Document 2NJ8L2RDdd1jJ4NYj4Q6DB9y5

PLAINTIFF'S EXHIBIT 1 DUP-2416 maMac**** E. 1. ou Pont de Nemours 5 Company Wilmington. Delaware 19898 EMPLOYEE RELATION* DEPARTMENT CC: Miller, Eng* Gorman, M&L Hatrh, ERD June 27, 1985 TO: PLANT MANAGERS AND SUPERINTENDENTS PLANT SAFETY AND FIRE PROTECTION SUPERVISORS MANUFACTURING COMMITTEE ENVIRONMENTAL QUALITY COMMITTEE CONTRACTOR SAFETY We thought the attached which will soon be presented by R. A. Harrington, Legal Department, to the Aaericen Ber Association would be of interest. It clearly presents the reasons for and legal probleaa connected with fcy of independent contractor* on our alee*. SAFETY AND OCCUPATIONAL HEALTH DIVISION JGP:nig,14-51 Attechaenc ^John G. Page, Jr,, Director ' DU? 09J-0789 CTTCO Tm I mo S fQ iC^TCH LivtHC TMAOuC h CH*M*TJr Du 029289 INDEPENDENT CONTRACTORS ASP SAFETY I. INTRODUCTION Today a* American industry is striving to be more competitive in world markets, tne focus of attention is on streamlining operations and reducing costs. One strategy frequently considered is increased use of independent contractors to reduce fixed payroll costs, particularly in the areas of construction and maintenance. As is often the case, however, tne effort to solve one problem spawns others. One question raised anytime independent contractors are used is the role, if any, that the employer should play in the contractor's safety program. Responsible employers today place a high priority on the safety of tneir employees, recognizing that a strong safety effort is both morally right and good business as well. Than same employers are left in a quandry, however, when it comes to the safety practices of contractors on their sites. It runs contrary to the employer's safety efforts to have contractor employees on site -- sometimes side by side with their own employees -- operating under different and typically laxer safety standards. Companies with a genuine humanitarian concern for the safety of their employees find it difficult to understand why they should be less concerned about contractor employees doing similar work. Obviously, employers must warn contractors about latent hazards on their sites and must take DUP 0910790 0v, -2- steps to be sure that the contractor employees don't pose a hazard to the plant or its own personnel, but snould they do more? Most businessmen have been counseled Cor years, that tney cannot and should not involve themselves in the safety practices of tnelr contractors. There are grave legal risks, tney are told. The primary concern is coemployment. They have oeen told that an employer actively involved in its contractor's safety program risks the possibility that the contractor's employees will be deemed to be its own. The basic test for coemployment is the degree to which the principal controls the day-to-day activities (as opposed to the results) of the contractor and its employees.1. The greater the degree of control, the greater risk of coemployment. Control over such matters as work methods, working conditions, hiring and firing, wages and benefits, hours, discipline and even safety may be considered.2 ' The impact of a finding that contractor amployees are, in law, employees of the principal can be far-reaching. In addition to rendering the principal liable for the actions of 3 tnose employees under respondent superior, there are potential labor and tax implications. For example, under the National Labor Relations Act, a labor union may be able to treat the principal and contractor as one, picketing the principal's facilitits or embroiling it in an organizational DUP U910791 Du 029291 4 effort. 3 The principal could also be obligated to treat them as its own employees under such statutes as the Equal Employment Opportunity Act of 1964,5 the Fair Labor Standards Act, state minimum wage laws, ^ tne Federal Insurance Contributions Act, the Federal Unemployment Tax Act, and the Occupational Safety and Health Act of 1970.^ Those who ace deemed the principal's employees might also be eligible for benefits the principal offers its own employees. Failure to include them in company benefit plans could jeopardize their tax qualified status. On the other hand, the costs of an unsafe contractor provide strong incentive for involvement in contractor safety. One potential cost is civil liability for work site injuries. In theory the employer is not liable for the contractor's neqlieenee. Although that daeccin* or nonliability was ones tne general rule,12 today it ia riddled with exceptions so numerous tnat it "can now be said to be 'general' only in the sense that it is applied where no good reason is found for departing from it."^ Indeed, as one commentator has stateds "it would be proper to sey that the rule is now primarily important as a preamble to the cetalog of its exceptions. Liability extends both to employees of the contractor and to third parties, but the primary exposure, especially with construction contractors, is for injurias to the contractor's DUP 0910792 DU 029292 4- employees. Because contractor employees are normally barred by workers' compensation statutes from suing their own employer for workplace injuries, they often look to the principal as the most convenient deep pocket. The theories under whicn a contractor employee or a tmrd party may nold tne principal responsible overlap and olend together.