Workers’ Compensation Exclusive Remedy Only Applies to Statutory Employer

When an employee of a Mississippi petroleum refinery plant’s contractor was injured on the job, he collected workers’ compensation benefits from the refinery. However, he then sued that same refinery and one of its employees for those injuries. The refinery, in turn, cited the exclusive remedy provision of workers’ compensation law, which in essence says you cannot sue your employer for work-related injuries covered under workers’ compensation law. Seems pretty straightforward, right? factory

However, the Mississippi Supreme Court ruled that the refinery wasn’t the worker’s statutory employer, and therefore wasn’t immune under the exclusivity rule. The case was remanded back to the lower court for trial.

Although workers’ compensation law varies from state to state, the concept of a “statutory employer” is a pretty universal one.  A statutory employer is one who employs another to perform work and who is liable for workers’ compensation according to statutes establishing an employment relationship or liability.

The classification of the worker is often central to whether a worker’s compensation claim is valid. That’s why designated “employees” are entitled to workers’ compensation benefits, while those who are “independent contractors” are not. In the same way, certain companies on a job site may legally be the “employer,” while others are general contractors or subcontractors. These labels aren’t solely determined by what the company decides. Rather, there are a number of factors courts will consider when defining the professional relationship, including the way workers were paid, how much control the company had over the work, how much control the company had over the schedule and whether the worker provided services exclusively to one firm.

Statutory employers are liable to pay workers’ compensation, but they are immune from liability for negligence lawsuits. Those who are not statutory employers are not shielded from immunity in personal injury lawsuits, but they don’t necessarily have to pay workers’ compensation benefits either.

In the recent case in question, the plaintiff/ maintenance worker was employed by a contractor of the refinery, and was injured when a refinery employee opened a valve that expelled hot steam and water onto plaintiff, causing him to suffer severe burns on much of his body. The refinery had contracted with plaintiff’s employer for eight years at the time of the accident. As part of the contract between those two companies, the refinery agreed to pay workers’ compensation benefits to the contracted workers on-site.

After the work injury, plaintiff immediately started receiving workers’ compensation benefits, with the company paying out a total of $350,000, fully exhausting the self-insured retention. The company’s workers’ compensation insurer on top of that paid $629,000 in workers’ compensation benefits.

Thereafter, plaintiff sued the refinery, arguing the company and its employee were liable for the injuries he suffered. He founded his claim on legal theories of negligence, premises liability and vicarious liability.

The company responded with a number of affirmative defenses, including the exclusive remedy provision. The workers’ compensation insurer intervened in the case, seeking reimbursement for the more than $600,000 it paid if plaintiff succeeded. Both sides sought summary judgment to determine whether defendant was a statutory employer entitled to immunity.

Although the district court granted summary judgment in favor of defendant, the state high court reversed for a number of reasons. Specifically, the court noted that even though the refinery voluntarily provided workers’ compensation for plaintiff’s injuries, it can’t seek immunity from tort liability where it was not required by statute to provide that coverage in the first place and where it was not a statutory employer.

Contact the Carolina workers’ compensation lawyers at the Lee Law Offices by calling 800-887-1965.

Additional Resources:

Thomas v. Chevron USA Inc., Jan. 26, 2017, Mississippi Supreme Court

More Blog Entries:

Employers Try to Thwart OSHA’s Injury Reporting Rule, Jan. 25, 2017, Winston-Salem Workers’ Compensation Lawyer Blog

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