Atiapo v. Goree Logistics – Penalty for Uninsured Trucking Contractor Affirmed

Almost all companies with more than a few employees in North Carolina must carry workers’ compensation insurance. The goal is to ensure that workers injured on-the-job have easy access to necessary medical care, and are adequately supported while they recover. highwaydriving.jpg

Unfortunately, there are a fair amount of employers who flout this rule. The state industrial commission has been cracking down on this problem more aggressively of late, but it can be tricky when it comes to the transportation industry. Trucking in particular is tough because the industry is so fragmented. One company owns the tractor, another owns the trailer, another the cargo, while the trucker is an independent contractor.

Independent contractors are not covered under workers’ compensation laws. However, N.C. Gen. Stat. 97-.19.1 spells out cases in which a general contractor may be deemed a “statutory employer” of some workers for purposes of workers’ compensation. If that company doesn’t carry workers’ compensation insurance as required, penalties may be instituted. (The law does not require motor carries to pay for workplace injuries for truck drivers who are independent contractors individually licensed by the U.S. Department of Transportation and who personally operates the vehicle. Only trucking firms with three or more employees have to carry coverage.)

The recent case of Atiapo v. Goree Logistics Inc., before the North Carolina Court of Appeals, was one of those in which a firm was accused of failing to provide the appropriate workers’ compensation coverage for a subcontracted worker.

According to court records, Company 1, a transportation broker with licensing, entered into a broker-carrier agreement with Company 2. Company 1 was acting on the behalf of its own client, an agricultural firm, to procure transportation of farming goods. The agreement indicated Company 2 would exercise complete control over work it performed in conveying the goods and Company 2 would assume payment of all taxes, unemployment, workers’ compensation and any other fees.

Driver operated the tractor trailer for Company 2, and was directed to drive the agricultural firm’s goods to Wyoming. Company 2 did not carry workers’ compensation insurance. After going there, he was directed to drive to Georgia and then to Colorado. While in Colorado, trucker crested the peak of a hill, where several vehicles were stopped. The truck’s brakes failed. A collision occurred and plaintiff was injured.

Plaintiff filed a notice of accident and sought workers’ compensation coverage from Company 2. The company denied his claim, arguing he was not an employee but an independent contractor, and further the company only had two persons driving trucks for it, so it wasn’t required to carry workers’ compensation insurance.

Following an initial hearing, Company 1 was added as a defendant party.

The North Carolina Industrial Commission later found that despite the presence of the written agreement between driver and Company 2, indicating he was an independent contractor, plaintiff was in fact an employee. He was wrongly classified. Further, it was found the company had no workers’ compensation insurance. However, the commission found Company 2 didn’t regularly employee three or more workers, and thus penalties weren’t assessed against the firm. However, it concluded Company 1 was the principal contractor, and ordered that firm to pay worker temporary total disability, all worker’s medical expenses and costs for the hearing.

Later, the attorney general interceded with a motion for reconsideration, asserting that state law indicates contractors, intermediate contractors and subcontractors in interstate or intrastate carrier industry operating licensed tractor trailers must carry workers’ compensation, regardless of how many employees they have. Therefore, it was argued Company 2 should be responsible for penalties for failure to maintain workers’ compensation insurance.

The commission amended its final opinion, and assessed penalties of $9,000 against the company and $80,000 against its principal (owner).

Defendants appealed, but the appellate court affirmed.

If you have been injured at work, contact the Lee Law Offices at 800-887-1965.

Additional Resources:
Atiapo v. Goree Logistics Inc., March 17, 2015, North Carolina Court of Appeals

North Carolina Industrial Commission v. Goree Logistics and Owen Thomas Inc. (uninsured employer), March 17, 2015, North Carolina Court of Appeals

More Blog Entries:
Shubert v. Macy’s West, Inc. – Failure to Adhere to Care Plan, March 19, 2015, Charlotte Work Injury Lawyer Blog

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