Thursday, March 2, 2023

Pennsylvania Superior Court Reviews Scope of Statutory Employer Status for General Contractors

In the case of Yoder v. McCarthy Construction, Inc., No. 1605 EDA 2021 (Pa. Super. Jan. 31, 2023 Bender, P.J.E., Panella, P.J., Sullivan, J.) (Op. by Bender, P.J.E.), the court addressed issues of whether or not a Defendant was a worker’s compensation statutory employer and, therefore, immune from any tort liability asserted by the Plaintiff, who was an employee of a subcontractor.

According to the Opinion, the jury in the underlying matter had entered a verdict for over $5.5 million dollars against the Defendant on the personal injury claims presented.

In reviewing the Worker's Compensation Law, 77 Pa.C.S.A. Section 462, the Superior Court noted that general contractors take on secondary liability for the payment of worker's compensation for the employees of any subcontractors.  In the event a subcontractor defaults on securing worker's compensation coverage, then the coverage purchased by the general contractor would apply.  In this regard, the general contractor is considered under the law to be a statutory employer of the subcontractor's employee.

In exchange for this secondary liability taken on by a general contractor under the law, the general contractor is granted immunity from any tort liability arising out of the same incident.   

The court found that, given that the Plaintiff had received worker’s compensation benefits, the Plaintiff was judicially estopped from denying his employee status. The court noted that the record confirmed that the Plaintiff was an employee of the subcontractor at issue, and not an independent contractor.

As such, the Pennsylvania Superior Court ruled that a statutory employer status is not limited to general contractors at a job site.

The court additionally noted that worker’s compensation immunity, including with respect to the issue of whether or not a Defendant is a statutory employer, is a jurisdictional issue that cannot be waived. 

The court additionally noted that whether a Defendant is a statutory employer is a question of law for the court, not a question of fact for the jury.

In the end, the Superior Court found that the Defendant was a statutory employer and was therefore immune from any liability.

Anyone wishing to review a copy of this decision may click this LINK.

I send thanks to Attorney James M. Beck of the Philadelphia office of the Reed Smith law firm in Philadelphia for bringing this case to my attention.

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