Pennsylvania Supreme Court Reaffirms Statutory Employer Status for General Contractors

The Pennsylvania legislature, in passing the Worker’s Compensation Act more than 100 years ago, sought to protect injured workers by ensuring that insurance would be available to workers who were injured during the course of their employment.  The General Assembly of Pennsylvania has amended the Act several times since its original passage in 1915, and courts have been reinterpreting the amendments as work related injury lawsuits have been brought over time.  As part of the Act, the legislature created a statutory construct whereby general contractors would bear secondary liability for the payment of worker’s compensation benefits to injured workers employed by their subcontractors, as it wished to ensure payment to injured workmen in the event the subcontractor defaulted on its primary obligation to provide benefits.  By so doing, the legislature deemed these general contractors to be “statutory employers” although they were not the actual employer.  In exchange for assuming this obligation, general contractors have been provided with immunity from civil tort liability for lawsuits brought by their subcontractors’ injured workers. 

Essentially, under the concept of statutory employer, general contractors, who are not the “actual” employer of the injured party, are given the status of statutory employer by legal fiction created by the legislature, thus enveloping them with immunity from tort liability.  The appellate courts of Pennsylvania have, for decades, consistently upheld the statutory employer status of general contractors and the immunity it provides.  Thus, with respect to injuries suffered by employees of subcontractors on construction projects it had appeared well settled that the subcontractor’s injured employee’s only remedy was compensation through the Worker’s Compensation Act; and that the injured workman was essentially barred from bringing any action against either its actual employer or the general contractor as statutory employer. 

It was crystal clear, that is, until a recent decision of the Bucks County Court of Common Pleas, which was later affirmed by the Pennsylvania Superior Court, upset this jurisprudential apple cart.  In that case, Patton v Worthington Associates, Inc., Worthington was engaged by a project owner as a general contractor for an addition to a Levittown Church.  Worthington in turn entered into a standard form subcontract with Patton Construction, Inc., a Pennsylvania corporation of which Earl Patton was the sole shareholder and employee.  In the course of Patton Construction, Inc.’s work on the Project, Mr. Patton fell and sustained injuries to his back.  Mr. Patton and his wife commenced a civil action against Worthington contending that the company failed to maintain safe conditions at the jobsite.  Worthington moved for summary judgment on the basis that it was Mr. Patton’s statutory employer and, accordingly, was immune from civil tort liability.  The Common Pleas Court, in denying summary judgment, refused to acknowledge Worthington’s statutory employer status and ultimately a jury trial was held with the jury awarding $1.5 million to the Pattons.  Worthington appealed to the Pennsylvania Superior Court which surprisingly affirmed the trial court’s ruling and the jury’s verdict.  Both the trial court and the Superior Court based their decisions on an erroneous legal question, that is, whether Mr. Patton, the injured person, was an independent contractor or an employee of Worthington? 

Next came Worthington’s appeal to the Pennsylvania Supreme Court.  The Pennsylvania Supreme Court, in reversing the Superior Court and the Trial Court, concluded that those courts completely misconstrued the concept of statutory employer.  In not so many words, the Pennsylvania Supreme Court, in its March 2014 published decision, opined that the two lower courts had completely whiffed on their analysis by setting up a false dichotomy and forcing the jurors to answer essentially the wrong question.  The Pennsylvania Supreme Court righted this wrong by restating the long standing applicable law, that is: a “statutory employer” is made one by the Worker’s Compensation Act, not by contract or common law.  The controlling questions in cases involving a statutory employer issue, the Pennsylvania Supreme Court reminded the judiciary, are whether the general contractor maintains control of the jobsite, and whether the subcontractor (actual employer of the injured workman) has been entrusted by the general contractor with a portion of the general contractor’s work as evidenced by the contract between the general contractor and the owner.  Having concluded that the answer to both of these controlling questions was yes, the Pennsylvania Supreme Court reversed the rulings of the lower courts.  Thus, the concept of statutory employer and the immunity it provides to general contractors has been reaffirmed in Pennsylvania. 

Whether one agrees with the concept of providing immunity to general contractors or not, the Patton case would leave most students of the law scratching their heads in wonder as to how highly-educated and experienced jurists could get this well settled legal concept and decades of precedent so wrong.  For now, once again, general contractors who are sued by injured employees of their subcontractors enjoy the immunities of the Worker’s Compensation Act in Pennsylvania. 

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Harrisburg Magazine Readers' Choice 2011