“Turn-Around” Work Considered Part of Facility Owner’s Business In Establishing Tort Immunity for Statutory Employer

Case:   Fletcher v. Anco Insulations, Inc. et al.
             Louisiana Fourth Circuit Court of Appeal
             No. 2016-0424, 208 So. 3d 467, 2017 La. App. LEXIS 67 (January 11, 2017)

Plaintiff James Fletcher was diagnosed with mesothelioma in 2015. As result, he brought suit against a number of entities alleging asbestos exposure. Fletcher worked for J.E. Merit, a contractor that provided additional workers to chemical plants. From 1998 to 1999, the Plaintiff performed work at the Exxon Refinery in Baton Rouge, and Exxon was named a Defendant. The matter proceeded to trial, and the district court determined Exxon was a statutory employer under La. R.S. 23:1061. As such, Plaintiff’s exclusive remedy against Exxon was under worker’s compensation, and Plaintiff was barred from pursuing a tort claim against Exxon. Fletcher challenged this ruling to the Louisiana Fourth Circuit Court of Appeal.

The Court of Appeal affirmed Exxon’s status as a statutory Employer. Under La. R.S. 23:1061, the statute establishes that a statutory employer is a principal who has contracted with others to perform work “which is part of his trade, business, or occupation.” The question on appeal was whether the work Exxon, as principal, contracted with Plaintiff’s direct employer qualified as Exxon’s part of Exxon’s business. In this case, Exxon contracted with J. E. Merit to aid Exxon in “turn-around” operations by providing support to Exxon employees during said operations. Exxon’s corporate representative established turn-around operations were “routine maintenance operations” necessary in order to keep the processing units in good working order. During turn-arounds, it was common to replace older equipment that was related to the use of the processing units. At times, this even included excavation and replacement of existing foundations which supported the equipment. Exxon and other workers would work in concert to complete the turn-around. Typically, civil crews were provided to excavate dirt for foundations, set forms, and pour concrete.

Plaintiff argued turn-around work could not be considered part of Exxon’s business because his direct employer was contracted to perform “new construction” in Exxon’s facilities outside the scope of what Exxon’s direct employees had the capacity to do. As Exxon was not in the business of plant construction or processing unit conversion, Plaintiff argued Exxon could not be his statutory employer. The court disagreed.

The Louisiana Supreme Court had promulgated a test to determine whether the contract work is part of the alleged principal’s trade, business, or occupation in Kirkland v. Riverwood Int’l USA, Inc. In ascertaining whether a statutory employment relationship exists the court looks at the following eight factors: (1) the nature of the business of the alleged principal; (2) whether the work was specialized or non-specialized; 3) whether the contract work was routine, customary, ordinary or usual; (4) whether the alleged principal customarily used his own employees to perform the work, or whether he contracted out all or most of such work; (5) whether the alleged principal had the equipment and personnel capable of performing the contract work; (6) whether those in similar businesses normally contract out this type of work or whether they have their own employees perform the work; (7) whether the direct employer of the claimant was an independent business enterprise who insured his own workers and included that cost in the contract; and (8) whether the principal was engaged in the contract work at the time of the incident.

In applying the factors to the aforementioned testimony elicited at trial, the court found the work performed by J.E. Merit was routine ordinary regularly scheduled maintenance. J.E. Merit would replace, refurbish, or upgrade equipment due to wear and tear, and was not hired to perform extraordinary construction and/or repairs. Because maintaining processing equipment is key to the business of Exxon, i.e., chemical production, the Fourth Circuit affirmed. Furthermore, Exxon’s direct employees oversaw and were involved in the activities. Exxon also had the tools, equipment, and personnel capable of performing the contract work. A number of Kirkland factors therefore fell in Exxon’s favor, and Exxon was entitled to tort immunity under Louisiana’s workers compensation scheme.

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