Hanco Corporation v. Goldman – Employer Liability After Work Death

The laws regarding exclusive remedy in most states are quite clear: If you have workers’ compensation insurance, that is the only recourse you have against your employer, no matter how negligent the company may have been in causing a worker’s injury or death.
But where the waters get muddied, especially where companies have numerous contracts and subcontracts necessary to complete a job, is in the examination of questions like:

  • Who is an employee?
  • Who is an employer?
  • Who is a co-worker?
  • Who is responsible per previously-established contracts?

In the case of Hanco Corporation v. Goldman, defendant company/ general contractor may have been able to avoid liability to a worker’s wife and children for his death in a trench collapse. However, the company actively participated in litigation for 26 months before raising the affirmative defense of exclusive remedy. Therefore, the Mississippi Supreme Court ruled, it had waived any affirmative defense it may have had under the provision of exclusive remedy.

To start, this was not a straight case of employer-employee relationship. There were a number of contractors and subcontractors involved on this construction job, so that made the question of who was an employer and who was an employee somewhat convoluted.

The structure was set up like this: Company A in Florida had a contract with Company B in Mississippi to construct a dock distribution facility in an industrial park. Company B then subcontracted with Company C to provide labor, materials and equipment for installation of HVAC systems, as well as design and engineering services. The subcontract between Company B and Company C required Company C to secure workers’ compensation and liability insurance and to provide Company B with those valid certificates showing those requirements were met. In turn, Company C had an agreement with a professional employer services company in Florida, Company D, that made its employees available to Company C for lease, with the right of direction and control over those workers, including termination, discipline and reassignment. Company D was required to provide those workers with workers’ compensation insurance, but Company C had to provide a general liability insurance policy with a minimum $1 million limit.

That brings us to the incident. Three workers, hired pursuant to this agreement, were killed while working on connecting sewer lines at the Mississippi site. The trench in which they were working collapsed, and buried the three men alive.

The wife and children of one worker collected workers’ compensation death benefits, but then also filed a lawsuit against numerous defendants – including Companies B and C – alleging negligence. Because regulations for the Occupational Safety & Health Administration (OSHA) were violated, the family moved for a summary judgment against Companies B and C. Defendant companies then moved for summary judgment arguing state law provided that workers’ compensation insurance was the exclusive remedy for the family, which had already received those benefits.

The Mississippi Supreme Court held in a 2006 case that when a defendant fails to reasonably and timely raise and pursue enforcement of any affirmative defense that would serve to stay or terminate litigation, it will ordinarily serve as a waiver.

In this case, defendant cited exclusive remedy in its initial answer to this complaint. However, it failed to file a summary judgment at that time, and instead, for more than two years, actively participated in litigation on the merits of the case, including participating in depositions and securing expert witnesses to call at trial. There was further no extreme or special circumstances that would justify or explain the delay. Defense had ample opportunity to assert exclusive remedy, and failed to do so. This constituted as a waiver of exclusive remedy protection.

Now, the case is remanded to continue to the trial phase.

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

Additional Resources:
Hanco Corporation v. Goldman, Sept. 17, 2015, Mississippi Suprem Court

More Blog Entries:
Adcock v. Illinois Workers’ Comp. Comm’n – Neutral Risk Principle, Sept. 18, 2015, Winston-Salem Workers’ Compensation Lawyer Blog

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