Construction Managers, Are You Exposing Yourselves to Labor Law Liability?

By Timothy P. Welch, Esq.

When dealing with construction site accidents, who a party is matters.  Under Labor Law sections 200, 240(1) and 241(6) owners, contractors, and their agents have a non-delegable duty to provide reasonable and adequate protection to workers from risks inherent at work sites, with a specific emphasis placed on elevation-related hazards.  Given the near strict liability nature of Labor Law section 240(1), it is critical to identify whether a party is a proper Labor Law defendant from the get-go. 

While identifying the owner (and usually the contractor) may be relatively straightforward, identifying “their agents” has proven to be a more complex undertaking.  It should be noted that the requirements set forth in the Labor Law are non-delegable from the standpoint of the owner or contractor, however, the duties themselves can be assigned to “agents” of an owner or “agents” of a contractor.  When such an assignment occurs, the same non-delegable duty held by the owner or contractor is imposed on the agents as well.  Moreover, “once an entity becomes an agent under the Labor Law it cannot escape liability to an injured plaintiff by delegating the work to another entity.^[1]”

An entity that often skirts the line between being an agent and not, is the Construction Manager. Traditionally, the Construction Manager has been found to be outside the purview of the Labor Law when its scope of work is narrowly focused on scheduling and general coordination of the construction process.  However, when a Construction Manager’s scope expands, so does its risk that it may, in fact, become a proper Labor Law defendant.

In Walls v. Turner Construction Company^[2], the Court of Appeals grappled with the issue of whether Turner (a Construction Manager by title) was, in fact, more than that; and whether it should be subject to the obligation to maintain a safe work site under the Labor Law.  In finding that Turner was more than a traditional Construction Manager, the Court observed that, as part of its scope of work, Turner assumed responsibility for contractual, statutory, and regulatory compliance of all contractors on the project.  Further, if Turner became aware of any unsafe condition or practice, it had the authority to stop work of any contractor.  Turner further assumed complete oversight and the power to take action to control or minimize the loss of life or damage to property.  (The absence of a General Contractor on the project also was taken into consideration.)  Following an injury to plaintiff, who was not provided with appropriate safety equipment, the Court found Turner to be more than a typical Construction Manager, in that it had such substantial supervisory control and authority at the work site, including overall worker safety, that it assumed the non-delegable duty.

What can be gleamed from Walls and its progeny is that, although a Construction Manager is generally not responsible for the safety of the workers, it may nonetheless become responsible if it has been delegated, or assumes, the authority and duties of a contractor, or if it functions as an agent of the owner through supervisory control and authority over the activity bringing about the injury, so that it has the power to avoid or correct any unsafe condition^[3].  The specification “authority over the activity” is a critical part of the analysis in that, a party need not actually exercise any authority for it to assume the non-delegable duty, simply being empowered with that authority is enough.

The first step in considering the risk a Construction Manager may face on a particular project must begin with analysis of the underlying agreement.  While Construction Manager agreements can come in a multitude of shapes and sizes, the two most prevalent in the industry are the contracts produced by AIA.  Specifically the Standard Form Agreement Between Owner and Construction Manager as Adviser (IAI Document C132-2019) and Standard Form Agreement Between Owner and Construction Manager as Constructor (IAI Document A133–2019) with incorporated General Conditions (AIA Document A201-2017).  As the names imply, the former is intended for a limited scope of work (theoretically outside of the Labor Law realm) with the latter suggesting a much more comprehensive relationship.  The third group of contracts (which are not being addressed here) are Standard Form Agreement Between Owner and Contractor (IAI Document A101-2017) and the related agreements.   

By example, some limiting sections in Construction-Manager-as-Adviser agreements can be found in Article 3, entitled Scope of Construction Manager’s Basic Services:   

§ 3.3.9 The Construction Manager shall endeavor to obtain satisfactory performance from each of the Contractors.  The Construction Manager shall recommend courses of action to the Owner when requirements of a Contract are not being fulfilled.

