Avoiding Tort Immunity: When Is the Premises Owner a Statutory Employer?
If the plaintiff — injured by your insured property owner — was employed by a company your insured hired to work on its property, he may be barred from suing your insured. The concept of statutory employer immunity plays a crucial role in defining the scope of liability in cases involving job-related injuries. Georgia, like many other states, has statutes designed to shield certain entities from tort liability under specific circumstances. Understanding Georgia's law on statutory employers and tort immunity requires a careful examination of relevant statutes, judicial interpretations and case law precedents.
The Georgia Workers' Compensation Act (the Act) establishes a comprehensive framework for compensating employees for work-related injuries and illnesses that does not require the employees to prove negligence or fault on the part of their employer. In return for this no-fault liability, the Act makes such compensation the exclusive remedy, prohibiting employees from suing their employers for tort liability in civil court.
However, the system sometimes failed to protect workers because their employers failed to obtain workers’ compensation insurance coverage and were otherwise judgment-proof. In order to protect persons working for such financially irresponsible employers, the legislature expanded the reach of the Act to permit liability for workers' compensation benefits to attach vicariously against the company who had hired the injured employee's employer. Georgia Code § 34-9-8 provides:
(a) a principal, intermediate, or subcontractor shall be liable for compensation to any employee injured while in the employ of any of his subcontractors engaged upon the subject matter of the contract to the same extent as the immediate employer . . . . (d) this Code section shall apply only in cases where the injury occurred on, in, or about the premises on which the principal contractor has undertaken to execute work or which are otherwise under his control or management.
Under this doctrine, this “statutory” employer — who was “up the ladder” from the injured worker’s direct employer — was now potentially liable to pay his workers’ compensation benefits, and in return, was given immunity from tort liability.
O.C.G.A. § 34-9-8 is commonly associated with the liability of principal contractors as statutory employers in construction settings. However, its scope extends beyond construction scenarios and may sometimes protect property owners such as manufacturers, hotels, gas stations and other service industry businesses against premises liability claims arising from a work-related injury. When such property owners qualify as statutory employers of the non-employee worker injured on their property, Georgia courts have applied O.C.G.A. § 34-9-8 to shield such owners from tort claims even when the injury was caused by the fault of the owner.
However, mere possession or control of the premises does not make an owner a statutory employer. To be considered the statutory employer of the worker supplied to the owner by another company, the worker must be engaged in fulfilling the owner’s duties to its own customers. For example, if a hotel owner hires a company to supply bellmen to carry luggage for hotel guests, and a bellman is injured when a defective railing gives way and causes him to fall, the injured bellman could not sue the hotel in tort for the defective railing because the hotel owner is his statutory employer. On the other hand, if the hotel owner hires a painting company to paint its lobby and one of the painters falls through the defective railing, the painter can sue the hotel in tort. The painter was not engaged to provide a service to the hotel guests, whereas the bellman was.
In Carr v. FedEx Ground Package Sys., Inc., 317 Ga. App. 733 (2012), the plaintiff was a driver for a small trucking company that had a written contract to provide trucking services to FedEx. The plaintiff’s direct employer leased its truck and driver to FedEx so FedEx could provide delivery services to its customers. While the plaintiff was engaged in this work for FedEx, he was seriously injured in a fight with a FedEx employee.
The plaintiff’s direct employer paid workers’ compensation benefits on his behalf, and the driver filed a personal injury action against FedEx. FedEx moved for summary judgment on the grounds that it was a statutory employer immune from liability under the exclusive remedy provision of the Act. The injured driver pointed out that FedEx’s contract with his direct employer specified that the driver was “an independent contractor, and not … an employee of FedEx Ground for any purpose,” and explicitly shielded FedEx from any workers’ compensation liability. The court held FedEx could not create a contract to relieve itself from any obligation created by the Act, so FedEx still qualified as a statutory employer and was immune from tort liability.
A contrary result occurred in Yoho v. Ringier of America, 263 Ga. 338 (1993), where tort immunity as a statutory employer did not extend to an “owner.” In that case, the property owner hired a company to repair printing equipment at its plant and the repair company’s employee was injured while completing the work. Because the worker was not performing services that the owner owed to its customers, the owner did not qualify as a statutory employer and the worker was free to pursue a tort claim against the owner.
The facts in Rickets v. Tri-State Systems, Inc., 177 Ga. App. 509 (1986), show how maintenance work can create immunity. Tri-State Systems owned an outdoor advertising sign that it furnished under contract to Days Inn. Tri-State hired another company to repaint the sign, and that employee was electrocuted while painting the sign and filed suit against the sign’s owner. Tri-State raised the statutory employer defense. The court found Tri-State was not the “mere passive owner” of the premises where the plaintiff was injured but was under contract to another entity with continuing obligations regarding the subject sign on which the employee was injured. As such, Tri-State qualified as the plaintiff’s statutory employer and was immune from tort liability.
These decisions and many others indicate premises owners, including franchisee owners of gas stations, restaurants and the like, can use similar arguments to defend against claims of tort liability on the grounds that they are statutory employers and subject to potential liability under the Act. Thus, when investigating the facts of a loss, it is critical to pay attention to the relationships between the injured employee, his direct employer, and the owner of the premises where the employee was injured. The statutory employer defense may protect your insured premises owner from liability.
Attorney Contact Info
Nelofar Agharahimi
nelofar@swiftcurrie.com
404.888.6181