Labor & Employment Law Daily Wrap Up, SAFETY—5th Cir.: Employer fails in bid to avoid OSHA citations by claiming workers were independent contractors, (Oct 9, 2025)

By Ronald Miller, J.D.

The loading crew brought little more than their labor in terms of investment to the enterprise and they worked exclusively for the employer.

Substantial evidence supported a decision of the OSHC denying a petition of a freight-forwarding service for review of an OSHA citation finding regulatory violations in the loading of vehicles for shipment overseas, ruled the Fifth Circuit in an unpublished decision. The employer had contended that the workers on its load crew were independent contractors so that regulations did not apply to them. However, the appeals court noted that after applying the standard articulated by the Supreme Court in Nationwide Mutual Insurance Co. v. Darden, an ALJ concluded that the loading crew’s exercise of judgment was bound by the restrictions imposed by the employer’s directions for loading. Further, the “economic realities” test established that the workers were employees such that the regulations applied to the employer’s workplace (Prime International Shipping, LLC v. Occupational Safety and Health Review Commission, No. 25-60182 (5th Cir. Oct. 7, 2025, unpublished).

The employer is a freight-forwarding service that ships vehicles overseas. At the employer’s workplace, vehicles are loaded into shipping containers. It hired a three-man load crew to perform that task.

OSHA violations. OSHA dispatched an investigator to the employer’s facility following reports that a fatality occurred there. Following that investigation, OSHA issued a citation to the employer for regulatory violations.

The citation alleged four serious violations found by the inspector, two of which were relevant to this petition: (1) a gap between a shipping container and the loading dock, which workers could fall through; and (2) a chopsaw with an exposed blade, uncovered by the tool’s guard, which was held partially open with rope. The agency alleged that the gap posed a violation of 29 C.F.R. § 1910.28(b)(3)(i) and that the chopsaw constituted a violation of 29 C.F.R. § 1910.212(a)(3)(ii). However, those regulations apply to conditions that imperil “employees”—not independent contractors.

The employer challenged the citation on the ground that the workers in three-man load crew were independent contractors and that, therefore, the regulations did not apply to its workplace conditions.

Employees versus independent contractors. An ALJ considered whether the workers were employees or independent contractors under the context-dependent standard articulated by the Supreme Court in Nationwide Mutual Insurance Co. v. Darden, 503 U.S. 318, 323—24 (1992), and informed by the Fifth Circuit’s “economic realities” test set forth in Parrish v. Premier Directional Drilling LP, 917 F.3d 369, 379 (5th Cir. 2019).

The Fifth Circuit observed that in Darden, the Supreme Court emphasized that the critical factor in determining the nature of the relationship between a worker and a company is the “hiring party’s right to control the manner and means by which the product is accomplished.” Further, under the Fifth Circuit’s “economic realities test,” the question is framed as follows: “whether the alleged employees, as a matter of ‘economic realities,’ are ‘economically dependent’ on the business to which they supply their labor and services.” Those realities include (1) the extent of the relative investments of the worker and the alleged employer; (2) the degree to which the worker’s opportunity for profit or loss is determined by the alleged employer; (3) the skill and initiative required in performing the job; and (4) the permanency of the relationship. Like the Darden test, the Fifth Circuit recognized that the degree of control exercised by the alleged employer is the critical question.

Applying the Darden standard, the ALJ considered the skill necessary for the workers to complete their task and the conditions imposed on them by the employer. The ALJ concluded that the loading crew’s exercise of judgment was “bounded literally, and figuratively by the restrictions imposed by [Prime]’s directions for loading and base construction.” He determined that those restrictions limited the crew’s discretion in deciding how vehicles of varying sizes would be placed into a box of fixed dimensions. He also noted that the employer provided all the tools, equipment, and materials required to perform the job.

Economic realities test. As for the Fifth Circuit’s economic realities test, the ALJ noted that the loading crew brought little more than their labor in terms of investment to the enterprise and that they worked exclusively for the employer. Accordingly, the ALJ determined that the workers were indeed the employer’s employees.

On review, the Fifth Circuit was satisfied that the ALJ’s employee-status determination was supported by substantial evidence. Likewise, substantial evidence supported the agency’s finding that the employer’s loading crew members were exposed to hazardous work conditions.

Accordingly, the employer’s petition for review of the Commission’s ruling was denied.

The case is No. 25-60182.

Judge: Per curiam.

Attorneys: Patrick Bates (P. Bates Law) for Prime International Shipping, L.L.C. Louise McGauley Betts, U.S. Department of Labor, for Occupational Safety and Health Review Commission and Lori Chavez-DeRemer.

Companies: Prime International Shipping, L.L.C.

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