Although workers’ compensation is supposed to be simple in practice, a common issue that arises from workplace accidents at construction sites is clarifying liability when there is a subcontractor relationship or multiple subcontractor relationships. The issues regarding workers compensation liability and civil suit immunity following the injury of a subcontractor worker are at the center of the Third District Court of Appeals’ recent decision in VMS, Inc. v. Alfonso (PDF download).
Alfonso started with a long chain of subcontractor relationships. At the beginning of the chain is the Florida Department of Transportation, which contracted with VMS to maintain and manage certain roadways in Palm Beach, Broward, and Miami-Dade Counties. As part of the contract, VMS was required to maintain workers’ compensation insurance, which it did. Next, VMS subcontracted some of the roadwork to ABC, which was also required pursuant to its subcontract with VMS to maintain workers’ compensation insurance, which it did. Thereafter, ABC hired an individual to handle some of the work that ABC had obligated itself to do. To accomplish this task, the individual hired several day laborers, including the plaintiff in this suit, but he never acquired workers’ compensation insurance. While performing roadwork covered by this labyrinth of subcontracts, the plaintiff was severely burned by hot tar that spilled on him. It is disputed whether VMS had knowledge of the accident, but the individual who hired the day laborer and ABC did have knowledge, and neither ABC nor VMS reported the incident to their respective workers’ compensation insurers.
The plaintiff laborer eventually brought suit against VMS, ABC, and the individual who directly hired him. ABC eventually settled with the plaintiff, but VMS asserted workers’ compensation immunity from suit and, alternatively, comparative negligence on the part of the subcontractors or the plaintiff. The plaintiff moved for partial summary judgment, arguing that VMS was estopped from asserting workers’ compensation immunity because it failed to notify its workers’ compensation insurer of the injury. The trial court granted the motion, but the Third District unanimously reversed.
First, the Third District noted that once an employer acquires and maintains workers’ compensation insurance for the benefit of employees, it is immune from suit for injuries covered by the workers’ compensation scheme. With respect to subcontractor relationships, the Florida Statutes provide:
“In case a contractor sublets any part or parts of his or her contract work to a subcontractor or subcontractors, all of the employees of such contractor and subcontractor or subcontractors engaged on such contract work shall be deemed to be employed in one and the same business or establishment, and the contractor shall be liable for, and shall secure, the payment of compensation to all such employees, except to employees of a subcontractor who has secured such payment.” § 440.10(1)(b), Fla. Stat. (2013).
Thus, when a contractor “secures coverage or ensures that the subcontractor does so, the [contractor] is immune from suit for the employees’ personal injuries.” Adams Homes of Nw. Fla., Inc. v. Cranfill, 7 So. 3d 611, 613 (Fla. 5th DCA 2009). In the current case, it is not disputed that VMC secured coverage for ABC’s employees by virtue of ABC acquiring workers’ compensation insurance for its employees. Accordingly, VMC is not liable for the injuries of ABC employees or the injuries of employees of subsequent subcontractor employees. It did not matter that VMC did not report the injury to its workers’ compensation provider, since ABC had secured insurance and should have reported the injury to its insurance provider. VMC would only be liable in the event that ABC had not secured workers’ compensation insurance for its employees.
Although this decision is a loss, the injured laborer in this case is still permitted to maintain suit against AMC, which didn’t report the incident to its insurance provider and is thus estopped from asserting civil suit immunity, and the individual who hired him directly and acquired no workers’ compensation insurance at all. Subcontractor relationships are far from uncommon in the construction industry, and many injured workers often find themselves confronting a maze of different possible liable parties. In order to firmly ascertain who may actually be liable and determine whether that liability extends to workers’ compensation insurance payments or full civil suit accountability, many injured workers should consider getting the assistance of knowledgeable counsel following a workplace accident. The South Florida injury attorneys at Frankl & Kominsky are well versed in Florida workers’ compensation and negligence law and are prepared to offer you this sort of legal guidance. If you are interested in a free case consultation, feel free to contact us.