Court Opinion

ID: 4710458
Source: CourtListenerOpinion
Date Created: 2021-08-11 14:24:09.932279+00
Date Added: 2024-06-11T08:07:03.604967
License: Public Domain

THE STATE OF SOUTH CAROLINA
               In The Supreme Court

   Angela D. Keene, Individually and as Personal
   Representative of the Estate of Dennis Seay, Deceased,
   and Linda Seay, Respondents,

   v.

   CNA Holdings, LLC, Petitioner.

   Appellate Case No. 2019-000816

ON WRIT OF CERTIORARI TO THE COURT OF APPEALS

             Appeal from Spartanburg County
            D. Garrison Hill, Circuit Court Judge

                    Opinion No. 28052
        Heard June 11, 2020 – Filed August 11, 2021

                        AFFIRMED

   Richard C. Godfrey, Kirkland & Ellis LLP, of Chicago,
   IL; C. Mitchell Brown, Allen Mattison Bogan, and Blake
   Terence Williams, Nelson Mullins Riley & Scarborough,
   LLP, of Columbia, all for Petitioner.

   Bert Glenn Utsey III, Clawson Fargnoli & Utsey, LLC, of
   Charleston; Theile Branham McVey and John D. Kassel,
   Kassel McVey, of Columbia; Kevin W. Paul, Dean Omar
   Branham Shirley, LLP, of Dallas, TX; Chris Panatier,
             Simon Greenstone Panatier, PC, of Dallas, TX, all for
             Respondents.

JUSTICE FEW: For eighty-two years, this Court struggled to correctly apply
sections 42-1-400 and -410 of The South Carolina Workers' Compensation Law,
which are collectively referred to as the "statutory employee doctrine." The resulting
body of jurisprudence is confusing, often conflicting, and always difficult for the
workers' compensation commission and the circuit court to apply. This difficulty
has become particularly apparent in the modern economy in which subcontracting
work a company could do with its own employees is such an important and
legitimate business practice. Today, following our more recent decisions on the
statutory employee doctrine, we apply the doctrine in light of the General
Assembly's original purpose for enacting it: "to prevent owners and contractors from
subcontracting out their work to avoid liability for injuries incurred in the course of
employment." Glass v. Dow Chem. Co., 325 S.C. 198, 201 n.1, 482 S.E.2d 49, 50
n.1 (1997). We find the circuit court and the court of appeals correctly determined
the injured worker in this case was not the statutory employee of the defendant.

      I.     Facts and Procedural History

Hystron Fibers Incorporated hired Daniel Construction Company in 1965 to build a
polyester fiber plant in Spartanburg, South Carolina. When the plant began
operating in 1967, Hystron retained Daniel to provide all maintenance and repair
workers at the plant. Hystron soon became Hoechst Fibers Incorporated. Pursuant
to a series of written contracts, Hoechst paid Daniel an annual fee and reimbursed
Daniel for certain costs. The contracts required Daniel to purchase workers'
compensation insurance for the workers and required Hoechst to reimburse Daniel
for the workers' compensation insurance premiums.

Dennis Seay was employed by Daniel. Seay worked various maintenance and repair
positions at the Hoechst plant from 1971 until 1980. The manufacture of polyester
fibers required the piping of very hot liquid polyester through asbestos-insulated
pipes. Seay's day-to-day tasks involved maintaining and repairing pumps, valves,
condensers, and other equipment in the piping network, all of which exposed him to
asbestos. He eventually developed lung problems, which were later diagnosed as
mesothelioma, a cancer caused by inhaling asbestos fibers.
Seay and his wife filed this lawsuit against CNA Holdings—Hoechst's corporate
successor1—claiming Hoechst acted negligently in using asbestos and in failing to
warn of its dangers. After Seay died from mesothelioma, his daughter—Angie
Keene—took over the lawsuit as personal representative of his estate. Keene
amended the complaint to add survival and wrongful death causes of action.

Throughout the litigation, CNA Holdings argued Seay was a statutory employee and
the Workers' Compensation Law provided the exclusive remedy for his claims. The
circuit court disagreed and denied CNA Holdings' motion for summary judgment.
A Spartanburg County jury awarded Seay's estate $14 million in actual damages and
$2 million in punitive damages. The trial court denied CNA Holdings' motion for
judgment notwithstanding the verdict, again finding Seay was not a statutory
employee. The court of appeals affirmed. Keene v. CNA Holdings, LLC, 426 S.C.
357, 376, 827 S.E.2d 183, 193 (Ct. App. 2019).2

        II.   Analysis

When our General Assembly enacted the original "Workmen's Compensation Act"
in 19363—now officially named The South Carolina Workers' Compensation
Law4—it included the statutory employee doctrine, now found in sections 42-1-400
and -410 of the South Carolina Code (2015). Section 42-1-400—the section
applicable in this case—provides,

1
  Hoechst Fibers Incorporated later became Hoechst Fibers Industries. After Seay
left in 1980, the company became Hoechst Celanese, then Celanese, then CNA
Holdings.
2
 The court of appeals considered other grounds on which CNA Holdings challenged
the jury verdict. See 426 S.C. at 376-87, 827 S.E.2d at 193-99. CNA Holdings does
not raise any of those other issues to this Court.
3
    Act No. 610, 1936 S.C. Acts 1231.
4
 The General Assembly changed the name of the Act in 1982 to The South Carolina
Workers' Compensation Law, and provided, "All references in this title to
'workmen's compensation' shall mean 'workers' compensation.'" Act. No. 303, 1982
S.C. Acts 2027; S.C. Code Ann. § 42-1-10 (2015).
             When any person, in this section . . . referred to as
             "owner," undertakes to perform or execute any work
             which is a part of his trade, business or occupation and
             contracts with any other person (in this section . . . referred
             to as "subcontractor") for the execution or performance by
             . . . such subcontractor of . . . any part of the work
             undertaken by such owner, the owner shall be liable to pay
             to any work[er] employed in the work any compensation
             under this title which he would have been liable to pay if
             the work[er] had been immediately employed by him.

