R. Acosta, Secretary, LABR v. Hensel Phelps Constr
This text of 909 F.3d 723 (R. Acosta, Secretary, LABR v. Hensel Phelps Constr) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
JAMES E. GRAVES, JR., Circuit Judge:
Thirty-seven years ago, this court, in a tort case, announced that "OSHA regulations protect only an employer's own employees."
Melerine v. Avondale Shipyards, Inc.
,
Today we reexamine
Melerine
, and the precedent on which it relies,
1
in the light of that shift. In this appeal, the Secretary of Labor asks the court to decide whether he has the authority-under either the Occupational Safety and Health Act,
I
The parties have stipulated to the relevant factual and procedural history in this action. In 2010, Respondent Hensel Phelps Construction Company entered into a contract with the City of Austin to build a new public library. Hensel Phelps, as general contractor, maintained control over the worksite through the presence of on-site management personnel, including superintendents, project engineers, and project managers. In 2014, Hensel Phelps contracted with subcontractor Haynes Eaglin Watters, LLC (HEW), to do certain work on the project's Seaholm Substation East Screen Wall. Later that year, HEW contracted with sub-subcontractor CVI Development, LLC, to complete demolition, excavation, and other work as required for the East Screen Wall.
*728
As the excavation at the worksite progressed, a nearly vertical wall of "Type C" soil
2
was allowed to develop, measuring approximately 12 feet in height and 150 feet in length. OSHA regulations mandate that excavations in this type of soil use protective systems, such as sloping, to protect employees from cave-ins.
See
On the rainy morning of March 4, 2015, CVI was assigned to reinstall reinforcing rods ("rebar") at the base of this excavated wall of soil, preliminary to pouring concrete footings. The wall was not properly sloped or otherwise protected from cave-in hazards, and had not been for several days. Concerned about the combination of the weather and the instability of the excavation wall, CVI owner Karl Daniels sent his employees to work on another area of the site while he awaited instructions from HEW or Hensel Phelps on how to proceed at the excavation area. A City of Austin inspector saw the CVI employees working at the other location and told Daniels that his employees should work only at the excavation. The inspector also reported to Hensel Phelps' area superintendent that CVI employees were working at the other location. The superintendent instructed Daniels to have his employees return to the excavation and not to do any other work until the excavation work was completed. Daniels sent an email to HEW's senior project manager, stating that "[P]lacing rebar in the mud and rain is unorthodox and very dangerous." The project manager gave only a cursory reply that CVI should comply with its instructions. Daniels thereafter removed his employees from the other work area and sent them back to the excavation area to install rebar.
That same day, the OSHA Area Office in Austin received a complaint of hazardous working conditions at the library project excavation area. A compliance officer conducted an inspection of the site and discovered three CVI employees working at the base of the unprotected wall of excavated soil. The city inspector, Hensel Phelps' superintendent, and both Hensel Phelps' and HEW's project superintendents were present at the wall, as well, with full views of the CVI employees working there.
OSHA cited both CVI and Hensel Phelps for willfully violating
Hensel Phelps timely contested the citation.
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JAMES E. GRAVES, JR., Circuit Judge:
Thirty-seven years ago, this court, in a tort case, announced that "OSHA regulations protect only an employer's own employees."
Melerine v. Avondale Shipyards, Inc.
,
Today we reexamine
Melerine
, and the precedent on which it relies,
1
in the light of that shift. In this appeal, the Secretary of Labor asks the court to decide whether he has the authority-under either the Occupational Safety and Health Act,
I
The parties have stipulated to the relevant factual and procedural history in this action. In 2010, Respondent Hensel Phelps Construction Company entered into a contract with the City of Austin to build a new public library. Hensel Phelps, as general contractor, maintained control over the worksite through the presence of on-site management personnel, including superintendents, project engineers, and project managers. In 2014, Hensel Phelps contracted with subcontractor Haynes Eaglin Watters, LLC (HEW), to do certain work on the project's Seaholm Substation East Screen Wall. Later that year, HEW contracted with sub-subcontractor CVI Development, LLC, to complete demolition, excavation, and other work as required for the East Screen Wall.
