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Attorneys

Who Is Liable When an Employee of an Independent Contractor Is Injured Due to a Cal-OSHA Violation?

August 23,2011

The California Supreme Court Confirms that Companies May Delegate Some Workplace Safety Obligations to Independent Contractors

On August 22, 2011, the California Supreme Court issued its decision in Seabright Insurance Company v. US Airways, Inc. The issue before the Court was whether the Privette rule applies when the party that hired an independent contractor (the “Hirer” or “Principal”) failed to comply with workplace safety requirements concerning the precise subject matter of the contract, and the injury is alleged to have occurred as a consequence of that failure. The Privette rule essentially provides that when employees of independent contractors are injured in the workplace, they cannot sue the party that hired the contractor to do the work. (Privette v. Superior Court (1993) 5 Cal.4th 689.)

Relevant Facts from the Seabright Case.

US Airways uses a conveyor to move luggage at San Francisco International Airport. The airport is the actual owner of the conveyor, but US Airways uses it under a permit and has responsibility for its maintenance. US Airways hired an independent contractor, Lloyd W. Aubry Co. (“Aubry”), to maintain and repair the conveyor. US Airways neither directed nor had its employees participate in Aubry‘s work.

The conveyor lacked certain safety guards required by applicable Cal-OSHA regulations. An Aubry employee, Anthony Verdon Lujan (“Verdon”), was inspecting the conveyor when his arm got caught in its moving parts and he suffered severe injuries. SeaBright, as Aubry’s workers‘ compensation insurer, paid Verdon benefits based on the injury and then sued US Airways in a civil action, claiming the airline caused Verdon‘s injury and seeking to recover what it paid in workers’ compensation benefits. Verdon intervened as a plaintiff in the civil action, alleging causes of action for negligence and premises liability.

Legal History Below.

Defendant US Airways sought summary judgment based on the Privette case as well as Hooker v. Department of Transportation (2002) 27 Cal.4th 198 (Hooker). In Hooker, the California Supreme Court held that despite the Privette rule, the hirer of an independent contractor can be liable for a workplace injury of the contractor‘s employee if the hirer retained control over the contractor‘s work and exercised that control in a way that affirmatively contributed to the employee‘s workplace injury. (Hooker, at p. 213). US Airways argued that it did not “affirmatively contribute” to Verdon‘s injury and thus summary judgment was appropriate.

SeaBright and Verdon countered with a declaration by an accident reconstruction expert, who stated that the lack of safety guards at the “nip points” on the conveyor violated Cal-OSHA laws (Lab. Code § 6300 et seq. and 8 CCR §§ 3999 and 4002 [regulations governing conveyor safety]) and that the safety guards would have prevented Verdon‘s injury.

The trial court struck the plaintiffs‘ declaration insofar as it discussed causation. It found no evidence that US Airways “affirmatively contributed” to Verdon’s injury and granted summary judgment.

SeaBright and Verdon appealed. The Court of Appeal reversed the trial court holding that, under Cal-OSHA, US Airways had a nondelegable duty to ensure that the conveyor had safety guards, and that the question of whether the airline‘s failure to perform this duty “affirmatively contributed” to Verdon’s injury under the principles in Hooker was one for the jury and thus precluded summary judgment. The Court of Appeal also found that US Airways could not delegate to Aubry the tort law duty US Airlines owed to Aubry‘s employees to ensure that the conveyor met Cal-OSHA safety standards. In support of its finding, the Court of Appeal quoted a comment from a California Supreme Court decision issued some 25 years before Privette, which did not involve workplace safety. US Airways and Verdon then petition the California Supreme Court for review.

California Supreme Court’s Decision.

Whether Cal-OSHA imposes on an employer like US Airways a tort law duty of care that extends to the employees of other parties such as independent contractors is a question that remains unsettled. However, assuming that Cal-OSHA regulations do impose such a duty, the issue before the Court was whether US Airways could and did delegate to Aubry any duty it owed to Aubry‘s employees to comply with the safety requirements of Cal-OSHA, or whether such duty is nondelegable.

In analyzing this issue, the Court examined its prior cases, including the 1993 seminal Privette case. In Privette, the Court explained: “At common law, a person who hired an independent contractor generally was not liable to third parties for injuries caused by the contractor‘s negligence in performing the work. [Citations.] Central to this rule of nonliability was the recognition that a person who hired an independent contractor had ‘no right of control as to the mode of doing the work contracted for.‘” (Id. at p. 693.)[1] In light of the limitation on the independent contractor‘s liability to its injured employee under the workers’ compensation system, the Court concluded in Privette that it would be unfair to permit the injured employee to obtain full tort damages from the hirer of the independent contractor.

