Tab  Wood
503.972.4259
 

OP-ED: Limiting risk and exposure under the Employer Liability Law

July 2018

Tab Wood
503.972.4259
Published in The Daily Journal of Commerce July 2018

Typically, when a construction worker in Oregon is injured on the job, his or her exclusive remedy to recover for the injuries is through the workers' compensation system. However, when a construction worker is injured on a project involving not only his or her direct employer, but also a number of other companies and/or contractors, the construction worker will often seek to recover damages from these third parties beyond the workers' compensation scheme.

The worker does this through Oregon's Employer Liability Law (ELL), which holds companies on a project (other than the worker's direct employer) liable for the worker's injuries under certain circumstances.

What is the ELL? It's an Oregon statute that imposes a heightened standard of care on those in charge of or having responsibility for work that involves risk or danger. The high standard requires a contractor or owner of a construction project to use every device, care and precaution that is practicable to use for the protection and safety of life and limb, without regard to the additional cost.

When and why is the ELL used? It's used when a worker is injured on a project involving not only his or her direct employer, but also other companies or contractors jointly working on the project. A typical example is a project where there is a developer, architect, general contractor and several subcontractors. If an employee of a subcontractor is injured on the job, that employee will likely be compensated for his or her injury through the workers' compensation system. However, that employee may also use the ELL to seek compensation from the general contractor, the architect, other subcontractors and/or the developer.

When is a company exposed under the ELL? The short answer is companies that are considered "indirect employers" of the injured worker have exposure under the ELL. However, certain requirements must be met before the court will consider a company an indirect employer. Specifically, the injured worker must establish that the indirect employer fits into one of three categories.

The first category includes instances where the injured worker's direct employer and the other company are engaged in a "common enterprise." Courts have said that basically includes instances where both the injured worker (and his or her co-workers) and the employees of the other company intermingle with each other while performing the particular activity that results in injury to the worker, or where the equipment that injures the worker is under the other company's control.

For example, if a framing contractor's employee is injured on a project due to faulty scaffolding, then that employee may be able to maintain a common enterprise ELL theory against the general contractor if the general contractor's employees intermingled with the injured worker performing the framing duties and were in charge of something more than general project oversight and scheduling – i.e. the general contractor provided and set up the scaffolding, directed what type of fall protection to use, and provided employees to work alongside the injured worker to assist in the framing task or direct how it was to be accomplished.

The second and third categories include instances where the other company retained the "right to control" or actually controlled how the injured worker accomplished his or her work. The "right to control" analysis focuses on the text of the contract between the parties – usually a general contractor and a subcontractor – and the extent to which the contract documents allow the other company (general contractor) to control safety procedures and oversight on the project, as well as the means and methods of how a subcontractor performs its work.

This is a detailed and often complex analysis that requires a thorough reading of the entire construction contract between the general contractor and subcontractor, paying particular attention to those sections detailing the parties' respective job duties and responsibilities, including those related to safety oversight and procedures. The actual control analysis focuses on the same areas, but involves a review of what actually happened on the job – i.e., how the companies interacted, rather than on the terms of the contract.

Why is it important to understand the ELL, and what can one do proactively to minimize exposure? It's important to understand the ELL because it has the potential to create liability on almost any construction job site where there is more than one company involved in the work. Before engaging in such a job, a company should have any construction agreement reviewed by an attorney prior to signature.

The "right to control" line is complicated, and there is often language in construction agreements that comes close to or crosses the line. It's also important to understand how employees and supervisors should act on a job site to avoid creating a "common enterprise" scenario or a scenario where an injured worker could argue the other company actually controlled how he or she did the work. Lastly, if an injured worker seeks compensation against one's company on any of these theories, immediately engage an attorney to help evaluate whether one is, in fact, an "indirect employer" under the ELL and, if not, help facilitate an exit from the case.

Tab Wood is an attorney in Sussman Shank's litigation group. He represents individuals and businesses in civil litigation, including complex commercial, construction, personal injury, employment and real estate litigation. Contact him at 503-972-4259 or twood@sussmanshank.com.


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