“Go back to work.” Those words from the general contractor precipitated the subcontractor employee’s injury. Still, the general contractor was not liable. In a win for the construction industry, the Court of Appeal ruled in August 2022 that the Privette Doctrine barred subcontractor employees’ injury claims against general contractors.
The Privette Doctrine is great for property owners, but, until now, it left general contractors in purgatory. The doctrine holds that the owner of property is not liable for injuries to a hired party’s employee. That is true even if the property owner created the condition that caused the injury. The theory is that, as the hirer, the property owner has delegated all safety to the company doing the work. That makes imminent sense. Still, how Privette applied to a contractor-subcontractor relationship was murky until McCullar v. SMC Contracting (2022) 83 Cal. App 5th 197.
Before going too far, we must discuss the term “general contractor.” While it can refer to a construction company that self-performs most or all its work, it also can refer to a company that just manages the construction or anything in between. The problem for the general contractor arises when its subcontractor’s employee is hurt onsite. The exclusive remedy doctrine limits the employee’s recovery against the subcontractor to workers’ compensation. There is no chance for a “nuclear verdict,” nor is there a jury for reptile theory to influence. Other than a hurt employee, a higher xmod, and some increasing premiums—the subcontractor is good.
That same employee, however, could make a civil tort claim against the general contractor—double points if the general contractor is a design-builder and the employee asks, “Why didn’t you design the project with safety in mind? Oh, I remember, to increase your profit, right?” Now, the general contractor and its various carriers worry about reptile theory and a nuclear verdict, and therein lies the problem. Did the contractor delegate the safety duty to the subcontractor like the property owner did? The Court of Appeals thinks yes.
McCullar v. SMC Contracting started the discussion. In that case, a general contractor hired a subcontractor to install a fire sprinkler system in Lake Tahoe, California. On the day of the incident, the subcontractor’s employee, McCullar, came to work and found that ice covered the floor. When McCullar told the general contractor, the general contractor confirmed that the ice was caused by work the general contractor did the night before. They then told McCullar to “get back to work.” McCullar asked his employer, the subcontractor, about the safety issue because of the icy floor. The subcontractor told McCullar to “get the job done.” Later, McCullar was injured when the ladder he was using slipped on the ice.
The Court of Appeals held that the general contractor delegated all control over fire sprinkler installation. This included ensuring that the subcontractor’s employees could do their work safely, as provided under the Privette Doctrine. The court further held that the Privette Doctrine shielded the general contractor from liability. That is true even though the general contractor caused the ice to form on the floor and directed McCullar to go back to work after he told the general contractor about the ice.
Though the McCullar court cited some exceptions to the Privette Doctrine, it held that they did not apply in this case. And so, a hirer (or general contractor) may be held liable when it: retains control over any part of the independent contractor’s (or subcontractor employee’s) work; negligently exercises that retained control; and that negligence affirmatively contributes to the worker’s injury.
While the court found that the general contractor retained control over the subcontractor’s work, it did not find that the general contractor “negligently exercised its retained authority in a manner that affirmatively contributed to McCullar’s injuries.” The court held that, even if the general contractor negligently creates a known workplace hazard, the subcontractor still “retains the responsibility for assessing whether its workers can perform their work safely.”
The court said that the general contractor’s “direction to ‘go back to work’ did not interfere with or otherwise impact McCullar’s decisions on how to safely perform his work. [The general contractor] did not, for example, direct McCullar to place a ladder on the ice and then attempt to climb it.” The court also declined to hold the general contractor liable on the theory that the general contractor knew about the unsafe condition and should have remedied it.
Handling Subcontractor Employee Claims
McCullar v. SMC Contracting strengthened Privette by applying it to injuries in a contractor-subcontractor relationship. This opens some new avenues for contractors to protect themselves better and for claims handlers and attorneys to litigate more effectively. On the pre-litigation side, contractors are wise to beef up the safety portions of their subcontracts. Make it clear in those documents that the subcontractor is responsible for their own employees’ safety. Contractors can go a step further by holding daily safety meetings before work starts and telling those onsite that they should not work if there is an unsafe situation. The goal here is for the contractor to continue delegating safety to the subcontractor specialists who can best implement it for their work.
For claims handlers and attorneys, McCullar v. SMC Contracting creates fertile ground for dispositive motions. Claims handlers and attorneys must gear their offensive and defensive discovery strategies with this case in mind. Defensively, contractor employees must be prepared to explain in deposition that subcontractors are responsible for their employee’s safety. They should explain that anyone on their projects can stop a job, or refuse a task, for safety reasons.
These contractor employees should be prepared for reptile-theory like questions. For example, in deposition, an early reptile-theory question such as, “Isn’t it true that safety is the most important thing on a job?” can be handled by saying, “It’s up there as being one of the most important. That is why we ultimately delegate safety of subcontractors’ employees to the subcontractors themselves—they’re the experts we hired for that work, so they’re in the best position for safety.”
McCullar changed the injury landscape on construction jobs for the better. It has made it harder for employees to sue the general contractor while getting workers’ compensation benefits from their subcontractor employer. But given the fact intensive nature of McCullar, claims handlers and attorneys should be mindful of what types of answers plaintiffs can give to survive dispositive motions. And then gear the litigation strategy to minimize that probability.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.