An Overview Of Pennsylvania’s Statutory Employer Doctrine

  • October 15, 2015
  • Blog
An Overview Of Pennsylvania’s Statutory Employer Doctrine

Pennsylvania’s Statutory Employer Doctrine is a common defense in construction accident cases. The law was originally meant to protect workers. It has since been twisted to help defend employers from liability for workplace accidents.

The history of the statutory employer defense

Generally, if a person is hurt while working they cannot sue their employer. The only legal claim a person would have against an employer is a worker's compensation claim. Worker's compensation claims are fairly limited. They usually will pay for medical expenses related to the work injury. They will also pay a portion of a person's weekly lost wages for as long as the person cannot work.

Contrast that with third-party lawsuits. These are usually lawsuits filed alleging someone was negligent. These suits can be brought against people other than your employer. In third-party negligence cases a person can claim greater damages, including physical and mental pain and suffering, loss of life's pleasures, embarrassment and humiliation, in addition to money for the injured person's spouse. These damages are not recoverable in worker's comp cases.

Philadelphia construction accident lawyer

Pennsylvania law sought to protect construction workers if they were hurt on the job and their direct employers did not have worker's compensation coverage. Rather than leave the injured worker with no way to quickly have their medical bills paid and their lost wages covered, the law provided an alternative.

If an injured worker was working for a subcontractor that did not carry worker's compensation coverage, the injured worker could potentially get worker's compensation benefits from the general contractor on the job site. If certain requirements were met, then the general contractor would be considered the "statutory employer" and would be obligated to pay comp benefits to the injured worker.

This law gave general contractors a financial incentive to make sure their subcontractors carried worker's compensation insurance. Otherwise, the general contractors would be forced to foot the bill. This would help protect workers.

However, this law was a trade-off. An employer cannot be sued for negligence in a third-party lawsuit. Contractors started to use this law to say that if they were a "statutory employer" and could be responsible for providing worker's compensation coverage then they could not be sued in a third-party lawsuit. The defense would apply even if the subcontractor still had worker's comp coverage. As long as the general contractor satisfied the statutory employer criteria, they would be immune from lawsuits even when they didn't pay comp benefits.

The statutory employer defense was now used by general contractors to avoid paying the greater damages often provided by third-party lawsuits.

The elements of the statutory employer defense

The statutory employer doctrine will only be applied if very specific elements are proven. In the landmark case of McDonald v. Levinson Steel Co., 153 A.2d 424 (1930), the Pennsylvania Supreme Court set forth five strict and necessary requirements that had to be proven if an employer wanted statutory employer immunity. 

The Court listed these requirements:

  1. An employer who is under contract with an owner or one in the position of an owner.
  2. Premises occupied by or under control of such an employer.
  3. A subcontract made by such employer.
  4. Part of the employer’s regular business entrusted to such subcontractor.
  5. An employee of such subcontractor.

Each and every one of the elements of Pennsylvania’s statutory employer doctrine must be met by a defendant for that defendant to be immune from third-party liability. If even one of these factors is not met, then the defense does not apply. 

The Courts have stated that this doctrine should only be imposed lightly. “Very great care. . .must be exercised before allowing an employer to avoid his liability at common law by asserting that he is a statutory employer. Section 203 of the Workmen’s Compensation Act, which was designed to extend benefits to workers, should not be casually converted into a shield behind which negligent employers may seek refuge.” Stipanovich v. Westinghouse Electric Corp., 231 A.2d 894, 898 (Pa. Super. 1967).

In other words, the Court should be wary about imposing this defense. It should only be permitted when a defendant has conclusively proven each element.

Fighting the statutory employer defense

Having an in-depth knowledge of this defense is incredibly helpful. There is little substitute for experience. A lawyer who has handled construction accident cases knows to look for certain evidence to help fight this defense from the very outset of the case.

An experienced construction accident lawyer is aware of the statutory employer defense from the time the case starts. The lawyer representing the injured worker should immediately start to evaluate who may be responsible for the accident, whether any of those defendants can raise the statutory employer defense, and whether there is a way to show that any of the required elements can be defeated.

