“Paymaster” May Not Be Considered Rig Worker’s Employer In Context Of Vicarious Liability For Negligence Under General Maritime Law

Confronted with an issue of first impression in the Fifth Circuit, the U.S. District Court for the Eastern District of Louisiana concluded that where a company serves only as a “paymaster,” that company cannot be considered a rig worker’s employer in the context of vicarious liability for negligence under general maritime law.  The court granted summary judgment to the company serving as paymaster for three rig workers in a case brought by another rig worker who was injured after pirates boarded a jack-up rig working off the coast of Nigeria and shot him in the leg with an AK-47 rifle at close range.

The injured worker’s claims included a claim against the company serving as paymaster for three rig workers for general maritime negligence on the grounds that the three workers the company paid were in fact negligent and that the company was vicariously liable for their actions.  The court first determined that a reasonable jury could find that negligence occurred given the known risk of boarding in this area of the world and that those charged with rig security should have reasonably foreseen that an attack on the vessel could occur and should have taken steps to minimize that risk.  Turning to the question of vicarious liability, the court found that the company was merely a “paymaster” for the three workers in question based on the evidence produced.

The court then considered whether a company serving only as a paymaster should be considered an employer of the workers for general maritime law purposes.  After reviewing the various tests used within the Fifth Circuit to analyze whether an employee/employer relationship exists, the court focused on the common theme present in all of the tests:  control.  Even under the Jones Act, a court considers a “payroll employer” to be a proper defendant only if it has not “divested itself of all control over the employee.”  The court characterized this Jones Act standard as a relaxed and atypical one given the Jones Act’s purpose of being “for the benefit and protection of seamen who are peculiarly the wards of admiralty,” and declined to transpose this lower threshold onto standard negligence claims brought pursuant to general maritime law.  Specifically, the court explained, “While general maritime law will often involve seamen, thus arguably should be subject to the same relaxed standards, [the paymaster company] is not and could never be considered [the injured worker’s] Jones Act employer under these facts, and the Court declines to expand the protections of the Jones Act beyond the reaches of the statute.”