The New York Labor Law is broken, at least with respect to how it applies to design professionals (the “A/E”). If not corrected, the protection afforded to the A/E will continue to fade, creating situations of increased potential liability and exposure, which will drive up insurance premiums and correspondingly, design and construction costs. While this was not the legislative intent of the labor law, A/Es are nevertheless faced with this reality and must act to protect themselves going forward.
New York Labor Law Section 200 is the general duty to protect the health and safety of employees from injuries on the job that were caused by unsafe work conditions. The law requires site owners and general contractors to take reasonable steps to keep their employees safe on the job. Labor Law Section 240 holds site owners and contractors strictly liable for injuries workers sustain in falls from heights or falling object accidents. Regardless of who was at fault, a worker can recover under a 240 claim against the site owner and contractor for their injuries. Labor Law Section 241 specifically refers to construction situations involving demolition, excavation, and safety equipment. Under Section 241, site owners and contractors must take reasonable steps to provide adequate safety provisions for their workers. The New York Labor Law is considered to be as favorable to workers’ safety as any law in the country based on the absolute liability provisions. Labor law claims are regularly among the highest verdicts in New York State.
The labor law applies to site owners, contractors, and their agents since those are the entities that have control over the work and site conditions. Significantly, A/Es are exempt from liability for labor law 240 and 241 claims. The basis for the exemption is that an A/E generally does not have the authority or responsibility to control the work site, the contractors and/or site safety. As a result, when lawsuits were improperly commenced against an A/E, New York Courts would routinely dismiss the labor law claims on motion practice. In dismissing the labor law claims, Courts would regularly rely on and cite to the typical A/E contract language, including that from the AIA contract documents, which provides, in sum and substance, that the architect/engineer shall neither have control over or charge of, nor be responsible for, the construction means, methods, techniques, sequences or procedures, or for safety precautions and programs in connection with the work, since these are solely the contractor's rights and responsibilities under the contract documents. While these labor law lawsuits were an inconvenience, ultimately, it was common for the claims to be dismissed by the Court on motion practice. A troubling Courthouse trend, however, has chipped away at the statutory intent to exempt the A/E from liability under the labor law.
Despite the clear legislative intent, precedent case law and in many instances, the appropriate contract language confirming that the A/E is not authorized to direct, supervise, or control the work, a trend has developed where Courts are denying motions to dismiss labor law claims against the A/E. Instead, Courts are giving credibility to arguments that the A/E may be considered an “agent” of the owner, which would expose them to liability under the statute. Similarly, on-site responsibilities, even where the A/E does not have the authority to direct, supervise and control the work, have been cited by the Courts as creating an “issue of fact”, which is the basis for denying a dispositive motion. Simply put, some Courts are “punting” on motions for summary judgment, which exposures A/E firms to potential strict liability and damages. When this happens, claimants are wrongfully empowered, which can motivate insurance carriers to settle at a premium, which has the effect of increasing insurance premiums to the breaking point for many A/E companies. When Judges look to promote “amicable” resolutions over enforcing legislative intent and following precedent, someone is bound to suffer and, in this case, it is the A/E. This trend is not just hurting A/E firms. By re-distributing responsibility and liability away from the owners and contractors, the entities that have actual control over the work site and workers, those entities have less motivation to ensure site safety as their potential liability is diminished by the inclusion of others in the liability pie. This trend could lead to a less safe work environment and certainly, more lawsuits.
Absent legislative intervention to protect the A/E firms, the most productive way to address this trend is through the A/E contract. Certainly, the usual provisions establishing the scope of A/E’s involvement with the contractor’s work must be established. This language includes confirmation that the A/E is not responsible for site safety and/or the contractor’s means and methods since those are exclusively the responsibility of the contractor. It is important not only to address the fact that the A/E is not responsible for something, but to indicate which entity is responsible. For example, the A/E is not responsible for site safety since that is the exclusive responsibility of the contractor. It would also be prudent to confirm that the A/E is not an “agent” of the owner for any purpose, including, but not limited to, for purposes of the labor law.
Another issue to address in the contract is the A/E’s on-site responsibilities. The AIA contract has language which addresses the scope of an A/E’s on-site responsibilities. Specifically, AIA Standard Form of Agreement between an owner and architect states that the A/E is not required to make exhaustive on-site inspections. Instead, the A/E is responsible for becoming generally familiar with the progress and quality of the work. The A/E is not responsible for the contractor's failure to perform the work in accordance with the contract documents. It is also advisable to add that A/E has no authority to stop the work. When defining the purpose or intent of the A/E’s on-site services, avoid terms such as “inspect”, “direct”, “supervise” or “control”. It is unusual for an A/E to have the extent of authority intended to trigger liability under the labor law and that must be made abundantly clear in the contract.
There is no guarantee that a well-crafted contract will protect the A/E from the wrongful ramifications of the labor law. On the other hand, a poorly worded contract could expose the A/E to strict liability, regardless of the contract intentions and actual scope of services.