Investigating the construction project is essential. Getting information on who owns the land or building, identifying each contractor and subcontractor, obtaining copies of the contracts and subcontracts, and getting firsthand information from the injured client or other witnesses about whether a defendant or it employers were physically on the premises at the time of the incident is vital. This information can be used to help fight the different elements of the defense.

It is common for OSHA to investigate serious workplace accidents. If OSHA does investigate an accident, you can issue a Freedom of Information Act (FOIA) request to get OSHA's investigation documents. This can be done even before suit is filed and does not require a subpoena.

While OSHA redacts certain information from its reports and files, there is often helpful information that is still provided pursuant to a FOIA request. This can include contracts or subcontracts for the job, statements, incident reports, and other findings.

The statutory employer defense is often raised at summary judgment. The key to defeating it is to show genuine issues of fact that dispute at least one of the elements of the defense. For example, if a general contractor did not have any of its own employees on the job site at the time of an accident, try to use this to show that the general contractor cannot prove the second prong of the test. That prong requires that the general contractor show the "premises occupied by or under control of such an employer." If the general contractor is not present on the job site, it can create an issue of fact as to whether it can actually occupy or control the premises when it isn't even there.

Remember, a defendant has to prove each and every factor to get immunity under this defense. To defeat it, you only have to show that one element cannot be proven.

Not every employer is protected by the statutory employer doctrine

The statutory employer defense is only available to those higher up on the contract chain. For example, a general contractor above the subcontractor could be immune from lawsuits by the subcontractor's employee. However, other subcontractors would not be immune.

For example, assume there is a construction site. There are two subcontractors. One is a carpentry subcontractor and the other is an electrical subcontractor. Each of these subcontractors are hired directly by the general contractor. Now assume one of the carpentry subcontractor's employees gets hurt. The general contractor can try to claim statutory employer immunity. This is because it has a contract with the carpentry subcontractor and is higher up the chain of command.

However, there should be nothing stopping the carpenter from suing the electrical subcontractor. The two subcontractors do not have a contract with one another. For this reason, statutory employer immunity cannot apply.

For this reason it is common that other subcontractors are sued in construction site cases, because they do not have the ability to claim a statutory employer defense unless they directly contracted with that subcontractor. If one subcontractor's employee hurts another subcontractor's employee, they cannot use the statutory employer defense is they do not have contracts with each other.

How an experienced Philadelphia construction accident lawyer can help

The personal injury law firm of Mattiacci Law has years of experience handling complex construction accident cases. Our attorneys, including John Mattiacci and Bill Coppol, have each handled multi-million dollar lawsuits involving construction cases.

In these cases, both John and Bill have time and again defeated the statutory employer defense when raised by various defendants. They start preparing their arguments to defeat this defense from the outset of the case. They strive to find the evidence necessary to fight the statutory employer doctrine wherever possible.

Our Philadelphia construction accident lawyers have successfully defeated this defense in construction accident cases on large construction projects, such as the Pennsylvania Convention Center Expansion project, the expansion of the University of Pennsylvania’s health system, and large SEPTA construction projects. Construction accident lawyers John Mattiacci and Bill Coppol have also been able to overcome this defense on smaller construction projects, such as residential home construction sites and smaller renovation projects at buildings such as Liberty Place.

Our success in defeating this defense has helped lead to the recovery of millions of dollars in settlements and verdicts for clients. Those clients have included union electricians, iron workers, carpenters, pile drivers, teamsters, and steamfitters, and others.

Having an attorney that is experienced in overcoming Pennsylvania’s Statutory Employer Doctrine is important. Knowledge of this doctrine is essential from the very start of a construction accident case. The key to defeating this defense must start at the very outset of a case and before litigation even starts. By knowing the doctrine and more importantly, how to defeat it, injured workers can still obtain the compensation they deserve. 

If you or a family member have been injured in a construction accident, call the Pennsylvania construction accident lawyers at Mattiacci Law today. John has handled catastrophic construction accident cases for years and has helped recover multi-million dollar recoveries for seriously injured clients. 

Contact Mattiacci Law for a free consultation to see what we can do to help you.

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