Obtaining just compensation for injured workers
Third-party liability increases the chance of a just recovery in construction accident cases.
by Jeffrey N. Roy
Construction work is one of the nation’s most hazardous occupations. Census figures compiled by the U.S. Department of Labor show that in 1995 alone, the construction industry accounted for 1,000 of the 6,210 on-the-job deaths reported that year.1 Hundreds of thousands of construction workers are injured in the course of their employment annually in the United States.2
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In most cases, injured employees are entitled to collect workers’ compensation benefits from their employers. Traditionally, however, these benefits do not fully compensate injured workers. Under most of the workers’ compensation schemes in the United States, the employer responsible for making payments and any of the client’s coworkers receive blanket immunity from tort liability. Just compensation occurs only if the employee can sue another responsible party. Third-party liability not only increases the chance of a just recovery but promotes greater workplace safety by imposing liability on those who are in the best position to prevent construction accidents.
Two authors have suggested that there should be a third-party case in most construction injuries and deaths.3 This article focuses on the existing immunities and ways around them to enable trial lawyers to identify culpable third parties and help clients achieve justice.
On construction jobs, typically there are varying levels of actors on the job site-owners, architects, engineers, general contractors, subcontractors, and suppliers. Many times, these entities will seek to insulate themselves from responsibility for workplace injuries through various stratification methods, such as indemnification agreements, delegation of duties to others, or legal immunities. These hurdles are universal, despite subtle differences in the various common law principles applicable in different states.
A recent case handled by my office, Padgett v. Dick Corp.,4 illustrates many of the stratification issues involved in construction cases and illuminates the different levels of immunity. That case involved the following facts.
The Massachusetts Water Resources Authority (MWRA), the owner of property in Boston, retained Dick Corp. as the general contractor for construction activities taking place at its Deer Island construction project. Dick Corp. retained ICOS as a subcontractor to construct a slurry wall on the project.
Cynthia Padgett, an ICOS laborer, was placing a concrete-lined, 10-foot-long “tremie” pipe weighing hundreds of pounds in a rack. While she was holding the pipe, a crane operator and a fellow ICOS employee jerked the crane’s boom, causing the pipe to go out of control. Padgett severely and permanently injured her back. She is unable to return to construction work. She received workers’ compensation benefits through ICOS, leaving ICOS immune from suit.
Padgett sued Dick Corp. and the MWRA, alleging negligence and violations of the Massachusetts state building code. She claimed that Dick Corp. failed to provide a safe workplace and that the crane operator was inexperienced in the tremie pipe operation. Padgett argued Dick Corp. knew that the operator had had problems controlling pipes before the incident.
There were several obstacles in this case: (1) the injury was caused in part by a coworker’s negligence; (2) the injury was caused in part by the negligence of the plaintiff’s employer, whom the defendant argued was immune from suit; and (3) the contract between the general contractor and the subcontractor provided that the subcontractor was solely responsible for the means, methods, and materials in its operations.
Overcoming the general rule
The first hurdle in a construction case is the general rule of nonliability for the employer of an independent contractor. The person or entity employing the independent contractor may be referred to as the “employer,” “principal,” “hirer,” or, depending on the circumstances of the case, as the “owner,” “developer,” or “general contractor.”
Generally, the employer of an independent contractor-here, the MWRA and Dick Corp.-is not liable for harm caused to another by an act or omission of the subcontractor-here, ICOS-or its employees. The most commonly accepted reason for this rule is that
since the employer has no right of control over the manner in which the work is to be done, it is to be regarded as the contractor’s own enterprise, and he, rather than the employer, is the proper party to be charged with the responsibility for preventing the risk, and administering and distributing it.5
The rule’s validity has come into question in courts that have considered this issue. Consequently, there are exceptions that can be used to avoid the result of nonliability. Some of the most useful are:
- Negligence of the employer. If an injured worker can establish that the owner or general contractor retained the authority and responsibility to supervise subcontractors’ safety procedures and performed this duty negligently, the general rule does not apply.
- Nondelegable duty arising by contract. In some cases, employers voluntarily assume contractual duties relating to job site safety. As one court said, “Obligations created by contract can provide a basis for an action in tort.”6 Often, construction contracts can be construed to impose a nondelegable duty to provide a safe workplace, particularly where the general contractor voluntarily assumes that duty in its contract with the owner or developer.
- Absolute liability for statutory violations. Many states impose statutory or regulatory obligations on owners, developers, and/or general contractors. Violation of these statutes and regulations can give rise to civil liability and, in some states, can result in the imposition of absolute liability. As discussed below, New York, Washington, and Michigan are prime examples of how statutory liability is imposed.
In many instances, the exceptions overlap and shade into one another, and often the attorney can rely on more than one to defeat the general rule of nonliability.
