How to Reduce Risk of Citation for Independent Contractor MSHA Violations

Mine operators can be cited by the federal Mine Safety and Health Administration (MSHA) for independent contractors’ violations of the Mine Act and MSHA regulations. Independent contractors perform a multitude of key mine activities like drilling, blasting, and crushing, all of which can expose an operator to risk of “overlapping” citation. Thoughtful, informed management of independent contractors’ activities and protective contract terms can reduce operators’ risk.

This article

• Outlines a mine operator’s responsibilities under the Mine Act concerning independent contractors, and explains the extent of a mine operator’s liability for violations committed by independent contractors; and
• Offers strategies for mine operators to protect against liability for independent contractor MSHA violations.

MSHA Regulates Independent Contractors

Mine operators and their independent contractors are equals under the Mine Act in many respects. The Mine Act subjects every “operator” to regulation by MSHA, and defines “operator” as “any owner, lessee, or other person who operates, controls, or supervises a coal or other mine or any independent contractor performing services or construction at such mine”. (30 USC § 802(d) [emphasis added].)

In other words, the Mine Act defines as an “operator” both mine operators, as well as independent contractors working for those mine operators at a mine. The federal courts have roundly confirmed that both mine operators and independent contractors must comply with the Mine Act and can be cited for violations. (See, e.g., Secretary of Labor v. Twentymile Coal Co. (D.C. Cir. 2006) 456 F.3d 151, 154-155; International Union, United Mine Workers of America v. FMSHRC (D.C. Cir. 1988) 840 F.2d 77, 83; Cyprus Indus. Minerals Co. v. FMSHRC (9th Cir. 1981) 664 F.2d 1116, 1119.)

Mine Operators Are Responsible For Overall Compliance

While the Mine Act affords mine operators and independent contractors equal standing definitionally, the Mine Act and courts continue to hold mine operators (“production-operators” as defined by 30 CFR § 45.2(d)) principally responsible for overall MSHA compliance: “the operators of such mines with the assistance of the miners have the primary responsibility to prevent the existence” of unsafe conditions. (30 USC § 801(e); see Brock v. Cathedral Bluffs Shale Oil Co. (D.C. Cir. 1986) 796 F.2d 533, 535; see also MSHA Program Policy Manual, III.45-1 [“[t]he mine operator’s overall compliance responsibility includes assuring each independent contractor’s compliance with the Act and with MSHA’s standards and regulations”].)

For a violation committed by an independent contractor at a mine, an MSHA inspector can cite: (1) the independent contractor; (2) the mine operator; or (3) both. (See MSHA Program Policy Manual, III.45-1; Secretary of Labor v. Twentymile Coal Co. (D.C. Cir. 2006) 456 F.3d 151, 154-155.) The federal Court of Appeals for the D. C. Circuit reconfirmed in Twentymile Coal Co. that because the Mine Act is a “strict liability” law, meaning that an operator can be held liable even absent a showing of fault, the courts have held that “multiple operators are jointly liable,” and a mine operator may be held “liable without regard to its own fault for violations committed or dangers created by its independent contractor.” (Twentymile Coal Co., 456 F.3d at p. 155; see, e.g., International Union, United Mine Workers of America v. FMSHRC (D.C. Cir. 1988) 840 F.2d 77, 83; Cyprus Indus. Minerals Co. v. FMSHRC (9th Cir. 1981) 664 F.2d 1116, 1119.)

Importantly, MSHA’s decision to cite an operator for an independent contractor violation is not appealable – the operator’s only recourse is to challenge the existence of the violation and/or the proposed penalty amount. (Twentymile Coal Co., 456 F.3d at p. 158.)

MSHA’s Enforcement Policy

MSHA lays out its policy for issuing citations to independent contractors and operators in its Program Policy Manual. Volume III, Part 45, Section III.45-1 provides that, where an independent contractor has violated the Mine Act or regulations, MSHA’s policy is to cite the independent contractor only. MSHA reserves the right, however, to also cite the mine operator where, in MSHA’s discretion, the mine operator bears some level of culpability for the circumstances underlying the citation. The Program Policy Manual includes four criteria to aid an inspector in making this determination.

MSHA will generally issue a citation to both an independent contractor and an operator for the independent contractor’s violation when an inspector concludes that:

1. The operator has contributed to the occurrence of the independent contractor’s violation;
2. The operator has contributed to the continued existence of the independent contractor’s violation;
3. The operator’s miners are exposed to the hazard created by the independent contractor’s violation; or
4. The operator has control over the condition that is in violation.

(Program Policy Manual, III.45-1; see also Independent Contractors: Final Rule, 45 Fed.Reg. 44,494 (1980), p. 44,497; see Brock v. Cathedral Bluffs Shale Oil Co. (DC Circuit 1986) 796 F.2d 533; International Union, United Mine Workers of America v. FMSHRC (DC Circuit 1988) 840 F.2d 77; Speed Mining, Inc., 27 FMSHRC 935, 946 (Dec. 2005) [“a particular criterion is satisfied only if the production Operator’s involvement is in some way ‘significant,’ i.e., it exceeds the minimal level that would be present with regard to virtually every independent contractor violation”].)