^ They can, however, be roughly categorized. A few of these ma^or categories are enough to illustrate the potential for principal liability from a contractor's failure to exercise due care. One common theory of liability is the "peculiar risk" or "inherently dangerous" doctrine, embodied in Sections 416 and 427 of the Restatement (Second) of Torts.16 under this doctrine, the principal may be liable if: (1) the contractor is engaged in an activity that is likely to create a peculiar risk of pnysical harm or involves a special innerent danger; (2) the danger or risk is foreseeable at the time the contract is entered into; (3) the contractor fails to guard against the danger or risk; and (4) this failure on the part of the contractor results in harm to an employee or some other third party.1' Tne duty to guard against the "peculiar risk" is considered nondelegable. 1 ft Ho direct negligence on the part of the principal need be shown. 19 Instead, the negli.gence of the contractor in failing to take the necessary precautions is DU 029293 DUP 0910793 imputed to tne employer.20 5 This doctrine applies irrespective of the degree of control exercised by the princi pal, 21 or any contractual provisions making the contractor responsible for necessary precautions.22 Courts have been rather expansive in applying the peculiar risk doctrine. What is a "peculiar risk" is very much in the eye of the beholder. For example, a general contractor was held liable for injuries sustained by a subcontractor's employee during the loading of concrete girders onto barges, where the subcontractor failed to take proper precautions to assure that a crane was not overloaded. The loading of concrete girders by crane was considered an inherently dangerous activity. Similarly, recovery was permitted against the principal where a contractor's employee was killed wnen an unshored trench collapsed. According to the court, trench digging was an activity involving a peculiar risk of harm unless special precautions, such as bracing or shoring, were taken. 24 Damages were also assessed against the employer for injuries sustained by a contractor's employee when, as a result of the contractor's failure to adequately support a welding buggy, the employee fell while installing an oil tank.2^ In still another case, a dump truck driver, the employee of a construction contractor, was permitted to recover against the principal -- the State of California -- for DuP 091U79 DU 029294 6 injuries incurred when a fellow employee on the construction site backed his vehicle into plaintiff. The contractor had failed to provide for flagmen to direct the trucks, which were required to back down a road for approximately a half block. Visibility was limited, and it was difficult to hear the back-up sirens above the construction noise. 26 In a final example, an employer was held liable for property damage to a third party from a fire caused by the contractor's failure to take proper precautions while using electric cutting torches to remove pi.pes. 27 Several states do limit the principal's liability under this doctrine to third parties, refusing to permit suit by the contractor's employees. 28 These courts reason that the primacy duty to protect contractor employees from the "peculiar risks" of their own work is with the immediate employer - the contractor - and not with the principal. Another theory often used to implicate the principal for the negligence of the contractor is the "statutory" or "regulatory" duty doctrine, described in the Restatement (Second) of Torts, Section 424.To break this theory into its most basic components: (1) tnere must be a statute or an administrative regulation which imposes a duty to take certain precautions for the safety of others when doing specified work; (2) the contractor must have failed to take the precautions provided for by the statute; and 0u9 091G-79S DU 029295 7 (3) the failure to take such precautions must result in harm to a party for whose protection the statute or regulation exists.30 As with the "peculiar risk" doctrine, the employer is held responsible for the contractor's failure to take the legislatively or administratively mandated precautions because these duties are considered nondelegable.31 This principle has been employed, for example, in holding a general contractor liable for injuries sustained when cement blocks, which were stacked by the subcontractor to a height exceeding that permitted by the city building code, fell on a third party; 32 in asserting liability against an employer for the negligence of its contractor in failing to properly illuminate and barricade trenches as required by statute;33 and, in imposing liability upon an owner where the contractor installed a concrete porch in violation of the city building code, resulting in the collapse of the porch to the injury of third parties. 