Caps & Immunities
noted that something more than simple respondeat superior would be required but perhaps not as stringent a showing as the alter ego requirement previously enunciated.27 In Tynes v. Shoney’s Inc, the U. S. District Court for
Maryland, applying the Le decision, held that an employee need not be shown to have acted as the “alter ego” of the employer, but at the same time not every intentional wrongdoing of a fellow employee can be attributable to the employer, so as to circumvent the employer’s statutory immunity. Te Court sought to articulate several factors to be considered in such cases:
A. Te status of the co-employee in the corporate hierarchy;
B. Te extent to which the wrongful conduct could be expected to flow from that position;
C. Te nature of the wrongdoing; D. Any prior notice that the employer had of the employee’s proclivity to do wrong.28
Not
Just “Real” Employers But Also “Statutory Employers” Are Immune
Te framers of workers’ compensation legislation were
most concerned with the protection of injured workers by enforcement of the provisions for mandatory purchase of workers’ compensation insurance. It was recognized that fly by night contractors frequently do not comply with any laws or regulations that make the cost of doing business more expensive. Although it was made a criminal offense to fail to purchase workers’ compensation insurance29 the law also provides for civil penalties,30
and criminal and civil
penalties were understood to be inadequate to assure before- the-fact compliance with the law by many small contractors. Additional protections were needed and were built into the law.
Te law places the burden on principal contractors who
hire subcontractors to make sure these subcontractors have workers’ compensation insurance coverage. Te consequence under the law to the contractor if its subcontractor does not have insurance coverage is to be held directly liable for the Claimant’s injuries as if it were the direct employer of the Claimant. Section 9-508 states that upon proof of the existence of a principal contract, “[a] principal contractor is liable to pay to a covered employee... any compensation that the principal contractor would have been liable to pay had the covered employee been employed directly by the principal contractor....”31
Te statute further extends liability to any intermediate contractors in the descending chain of
27 Id. 28 867
F.Supp 330, 334 (D. Md. 1994). 29 Md. Labor & Employ Art. Code Ann. Section 9-1107 30 Id. 31 Md. Labor & Employ Art. Code Ann. Section 9-508(a)
subcontractors down to the Claimant’s actual employer: “If an employee of a subcontractor
...files a claim against a principal contractor... the principal contractor may join the subcontractor and any intermediate contractor as defendant or codefendant.”32
the principal contractor and intermediate subcontractors are commonly referred to as “statutory employers” of the injured worker.33 Statutory employment liability is absolute and doesn’t
depend on a showing that the contractor was negligent in seeking information from his subcontractors about insurance coverage. Tus, even if the subcontractor misrepresents his insured status, the statute nevertheless imposes liability on the part of the contractor to the injured employee. Along with the imposition of statutory employment liability on principal contractors and intermediate subcontractors,
“statutory
employers” enjoy the corresponding immunity from damage suits that an insured employer would have. Te Court of Appeals in so holding stated: “If an employer is within the act to bear its liabilities, he must remain to be accorded its immunities, in the absence of a clearly expressed legislative intention to the contrary.” 34
32 Md. Labor & Employ Art. Code Ann. Section 9-508(c) 33 Md. Labor & Employ Art. Code Ann. Section 9-508(b) 34 State v. Bennett Building Co., 154 Md. 159, 168, 140 A. 52, 54-55 (1928).
Trial Reporter / Spring 2011 45
Although the term is not used in the law,
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68