Opinion ID: 4034253
Heading Depth: 3
Heading Rank: 3

Heading: Retained right to control

Text: To establish that Polygon “retained the right to control” the pertinent risk-producing activity, plaintiff must “identify some source of legal authority for that perceived right” or present evidence from which a retained right of control can be inferred. Boothby v. D.R. Johnson Lumber Co., 341 Or 35, 41, 137 P3d 699 (2006). In Boothby, this court focused its analysis of that issue on the terms of the contract between the defendant and its independent contractor, who was the direct employer of the plaintiff. Id. We also do so here, as well as considering evidence about the manner in which the contract was performed. As discussed, several provisions of the contract between Polygon and Wood Mechanix assigned primary responsibility to Wood Mechanix for the framing work— including related fall protection—on the project. In particular, the contract required Wood Mechanix to provide railings, braces, and fall protection for the framing work in accordance with OSHA requirements. The contract also required Wood Mechanix to develop and implement a site-specific safety plan that identified and anticipated hazards and provided specific means to address those hazards, including fall protection. Also as discussed, Wood Mechanix made its own decision to use guardrails as the form of fall protection on the upper floors of the buildings, and Wood Mechanix was responsible for assembling and maintaining the guardrails. In addition, the contract required Wood Mechanix to defend, indemnify, and provide liability insurance coverage to protect Polygon from liability for injuries to Wood Mechanix employees working on the project. In short, the contract made Wood Mechanix primarily responsible for safety measures for the framing work and required it to protect Polygon from liability for injuries that might befall Wood Mechanix employees doing that work. However, the contract also included provisions under which Polygon retained some right to control the framing work, including related safety matters. In particular, the contract provided that Cite as 360 Or 170 (2016) 185 “[Wood Mechanix] shall take all necessary safety precautions pertaining to its work and the conduct thereof, including but not limited to, compliance with all applicable laws, ordinances, rules[,] regulations and orders issued by a public authority, whether federal, state, local or other, the federal Occupational Safety and Health Act, the Oregon Safe Employment Act, and any safety measures requested by [Polygon].” (Emphasis added.) That provision permitted Polygon to require safety measures that it deemed appropriate beyond those necessary to comply with applicable state and federal laws; it correspondingly conferred discretion on Polygon to determine for itself whether any additional safety measures should be taken. In addition, Polygon’s Accident Prevention Plan provided that Polygon’s superintendents would inspect the construction site daily for safety hazards and issue safety hazard notices to any subcontractor in violation. Although that plan was not disseminated to Wood Mechanix, consistently with the contract itself, it reinforces the point that Polygon retained the right to inspect and ensure the integrity of the guardrails as adequate fall protection measures, if it chose to do so. Against that evidentiary backdrop, we return to the governing legal principles. In Wilson, a property owner hired a general contractor to build an electric transmission line; the general contractor, in turn, hired an independent contractor to construct the towers supporting the line. 252 Or at 389. Under the subcontract, the independent contractor was responsible for the method and manner in which the risk-producing activity was performed. Id. at 392-94. The owner, however, retained the contractual right to “increase th[e] safety, efficiency, and adequacy” of the independent contractor’s methods “[i]f at any time the Contractor’s methods    appear to the [owner] to be unsafe.” Id. at 394 (quoting the contract) (emphasis omitted). As this court explained in Cortez v. Nacco Materials Handling Group, 356 Or 254, 337 P3d 111 (2014): “The contractual right that the owner retained in Wilson, as the court characterized it, was limited to 186 Yeatts v. Polygon Northwest Co. requiring greater safety procedures than those that the contractor had put in place, and the question in Wilson was whether the owner’s retention of that right was sufficient to make it liable under the ELL. The court held that it was not, for three related reasons. First, the court explained that, in order for an owner’s retained right to give rise to liability under the ELL, the right had to ‘bear some relation to the creation of a risk of danger to work[ers] resulting from dangerous working conditions.’ Under the terms of the parties’ contract, however, the independent contractor was responsible for the manner or methods in which the risk-producing activity was performed. Second, although the owner retained the right to require greater safety procedures, the court explained that the retention of that right ‘created no risk of danger to [the] plaintiff.’ The court reasoned that the retention of that right would create a risk of danger to the plaintiff only if it caused the independent contractor to be less diligent regarding safety, a possibility that the court discounted because ‘the duty to maintain safety remained the primary duty of the contractor.’ Finally, the court reasoned that imposing liability on owners for retaining a contractual right to require greater safety measures would serve as a disincentive to including such clauses in future contracts and thus would be contrary to the purposes underlying the ELL.” Cortez, 356 Or at 275-76 (emphasis in original; citations omitted). In Cortez, an injured worker brought negligence and ELL claims against the sole member of a limited liability company (LLC). In that case—also decided on summary judgment—the LLC was the plaintiff’s direct employer. Id. at 256. An officer of the sole member of the LLC acknowledged that the member “could have made all of th[e safety] changes” that it later made after the plaintiff’s accident at the point at which it had first acquired the LLC. Id. at 274. Similarly, the officer agreed “that[,] if the [member] wanted to change either the design or the equipment used in the yard at [the LLC operation], they could do that.” Id. at 275. This court concluded that “[a] reasonable juror could infer from that evidence that, as the LLC statutes state, [the member] retained the right to manage the day-to-day operations of [the LLC], including Cite as 360 Or 170 (2016) 187 the operation of the forklifts and attendant safety procedures. Put differently, a reasonable juror could infer that [the member] retain[ed] the right to control the manner or method in which the risk-producing activity was performed.” Id. at 275 (internal quotation marks omitted; citation omitted). The defendant in Cortez remonstrated that Wilson was controlling and required a contrary conclusion. Id. The court disagreed; the court distinguished the circumstances involved, because Wilson arose in the context of an owner/independent contractor relationship, whereas Cortez involved a sole member-manager of an LLC that delegated day-to-day decisions to a mill manager and human resources director. Id. at 276.5 Here, Wilson also is distinguishable in part. Although this case, like Wilson, involves an independent contractor relationship, the contractual relationship and terms here differ from those in Wilson. First, Wilson involved an owner/independent contractor relationship in which the parties’ expectations and roles differ from those ordinarily at play in a general/subcontractor relationship. In Wilson, the court stated: “An owner who reserves the right to impose or require safety precautions for the benefit of his contractor’s workmen derives no possible pecuniary benefit from the reservation because he has contracted for a finished product.” 252 Or at 396. Presumably reasoning from that premise, the court also said: “[B]efore the retained right of control by an owner should give rise to liability, that retained right of control should bear some relation to the creation of a risk of danger to workmen resulting from dangerous working conditions.” Id. at 395-96. The circumstances arguably are somewhat different where a general contractor is responsible to the owner for the performance of its own contractual obligations, which includes the work performed by the subcontractor. In that situation, it is still the owner who has “contracted for a finished product.” The general contractor 5 This court noted in Cortez that the plaintiff had not “argue[d] that Wilson was wrongly decided, and we assume[d] that the court’s decision was correct in light of the particular contractual relationship in that case.” Id. at 276 n 23. 188 Yeatts v. Polygon Northwest Co. remains bound to perform the work and therefore has an ongoing pecuniary incentive to avoid a risk of injury to workers on the jobsite. Second, although the owner in Wilson could request greater safety measures than the contract expressly imposed on the independent contractor, the contract in that case further provided that “[t]he failure of the [owner] to make such demands shall not relieve the Contractor of his obligation to secure the quality, the safe conducting of the work, and the rate of progress required by the Contract; and the Contractor alone shall be and remain liable and responsible for the safety, efficiency, and adequacy of his methods, materials, working force, and equipment, irrespective of whether or not he makes any change as a result of any order or orders received from the [owner].” Wilson, 252 Or at 394 (quoting the contract) (emphasis