The Massachusetts Supreme Judicial Court has ruled that the state’s workers’ compensation statute does not bar a lawsuit by a subcontractor’s employee against the general contractor, even if the employee previously collected workers’ compensation benefits from the general contractor’s insurer.  See Wentworth v. Henry C. Becker Custom Bldg., No. SJC-10806 (May 23, 2011).  A copy of the decision is available here.

The subcontractor’s employee was injured onsite in an explosion.  The subcontractor did not carry workers’ compensation insurance.  Under Section 18 of the Massachusetts workers’ compensation law, when an employee of an uninsured subcontractor is injured, the general contractor’s insurer must pay the workers’ compensation.  Here, after the general contractor’s insurer paid the benefits to the injured employee, the employee sued the general contractor for negligence.  The trial court granted summary judgment to the general contractor based on the workers’ compensation bar, but the Appeals Court overturned the decision.

The Supreme Judicial Court upheld the Appeals Court’s decision, ruling that the bar did not apply.  The court held that, under the language of the immunity provision, the plaintiff was not an “employee” of the “insured.”  Furthermore, Section 15 of the statute specifically provides that the payment of workers’ compensation benefits does not bar a lawsuit against any party other than the “insured person employing such employee.”  The court noted that the purpose of Section 18 is to prevent the general contractor from “escaping its obligation” under the workers’ compensation act by hiring uninsured subcontractors.  The court reasoned that conferring immunity on the general contractor would frustrate this purpose, as this benefit would not have been available had the general contractor hired an insured subcontractor.

One result of the court’s decision in Wentworth is that the general contractor’s general liability insurer could be exposed to the common law claims which were held not to be barred.  It will be interesting to see whether courts consider these claims to be “obligations under a workers’ compensation law” such that the workers’ compensation exclusion would apply.