At the time of the original Act, it was feared employers would reject the new expense
of insuring workers and find ways to avoid that expense by contracting out "part of
[their] trade, business or occupation" to a subcontractor. As we stated on our first
review of the statutory employee doctrine in 1939, "It is easily conceivable that [an
employer] may let a part of the work to be done to others who are financially
irresponsible, and that the employee . . . who is injured while doing the work is left
without remedy." Marchbanks v. Duke Power Co., 190 S.C. 336, 363, 2 S.E.2d 825,
836 (1939).

Our General Assembly enacted the statutory employee doctrine—as did the
legislatures of most states across the country5—"to forestall evasion of the act by
those who might be tempted to subdivide their regular operations among
subcontractors, thus escaping direct employment relations with the workers . . . ."
Lex K. Larson et al., LARSON'S WORKERS' COMPENSATION LAW § 70.05 (2020); see
also id. § 70.04 ("The purpose of this legislation was to protect employees of
irresponsible and uninsured subcontractors . . . ."); Grady L. Beard, et al., THE LAW
OF WORKERS' COMPENSATION INSURANCE IN SOUTH CAROLINA, Statutory
Employers: Liability of Owners 43 (6th ed. 2012) (explaining the General Assembly
enacted the statutory employee doctrine because "it would not be fair to relieve the
owner of compensation to employees doing work which was a part of his trade or
business by permitting such owner to sublet or subcontract some part of said work").
As we stated in Glass, the purpose of the statutory employee doctrine "is to prevent
owners and contractors from subcontracting out their work to avoid liability for

5
  See Lex K. Larson et al., LARSON'S WORKERS' COMPENSATION LAW § 70.01 (2020)
(stating, "Four-fifths of the states have adopted 'contractor-under' statutes, imposing
on the general employer compensation liability . . . to the employees of contractors
. . . under it").
injuries incurred in the course of employment." 325 S.C. at 201 n.1, 482 S.E.2d at
50 n.1.

In the early years of interpreting the predecessor statutes to sections 42-1-400
and -410, this Court viewed the scope of an employer's "trade, business or
occupation" quite broadly. Marchbanks itself is a good example. Duke Power
Company hired Coln—a contractor—to paint 170 metal power poles in the City of
Greenville for one dollar apiece. 190 S.C. at 338, 2 S.E.2d at 826. Duke Power
hired a contractor to paint the poles approximately every two years. Id. The plaintiff
was an employee of Coln, not Duke Power. Id. In the course of his work painting
the poles, the plaintiff came into contact with a hot wire he later claimed was
defective. 190 S.C. at 357, 2 S.E.2d at 834. The plaintiff sued Duke Power and
Coln in circuit court for negligence in causing his injuries. Id. We affirmed the
circuit court's finding the plaintiff was Duke Power's statutory employee, stating,

             [I]t is difficult to see how the power company could carry
             on its business if its lines of wires were not kept in sound
             condition, or how this could be done if the posts to which
             they are attached were not kept in safe and sound
             condition. Evidently it was necessary to this end that the
             poles be "protected from the weather," and the appellant
             was engaged about this work. . . . Surely it cannot be
             seriously argued that the unfortunate employee was not
             engaged in work "which is a part of the trade, business or
             occupation" of the power company which it was
             undertaking to have performed.

190 S.C. at 365-66, 2 S.E.2d at 837.

In Boseman v. Pacific Mills, 193 S.C. 479, 8 S.E.2d 878 (1940)—an appeal from the
industrial commission6—the claimant was an employee of a contractor whom
Pacific Mills hired to paint a water tower at its Granby Plant in Columbia. 193 S.C.
at 480, 8 S.E.2d at 878. While the claimant and a co-worker were painting the tank,
it caught fire and exploded, burning both men to death. Id. We stated, "The only
question for our consideration . . . is whether the deceased . . . was performing work

6
  The 1936 Act created the South Carolina industrial commission to hear claims
under the Act. Act No. 610, 1936 S.C. Acts 1231, 1255. The General Assembly
renamed the commission the workers' compensation commission in 1986. Act. No.
399, 1986 S.C. Acts 2716, 2718.
which was a part of the trade, business or occupation of the Pacific Mills." 193 S.C.
at 481, 8 S.E.2d at 879. Finding the claimant was the statutory employee of Pacific
Mills, we stated,

             The tank was an integral part of the mill business. . . . The
             very nature of the work done by the mill, that of the
             manufacture of cotton into cloth, especially required the
             best of protection against fire. Hence, this tank was
             particularly necessary and essential in the operation and
             carrying on of the business of the mill. It, therefore,
             follows that the painting of the tank was such a part of the
             trade, business or occupation of the Pacific Mills . . . .