Negligence of the employer
When a general contractor entrusts part of a job to subcontractors but supervises either the entire job or its safety aspects, the general contractor is liable if it (1) fails to prevent the subcontractors from working in a way that is unreasonably dangerous to others, (2) knows or should know that the subcontractors’ work is being done in this manner, and (3) can prevent this by exercising the control it has retained.7 In other words, the general contractor may be liable for any negligence in connection with the work if it directed the work, furnished equipment for it, or retained control over any part of it.8
To hold the employer liable, a plaintiff must show that the employer had more than just general control over the independent contractor. The employer must exercise enough control so that the “contractor is not entirely free to do the work his own way.”9 That the employer simply made “suggestions or recommendations which need not necessarily be followed” is insufficient to show the requisite control.10
The contract documents and construction safety manuals in use on the job are a good starting point for examining the level and extent of control. For example, in Padgett, one of the job site safety manuals provided that the prevention of accidents and protection of property were of primary importance and should receive top priority, support, and participation by all parties. Under the contract, the general contractor, Dick Corp., was accountable for the safe, healthful performance of work by each of its subcontractors.
The contract in Padgett also dictated that the general contractor (1) appoint a safety representative to ensure that all subcontractors’ employees comply with job site safety rules and regulations and (2) provide for continuous surveillance of the subcontractors’ operations so that it would be aware of unsafe acts or conditions.
Other facts revealed at trial relating to duty included the following:
- The general contractor’s safety representative testified that his sole function on this job was to monitor safety in a 300-by-300-foot area, supervising approximately 25 employees, including Padgett and the other ICOS employees.
- The general contractor’s expert testified that if there was a hazardous condition on the job involving the subcontractor, the general contractor should have had it corrected. Indeed, he testified that on this job,
- if the safety representative saw the crane’s boom moving erratically, he had a duty to correct that condition and stop the work.
- The safety officer testified that he did not continuously survey the site, despite the fact that he was contractually bound to do so.
- The general contractor’s superintendent testified that Dick Corp. did not monitor the subcontractor’s safety, despite the fact that the applicable construction safety manual specifically stated that it was required to do so.
These facts showed that Dick Corp. had the requisite duty and authority to act but failed to stop the ICOS crane operator who was jerking the boom. This failure led to the plaintiff’s injury.
Nondelegable duty arising by contract
Written obligations in construction contracts impose a nondelegable duty on the employer of an independent contractor. These contractual obligations can provide a further basis for tort liability. This concept was reinforced recently by the Supreme Judicial Court of Massachusetts in O’Brien v. Christensen.11
In O’Brien, two men were seriously injured when they fell 25 feet from a porch attached to a condominium building. They sued the building owner, who was contractually responsible for the proper maintenance and repair of the common elements of the building. Three years before the accident, the owner had the porch railings repaired by an independent contractor. The independent contractor performed the work negligently and failed to comply with the Massachusetts state building code.
The trial judge in the case instructed the jury that if they found the contractor was negligent in making the repairs, the owner would be vicariously liable. The owner’s duty in O’Brien was predicated solely upon the nondelegability of his voluntarily assumed contractual duty. In seeking to impose liability in construction accident cases, similar arguments can be advanced based on the contract documents and the specifications.
The contract documents in Padgett directed Dick Corp. to comply with the state building code, the requirements of the U.S. Occupational Safety and Health Administration, and the Massachusetts “Rules and Regulations for the Prevention of Accidents in Construction Operations.”12 In that regard, the general contractor was required to have a “competent person”13 on the site to monitor compliance with these safety requirements and to designate a person to prevent accidents.
The jury in Padgett was instructed that if the crane operator was negligent, the general contractor would be liable under the contract for failure to provide a safe workplace. The jury was also told to consider whether Dick Corp.’s safety representative was negligent in his surveillance duties and in failing to prevent the erratic crane operation, as directed by the contract’s provisions.
Some courts have imposed liability in this context as vicarious liability.14 Under that theory, an owner or occupier of property is required to rehabilitate it with regard to the safety of others and cannot escape liability simply by hiring someone else to perform the work.
Moreover, the Restatement (Second) of Torts §422 provides that a “possessor of land, who entrusts work to an independent contractor, is subject to the same liability as though he had retained the work in his own hands.” This is a clear expression of the landowner’s nondelegable duty to protect others from unsafe conditions.
Absolute liability for statutory violations
Several states have a statutory scheme giving general contractors primary responsibility for compliance with safety regulations on job sites. These states impose absolute liability on the general contractor when an independent contractor’s employee is injured as a result of a violation of a statutory, administrative, or regulatory code related to workplace safety.
