DOES HORIZONTAL WORKERS COMPENSATION IMMUNITY APPLY?

The Second District Court of Appeals in Heredia v. John Beach & Associates, Inc., 44 Fla. L. Weekly D1892a (Fla. 2d DCA 2019) found that horizontal workers compensation immunity did not apply when the subcontractors were hired by a developer and not a contractor.     In this case, a developer (really, a homebuilder) of a subdivision hired an earthwork subcontractor and a surveyor.   An employee of the surveyor injured an employee of the earthwork subcontractor prompting the earthwork subcontractor to sue the surveying company.  The issue was whether horizontal workers compensation immunity applied.

 

Section 440.10(1)(b) provides the contours of horizontal immunity:

 

In case a contractor sublets any part or parts of his or her contract work to a subcontractor or subcontractors, all of the employees of such contractor and subcontractor or subcontractors engaged on such contract work shall be deemed to be employed in one and the same business or establishment, and the contractor shall be liable for, and shall secure, the payment of compensation to all such employees, except to employees of a subcontractor who has secured such payment.

Heredia, supra

 

The Court explained that to be considered a contractor:

 

its “ ‘primary obligation in performing a job or providing a service must arise out of a contract.’  This “ ‘primary obligation’ . . . is ‘an obligation under the prime contract between the contractor and a third party.’ ”  “Stated another way, the rule is that the entity alleged to be the contractor must have ‘incurred a contractual obligation to a third party, a part of which obligation the entity has delegated or sublet to a subcontractor whose employee is injured.’ ” 

Heredia, supra (internal quotations omitted).

 

The reality is that the homebuilder / developer was likely a licensed general contractor that hired the subcontractors.  But, based on the definition of contractor under the workers compensation immunity context, this would not have been good enough because the developer would not have been performing work pursuant to a contract with another.  See Heredia, supra (finding that record evidence showed that developer was performing work on property it owned for its own property and was not performing any work under a contract with another).  The developer would have needed to hire itself, or a related entity, as the general contractor to best preserve arguments with respect to workers compensation immunities.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Posted in horizontal immunity, workers compensation.