193 S.C. at 483, 8 S.E.2d at 880.

We continued for decades to interpret the phrase "trade, business or occupation"
broadly to include any work we deemed necessary to the owner's business. In Bell
v. South Carolina Electric & Gas Co., 234 S.C. 577, 109 S.E.2d 441 (1959), we
applied our broad interpretation to maintenance and repair workers. Relying on
Marchbanks, Boseman, and other cases, we stated, "The defendant Power Company
is . . . engaged in the manufacture and transmission of electricity and uses poles and
wires in its business and the repair and maintenance of such poles and wires . . . are
part of its business, trade and occupation." 234 S.C. at 580-81, 109 S.E.2d at 442.

From Bell in 1959 to Glass in 1997, most of our decisions were consistent with this
broad view of "trade, business or occupation." In its brief, CNA Holdings correctly
characterizes these cases as, "A long line of South Carolina decisions [that] have
held that maintenance workers are statutory employees of manufacturing
businesses." CNA Holdings argues "the Court of Appeals cast aside all of these
cases, which provide significant, direct support for [our] position that Seay's
maintenance work was an important, necessary, integral, and essential part of [our]
manufacturing business." While we disagree the court of appeals "cast aside"
anything, we do agree that its decision in this case cannot be reconciled with the
broad view we took of an employer's "trade, business or occupation" in those early
cases. If the infrequently-performed work the subcontracted employees performed
in Marchbanks, Boseman, and Bell qualified for statutory employee status, it is
difficult to imagine the regular—daily, in fact—maintenance and repair work Seay
and his co-workers performed at Hoechst does not also qualify.
The reality, however, is that none of our recent jurisprudence on this question is
consistent with the broad interpretation of "trade, business or occupation" in our
original cases. Shortly after Bell, even as we viewed the scope of a company's "trade,
business or occupation" broadly in most of our cases, we began a series of cases in
which we narrowed our original view. In Bridges v. Wyandotte Worsted Co., 243
S.C. 1, 132 S.E.2d 18 (1963), overruled on other grounds by Sabb v. South Carolina
State University, 350 S.C. 416, 422-23 n.2, 567 S.E.2d 231, 234 n.2 (2002), we said,
"It is especially difficult to lay down any hard and fast rule with regard to such
activities as repair and maintenance," because "[t]he practices of different concerns
operating in the same field often vary." 243 S.C. at 11, 132 S.E.2d at 23. Our point
was that different business managers make legitimate choices about the scope of
their company's business based on circumstances the manager deems important to
the company. We illustrated the point with an example from LARSON'S WORKMEN'S
COMPENSATION LAW. "For example," we stated, "activities which would be unusual
and out of the ordinary in a small business might be a normal activity for a large
concern." Id. (citing Arthur Larson & Lex K. Larson, LARSON’S WORKMEN’S
COMPENSATION LAW § 49.12 (1st ed. 1952)).

The defendant in Bridges owned an electric transmission line at its plant at Conestee.
243 S.C. at 4, 132 S.E.2d at 19. Ordinarily, "The defendant regularly employed a
crew of men who maintained the electrical system, two of whom were experienced
and competent electricians in the handling of electrical work on energized, or so-
called 'hot' electrical lines." 243 S.C. at 5, 132 S.E.2d at 19. In other words, the
defendant's management made a business decision to have its own employees handle
the work of maintaining and replacing electric transmission lines. On the day the
plaintiff was injured, however, "due to the excessive amount of overtime that its men
had already worked, the defendant . . . contracted with . . . an electrical contractor,"
the plaintiff's immediate employer, "to do the work." 243 S.C. at 5, 132 S.E.2d at
20. Despite the temporary change, we honored the original business decision,
stating, "The maintenance and repair of its electrical system was, therefore, made a
part of the work done by the defendant in the prosecution of its business of
manufacturing woolen goods." 243 S.C. at 12, 132 S.E.2d at 23. The fact the work
was performed on one occasion by a contractor did not change the defendant's
business decision to include maintenance and repair of its electrical system as a part
of its business. We held the employees of the contractor were statutory employees.
Id.

The next case in the series—ironically—involved Daniel, which by then had become
Daniel International Corporation. Wilson v. Daniel Int'l Corp., 260 S.C. 548, 197
S.E.2d 686 (1973). Daniel contracted to build an industrial plant in Georgetown.
260 S.C. at 551, 197 S.E.2d at 687. Daniel had three options for getting the concrete
it needed to build the plant: purchase concrete from an outside source, get concrete
made by Daniel employees from its concrete division, or have Daniel employees
mix concrete onsite. 260 S.C. at 553, 197 S.E.2d at 688. Because it decided a
"purchase from an outside source . . . was the most economical," Daniel chose not
to use its own employees. 260 S.C. at 553-54, 197 S.E.2d at 688. In finding the
injured employee of the concrete supplier was not a statutory employee, we relied
primarily on our finding he worked for the seller of material. 260 S.C. at 553-54,
197 S.E.2d at 688-89. However, our recognition of the importance of corporate
decision making is inescapable. If Daniel had not chosen—for economic reasons—
to use a contractor for this particular job, its own employees would have been doing
the work.

