Category: Statutory Employer Doctrine

Insurance Federation of Pennsylvania Gives Major Assist in Supreme Court Victory for Statutory Employers & Their Insurers

On March 26, 2014, the Supreme Court of Pennsylvania announced its unanimous decision in the case of Patton v. Worthington Associates, 625 Pa. 1, 89 A.3d 643 (2014), reversing decisions in the lower courts and forcefully reaffirming the Statutory Employer Doctrine of the Pennsylvania Workers Compensation Act.  In its decision, the Court frequently and favorably cited the amicus brief prepared by Tom Tyler of Davis Parry & Tyler, counsel for amici Insurance Federation of Pennsylvania, Inc., and Shoemaker Construction Company.

According to the Workers Compensation Act of Pennsylvania, at 77 P.S. § 52, the Statutory Employer Doctrine fixes responsibility to provide workers compensation benefits to injured workers.  The statute provides that responsibility is imposed not only on the injured worker’s immediate employer, but also, in case that employer defaults, on any superior contractor up the vertical contractual ladder that contracted with that employer.  In return for the imposition of such workers compensation liability (even if a superior contractor has not been called upon to actually pay such benefits), these “statutory employers” are immune from tort liability to the injured worker.  77 P.S. § 481.  According to the seminal 1930 Supreme Court decision of McDonald v. Levinson Steel Co., 302 Pa. 287, 153 A. 424, the following 5 elements must be shown for a general contractor to be deemed a “statutory employer”:  (1) the general contractor is under contract with an owner or one in the position of an owner; (2) the construction site premises are occupied by or under the control of the general contractor; (3) there is a subcontract made by such general contractor with a subcontractor on the job; (4) the work entrusted by the general contractor to the subcontractor is required of the general contractor under the contract with the owner; and (5) the injured worker is an employee of such subcontractor.  In 2012, the Superior Court’s ruling in the Patton case effectively eviscerated the Statutory Employer Doctrine, with predictable adverse consequences for general contractors and their insurance carriers.

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Heads I Win; Tails You Lose: Patton v. Worthington Associates, Inc. and the Destruction of the Statutory Employer Doctrine

In March 2012, a 2-1 Superior Court panel rendered a decision in the construction accident case of Patton v. Worthington Associates, Inc., 43 A.3d 479 (Pa.Super. 2012), that for practical purposes has eviscerated the statutory employer doctrine in Pennsylvania.  A number of weeks later, I strolled back from court to my office with plaintiff counsel in our own construction accident tort case; his reliance on Patton had resulted in the recent denial of my statutory employer defense in the case.  Counsel commented on what he viewed as Patton’s salutary effect, observing that “finally, the Superior Court and the Commonwealth Court are on the same page.”  Counsel’s observation, however, immediately struck me as faulty, since, if the statutory employer doctrine is properly applied, disparate results should be found in the two courts: in a nutshell, where statutory employer liability to pay workers compensation benefits is found in Commonwealth Court, that party’s  statutory employer defense to tort liability should arise in Superior Court.  Conversely, if that party is not a statutory employer, it will be without workers compensation liability in Commonwealth Court, but will face tort liability to the injured party in Superior Court.

This paper will examine the origins and near-century-long treatment, both legislative and judicial, of the statutory employer doctrine, and the ill-considered practical effects of Patton.  In short, while its reasoning strongly suggests Patton’s presumed goal was to constrain (or even eliminate altogether) the immunities from tort liability that the statutory employer may enjoy (a goal clearly at odds with well-settled Pennsylvania Supreme Court decisional law), its surely unintended consequence is to offer a means by which a statutory employer may in fact escape workers compensation liability to injured workers.

Continue reading “Heads I Win; Tails You Lose: Patton v. Worthington Associates, Inc. and the Destruction of the Statutory Employer Doctrine”