34 In another case, a court found a trucking company liable for the death of a third party resulting from a fire caused by a gas station attendant's failure to comply with the procedure proscribed by an Interstate Commerce Commission regulation for filling fuel tanks.35 A few courts refuse to permit employees of the contractor to recover under this theory.36 A third situation in which the employer may be held accountable for the torts of its contractor occurs when the DU 029296 DuP 0910796 -8employer hires an incompetent agent. Tne Restatement (Second) of Torts discusses the "unqualified contractor" or "negligent hiring" doctrine, as this theory of liability is sometimes termed, in Section 411.37 To rely on this theory, a plaintiff must establish that: (1) the independent contractor was careless, reckless or incompetent; (2) tne principal knew, or by the exercise of reasonable diligence could have ascertained, that the contractor possessed those traits; (3) those traits gave rise to plaintiff's injury.38 In short, the employer will be held accountable for tne tortious conduct of its contractor where the employer was negligent in hiring an incompetent contractor, and where such negligence can be proximatcly traced to the injury.39 Problems can occur when the principal hires a contractor of a young age,40 one witn limited experience in or training in the type of work to be performed,4^ or one with a poor performance record or unfavorable reputation.42 In one case, the court sustained a cause of action against a manufacturer for injuries allegedly caused by the negligent driving of its distributor, where it was asserted that the distributor had a poor driving record.43 In another, liability was imposed on a housemoving company for tne deeth of its subcontractor's employee, where the company knew or should have known of the subcontractor's unsuitabla method of tree reaovel, and the use of these improper procedures OOP 0910797 jyu 029297 9 resulted in the employee's death.44 Similarly, recovery was permitted for property damage resulting from an agent's negligence m preparing, supervising and setting off a dynamite blast. Althougn the contractor was an experienced blaster, it had never taxen part in tne type of blast attempted 4S tnere. Again, some jurisdictions refuse to extend this theory to provide a remedy for the contractor's employees.46 Of course, in all employer-independent contractor relationships, an employer remains responsible for its own negligence, which can be manifested in numerous ways. The principal may negligently order an activity that it knew or should have known involved an unreasonable risk of injury. It may also breach its duty to maintain land or chattels in a reasonably safe condition by failing to inspect the work of the contractor after its completion.4 Negligent exercise of any control which the principal has retained over work otherwise entrusted to tne contractor can lead to liability.49 Violation of safety regulations or legislation, such as OSHA, can also result in tne employer being found negligent under a per se negligence theory,60 or evidence of negligence theory.53 Countless other examples of negligence theories exist,63 but perhaps the most common theory rests on the principal's duty as a landowner to provide a safe work place free froa latent defects.63 It is an unusual accident on a DUP 0910798 DU 029298 10 ma]or industrial or construction site that cannot arguably attributed to some latent premises defects, e.g., oil or water on cne ground, insufficiently protected electrical equipment, insufficient guard rails or otnes height protection, etc. As the foregoing discussion illustrates, the threat of liability exposure in the employer-independent contractor context is a real one. An indemnity or hold-harmless clause can provide some protection. It can shift back to the contractor the liability for personal injury or property damage caused by its negligence, 5 4 and may even provide that the principal is relieved- of liability stemming from its own negligent act.55 There are limitations, however. Host important is the ability to obtain such provisions. Many contractors are unwilling to indemnify the principal against its awn negligence. And courts generally will not construe a hold-harmless clause to include indemnification against losses from tne indemnitee's own negligence unless that intantion is clearly and unequivocably expressed.55 Some states have declared provisions of this type void against public policy.5*7 Without a hold harmless agreement that includes the employer's own negligence, tne risk of litigation and eventual liability is still very real. Whereas indemnity agreements can provide some protection against suits by both third parties and employees, the statutory employer defense may protect only against actions UUP 0910799 DU 029299 il by employees. Tne pnrase "statutory employer* is a term of art under state workers' compensation statutes and case law. in most states, those classified as statutory employers en}oy an immunity from civil suit brougnt by persons (typically