In Glass, we recognized that not all work "necessary" for the owner to "carry on its
business"—the standard we used in Marchbanks and Boseman—was "part of his . . .
business" under section 42-1-400. Glass arose after the Medical University of South
Carolina negotiated the settlement of a dispute with Dow Chemical Company over
cracking in exterior panels installed on a building at its campus in Charleston. 325
S.C. at 200, 482 S.E.2d at 50. Dow agreed to settle the dispute by removing the old
panels and replacing them. Id. To carry out the settlement, Dow hired a supervising
contractor, who hired a removal contractor, who hired River City Rigging to provide
welders. Id. We specifically recognized that "where repairs are major, specialized,
or of the sort which the employer is not equipped to handle with its own work force,
they are not part of the business." 325 S.C. at 202, 482 S.E.2d at 51 (citing Arthur
Larson & Lex K. Larson, THE LAW OF WORKMEN'S COMPENSATION § 49.16(e) (2nd
ed. 1996)). Applying that principle to the facts of Glass, we stated, "Here, the major
task of dismantling the outer walls . . . and of completely replacing facade panels
required technical knowledge that was highly specialized. Additionally, Dow was
completely unable to handle the repairs with its own work force because its
immediate employees were not trained in construction." 325 S.C. at 202, 482 S.E.2d
at 51. In finding the injured employee of the concrete supplier was not a statutory
employee, we relied primarily on our finding that the employees' "activities were not
related to the basic operation of Dow's business," but "stemmed simply from Dow's
desire to avoid litigation costs." Id. We recognized, however, that corporate
managers often choose not to make major or otherwise specialized repairs part of
their business.

Three years after Glass, we decided the first of two cases from the transportation
industry, whose applicability beyond the transportation context became a significant
issue in this case at the court of appeals. In Abbott v. The Limited, Inc., 338 S.C.
161, 526 S.E.2d 513 (2000), a truck driver delivering goods to a retail store "was
injured when he slipped and fell while unloading boxes on Retailer's premises." 338
S.C. at 162, 526 S.E.2d at 514. The circuit court dismissed the employee's tort action
under the statutory employee doctrine and the court of appeals affirmed. Id. The
court of appeals held that when work is "an important part . . . [or] . . . a necessary,
essential, and integral part" of the business of the employer, the worker is the
statutory employee of the business. Abbott v. The Ltd., Inc., 332 S.C. 171, 174, 503
S.E.2d 494, 496 (Ct. App. 1998) (citations omitted), rev'd, 338 S.C. 161, 526 S.E.2d
513. The court of appeals stated,

             We agree with the trial court that the prompt and efficient
             delivery of goods for the purpose of stocking its retail
             stores is an integral and essential part of [the retailer]'s
             business. [The retailer] could not operate a retail business
             without stock. Because [the truck driver]'s work was at
             least 'important' to [the retailer]'s business, the trial court
             properly deemed him a statutory employee.

332 S.C. at 174-75, 503 S.E.2d at 496.

We reversed, explaining, "The fact that it was important to Retailer to receive goods
does not render the delivery of goods an important part of Retailer's business." 338
S.C. at 163, 526 S.E.2d at 514.

Three years after Abbott, we decided the second transportation case, Olmstead v.
Shakespeare, 354 S.C. 421, 581 S.E.2d 483 (2003). We held "Abbott is not limited
to receipt of goods cases, but applies equally to delivery of goods cases as long as
the transportation of goods is not the primary business of the company to whom or
from whom goods are being delivered." 354 S.C. at 425, 581 S.E.2d at 485
(emphasis added).

In this case, the court of appeals recognized this Court changed its interpretation of
the statutory employee doctrine from Bridges through Wilson and Glass,
culminating in Abbott and Olmstead. Addressing the parties' argument over whether
this Court intended Abbott and Olmstead to apply outside the transportation context,
the court of appeals stated "the logic employed by the court
in Abbott and Olmstead brought new clarity to the abundance of case law on this
issue and this logic is binding in the present case." Keene, 426 S.C. at 370, 827
S.E.2d at 190. The court of appeals continued,
             In sum, the analysis in Abbott and Olmstead is true to the
             legislative intent underlying section 42-1-400, which
             seeks to determine whether the type of work performed by
             the worker is the same type of work "the owner" has
             established as its business, and its logic applies across all
             trades, businesses, and occupations, allowing each case to
             be decided on its own facts.

426 S.C. at 370, 827 S.E.2d at 190-91.

We agree with the court of appeals. Looking back on Bridges, Wilson, Glass, Abbott,
and Olmstead, the concepts we discussed in those cases are relevant to the analysis
of this case and all statutory employee cases. In each case, we acknowledged things
have changed since the time of Marchbanks and Boseman. In Bridges, we put value
on the business decisions of management. 243 S.C. at 12, 132 S.E.2d at 23. In
Wilson, we honored Daniel's decision to remove the provision of concrete from the
scope of its business even though Daniel's own employees did the same work on
other jobsites. 260 S.C. at 553-54, 197 S.E.2d at 688. In Glass, we recognized that
"major" repairs, "specialized" work, and jobs "of the sort which the employer is not
equipped to handle with its own work force" are "not [necessarily] part of the
business" of the owner. 325 S.C. at 202, 482 S.E.2d at 51. In Abbott, we held that
just because work is important to a business does not mean the work is part of the
business. 338 S.C. at 163, 526 S.E.2d at 514. In Olmstead, we clarified that
"Abbott represents a change in this state's jurisprudence on what activity constitutes
'part of [the owner's] trade, business or occupation' under section 42-1-400," and we
"overrule[d] all prior cases to the extent they are in conflict with our holding
in Abbott," 354 S.C. at 426-27, 581 S.E.2d at 486 (first alteration in original). The
trend away from Marchbanks and Boseman—and the broad view of an employer's
"trade, business or occupation" those opinions represented—was firmly established
by this Court by the time this case reached the court of appeals.

