Opinion ID: 1703148
Heading Depth: 1
Heading Rank: 2

Heading: History of La.Rev.Stat. 23:1032 and 1061

Text: The Louisiana Workers' Compensation Act, originally adopted in 1914, represented a compromise in which the employer was granted tort immunity for all workplace accidents in exchange for absolute liability for compensation payments of medical expenses and partial wage replacement, while the employee gave up the right to recovery of full damages against the employer in some cases in exchange for recovery of lesser amounts as compensation for almost all workplace injuries without having to prove fault. The balance struck by this original legislative compromise has swung from time to time, but the compromise nature of the Act has remained the focal point of its viability. La.Rev.Stat. 23:1032, as originally enacted, expressed the limitation of the employee's remedy on account of a compensable injury to the rights and remedies in the Act. This limitation, although not expressly stated at the time, clearly excluded other remedies against the employer. [3] There was no mention of any immunity for persons defined as a principal in La.Rev.Stat. 23:1061 or for employees of the direct employer or the principal. Conversely, Section 1061 did not purport to grant any immunity to anyone, but rather granted to injured employees an additional source of compensation recovery. [4] The original purpose of Section 1061, a provision which is found in the compensation acts of most states, was to prevent an employer from avoiding compensation responsibility by interposing an independent contractor or sub-contractor between himself and his employee. Wex S. Malone & H. Alston Johnson III, Workers' Compensation Law and Practice, 13 Louisiana Civil Law Treatise, § 128 (3d ed. 1994). The Legislature closed that loophole, and gave the injured employee an additional source of compensation recovery, by subjecting any person (called a principal or statutory employer) to compensation liability when that person undertakes work that is part of his trade business or occupation by means of a contract with another or when that person contracts to perform work and sub-contracts a portion of that work to another. Id. at § 121. Thus, Section 1061 by its terms has always given an advantage to injured employees and has never purported to take any advantage away from injured employees. Nothing in the Act expressly provided, or even suggested, that the principal was entitled to any tort immunity, even if the principal actually had to pay compensation benefits to an injured employee. [5] The Legislature arguably deemed immunity inappropriate since a principal was entitled to full indemnity for payment of compensation and could avoid compensation exposure altogether by requiring the contractor, as part of the contract, to carry workers' compensation insurance for its employees. In 1950, this court, and not the Legislature, established tort immunity for the principal. Without any discussion of the absence in Section 1032 or 1061 of any suggestion of a legislative intent to grant tort immunity to a principal, or of a principal's apparent ability to avoid any compensation liability, or of the question whether immunity should only apply if the principal actually pays compensation, this court in Thibodaux v. Sun Oil Co., 218 La. 453, 49 So.2d 852 (1950) rendered a judgment maintaining an exception of no cause of action and limiting the plaintiff's remedy against the principal to compensation under the Act. Despite suggestions that this court reconsider the Thibodaux decision, [6] neither this court nor the Legislature reexamined the issue for twenty-six years. In 1976, the Legislature set out to abolish the so-called executive officer tort actions. Because Section 1032 expressly granted tort immunity only to the employer in actions by an injured employee and did not extend tort immunity to employees of the employer, the courts had recognized under certain circumstances a cause of action by an injured employee against certain other employees of the employer, who were frequently covered as executive officers under the employer's insurance policy. See Adams v. Fidelity and Casualty Co. of N.Y., 107 So.2d 496 (La.App. 1st Cir.1958); Canter v. Koehring Co., 283 So.2d 716 (La.1973). When the 1976 amendment to Section 1032 added employees of the employer as persons immune in tort suits by an injured employee, the Legislature also granted statutory immunity for the first time to principals and employees of principals, and the Thibodaux decision was thereby codified. [7] See Rowe v. Northwestern Nat'l. Ins. Co., 471 So.2d 226, 229 (La.1985) (Lemmon, J., concurring). It is that legislative granting of immunity to principals and employees of principals that is under constitutional attack in this declaratory judgment action.