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It is a scenario that arises every day – a subcontractor’s employee injures themselves on a job site and is out of work for an extended period of time. Under negligence principles, who had the duty to ensure employee safety and can thus be potentially liable for the employee’s injuries and damages, including perhaps decades of future lost earnings?
The obvious answer is the subcontractor, but in most instances a state workers’ compensation act will bar the employee from pursuing a cause of action directly against their employer. Instead, an employee seeking recovery beyond workers’ compensation benefits directs their claim against other entities involved in the construction project, such as the property owner or general contractor. The employee’s first hurdle in establishing a claim against these entities is whether a “duty of care” is owed.
Relevant law
Whether a duty of care is owed in connection with construction site accidents is not as straightforward as it may seem. On the one hand, the general common law principle is that “the employer of an independent contractor is not liable for physical harm caused to another by an act or omission of the contractor or his servants.” Pursuant to this principle, the only entity with any duty to ensure the safety of an independent contractor’s employees is the independent contractor itself – property owners and general contractors owe no duty other than in the case of select exceptions.
On the other hand, some courts are hesitant to base a decision regarding the duty of care solely on an entity’s alleged status as an independent contractor. Instead, courts look to a variety of factors or exceptions before determining whether a duty exists.
This issue is critical because, unlike other defenses to negligence, whether and what duty of care is owed generally is a legal issue to be decided by the court – not a jury. As such, evidence that no duty was owed to an injured employee can support a summary judgment motion, early case disposition, and significant savings for the parties or their insurer.
Below we summarize the law from three major US jurisdictions on this issue and address case strategy that can be used in order to resolve construction site injury cases when the “no duty owed” legal principle weighs in the defendant’s favor.
New Jersey courts recognize the legal principle that a landowner or general contractor does not owe a duty of care to the employee of an independent contractor. Under this principle, “the party contracting out the work, be it a landowner or a general contractor, is not liable for injuries to employees of the [sub]contractor resulting from either the condition to the premises or the manner in which the work is performed.”
While the “no duty” legal principle is good law, it is not absolute. For one, New Jersey courts will look to whether the employee was injured by a risk inherent to the work being performed; landowners may still have a duty to make premises safe of dangerous conditions unrelated to the work performed. Additionally, this “no duty” principle is held to be inapplicable in the case of three exceptions: (1) where the party contracting out work, “retains control of the manner and means of doing the work contracted for” (2) “when the party knowingly engage[s] an incompetent subcontractor” or (3) when the “activity contracted for constitutes a nuisance per se [i.e. is unusually dangerous].”
Specifically with respect to general contractors, New Jersey courts have tended to analyze the issue of duty by addressing a number of factors under which a general contractor (but not a property owner) may owe a duty if the risk that caused injury was foreseeable. However, a general contractor may still be held to have owed no duty if it did not control the “means and methods” of a subcontractor’s work. Indeed, this principle was reaffirmed by an Appellate Division decision issued very recently in January, 2021.
In summary, an argument that no duty was owed to the employee of an independent contractor is sustainable under New Jersey law – but tread carefully when making the argument and develop factual evidence through discovery that distinguishes your case from the exceptions noted above.
Similar to New Jersey, California recognizes the common law doctrine “that when a hirer [has] delegated a task to an independent contractor, it [has] in effect delegated responsibility for performing that task safely, and assignment of liability to the contractor followed that delegation.”
However, the immunity of a “hirer” for jobsite injuries is not without limitations. First, this immunity will not apply if the hirer controls the work being performed when the injury occurs.
Another exception is recognized by California law in the form of a doctrine called “peculiar risk.” Under this doctrine, if the work being performed is “inherently dangerous”, the hiring party may be held liable for injuries that occur.
Moreover, in recent years, the California Supreme Court has recognized a limit on hirer immunity in the form of basic common law principles of premises liability. In particular, the California Supreme Court has stated that a landowner will be held liable if “(1) it knows or reasonably should know of a concealed, pre-existing hazardous condition on its premises, (2) the contractor does not know and could not reasonably ascertain the condition and (3) the landowner fails to warn the contractor.”
Overall, the fact that California law still recognizes the principle of no duty of care is helpful to defendants, but hirer immunity has been substantially scaled back by recent decisions.
Similar to courts in New Jersey and California, New York courts recognize that “[t]he general rule is that a party who retains an independent contractor, as distinguished from a mere employee or servant, is not liable for the independent contractor's negligent acts.”
Notably, however, New York has limited this principle in ways that are more severe than New Jersey or California. First, like the other states, New York recognizes that a hiring party may owe a duty to a contractor’s employee when it controls the work being performed. A hiring party may also owe a duty to a contractor’s employee when it is negligent in selecting, instructing or supervising the contractor; or the contractor has been employed for work that is especially or “inherently” dangerous.
In addition, New York also does not recognize the immunity of a hiring party when the hiring party “is under a specific non-delegable duty.” This is the most important limitation on the rule in New York, because the list of non-delegable duties under New York law is extensive and includes non-delegable duties created by both statute and the common law; including a non-delegable duty placed on a project owner and general contractor, by statute, requiring that a project owner and general contractor have final responsibility for construction site safety.
Accordingly, while New York recognizes a general immunity for the party hiring an independent contractor, the extensive list of non-delegable duties under New York law severely limits the application of this principle; particularly in the context of construction site safety.
Comment: strategies to mitigate risk for construction site injuries
Taking the above law into account, how can landowners, property managers, general contractors and their insurers best proceed with construction site injury claims?
When handling a claim involving the defense of a landowner, property manager or general contractor in a suit seeking damages for a construction site accident, look for facts relevant to the “no duty owed” defense in case analyses and reports from appointed counsel. Ask appointed counsel to conduct specific discovery on this issue. Consider whether, going forward, there are ways that landowners, property managers and general contractors may strengthen their contracts with independent contractors, and each other, in order to minimize or eliminate the defendant’s control over a subcontractor’s work and maximize their right to indemnification. A diligent and successful pursuit of a “no duty” argument and other risk transfer efforts can save significant defense and indemnity costs.
Read other items in Construction and Engineering Brief - February 2021
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Construction and engineering
Insurance and reinsurance
United States