Arkansas High Court Says Workers’ Comp Commission Must Decide Issues of Employer Status

Company A owns and operates a nuclear power plant, and hires Company B to provide civil engineers to lift and remove a generator from a turbine building and then to replace it with a newly refurbished generator.  During the work, an employee of Company B dies as a result of injuries from a steel beam falling on him.  His estate sued Company A in Arkansas state court.  Company A filed a motion to dismiss asserting that because the worker was a statutory employee of Company A, the exclusive remedy provisions of the Arkansas Workers’ Compensation Act applied and that the case was within the exclusive jurisdiction of the Arkansas Workers’ Compensation Commission (“Commission”).  The circuit court denied that motion to dismiss and concluded that the worker was an employee only of Company B, and that he could sue Company A in tort.  Yesterday, however, the Supreme Court of Arkansas issued a writ of prohibition on the grounds that the circuit court was without jurisdiction to decide the issue and granting the parties leave to pursue the matter before the Commission.  Under Arkansas law, where a party to a case raises a question of whether a person enjoys workers’ compensation immunity, the Commission must first decide the issue unless the facts are so one-sided that the issues of employer status can be determined as a matter of law.

The dissent believed that this case did present such a case where the facts were so one-sided that the case could be decided as a matter of law, pointing to the following:  worker was an employee of Company B, which already paid his workers’ compensation benefits; Company A was not his employer; and the contract between A and B provided, “[Company B] will have complete control of, and supervision over, its employees, tools and equipment … It is expressly understood and agreed between the parties hereto that [Company B] shall be, and operate as, an independent contractor in the performance of this Contract and shall be solely responsible for wages, benefits and safety of [Company B’s] employees.”