contractor employees) deemed to oe its employees.66 Sucn employees are relegated to the remedy provided under that CQ state's worKers' compensation laws. Unfortunately the price for ootaining tnis protection may be unacceptably high. Althougn the precise criteria for the statutory employer defense vary from state to state, three basic approaches nave evolved. The first, and most common test, is the common law "control" test.60 Under this test, one looks to the degree of control that the principal exercises over the activities of the contractor and its employees, in terms of the manner in wtiicn the work ia performed end the details of chi work. The greater the degree of control, the greater chance tne principal will be deemed a statutory employer.61* A second test, and one which has been gaining in adnerence, is the "nature of the work" test.62 Under this test, the court examines the nature of the contractor's work in relation to the principal's regular business. Where the type activity contracted is customarily done by employees in the principal's Industry, or where the principal itself commonly performs this work using its own employees, ehs principal is deemed a statutory employer, and the contractor's employees are limited to workers' compensation remedies.60 DUP 0910800 DU 029300 12 Finally, a few jurisdictions have adopted a third variation, which focuses on whetner the principal has provided, or nas arranged for the provision of, workers' compensation insurance for the contractor's employees. Where it nas, the principal is shielded from common law tort liaoility.* There are certainly situations where a principal can take refjge behind the statutory employer doctrine, but there may be significant downsides. The employee may find itself with worker's compensation liability for the contractor's employees wnere it~would have had no civil liability.6^ More importantly, however, m states where the test is common law "control", the principal cannot take advantage of this defense without being squarely confronted by the coemployment proolems because the test for both is the same. Thus the statutory employer defense is an unreliable planning tool for a company witn nationwide operations. Moreover, personal injury or property damage awards are not the only price an employer will pay for an unsafe contractor. Accidents result in a loss of time and money because of the need for investigation and reporting and the training of replacement personnel. It is often necessary to pay the injured and otnec workers for time not worked. Additional costs are incurred for repair and cleanup, as well as equipment and property damage. Worker's compensation and DUP C91C8Q1 DU 029301 13 liability insurance costs -- ultimately borne oy the principal ~" ace * direct reflection of safety performance. Adverse publicity and labor relations effects may also follow any significant accident. A Business Roundtable task force has estimated that accidents in industrial, utility and commercial construction cost S3.9 billion dollars os 6.5% of the $137 billion spent annually by users of those services.6"7 Surprisingly, the bulk of tnat amount is not for direct costs such as insurance premiums, workers' compensation benefits, litigation costs or liability. It represents such indirect costs as reduced . productivity, delsys in project schedules, administrative time for investigations and reports, training of replacament personnel, wages paid for non-working tints, and damaga to equipment and facility. The ratio of indirect to direct costs varies from 4:1 to 17:1 depending on the nature and severity of the accident. 6 d The task force concluded that as much as $2.75 billion dollars nst -- 8% of dirsct construction labor payroll - could realistically be saved each year by active eg safety programs. Few companies aren't interested in saving 8% of contractor labor costs, and nsithsr indemnity agreements nor the statutory employer defense will accomplish that goal. In sum, for both moral and economic reasons, safe completion of the contractor's task should be a matter of major importance to the employer. What then can a corporation do DUP 0910802 DU 029302 14 witn potential civil liability and very teal cost penalties on one side and the sword of coemployment hanging over its head if it goes too far in controlling contractor activity? There are steps that can be tanen if the principal will plan carefully and act with discipline. The Key is to Keep in perspective the impact of safety activity on the coemployment determination. The principal's control over other facets of the contractor's activities -- activities more central to the employment relationship such as wages and hours, hiring, worK methods, etc. -- is far more likely to be determinative. If the principal actively controls other aspects of the contractor's . work, it has little to lose by being involed in safety as well. It is already at risk, and a carefully designed safety program will add little to that risk. If, on the other hand, the employer-contractor relationship is otherwise clean, it is unlikely that a