*728
As the excavation at the worksite progressed, a nearly vertical wall of "Type C" soil
2
was allowed to develop, measuring approximately 12 feet in height and 150 feet in length. OSHA regulations mandate that excavations in this type of soil use protective systems, such as sloping, to protect employees from cave-ins.
See
On the rainy morning of March 4, 2015, CVI was assigned to reinstall reinforcing rods ("rebar") at the base of this excavated wall of soil, preliminary to pouring concrete footings. The wall was not properly sloped or otherwise protected from cave-in hazards, and had not been for several days. Concerned about the combination of the weather and the instability of the excavation wall, CVI owner Karl Daniels sent his employees to work on another area of the site while he awaited instructions from HEW or Hensel Phelps on how to proceed at the excavation area. A City of Austin inspector saw the CVI employees working at the other location and told Daniels that his employees should work only at the excavation. The inspector also reported to Hensel Phelps' area superintendent that CVI employees were working at the other location. The superintendent instructed Daniels to have his employees return to the excavation and not to do any other work until the excavation work was completed. Daniels sent an email to HEW's senior project manager, stating that "[P]lacing rebar in the mud and rain is unorthodox and very dangerous." The project manager gave only a cursory reply that CVI should comply with its instructions. Daniels thereafter removed his employees from the other work area and sent them back to the excavation area to install rebar.
That same day, the OSHA Area Office in Austin received a complaint of hazardous working conditions at the library project excavation area. A compliance officer conducted an inspection of the site and discovered three CVI employees working at the base of the unprotected wall of excavated soil. The city inspector, Hensel Phelps' superintendent, and both Hensel Phelps' and HEW's project superintendents were present at the wall, as well, with full views of the CVI employees working there.
OSHA cited both CVI and Hensel Phelps for willfully violating
Hensel Phelps timely contested the citation. In the proceedings before the Occupational Safety and Health Review Commission ALJ, the parties stipulated that (1) the excavation was not adequately protected; (2) Hensel Phelps knew that the excavation was not adequately protected because its supervisors observed CVI employees working next to the unprotected excavation; (3) and Hensel Phelps had management authority over the entire library project and had the specific authority to prevent the violation by correcting the hazardous conditions or by stopping CVI's employees from working in the area. The ALJ determined that Hensel Phelps met the requirements to be considered a "controlling employer" who has a duty under the Occupational Safety and Health Act,
But this finding was not the end of the matter, for "[w]here it is highly probable that a Commission decision would be appealed to a particular circuit, the Commission [ ] generally applie[s] the precedent of that circuit in deciding the case-even if it may differ from the Commission's precedent."
Kerns Bros. Tree Serv.
,
The Secretary sought discretionary review of the ALJ's decision. The Commission did not grant it, so the decision became a final order of the Commission.
See
II
Because the ALJ's decision became a final order of the Commission, we review that decision on appeal.
W.G. Yates & Sons Constr. Co. v. Occupational Safety & Health Review Comm'n
,
*730
Aus. Indus. Specialty Servs., L.P. v. Occupational Safety & Health Review Comm'n
,
III
A court reviewing an agency's interpretation of its authority under the statute it administers must engage with the two-step framework established in
Chevron
.
See
W. Ref. Sw., Inc. v. FERC
,
It is undisputed that none of Hensel Phelps' employees were exposed to the excavation wall hazard. Despite this, the Secretary maintains that he has the authority under both the Act and the implementing regulations to issue citations to controlling employers, like Hensel Phelps, at multi-employer worksites. It is also undisputed that the Secretary's position is contrary to this court's decision in
Melerine
, in which we reaffirmed precedent finding both the Act and OSHA regulations protect only an employer's own employees.
That said,
Melerine
and the cases it relies on all predate
Chevron
. In such a
*731
situation-where an appellate court's pre-
Chevron
statutory interpretation is at odds with the
Chevron
deference possibly due an administrative agency's subsequent interpretation-we turn to the Supreme Court's holding in
National Cable & Telecommunications Ass'n v. Brand X Internet Services
,
"
Brand X
demands that we reexamine pre-
Chevron
precedents through a
Chevron
lens."
