All parties to a joint venture may escape tort liability when any of their employees are injured, provided the joint venture is ultimately responsible for making premium payments for workers’ compensation insurance. If one co-venturer is responsible for procuring and paying for workers’ compensation insurance, all co-venturers will benefit from tort immunity if the joint venture is itself ultimately responsible for insurance payments. That responsibility will arise if there exists an obligation to reimburse a co-venturer for payment of insurance premiums and can be clearly indicated in the agreement arrived at by the companies forming the joint venture. Such language can substantially limit a company’s exposure to tort liability.
In December 2008, the Illinois Supreme Court decided that the immunity afforded to an employer by the exclusive remedy provisions of the Workers’ Compensation Act extends to both the co-venturer of the employer and to the joint venture itself. Ioerger v. Halverson Constr. Co. Inc., 232 Ill. 2d 196 (2009). The Act’s immunity protects an employer from tort liability by precluding injured workers from bringing a negligence action after making a workers’ compensation claim. An employer need only pay its workers’ compensation insurance premium to receive immunity. Thus, when two or more enterprises enter into a joint venture, each of them and the joint venture itself benefit from the immunity provided by the Act. The immunity exists to protect those employers who provide their injured employees with workers’ compensation benefits from the burden of having to answer in court for the same injury. By the same token, employers who do not provide their employees with workers’ compensation benefits may not invoke the Act’s immunity to escape tort liability.
In Ioerger the court heard allegations of negligence and wrongful death when a platform collapsed and four employees plummeted into the river below them. The three surviving and injured workers and the deceased employee’s estate each applied for and received workers’ compensation benefits. The benefits were paid by the insurance carrier contracted by the employer, one of two companies that had formed a joint venture to construct a bridge for the state. In thisjoint venture, one company maintained the responsibility of furnishing workmen and paying for workers’ compensation insurance. Pursuant to agreement, the joint venture was to reimburse costs expended, including costs for insurance. When the workers involved in the accident filed a civil action against the employing co-venturer, the trial court dismissed the claim, ruling that immunity applied to both co-venturers and the joint venture as well. The Supreme Court agreed, ruling that because an employer’s immunity extends by statute to its agents, the co-venturers, as each other’s agents in their joint venture, were each entitled to the same immunity.
The appellate court had reversed the circuit court’s decision, basing its own decision on the fact that reimbursement for payment of workers’ compensation insurance premiums had not yet occurred. However, the supreme court disagreed with the appellate court that lack of reimbursement was sufficient to exclude the employing co-venturer from the immunity provided by the Act. The court instead determined that because joint ventures arise solely through voluntary agreement, they are controlled by the terms of the created agreement. Thus, the dispositive fact was the contractual obligation to provide for insurance through reimbursements, not the act of reimbursement itself.
In essence, companies forming a joint venture for any project where personal injury is a potential risk will benefit by drafting their agreements carefully to ensure that each of them are protected by the remedy provisions of the Workers’ Compensation Act.
