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Don’t Be an Ostrich When Dealing with Your Subcontractors

A few weeks ago I spoke about the legal challenges of managing contractors at the Texas Chemical Council’s annual Environmental, Health & Safety conference in Galveston, Texas. While it is “black letter law” that employers are not liable for injuries to employees of subcontractors that they do not control, general contractors in reality are often sued by the employees of their subcontractors after being barred from suing their own employers by workers’ compensation statutes.

One way to avoid being held liable is to exercise absolutely no control over your subcontractors. However, most of us agree that the “ostrich solution” is neither ethical nor smart. Every reputable company is going to want to — and should — exercise some degree of control over its subcontractors, especially regarding workplace safety. The challenge is how to do so without exercising too much control, which would result in being held legally liable for injuries to the subcontractor’s employees.

Courts have recognized that contractors can do certain things without being “in control”: ordering a subcontractor to stop work, posting a generic safety plan, requiring subcontractors to conduct safety meetings, and inspecting a project to determine progress are all things that a contractor can do without being deemed in control of its subcontractors.

But the smartest thing that a general contractor can do is to carefully evaluate and investigate subcontractor safety programs and culture before engaging them in the first place. Although rarely involved in the process of selecting a subcontractor, contractors should consider including health and safety managers in the evaluation process when deciding whether to engage a subcontractor. Not surprisingly, this simple piece of advice got the biggest applause from my audience of managers at the conference in Galveston.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.