No personal injury case against “statutory employer.”

The Court of Appeals affirmed dismissal of a personal injury case because the defendant qualified as a statutory employer of plaintiff under Tennessee’s workers’ compensation laws.  Under the “exclusivity doctrine” in worker’s compensation law, an employee cannot sue his or her employer under  tort law.  Instead,  the exclusive remedy for the employee is under worker’s compensation law.

In Coblentz v. Tractor Supply Company, No. M2023-00249-COA-R3-CV (Tenn. Ct. App. Apr. 26, 2024), plaintiff worked as a sales representative for a hardware company. The hardware company supplied certain products to defendant retail store. Plaintiff’s job therefore included visiting defendant store, along with many other stores, to check its inventory. While at the store, plaintiff would determine whether additional inventory from his hardware company should be sent, stock any new product, and generally straighten the area where his company’s products were displayed. Plaintiff typically visited defendant store every four to six weeks.

During one visit, a large barn door fell off its track and hit plaintiff. Plaintiff filed a workers’ compensation case against the hardware company he worked for, which was settled. He also filed this personal injury case against defendant retail store. Defendant moved for summary judgment, arguing that it was a statutory employer under Tennessee’s workers’ compensation laws, and that workers’ compensation was therefore plaintiff’s exclusive remedy. The trial court agreed, granting summary judgment to defendant, and the Court of Appeals affirmed.

In certain circumstances, Tennessee’s workers’ compensation rules extend beyond an injured person’s primary employer. When the injured worker is an employee of a subcontractor, the “statutory employer rule” provides that the “principal contractor is secondarily liable for workers’ compensation and thus pays workers’ compensation only if the immediate employer cannot do so.” (internal citation omitted). Under this rule, a statutory employer is immune from tort liability. (internal citation omitted).

Applying Tennessee law to the facts of this case, the Court agreed that defendant retail store satisfied one of the three tests to be considered a principal contractor (or statutory employer). The Court found that “the work being performed by [plaintiff was] part of the regular business of the company or…the same type of work usually performed by the company’s employees.” (internal citation omitted). In reaching this conclusion, the Court noted that plaintiff went into the store with some regularity, that he checked stock and added stock to shelves, that he straightened the display, and that he would clean up the area if needed.

Because the Court ruled that defendant qualified as a statutory employer for workers’ compensation, summary judgment for defendant was affirmed.

Judge Usman wrote a lengthy dissent here, expressing his concern that “existing Tennessee caselaw does not appear to have grappled with vendor-vendee relationships when determining statutory employer status.” The dissent examined multiple other states which have ruled that vendor-vendee relationships do not fall within the principal-subcontractor definition in workers’ compensation laws. The dissenting opinion also identified reasons that this approach might make sense in Tennessee, and it ended by stating that “[a]pplying existing caselaw without integrating the limitation as to vendors threatens to make many more employers liable for workers’ compensation of employees who are not their direct employees while reducing the protections of such employees against negligence by employers who are not their direct employer.”

The dissent in this case brings up an interesting issue in Tennessee law, as bringing more and more vendor-vendee relationships under workers’ compensation would have serious implications for both businesses and individuals.  Hopefully the Tennessee Supreme Court will accept the opportunity to review this case.   It represents a dramatic change in Tennessee law.

The Court of Appeals released this opinion 3.5 months after oral arguments.

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