CNA Holdings argues the decisions of the circuit court and the court of appeals in
this case refusing to apply the statutory employee doctrine "conflict with the public
policy favoring inclusion under the Workers' Compensation Law." The applicable
public policy, however, is to ensure that workers are covered under the Workers'
Compensation Law. Glass, 325 S.C. at 201 n.1, 482 S.E.2d at 50 n.1; Larson et al.,
supra, §§ 70.04, 70.05. It does not matter to the fulfillment of this policy who
provides the coverage. Here, Hoechst contracted out the maintenance and repair
work to a sophisticated international construction company—Daniel Construction—
not to a financially irresponsible subcontractor without the capacity to insure its
workers. But Hoechst went further—to its credit—and mandated through contract
that the maintenance workers would be insured. The decisions of the circuit court,
the court of appeals, and now this Court, in no way frustrate the policy of the
statutory employee doctrine or the Workers' Compensation Law.

It is also important to note that the public policy at issue here is not to provide civil
immunity to employers like Hoechst or their corporate successors like CNA
Holdings. In Olmstead, the court of appeals wrote "the underlying rationale" of
favoring coverage for workers "is not as pertinent where the statutory employee
definition and exclusive remedy provision are used as a shield to prevent recovery
under another theory." Olmstead v. Shakespeare, 348 S.C. 436, 441, 559 S.E.2d
370, 373 (Ct. App. 2002), aff'd as modified, 354 S.C. 421, 581 S.E.2d 483. On
review of that statement, this Court "decline[d]" to "adopt[] a different standard of
review for cases in which the workers' compensation statute is used as a shield to
liability." 354 S.C. at 427, 581 S.E.2d at 486. We decline again to do so today.
Certainly, when the public policy behind the statutory employee doctrine leads to a
finding that a worker is a statutory employee, the collateral consequence of that
finding is the claim against the owner must be filed with the workers' compensation
commission. In that event, the owner collaterally enjoys immunity from tort
liability. However, when the public policy favoring coverage is satisfied—as it was
here—that policy has nothing to say about providing immunity to the owner. For
these reasons, CNA Holdings' argument that public policy supports its position is
misplaced.

The question posed by section 42-1-400 today is the same key question we addressed
in Marchbanks: whether the work contracted out is "part of [the owner's] trade,
business or occupation." Over time, we developed what we called "tests" for courts
and the workers' compensation commission to use in answering the key question.
See Keene, 426 S.C. at 368, 827 S.E.2d at 189 (reciting the "three tests" and stating
they "were first articulated by our supreme court in 1988 . . . by drawing on"
Bridges, Boseman, and Marchbanks (first citing Olmstead, 354 S.C. at 424, 581
S.E.2d at 485; then citing Ost v. Integrated Prods., Inc., 296 S.C. 241, 245, 371
S.E.2d 796, 798-99 (1988))). While each test remains a valid consideration, today
we refocus on the key question posed by the statute.

In answering the question posed by section 42-1-400—whether the work contracted
out is "part of [the owner's] trade, business or occupation"—the court should focus
initially on what the owner decided is part of its business. Increasingly, business
managers are outsourcing work that formerly was handled as a part of the business,
and they are doing so to meet the ever-increasing competitive challenges businesses
face. See Keith Cunningham-Parmeter, From Amazon to Uber: Defining
Employment in the Modern Economy, 96 B.U. L. Rev. 1673, 1676 (2016) ("Since
the end of the Great Recession, U.S. businesses have aggressively engaged in a series
of organizational changes—from classifying workers as independent contractors, to
hiring subcontractors, to utilizing staffing agencies—to delegate employment-
related responsibilities to outsiders."). In reality, therefore, what is or is not "part
of" the owner's business is a question of business judgment, not law. If a business
manager reasonably believes her workforce is not equipped to handle a certain job,
or the financial or other business interests of her company are served by outsourcing
the work, and if the decision to do so is not driven by a desire to avoid the cost of
insuring workers, then the business manager has legitimately defined the scope of
her company's business to not include that particular work.

In this case, there is no question Hoechst made a legitimate business decision to
outsource its maintenance and repair work. Hoechst clearly had no intention of
avoiding the cost of insuring the workers who did the work against work-related
injuries. In fact, "to its credit" as we stated, Hoechst provided in its contract with
Daniel that the workers must be insured and Hoechst would pay for it. Hoechst
business managers considered the economic interests of the company and
determined maintenance and repair was not "work which is a part of [its] trade,
business or occupation." § 42-1-400. As the court of appeals summarized,

             [T]he unique facts of the present case [demonstrate] that
             Seay's work, while important to the manufacturing process
             performed by [Hoescht] employees, was not part of that
             process . . . .    Only Daniel employees performed
             maintenance and repairs on the equipment in the
             Spartanburg plant. None of the [Hoechst] employees
             performed this type of work. . . . [Hoechst] contracted
             with Daniel because it was "a qualified, capable contractor
             that can do the expert work that [Hoechst] needed done,
             both in construction and maintenance. As aptly noted by
             the circuit court, [Hoechst] "has presented no evidence
             that its corporate purpose included equipment
             maintenance."

