It is true that since Darden some cases have affirmed citations under the multi-
employer doctrine. But these cases have no precedential value because none considered or
discussed the legal rationale upon which the multi-employer doctrine is based and none even
mention Darden, Christensen, or Mead>

In her brief and testimony in this case the Secretary judicially admits that the multi-
employer doctrine is the sole authority for holding Summit liable for the safety of the
employees of another employer. Secy’s Opening Br. at 8. She argues that under that
doctrine Summit can be cited as the “creating” and the “controlling” employer.
Administrative Law Judge Schumacher held that Summit did not create the hazard but
affirmed the citation because Summit was the “controlling” employer.

But the OSH Act does not define an employer as one who creates a hazard or controls
a hazard. Therefore, under Darden, the term “employer” must be understood in the
conventional common law sense. Following Darden, the Commission has held in five
separate cases that the OSH Act does not define employer as anything other than a
conventional common law employer and, therefore, only the employer of affected employees
may be cited. In short, Darden negates the multi-employer doctrine and thus negates the only

basis for citing Summit.

5The only case to specifically consider Darden is IBP, Inc. v. Herman. There, the court
observed that Darden contradicted the Secretary’s view that, because of the Act’s broad “remedial”
purpose, the statute’s references to the employer and employee “were not intended to be...interpreted
in the common law sense.” 144 F.3d at 865, 18 BNA OSHC at 1355.

10


In its briefing notice the Commission requested briefing on the impact of Nationwide
Mutual Insurance v. Darden, 503 U.S. 318 (1992) on the multi-employer doctrine. The
Secretary’s opening brief side steps that issue. The Secretary asserts that Darden is
“irrelevant” to the multi-employer doctrine because Darden only addressed how to determine
whether an employment relationship exists and the multi-employer doctrine “presupposes”
there is no employment relationship. Secy’s Br. at 7-8.

Summit thinks the Secretary misstates the holding in Darden, misstates the legal
foundation of the multi-employer doctrine, and avoids altogether the question of the source
of authority for making one employer responsible for the safety of employees of another
employer.

The holding in Nationwide Mutual Insurance v. Darden

Remember, the fundamental question in Darden was whether Nationwide owed
retirement benefits to Darden. If Darden was an employee of Nationwide then Nationwide
had the legal duty, under ERISA, to cover Darden under its retirement plan. ERISA defines
“employee” as “any individual employed by any employer.” The Fourth Circuit
acknowledged that Darden would probably not qualify as an employee under traditional
principles of agency law but interpreted the term broadly enough to cover Darden because
that furthered the “declared policy and purposes of ERISA.” See 503 U.S. at 321. The
Fourth Circuit relied on United States v. Silk, 331 U.S. 704 (1947) for the principle that the

term employee in a statute should be construed “in the light of the mischief to be corrected


exercised an employer’s control over the workers)?

The Secretary’s argument that the multi-employer doctrine is not based on an
expansive definition of employer and employee or on the purpose of the Act is also belied
by the Secretary’s own briefs on this issue. For instance, in her briefs to the United States
Court of Appeals in JBP, Inc., v. Herman, 144 F.3d 861, 18 BNA OSHC 1353 (D.C. Cir.
1998) the Secretary argued that the term employer in § 5(a)(2) of the OSH Act, 29 U.S.C. §
654(a)(2), should be interpreted broadly to make “those employers who are ‘best able’ to
prevent and abate hazards responsible for doing so even if their own employees are not
exposed to the hazards” because that “effectuates the statutory purpose.” Secy’s Opening
Br. to Ct. of Appeals at 28, 30. The Court of Appeals summarized these arguments by stating
that “the Secretary’s view” is that the terms employer and employee should not be interpreted
in the common law sense because of the “remedial” purpose of the Act. 144 F.3d at 865, 18
BNA OSHC at 1355.

