached an agreement, whereby
respondent agreed to furnish to the Department a backhoe with an operator and
certain men and equipment. Respondent’s president then informed Mr. Wilson, a
backhoe operator, and two laborers that they were going to “do a city job.”
Soon thereafter the three workers began reporting for work directly to the
Department’s job site.
Regarding
the issue of supervisory control, respondent’s President, Mr. Gordon, testified
that Mr. Kimbrough, the job superintendent for the Sewer Department, exercised
supervisory authority over the employees and could hire and fire them without
Mr. Gordon’s consent. Mr. Gordon also stated that he had no right to exercise
any authority over the workplace and that, if he saw anything improper at the site,
he could do no more than bring the matter to the attention of Superintendent
Kimbrough.
The
Sewer Department’s manager, Frank Murphy, also acknowledged Kimbrough’s
authority and in response to the Court’s question as to who exercised “total
control and dominion over the alleged employees of Mr. Gordon, the City or Mr.
Gordon,” responded:
“Under
our arrangement, Mr. Gordon furnished some equipment and some employees. And
expertise and many things.
Originally to start out, this was just a
blasting job. We plowed up some rock where we are talking about where this
whole case is based on, they would have to follow Mr. Kimbrough’s instructions
on the job.”
In
response to complainant’s questions during cross-examination, Murphy testified
that Kimbrough exercised direct supervision over respondent’s alleged employees
in the following manner:
A. Well, I’ve been using the term he told
them exactly what to do. I think you would find he told them how many beddings
to put under the pipe where they were working around the pipe; he told Mr.
Wilson exactly how deep to dig it in the ditch; he told Mr. Wilson where to dig
and what he wanted to accomplish. He was there all of the time, if he wasn’t
there, he would be back shortly.
* * *
Q. He was in charge of giving them
directions or instructions?
A. Yes, sir.
* * *
Q. But did Mr. Kimbrough tell these two
laborers?
A. Yes, I think one of the laborers
testified that he, Mr. Kimbrough, told him to put a little more rock under the
pipe.
Q. Could Mr. Kimbrough hire and fire these
employees?
A. If Mr. Kimbrough didn’t like — not only
the city employees we have intermixed with these other employees, if he didn’t
like what Wilson was doing, he could, yes, he could tell Bill Wilson he’s
through on that job.
* * *
Q. What about the two laborers; could he
tell them?
A. If he didn’t like it, he could run them
off.”
Superintendent Kimbrough corroborated the
testimony of Mr. Gordon and Mr. Murphy, stating that he was the one who
determined how the trenches and excavations were dug and that he directed the
activities of all the workers. Specifically, he testified as follows:
“Q. Did you have total control of these
employees?
A. Yes, sir.
Q. Who decided how the trench would be
dug, how the excavation would be dug, any questions relating to the safety of
the trench or the excavation, and anything else in sloping, this type of thing?
A. I did.
Q. And the employees did that at your
direction?
A. Yes, sir.”
In regard to Gordon’s authority as
compared to his, Kimbrough answered as follows:
“Q. In the event you have a situation
where Mr. Gordon came and wanted to suggest a certain way be done to perform
the work, who had the firm decision-making authority as to what method would be
followed?
A. I would. If yours was a better way than
mine, I would do it, but I would have the decision to make whether to do it or
not.
Q. Was it your final decision as far as
what safety requirements were [met]?
A. Yes, sir.
During
cross-examination, Kimbrough explained that he meant by “directed the
employees” that he “was in charge of everything that needed to be done or the
way it was to be done.” Furthermore, he relayed these instructions both to
Wilson and the laborers on different occasions. Finally, in response to complainant’s
question as to whether he considered them city employees, Kimbrough stated, “As
far as I know, they were. If I could hire or fire them, they were city
employees or Sewer Department employees.”
The
backhoe operator, Mr. Wilson, testified that he received his instructions from
superintendent Kimbrough and that the only instructions he received from Mr.
Gordon were that he would be working for Kimbrough and to follow his
instructions. Similarly, the two laborers, Mr. Leach and Mr. Toney, testified that
Kimbrough was in charge. On cross-examination Mr. Leach testified as follows:
“Q. And you were working under the control
of the City’s job superintendent, were you not?