426 S.C. at 374-75, 827 S.E.2d at 193.

The original purpose of the statutory employee doctrine was to prevent business
managers from outsourcing work for the purpose of avoiding workers' compensation
costs. That purpose has nothing to do with outsourcing work for legitimate business
reasons. Moreover, unlike the economy of 1936, it has become standard in the
modern economy for businesses to bear the cost of insuring workers against injury.
Seay's family presumably received the worker's compensation benefits Hoechst
obligated through contract that Daniel must provide. The original purposes of the
statutory employee doctrine are not served by making CNA Holdings an additional
provider of workers' compensation benefits, because Daniel provided those benefits.
The original purposes are certainly not served by granting CNA Holdings immunity
for its wrongful conduct. It is not the role of courts to second-guess a legitimate
business decision whose effect—far from the improper purposes the statutory
employee doctrine was designed to prevent—was actually to guarantee that the
workers affected by the decision would be insured against work-related injuries.

      III.   Conclusion

The court of appeals correctly affirmed the circuit court's determination that Seay
was not the statutory employee of Hoechst. We affirm.

AFFIRMED.

BEATTY, C.J., and HEARN, J., concur. JAMES, J., dissenting in a separate
opinion in which KITTREDGE, J., concurs.
JUSTICE JAMES: I respectfully dissent. I would hold Mr. Seay was a statutory
employee of Hoechst Celanese and would therefore reverse the court of appeals.

I disagree with the majority as to how we should read Abbott v. The Limited, Inc.,
338 S.C. 161, 526 S.E.2d 513 (2000) and Olmstead v. Shakespeare, 354 S.C. 421,
581 S.E.2d 483 (2003). I also disagree with the majority's apparent approval of a
different standard for reviewing the application of the statutory employee doctrine,
depending upon whether the worker invokes the doctrine to obtain workers'
compensation benefits or whether the owner invokes the doctrine as a defense to
civil liability.

                                          I.

      A. Abbott and Olmstead

We stated in Olmstead that "Abbott represents a change in this state's jurisprudence
on what activity constitutes 'part of the owner's trade, business or occupation' under
section 42-1-400." 354 S.C. at 426, 581 S.E.2d at 486. I believe any "change"
recognized by the Olmstead Court is limited to transportation cases. That is the only
reasonable way to view the Olmstead opinion. We specifically noted in Olmstead
that Abbott involved the delivery of goods to the alleged statutory employer and that
Olmstead involved the delivery of goods from the alleged statutory employer. Id. at
425, 581 S.E.2d at 485. We then held the court of appeals correctly concluded "that
Abbott is not limited to receipt of goods cases, but applies equally to delivery of
goods cases as long as the transportation of goods is not the primary business of the
company to whom or from whom goods are being delivered." Id. I believe the
limitation of Abbott and Olmstead to the transportation context is further manifested
by this observation in Olmstead:

             Abbott does not change the need for this case by case
             analysis; Abbott merely establishes that transportation of
             goods is important to nearly all businesses, and, that
             transportation of goods by a common carrier alone,
             without something more, does not qualify as "part of [the
             owner's] trade, business, or occupation" under any of the
             three established tests for statutory employment.

Id. at 426, 581 S.E.2d at 486.

In light of our decisions in Abbott and Olmstead, it is easy to understand why the
Abbott Court overruled the court of appeals' transportation-related decisions in
Neese v. Michelin Tire Corp., 324 S.C. 465, 478 S.E.2d 91 (Ct. App. 1996) and
Hairston v. Re: Leasing, Inc., 286 S.C. 493, 334 S.E.2d 825 (Ct. App. 1985). In
Olmstead, we went on to "overrule all prior cases to the extent they are in conflict
with our holding in Abbott and now in this case." Id. at 427, 581 S.E.2d at 486.
When Olmstead was decided, Marchbanks, Boseman, Bell, Bridges, Glass, and other
non-transportation cases were there for the picking to be overruled in whole or in
part, but they were not.

        B. Seay's Status

Regardless of whether Abbott and Olmstead are limited to transportation cases, I
would hold that under the facts of this case, Seay was Hoechst's statutory employee.
The three tests for determining whether a worker is a statutory employee have not
changed. We must consider whether the worker's activities "(1) are an important
part of the trade or business of the employer, (2) are a necessary, essential, and
integral part of the business of the employer, or (3) have been previously performed
by employees of the employer." Glass v. Dow Chem. Co., 325 S.C. 198, 201, 482
S.E.2d 49, 50 (1997). Perhaps the first and second tests are the same, but whatever
the case, the worker's employment activities need only meet one of the three tests
for the worker to be a statutory employee. Seay's activities at the Hoechst plant met
the first two tests.

The majority writes that our decisions in Marchbanks v. Duke Power Co.,7 Boseman
v. Pacific Mills,8 Bell v. South Carolina Electric & Gas Co.,9 and Glass were
consistent with a broad view of what was part of an owner's "trade, business, or
occupation." The majority concedes it is hard to imagine that in light of those
decisions, Seay was not a statutory employee of Hoechst. I agree, and I would stop
the analysis there and hold Seay was Hoechst's statutory employee. However, the
majority concludes our analysis of the statutory employment issue has narrowed
over the years and compels a different result, so I must go further.

The majority believes that beginning with our 1963 decision in Bridges v. Wyandotte
Worsted Co.,10 "we began a series of cases in which we narrowed our original view."