Similarly, in her brief in Docket 03-1622 the Secretary devotes several pages to

“It should be noted that the Secretary relies on Haugan’s outdated control theory here. She
does not argue that Summit exercised a common law employer’s control over the workers. In fact,
the CSHO admitted he did not know anything about these employment factors. (Tr. 108). Instead,
the Secretary argues, and Judge Schumacher erroneously held, that the subcontract provisions giving
Summit authority necessary to ensure the project was built accordingly to the owner’s and lender’s
requirements likewise empowered Summit to compel the subcontractor to comply with OSHA. This
argument reflects the fundamental fallacy of the Secretary’s position because it skips the issue of
whether there is a statutory duty. As discussed in Summit’s Opening Brief at 25-26, the “control”
necessary to enforce a private contract does not create a statutory duty. Thus the issue is not whether
Summit could have compelled the subcontractor to comply with OSHA, the issue is whether Summit
had a statutory duty to do so.


Supreme Court’s decision. Id. at 1026. In subsequent decisions in Secretary v. Don Davis,
19 BNA OSHC 1477 (Rev. Comm. 2001), Secretary v. Allstate Painting and Contracting
Co.,21 BNA OSHC 1033 (Rev. Comm. 2005) and Secretary v. AAA Delivery Services, Inc.,
21 BNA OSHC 1219 (Rev. Comm. 2005) the Commission clearly relied on Darden in
dismissing citations because the Secretary failed to prove that the respondents were the
common law employers of the affected employees.

In short, the Secretary’s argument that Darden is irrelevant is wrong. Darden did
more than explain the criteria for establishing a common law employment relationship.
Darden held that there must be such an employment relationship before an employer’s duties

or an employee’s benefits arise under a statute. And the Commission has already applied this

principle to cases under the OSH Act.

The legal foundation of the multi-employer doctrine

The Secretary also argues that Darden’s “rejection of the ‘correction of mischief’ test
for construing the term ‘employee’ is of no significance [because] the multi-employer
worksite doctrine does not derive from the ‘correction of mischief? test or a broad
construction of ‘employee’.” Secy’s Br. at 8. This argument ignores contrary statements in
numerous Commission and court decisions and in the Secretary’s own briefs. For example,
in Secretary v. S&S Diving Company, 8 BNA OSHC 2041, 2042 (Rev. Comm. 1980) the

Commission held S&S responsible for the safety of divers who were independent contractors

on the basis that “the term ‘employer’ [or ‘employee’] under the Act is not limited to


and the end to be attained.” Jd. at 324.

The Supreme Court reversed. The Court held that where a statute imposes a duty on
an “employer” or creates a benefit for an “employee,” those terms must be understood in the
common law agency sense unless the statute expressly defines employer or employee
otherwise. If the statute does not define those terms otherwise, then the duty and benefit
created by the statute only arises when there is a common law master-servant relationship.
Id, at 322-323. Thus the courts may not impose a duty (to pay ERISA benefits in that case)
or create a benefit (to receive ERISA benefits) outside a “conventional master-servant
relationship as understood by the common law agency doctrine.” /bid. (Citations omitted).
In so holding, the Court stated that it was abandoning its prior holding in United States v.
Silk, which means that the purpose of a statute may no longer be used to justify defining
employer or employee expansively. Jd. at 324.

Since then, as discussed in Summit’s opening brief, the Review Commission itselfhas
held that Darden controls the definition of employer under the OSH Act and thus necessarily
impacts an employer’s duties under the Act. In Secretary v. Timothy Victory, 18 BNA OSHC
1023 (Rev. Comm. 1997), the Commission acknowledged that it had previously subscribed
to the proposition that the term “employer” should be defined broadly because of the
statutory purpose, and that the duties and liabilities of an employer under the Act were
therefore not limited to common law employment relationships. But after Darden the

Commission “modified that proposition...in order to conform Commission precedent” to the


liability but nonetheless held one employer responsible for the safety of employees of another
employer based on the “broad, remedial purpose of the Act.” Jd. at 1723-1724. This is the
“correction of mischief” test. And this is precisely what Darden forecloses—i.e. imposition
of a statutory duty outside the common law employment relationship on the theory that
advances the purpose of the statute. Darden at 322-323.

