Jarrett v. Dillard – Employer President Personally Liable for Workers’ Comp Payments

In North Carolina, any company with more than three employees is required to carry workers’ compensation insurance.
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There are a few exceptions in which smaller companies may required to do so, and some others in which larger companies may be able to forgo it. However, that’s the general rule.

When companies fail to do this, they may be subjected to fines and criminal actions, as well as lose the exclusive remedy protection normally afforded them, which means employees who are injured retain the right to sue the firm for personal injury. The firm may also still be responsible for paying those benefits to any workers injured.

Several other states have held that company presidents, CEOs, treasurers and other corporate officers may be held personally liable to cover workers’ compensation benefits when the company is required to have a plan and fails in this responsibility.

The recent case of Jarrett v. Dillard, before the Mississippi Supreme Court, was one such case.

According to court records, the employee in question suffered a compensable, work-related injury in June 2007. The state workers’ compensation commission awarded him $200 weekly for temporary total disability benefits until further notice. The company, which did not have workers’ compensation insurance, was ordered to also pay for worker’s medical bills stemming from his injury. An appellate court affirmed this decision in 2000.

Soon after, worker’s attorney filed a notice of lis pendens on real property belonging to the president of the company. The notice indicated claimant intended to hold the president personally responsible to pay for those benefits because he had failed to maintain workers’ compensation insurance. Further, the company itself had by the following year been depleted of all assets and was no longer in operation.

By 2005, the administrative law judge still had not conducted a hearing on those unresolved issues, and that year, claimant died. His son then opened an estate and as executor, moved to take action on the pending workers’ compensation claim asserting personal liability against the former company president.

A hearing was held by the administrative law judge in 2007 finding that while some benefits had been paid, claimant was entitled to receive permanent total disability benefits, as well as penalties and interest for past-due payments. Early the next year, an amended order was entered finding estate was entitled to a total benefit amount of $135,400, which included 10 percent interest and past-due installments.

No one appealed this order.

Estate then filed a formal complaint against former president and the company asserting president was personally liable to pay the workers’ compensation claim. President responded the claim was barred by the statute of limitations and the doctrine of res judicata.

In 2010, circuit court granted estate’s motion for summary judgment in part, finding the company liable to pay benefits, but not the president personally.

A renewed summary judgment motion was filed seeking to hold president personally liable.

Circuit court this time granted estate’s renewed motion and entered a judgment of $223,000 against both the company and the president personally, with both held jointly and individually responsible.

An appeals court reversed, but the Mississippi Supreme Court reinstated the verdict of the trial court, finding the claim was not barred by either the statute of limitations or the doctrine of res judicata (as the appellate court had determined).

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

Additional Resources:
Jarrett v. Dillard, July 2, 2015, Mississippi Suprem Court

More Blog Entries:
Workers’ Compensation Death Benefits Approved for Company President’s Survivors, July 22, 2015, Charlotte Workers’ Compensation Attorney Blog

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