Opinion ID: 1708771
Heading Depth: 1
Heading Rank: 1

Heading: Principals

Text: Cotton's Fleet Service, Inc. was not a principal or a statutory employer and therefore was not entitled to tort immunity under the Worker's Compensation Act. A principal or statutory employer under the Worker's Compensation Act is a person who undertakes to execute any work, which is a part of his trade, business or occupation or which he had contracted to perform, and contracts with a contractor for the execution of the whole or any part of the principal's work. La.R.S. 23:1061. A principal is liable to pay to any employee, including a contractor's employees, employed in the execution of the work the compensation which he would have been liable to pay if the employee had been immediately employed by him. Id. The rights and remedies granted by the Worker's Compensation Act to an employee or his dependent on account of an injury for which he is entitled to compensation are exclusive of all other rights and remedies against his employer or any principal (statutory employer). La.R.S. 23:1032; 14 Malone & Johnson, La. Civil Law Treatise  Worker's Compensation, § 361 (1980). The compensation act statutorily creates an employer-employee relationship between a principal and the employees of his contractor to prevent an employer from evading his compensation responsibility by imposing an insolvent contractor between himself and his employees. Lewis v. Exxon Corp., 441 So.2d 192 (La.1983); Johnson v. Alexander, 419 So.2d 451 (La. 1982). Thus, when a principal employs a contractor to execute the whole or any part of the principal's trade, business or occupation, the principal's liability to any injured employee of the contractor is limited to the same extent as if the injured person had been immediately employed by the principal. Johnson v. Alexander, 419 So.2d at 454. As a result, recovery of worker's compensation is the exclusive remedy of the statutory employee against his own employer, as well as against the principal and employees of such employer or principal. La.R.S. 23:1032; Johnson v. Alexander, 419 So.2d at 454. However, there is no provision in the statutory scheme which creates an employer-employee relationship between the contractor and the principal's employees. As a result, the contractor has no liability for compensation to injured employees of the principal. Without any obligation to pay compensation, the contractor has not participated in the mutual compromise contemplated by the worker's compensation law and is not immune from suit in tort. Further, absent a statutory provision to the contrary, the employees of the contractor must be considered as third persons as far as the employees of the principal are concerned and subject to proceedings in tort. Johnson v. Alexander, 419 So.2d at 454. See Benoit v. Hunt Tool Co., 219 La. 380, 53 So.2d 137 (1951); Bertrand v. Howard Trucking Co., 427 So.2d 40 (La.App. 3rd Cir.1983); 14 Malone & Johnson, supra at § 368. In this case, if there was a statutory employer, the plaintiff worker's actual employer, Cotton's Incorporated, was the principal, because it undertook to execute part of what ostensibly was its work, i.e. owning and maintaining bread trucks, by contracting with a contractor, Cotton's Fleet Service, Inc., for the execution of that part of its work. By the same token, Cotton's Fleet Service, Inc. was a contractor and not a principal because it agreed to perform part of the principal's work and did not contract with any one to perform all or part of its own work. Consequently, Cotton's Fleet Service, Inc., a contractor, was not immune from suit in tort by the plaintiff, an employee of an ostensible principal. The precedent relied upon by the trial and appellate courts, Nichols v. Uniroyal, Inc., 399 So.2d 751 (La.App. 3rd Cir.1981), is inapposite. In that case the defendant corporation contracted with its subsidiary to perform part of the principal's work and was therefore a statutory employer of its contractor's employee employed in the execution of that work. The case did not present a situation such as the present one in which a contractor seeks to avoid tort liability to an employee of the principal, a worker with whom the contractor had no worker's compensation relationship.