New York and Washington are two examples. In New York, Labor Law §200 is a codification of the common law duty to maintain a safe construction site. As noted recently in Rizzuto v. L.A. Wenger Contracting Co., that provision places the duty on an owner or general contractor if it “ha[s] the authority to control the activity bringing about the injury to enable it to avoid or correct the unsafe condition.”15
New York’s Labor Law §240(1) requires contractors and owners to provide scaffolding, hoists, ladders, braces, ropes, and other devices to protect workers. This section, known as the “Scaffold Law,” has been applied in situations where workers are injured as a result of inadequate or missing safety equipment at elevated worksites.16 Section 240(1) prescribes these safety precautions for workers in recognition of the extreme danger of working at heights.17
New York’s Labor Law §241(6) imposes a nondelegable duty of reasonable care on owners and contractors “to provide reasonable and adequate protection and safety” to workers employed in all the areas where construction, excavation, or demolition work is being performed.18 The legislative history of §241 expresses an intent by lawmakers to place the “ultimate responsibility for safety practices at building construction jobs where such responsibility actually belongs, on the owner and general contractor.”19
Under the New York statute, once the negligence of a project party is established, the owner or general contractor is vicariously liable, regardless of its ability to direct, control, or supervise the construction site. Furthermore, given this vicarious liability, the “absence of actual or constructive notice sufficient to prevent or cure . . . [is] irrelevant to the imposition of [this statutory] liability.”20
In Washington, a specific duty is imposed on employers to comply with applicable Washington Industrial Safety and Health Act regulations. There, as reinforced by the Washington Supreme Court in Stute v. P.B.M.C., Inc., a general contractor bears “primary responsibility for compliance with safety regulations” on a job site “because the general contractor’s innate supervisory authority constitutes control over the workplace.”21 Such a rule recognizes that the general contractor is in the best position to coordinate work or provide expensive safety features to protect subcontractors’ employees.
The rationale underlying liability in these contexts was set forth by the Michigan Supreme Court in Funk v. General Motors Corp.:
Placing ultimate responsibility on the general contractor for job safety in common work areas will, from a practical, economic standpoint, render it more likely that the various subcontractors being supervised by the general contractor will implement or that the general contractor will himself implement the necessary precautions and provide the necessary safety equipment in those areas.22
As outlined in the New York and Washington examples, these statutes offer encouraging opportunities for recovery. Indeed, if there is a lack of evidence of the general contractor’s direct negligence, these statutes may provide the only avenue for recovery.
Inherently dangerous work
One other exception to the general rule, which involves inherently dangerous work, has been problematic for independent contractors’ employees. Generally, the Restatement (Second) of Torts §§413, 416, and 427 provide that the employer of an independent contractor who recognizes a peculiar unreasonable risk to others is liable for physical harm if the employer fails to take reasonable precautions. These rules impose on those who hire an independent contractor to perform inherently dangerous work a duty to ensure that the contractor takes special precautions to prevent harm to others.
The phrase “to others” has proved fatal to employees of the independent contractor. Courts that have construed these sections have found that employees who are injured by their employer’s negligence in inherent-danger cases are barred from seeking recovery against the hiring person under the peculiar-risk doctrine.23 Under this doctrine, liability is imposed when injuries might be expected to occur on the job absent special precautions.
Some courts have suggested that this limitation of liability is justified by the availability of workers’ compensation benefits to the injured employee, obviating the need for third-party liability.24 In light of these cases, extreme caution should be exercised in pursuing a claim based on the peculiar-risk doctrine. Plaintiff lawyers should be prepared to advance other theories of liability if the court does not adopt the peculiar risk theory in their case.
Most defendants in these cases will try to escape liability by invoking an “empty chair” defense-that is, by pointing the finger at the injured person’s employer or coworkers, who are immune from suit and, thus, not parties to the litigation.
Evidence suggesting the negligence of nonparties is irrelevant to the case and should therefore be excluded. Negligence of a nonparty “is not material” unless that party’s negligence, “either standing alone or combined with the negligence of [the plaintiff], was the sole proximate cause of [the plaintiff’s] injuries.”25
A motion in limine is justified because, if evidence concerning nonparties is admitted, the jury could then apportion alleged negligence to them. Because the nonparties have not appeared and have also not been represented, this evidence would not accurately reflect their respective fault.
Further, it would be unduly burdensome and prejudicial to require the plaintiff to marshal evidence, make objections, argue the case, and examine witnesses from the standpoint of unrepresented parties. Requiring plaintiff attorneys to serve in such a dual capacity is antithetical to their primary obligation-proving the plaintiff’s case.
Finally, the Montana Supreme Court, in an enlightened opinion, found that the “empty chair” defense violates the rights of substantive due process guaranteed to the plaintiff and the nonparties by the Fourteenth Amendment to the United States Constitution.26
Work for courts and legislatures
Most construction accidents can be eliminated. This will not happen, however, until courts and legislatures eliminate the immunities that allow dangerous practices to exist without recourse. Trial lawyers must attack the immunities in court and overcome the various stratification issues. Doing so requires an understanding of often complex construction contracts and careful planning and execution during the discovery process.
