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Paying employer’s workers’ comp premiums did not immunize nonemployer

On Friday, Jan. 21, the Illinois Supreme Court defined a class of third parties that injured workers may sue for injury or illness sustained at work. Normally, workers’ compensation is the exclusive financial remedy for a work-related injury, preventing an injured employee from suing their employer directly regardless of who was at fault.

Third-party defendants

Certain third parties (other than the employer) may have separate liability for workplace injury in narrow circumstances. For example, the owner of a leased workplace may be liable for worker injury caused by the owner’s negligent maintenance of the premises. Or the manufacturer of a defective machine used in the workplace may be subject to suit if that machine malfunctioned and harmed an employee who was using it at work.

Illinois Supreme Court green lights suit against general contractor

Munoz v. Bulley & Andrews, LLC, involved a scenario that required detailed analysis of whether a third party could be sued for a workplace injury. Donovan Munoz, an employee of Bulley Concrete, severely injured his back working at a construction worksite where his employer was a subcontractor for Bulley & Andrews (BA) as general contractor.

Munoz’ workers’ compensation claim was approved, and he also filed a personal injury lawsuit against the general contractor BA for the same injury. He alleged that BA as general contractor controlled the site and allowed unsafe conditions to develop.

Aspects of the relationship between BA and Bulley Concrete included:

  • BA owned Bulley Concrete, but they operated as separate legal, taxpaying entities each with their own employees.
  • BA paid workers’ compensation insurance and benefits for Bulley Concrete.
  • Munoz worked for Bulley Concrete as an employee, but not for BA.
  • BA was the general contractor on the job on which Munoz was injured with Bulley Concrete as subcontractor.

BA argued that the workers’ compensation exclusive remedy rules protected it because it owns Bulley Concrete and BA paid for Bulley Concrete’s workers’ compensation premiums. Munoz responded that only Bulley Concrete as his employer had immunity from suit. The court agreed with Munoz.

The relationship between the entities

The court said that BA did not acquire Bulley Concrete’s immunity by paying for its workers’ compensation insurance. While the construction contract gave BA obligations to protect itself from claims arising out of the project, Bulley Concrete was not a party to that contract, reasoned the court. Therefore, BA had no legal obligation to provide workers’ compensation insurance to Bulley Concrete. The fact that it provided it did not give it Bulley Concrete’s immunity from suit.

Only “immediate employers of an injured worker” were immune from suit. That BA is the parent company of Bulley Concrete did not confer immunity to BA because they operated as separate entities – only Bulley Concrete was the immediate employer. BA also did not have immunity either as an agent or a co-joint venturer of Bulley Concrete as the employer. Therefore, the injured workers’ suit against BA as a nonemployer third party could proceed.

As this Illinois Supreme Court opinion shows, whether a third party other than the immediate employer can be sued for a work injury can be a complicated question. It is important to consult an experienced workers’ compensation attorney not only for guidance on the workers’ comp claim, but also for thorough analysis of whether a third-party lawsuit is an option under the circumstances of the injury.