7
    190 S.C. 336, 2 S.E.2d 825 (1939).
8
    193 S.C. 479, 8 S.E.2d 878 (1940).
9
    234 S.C. 577, 109 S.E.2d 441 (1959).
10
  243 S.C. 1, 132 S.E.2d 18 (1963), overruled on other grounds by Sabb v. South
Carolina State University, 350 S.C. 416, 422 n.2, 567 S.E.2d 231, 234 n.2 (2002).
I disagree with that statement for two reasons. First, the majority cites the following
language in Bridges that it claims supports our evolving view: "It is especially
difficult to lay down any hard and fast rule with regard to such activities as repair
and maintenance," because "[t]he practices of different concerns operating in the
same field often vary." 243 S.C. at 11, 132 S.E.2d at 23. In our 1939 decision in
Marchbanks, a case dealing with maintenance of power poles, we noted the
difficulty in determining whether a person is a statutory employee when we said, "it
is often a matter of extreme difficulty to decide whether the work in a given case
falls within the designation of the statute. It is in each case largely a question of
degree and of fact . . . ." 190 S.C. at 361, 2 S.E.2d at 835 (quoting Fox v. Fafnir
Bearing Co., 139 A. 778, 779 (Conn. 1928)). This language from Marchbanks is
essentially the same language we used in Bridges, so the cited language in Bridges
does not, in my view, mark the beginning of a movement toward a narrower view of
the statutory employee analysis.

My second disagreement with the majority's conclusion that Bridges signaled our
movement toward a narrower view is more basic. Keep in mind there are three tests
for determining whether a worker is a statutory employee. Our appellate decisions
have typically required an analysis of the first two tests—whether the work
performed was an important part of or necessary, essential, or integral to the owner's
trade or business. There is a third test—whether the work had been previously
performed by employees of the owner. Our focus in Bridges was upon that third
test, and we noted the repair work performed on the owner's transmission lines was
customarily done by the owner's regular employees; however, because those
employees were overworked and needed rest, the owner contracted the work out to
Collins Electric Company, the direct employer of the worker who was ultimately
injured. We held the injured worker was the owner's statutory employee because
the work he performed "was a part of the work ordinarily and customarily performed
by the employees of the [owner] in the prosecution of the [owner's] business."
Bridges, 243 S.C. at 12, 132 S.E.2d at 23. Consequently, Bridges does not represent
a narrowing of our view in comparison with our earlier decisions in which we
determined whether a worker's activity was an important, necessary, essential, or
integral part of the owner's business.

The logic of our case-by-case approach to the statutory employee issue was evident
in Wilson v. Daniel International Corp., 260 S.C. 548, 197 S.E.2d 686 (1973).
Daniel was building its plant in Georgetown and needed mixed concrete for
construction. Daniel had three choices: (1) mix the concrete on the construction site
using its own employees; (2) get concrete made by its employees from its concrete
division; or (3) purchase concrete from an outside source. Daniel chose the third
option and bought the concrete from Winyah. Winyah employees mixed the
concrete at Winyah's plant. A Winyah worker was delivering the mixed concrete to
the Daniel site when he was injured by the negligence of a Daniel employee. The
worker sued Daniel for negligence, and Daniel asserted the statutory employee
defense.

In its discussion of Wilson, the majority states "our recognition of the importance of
[Daniel's] corporate decision making is inescapable." I read Wilson to say what it
actually said: under the facts of that case, Winyah's worker was not Daniel's statutory
employee because Winyah and Daniel's relationship was that of vendor-vendee and
because "Winyah was not engaged in the execution or performance of any part of
Daniel's work." 260 S.C. at 554, 197 S.E.2d at 689.

The majority reads Glass as our further recognition of and respect for the decisions
of "corporate managers." In my view, we need not engage in such a nuanced reading
of Glass. I believe Glass is yet another good example of the case-by-case approach.
In Glass, facade panels installed on an MUSC building began to crack. 325 S.C. at
200, 482 S.E.2d at 50. Dow Chemical did not make or install the panels, but rather
manufactured a product called Sarabond that was mixed with the mortar used in
constructing the panels. MUSC claimed the Sarabond was causing the panels to
crack. Dow agreed to settle the dispute with MUSC by removing the old panels and
replacing them with a panel that did not contain Sarabond. As part of the settlement,
Dow hired a supervising contractor, which hired a removal contractor, which hired
another company to provide welders to remove the bolts and clips that held the
defective panels in place. The bolts and clips were painted with lead paint, and when
welders removed the bolts and clips, the bolts and clips emitted toxic lead fumes.
Mr. Glass was one of the welders, and he claimed he was permanently disabled by
lead poisoning when he ingested the fumes. He sued Dow, and Dow claimed it was
Glass's statutory employer and thus not liable to him in tort.

The trial court disagreed with Dow and struck the statutory employee defense, and
the court of appeals affirmed. This Court granted a writ of certiorari to Dow and
affirmed the court of appeals. We repeated the three tests for determining whether
a worker is a statutory employee, and we again noted "no easily applied formula can
be laid down for determining whether work in a particular case meets these tests,
[so] each case must be decided on its own facts." Id. at 201, 482 S.E.2d at 51. We
applied the facts to the first test and concluded replacement of the Sarabond panels
was not an important part of Dow's business, as the welders' activities "were not
related to the basic operation of Dow's business of manufacturing Sarabond. Instead,
[the welders'] activities stemmed simply from Dow's desire to avoid litigation costs."
Id. at 202, 482 S.E.2d at 51. Applying the second test, we held Dow's replacement
of the panels with panels containing the product of another manufacturer "was not a
necessary, integral, or essential part of its [manufacturing] business." Id. at 202-03,
482 S.E.2d at 51. In explaining this conclusion, we noted, "Regardless of how Dow
determines to settle its dispute with MUSC, the manufacturing of Sarabond can
continue." Id. at 203, 482 S.E.2d at 51. In concluding the third test did not rescue
Dow's statutory employee defense, we noted "none of Dow's regular employees have
ever engaged in construction work . . . ." Id. at 204, 482 S.E.2d at 52.

