Oral arguments presented before the Pennsylvania Supreme Court by John J. Hare, shareholder and chair of Marshall Dennehey’s Appellate Advocacy and Post-Trial Practice Group, have led to a unanimous decision by the court to reinstate a long-standing statutory employer defense for general contractors and others who are sued in tort for injuries to subcontractors’ employees. Representing Worthington in Patton v Worthington Associates, Hare successfully argued that the statutory employer issue is a matter of law and not one to be decided by a jury.
The court’s decision is significant because it negates a large verdict and reverses two lower court decisions that had essentially nullified Pennsylvania’s long-standing statutory employer doctrine, which creates an employment relationship between a contractor and the employees of subcontractors, such that the employees are entitled to workers’ compensation benefits from the contractor but, in exchange, the contractor receives the same workers’ compensation immunity from tort liability that an actual employer receives. The doctrine operates primarily to immunize contractors on construction projects from tort lawsuits by the injured employees of subcontractors. The Supreme Court’s decision ensures that protection remains in place.
The case involved a lawsuit by Earl Patton, owner of Patton Construction, a subcontractor hired by the general contractor, Worthington, to perform carpentry work on a church. Patton was injured when the scissorlift he was operating drove into a hole on the construction site and toppled over. Patton and his wife filed suit alleging negligence by Worthington for failing to cover the hole into which Mr. Patton drove. A jury returned a $1.5 million verdict for the Pattons and a divided state Superior Court affirmed, rejecting arguments that Worthington was immune from suit pursuant to Pennsylvania’s statutory employer doctrine.
In its unanimous 7-0 decision, the Supreme Court reversed the lower courts and remanded for the entry of judgment, notwithstanding the verdict, in favor of Worthington. The Supreme Court explained that the statutory employer doctrine has been applied for more than 80 years based upon a straightforward application of a five-part test set forth by the Supreme Court in McDonald v. Levinson Steel Co., 153 A. 424 (Pa. 1930). Despite that straightforward test, the lower courts had erroneously created an additional element that requires a fact-finder to determine whether the subcontractor’s employee (the plaintiff) also is a common law employee or an independent contractor of the contractor.
In his arguments before the Supreme Court, Hare argued that the question created by the lower courts actually nullified the statutory employer doctrine because it can never be answered in a way that allows the doctrine to apply. Specifically, if the fact-finder determines that the plaintiff is an actual employee of the contractor, the contractor is immunized as an actual employer and does not need statutory employer immunity. Likewise, if the plaintiff is an independent contractor, he necessarily cannot be a statutory employee because the doctrine applies only to employees of subcontractors, not independent contractors.
Given the lower courts’ nullification of statutory employer immunity, the case was closely watched by the insurance and construction industries, and nearly two dozen groups from those industries filed amicus briefs in support of Worthington. According to Hare, “we believed from the outset of our involvement, following the adverse verdict, that Worthington was clearly entitled to statutory employer immunity. As the Supreme Court unanimously held, the statutory employer doctrine has been applied to immunize general contractors under these facts in an unbroken line of cases dating back to McDonald in 1930. The allocation of risk and insurance on construction sites in Pennsylvania has always accounted for the presence of the doctrine, but it was effectively nullified by the Superior Court majority’s decision in early 2012. That’s why dozens of construction groups, large and small, came before the Supreme Court as amici curiae seeking a reversal of the Superior Court. The Supreme Court’s ruling has now restored the doctrine.”
The decision in its entirety may be found at: http://www.pacourts.us/.
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