omitted). Thus, the parties expressly left ultimate responsibility for safety measures in the hands of the independent contractor. Although the owner could ask for additional safety measures, the contract provided that the independent contractor “alone” was responsible for the safety of its employees and the adequacy of its methods of work. Here, in contrast, Polygon was in overall charge of the construction project. Unlike the owner in Wilson, Polygon retained the right for its own construction superintendents to inspect the work site in its entirety. It also had the contractual right to impose additional safety measures, and, although the safety of its own work force was primarily the responsibility of Wood Mechanix in this case, unlike in Wilson, there was no express provision in the contract that purported to make Wood Mechanix alone responsible for the safety of its direct employees. Thus, unlike in Wilson, contractual responsibility for the safety of the subcontractor’s employees was not fully shifted from the general contractor to the subcontractor in this case. Those distinctions notwithstanding, plaintiff correctly notes that the “risk-creation” concept that this court applied in Wilson was not derived from a statutory construction analysis of ORS 654.305 that accords with our accepted Cite as 360 Or 170 (2016) 189 methodology, under which we interpret the statutory text in context, PGE v. Bureau of Labor and Industries, 317 Or 606, 610-11, 859 P2d 1143 (1993), and then, to the extent we find it helpful, we consider the legislative history proffered by the parties, ORS 174.020(3). See also State v. Gaines, 346 Or 160, 171-72, 206 P3d 1042 (2009) (after considering text and context, court considers any pertinent legislative history, giving it appropriate weight). In particular, one aspect of the analysis in Wilson is sufficiently problematic to require correction. As noted, this court in Wilson stated that, before the retention of a right of control would give rise to liability, that retained right must bear some relation to the creation of a risk of danger to workers. 252 Or at 395-96. The court then determined that the owner’s retained right to require greater safety measures than those provided by the plaintiff’s direct employer would not create a risk of danger to the plaintiff. Id. at 396. The court further stated that such a retained right would create a risk of danger to the plaintiff only if it caused the plaintiff’s direct employer to be less diligent regarding safety, a possibility that the court discounted in that case because “the duty to maintain safety remained the primary duty of the contractor.” Id. That “risk-creation” concept arose from the court’s concern that imposing liability under the ELL in that situation would lead to less workplace safety by inducing complacency, which would be in direct opposition to the purpose of the ELL—the protection of workers. Id. (“[I]f duties not otherwise required of owners are imposed because of the reservation of a right to require safety precautions, it is obvious that owners will not actively concern themselves with the workmen’s safety. As a result, the imposition of liability    would defeat the very purpose the [ELL] was designed to accomplish.”). On further reflection, we conclude that there simply is no support in the text, context, or legislative history of the ELL for the proposition that the retained right to inspect work and require greater safety measures would only give rise to liability under the ELL if such retention created a risk of danger to the plaintiff by causing the plaintiff’s direct employer to be less diligent. There is no reason to conclude 190 Yeatts v. Polygon Northwest Co. that a general contractor’s right to inspect work for safety hazards is insufficient to amount to a retained right of control even where the reservation of that right does not cause the subcontractor who is primarily responsible for the work to be less diligent. To the contrary, such an inspection right creates an additional opportunity to avoid jobsite injury, even if the subcontractor has an undiminished incentive to diligently inspect its own work. Under the principle of stare decisis, we assume that all fully considered decisions of this court were correctly decided. Farmers Ins. Co. v. Mowry, 350 Or 686, 692, 261 P3d 1 (2011). It is incumbent upon the party wishing to change a precedent to affirmatively persuade this court to abandon that precedent. Id. Various considerations may be weighed in deciding to depart from precedent, including a need to correct a past error, particularly where “an earlier case was inadequately considered or wrong when it was decided.” Id. at 692-93 (quoting G.L. v. Kaiser Foundation Hospitals, Inc., 306 Or 54, 59, 757 P2d 1347 (1988)). In this case, we are persuaded that the above- discussed aspect of the holding in Wilson was incorrect when it was decided. As noted, the