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Negligence Claim Against Joint Employer Prevented



By Gina Helou

The worker was employed by a general contractor that had hired the machinery provider to supply a crane for the construction project, as well as a certified crane operator.  The certified crane operator was employed by the machinery provider.  Through a contract with the general contractor, the machinery provider supplied the crane operator for the construction company’s use; however, he would be under the supervision of the general contractor.  The supervision included approving the crane operator’s hours before the machinery provider would issue his paycheck.  

The injury occurred when the crane operator was moving a large wooden block form that was used in the construction of a concrete wall.  Part of the wooden block form detached from the rigging and fell while the crane was moving the suspended piece toward a concrete wall.  Part of the falling debris struck the worker.  Rather than file a worker’s compensation claim against his employer – the general contractor – the worker decided to file a negligence lawsuit against the machinery provider because the crane operator was employed and paid by the machinery provider, making it potentially vicariously liable for the operator’s negligence.

Co-employee or not? Negligence claim depends on it
The machinery provider argued that the crane operator and the injured worker were co-employees on the jobsite under the supervision of the general contractor, and therefore, the worker had to pursue remedies through his employer under the Worker’s Compensation Act.  The trial court agreed, citing how the Act “provides the exclusive remedy for recovery of personal injuries arising out of and in the course of employment.”  The issue, however, was that the worker did not sue his employer on a negligence theory, but rather he sued the machinery provider.  The trial court noted the Indiana Worker’s Compensation Act does permit an injured worker to sue a third party for negligence as long as that third party is not the employer or a fellow employee.  This is why the machinery provider argued that the crane operator and the injured worker were co-employees.

The machinery provider prevailed under Indiana case precedent. The Indiana Court of Appeals had previously held that “[a] person may have more than one employer at any given time for purposes of the Worker’s Compensation Act when one employer has loaned his employee to another employer.”  That previous ruling fit the facts of the current case so decisively, that the trial court, and subsequently the appellate court, agreed that the Worker’s Compensation Act prevailed and was the exclusive remedy for the injured worker.

There were enough factors satisfying the finding that the crane operator, while under the supervision and control of the general contractor, could be considered an employee of the construction company, even though his paycheck came from the machinery provider.  With this issue satisfied, the crane operator and the injured employee were held to be co-employees, and, as a consequence, the appellate court ruled that the Indiana Worker’s Compensation Act applied and dismissed the claim.

Practice points
Although a successful negligence lawsuit would have potentially been more lucrative than a worker’s compensation claim for the injured worker, the machinery provider successfully established the exclusivity of the injured worker’s potential remedy under the Indiana Worker’s Compensation Act. While each state has enacted its own worker’s compensation statutes, each of them attempt to strike a balance between the employer and employee’s interest. The object is to create a work environment where employees are protected in the event of an injury which may prevent them from working for a period of time or accruing expensive medical bills; but also to protect employers, who may or may not be at fault, from lawsuits by injured employees. This case highlights the potential for parties, such as the machinery provider in this case, to defend against negligence claims by raising the applicability of a worker’s compensation statute.

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