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By: J. Kent Holland
ConstructionRisk, LLC

The U.S. Federal District Court lacked subject matter jurisdiction over a suit by a general contractor’s employee against a construction subcontractor who was engaged in the general contractor’s trade, business and occupation. Under Virginia’s law, an injured employee who is covered by workers’ compensation cannot sue his employer. The courts have interpreted the workers’ compensation act as barring suits where, as here, injured employees of a general contractor attempt to sue a subcontractor who was engaged in the general contractor’s “trade, business or occupation.”   The subcontractor is treated as a statutory co-employee of the injured worker and is entitled to the immunity afforded by the Act.   Demetres v. East-West Construction, 776 F.3d 271 (4th Cir. 2015).

A resident of North Carolina was working on a project in Virginia for his employer, Ashland Construction Company, a North Carolina based company. Ashland hired East West Construction Company as its subcontractor to perform site work.   One of the subcontractor’s employees accidently backed over Ashland’s employee, causing severe injuries. The employee received workers’ compensation benefits under North Carolina law through his employment with Ashland. He then filed a personal injury suit in Virginia against the subcontractor. In its successful motion to dismiss the suit, the subcontractor argued that the exclusivity provision of the Virginia Workers’ Compensation Act barred the suit. In upholding the dismissal, the Circuit Court held because the court’s jurisdiction was based on diversity, the district court was required to apply Virginia law. The court explained that Virginia subscribes to the lex loic delicti principle for determining the applicable substantive law in tort suits, and that “According to that principle, the law of the place in which the injury occurred governs the substantive cause of action.”

 

About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with Construction Risk Counsel, PLLC) representing design professionals, contractors and project owners.  He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects.  He is publisher of ConstructionRisk.com Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932.  This article is published in ConstructionRisk.com Report, Vol. 18, No. 6 (September 2016).

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