Dominion Energy Brayton Point, LLC v. Johnson
,
A
The Secretary argues that two particular sections of the Act grant him authority to cite controlling employers at multi-employer worksites:
(a) Each employer-
(1) shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees;
(2) shall comply with occupational safety and health standards promulgated under this chapter.
At
Chevron
step one, we ask whether Congress, through § 654(a), has directly spoken to this issue,
i.e.
, has Congress affirmatively limited (or affirmatively refused to limit) the Secretary's authority to cite employers to only hazards that affect his own employees? "[A] reviewing court should not confine itself to examining a particular statutory provision in isolation. The meaning-or ambiguity-of certain words or phrases may only become evident when placed in context."
FDA v. Brown & Williamson Tobacco Corp.
,
Even a cursory glance at the plain language of § 654(a) demonstrates that subsection (a)(1) contains the limiting language "to each of his employees," but subsection (a)(2) does not. "Absent persuasive indications to the contrary, we presume Congress says what it means and means what it says,"
Simmons v. Himmelreich
, 578 U.S. ----, ----,
This reading is bolstered by combining the text of § 654(a)(2) with § 652(8) 's definition of "occupational safety and health standard," as together they require an employer to take action to provide safe or healthful "employment"
and
"places of employment." The Supreme Court has "cautioned against reading a [statutory] text in a way that makes part of it redundant."
Nat'l Ass'n of Home Builders v. Defs. of Wildlife
,
For Hensel Phelps to successfully pretermit the analysis at
Chevron
step one, it must show that the language of § 654(a)(2) plainly permits citation of only those employers who expose their own employees to hazards. It has a tough row to hoe, for its view of § 654(a)(2) is contrary to the view of every circuit court that has espoused one: each of those seven courts has held either that § 654(a)(2) unambiguously stands for the
opposite
of what Hensel Phelps argues-
i.e.
, that the statute unambiguously accords with the Secretary's interpretation-or that the statute is at least ambiguous on the issue.
See
Universal Constr. Co.
,
Hensel Phelps argues that the controlling employer policy violates section 4(b)(4) of the Act. That provision states that "Nothing in this Act shall be construed to ... affect ... the common law ... duties, or liabilities of employers."
We also reject Hensel Phelps' argument that the Secretary's purported authority under the Act is improperly premised on an expansive definition of "employer" and "employee," contrary to the Supreme Court's holding in
Nationwide Mutual Insurance Co. v. Darden
,
At bottom, even assuming that § 654(a)(2) is susceptible to Hensel Phelps' interpretation, we are not convinced that the statute is not also susceptible to the Secretary's interpretation. In our view, the intent of Congress underlying this statute is at least ambiguous. The Tenth Circuit's discussion in Universal Construction Co. perfectly encapsulates the ambiguity:
It may be ... that (a)(2) was intended to create a specific duty requiring an employer to comply with OSHA safety standards for the good of all employees-even those employed by others-at a common worksite. If so, however, it is plausible that Congress would have chosen more direct phrasing to implement such a scheme.... Subsection (2) on its face does not limit an employer's duty to comply with safety standards only to the employer's employees. Nor is there any patently compelling reason to assume merely because liability under (a)(1) is limited to situations where an employer's own employees are exposed to hazards, liability under (a)(2) is likewise limited.... Given the ambiguities of the statute, we are not prepared to conclude *735 the plain language of the statute alone or its nonexistent legislative history on this issue permits us to accept or reject the multi-employer doctrine.
At step two, "
Chevron
directs courts to accept an agency's reasonable resolution of an ambiguity in a statute that the agency administers."
Michigan v. EPA
, 576 U.S. ----, ----,
The Secretary's interpretation of § 654(a)(2) as permitting him to cite a controlling employer at a multi-employer worksite conforms to those minimal standards of rationality and is well within the bounds of permissible interpretation. The interpretation makes practical sense. In a place of employment like a construction worksite, populated by subcontractors, sub-subcontractors, and their employees performing various (and often overlapping) tasks, only the general contractor maintains supervisory authority over-and has access to-the entire space. If a general contractor enjoys the benefits of project supervision, it follows that he should also bear the burdens, by being held to comply-and to direct its subcontractors to comply-with the Act's safety standards.
