In Louisiana, filing a workers’ compensation claim often feels like a trade-off. While the system provides guaranteed medical and wage benefits, it also acts as an ‘exclusive remedy,’ meaning you generally cannot sue your employer for negligence. But what happens when you work for a subcontractor on a larger job site? Under the ‘Two-Contract Theory,’ you might find yourself barred from suing the general contractor as well, even if their negligence caused your injury.
The Exclusive Remedy Rule: Why You Can’t Always Sue in Tort
In Louisiana, an employee can only be compensated for a work related injury through workers’ compensation. This means that if an employee is negligently harmed during the course of work, the only remedy available is what is provided through the workers’ compensation act. This is true unless the injury was as a result of intentional conduct. In the business world, many general contractors contract out work to subcontractors. Legally the issue in such a case becomes how to define who the employee is employed by in case of an injury.
Understanding the Two-Contract Theory in Louisiana
In Louisiana, there is a doctrine called the two contract theory. The basic outline of this theory is that in a situation where there are three parties in a contract which includes a general contractor, subcontractor, and subcontractor’s employee, the subcontractor’s employee is considered an employee of the general contractor. This mean that if the subcontractor’s employee is injured while performing work for the general contractor, the employee will only be able to receive workers’ compensation, not any damages based on negligence or any other branch of tort law. This may, at first glance, seem like a harsh result. However, in the modern business world, there are so many employment contractual relationships that liability must be limited to what is reasonable under the circumstances. The two contract theory should not be viewed as a way to protect business, but rather as a means for the judicial system to not be able to overreach.
Mason v. Waste Management: A Case Study in Statutory Employmen
In a recent case, Mason v. Waste Management Inc. Et Al., the law concerning employee rights is discussed in such a circumstance. Lamare Kindle and Wallace Bradley, were employed by Waste Management Inc. Mr. Bradley was employed directly by Waste Management. Mr. Kindle was employed by CPST Inc. CPST was a subcontractor which had contractually agreed to supply Waste Management with employees in an effort to help Waste Management collect trash it was required to contractually pick up. Waste Management had agreed to pick up trash in a contract with the Morehouse Parish Police Jury. So the contractual relationships are broken down as follows: Morehouse Parish Police Jury needed a company to come pick up trash in its area. Waste Management agreed to pick up the trash and signed a contract with Morehouse Parish to do so. Mr. Bradley was employed by Waste Management. In an effort to fulfill its obligation to Morehouse Parish, Waste Management needed to hire temp workers. CPST contractually agreed to supply Waste Management with employees. Mr. Kindle was employed by CPST.
Mr. Bradley was driving a truck registered to Waste Management. Mr. Kindle was a passenger in the truck driven by Mr. Bradley. Upon coming to a train track Mr. Bradley made the tragic mistake of crossing over the tracks as a train passed the intersection. Both Mr. Bradley and Mr. Kindle was sadly killed as a result of the collision with the train. Mr. Kindle’s parents sued Waste Management alleging that it was liable for any negligence that was attributed to Mr. Bradley while he was driving the garbage truck. The police report stated that the accident was likely the result of Mr. Bradley’s inattentivness.
General Contractors vs. Subcontractors: Who is the Real Employer?
Waste Management argued that under the two contract theory, Mr. Kindle was its employee and because there was negligence and not intentional conduct, the only remedy available was workers’ compensation. Because Waste Management held a position as a general contractor in relation to Morehouse Parish, and CPST held a relationship with Waste Management as a subcontractor, the circumstance of the contractual relationships fell under the definition of the two contract theory. Therefore, Mr. Kindle was considered an employee of Waste Management and the only remedy available was workers’ compensation.
Navigating the maze of contractual relationships between general contractors and subcontractors is one of the most difficult aspects of Louisiana injury law. Whether you are dealing with a Truck Accident on a job site or a construction injury, knowing which ’employer’ is liable is critical to your recovery. Don’t assume workers’ comp is your only option until you’ve had a professional review of the contracts involved. Contact our Louisiana workers’ compensation team today to ensure you are exploring every possible avenue for recovery.
The “Two-Contract” & Third-Party Claim Checklist
If you were injured on a job site while working for a subcontractor, use this checklist to see if you can bypass the “Exclusive Remedy” rule:
- [ ] Was there an intentional act? If your employer or a co-worker intentionally caused you harm, Workers’ Comp is not your only remedy.
- [ ] Are there “Two Contracts”? Did a general contractor hire your employer specifically to fulfill a portion of a contract they have with a third-party owner? If yes, the “Two-Contract Theory” likely protects the general contractor from a lawsuit.
- [ ] Is the Third Party truly “independent”? If the person who caused your injury works for a completely different company that has no contractual “Statutory Employer” link to yours, you likely can file a personal injury lawsuit against them.
- [ ] Was the equipment defective? If your injury was caused by a faulty machine or tool, you may have a Product Liability claim against the manufacturer, regardless of your employment status.
- [ ] Was it a vehicle accident? If you were hit by a driver unaffiliated with the job site while working, a standard Car or Truck Accident claim is usually available.
The Takeaway: Don’t let a company tell you that Workers’ Comp is your only option. These relationships are legally complex. We look for the “gap” in the contracts to maximize your recovery.