…

§ 3.3.13 The Construction Manager shall obtain and review the safety programs developed by each of the Contractors solely and exclusively for purposes of coordinating the safety programs with those of the other Contractors and for making recommendations for any additional safety measures to he considered in the Work of the Contractors.  The Construction Manager’s responsibilities for coordination of safety programs shall not extend to direct control over or charge of the acts or omissions of the Contractors, Subcontractors, agents or employees of the Contractors or Subcontractors, or any other persons performing portions of the Work and not directly employed by the Construction Manager.

…

§ 3.3.15 The Construction Manager shall advise and consult with the Owner and Architect during the performance of its Construction Phase Services. The Construction Manager shall have authority to act on behalf of the Owner only to the extent provided in this Agreement. The Construction Manager shall not have control over, charge of, or responsibility for the construction means, methods, techniques, sequences or procedures, or for safety precautions and programs in connection with the Work of each of the Contractors, since these are solely the Contractor’s rights and responsibilities under the Contract Documents. The Construction Manager shall not be responsible for a Contractor’s failure to perform the Work in accordance with the requirements of the Contract Documents.  The Construction Manager shall be responsible for the Construction Manager’s negligent acts or omissions, but shall not have control over or charge of, and shall not be responsible for, acts or omissions of the Contractors, Subcontractors, or their agents or employees, or any other persons or any other persons as entities preforming portions of the Work^[4].

As is clear from the excerpts above, each subsection was specifically drafted to limit the Construction Manager’s actual and apparent authority over the project work and the workers therein.

The Construction-Manager-as-Constructor Agreement (including the incorporated General Conditions), by contrast, is a significantly more comprehensive agreement and delves into active work on the project and additional authority for the Construction Manager at the worksite.  In that circumstance, the Construction-Manager-as-Constructor is brought on in the preconstruction phase to provide collaboration and input from the very beginning of the project up to construction, and also provides actual construction work, either solely or in conjunction with other subcontractors.  

In contrast to the above language, the General Conditions of IAI Document A133–2019 provide the following:

§ 3.3.1  The Contractor shall supervise and direct the Work, using the Contractor’s best skill and attention.  The Contractor shall be solely responsible for, and have control over, construction means, methods, techniques, sequences, and procedures, and for coordinating all portions of the Work under the Contract. … If the Contractor determines that such means, methods, techniques, sequences or procedures may not be safe, the Contractor shall give timely notice to the Owner and Architect, and shall propose alternative means, methods, techniques, sequences, or procedures. ...

§ 3.3.2 The Contractor shall be responsible to the Owner for acts and omissions of the Contractor’s employees, Subcontractors and their agents and employees, and other persons or entities performing portions of the Work for, or on behalf of, the Contractor or any of its Subcontractors.

§ 3.3.3 The Contractor shall be responsible for inspection of portions of Work already performed to determine that such portions are in proper condition to receive subsequent Work^[5].

As is clear from the language of these two contracts, it is critical that Construction Managers know and understand their scope of work pursuant to any given contract. 

Contractual language alone, however, is not the be-all and end-all.  As we learned in Walls, how a party titles itself in the contract is secondary to how that party actually conducts itself on the job.  So, the next critical step to any analysis is a review of the actual work the Construction Manager has undertaken at the worksite: Has the Construction Manager been delegated specific authority over the work itself?  Does it have power over safety practice and procedures?  Does it have oversight authority?  Is it frequently on-site?  Does it have the power to control specific activities on the project?  Does it have authority to stop work (and under what circumstances)?  Does it have authority to control the means and methods of how the work is undertaken?  

If the answers to some or all of these questions are in the affirmative, a Construction Manager may be at significant risk of assuming the non-delegable duties of owners and contractors and thereby risking exposure to Labor Law liability. 

As with most things is life, the devil is in the details.  Evaluating whether a Construction Manager is subject to the Labor Law can be complicated and requires consideration of the relevant facts on a case-by-case basis.  But this is what the H&F Labor Law team does every day.  If you have questions about your potential exposure, or you find yourself in a “situation,” send us an email or give us a call.