A. He was there, yeah.
Q. Mr. Kimbrough?
A. He was there.
Q. He was the man that had the ultimate
authority as to what you did, and where you were assigned and what type work
you were doing on that day, wasn’t he?
A. Right.
Q. He had complete control and authority
over you?
A. Right.
Q. And directed your work?
A. Right.”
Mr. Toney likewise testified as to this
subject as follows:
“Q. You knew this was a city job, didn’t
you?
A. Yes, sir.
Q. Who had control of the job?
A. Mr. Kimbrough.
Q. Mr. Kimbrough?
A. Yes.
Q. He was the boss?
A. Right.
Q. On this job?
A. To my knowledge.
Q. Right. It wasn’t Mr. Wilson, was it?
A. No, he was operator.
* * *
Q. I’ll ask you the same question I asked
Mr. Leach: what do you understand by the term “city” employees?
A. Well, my understanding was at the beginning
of going on the first day, was, my boss that I worked for, Mr. C. D. Gordon,
told me we was going down and do a job for the city down on Camp Robinson by
the shopping center. ‘You work under Mr. Kimbrough because it is a city job.’ I
said, ‘Okay.’ He say, ‘It is way down there across 47th Street.’
I know approximately how to get to the job
because I hauls the men to work. I had the transportation.
Q. Could Mr. Kimbrough fire you?
A. Yes, he could.
Well, that is my understanding because we
was doing a job for the City. We had to abide by the city rules.”
Despite
all of the foregoing testimony, Messrs. Cleary and Barnako conclude that “the
evidence establishes that respondent maintained a significant degree of control
over the employees.” They base this conclusion on two findings: firstly, that
Mr. Wilson “directed the laborers in the performance of tasks related to the
operation of the backhoe and the process of laying pipe;” and secondly, that
“during Mr. Kimbrough’s frequent absences from the job, Mr. Wilson exercised
broader authority.”
Although
there is some evidence that Wilson gave a few minor directions to his
co-workers, particularly when Mr. Kimbrough was not present, the evidence is
overwhelming that such direction was pursuant to Wilson’s job as the backhoe
operator and not as a supervisor or foreman. Furthermore, the evidence clearly
shows that whatever authority Wilson exercised came either from his own
assumption of such authority, or from Mr. Kimbrough, not from Mr. Gordon. On cross-examination
Mr. Wilson testified as follows:
Q. Who were you
receiving your instructions from?
A. Mr. Kimbrough.
Q. Any from Mr.
Gordon?
A. Nothing except
that’s who I would work for all the time, you know.
Q. Did he tell you
to follow the instructions of city employees?
A. He did. And me
and him talked on the phone of a night to do it and all.
Q. Did you give
instructions to the laborers, Mr. Leach and Mr. Toney? Did you give them
supervisory instructions?
A. At times I
would if Mr. Kimbrough wasn’t around and I seen something that had to be done
or needed to be done to keep me from having to get off the machine to do it,
yes.”
On redirect, he
continued as follows:
“Q. At the time
you were working on this particular job, whose control and direction were you
actually under?
A. Mr. Kimbrough.
Q. You knew it was
a City job?
A. I did.
* * *
Q. Now there was
some discussion on cross-examination about supervisory instructions. What type
of instructions are you referring to?
A. You know, like
if the foreman ain’t around, I’m not afraid on the job, I’m an operator on the
job, and I have got more authority than anybody else.
Q. This is the
normal authority of an operator?
A. Normal everyday
stuff.
Q. Well, what kind
of instructions would you give? Would they be instructions for, you know, to
leave the job and go someplace, or would they be instructions along the line
of, ‘You can move this pipe.’ ‘Put it over here.’
A. That’s right.
Q. What’s right?
A. The pipes, something
like that.
Q. Installation of
pipes?
A. Yeah.
Q. Did you have
any authority on the job site, the one in question, to make any decisions such
as the type of safety precautions that would be necessary or anything like
that?
A. No, sir, I
didn’t have the authority to do that.
Q. Didn’t have the
authority to hire or fire?
A. No.
Q. Did you have
the authority to discipline somebody?
A. No, sir.
Q. Did you have
the authority to have somebody stay overtime?
A. I sure didn’t.
Q. Would it be
fair to say that your authority was principally routine instructions of the
crew members in getting the job done that you were assigned?
A. Absolutely
right.