See
Universal Constr. Co.
,
We disagree with Hensel Phelps that anything in
United States v. Mead Corp.
,
We find that the Secretary's construction of the statute as granting authority to issue citations to controlling employers is a "reasonably defensible" one.
Sara Lee Bakery Grp., Inc. v. NLRB
,
B
Continuing along on our
Brand X
journey, we must next look at our previous cases-
Southeast Contractors
,
Horn
,
Barrera
, and
Melerine
-to determine the provenance of the principle that the Act protects only an employer's employees, and decide whether it "follows from the unambiguous terms of the statute and thus leaves no room for agency discretion."
Brand X
,
The two times 9 this court previously dealt with Brand X , we followed our pre- Chevron precedent because our prior opinions on the issue had not indicated any ambiguity in the provisions they were interpreting.
The first case,
Silva-Trevino v. Holder
,
In the second case,
Exelon Wind 1, L.L.C. v. Nelson
,
In both Silva-Trevino and Exelon Wind , we had previously construed the relevant statute or regulation in keeping with its plain, unambiguous text. And in both cases, we rejected an agency's subsequent interpretation that was directly at odds with our prior interpretation.
Just the opposite here: Melerine expressly recognized that the court decided to come down on one side of a "complex debate." What is more, Melerine and most of the cases predating it analyzed an OSHA regulation, not the text of the statute in which we and other circuits have found ambiguity.
*739
In
Melerine
, the defendant had hired the plaintiff's employer as a subcontractor to perform certain work. The plaintiff was injured on the job and sued the defendant, claiming, not unlike the plaintiff in
Horn
, that the defendant's violation of certain OSHA standards established negligence
per se
. The court began the pertinent discussion by explaining that whether the Act "regulates only the obligation of the employer to provide safe work conditions for his employees or also states a standard of care due third persons has been the subject of '
complex dispute
.' "
Melerine
,
Some courts have held that, given the language of [the Act]'s clauses on the duties of employers, [the Act]'s broad statement of purpose, and [the Act]'s generally broad language, OSHA regulations protect not only an employer's own employees, but all employees who may be harmed by the employer's violation of the regulations. This court, however, along with others, has held that OSHA regulations protect only an employer's own employees.
Id. at 710-11 (footnotes omitted). 13 Looking specifically at § 654(a)(2), the court conceded that "[o]ne might argue ... that § 654(a)(2), which lacks the limiting language 'his employees' of § 654(a)(1), establishes for the benefit of all employees, not just an employer's own employees, a specific duty to comply with OSHA regulations." Id. at 710 n.12. But after summarizing Southeast Contractors , Horn , and Barrera , the court reiterated that "[i]n this circuit, ... the class protected by OSHA regulations comprises only employers' own employees." Id. at 712.
We cannot ignore the glaring reality that Melerine is silent on the scope of any provision of the Act. Save one statement that the Act did not create "a civil cause of action against either a plaintiff's employer or a third party who is not the plaintiff's employer," id. at 709, Melerine 's holding (and the reasoning supporting it) extends no further than to the OSHA regulations :
[I]n this negligence action, we reject the argument that the failure of a third party that was not the plaintiff's employer to follow OSHA regulations establishes that third party's negligence....
Melerine does not ... contend that the OSHA regulations create a civil cause of action against Avondale. He urges instead that their violation establishes Avondale's negligence per se in a cause of action given him by general maritime law....
The threshold issue ... is whether Melerine was a member of the class that the OSHA regulations were intended to protect....
This court, ... along with others, has held that OSHA regulations protect an employer's own employees....
In this circuit, ... the class protected by OSHA regulations comprises only employers' own employees.... [T]his interpretation *740 of the scope of coverage of OSHA regulations also accords with the scope of coverage explicitly given to the specific OSHA regulations at issue in this case.
Id.
at 707, 709-12 (emphases added).
