General contractors should be aware that simply paying workers’ compensation insurance premiums for a subcontractor will not provide them with the exclusive remedy protection under the Illinois Workers’ Compensation Act.
The Illinois Supreme Court confirmed that the exclusive remedy provisions of the Workers’ Compensation Act (820 ILCS 305/5(a), 11) do not extend to a general contractor who is not the employee’s immediate employer, even if the general contractor paid for workers’ compensation insurance and benefits for a subcontractor and its employees. Munoz v. Bulley & Andrews, 2022 IL 127067.
Bulley & Andrews LLC served as the general contractor for a construction project in Chicago that used workers employed by Bulley Concrete. Bulley Concrete was a wholly owned subsidiary of Bulley & Andrews. Bully & Andrews used Bulley Concrete for the concrete work on the project. Bulley & Andrews executed contracts with other subcontractors for work on the project but did not enter into any contract with Bulley Concrete. Bulley & Andrews did enter into a contract with the property owner to pay for the workers’ compensation insurance and benefits for subcontractors. As such, Bulley & Andrews paid the workers’ compensation insurance premiums and benefits for Bulley Concrete and its employees.
Plaintiff Donovan Munoz, was employed as a construction worker by Bulley Concrete. Plaintiff injured his back at the construction site while removing blankets from fresh concrete. Plaintiff signed in on Bulley Concrete time sheets, and Bulley Concrete paid his wages.
Plaintiff filed a claim with the Illinois Workers’ Compensation Commission against Bulley Concrete. Plaintiff incurred medical bills of $76,046.34. At the time of the occurrence, Bulley Concrete was an insured under a workers’ compensation policy issued by Arch Insurance Company. Bulley & Andrews and other subsidiaries and affiliates of the company were insured under the same policy.
Plaintiff subsequently filed a personal injury lawsuit against Bulley & Andrews as the general contractor alleging that it retained control of the jobsite and breached its duty of care by failing to use its retained control to stop plaintiff’s employer, Bulley Concrete, from using unsafe equipment among other allegations. Bulley & Andrews moved to dismiss plaintiff’s complaint and contended that plaintiff’s claims were barred by the exclusive remedy provisions of the Workers’ Compensation Act. Bulley & Andrews argued that it had a preexisting legal obligation to the property owner to pay for plaintiff’s workers’ compensation benefits and that it did so by paying plaintiff’s medical bills.
The trial court granted Bulley & Andrews motion to dismiss. The ruling was affirmed by the 1st District Appellate court. The Appellate Court reasoned that Bulley & Andrews was legally obligated under its contract with the owner to pay for the workers’ compensation insurance and benefits that plaintiff received and was thus protected by the exclusive remedy provision.
Plaintiff appealed to the Illinois Supreme Court arguing that since he was directly employed by Bulley Concrete the exclusive remedy provision did not bar him from suing Bulley & Andrews.
In its analysis, The Illinois Supreme Court cited to Laffoon v. Bell & Zoller Coal Co., 65 Ill. 2d 437 (1976) stating that immunity does not hinge on the payment of benefits. Rather, under the plain language of section 5(a), immunity is conferred only on immediate employers of an injured worker. In Munoz, the court found there was no dispute that Bulley & Andrews was not plaintiff’s immediate employer as Bulley & Andrews and Bulley Concrete were operated as separate and distinct entities. Therefore, plaintiff was not barred from suing Bulley & Andrews by sections 5(a) and 11 of the Act.
McKenna Storer has been serving its clients for more than 66 years. We are open and available for consultations at both our Chicago and Woodstock locations. Please follow us on or our LinkedIn, Twitter or Facebook pages.