General contractors and other employers (even some owners) have greater exposure under Oregon’s Employer Liability Law (the “ELL”) to injured workers based on the recent Oregon Supreme Court decision in Yeatts v. Polygon Northwest Co. The ELL imposes liability on all “owners, contractors or subcontractors and other persons having charge of, or responsibility for,” work involving a risk or danger. ORS 654.305. The ELL also imposes liability on an “indirect employer,” such as an owner or contractor, for a subtier contractor’s worker’s safety on a jobsite if the indirect employer retains the right to control how risky activities are performed.

For the last 50-plus years before Yeatts, an owner or contractor could insulate itself from liability under the ELL by delegating site safety responsibility to subtier contractors, while still maintaining the right to inspect the safety procedures or requiring greater safety measures than those imposed by law. In other words, merely having the right to inspect the safety procedures or require additional safety measures did not mean that an owner or contractor “controlled” the risky activity, thereby subjecting it to liability as an “indirect employer.”

In Yeatts, however, the court rejected the status quo. Now, “particularly in the absence of a contractual provision that place[s] sole responsibility for safety” on the subtier contractor, an owner or contractor that retains the contractual right to require additional safety measures from the direct-employer subtier contractor, or retains the right to inspect the entire worksite, may be found to “control the risk-producing activity.”

The Yeatts decision means that owners and contractors need to closely reexamine their form construction contracts, specifically how those contracts delegate site safety responsibility. A contract clause giving an owner or contractor the right to supervise site safety procedures or require additional safety measures may now expose it to liability under the ELL.