Eighth Circuit Opines that Statutory Employers may be Exempt from Civil Suit under Missouri Law

Recently, the United States Court of Appeals for the Eighth Circuit opined on whether a statutory employer under Missouri’s workers’ compensation law is immune from civil liability by an injured worker when the primary employer has workers’ compensation insurance. In Blanton v. The Kansas City Southern Railway Company, 2022 WL 1463025 (8th Cir. 2022), the plaintiff, Nathan Blanton, was injured in a locomotive collision. His employer, ITS, had previously contracted to provide railcar-switching services for Kansas City Southern Railway Company (“KCSR”). Blanton filed a workers’ compensation claim, which was settled after Blanton received a lump sum payment. He then filed a civil negligence suit against KCSR, which was removed to federal court. The district court dismissed Blanton’s suit on the ground that KCSR was exempt from liability under Missouri’s workers’ compensation law.

            Like many states, Missouri’s workers’ compensation system is the exclusive remedy for employees injured in the workplace. However, employees may bring a civil action against employers who violate the statutory requirement to carry workers’ compensation insurance or qualify as a self-insurer. In certain circumstances, a contractor may be deemed an employer of a subcontractor’s employees. The contractor, often called the “statutory employer”, is secondarily liable for the injury while the subcontractor is primarily liable. Under Mo. Rev. Stat. Sec. 287.040.3, “[n]o such [secondarily liable] employer shall be liable as in this section provided, if the employee was insured by his immediate or any intermediate employer.” 

            On appeal, Blanton argued that even though he was insured through his immediate employer, ITS, Mo. Rev. Stat. Sec. 287.040.3 only exempted KCSR from workers’ compensation liability, not negligence liability.  Interpreting the plain meaning of language contained in the statute, the court determined that Mo. Rev. Stat. Sec. 287.040.3 applied to bar suit for secondary employers in civil actions as well as workers’ compensation claims when the immediate employer has insurance. In doing so, it noted conflicting decisions by the Missouri appellate courts on the issue. Compare Harman v. Manheim Remarketing, Inc., 461 S.W.3d 876, 877-78 (Mo. Ct. App. 2015) (holding that a civil action is permitted where the statutory employer failed to carry workers’ compensation insurance even after obtaining workers’ compensation from an immediate employer) with Augur v. Norfolk Southern Railway Co., 154 S.W.3d 510, 512, 517 (Mo. Ct. App. 2005) (holding that a worker cannot bring suit against a statutory employer for the same injuries for which he or she obtained workers’ compensation benefits). Since the Eight Circuit believed that the decision barring civil suits as well as workers’ compensation claims did not conflict with the plain meaning of the statute, it refused to rely on the more recent decision stating the opposite. 

            It is not an uncommon scenario for a subcontractor’s employees to seek to hold a contractor liable under negligence theories, such a premises liability, despite having received workers’ compensation benefits. While this case does not resolve the conflicting cases in Missouri state courts, it does provide authority in federal court until additional cases on the issue are decided in Missouri. Thus, companies that would qualify as statutory employers in negligence suits may want to consider whether it would be beneficial strategically to remove the case to federal court prior to moving for dismissal.  

Author: Makenna J. Stoakes

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