I do not read Glass as anything but a logical application of the three tests to the facts
of that case. Therefore, I respectfully disagree with the majority that Glass—and
Wilson and Bridges before it—signaled the beginning of our recognition of corporate
decision-making as a primary consideration in determining whether a worker is a
statutory employee.

The determination of whether a worker is a statutory employee depends upon the
facts and circumstances of the case. "[T]here is no easily applied formula and each
case must be decided on its own facts." Abbott, 338 S.C. at 163, 526 S.E.2d at 514.
"[T]he tests established to interpret [section 42-1-400] do not eliminate the need for
an individualized determination of the facts of each case in which statutory
employment is alleged." Olmstead, 354 S.C. at 426, 581 S.E.2d at 486. In the instant
case, the majority summarizes Seay's job responsibilities as "involv[ing] maintaining
and repairing pumps, valves, condensers, and other equipment in the piping network
[at the Hoechst plant]." I believe it is important to note the following facts as well:
the plant manufactured synthetic fibers; Seay was one of 500 Daniel employees who
worked full time at the Hoechst plant; the manufacturing equipment Seay worked
on included steam lines, valves, gear boxes, condensers, and pumps, all of which
were integral to the efficient operation of the plant's production of the fibers;
according to Seay, if these components didn't operate, the plant wouldn't run; during
the time Seay worked at the plant from 1969 through 1978, he worked as a
millwright and maintained the foregoing equipment; Seay's job was so integral to
the operation of the plant, about once a year, portions of the plant would shut down
so Seay could perform repairs necessary to resume operations; the plant provided all
supplies for Seay's work; and a Hoechst employee, known as a "lead man," provided
instructions to Seay's supervisor at Daniel, who then assigned daily job duties to
Seay. The totality of these circumstances satisfies two of the three tests re-
enumerated in Olmstead: Seay's daily work activities were "an important part of
[Hoechst's] business or trade," and they were "a necessary, essential, and integral
part of [Hoechst's] business," the production of synthetic fibers. 354 S.C. at 424,
581 S.E.2d at 485.
Even under the narrower view approved by the majority, Seay's status as a statutory
employee of Hoechst was much stronger than the employees in our prior cases in
which we held the employee was a statutory employee. In that respect, Seay's status
as a statutory employee does not depend upon what the majority contends is an
outdated and overly broad application of the doctrine. Seay was much more than
the statutory employee who painted Duke Power power poles once every two years
while directly employed by a company with which Duke Power contracted to do the
work (Marchbanks); he was much more than the statutory employee who painted a
water tower at the Pacific Mills plant (Boseman); he was much more than the
statutory employee of a power company who climbed a power pole and fell to his
death (Bell); and he was much more than the statutory employee who repaired a
transmission line owned by a plant and over which electric current traveled to power
plant machinery (Bridges).

Finally, I do not understand how the majority's new affinity for the evolution of
decision-making of business managers and the majority's new emphasis on the
"modern economy" is relevant to our analysis of Seay's employment status from
1969 through 1978. That was a time frame that certainly did not fall within the
period of the "modern economy." Consequently, an analysis that considers "the
ever-increasing competitive challenges businesses face" in the Amazon and Uber
economy is misplaced. Under the facts of this case, I would hold Seay was Hoechst's
statutory employee.

                                        II.

The majority writes that it is not adopting a different standard for reviewing the
application of the statutory employee doctrine depending upon whether the worker
invokes the doctrine to obtain workers' compensation benefits or whether the owner
invokes the doctrine as a defense to civil liability. As the majority notes, in
Olmstead, this Court rejected the court of appeals' conclusion that the underlying
rationale of favoring workers' compensation coverage for employees "is not as
pertinent where the statutory employee definition and exclusive remedy provision
are used as a shield to prevent recovery under another theory." Olmstead v.
Shakespeare, 348 S.C. 436, 441, 559 S.E.2d 370, 373 (Ct. App. 2002), aff'd as
modified, 354 S.C. 421, 427, 581 S.E.2d 483, 486. And as noted by the majority,
we declined in Olmstead to adopt a differing standard of review for cases in which
the statutory employment theory is used as a defense to civil liability. 354 S.C. at
427, 581 S.E.2d at 486. The majority then states, "We decline again to do so today."

I have no doubt that many reading the majority opinion will believe this case signals
a trend toward the application of a different standard, much in the same way the
majority believes Bridges, Wilson, and Glass signaled the beginning of a trend away
from the reasoning of Marchbanks, Boseman, and Bell on the issue of whether work
falls within the trade, business, or occupation of an owner. The majority's comment
that the "original purposes [of the statutory employee doctrine] are certainly not
served by granting CNA Holdings immunity for its wrongful conduct" will be taken
to heart, in spite of the majority's professed refusal to adopt a new standard.

                                       III.

Under the facts of this case, I would reverse the court of appeals and hold Mr. Seay
was a statutory employee of Hoechst.

KITTREDGE, J., concurs.