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.
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:
(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:
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:
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