Other multi-employer decisions have imposed liability on employers who “control”
the worksite. See e.g. Secretary v. Gil Haugan d/b/a Haugan Construction Co.,7 BNA
OSHC 2004 (Rev. Comm. 1979). These decisions, too, simply interpret the term employer
broadly in order to make one employer responsible for the safety of employees of another
employer. In Secretary v. Don Davis the Commission recognized that Darden invalidates
this control theory. The Commission held that now, under Darden, for an employer to be
liable under the OSH Acct it is not enough that he controls the overall work, he must control
the workers. And to prove control over the workers, the Secretary must show the employer
can hire, discipline, or fire the workers, can assign them additional projects, and sets the
workers’ pay and work hours. Don Davis at 1482. See also Secretary v. Timothy Victory,

18 BNA OSHC at 1027. (Emphasizing that the Secretary bears the burden of establishing

that the respondent


UNITED STATES OF AMERICA

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

SECRETARY OF LABOR §
§
Complainant, §
§ OSHRC DOCKET
v. § No. 05-0839
§
SUMMIT CONTRACTORS, INC. §
§ REGION III
§

Respondent.

SUMMIT’S REPLY BRIEF ON REVIEW

Robert E. Rader, Jr.

2777 Stemmons Freeway
Stemmons Place, Suite 1125
Dallas, Texas 75207

(214) 630-4700

Attorney for Respondent


21:9791. It is well settled that the FIRM does not have the force or effect of law. See e.g.
Secretary v. D.M. Sabia Co., 17 BNA OSHC 1413, 1415 n. 6 (Rev. Comm. 1995).
Therefore, the CPL cannot independently confer authority to cite Summit.

The only validly promulgated regulation on this issue, 29 CFR 1910.12(a), specifically
limits a construction employer’s duties under the construction standards to his own
employees. Thus, there is no regulation that provides authority to cite Summit here.’

That leaves the Act itself'as the only possible source of authority. As discussed above
and in Summit’s Opening Brief, whether the Act provides authority for citing Summit for a
hazard to which only the sub-subcontractor’s employees were exposed depends on how the
term “employer” in the Act is defined. If that term is defined in the common law agency
sense, as Darden, Timothy Victory, Don Davis, Allstate Painting and Contracting, and AAA
Delivery Services require, then the Act itself does not provide such authority.

The Secretary’s arguments seem to assume that the Commission and courts can
judicially create authority to make one contractor liable for the safety of another contractor’s
employees. But that is not so. The Commission and courts can only interpret the law passed
by the legislative branch. The Commission and courts have often stated that the Act itself
does not address the issue of multi-employer liability See e.g. Access Equipment Systems at

1723, Anning-Johnson Co. v. OSHRC, 516 F.2d 1081, 1087 n. 14, 3 BNA OSHC 1166, 1170

3The Secretary concedes that the words “his employees” in § 5(a)(1) of the Act limit an
employer’s duties to his own employees. How, then, can the Secretary credibly argue, or Judge
Schumacher reasonably hold, that the same words “his employees” in § 1910.12(a) do not likewise
limit an employer’s duty to his own employees?

8


arguing that the term “employer” in the Act must be interpreted more broadly than the
common law employer-employee relationship because such an “interpretation” advances the
purpose of the Act. Secy’s Response Brief, Dkt. 03-1622 at 13-14, 16-17, 22. Her argument
now that the multi-employer doctrine is not based on a broad definition of employer and the
purpose of the Act is a transparent attempt to dodge the effect of the holding in Darden.

The Secretary avoids the fundamental issue

What is the source of authority for holding one employer liable for the safety of
employees of another employer? That is the fundamental issue. There are only three
possible sources of authority—the standard itself, a validly promulgated regulation, or the
OSH Act.