These criteria help inform strategies for operators to avoid liability for independent contractor violations.

Strategies To Reduce Risk Of Operator Liability

As a general matter, mine operators can reduce risk of liability by treating independent contractors and their employees as fully separate entities, rather than as quasi-employees – in other words, by maintaining an “arm’s-length” relationship. This overarching rule should be implemented both through on-the-ground practices and protective contract provisions.

On-the-ground practices may include the following:

1. To the extent possible, fence off, tape off, or otherwise separate the independent contractor’s work area. This will (a) help reduce the potential to cause or contribute to an independent contractor violation; (b) help underscore the mine operator’s lack of control over the independent contractor’s activities; and (c) help minimize the risk of exposing miners to hazards created by the independent contractor.
2. Following on item 1 above, prohibit miners from entering the independent contractor work area. This is the best way to minimize risk of exposing miners to hazards created by the independent contractor.
3. Limit inspections and supervision of the independent contractor’s work to evaluating progress and compliance with the work contract. Any further inspection or supervisorial role connotes greater operator control over the independent contractor.
4. Require the independent contractor to be self-sufficient. To the extent possible, mine operators should not allow independent contractors to use operator equipment, tools, restrooms, shop facilities, services (i.e., welders), or other mine operator assets.
5. Maintain a current independent contractor register. 30 CFR § 45.4 requires a mine operator to keep a register that includes the following information for each independent contractor at the mine: (a) the independent contractor’s trade name, business address and business telephone number; (b) a description of the nature of the work to be performed by the independent contractor and where at the mine the work is to be performed; (c) the independent contractor’s MSHA identification number, if any; and (d) the independent contractor’s address of record for service of citations, or other documents. Independent contractors are required to provide this information in writing to mine operators, and mine operators are in turn required to provide this information to an MSHA inspector upon request. (30 CFR § 45.4(a), (b).)
6. Following on item 5 above, require an independent contractor to obtain its own MSHA identification number. The MSHA regulations do not require independent contractors to obtain an MSHA identification number. (See 30 CFR § 45.3; note that the Program Policy Manual requires independent contractors that perform certain functions to obtain an ID number – see Program Policy Manual III, 45.3.) A separate identification number will serve several functions, including forcing the independent contractor into contact with MSHA and alerting MSHA to the independent contractor and easing reporting and recordkeeping requirements for both parties.
7. Conduct limited safety checks on independent contractor equipment. If a mine operator cannot fully separate its miners from an independent contractor work area, the mine operator should conduct safety inspections on only that independent contractor equipment that could present a hazard to the operator’s miners.
8. Ensure independent contractors’ (and operator) compliance with MSHA training requirements. Mine operators must provide and document Site-specific Hazard Awareness Training for all independent contractor employees. (See 30 CFR § 46.12(a)(1); § 48.11.) Mine operators should also require independent contractors to verify compliance with Part 46 and Part 48 training requirements for all their employees, and that the independent contractor will provide required documentation to an inspector if requested to do so.
9. Require independent contractors to provide documentation showing compliance with Part 50 reporting and recordkeeping requirements. Note that MSHA draws a distinction in the Program Policy Manual regarding the extent of reporting required of some independent contractors who perform any of nine specified functions at a mine site versus those that do not. Although the Program Policy Manual represents MSHA enforcement policy, the Mine Act makes no such distinction and MSHA is not bound by the Program Policy Manual. (See, e.g. Sec’y of Labor v. D.H. Blattner & Sons, Inc., 18 FMSHRC 1580, 1586 (Sept. 1996), citing King Knob Coal Co., 3 FMSHRC 1417, 1420 (June 1981); see also Brock v. Cathedral Bluffs Shale Oil Co. (D.C. Cir. 1986) 796 F.2d 533, 538-539.)

Certain contract provisions can reinforce the distinct contractor-contractee relationship between a mine operator and its independent contractors. Of course, on-the-ground practices will be the more compelling factor for an MSHA inspector, but a contract can be useful additional evidence, and, perhaps more importantly, will aid the independent contractor in understanding its responsibilities with respect to MSHA compliance.

Operator-independent contractor agreements may include the following provisions:

1. Require the independent contractor to independently comply with the Mine Act and all MSHA regulations. This provision underscores that the mine operator will not assist the independent contractor except where required.
2. Require the independent contractor to verify that it will produce, file, and maintain all required reports and documentation. These will include training plans, if applicable, training records, and quarterly reports, as discussed above.
3. Require the independent contractor to indemnify the mine operator against MSHA enforcement directed at conditions attributable solely to the independent contractor. As noted, if MSHA cites an operator for an independent contractor violation, the operator’s only recourse is to challenge the existence of the alleged violation or the amount of penalties assessed. The independent contractor should indemnify the operator for the reasonable attorney’s fees and costs to challenge a citation or penalty assessment, as well as for any penalty finally assessed.

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