The Supreme Court of Idaho, on April 26, 2021, in Kelly v. TRC Fabrication, LLC, clarified, as a matter of first impression, when delivery services ancillary to a contract for the sale of goods would create a statutory employer relationship for workers compensation purposes.
In this case, a third-party delivery driver, who was hired to deliver goods sold by a manufacturer, was injured while delivering the goods. The driver sued the company purchasing the goods for the injuries. The purchasing company argued that it could not be sued in tort because the delivery driver was its statutory employee with an exclusive remedy in workers compensation. The court held that, for purposes of workers compensation exclusive remedy, the purchasing company was not the statutory employer of the driver, and thus was not immune from the tort lawsuit. In its decision, the court adopted the rule that delivery services ancillary to a contract for the sale of goods do not themselves create a statutory employer contractual relationship, except when the sale contract is accompanied by the performance of substantial services in connection with the sale, or where the transaction is a subterfuge to avoid liability under the Idaho workers compensation laws. Applying this rule to the facts, the court concluded that the contract at issue dealt exclusively with the sale of goods and nothing suggested that “substantial services” were to be performed. In addition, the court found, the contract represented a routine commercial transaction, and nothing indicated that it was a device or subterfuge to avoid workers compensation liability.
With this decision, the court reversed a trial court’s ruling, which found that the purchasing company was the statutory employer of the driver and therefore protected from lawsuits by workers compensation exclusive remedy.
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