All is Not Well with Oregon's ELL

Inherent in our concept of justice is the fact that one who causes an injury should pay for it, and where multiple entities are jointly responsible for the same injury, liability should be allocated consistent with their degree of culpability. As a cumulative result of a number of Oregon laws, the party with the greatest culpability may not pay anything for the injuries they cause.

In Oregon, as in most states, the statutory workers' compensation system is the exclusive remedy of an employee injured on the job against their direct employer. Only the direct employer who provides the workers compensation insurance is actually immune from civil liability, however, and the injured worker can collect workers' compensation benefits and still sue another contractor or the owner of the job site. When the injury actually resulted from the immune employer's failure to train, provide safety equipment or supervise its own employees, these types of claims cannot fairly allocate liability.

Those who are defendants in this type of lawsuit are not allowed to bring a claim against the immune employer regardless of the degree of negligence resulting in the injury. In fact, Oregon law says a jury cannot even consider the fault or negligence of the immune employer when allocating fault to the defendants.

Another unique Oregon law is Employer's Liability Law or the ELL. This statute provided a statutory cause of action to an employee against the direct employer prior to the passage of the workers' compensation laws. The problem is it was never repealed. So while the ELL does not apply to the “employer” anymore, it provides a high burden on the non-immune contractors, subcontractors and owners having responsibility for work involving a risk or danger to employees as this law requires the use of

"every device, care and precaution that is practicable to use for the protection and safety of life and limb * * * without regard to the additional cost of suitable material or safety appliance and devices." ORS 654.305.

The immune employer is not the only beneficiary of the legislature's protection. The workers' compensation insurer has a lien against any recovery the injured employee may get from a third party for the benefits the insurer paid under the workers’ compensation system, and the workers’ compensation insurer even has the right to bring the lawsuit against potentially liable third parties if the employee does not. So, even if the immune employer had the greatest degree of fault in actually causing the injury, if the injured employee recovers against the non-immune defendants, the workers’ compensation insurer may ultimately pay nothing at all. 

In the context of construction, parties are not free to allocate risk as they are in other industries as the law voids risk allocations in “construction agreements” broadly defined to include contracts for the “planning, design, construction, repair, improvement or maintenance of any building, highway. . . or project . . . attached to real estate.” ORS 30.140(3). For instance, ORS 30.140 voids indemnity agreements to the extent that they require one party to indemnify another party for the other party’s fault. Construction contracts frequently require that a contractor name the project owner as an “additional insured” on general liability insurance policies. One benefit of being an additional insured in most states is that when sued by a contractor’s employee for an on-the-job injury, the owner can tender the lawsuit to the contractor’s insurer. Not in Oregon. Also void are any contractual terms requiring that one party have its insurer waive the right of subrogation. Subrogation is the right of the insurance company that has paid a claim (such as a workers’ compensation insurer) to bring a lawsuit against other parties who may be liable for the same injury. In Oregon, contractors are a uniquely protected class. A provision that waives their rights of subrogation, indemnity or contribution is void to the extent the injury or damage is caused by another person. ORS 30.145(1). Other states allow construction projects to include workers’ compensation insurance in wrap-pp policies purchased by the owner or general contractor for the benefit of all employers, whereas Oregon only allows this when the project value is over $90 million.

It is time that the Oregon legislature took another look at the equities of the cumulative effect of these piecemeal laws. Maybe workers’ compensation should be the exclusive remedy of an injured worker against everyone working on the job site as it is in other states. Perhaps it is time to bid adieu to the ELL or modify the laws to allow a jury to consider the fault of the immune employer when awarding damages against others. 

"All is Not Well with Oregon's ELL" was originally published on December 17, 2014, by the Daily Journal of Commerce.