coemployment finding will be based solely on an active safety role. The strategy of a sound, disciplined safety program should oe to use the contracting process itself to secure the desired level of safety performance, with appropriate auditing and follow-up through contractor supervision. If these phases are handled properly, it should not be necessary to comanage" on the job site. ' First, the principal should make safety a prime consideration in the contractor selection process. Safety PUP 09IC8Q3 Dv 029303 15 requirements should oe a pact of bid packages submitted to prospective contractors so that safety-related costs are included in the Dids. Otherwise, tne contractor selected is not lively to oe cooperative wnen asked to take steps necessary for safe performance during the life of the contract. The contract should set safety performance standards and appropriate health and safety rules. It should include an indemnification provision if possible. It should also include tne right to terminate work for failure to comply with safety requirements. The employer should evaluate the safety records of prospective bidders, considering quality of safety performance just as it would consider the quality of work. There are two objective standards the principal can use to measure a contractor's likely safety performance. One is the experience modification cate, commonly referred to as tha EAR. This figure is computed by the centractoc's compensation carrier based on the firm's workers' compensation loss record end is used to determine its premium. The more infrequent and less severe the contractor's accidents, the lower the rate will be. The second indicator is the OSHA recordable incidence rate. Under the Occupational Safety and Health Act (1970), employers are required to record and report information regarding injuries on the Occupational injuries and Illness Annual Survey, Form No. 200. This form reflects figures regarding the numbers of fatalities, injuries and illnesses, with or without DU? 0910904 029304 - 16 lost work days, and can ae used to calculate an incidence cate foe any of the items listed on the form oy tne following fo cmula t of incidents X 230,300 , Incidence I of noucs worked Race # of incidents of incidents listed on Form No. 200 foe a specific category of events # of hours worked * # of hours a contractor's employees worked over the annual period covered by the Form No. 200 utilized The principal should obtain the EKR figure and copies (or summaries) of recent QSHA Form 200's from each contractor at the time of oidding and should make a comparison of the various candidate's figures. Both items should be readily available. Employers are requited to keep the OSHA forms for 5 years. Information regarding average industry figures for EHRs and osha incidence rates are available through the insurance industry and the Bureau of Labor Statistics respectively. There are, however, three different types of EMR, and they are not comparable. Comparisons snould always be made to EMRs of the same type as the bidders. The principal should also obtain information from eacn prospective contractor regarding its safety practices and attituda in general. Managerial accountability through the first line supervisors, the existence of written safety programs, the frequency of safety inspections end safety DUP 0910805 DU 029305 17 meetings, and tne practice of regular orientation of new workers and foremen are among the many indicia to be considered. Once the contractor is on the site the principal should act through contractor supervision to obtain the agreed safety performance. Tne contractor should designate a responsible supervisor as job safety coordinator. There should oe regular safety meetings with the contractor. A permit system for hazardous activities should be required. The principal should monitor contractor activities for safety compliance, require that all accidents be Reported immediately and that full investigation be conducted with the principal's participation, require the maintenance of accident statistics, and attend orientation meetings and training sessions regarding plant hazards and safety requirements. In effect, the principal should treat safety like any other job specification. If the contractor is constructing a building, the principal will certainly watch to see that it is built according to specifications. If not, the principal will advise contractor management that it is not performing consistently with the contract and take more serious steps if necessary. Similarly, the contract should require a level of safety performance. The principal should ascertain that this provision of tne contract is being fulfilled as well and should bring it to the attention of the contractor's management if it is not. Except in imminent danger situations, the principal must avoid dealing directly with contractor's employees. DUP 0910806 DU 029306 18 The approach described above has been used for many years by some companies. It was endorsed by the Business Roundtable task force, and the task force report is an excellent source of more