14
Even were we to assume that
Melerine
's discussion of regulations applies to the Act as well, the decision proves, in obvious terms, that this court's prior construction of the Act was just a choice of one side of a "complex debate." The court acknowledged that it is plausible to interpret the statute, as the Secretary does, in a way that gives weight to the lack of limiting language in § 654(a)(2), but it held that it was bound to interpret the statute (or, more accurately, the regulation) consistently with precedent. This "back-and-forth" language does not "sound like the type of decision that
Brand X
contemplated."
Rush Univ. Med. Ctr. v. Burwell
,
Melerine
, if it reveals anything pertinent to this analysis, reveals the court's view that the statute is open to the Secretary's interpretation. The decision is, quite simply, the opposite of "judicial precedent holding that the statute unambiguously forecloses the agency's interpretation."
Brand X
,
The decision in
Southeast Contractors
-a one-paragraph, per curiam opinion-turned, not on any interpretation of § 654(a)(2), but on an interpretation of a particular OSHA regulation. There, an employee of Southeast, the general contractor at a construction site, was killed when a subcontractor's employee backed a truck into him. OSHA cited
Southeast
for violating
Horn
also does not carry the day. The question raised in that case was whether a subcontractor's employee could hold a general contractor liable on a theory of negligence
per se
under Georgia law based on the general contractor's alleged violation of § 654(a). The court held that the general contractor had no duty to the plaintiff under that statute because the general contractor was not the plaintiff's "employer."
Horn
,
He explained that an employer cannot be held in violation of [ § 654(a) ] if [h]is employees are not affected by the noncompliance with a standard. And if there was ever any doubt as to what he meant by "[h]is employee" this was eliminated by his reiteration of the general rule that a contractor is not responsible for the acts of his subcontractors or their employees. In light of this precedent and because it is conceded that [the plaintiff] was an employee of [the subcontractor], we must hold this "statutory duty" exception inapplicable.
Barrera
is wholly irrelevant. The decision in that case, an appeal by a defendant found liable for $300,000 of personal injury damages, was that the trial court correctly refused to instruct the jury that there could be no liability if the plaintiff was unusually susceptible to emotional disturbance and the defendant lacked knowledge of that susceptibility, because Texas law did not recognize that defense.
Barrera
,
"Before a judicial construction of a statute, whether contained in a precedent or not, may trump an agency's, the court must hold that the statute unambiguously requires the court's construction."
Brand X
,
C
"It is a well-settled Fifth Circuit rule of orderliness that one panel of our court may not overturn another panel's decision...."
Jacobs v. Nat'l Drug Intelligence Ctr.
,
*743
Brand X
represents such a fundamental change. It requires this court to look anew at pre-
Chevron
precedent, guided by
Chevron
, to determine whether the Secretary's construction of his authorizing statute must govern and, if that construction must govern, it requires the court to disregard our precedent to the extent it conflicts.
See, e.g.
,
Palmetto Prince George Operating, LLC v. NLRB
,
D
This brings us to the ultimate question: what of the ALJ's decision? The ALJ cited Commission precedent that an employer has a duty under § 654(a)(2) to protect all employees engaged in a common undertaking, and can be held responsible for the violations of other employers "where it could reasonably be expected to prevent or detect and abate the violations due to its supervisory authority and control over the worksite." ALJ Decision at *5 (quoting
Summit Contractors, Inc.
,
IV
In sum, we conclude that the Secretary of Labor has the authority under section 5(a)(2) of the Occupational Safety and Health Act,
The Petition for Review is GRANTED , the Final Order of the Occupational Safety and Health Review Commission is REVERSED , and this cause is REMANDED to the Commission for further proceedings consistent with this opinion.
Se. Contractors, Inc. v. Dunlop
,
So-called "Type C" soil is the least stable type under OSHA's soil classification system. Type C soil includes gravel, sand, soil from which water is freely seeping, and other unstable soils. See 29 C.F.R. part 1926, subpart P, appendix A.
The regulation provides: "Each employee in an excavation shall be protected from cave-ins by an adequate protective system ... except when: (i) Excavations are made entirely in stable rock; or (ii) Excavations are less than 5 feet (1.52m) in depth and examination of the ground by a competent person provides no indication of a potential cave-in."
CVI later settled with OSHA; OSHA's citation of CVI is not at issue here.
