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“Illegal” Status of Workers Immaterial to Employers’ Protections Under Workers’ Compensation Law § 11

March 26, 2014 • Posted By Victoria Kennedy • Complex Litigation

In a recent decision, dated February 13, 2014, the New York Court of Appeals affirmed the dismissal of a third-party complaint filed by a property owner against its contractor for common-law contribution and indemnification in connection with Labor Law claims brought by illegally employed workers hired by the contractor. This case New York Hospital Medical Center of Queens v. Microtech Contracting Corp., --N.E.3d--, 22 N.Y.3d 501 (2014)  resolved a somewhat novel debate on whether Workers’ Compensation Law § 11 (“Section 11”) shielded a contractor from third-party claims when the contractor’s employees were not legally employed in the United States. 

In New York Hospital, two workers were injured while performing demolition work.  They made statutory workers’ compensation claims against the contractor that hired them, for which they received compensation from the contractor’s insurance carrier.  The workers also sued and won summary judgment against the property owner under Labor Laws §§ 240(1) and 240(6) in Suffolk County Supreme Court. The property owner then commenced a third-party complaint against the contractor for common-law contribution and indemnification. The contractor moved to dismiss the third-party complaint on the well-established basis that Section 11 bars such claims in the absence of a “grave injury” or a written contract providing contribution or indemnification, neither of which applied in this case.  The property owner opposed the motion arguing that any employment agreement between the contractor and the undocumented workers would have been invalid under the Immigration Reform and Control Act, and thus the contractor should not benefit from the protections of the Workers’ Compensation Law.

The Suffolk County Supreme Court disagreed with the property owner and granted the contractor’s motion to dismiss explaining that Section 11 does not provide any exception to the Workers’ Compensation Law based on workers’ status, and in the absence of such an exception the property owner could not avoid the clear bar to its third-party claims.  The Second Department affirmed. On appeal, the Court of Appeals affirmed the Second Department’s decision and further reasoned that since Section 11 does not even require a contract between the employer and employee, the employee’s legal status under such an agreement cannot be deemed material to the employer’s statutory protection from third party liability.

 

French & Casey regularly defends clients against Labor Law §§ 240-241 and related claims.