Utah Supreme Court Rejects OSHA’s Multi-Employer Citation Policy

by Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

Multi-Employer Citation Policies

One of the most controversial policies of the Occupational Safety and Health Administration (OSHA) is its Multi-Employer Citation Policy (better known as the “MEP”). OSHA uses this policy to cite companies for violations of the Occupational Safety and Health Act (OSH Act) committed by other companies working at the same worksite. The genesis of the policy originates from the agency’s desire to hold general contractors on construction sites liable for the actions of subcontractors that they supervise. OSHA initially reserved the MEP for employers in the construction industry, but the agency currently maintains that it applies to all employers, even those outside construction, whenever two or more companies are on the same worksite.

The MEP has, in the words of the District of Columbia Circuit Court of Appeals, a “checkered history.” OSHA initiated rulemaking on the policy back in the 1970s, but quickly withdrew the proposal after the Occupational Safety and Health Review Commission (the federal agency tasked with resolving contested citations) upheld the policy, deferring to OSHA’s interpretation of the OSH Act. Over the last few decades several federal courts of appeals—including the First, Second, Seventh, Eighth, and Tenth Circuits—have upheld the MEP, but two—the Fourth and Fifth Circuits—have rejected the policy.

State Plan States

The OSH Act permits states to opt out of federal OSHA and instead to establish state agencies to administer their own job safety and health programs. States that have availed themselves of this option—so-called “State-Plan” states— must ensure that their state plans’ safety and health standards and enforcement are “at least as effective as” the federal agency’s. OSHA maintains that to be at least as effective as the federal regime, State-Plan states must adopt the MEP, among other things.

Hughes General Contractors, Inc. v. Utah Labor Commission: Background

Utah is one of those State Plan States, Utah operates its state agency, the Utah Occupational Safety and Health Division (Utah OSHA), which adopted and enforces the MEP. One day in June 2009, Utah OSHA inspected a construction site at a high school in Parowan, Utah and cited the general contractor, Hughes General Contractors, for a scaffolding violation relating to masonry work performed by one of Hughes’s subcontractors. Utah OSHA claimed that under the MEP, Hughes was responsible for the safety of its subcontractors.

Hughes contested the citations, challenging the legal validity of the MEP. An administrative law judge and the Utah Labor Commission Appeals Board upheld the citations and Utah OSHA’s use of the MEP. The Appeals Board relied heavily on Tenth Circuit federal case law to support its decision. Hughes then appealed to the Utah Court of Appeals.

The Utah Supreme Court’s Decision

The Utah Court of Appeals certified the case to the Utah Supreme Court. In a 5-0 decision issued on January 31, 2014, Hughes General Contractors Inc. v. Utah Labor Commission, the Utah Supreme Court repudiated the MEP as incompatible with Utah law.

First, the court explained, the Utah Occupational Safety and Health Act (UOSHA) is different from the federal OSH Act. Whereas the federal statute has two distinct provisions creating employer obligations under sections 5(a)(1) and 5(a)(2), the Utah statute has only one. Utah law requires that “[e]ach employer . . . furnish each of the employer’s employees employment and a place of employment free from recognized hazards” “Employer,” reasoned the court, connotes a traditional principal-agent employment relationship, unless the legislature says otherwise. The language of the Utah statute conveyed the Utah legislature’s embrace of this traditional relationship.

The Utah Supreme Court then explained that even the term “multi-employer” is a misnomer. “Typically a general contractor is not an employer vis-à-vis the workers of its subcontractors,” the court explained. According to the court, “typically there is only one employer as to any one group of workers,” not multiple employers.

Next the court turned to the federal cases upon which the ALJ and Appeals Board relied and ruled that they were distinguishable on another ground. Several federal cases relied upon a principal of administrative deference known as the Chevron doctrine. The Chevron doctrine, based on a 1984 U.S. Supreme Court case, requires federal courts to defer to federal agencies’ interpretations of ambiguities in their implementing statutes. (Who, after all, knows a statute better than the agency from which it sprang?)

Utah, however, has never adopted a Chevron ­doctrine on “pure questions of law.” The Utah Supreme Court explained that the Chevron doctrine makes sense on a national level—it creates uniformity and avoids the problem of different courts in different parts of the country creating a patchwork of interpretations of a single statute. With a single line of appellate courts, Utah does not have that problem. “So we have retained for the courts the de novo prerogative of interpreting the law, unencumbered by any standard of agency deference,” the court wrote.

Finally, the Utah Supreme Court rejected Utah OSHA’s invitation to adopt the MEP as a matter of public policy. Utah OSHA noted that a principal purpose of UOSHA was to improve workplace safety, and the MEP would help accomplish that purpose. But the court declined to “pick sides in the policy debate engaged in by the parties.” “[L]egislation is rarely a result of an attempt to advance a single cause at all costs,” the court explained. Instead, it “is almost always a balance of competing objectives.” While workplace safety is at the core of Utah’s law, Utah’s statute “also obviously balances concerns for fairness to employers.”

The Future of the MEP in Utah

Federal OSHA and Utah OSHA are no doubt unhappy with the Utah Supreme Court’s ruling. But the decision leaves the agencies only one real alternative to imposing the MEP within the state of Utah: the sacrifice of Utah OSHA. Federal OSHA could revoke Utah’s state plan and impose federal agency jurisdiction over the state of Utah. That is a fairly drastic solution, however, and for countless practical and political considerations, extremely unlikely to happen.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ogletree, Deakins, Nash, Smoak & Stewart, P.C. | Attorney Advertising

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Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

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