court in Wilson derived the risk-creation requirement from its concern with upholding the purpose of the ELL, but proper consideration was not given to the text, context, and history of the ELL in creating that requirement. See Gaines, 346 Or at 171-72. First, considering the text of the ELL, it applies to “persons having charge of, or responsibility for, any work involving a risk or danger to the employees,” and it requires such persons to “use every device, care and precaution that is practicable to use for the protection and safety of life and limb, limited only by the necessity for preserving the efficiency of the structure, machine or other apparatus or device, and without regard to the additional cost of suitable material or safety appliance and devices.” ORS 654.305. That statute does not require that the act of having charge of or responsibility for that work create, by itself, an additional risk of danger to workers by causing their direct employers to be less diligent. Nor does anything in the context of ORS 654.305 or any other provision of the ELL support the existence of such a requirement. Cite as 360 Or 170 (2016) 191 Finally, that requirement does not comport with the enactment history of the ELL. In Saylor v. Enterprise Electric Co., 106 Or 421, 212 P 477 (1923), this court considered that enactment history and the purpose of the ELL, which originally was proposed by initiative and enacted by a vote of the people in 1910.6 106 Or at 425. See also Or Laws 1911, ch 3. The original ballot title described “A bill for a law requiring protection for persons engaged in hazardous employments   .” Official Voters’ Pamphlet, General Election, Nov 8, 1910, 81. The argument in favor of the measure set out in the voter’s pamphlet described the lack of protections for the safety and lives of workers under the common law and asked voters to pass the ELL so that “the employer [would] be compelled to use diligence in protecting the laborer as to his life and limb.” Id. at 85. The purpose of the ELL, therefore, was to protect employees engaged in lines of work “involving risk or danger” by imposing higher standards of care upon employers than did the common law. See Saylor, 106 Or at 427-28; Or Laws 1911, ch 3, § 1. This court in Wilson correctly recognized that broad purpose; however, nothing in the history of the ELL— either in its enactment or in this court’s decisions preceding Wilson—indicates that, in the case of the retained right to control workplace safety, liability will arise under the ELL only where the retained right creates an additional risk of danger to workers by causing their direct employers to be less diligent. Wilson incorrectly imposed that requirement, which is not grounded in the text, context, or history of the ELL. See ORS 174.010 (courts not to insert “what has been omitted”). This court has not often relied on that aspect of Wilson;7 most recently, in Cortez, the court expressly 6 Part of section 1 of the enacted law became ORS 654.305, and the current text has not changed substantively from the original. See Or Laws 1911, ch 3, § 1. 7 Only one other case relied upon the reasoning in Wilson. In Wienke v. Ochoco Lumber Co., 276 Or 1159, 588 P2d 319 (1976), after determining that liability did not arise under the ELL because the defendant lumber company did not have the right to directly control the injury-creating activity, this court stated “another reason for holding that the [ELL] should not apply.” 276 Or at 1167. Relying on the reasoning in Wilson, the court stated: “In addition, by no stretch of the imagination can it be argued that any risk was created that the contractor would fail in his duties of safety to his employees upon the expectation that 192 Yeatts v. Polygon Northwest Co. distinguished it, noting that the parties had not asked us to revisit the holding in that case. Rather than continue to limit the holding in Wilson to the facts of that case, for the foregoing reasons, we disavow that holding to the extent that it requires a plaintiff to show that a defendant’s right to control a risk-producing activity created an additional risk of danger to the plaintiff by causing the plaintiff’s direct employer to be less diligent. We conclude that Polygon’s retention of the rights to require additional safety measures, and to inspect the work site in its entirety, particularly in the absence of a contractual provision that placed sole responsibility for safety measures on Wood Mechanix, constituted sufficient evidence that Polygon retained the right to control the riskproducing activity so as to preclude summary judgment in favor of Polygon with respect to that specification of plaintiff’s ELL claim. Accordingly, we reverse the decisions of the trial court and the Court of Appeals on the retained right of control specification of plaintiff’s ELL claim and remand to the trial court for further proceedings on that specification.