Amendments expanding WC coverage upheld as constitutional

Under Alaska's 2004 amendments to the Workers' Compensation Act, project owners are covered by the exclusive workers' compensation remedy, and general contractors and project owners are immune from civil suits.

Case name: Schiel v. Union Oil Company of California, No. S-13058, No. 6436 (Alaska 11/20/09).

Ruling: The Alaska Supreme Court held that amendments to the Workers' Compensation Act extending workers' compensation coverage to project owners were constitutional.

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What it means: Under Alaska's 2004 amendments to the Workers' Compensation Act, the definition of "employer" is expanded for purposes of the exclusive liability provision to include any person who is potentially liable for securing payment of compensation. Project owners are now covered by the exclusive workers' compensation remedy, and general contractors and project owners are immune from civil suits.

Summary: A worker lost two fingers working on an oil drilling platform. He received workers' compensation benefits from his employer and sued the drilling platform company, which owned the project. The platform company argued it was the worker's statutory employer and was therefore immune from suit under Alaska's 2004 workers' compensation amendments. The amendments expanded the exclusive liability provision to include project owners. The worker argued that the amendments violated his equal protection and due process rights under Alaska's Constitution.

The Alaska Supreme Court rejected the worker's arguments. It explained that the worker was still able to get compensation for his work-related injuries through the workers' compensation system even if he was unable to sue the project owner for negligence. Thus, his rights were not infringed. The court also found the amendments were legitimately related to the legislature's objective of preventing workers from receiving a double recovery in both tort and workers' compensation. It held that the amendments did not violate the worker's rights and upheld their constitutionality.

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January 11, 2010

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