Defenses: Workers Compensation Exclusive Remedy and Up the Ladder

From Kenney v. Cemex, Inc., COA, NPO, 3/25/2011

In its motion for summary judgment, Cemex argued that Kenney was barred from bringing any tort claim against it because he received workers’ compensation benefits from HS Construction’s insurance carrier. Cemex relied on the exclusivity provision of the Kentucky Workers’ Compensation Act, KRS 342.690(1). In relevant part, the exclusivity provision states:
If an employer secures payment of compensation as required by this chapter, the liability of such employer under this chapter shall be exclusive and in place of all other liability of such employer to the employee, his legal representative, husband or wife, parents, dependents, next of kin, and anyone otherwise entitled to recover damages from such employer at law or in admiralty on account of such injury or death. For purposes of this section, the term “employer” shall include a “contractor” covered by subsection (2) of KRS 342.610, whether or not the subcontractor has in fact secured the payment of compensation.

“The statute makes it plain that if [a company] is a contractor, it has no liability in tort to an injured employee of a subcontractor.” Fireman’s Fund Ins. Co. v. Sherman & Fletcher, 705 S.W.2d 459, 461 (Ky. 1986). This is referred to as “up-the-ladder” immunity. If a company meets the definition of “contractor” provided in the workers’ compensation statutes, then it is deemed to be an “up-the- ladder” employer of its subcontractors’ employees and, like any employer, is entitled to immunity from its employees’ tort actions. The statutes define a “contractor” as a “person who contracts with another . . . [t]o have work performed of a kind which is a regular or recurrent part of the work of the [person’s] trade, business, occupation, or profession.” KRS 342.610(2)(b).

Accordingly, the dispositive issue in this matter, and the focus of Kenney’s disagreement with Cemex, is whether the repairs Kenney was assigned to perform on the splitter gate at the 526 Ball Mill qualified as work that is a “regular” and “recurrent” part of Cemex’s business, per KRS 342.610(2)(b).
Kentucky jurisprudence further defines these terms. In General Elec. Co. v. Cain, 236 S.W.3d 579 (Ky. 2007), our Supreme Court held that, as used in the statute, “regular” and “recurrent” workis work that is customary, usual, or normal to the particular business (including work assumed by contract or required by law) or work that the business repeats with some degree of regularity, and it is of a kind that the business or similar businesses would normally perform or be expected to perform with employees.” Id. at 588.

The Court also stated that “‘regular’ means that the type of work performed is a ‘customary, usual or normal’ part of the premises owner’s ‘trade, business, occupation, or profession,’ including work assumed by contract or required by law.” Cain, 236 S.W.3d at 586-7. “Recurrent” means that the work is repeated, though not “with the preciseness of a clock.” Id. (quoting Daniels v. Louisville Gas and Elec. Co., 933 S.W.2d 821, 824 (Ky. App. 1996)).

The Sixth Circuit has held that work being done “periodically,” as an “ordinary part of plant maintenance,” is regular or recurrent. Granus v. North American Philips Lighting Corp., 821 F.2d 1253, 1257 (6th Cir. 1987). In Daniels, a panel of this Court held that emissions testing was a regular or recurrent part of a contractor’s business on the basis of its manager’s affidavit stating that testing had occurred on fourteen occasions in 28 years. Daniels, 933 S.W.2d at 824.

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