Exclusive remedy of Oregon's workers compensation law won't protect member of LLC

By Michael (Sam) Sandmire
April 2, 2012

The Oregon Court of Appeals recently held that a member of a limited liability company is not protected from suit by the exclusive remedy provision of Oregon’s workers’ compensation law, Oregon Revised Statutes 656.018.  In Cortez v. Nacco Materials Handling Group, Inc.,an employee of the LLC was injured by a forklift.  The employee obtained workers’ compensation benefits from the LLC’s insurer, but subsequently filed an action against an LLC member as an individual defendant for negligence and under the Oregon Employer Liability Law (ELL).  While the court concluded that the LLC member-defendant was not entitled to the protection of the exclusive remedy provision, it refused to impose liability on the LLC member under the ELL because there was no evidence that the member had the required level of control over the employee’s activity.  The court emphasized that the LLC itself “owned and controlled the forklift’s day-to-day use.  Management of the forklift fell on [the LLC], not defendant.”  It also rejected the notion that the “right to control” could be found solely by the existence of a broad contractual right to intervene in safety procedures; instead the defendant must have control over the actual instrument that caused the injury.  Since the defendant did not specifically control matters related to the forklift, there was no valid ELL claim.  On the other hand, the court allowed plaintiff’s negligence claim to proceed to trial.  It rejected the notion that, if “there is no basis for a claim under the ELL, there cannot be a claim for common-law negligence.”  The Court’s full opinion can be found here.

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