On September 15, 2023, the Supreme Court of Idaho, in Smith v. Excel Fabrication, LLC, reversed its previous precedent when it held that independent contractors are separate and distinct from contractors and subcontractors and, as a result, not entitled to workers compensation exclusive (WC) remedy immunity.
In this case, a sugar refining company hired a third-party entity to build a flight of stairs to its refining tanks. Subsequently, in 2017, an employee of the refinery fell from the stairs built by the third party and suffered injuries. The employee recovered WC benefits from his employer and sued the third party for negligent construction and installation. The trial court dismissed the case concluding that the injured employee’s employer, the refining company, was the third-party statutory employer and therefore, the third party was immune from lawsuit as a co-employee.
On appeal to the Supreme Court of Idaho, the court analyzed application of Idaho statute 72-223, which precludes injured employees from recovering in a third-party lawsuit against certain contractors, subcontractors, and independent contractors under specific circumstances outlined in the statute. The court concluded that pursuant to the statute and other WC laws, the term “independent contractor” is separate and distinct from “contractors and subcontractors,” and that independent contractors are not afforded immunity from tort liability under WC in the same way that contractors and subcontractors are. As a result, the third party that was determined to be an independent contractor was not a statutory employer or employee, and therefore was not entitled to immunity from tort liability.
With this decision, the court overruled its 2003 case of Robison v. Bateman-Hall, Inc., which, according to the court, unnecessarily muddled the analysis regarding third-party tort liability.
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