The overturned ruling that fundamentally changed construction safety liability—what general contractors must know about their expanded responsibilities as the "controlling entity"
On a federal construction project in Louisiana, a subcontractor's employee fell from an unguarded platform and was seriously injured. The general contractor, Hensel Phelps, argued they weren't responsible—the subcontractor controlled that work area.
OSHA disagreed. So did the initial administrative law judge. But Hensel Phelps appealed, and for a moment, it looked like they might win.
Then the 5th Circuit Court of Appeals stepped in and overturned the lower ruling. The decision: General contractors are liable as the "controlling entity" on multi-employer worksites—even for hazards created by their subcontractors.
The Facts: A subcontractor's employee was working on an elevated platform without proper fall protection. The worker fell and was injured. OSHA cited Hensel Phelps under the multi-employer worksite doctrine.
Initial Ruling: Administrative Law Judge (ALJ) found Hensel Phelps liable as a "controlling employer" because they had general supervisory authority over the worksite.
Appeal: Hensel Phelps argued they didn't have "control" over the specific area where the violation occurred because the subcontractor was managing that task.
5th Circuit Decision: The court overturned Hensel Phelps' challenge and affirmed OSHA's citation, holding that general contractors with overall authority over a site are responsible for ensuring compliance—even in areas directly controlled by subcontractors.
Under OSHA's Multi-Employer Citation Policy, there are four types of employers who can be cited for violations on a worksite:
The employer whose employees created the hazard (e.g., the subcontractor who left the platform unguarded).
The employer whose own employees are exposed to the hazard (even if they didn't create it).
The employer responsible for correcting a hazard (typically through a contract provision or project agreement).
The employer who has general supervisory authority over the worksite, including the power to correct safety violations or require others to correct them.
⚠️ This is where general contractors get caught.
Before this ruling, many general contractors believed that if a subcontractor had direct control over a specific work area or task, the GC could avoid liability by pointing to the sub's autonomy.
The 5th Circuit rejected that argument entirely.
The Court's Logic:
In other words: If you're the GC, you own the safety failures—period.
The Hensel Phelps ruling fundamentally changed the risk calculus for general contractors. Here's what you're now on the hook for:
You can no longer rely on subcontractors to self-police their own safety practices. As the controlling entity, you must:
The Catch-22:
If you don't inspect, OSHA can argue you failed to exercise control. If you do inspect and miss something, OSHA can argue you should have caught it. Either way, you're liable.
The ruling makes it clear: if you have the contractual authority to stop unsafe work, you must use it—or face liability.
Your Contractual Language Now Creates Liability:
If you have the power to act but don't, OSHA will cite you for failing to exercise your control.
Here's the question every GC should be asking after this ruling:
"How do I know my subcontractors actually understand the OSHA standards they're supposed to be following?"
If you can't answer that question with evidence, you're gambling with citations, fines, and project shutdowns.
Résumés and certifications don't prove competency. Regulation-based assessments do.
You Need Objective Proof That:
When OSHA shows up after an incident, they'll ask for proof that you exercised your controlling authority. You'll need:
Site inspection logs
Corrective action records
Safety meeting minutes
Work stoppage documentation
Subcontractor competency verification
Contractual safety requirements
If you can't produce it, OSHA will assume you didn't do it.
Being cited as a controlling employer isn't just a regulatory headache—it's a financial and legal catastrophe that can ripple through your entire operation.
OSHA penalties for serious violations can range from $16,131 per violation for serious citations to $161,323 per violation for willful or repeat violations.
Real Example:
A GC cited for multiple fall protection violations across a site can face $500,000+ in fines before lawyer fees even start.
OSHA citations signal to insurers that you're a high-risk client. Your Experience Modification Rate (EMR) will climb, and so will your premiums.
One serious citation can increase your insurance costs by 15-30% for the next three years.
Many federal agencies and private owners now screen contractors for OSHA violation history. A controlling employer citation can:
Being cited as a controlling employer opens you up to civil lawsuits from:
Injured workers (in states allowing third-party suits)
Subcontractors seeking indemnification
Property owners claiming breach of contract
Other contractors affected by work stoppages
OSHA citations become evidence in civil court—making it much harder to defend your position.
Word spreads fast in the construction industry. Once you're known as a GC that gets cited for controlling employer violations, quality subcontractors will avoid your projects.
You'll be left with bottom-tier subs willing to work under increased scrutiny—which only makes your compliance problems worse.
Between OSHA fines, increased insurance premiums, legal defense costs, lost contracts, and reputation damage, a single controlling employer citation can easily cost a general contractor $2-5 million over three years.
And that's assuming there was no serious injury or fatality involved.
The Hensel Phelps ruling can't be wished away. But you can adapt your operations to minimize exposure and demonstrate due diligence.
Don't wait until they're on-site to find out your subcontractor's safety manager doesn't know OSHA 1926. Verify their regulatory knowledge before awarding the contract.
What to Require:
Why This Matters:
If you can show OSHA that you verified competency before the project started, you have a much stronger defense than "we trusted their résumé."
You're going to be held liable for what happens on-site, so you need eyes everywhere, all the time.
Daily Inspections
Assigned safety personnel walk every active work area
Digital Documentation
Use apps to log observations with photos and timestamps
Immediate Corrective Action
Stop work when violations are identified
Follow-Up Verification
Confirm corrections were made before resuming work
Your subcontracts should clearly outline safety responsibilities and give you unambiguous authority to enforce compliance.
Key Contract Provisions:
⚠️ Warning: Strong contract language also creates higher expectations for your own compliance. Use it—but enforce it consistently.
If you're going to be held responsible for catching subcontractor violations, your own safety staff better know what to look for.
Ask yourself:
If the answer is "I think so" or "probably," you're not ready for the post-Hensel Phelps world.
The Hensel Phelps ruling didn't create new OSHA standards—it clarified that general contractors can no longer hide behind "the subcontractor was in charge."
If you have general supervisory authority over a construction site, you are the controlling entity. And that means you are liable for safety violations—even those committed by subcontractors in areas you don't directly manage.
This isn't about fairness. It's about liability allocation in multi-employer environments. OSHA believes the entity with the most power should bear the most responsibility.
You can complain about the ruling, or you can adapt to it. Only one of those options protects your bottom line.
The single most effective way to reduce controlling employer liability?
Verify competency before problems happen—not after OSHA shows up.
Protect Your Company with Regulation-Based Competency Verification
EHSINDEX assessments provide objective proof that your subcontractors—and your own team—actually know the OSHA standards they're supposed to follow.