Ohio Supreme Court Expands Liability Protection For Subcontractors Working On Self Insured Construction Projects.
The Ohio Supreme Court announced that subcontractors enrolled in a self-insured construction project will now find immunity from tort claims made by employees of a different enrolled-subcontractor who are injured or killed while working on the self-insured project and whose injury, illness, or death is compensable under Ohio’s workers’ compensation law.
In Stolz v. J & B Steel Erectors, Inc., The Supreme Court was asked by the US District Court for the Southern District of Ohio, Western Division for clarification on the question of whether “Ohio Rev. Code §§ 4123.35 and 4123.74 provide immunity to subcontractors enrolled in a Workers’ Compensation self-insurance plan from tort claims made by employees of [other] enrolled subcontractors injured while working on the self-insured project.” In the case before the Federal District Court, plaintiff, an employee for one subcontractor, sued another subcontractor for injuries allegedly caused by the second subcontractor’s negligence. The general contractor had obtained authority to be a self-ensuring employer on the project under R.C. 4123.35(O) and therefore was required to provide workers’ compensation coverage for both its own employees and those of enrolled subcontractors working on the casino construction project. The plaintiff’s employer, a subcontractor, and other subcontractors were enrolled subcontractors.
The Supreme Court answered the question of whether subcontractors enrolled in a Workers’ Compensation self-insurance plan are immune from tort claims made by employees of other enrolled subcontractors injured while working on the self-insured project in the affirmative and held that the subcontractor which allegedly caused the injuries was immune from liability for the claims because it was an enrolled subcontractor. The Court reasoned the statutes created a “legal fiction” wherein a “self-insuring employer is the employer of all covered employees, including employees of enrolled subcontractors, for purposes of workers’ compensation.” This legal fiction, according to the Court, therefore “made clear that for purposes of workers’ compensation, enrolled subcontractors do not have employees working on the construction project.” Thus, the general contractor, not the enrolled subcontractor-employer, is liable for workplace injuries of the enrolled subcontractor’s employees; the enrolled subcontractor is immune. Additionally, referencing tort law, the Court concluded that “a worker who may be compensated with workers’ compensation benefits is prevented from suing a co-employee (any other employee on the job site who is enrolled in the self-insuring employer’s plan), and thus the worker cannot seek to hold the co-employee’s actual employer vicariously liable in order to recover damages in tort.” For these reasons, the Court concluded, enrolled subcontractors were immune from claims of employees of other enrolled subcontractors who were injured or killed while working on the project so long as the event is compensable under Ohio’s workers’ compensation laws.
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