In analyzing this issue, the Court examined its prior cases, including the 1993 seminal Privette case. In Privette, the Court explained: “At common law, a person who hired an independent contractor generally was not liable to third parties for injuries caused by the contractor‘s negligence in performing the work. [Citations.] Central to this rule of nonliability was the recognition that a person who hired an independent contractor had ‘no right of control as to the mode of doing the work contracted for.‘” (Id. at p. 693.) In light of the limitation on the independent contractor‘s liability to its injured employee under the workers’ compensation system, the Court concluded in Privette that it would be unfair to permit the injured employee to obtain full tort damages from the hirer of the independent contractor.

In 1998 the Court decided Toland v. Sunland Housing Group, Inc. (1998) 18 Cal.4th 253 (“Toland”). The Court reviewed its holding in Privette as it related to the question of whether a hirer of an independent contractor has an obligation to specify, as part of its contract with the contractor, that the contractor should take special precautions to avert a peculiar risk. The Court noted that the hirer “has no obligation to specify the precautions an independent contractor should take for the safety of the contractor’s employees” and “[a]bsent an obligation, there can be no liability in tort.” (Toland, at p. 267.) The Court also said that subjecting those who hire contractors to peculiar risk liability in such circumstances would negate the hirer’s “right to delegate to independent contractors the responsibility of ensuring the safety of their own workers.” (Id. at p. 269.) Thus, in Toland, the Court recognized the principle of delegation of duty as a rationale for its decision.

Then in 2002, the Court refined the principles from Privette and Toland in the Hooker case, holding that an independent contractor‘s employee can sometimes recover in tort from the contractor‘s hirer if the hirer retained control of the contracted work and “fail[ed] to exercise his control with reasonable care . . . .” (Hooker at p. 206.) The Court noted that its prior holding in Privette was based on the principle that the hirer of an independent contractor generally has “no right of control as to the mode of doing the work contracted for . . . .” (Hooker, at p. 213.)

Finally, in 2005, the Court issued its decision in Kinsman v. Unocal Corp. (2005) 37 Cal.4th 659 (Kinsman).) In that case, the Court stressed the “framework of delegation” to explain its holdings in Privette, Toland, and Hooker. According to the Court, those decisions were grounded on a common law principle “that when a hirer delegated a task to an independent contractor, it in effect delegated responsibility for performing that task safely, and assignment of liability to the contractor followed that delegation.” (Kinsman, at p. 671.)

In the present case, the Court concluded that the Privette line of decisions discussed above established that an independent contractor‘s hirer presumptively delegates to that contractor its tort law duty to provide a safe workplace for the contractor‘s employees. However, one question remained: is the duty, if any, to comply with Cal-OSHA and its regulations for the benefit of an independent contractor‘s employees nondelegable? The nondelegable duties doctrine applies when the duty preexists and does not arise from the contract with the independent contractor. (See Eli v. Murphy (1952) 39 Cal.2d 598, 600 and Knell v. Morris (1952) 12 39 Cal.2d 450, 456.)

The Court noted that several courts of appeal have concluded that a hirer‘s statutory or regulatory duties constitute retained control if those duties are nondelegable. The courts disagree, however, about the effect of a breach. Some courts, like the Court of Appeal in this case, have held that the breach of a nondelegable statutory or regulatory duty can, by itself, create a triable issue as to whether the hirer “affirmatively contributed” to the injury of the independent contractor‘s employee. Other courts have held that if the breach is merely an omission, that breach alone cannot qualify as the “affirmative contribution” required for liability under Hooker.

The California Supreme Court ultimately held that the conflict between the courts of appeal is of no moment. It found that US Airways presumptively delegated to Aubry any tort law duty of care the airline had (or may have had) under Cal-OSHA regulations to ensure workplace safety for the benefit of Aubry‘s employees. According to the Court, the delegation which is “implied as an incident of an independent contractor‘s hiring” includes a duty to identify the absence of the safety guards required by Cal-OSHA regulations and to take reasonable steps to address that hazard.
Thus, the Court ultimately found that the Privette rule did apply to the circumstances presented in this case and held that neither SeaBright nor Verdon could recover in tort from US Airways on a theory that Verdon‘s workplace injury resulted from US Airway’s breach of what they claimed to be a nondelegable duty under Cal-OSHA regulations to provide safety guards on the conveyor. Hence, the Court reversed the Court of Appeal decision finding it erred in reversing the trial court, which had granted summary judgment for US Airways.

[1] In Privette, a property owner hired a roofing company to install a new roof, and an employee of the roofing company was burned when attempting to carry a bucket of hot tar up a ladder. At issue was the “peculiar risk” exception to the general rule of nonliability. The peculiar risk exception allows lawsuits against those who hire contractors, if the work is “likely to create . . . a peculiar risk of physical harm to others unless special precautions are taken . . . .” (Rest.2d Torts, § 416.)