Morehouse Parish Case Illuminates Vitality of the ‘Two Contract Theory’ and the Exclusivity of the Workers Comp Remedy

The case of Dugan v. Waste Management, Inc., was recently handed down by the Second Circuit Louisiana Court of Appeals. It is a tragic case, involving the deaths of two garbage truck employees, and the wrongful death suit that followed. In June 2007, Lamare Kindle and Wallace Bradley were riding in a garbage truck owned by Waste Management. Mr. Kindle and Mr. Bradley were both garbagemen, performing waste reduction services for Waste Management. Mr. Bradley was driving the garbage truck, while Mr. Kindle rode as passenger. As the garbage truck came upon a railway crossing, Mr. Bradley is alleged to have failed to yield and the two were both struck and killed by an oncoming freight train.

Mr. Kindle’s parents, including Ms. Bonita Dugan, subsequently filed a wrongful death suit to recover for their son’s death. Their theory was that, because Mr. Bradley was a direct employee of Waste Management and was acting in his scope of employment at the time of the accident, Mr. Bradley was thereby an agent of Waste Management. Moreover, because an employer can be held legally responsible for its agent’s negligent actions, the parents stated that Waste Management should be held directly responsible for Bradley’s negligent driving.

In spite of this usually sound legal theory, the wrongful death suit was immediately complicated by the peculiar employment relationship Mr. Kindle held with Waste Management. While Mr. Bradley, the driver, was a direct employee of Waste Management, Mr. Kindle, the passenger, subcontracted his labor to Waste Management through a temporary employment agency. A question arose: notwithstanding the subcontractual relationship, was Mr. Kindle an “employee” of Waste Management or an “employee” of the employment agency instead?

Under Louisiana law, when a plaintiff is injured during the course of his employment, he cannot directly sue his employer for harms caused by negligent or non-intentional acts. Instead, the employee must use the state’s workers comp system to resolve his claims against his employer. On the other hand, if the plaintiff is not an “employee” of the defendant, the plaintiff is free to seek a typical civil remedy from the courts. As a generality, workers comp remedies tend to be modest and limited in scope, while civil remedies allow for greater monetary damages.

In the absence of a direct employment arrangement, a worker can nevertheless be an “employee” of the defendant. This scheme is referred to as “statutory employment.” In Louisiana, there are two ways to be a “statutory employee.” First, if a written contract expressly recognizes the defendant as a “statutory employer”, then by the terms of the contract, the plaintiff is a “statutory employee” and can only seek the more modest workers comp remedies. Likewise, if the defendant satisfies the “two contract theory,” (to be expained later) the plaintiff will be deemed a “statutory employee” as well. In the instant case, the court noticed that the written contract between Waste Management and Mr. Kindle did not expressly refer to Kindle as a “statutory employee.” Therefore, the first method of achieving statutory employment was not met. However, a subsidiary question remained: was Mr. Kindle a “statutory employee” under the two contract theory?

The two contract theory occurs when a defendant is the principal in the middle of two contracts. More specifically, the two contract defense applies when (1) the principal enters into a contract with a third party; (2) pursuant to that contract, work must be performed; and (3) in order for the principal to fulfill its contractual obligation to peform the work, the principal enters into a subcontract for all or part of the work performed.

In this case, Waste Management met each element of the two contract theory. First, it had contracted with Morehouse Parish, a third party. Second, the terms of the contract specified that Waste Management should dispose of solid waste in the parish, which was “work to be peformed.” Finally, Waste Management subcontracted with the employment agency to fulfill its contractual obligation with Morehouse Parish. Accordingly, the court ruled that Mr. Kindle was a “statutory employee” of Waste Management under the two contract theory. This meant that workers comp was the sole remedy available, and Kindle’s parents’ wrongful death claim was barred.
As the Dugan case shows, the two contract theory can prevent a plaintiff’s typical recovery for injuries incurred while on the job. Even temporary workers may be precluded from suing for workplace injuries, despite the fact they were never directly hired by the defendant-employer. On the other hand, “independent contractors” are not employees, and they are not confined to the workers compensation system. Indeed, they can sue in civil court for more extensive remedies resulting from on the job injuries.

If you’ve sustained injuries while working and are unsure of whether you are an “employee” or an “independent contractor” of the business that hired you, it’s important to consult an experienced attorney before making any legal decision. Lawyers at the Berniard Law Firm can examine the various factors that define your relationship with the entity you are working for and can thus conclude whether you must file a workers comp claim or can pursue a civil remedy. Contact Berniard Law Firm today to ensure your workplace rights are adequately upheld.