Is the parent company of a worker’s direct employer protected from civil liability when a fatal incident occurs at a worksite? The Arkansas Court of Appeals found that, yes, the workers’ compensation exclusivity provision does extend to a parent company.
A lawsuit filed by the estate of a deceased worker can’t move forward after the appeals court found the parent company was entitled to the same protections as the direct employer under the state’s workers’ compensation law.
Worker killed when platform collapsed
Jordan Mason was sweeping sawdust off a lumber deck conveyor on May 30, 2018, while working for Wilson Brothers Lumber. The grating he was standing on collapsed and he fell about 10 feet and the rest of the steel grating crashed down on top of him.
Mason died from his injuries, leaving behind a 14-month-old daughter, who was left in the care of Mason’s parents.
The estate filed a lawsuit against Frank & Grady, the company that owns Wilson Brothers Lumber, and filed a workers’ compensation claim for full death benefits from Wilson Brothers.
The Arkansas Workers’ Compensation Commission found that Mason’s daughter was entitled to full death benefits and that Frank & Grady was immune to a lawsuit because it was the sole owner of Wilson Brothers, giving it the same protection as the direct employer under the state’s workers’ compensation exclusivity provision.
Exclusivity provision applied, daughter gets full benefits
On appeal, Mason’s estate argued that the commission erred in finding Frank & Grady was protected under workers’ compensation law.
The appeals court upheld the commission’s decision, finding that a previous case, Myers v. Yamato Kogyo Co., set precedent that parent companies were protected in these situations.
In Myers, the Arkansas Supreme Court found that parent companies were “party-employers acting within the employer-shareholder role” and entitled to immunity as principals and stockholders of the direct employer.
That case presented no facts that placed the claims “outside the normal employment context” so workers’ compensation immunity provisions applied.
The appeals court found the same thing applied to Mason’s case, as the estate made no claims that Frank & Grady’s relationship to Wilson Brothers was anything outside of a normal ownership. The court also found Mason’s daughter was entitled to full death benefits.
