This feature is a part of "The Dotted Line" series, which takes an in-depth look at the complex legal landscape of the construction industry. To view the entire series, click here.
In the construction industry, there are inherent risks for workers, even on the safest of jobsites, which is why supervisors and safety personnel are encouraged to be vigilant in their efforts to identify and mitigate potentially dangerous situations, many times as work goes on around them.
There are, however, instances when a condition is too dangerous for work to continue.
It is important to first remember that, ultimately, contractors are responsible for the well-being of their employees and must make sure their working environment is safe, said attorney J. Gregory Cahill of law firm Dickinson Wright in Phoenix.
Additionally, the general contractor is responsible for the overall safety on a project and can be held liable if there is a known safety risk or hazard but does not act to eliminate the hazard or allows workers to be exposed, even if that means ordering the offending subcontractor or worker off the job.
So, given that employees must stop work if they face a real danger, Cahill said disputes may arise, not so much about the stoppage, but about who is responsible for the additional costs and delays associated with pulling a crew, equipment or both off of a project.
If a subcontractor is creating a hazard and causes the owner or general contractor to incur extra costs after being forced to stop work until it can perform the duties under its contract safely, he said, then that subcontractor would likely be liable for the costs associated with resulting delays.
“But there is a flip side to that,” Cahill said. “Let’s say that the general contractor is telling the subcontractor to perform work in an unsafe manner. The subcontractor can (refuse)… and the general contractor would be liable because they are the one that created the hazardous or unsafe condition.”
Fortunately, most standard forms of construction agreements include a reference to situations in which employees could be in imminent danger and provide options for a contractor that acts to protect its workers.
"If there is an unsafe condition that can't be rendered safe by reasonable precautions, the work gets stopped — period — until the condition is no longer unsafe."
J. Gregory Cahill
Attorney, Dickinson Wright in Phoenix
In Section 10.4 Emergencies of the American Institute of Architects document A201 — 2017 General Conditions of the Contract for Construction, the clause directs contractors to “act, at the Contractor’s discretion, to prevent threatened damage, injury or loss.” The section clause also allows for the pursuit of an adjustment of time and contract price — a change order.
The portion of A201 that deals with work stoppages and hazardous conditions, specifically materials and substances, is Section 10.3. Not only does this clause allow a contractor to halt its activities when it encounters a previously unknown or undisclosed hazardous material or substance, it requires such action if the condition cannot be resolved by taking reasonable precautions, Cahill said.
This section of the AIA contract, said attorney Joseph McManus Jr., shareholder at Carlton Fields in Washington, D.C., also clarifies that hazards such as asbestos and PCB’s (polychlorinated biphenyls) are the owner’s problem and, as such the owner must render the dangerous jobsite conditions harmless before work can resume. Again, this concerns hazardous materials and substances that were unknown to the contractor.
Section 10.3 also addresses procedure, according to Daniel Felsen, also an attorney and shareholder at Carlton Fields. The first step is to stop work, he said. Then the contractor must notify the owner of the hazard. The onus is then on the owner to determine if the material or substance is hazardous, and, if so, retain someone to deal with the cleanup or remediation.
Companies that perform this type of work, Felsen said, usually must be licensed to tackle the hazard at hand, and the prime contractor and architect have the right to object to the owner’s choice of company as long as their objections are reasonable.
There are also similar protections for contractors that perform federal work under the Federal Acquisition Regulation (FAR), he said.
Hazardous material encounters
While contracts often mention specific hazardous materials or substances, that does not mean contractors will not encounter different ones or more of the known materials but in unexpected areas of the project. As long as the substance or material in question was not anticipated or is in a different location, the owner must render it harmless if necessary.
However, whether a contractor can make a claim for extra time to the schedule and more money is not always clear, even if they encounter unknown hazards and stop work in the affected area.
On a large project, for instance, finding hazardous material in one section of the property will not necessarily affect the schedule if work can continue elsewhere. In fact, Felsen said, the smaller the project, the higher the likelihood that uncovering a dangerous substance will shut down the entire job given the space constraints.
In this case, the contractors that are forced to stop work, McManus said, should be able to make claims for additional costs related to demobilization, delays and remobilization as long as they are not frivolous.
It is not unheard of, Felsen said, for a contractor who is struggling on the job either with money or the schedule to manufacture or exaggerate the seriousness of the claim in order to be able to walk off or get some type of reimbursement.
If the affected area is not on the critical path of the schedule, he said, or the hazard can be rendered harmless fairly quickly, the contractor might not have a basis to bring any monetary or delay claims at all.
If the hazardous condition is not addressed and remedied despite requests from contractors on the project, said attorney Neil Brunetz, of counsel at Drew Eckl & Farnham in Atlanta, there is a fail-safe — a call to federal OSHA or the OSHA-approved state program agency that brings OSHA investigators to the project and who observe a safety hazard.
If the contractor or employee who called OSHA end up being fired because he notified the agency, he said, then it is possible that the terminated person could have a whistleblower claim, in addition to contractual remedies, as long as he followed procedure and tried to resolve the issue first by notifying those up the chain of command on the project.
In practice, however, a potential OSHA inspection would likely spur the responsible party to remedy the hazard as the preferable alternative, Brunetz said.
Again, the overriding policy on any jobsite, Cahill said, should be to err on the side of safety.
“If there is an unsafe condition that can't be rendered safe by reasonable precautions, the work gets stopped —period — until the condition is no longer unsafe,” he said. “Then everybody can sit there and fight about who is responsible for the delay, who is responsible for the additional cost, who is responsible for the liquidated damages and all those other things.”
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