Liable or Not?

Imagine you’re a general contractor patrolling the workplace of a construction project and you see a person fall from the scaffolding of a building. The person, an employee of the roofing subcontractor, is injured and sues you for negligence, claiming that you failed to maintain a safe workplace.

Whether you’re liable for the subcontractor’s employee’s injuries depends in part on the state where the accident occurred. Even among Western states, a general contractor’s potential liability for the workplace injury of a subcontractor’s employee varies greatly. This article considers the relevant statutory and common law for Washington, California, Oregon, and Idaho, and what insurers in those states can potentially expect in terms of potential liability for the general contractors they insure.

Washington—A Heavy Burden for Contractors

The recent Washington Supreme Court decision in Vargas v. Inland Washington, LLC (2019) held that the worksite injury of a subcontractor’s employee exposes the general contractor to potential liability, even where the general contractor is not in direct control of the situation that caused the injury. In fact, a general contractor may be held directly liable for breaching its duty to provide a safe workplace, and vicariously liable for the negligence of the other entities on the worksite.

The court in Vargas emphasized that “general contractors have expansive statutory and common-law duties to provide a safe workplace,” and these duties are owed to all employees on a worksite, including a subcontractor’s employees. The court noted that the general rule at common law is: One who engages a subcontractor is not liable for the injuries of the employees of the subcontractor, however the general contractor has a duty to all employees on a worksite when it retains some control over the work. In Washington, “[A] general contractor’s general supervisory functions are sufficient to establish control.”

Based on this reasoning, general contractors in Washington may be found liable for employee injuries on a construction site based solely on the fact that their duty to provide a safe workplace and general supervisory responsibilities meets the threshold for establishing control. The Vargas court did not state that a general contractor is per se liable for any injury, but it is clear that, after a worksite injury, the general contractor will have a heavy burden to prove that it fulfilled all of its statutory and common-law duties to avoid liability. 

California—The Privette Doctrine and Exceptions

In California, the circumstances are different. Since 1993, the “Privette Doctrine” has limited the extent of liability that general contractors have for worksite injuries suffered by a subcontractor’s employees. In Privette v. Superior Court (1993), the California Supreme Court held that, when a subcontractor’s performance of inherently dangerous work results in injuries to an employee of the subcontractor that is subject to workers compensation coverage, the employee has no claim for tort damages from the person who hired the subcontractor but did not cause the injuries. The court reasoned that injured employees of a subcontractor are covered by workers compensation, which is traditionally the exclusive remedy for an injured employee. Moreover, “[T]o impose vicarious liability for tort damage on a person who hires an independent contractor for specialized work would penalize those individuals who hire experts to perform dangerous work rather than assigning such activity to their own inexperienced employees.”

Privette has been extended and upheld by many other California courts, with some notable exceptions, in particular the Hooker v. Dept. of Transportation (2002) case. Where a general contractor retains control over a worksite to such an extent that it affirmatively contributed to the employee’s injuries, the subcontractor’s injured employee has a cause of action against the general contractor. The court explained in Hooker that a hirer of an independent contractor is not liable to an employee of the contractor merely because the hirer retained control over safety conditions at a worksite. But the hirer is liable to such an employee if its exercise of retained control affirmatively contributed to the employee’s injuries.

Oregon—Parsing the ELL

As in Washington, Oregon’s statutory law subjects general contractors to greater liability exposure for workplace injuries of a subcontractor’s employee than its neighbor to the south. Oregon’s Employer Liability Law (ELL) imposes liability on a general contractor for a subcontractor’s employee’s safety on a worksite if the general contractor is engaged jointly with the subcontractor in a common enterprise; or if the general contractor actually controls, or retains the right to control, how risk-producing activities are performed. Under the ELL, a general contractor has charge of, and responsibility over, risky activities performed on the worksite.

The 2016 Oregon Supreme Court decision of Yeatts v. Polygon Northwest Co. (2016) streamlined the element of “retaining” the right to control for the benefit of claimants by eliminating any need to show that such retention caused the subcontractor to be less diligent about safety. Instead, the court found that, where a general contractor retains the right by contract to provide direction to workers about safety when needed (“put your hardhat on!”), or to inspect the overall worksite for safety, that creates a question for a jury to decide if such indirect control would subject the general contractor to liability under the ELL. 

Since it would be highly unusual for a general contractor to not allow itself the right to inspect or direct for safety on its job site, even where it has contractually delegated responsibility for safety to the subcontractor, it is likely that claims against a general contractor for worksite injuries for employees of subcontractors will continue to survive to trial in Oregon.   

Idaho—Courts Uphold Common Law

The Idaho Workers’ Compensation Act provides employees the exclusive remedy for injuries arising out of, and in the course of, employment, except for claims against a “third-party.” The Supreme Court of Idaho held, in Robinson v. Bateman-Hall, Inc. (2003), that a general contractor is a statutory employer of the subcontractor’s employees under the Act, and is therefore immune from third-party tort liability arising from the workplace injury of a subcontractor’s employee.

The court in Robinson upheld Idaho common law, which states that “if a person is normally equipped with manpower and tools to do a job and nevertheless contracts it to another employer, he is the statutory employer of the second employer’s employees.” Although the injured employee in this case argued that the general contractor was not equipped to perform the specialized work of the subcontractor, and therefore is a third-party as opposed to a statutory employee, the court rejected this reasoning and held that “a contractor or subcontractor is liable [as a statutory employer] based on this contractual status alone.”

The rule established in Robinson has been upheld by the Supreme Court of Idaho, and, as a result, general contractors in Idaho are afforded the most protection against potential liability for the worksite injuries of a subcontractor’s employees in the Northwest, based simply on the contractual status of a general contractor as an employer.

Wrapping Up the States

Insurers of general contractors in Idaho may be protected when it comes to extending liability coverage for the workplace injuries of a subcontractor’s employee because the state’s workers compensation statutes include general contractors as employers of the subcontractor’s employees.

Similarly, in California, the state’s workers compensation statute provides broad protections to general contractors because it is ordinarily the exclusive remedy for an injured employee. Only in special situations, such as where a general contractor’s control over the workplace and the risk-producing activity affirmatively contributed to the employee’s injuries, can a subcontractor’s employee sue the general contractor for negligence.

In Oregon, careful drafting of contractual responsibilities between a general contractor and subcontractors can potentially protect a general contractor from liability in the event that a subcontractor’s employee is injured on the job. In practice, however, it may be difficult for general contractors to be far enough removed from controlling the safety procedures of the worksite to realistically be protected from such litigation. Because typical general contractors would retain the right to direct and inspect for safety on a job site, it can be assumed that potential liability for injuries to subcontractor workers may follow.  

General contractors have a similar potential liability for workplace injuries in Washington, where the recent Supreme Court decision of Vargas held that a general contractor’s general supervisory functions may be sufficient to establish control over the workplace, and thus subject them to liability for the injuries of a subcontractor’s employee. Insurers in Washington and Oregon must be prepared to potentially be required to cover the accidents of injured subcontractor workers on a construction site in those states.