The "ordinary tools of statutory construction" include "text, structure, purpose, and legislative history."
BNSF Ry. Co. v. United States
,
If the answer to this final question is no, the court may undergo the analysis again, this time using the Secretary's interpretation of his authority under the implementing regulations, for this Circuit similarly applies
Brand X
to the court's pre-
Chevron
interpretation of a federal regulation.
Exelon Wind 1, L.L.C. v. Nelson
,
The Commission further elucidates this justification:
Typically, a construction job will find a number of contractors and subcontractors on the worksite, whose employees mingle throughout the site while work is in progress. In this situation, a hazard created by one employer can foreseeably affect the safety of employees of other employers on the site. Conversely, as a practical matter it is impossible for a particular employer to anticipate all the hazards which others may create as the work progresses, or to constantly inspect the entire jobsite to detect violations created by others. Indeed, ... it would be unduly burdensome to require particular crafts to correct violations for which they have no expertise and which have been created by other crafts.... [O]n a construction site, the safety of all employees can best be achieved if each employer is responsible for assuring that its own conduct does not create hazards to any employees on the site, and that imposing liability on this basis would not place an unreasonable or unachievable duty on contractors....
Additionally, the general contractor normally has responsibility to assure that the other contractors fulfill their obligations with respect to employee safety which affect the entire site. The general contractor is well situated to obtain abatement of hazards, either through its own resources or through its supervisory role with respect to other contractors. It is therefore reasonable to expect the general contractor to assure compliance with the standards insofar as all employees on the site are affected. Thus, we will hold the general contractor responsible for violations it could reasonably have been expected to prevent or abate by reason of its supervisory capacity.
Grossman Steel & Aluminum Corp.
,
This is not to say that the Secretary must have interpreted the Act in this way from the date of enactment.
See
La. Pub. Serv. Comm'n v. FERC
,
A third case,
CenturyTel of Chatham, LLC v. Sprint Communications Co.
,
We explained:
[W]e need not speculate as to what is meant by the phrase "convicted of" a crime of moral turpitude, because Congress had the foresight to tell us. The statutory definitions indicate that "conviction means, with respect to an alien, a formal judgment of guilt...." The statute then includes a list of the seven official documents that may be considered as proof of such a conviction.Id. § 1229a(c)(3)(B). There is no mention of any additional evidence; and the introductory phrasing, "any of the following documents or records" gives no indication that extrinsic evidence is contemplated.
Silva-Trevino
,
The meanings of these terms are not material to our discussion.
The relevant text of Power Resource provided as follows:
If FERC had determined it necessary to set more specific guidelines concerning [Legally Enforceable Obligations], it could have done so. For example, the FERC regulations could have mandated that the [Qualifying Facilities] must be able to lock in purchase rates with a [Legally Enforceable Obligation] prior to construction of a facility. The plain text of the FERC regulation, however, fails to mandate that requirement. Rather, defining the parameters for creating a [Legally Enforceable Obligation] is left to the states and their regulatory agencies.
Exelon Wind
,
The "others" the court referred to were the Fourth Circuit-which in
Gilles & Cotting Co.
deferred to the Commission's interpretation of the Act, an interpretation the Commission had already abandoned in favor of the Secretary's interpretation by the time
Melerine
was decided-and the Iowa Supreme Court-which in
Koll v. Manatt's Transportation Co.
,
This court recently noted the limited reach of
Melerine
's holding, stating that it represents the notion that "[w]e have not endorsed a non-employee's use of OSHA regulations to sue a general contractor in negligence per se."
Martino v. Kiewit N.M. Corp.
,
Hensel Phelps contends that
Melerine
should survive
Brand X
because it bases its holding on the legislative history of the Act. We disagree. Review of the opinion demonstrates that, in fact, it bases its holding on an
absence
of legislative history. In its scant discussion of the Act, the court quoted with approval a statement from the district court in
Horn
that "no legislative history nor statutory provision has been cited by the Plaintiff to support the proposition that Congress intended to create a duty on behalf of the employer with respect to persons other than its own employers."
Melerine
,
At the time of the Commission's decision, the Commission was still two years shy of adopting the Secretary's interpretation § 654(a)(2).
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