Powell Trachtman Logan Carrle & Lombardo

Design Professional's Practice Bulletin

Volume 4, Number 3 — December 2000

This Bulletin addresses recent developments affecting Design Professionals as well as business concerns as important as the specific professional and technical issues they face.

Editors: Neil P. Clain and Richard J. Davies

Design Professionals’ Liability for Violation of OSHA Construction Standards Clarified

By Neil P. Clain, Jr., Esquire

Design professionals often face claims that they are responsible for construction site safety. To reduce exposure to such claims, most form contracts and well-drafted manuscript contracts expressly disclaim responsibility for site safety, for construction means, methods and techniques, and for control of the work of contractors. Such clauses recently proved to be instrumental in reversing an attempt by the Secretary of Labor to cite a design professional for violation of OSHA construction standards by an owner’s construction contractor.

We reported in our February 1998 issue that in Secretary of Labor vs. CH2M Hill Central, Inc., the Occupational Safety and Health Review Commission (“OSHRC”) upheld fines imposed on a design professional for violations of OSHA construction standards by a construction contractor. (Past issues are available on our website at powelltrachtman.com, click on the Publications icon.) The fines were imposed in the aftermath of a fatal methane gas explosion in a complex tunnel project, in which the cited design professional served as the owner’s consulting engineer. The fines were imposed even though the design professional’s contract expressly disclaimed responsibility for construction site safety.

A federal appeals court recently reversed the OSHRC’s findings of violations by the design professional and vacated the fines. The appellate court reviewed the design professional’s contract with great care and reproached the OSHRC for failing to do the same, expressing “concern” at the OSHRC’s “decision to ignore contract language in evaluating to whom the regulations applied.” While “perfunctory language” that does not represent the design professional’s “true responsibilities” does not absolve it of responsibility, “language exempting an employer from particular responsibilities that the facts confirm the employer does not actually retain cannot casually be thrown aside.”

The appellate court quoted several sections of the design professional’s contract in which responsibility for site safety precautions was expressly disclaimed. The Secretary of Labor’s claim that the design professional accepted safety-related duties in connection with preparing modifications to the general contractor’s contract to address the methane problem in the tunnel was rejected because it “only presents half the picture.” The contract modifications, though drafted by the design professional, had to be reviewed and approved by the owner; the design professional “could not act on its own.” “The Secretary seems to refuse to acknowledge that while [the design professional] drafted the contract modification language and served as the contact person for [the general contractor], the firm reported to and had to obtain the approval of [the owner] before any modifications were incorporated into the existing contract.” This allocation of responsibility between the design professional and the owner in their written contract was not altered by the admission of the owner’s representative that he lacked the knowledge to recommend safety precautions and that he did not attend the meetings between the design professional and construction contractor to discuss the contract modifications addressing the methane problem. “[W]e will not predicate liability on [the design professional], who fulfilled its contract duties, because [the owner] did not hire qualified individuals to oversee the process for which it had contractually retained responsibility.” Drafting contract modifications for the owner’s approval, and serving as the intermediary between the contractor and the owner, is not a sufficient basis for liability.

The appellate court’s insistence upon respect for the design professional’s contract underscores the importance of securing soundly drafted written contracts. A written contract defining the duties and responsibilities of the parties is not a bothersome formality -- it is one of the best risk management devices at your disposal. The opinion is also a reminder that when you have a contract, you must know its requirements, and abide by them; if your actual performance is inconsistent with your contractual requirements, it will be what you actually did, not what the contract required you to do, that will determine your liability.

While the court’s opinion is a valuable tool for the design community in resisting future attempts by the Secretary of Labor to impose fines for violation of OSHA construction standards, it does not eliminate the threat. The court refused to confer blanket immunity on design professionals for OSHA construction standards violations, insisting that determining whether a design professional is “engaged in construction work” must still be made by a case-by-case evaluation of the facts. It also did not invalidate the Secretary of Labor’s new test for determining whether design professionals have “engaged in construction work” so as to be subject to the construction standards, a broader test than the one it replaced (though the court expressed skepticism about the new standard). (See our February 1998 issue for more detail.) On the other hand, the court did not approve the new standard, either; it merely found that in this case it did not have to address the issue because the design professional was not “engaged in construction work” under either standard. Finally, other federal appellate courts are not bound this opinion and since its outcome is so heavily dependent upon the facts, other courts that might not want to follow its precedent will probably find it easy to distinguish the case on a factual basis. Nevertheless, the reversal of the findings of the OSHA violations and the vacation of the fines, together with the court’s strong opinion, are a real victory for the design professional community.

This bulletin is intended for general information purposes only and does not constitute legal advice. The reader should consult with legal counsel to determine how laws, suggestions and illustrations apply to specific situations.