Illinois Supreme Court Decides General Contractors Cannot Assert Exclusive Remedy Doctrine

By: Jeffrey Kehl

In Munoz v. Bulley & Andrews, LLC, 127067 (January 21, 2022), the Illinois Supreme Court held that the exclusive remedy provision of the Workers’ Compensation Act, which bars any direct action of an employee against their employer for negligence, does not apply to a general contractor who provided workers’ compensation insurance and benefits for a subcontractor and its employees, including the plaintiff.

In Munoz, Plaintiff was employed by Bulley & Andrews Concrete Restoration (“Bulley Concrete”), a fully owned subsidiary and subcontractor of Bulley & Andrews, LLC (“Bulley”). Plaintiff was injured while performing work for a project for Bulley.  Bulley had agreed with the project owner to provide workers’ compensation insurance and benefits for all employees, including the employees of Bulley’s subcontractors.

In a resulting lawsuit, Plaintiff sued Bulley claiming that it was the general contractor who owed a general duty to provide a safe workplace. Bulley moved to dismiss the suit on the grounds that the exclusive remedy provision of the Workers’ Compensation Act, precluded its liability because it had paid workers’ compensation insurance and benefits to Plaintiff. The trial court and the appellate court agreed.

On review, the Illinois Supreme Court entered a blanket opinion holding that a general contractor who is not the direct employer of the injured employee cannot assert the exclusive remedy provision of Section 5(a) of the Workers’ Compensation Act.

In support of the sweeping language of this holding, the court noted the case was consistent with prior holdings of the court addressing whether general contractor could ever claim any protection under the Exclusive Remedy Doctrine. For example, in Laffoon v. Bell & Zoler Coals Co., 65 Ill. 2d 437 (1976), the court held that only a direct employer could claim protection of the Exclusive Remedy Doctrine and even the general contractor who is obligated to pay workers’ compensation benefits because the subcontractor was uninsured is not the direct employer for purposes of the Act.

The Munoz court also labored with its prior decision in Ioger v. Halverson Constr. Co., 232 Ill. 2d 196 (2008). In Ioger, the general contractor was a signator to a joint venture agreement with Plaintiff’s employer. Under the joint venture agreement, the general contractor agreed to be responsible for workers’ compensation benefits. The court held that the general contractor could claim the protection of the Exclusive Remedy Doctrine because the joint venture was actually an agent of its members and the contractual obligation of the general contractor was made on behalf of the joint venture.

The Munoz court distinguished Ioger, noting that there was no contractual agreement between  Bulley and Bulley Concrete that required Bulley to provide workers’ compensation insurance and benefits to employees of Bulley Concrete. As such, there was no contractual agreement that rendered Bulley an agent of Bulley Concrete such that the Exclusive Remedy Doctrine could apply. The project contract under which Bulley agreed to provide workers’ compensation benefits was between Bulley and the owner and did not invoke principles of agency law such that the “agent of the employer” language of the workers’ compensation provision would apply. As the court noted, there is nothing within the exclusive remedy provision that provides that non-employers acquire the immunity simply by paying the insurance and benefits.

The impact of Munoz is clear. As a broad proposition, a general contractor cannot assert protection under the Exclusive Remedy Doctrine simply because it is responsible for payment of workers’ compensation benefits. However, the court did not address whether a general contractor could never be an agent of the subcontractor or a co-employer for whom the Exclusive Remedy Doctrine could apply.  While the decision greatly limits the potential use of the Exclusive Remedy Doctrine, we foresee agency and co-employer theories as still viable inroads into asserting the Exclusive Remedy Doctrine.