Although a case may seem frustrating at first, there are avenues for recovery and opportunities to obtain just compensation. If trial lawyers continue to pursue these, perhaps injured workers throughout the nation will achieve justice.
1. U.S. DEP’T OF LABOR, NATIONAL CENSUS OF FATAL OCCUPATIONAL INJURIES (1995). See Labor Department’s Fatality Census Tells How Workers Died, TRIAL, Oct. 1996, at 105.
2. See generally NATIONAL SAFETY COUNCIL, ACCIDENT FACTS (published annually).
3. HARRY M. PHILO & HARRY M. PHILO JR., LAWYERS DESK REFERENCE §25.1, at 394 (8th ed. 1993).
4. No. 95-1937 (Mass., Suffolk County Super. Ct. Apr. 8, 1998); 41 ATLA L. REP. 312 (1998).
5. W. PAGE KEETON, PROSSER AND KEETON ON THE LAW OF TORTS §71, at 509 (5th ed. 1984 & Supp. 1988).
6. O’Brien v. Christensen, 662 N.E.2d 205, 208-09 (Mass. 1996); see Parent v. Stone & Webster Eng’g Corp., 556 N.E.2d 1009 (Mass. 1990), and cases cited.
7. Corsetti v. Stone Co., 483 N.E.2d 793, 798 (Mass. 1985).
9. Foley v. Rust Int’l, 901 F.2d 183, 184 (1st Cir. 1990) (quoting RESTATEMENT (SECOND) OF TORTS §414 cmt. c (1965)).
10. St. Germaine v. Pendergast, 584 N.E.2d 611, 616 n.11 (Mass. 1992) (quoting RESTATEMENT (SECOND) OF TORTS §414 cmt. c (1965)).
11. 662 N.E.2d 205; see also Parent, 556 N.E.2d 1009, 1012, and cases cited.
12. MASS. REGS. CODE tit. 454, §10.03(1)(a) (1998) provides the following: “All places where employees are directed or permitted to perform work of any kind in construction work or demolition work shall be so constructed, equipped, arranged, operated, and conducted as to provide reasonable and adequate protection to the lives, health, and safety of employees and others.” MASS. REGS. CODE tit. 454, §10.03(1)(b) (1998) provides the following: “Employers, owners, contractors sub-contractors, superintendents, or foremen in charge, and other persons obligated by law to adhere to the requirements of 454 CMR 10.00 shall not direct or permit an employee to work under conditions which are not in compliance with or which are prohibited by 454 CMR 10.00.” Washington has similar rules and regulations known as the Washington Industrial Safety and Health Act of 1973 (WISHA), WASH. REV. CODE §49.17.
13. “Competent person” is defined in MASS. REGS. CODE tit. 454, §10.01 (1998) as: “One who is capable of identifying existing and predictable hazards in the surroundings or working conditions which are unsanitary, hazardous, or dangerous to employees, and who has authorization to take prompt corrective measures to eliminate them.” See also 29 C.F.R. §1926.32(f) (1993).
14. O’Brien, 662 N.E.2d 205.
15. 693 N.E.2d 1068, 1073 (N.Y. 1998) (quoting Russin v. Picciano & Son, 429 N.E.2d 805, 807 (N.Y. 1981)).
16. Rocovich v. Consolidated Edison Co., 577 N.Y.S.2d 219 (1991).
17. Id. See also Ross v. Curtis-Palmer Hydro-Elec. Co., 601 N.Y.S.2d 49, 52 (1993).
18. N.Y. LAB. LAW §241(6) (Consol. 1998); see also Rizzuto, 693 N.E.2d 1068, 1072-73.
19. 1969 N.Y. LEGIS. ANN. at 407-08.
20. Rizzuto, 693 N.E.2d 1068, 1072-73.
21. 788 P.2d 545, 550 (Wash. 1990).
22. 220 N.W.2d 641, 646 (Mich. 1974), overruled in part on other grounds by Hardy v. Enviro-Chem Sys., 323 N.W.2d 270 (Mich. 1982).
23. Toland v. Sunland Housing Group, Inc., 955 P.2d 504, 506 (Cal. 1998); Vertentes v. Barletta Co., 466 N.E.2d 500, 501-03 (Mass. 1984).
24. E.g., Toland, 955 P.2d 504, 509.
25. Correia v. Firestone Tire & Rubber Co., 446 N.E.2d 1033, 1039 (Mass. 1983).
26. Plumb v. Fourth Jud. Dist. Ct., 927 P.2d 1011, 1021 (Mont. 1996).