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Demetres v. East West Construction – Subcontractor Deemed “Co-Employee”

When a worker suffers an on-the-job injury, state law holds workers’ compensation benefits are the sole source of compensation a worker can receive, with few exceptions. These benefits are considered the “exclusive remedy” a worker can pursue against an employer.
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Other third parties may still be vulnerable to a negligence lawsuit, but plaintiffs should bear in mind that some are still statutorily protected under workers’ compensation law in some cases.

For example, a negligent third-party driver could be held liable, as could potentially the property owner of a construction site. However, there are some exceptions. Co-workers, for example, are usually protected. (A 2012 Georgia Supreme Court decision in Smith v. Ellis held co-workers could potentially be held liable for injuries caused if their negligent actions occurred outside the course and scope of their employment.)

In the recent case of Demetres v. East West Construction, the U.S. Court of Appeals for the Fourth Circuit determined that per Virginia law, a subcontractor is to be considered a co-employee for purposes of a workers’ compensation claim made by a direct employee of the company that hired the subcontractor.

According to court records, claimant/employee is a resident of North Carolina, and his company was based there as well. The subcontractor in question is based in Virginia. The employer hired the subcontractor to prepare a site in Virginia Beach for the erection of a drug store. Claimant was designated as the superintendent.

An employee of the subcontractor was operating a bulldozer and in so doing, backed over claimant, causing him serious injuries. In fact, he was nearly killed.

Claimant sought and received workers’ compensation benefits through his employer under North Carolina law. He later filed a personal injury lawsuit in Virginia against the subcontractor, asserting the company and its employee were negligent and seeking $1 million in damages.

Defendant subcontractor filed a motion to dismiss for lack of subject matter jurisdiction, arguing the exclusive remedy provision of workers’ compensation law shielded it from liability in the personal injury action.

The district court agreed with defendant and granted the motion for dismissal.

Plaintiff appealed, but the 4th Circuit federal appeals court affirmed.

Plaintiff made two primary arguments on appeal:

  • The Full Faith and Credit Clause requires Virginia to defer to North Carolina law in determining liability;
  • Precedent in Virginia case law allows a court to apply the law of the state where benefits were paid, even if the underlying injury occurred in Virginia.

Our Atlanta construction injury attorneys understand the law in Virginia holds injured employees of a general contractor can’t sue a subcontractor who was engaged in general contractor’s occupation, business or trade. That is, if both the claimant and the subcontractor are working on the same project and both engaged in the general contractor’s work, the subcontractor is considered a co-worker of the claimant, and thus, is immune from negligence action.

North Carolina’s workers’ compensation law is more permissive on this issue. However, the U.S. Supreme Court has ruled that states with more permissive workers’ compensation laws aren’t required to give “full faith and credit” to those with more restrictive interpretations, and the inverse is true as well.

Thus, in applying Virginia law, the claim is barred.

Because so many companies conduct work out-of-state, issues like this crop up all the time. It’s important to contact an experienced work injury lawyer to help you explore all relevant options.

For information on Atlanta work injury compensation, contact J. Franklin Burns, P.C., at 1-404-303-7770.

Additional Resources:
Demetres v. East West Construction, Jan. 15, 2015, U.S. Court of Appeals for the Fourth Circuit
More Blog Entries:
Martin County Coal Co. v. Goble – On Permanent Psychological Impairments, Jan. 6, 2015, Atlanta Work Injury Lawyer Blog