The cited standard clearly does not provide such authority. Even the CSHO
acknowledged that the plain language of the standard only imposes a duty on an employer
toward his own employees, it does not require a general contractor to protect employees of
a subcontractor. (Tr. 106).

Nor is there any validly promulgated regulation that provides authority to cite Summit
here. The CSHO testified that the citation to Summit was based solely on OSHA’s multi-
employer citation policy set forth in OSHA Instruction CPL 2-0.124, and that only the CPL
provides authority for citing a “creating” or “controlling” employer. (Tr. 106-108).

However, the CPL has not been promulgated as a regulation, it is only part of OSHA’s Field

Inspection Reference Manual (FIRM). See BNA Occup. Safety and Health Rptr. Vol I p.



employment relationships as defined under common law principles but rather is to be broadly
construed in light of the statutory purpose.”!

S&S Diving cited the Commission’s earlier decision in Secretary v. Griffin & Brand
of McAllen, Inc., 6 BNA OSHC 1703, 1705 (Rev. Comm. 1978) wherein the Commission
recognized there was a contractor-independent contractor relationship but nonetheless held
the contractor responsible as the employer because “the term ‘employer’ is one of art in
remedial legislation that is to be defined according to the statutory [purpose].” Griffin &
Brand, in turn, cited Clarkson Construction Co. v. OSAHRC, 531 F.2d 451, 3 BNA OSHC
1880, 1883-1884 (10" Cir. 1976) which adopted Commissioner Cleary’s view in Secretary
v. James E. Roberts Co., 1 BNA OSHC 1684 (Rev. Comm. 1974) (Dissenting opinion of
Commissioner Cleary) that employer and employee under the Act should not be defined in
the common law sense, but should be defined broadly in order to accomplish the remedial
purpose of the Act.

Even in decisions where the Commission did not specifically repeat that multi-
employer liability was based on a broad definition of employer or employee, that is implicit
in the Commission’s rulings. Indeed, in Secretary v. Access Equipment Systems, Inc., 18
BNA OSHC 1718 (Rev. Comm. 1999), cited by the Secretary, the Commission

acknowledged there is no specific authorization in the Act for imposing multi-employer

‘In Timothy Victory, decided after Darden, the Commission held under almost identical
circumstances that the divers were independent contractors rather than employees. Thus there cannot
be any doubt that the multi-employer liability imposed in S&S Diving was based on a broad
definition of employee.


Secretary v. Don Davis,

19 BNA OSHC 1477 (Rev. Comm. 2001) ............000-

Secretary v. Gil Haugan d/b/a Haugan Construction Co.,
7 BNA OSHC 2004 (Rev. Comm. 1979)

Secretary v. Griffin & Brand of McAllen, Inc.,
6 BNA OSHC 1703 (Rev. Comm. 1978)

Secretary v. James E. Roberts Co.,

1 BNA OSHC 1684 (Rev. Comm. 1974) ...........05.004

Secretary v. S&S Diving Company,

8 BNA OSHC 2041 (Rev. Comm. 1980) ...........0.0005

Secretary v. Timothy Victory,

18 BNA OSHC 1023 (Rev. Comm. 1997) .............0005

United States v. Mead Corp,

533 U.S. 218 (2001) oo... cece ccc ccc eeeeeeeeeeeeeenes

United States v. Silk,

331 US. 704 (1947) oo ccc ccc e cece ececeeeceener eae

Statutes, Regulations and Authorities

29 CFR. 1910.12(a) 2... cece eee ee
29 U.S.C. § 654(a)(2) . 0c tees
BNA Occup. Safety and Health Rptr. Vol. Ip. 21:9791 ...........

Field Inspection Reference Manual (FIRM) .................005

OSHA Instruction CPL 2-0.124 0.0... cece eee eee eee

iti


Respectfully submitted,

RADER & CAMPBELL
(A Professional Corporation)

Bhud- Eleaf —

Robert E. Rader, Jr.

