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Koutcher Wins One of the First Claim Petitions Litigated Under the New “Six L’s” Standard

  • Jon Koutcher
  • 04/04/2014

Philadelphia workers compensation lawyer Jonathan B. Koutcher of PearsonKoutcher, LLP recently won an important decision litigated under the “Six L’s” standard.  In this case, an injured laborer fell through a floor, suffering catastrophic physical and closed head injuries.  In a complicated fact pattern, the laborer was hired by a subcontractor of a company who essentially renovated properties to then flip for a profit or retain as rental income.  This entity was not in the construction business as typically defined. The entity acted more as an investor.  The subcontractor did not maintain worker’s compensation insurance.  The laborer maintained all along that the company that was renovating the property (the investor) was his employer; the worker’s compensation judge determined the subcontractor was the laborer’s employer. The judge then found that since the subcontractor did not maintain worker’s compensation insurance, the company that was renovating the property, the investor, which hired the subcontractor, was the laborer’s statutory employer and liable to pay the laborer wage loss and medical benefits.

In McDonald v. Levinson Steel, a Pennsylvania Supreme Court case from 1930, an entity that was not the true employer, or master, of an individual, could still be a statutory employer under Section 302(b) of the Act and therefore liable to pay worker’s compensation benefits. Historically, to prove entitlement to the statutory employer doctrine, an injured worker had to prove that: 1. the entity was under contract with an owner (of the premises where the injury was sustained); 2. the entity occupied or was in control of that premises at the time of the injury, 3. the entity entered into a subcontract (with the injured worker’s employer), 4. the entity entrusted part of its business to the subcontractor, and 5. the injured party is an employee of the subcontractor.  Most of the cases arose in the context of a construction site accident; when accidents occurred in a different setting, it was very difficult to prove control of the premises, particularly when an accident did not occur at a jobsite.

In Six L’s Packing Co v WCAB (Williamson), a 2013 decision, the Pennsylvania Supreme Court eliminated the “on premises” condition/requirement referenced in Section 302(b) of the Act for an entity to be a statutory employer under Section 302 (a) of the Act.  Essentially, the McDonald test was not required to be satisfied under Section 302 (a). Six L’s also expanded the statutory employer doctrine beyond a construction fact pattern (in Six L’s, the statutory employer was a tomato processor and distributor). The statute expands to any scenario in which a contractor subcontracts all or any part of a contract, within the scope of work delineated in Section 302(a)’s specialized definition of contractor (including work of a kind that is a regular or recurrent part of the business of the putative statutory employer).

As a result of the Claim Petition being granted, the injured laborer received wage loss benefits retroactive to May, 2011 when the accident occurred and ongoing benefits as well.  In addition, the injured laborer was awarded disfigurement benefits (specific loss) for disfigured teeth and a scar on his face totaling 95 weeks.  Since the injured worker receives ongoing total, temporary disability (ttd) benefits, the specific loss award is deferred until the injured worker’s status changes following the period of ttd.

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