detailed information on how to construct a positive contractor safety program.70 This approach is not, however, without risk. In addition to coemployment concerns, an employer that specifies and monitors the contractor's safety performance must be concerned with the "negligent supervision", "retention of control", or "assumption of- duty" doctrine, as it is variously termed. Set forth in the Restatement (Second) of Torts, Section 414, this doctrine provides for the imposition of liability upon the employer, where it is negligent in the exercise of its control retained with respect to work otherwise delegated to an independent contractor.7^ Thus, where an employer controls, or has the authority to control, the contractor's safety practices, it is charged with a duty to use due care in the exercise of that control.7^" Both contractual provisions and the extent of actual control are examined to determine the scope of this duty.7^ In one case, for example, a general contractor was found liable for injury to its subcontractor's employee, where the general failed to install, or provide for the installation of, safety nets under the construction area. The employee fell twenty-nine feet, sustaining serious injury. Although the DU 029307 DUP 0910807 19 subcontractor had responsibility for insuring worksite safety under its agreement with the general, the latter retained coordinating and supervising authority over safety. The general contractor had, in fact, conducted safety meetings on a weekly basis, but it had never taken any action regarding safety nets. The court found that the general contractor had failed to adequately exercise its safety authority by not providing for nets.73 If one thing is clear, however, it is that the principal is at risk of incurring significant costs every time it substitutes a contractor for its own employee. A professionally run safety program of the type described above is worth the incremental legal risks it adds if it results in an improved safety record, fewer accidents and, therefore, fewer occasions for lawyers to apply the various theories of liability discussed above. DU 029308 DUP 0910808 FOOTNOTES 1* See generally, 41 Am. Jur. 2d Independent Contractors Section 5 (1968). 2. For a thorough discussion of factors considered important in determining whether the coemployment concept will be applied, see King v. Southwestern Greyhound Lines, Inc. 169 F.2d 497 (10th Cir.), cert, denied, 335 U.S. 891 (1948). See generally 41 Am. Jur. 2d Independent Contractors Sections 5-23 (1968). 3.- See Nelson v. Shell Oil Co., 396 So.2d 752 (Fla. Dist. Ct. APP*)/ petition denied. 407 So.2d 1104 (Fla. 1981). 4. 29 U.S.C.A. Sections 141 et. seq. (1978 & Am. Supp. 1984). See Lorenz Schneider Co. v. NLRB, 517 F.2d 445 (2nd Cir. 1975) (principal found guilty of an unfair labor practice). 5. 42 U.S.C.A. Sections 2Q00e et seq. (1981 & Cum. Supp. 1984). See Sprides v. Reinhardt, 613 F.2d 826 (D.C. Cir. 1979) (requisite employer-employee relationship established so as to permit allegations of sexual harassment and discrimination-under EEO Act). 6. 29 U.S.C.A. Sections 201 et seq. (1978 & Cum. Supp. 1984). See Sims v. Parke Davis & Co., 334 F. Supp. 774 (E.D. Mich.), aff'd, 453 F.2d 1259 (6th Cir. 1971), cert, denied, (where employer-employee relationship not found, payment of wages below federal minimum is permissible) . DU 029309 DUP 0910809 7. See, e.q.. Mien. Comp, Daws Ann. Sections 408.381 et seq. (1967 i Cum. Supp. 1984-85) See Sims v. Parke Davis i Co., 334 P. Supp. 774 (E.D. Mich.), aff*d. , 453 F.2d 1259 (6th Cir. 1971), cert, denied, 405 U.S. 978 (1972) (payment of wages below those required Dy state law permissible wnere no employer-employee relationship exists). .8 26 U.S.C.A. Sections 3101 et seq. (1979 fc Cum. Supp. 1984). See Pack v. United States, 434 F. Supp. 232 (.3. Tenn. 1977) (employer found owing in employment taxes where relationship found to be employer-employee, not employer-independent contractor). 9. 26 U.S.C.A. Sections 3301 et seq, (1979 fc Cum. Supp. 1984). See Chase rtfg., Inc. v. United States, 446 F. Supp. 698 (E.D. Mo. 1978) (employer found owinq in employment and withholding taxes where relationship found to be employee, not employer-independent contractor). 10. 29 U.S.C.A. Sections 651 et. seq. (1975 & Cum. Supp. 1984). See Cocnran v. International Harvester Co., 408 F. Supp. 598 (W.D. Ky. 1975). 11. See, e.q.. Burnella vs. Commissioner, 68 T.C. 387 (1977). 12. w. Keeton, D. Dobbs, R. Keeton k D. Owen, Prosser and Keeton on The Law of Torts Section 71 at 509-510 (1984) [hereinafter cited as Prosser t Keetonl. 13. Restatement (Second) of Torts Section 409 comment b (1965). DUP 0910810 DU 029310 14. Pacific Fir* ins. oo < Kenny Boiler & Mfg. Co. i 201 Minn. 500, 503, 277 N.W. 226, 228 (1937). 15. Prosser fc Keeton. supra at 510. 