U.S. Appeals Court denies claim against OSHA citation of affiliated entity

The 10th Circuit United States Court of Appeals recently denied a claim regarding an OSHA citation of an affiliate entity at a multi-employer worksite.

Universal Health Services of Delaware, Inc. (UHS) filed a petition against the Occupational Safety and Health Review Commission (OSHRC) after OSHA cited it and Cedar Springs Hospital Inc. for failing to provide adequate safety measures to protect employees from workplace violence at a psychiatric hospital in Colorado Springs, Colorado.

Three key questions

In industries such as healthcare, hospitality, and construction, different companies often control operations, management, and ownership. When safety incidents potentially involve multiple entities, OSHA investigators ask three questions to help determine which entities can be cited:

1. Is the location a worksite for the entity?
2. Have entities integrated their operations for safety and health?
3. Do the entities share a common president, management, supervision, or ownership?

The Court ruled UHS could be cited for safety issues at the hospital because it satisfied all three criteria.

Common worksite

The Government considered the hospital a worksite of UHS because its employees worked at the location as CEO, CFO, and COO. But UHS did not consider the hospital as its worksite because its headquarters was in Pennsylvania, the three executives did not serve on its board, and most of the patient interactions were conducted by the hospital’s staff.

The Court determined none of UHS’ claims were applicable since its employees allegedly “faced exposure to workplace violence at the psychiatric hospital” including “physical threats and assaults by patients toward staff.”

The CFO also testified he interacted with patients during weekly visits. Other executives also visited the hospital as part of their jobs.

Integrated safety & health operations

UHS argued sharing resources did not constitute integration of safety and health operations because its employees did not provide patient care.

The Court ruled safety operations were integrated because UHS provided safety oversight to the facility, including paying for and requiring hospital staff to attend workplace violence training courses, created workplace violence reports, compiled injury data, and reviewed the hospital’s plan to address workplace violence.

A UHS employee also testified he provided daily oversight of hospital directors - including the director of risk management - and “shouldered the responsibility to ensure safety.”

Same parent company

UHS claimed it did not share a president, management, or supervision with the hospital, but did not deny it common ownership. UHS and Cedar Springs Hospital both stated they are wholly owned subsidiaries of Universal Health Services, Inc.

The Court noted that even though there was intermediary ownership by another entity, both entities shared the same parent company, comparing it to a similar case from 2025 where UHS of Delaware shared UHS Inc. as a pa with another behavioral health facility.

Case emphasises OSHA’s multi-employer worksite policies

Legal professionals from Baker & Hostetler LLP said the 10th Circuit’s provided “important guidance” on when OSHA can hold management companies liable for workplace safety violations at facilities owned and operated by an affiliated, but not subsidiary, entity.

“This guidance is particularly relevant for integrated companies with complex corporate structures ... where local operations, corporate management, and ownership are often separated.

“A management company that provides on-site executive or supervisory control for an affiliated company can be liable for safety violations at the affiliate’s site. The three-part test is fact intensive and focuses on the reality of the working relationship, not just corporate formalities or the language in an agreement governing shared provision of services.

“Just as important, the 10th Circuit’s application of the common ownership analysis confirms OSHA’s capability to cite entirely separate affiliates that share the same ‘ultimate parent company.’ Companies with shared management, integrated workplace safety operations, or overlapping personnel should carefully assess their OSHA compliance obligations across all affiliated worksites to understand potential OSHA liability exposure.”