ID Supreme Court clarifies independent contractor liability under workers’ comp law

In September 2023, the Idaho Supreme Court held that the exclusive remedy rule of Idaho’s workers’ compensation law doesn’t shield independent contractors from lawsuits filed by injured employees.

Exclusive remedy rule

For context, Idaho’s workers’ comp law contains an exclusive remedy rule that limits an injured worker’s remedy to workers’ comp benefits when the worker sustains injuries in the course of employment.

Historically called the “grand bargain” between employers and employees, the rule prohibits injured employees from filing civil suits against their employers or coworkers, including statutory employers and coworkers such as contractors and subcontractors.

Fall leads to clarity

A sugar-refining company contracted with Excel Fabrication, LLC, to install stairs on the company’s refining tanks. Mitchell Smith, one of the sugar-refining company’s employees, was injured when one of the stairs’ handrails gave out and caused him to fall.

After receiving workers’ comp benefits from his company, Smith filed suit against Excel Fabrication for negligent construction and installation of the stairs. The district court dismissed his claim, finding that Excel Fabrication was his statutory co-employee and, therefore, immune from suit under the exclusive remedy rule. He appealed to the Idaho Supreme Court.