16. Restatemtnt (Second) of Torts Sections 416, 427 (1965). Section 416 provides: Wock Dangerous in Absence of Special Precautions One wno employes an independent contractor to do worn wmcn the employer should recognise as likely to create during its progress a peculiar risk o physical harm to others unless special precautions are taken, is suoject to liability for physical narm caused to them by the failure of tne contractor to exercise reasonable care to take such precautions even though the employer has provided for such precautions in the contract or otherwise. Id. at Section 416. Section 427 states: Negligence as to Danger Inherent in the work One who employs an independent contractor to do work involving a special danger to others which the employer knows or has reason to know to be inherent in or normal to the work, or which he contemplates or has reason to contemplate wnen making the contaot, is subject to liaollity for physical harm caused to such others by the contractor's failure to take reasonable precautions against such danger. Id. at Section 427. ' 17. Id. at Sections 416, 427. 18. Southwestern Bell Tel. Co. v. Rawlings Mfg. Co., 359 S.W.2d 393, 398 (Mo. Ct. App. 1962) 19. MOSS v. Swann Oil, Inc., 423 F. Supp. 1280, 1283 (E.O. Pa. 1976), aft'd without opinion, Ds Moss v. Swann Oil, Inc. 566 F.2d 1160 (3d Cir. 1977). DUP 0910811 DU 029311 20. Sevit, Inc. V. Western Stoc* Center, Inc. 38 Colo. App. 401, 404, 559 P.2d 1118, mo (1976), afg'd, western stoc< Center, Inc. v. Sevit, Inc., 195 Colo. 372, 573 P.2d 1045 (1978) . 21. Castro v. State, 114 Cal. App. 3d 503, 517-518, 170 Cal. Rptr. 734, 742-43 (Cal. Ct. App. 1981); Heath v. Hutn Engineers, Inc., 279 Pa. Soper. 90, 93, 420 A.2d 758, 760 (1980). 22. Giarratano v. Weitz Co., 259 Iowa 1292, 1307-08, 147 N.w.2d 824, 833-34 (1967) j Restatement (Second) of Torts Section 416 and comment C (1965). 23. La Count v. Hensel Phelps Constr. Co., 79 Cal. App. 3d 754, . 145 Cal. Rptr. 244 (Cal. Ct. App. 1978). 24. Heath v. Huth Engineers, Inc ., 279 Pa. Super. 90, 420 A.2d 758 (1980). 25. Moss v. Swann Oil, Inc. , 423 P. Supp. 1280 (E.o. Pa. 1976) aff'd without opinion, De Moss v. Swann Oil, Inc., 566 F.2d 1160 (3d Cic. 1977). 26. Castro v. State, 114 Cal. App. 3d 503, 170 Cal. Rptr. 734 (Cal. Ct. App. 1981). 27. Sevit, Inc. v. Western StocK Center, Inc., 38 Colo. App. 401, 559 P.2d 1118 (1976), afg'd. Western StocK Center, Inc. v. Sevit, Inc. 195 Colo. 372, 578 F.2d 1045 (1978). 28. Conover v. Northern States Power Co., 313 N.W. 2d 397, 404 (Minn. 1981); Donch v. Delta Inspection Services Inc., 165 N.J. Super. 567, 575, 398 A.2d 92S, 929 (1979). DUP 0910812 DU 029312 29* Restatement (Second) of Torts Section 424 (1965). This provision states: Precautions Required By Statute or Regulation One who by statute or by administrative regulation is under a duty to provide specified safeguards or precautions for the safety of others is subject to liability to the otners for whose protection the duty is imposed for harm causes by tne failure of a contractor employed by run to provide such safeguards or precautions. Id. 30. Id. 31. Mastrandrea v. J. Mann, Inc. 128 So.2d 146, 148 (Fla. App.), cert, denied. J. Mann, Inc. v. Mastrandrea, 133 So.2d 320 (Fla. 1961); Jack Cooper Transport Co. v. Griffin, 356 P.2d 748, 754 (Okie. 1959) 32. Mastrandrea v. J. Mann, Inc., 128 So.2d 146 (Fla. App.), cert, denied. J. Mann, Inc. v. Mastrandrea, 133 So.2d 320 (Fla. 1961). 33. Oixon v. Simpson, 74 Nev. 358, 332 P.2d 656 (1958). 34. Gardenvillage Realty Corp. v. Russo, 34 Md. App. 25, 366 A.2d 101 (1976). 35. Jack Cooper Transport Co. v. Griffin, 356 P.2d 748 (Okla. 1959) . 36. Conover v. Northern States Power Co., 313 N.W.2d 397, 407 (Minn. 1981). 37. Restatement (Second) of Torts Section 411 (1965). Section 411 provides: Negligence in Selection of Contractor OUP 0910813 DU 029313 An employee is subject to liability foe physical harm to third persons caused by ms failure to exercise * reasonable care to employ a competent and careful contractor (a) to do wots which will involve a risk of physical harm unless it is sxillfully and carefully done, or (0) to perform any duty which tne employer owes to third persons. Id. 36. See id.; Annot., 76 A.L.R.3d 910, 915-919 (1977). 39. Id. 40. Ellis S Lewis v. Warner, 180 Ark. 53, 20 S.W.2d 320 (1929). 41. Watsontown Brick Co. v. Hercules Powder Co., 265 F. Supp. 26B (M.D. Pa.), affd., 387 F.2d 99 (3rd Cir. 1967). 42. Gettemy v. Star House Hovers, Inc., 225 Cal, App. 2d 636, 37 Cal. Rptr. 441 (Cal. Ct. App. 1964). 43. Gomien v. Waar-Evec Aluminum, Inc., 50 111.2d 19, 276 N..2d 336 (1971). 44. Gettamy v. Star House Hovers, Inc,, 225 Cal, App. 2d 636, 37 Cal. Rptr 441 (Cal. Ct. App. 1964). 45. Watsontown Brick Co. v. Hercules Powder Co,, 265 F. Supp. 268 (H.D. Ps.), aff'd., 387 r.2d 99 (3rd Cir. 1967), 4o. Hess v. Upper Mississippi Towing Corp., 559 F.2d 1030, 1033 (5th Cir.), reh*g dsnied, Hess v. upper Mississippi Towing Corp., (5th Cir. 1977), cert, denied, Hess v. upper Mississippi Towing Corp., 435 U.S. 924 (1978). 47. See, e.g., Moloso v. State, 644 P.2d 205 (Alaska 1982). See also. Restatement (Second) of Torts Section 410 (1965), which provides! OVP o910814 DU 029314 Contractor's Conduct in Obedience to Employer's Directions The employer of an independent contractor is subject to the same liability for physical harm caused by an act or omission committed by the contractor pursuant to orders or directions negligently given by the employer, as though the act or omission were that of the employer himself. 