| Blog | Mooney Law wins Appeal on Employee or Subcontractor Status in Workers Comp

Mooney Law wins Appeal on Employee or Subcontractor Status in Workers Comp

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Mooney Law Partner Mark Buterbaugh recently won an Appeal before the Pennsylvania Workers Compensation Appeal Board regarding whether an injured worker was deemed to be an employee or a subcontractor.  Mooney Law won the case before the Workers Compensation Judge (WCJ), but the Defendant Employer appealed the decision to the Appeal Board.  Prior to the COVID-19 pandemic, the case was to be argued at Dickinson College in front of law students due to the narrow issue of employment status.

In this matter, our client worked for a company that performs general construction and iron works.  While working on an oven installation, our client fell through to a concrete floor and fractured his heel of his foot.  He required surgery.  The employer denied that our client was an employee and argued he was instead a subcontractor, therefore not covered by the PA Workers Compensation Act.  Both parties agreed to resolve the litigation, except for the employment status of my client.

The WCJ issued a decision in favor of our client, finding him to be an employee and not a subcontractor. Defendant employer appealed on two issues.  First, they argued the WCJ improperly applied the Construction Workplace Misclassification Act (CWMA), arguing that this was not typical construction activity.  Second, they argued that common law cases would find our client to be an independent contractor.

The Appeal Board ruled in our favor, finding that the CMWA did apply.  First, the Appeal Board noted our cross examination that got the Defendant employer to admit that his business was ‘general construction and iron works.’   Second, as the Appeal Board stated in the Opinion, the CWMA references in defining construction activities as:

The CWMA applies only to individuals who work for a business performing construction services.  Dept. Of Labor and Indus., UEGF v. WCAB (Lin and Eastern Taste), 187 A.3d 914 (Pa. 2018) Construction services is defined as “erection, reconstruction, demolition, alteration, modification, custom fabrication, building, assembling, site preparation and repair work done on real property or premises under contract.” 43 P.S. §933.2.

Essentially, the Appeal Board expands the ‘construction services’ beyond what most employers would think to be “construction”.  Far too often, employers mistakenly believe unless an actual building is being built, then it not considered construction services.  That premises is wrong and the Appeal Board agreed with us.

Additionally, once the CWMA is applied, then three elements MUST be met for an injured worker to not be considered an employee.  Quite frankly, in our practice, most fail the very first element.  The first element requires that the employer and employee have a written subcontractor agreement.  If there is no written subcontractor agreement, then the injured worker is considered an employee.  In this case, the Appeal Board examined whether a hold harmless agreement signed by our client was considered a written subcontractor agreement.  We indeed were able to get the employer to admit on cross examination that he did not have a written subcontract agreement in place, other than the hold harmless.  We argued that first, a hold harmless agreement is not a written subcontractor agreement and that our client signed the agreement in December, nearly three months AFTER the date of injury.  The Appeal Board noted the hold harmless was signed after the injury and agreed the Defendant admitted on cross examination that he did not have an actual written subcontract agreement.  We won the appeal right there.

However, the Appeal Board went on to discuss the common law analysis that determines whether an injured worker is an employee or an independent contractor. Through the testimony of our client and the cross examination of the employer, we were able to establish that our client was driven to work by the employer, his hours were controlled by the employer, tools were provided to him, and that our client did not set his own hours and was paid regularly, by hour, by week.   The Appeal Board reiterated precedence that the primary factor to determine independent contractor status is the “the alleged employer’s right to control the work to be done by the claimant and the manner in which it is performed.”   The Appeal Board accepted our argument and affirmed the WCJ in finding even under common law analysis, our client would still be found to be an employee.  From time to time, employee status is still an area of Workers Compensation practice that still gets argued from time to time.   It’s a pretty narrow issue with room to make legal arguments.

Mooney Law continues to fight for the rights and benefits of injured workers across Central Pennsylvania and Maryland.  We settle many cases for our clients.  We have recovered tens of millions of dollars on behalf of injured workers.  HOWEVER, we are also experienced litigators and have no fear in going to Judge’s decision and further on Appeal, if necessary.  Our interests do not lie with employers or unions.  Our interest lies with our clients.  Our firm has never shied away from litigation.  If you have been injured at work, call Mooney Law for a FREE consultation.  We would be happy to discuss your case.  You can contact Mooney Law at 833-MOONEYLAW or 717-200-HELP to schedule a free consultation.

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