Mr. Wilson’s testimony as to his authority
over the laborers, is corroborated by the previously quoted testimony of Mr.
Toney. Further corroboration is contained in the testimony of Mr. Leach who
testified on cross-examination as follows:
Q. Mr. Leach,
there was some testimony on redirect a moment ago about instructions from Mr.
Wilson. What type of instructions were you talking about when the term
‘instructions’ was used? Were you talking about just generally how, where he
wanted you to lay the pipe and this type of thing?
A. Something like
that, yes.
Q. They [weren’t]
supervisory instructions along the lines he was going to discipline you, or he
was going to fire you or anything like that, were they?
A. No.
Q. Mr. Wilson
wasn’t ‘the man’ on this job on February the 11th that granted you time off to
leave the job early or anything like that, that was Mr. Kimbrough, wasn’t it?
A. That’s right.
Q. Mr. Wilson was
— the three of you worked as a team and he might have at times indicated where
he was going to be using this machinery, where you could be out of way and this
type of instruction; right?
A. Right.
Q. In other words,
sort of a lead-man type instruction, is that correct?
A. Leader and
backhoe operator.
* * *
Q. Your
instructions from Mr. Wilson were of a routine nature, dealing with the
operations in between the two pipe layers, or theirs and the machine
operator’s, correct?
A. Right.
Q. They were not
supervisory in nature as far as lay-off time or anything of that nature,
disciplinary action or anything?
A. Right.
The
foregoing makes crystal clear that any authority Wilson exercised could not be
deemed “supervisory” by any stretch of the imagination. Furthermore, Mr. Gordon
and Mr. Wilson both testified that no authority was granted to Wilson by Mr.
Gordon. Accordingly, if any supervisory authority was granted to Wilson at all,
it was granted by Mr. Kimbrough. Although the evidence is unclear on this
point, if, in fact, Kimbrough granted such authority to Wilson, it is manifest
that it cannot be concluded that respondent retained any supervisory control.
On the contrary, this is more evidence that Wilson was an employee of the Sewer
Department and not the respondent.
Although
the foregoing makes abundantly clear the absurdity of the holding by Messrs.
Cleary and Barnako, I would like to make one additional point. In the lead
opinion my colleagues cite Frohlick Crane Service, Inc. v. OSAHRC, 521
F.2d 628, 631 (10th Cir. 1975) for the proposition that “When an employer is
hired for its expertise and that expertise is relied upon, that employer is
responsible for the actions of its employees relevant to its work.” The
complete quotation from the Tenth Circuit’s decision in Frohlick does
not support the stated proposition. That case involved the issue of whether a
crane operator was the employee of the respondent, Frohlick (the lessor)
or the lessee. The court stated as follows:
In this regard the
Judge concluded that Frohlick was the employer, with the comment that where, as
here, the lessee of the crane relies upon the expertise of the crane
operator and gives no particular direction as to the operation of the
crane, then it is the duty of Frohlick, the actual employer of the crane
operator, to comply with the minimum safety requirements as set forth in the
standards. The Commission agreed with this conclusion and the rationale in
support thereof, and so do we. (Emphasis added.)
If
the Frohlick case has any relevancy here, it supports the disposition
reached below by Judge Kennedy - for the Sewer Department gave particular
directions to the employees provided by respondent in the instant case.
[No copy of the ALJ decision has been found.]
[1] Citation no. 1
alleged “nonserious” violations of the excavation standards published at 29 CFR
§ 1926.651(m), (p), and (t). Total penalties of $ 160 were proposed.
Citation no. 2
alleged “repeated serious” violations of the excavation and trenching standards
published at 29 CFR § 1926.65(i)(1) and § 1926.652(b), (e), and (h). Total
penalties of $ 1600 were proposed for these violations.
[2] We would note
that if respondent is not the employer, the employees would not benefit from
any of the protections afforded by the Act. The city sewer department, as a
subdivision of the State of Arkansas, is exempt from compliance with the
requirements of the Act. See section 3(5) of the Act.
[3] We would observe
that even if respondent can show that the sewer department had responsibility
for safety under the terms of their agreement, respondent, as an employer
subject to the requirements of the Act, had a duty to take measures which were
reasonable under the circumstances to protect its employees. Anning-Johnson
Co., supra; Grossman Steel & Aluminum Co., supra.