Worker's Comp Trumps Employer Liability: California Supremes

July 9, 2001 ( ? The California Supreme Court has unanimously held that a contractor's employee covered by workers' compensation can't recover damages from the person who hired the contractor.

The court, in a 6-0 vote, said employees or their survivors in those situations can collect only workers’ compensation benefits, even if the hirer failed to make sure the contractor was qualified for the work.

Writing for the court in Camargo vs. Tjaarda Dairy, Justice Janice Rogers Brown noted, “The hirer should not have to pay for injuries caused by the contractor’s negligent performance, because the workers’ compensation system already covers those injuries.”

However, workers’ compensation usually pays a fraction of what victims could receive in a lawsuit.

The workers’ compensation system bars employees from suing their employers for on-the-job injuries and generally limits their recovery to medical expenses and lost wages. The ruling was consistent with previous decisions from the California high court, which have restricted the ability of employees of contractors, or their relatives, to sue third parties for workplace injuries.

Case History

In this case, the widow and five children of Alberto Camargo, a laborer who died, had brought the lawsuit in a 1996 tractor accident.

Camargo died when his tractor rolled over as he was driving over a big mound of manure at the dairy. He was a full-time employee of Golden Cal Trucking, which the dairy had hired to clear out manure from its corrals and haul it away in exchange for the right to buy the manure at a discount.

The suit alleged that Tjaarda Dairy had negligently hired a contractor to remove manure. The suit charged that the dairy had failed to determine whether Camargo was qualified to operate the tractor safely, while the dairy denied any negligence.

A Superior Court judge had dismissed the lawsuit. However, the 5th District Court of Appeals in Fresno reinstated on the grounds that the state Supreme Court had not specifically barred suits in cases that alleged negligent hiring.

After “Math”

The attorney for the dairy noted it would be unfair if the hirer were liable for substantial damages when the firm that employed the worker could not be sued.

Fred H. Hiestand, general counsel for the Civil Justice Assn. of California, a tort reform group, said the decision should encourage companies to obtain workers’ compensation insurance. “If you get workers’ compensation, you can’t be sued for injuries to your employees,” Hiestand said. “If you don’t get it, it is open season on you.”

Until 1993, California courts allowed injured workers of contractors to sue firms that hired the contractors for work that was inherently dangerous. The court barred such suits that year and in a similar 1998 ruling.