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Exclusive remedy provisions of Illinois Worker’s Compensation Act do not apply to a lawsuit filed against a general contractor who is not a claimant’s direct employer

by | Mar 11, 2022 | Firm News |

In a personal injury lawsuit filed against the corporate owner of smaller business that employed a claimant who was injured while working at a construction site (with the claimant then filing a separate claim for worker’s compensation benefits against the subsidiary business, which poured concrete for buildings under construction), both the circuit court and the appellate court held that the claimant’s separate civil lawsuit filed against the larger, parent corporation was barred by the exclusive remedy provisions of the Illinois Worker’s Compensation Act (or “WCA”). See Munoz v. Bulley & Andrews, LLC, 2022 IL 127067 (IL Supreme Court Opinion filed January 21, 2022).[1] However, the case was ultimately appealed to the Illinois Supreme Court as alluded to above, which held that that the claimant’s suit against the larger, umbrella corporation was not barred by the exclusive remedy provisions of the WCA (which mandate that a claimant for worker’s compensation benefits cannot also file a separate civil lawsuit against his employer as well). To provide some factual background to this case, as mentioned above, the claimant was employed by the afore-mentioned subsidiary business which specialized in pouring concrete for construction projects (and which was working as a subcontractor for the parent company, which served as a general contractor for the entire project).[2] While working one day at the project’s building site, the claimant was injured, and shortly thereafter filed a claim for benefits under the WCA against the smaller subsidiary business. The claimant also filed a separate injury civil suit against the concrete company’s aforesaid parent corporation, and other defendants as well.[3] The larger company then filed a motion to dismiss, alleging in part that, since the concrete company was a completely owned subsidiary of the larger business, they were basically the same business for purposes of the WCA, and that therefore the claimant’s aforesaid suit against the larger business was barred by the WCA’s exclusive remedy provisions. The circuit court granted the motion, and the appellate court affirmed, but the Illinois Supreme Court reversed, holding that since the parent company and the subsidiary each had different income tax identification numbers and filed separate state and federal income tax returns, and also had different executive leadership and management personnel and employees, respectively speaking, they were separate entities under the WCA, and that therefore the claimant’s suit against the larger corporation could still proceed, since the parent company, as a separate business, was not the claimant’s direct employer, and also did not act as an agent of its subsidiary concrete pouring business, either in overseeing the construction project or for the purposes of the claimant’s lawsuit (and moreover, the parent company did not agree to provide worker’s compensation insurance coverage or any other benefits to the smaller concrete business’s employees, either).[4]

The Munoz case illustrates what can sometimes happen when a parent company hires one of its wholly-owned but separately managed and registered businesses to work on a project, but then cannot later claim immunity under the WCA, when one of the subsidiary’s employee’s files a lawsuit for personal injuries against the parent corporation.

[1]See Munoz v. Bulley & Andrews, LLC, 2022 IL 127067 (January 21, 2022).
[2]See Id.
[3]See Id.
[4]See Id.