43. See, e.q.. Schwartz v. Zulka, 70 N.J. Super. 256, 175 A.2d 465 (1961) , modified. Schwartz v. North Jersey Bldg. Contractors Corp., 38 N.J. 9, 182 A.2d 865 (1962). See also, Restatement (Second) of Torts Section 412 (1965), which states: Failure to Inspect Work of Contractor After Completion One who is under a duty to exercise reasonable care to maintain land or chattels in sucn condition as not to involve unreasonable risk of bodily harm to others and who entrusts the work of repair and maintenance to an independent contractor, is subject to liability for bodily harm caused to them oy nis failure to exercise such care as the circumstances may reasonably require him to exercise to ascertain whether the land or chattel is in reasonable safe condition after the contractor's work is completed. 49. Sea. e.o. . Kelley v. Howard S. Wrignt Construction Co. 90 Wash.2d 323, 582 P.2d 500 (1978). See also. Restatement (Second) of Torts Section 414 (1965), which provides: Negligence in Exercising Control Retained by Employer One who entrusts work to an independent contractor, but wno retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise ceasonaole care, whicn is caused by his failure to exercise his control with reasonable care. 50. See, e.q.. Teal v. S. I. du Pont de Nemours a Co., 729 F.2d 799 (6th Cir. 1984}. 51. See, e.g.. Kmgnt v. Burns, Kirkley a Williams Constr. Co., 331# So.2d 651 (Ala. 1976). DUP 0910015 Dv 029315 52. See, e.q. Restatement (Second) of Torts Section 414A < 196S) ("Duty of Possessor of -and to Prevent Activities and Conditions Dangerous To Those Outside of Land1'); id.; ("Duty to Supervise Equipment and Metnods of Contractors or Concessionaires on Land Held Open to Public"). 53. See, e.g., Jackson v. Tennessee Valley Authority, 413 F.Supp. 1050 (M.D. Tenn. 1976). 54. See, e.g., united States v. Seckinger, 397 U.S. 203, reh'a denied, 397 U.S. 1031 (1970); De Tienne v. S. N. Nielson Co., 45 111. App. 2d 231, 195 N.E.2d 240 (1963). 55. See, e.g., Oregon Transfer Co. v, Tyee Construction Co., 188 F. Supp. 647 (D. Or. 1960); Sellers v. Owens-Illinois Class Co., 156 W. Va. 87, 191 S..2d 166 (W. Va. 1972). 56. See, e.g.. Paul Hardeman, Inc. v. J. X. Hass Co., 246 Ark. 559, 439 S.W. 2d 281 (1969); Wrobel v. Trapani, 129 111. App. 2d 306, 264 N.E.24 240 (1970). 57. See, e.g.. Champagne v. W. E. O'Neill Constr. Co., 77 111. App. 3d 136, 32 111. Dec. 609, 395 N.E.2d 990 (1979).. 58. See, e.g.. Pearman v. United States, 528 F. Supp. 598, 600 (W.D. Va. 1981). 59. Id. 60. See lc, A. Larson, The Law of Workmen's Compensation Section 43.30, at 8-8 (1982) ("the right to control tne details o the work is the primary test"). DUP 3910815 DU 029316 61. See, c.g.. Livingston v. Citizen's Utility, Inc. 107 Aeiz. 62, 481 P.2d 855 (1971); Weaver v. Shell Oil Co., 91 Nev. 324, 535 P.2d 787 (1975); Brooks v. Chemical Leaman Tank Lines, Inc., 71 A.0.2d 405, 422 N..S.2d 695 (1979). 62. See 1C, A. Larson, The Law of Workmen's Compensation Section 43.54 (discussing the "[tlrend toward nature-of-work test"). 63. dee, c.g., Darville v. Texaco, Inc., 674 F.2d 443 (5th Cir.), cert, denied. 459 U.S. 969 (1982), later proceeding. 442 So.2d 1246 (La. Ct. App. 1983), rev'd, 447 So.2d 473 (La.), reconsideration denied, 448 So.2d 1302 (La. 19B4); Pearman v. United States, 528 F. Supp. 598 (W.D. Va. 1981); Begnaud v. Pedestal Crane, Inc., 408 So.2d 24 (La. Ct. App. ' 1981). 64. See Husiek v. Puerto Rico Telephone Co., 357 F.2d 603 (1st Cic. 1966). C. Powell v. Independent Consts. Co., 396 So.2d 725 (Fla. Dist. Ct. App.). petition denied. 402 So.2d 612 (Fla. 1981); Haygood v. Home Tranepoctation Company, Inc., 149 Ga. App. 229, 253 S.E.2d 805, aft*d.. 244 Ga. 165, 229 S.E. 2d 429 (1979). 65. Sae, e.g.. Alexander v. Industrial Cosun'n, 72 111. 2d 444, 21 111. Dec. 342, 381 M.E.2d 669 (1978). ' 66. See generally. The Business Roundtable, Improving Safety Performance - A Construction Industry Cost Effectiveness Project Report (Report A-3, January 1982). PUP 0910817 DU 029317 (availaole from The business Roundtable, 200 Par* Avenue Naw York, New Yor* 10166, phone: (215) 682-6370) [hereinafter cited as Safety Reoortl 67. Id. at 3. 63. Id. at 11. 69. Id. at 3. 70. Id. 71. Restatement (Second)of Torts Section 414 (1965) 414 provides: Section Negligence in Exercising Control Retained by Employer ' One who entrusts work to an independent contractor, but wno retains tne control of any part of the work is subject to liability for pnysieal harm to others for whose safety the employer owes a duty to exercise reasonable care, whicn is caused by his failure to exercise his control with reasonaole care. Id. . 71. See, e.c.. Moloso v. State, 644 P.2d, 205 (Alaska 1982); Kelley v. Howard S. Wright Constc. Co., 90 Wash. 2d 323, 582 P.2d 500 (1978). ' 72. Moloso v. State, 644 P.2d 205, 211 (Alaska 1982). 73. Kelley v. Howard S. Wright Constr. Co., 90 Wash. 2d 323, 582 P.2d 500 (1978). OOP 0910818 DU 029318