2777 Stemmons Freeway, suite 1125
Dallas, Texas 75207

(214) 630-4700

ATTORNEY FOR SUMMIT
CONTRACTORS, INC.

CERTIFICATE OF SERVICE
A copy of the foregoing was sent via Federal Express to Mr. Gary K. Stearman,
Counsel for the Secretary of Labor, Office of the Solicitor, United States Department of

Labor, Room $4004, 200 Constitution Avenue, N.W., Washington, D.C. 20210 on this 30"

Lohud- z 3 La {—
Robert E. Rader, Jr.

day of August, 2006.

11


TABLE OF AUTHORITIES

Cases

Anning-Johnson Co. v. OSHRC,

516 F.2d 1081 (7" Cir. 1975)... 0.

Chao, Secretary of Labor v. Russell P. Le Frois Builder, Inc.,

291 F.3d 219 (2d Cir. 2002) 0... cece cece eee een

Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.,

467 U.S. 837 (1984) 0. ences

Christensen v. Harris County,

529 U.S. 576 (2000) 0... eee cece cette eens

Clarkson Construction Co. v. OSAHRC,

531 F.2d 451, 3 BNA OSHC 1880 (10" Cir. 1976) ............

IBP, Inc., v. Herman,

144 F.3d 861, 18 BNA OSHC 1353 (D.C. Cir. 1998) ..........

Nationwide Mutual Insurance v. Darden,

503 U.S. 318 (1992) 2... ccc eceeeeen eee

Secretary v. AAA Delivery Services, Inc.,
21 BNA OSHC 1219 (Rev. Comm. 2005)

Secretary v. Access Equipment Systems, Inc.,

18 BNA OSHC 1718 (Rev. Comm. 1999) .......... 0.0000

Secretary v. Allstate Painting and Contracting Co.,

21 BNA OSHC 1033 (Rev. Comm. 2005) ..............2005

Secretary v. D.M. Sabia Co.,
17 BNA OSHC 1413 (Rev. Comm. 1995)

ii

Page(s)


TABLE OF CONTENTS
Page
The holding in Nationwide Mutual Insurance v. Darden ......0. 0c cece ene e neues 1
The legal foundation of the multi-employer doctrine ............. 0.00. cece eee eee 3
The Secretary avoids the fundamental issue 2.0.6.0... 0... c cee eee eee eee ees 7
CONCLUSION 6... ee eet e tenn nee e net e eee 9


n. 14 (7" Cir. 1975), and have sought to “remedy” Congress’ supposed oversight by
interpreting § 5(a)(2), 29 U.S.C. § 654(a)(2), to impose the duty on one employer to protect
the employees of another employer. Since Darden, however, such an interpretation is not
permissible.

Conclusion

Prior to Darden the multi-employer doctrine was applied because it was thought that
employer and employee could be interpreted broadly in order to advance the purpose of the
Act. When the doctrine was challenged, the courts deferred to the Secretary’s interpretation
because Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837
(1984) required such deference.

But the law has changed. Darden, of course, precludes broad interpretations of
employer and employee based solely on the remedial purpose of the Act. Equally important,
Chevron has been superseded by the holdings in Christensen v. Harris County, 529 U.S. 576
(2000) and United States v. Mead Corp, 533 U.S. 218 (2001). Under Christensen and Mead
no deference is owed the Secretary’s interpretation because it has not been formally
promulgated as a rule and is, in fact, contrary to § 1910.12(a) which is a formally
promulgated rule. Cf Chao, Secretary of Labor v. Russell P. LeFrois Builder, Inc.,291 F.3d

219, 227-228 (2d Cir. 2002).*

‘Christensen and Mead arguably require deference to the interpretation expressed in §
1910.12(a) because it was formally promulgated, thereby invalidating the multi-employer doctrine
even without the holding in Darden.