Iowa Sole Proprietor Working Alongside Others is Still Employer For Purposes of Workers’ Compensation Exclusive Remedy Defense

An Iowa sole proprietor, who worked alongside his employees, was nevertheless still an employer—and not a co-employee—for purposes of the Iowa Workers’ Compensation Act, held a state appellate court [Mullen v. Grettenberg, 2015 Iowa App. LEXIS 927 (Oct. 14, 2015)]. Accordingly, a wrongful death action against the proprietor was barred by the exclusive remedy provisions of the Act, notwithstanding a separate provision in the Act [see Iowa Code § 85.20(2); Larson’s Workers’ Compensation Law, § 111.03] that allowed civil actions to proceed against a co-employee whose gross negligence caused the worker’s injury or death.

Background

Mullen worked for Grettenberg, the sole proprietor of Grettenberg Farms, Ltd. Mullen was emptying a grain bin when he became trapped inside and suffocated. Grettenberg was working in the vicinity of the accident. The administrators of Mullen’s estate filed a wrongful death action against Grettenberg, alleging he had been grossly negligent while serving as Mullen’s “supervisor” and “co-employee.” Grettenberg countered that he was Mullen’s employer and not a co-employee and that the tort action was, therefore, barred by exclusivity. The trial court agreed with Grettenberg and dismissed the case. The appellate court affirmed.

Precedent Rulings

The Court indicated that Grettenberg could not be “deemed” a co-employee, that while the precise issue had not been determined by an Iowa appellate court, other precedent supported such a ruling. For example, in Horsman v. Wahl, 551 N.W.2d 619 (Iowa 1996), the state supreme court held that a proprietor or partner who elected to purchase workers’ compensation insurance was appropriately defined as an employee for purposes of coverage, that proprietor or partner was still an employer for purposes of the exclusive remedy defense.

The Court added that in the instant case, there was no evidence whether Grettenberg had elected to be covered by workers’ compensation insurance; his status as an employer was even clearer than the defendant’s status in Horsman. The Court also sited Carlson v. Carlson, 346 N.W.2d 525 (Iowa 1994) which, citing Larson, held that a member of a partnership, even if he was a “working partner,” was still in law the employer of the partnership’s employees and could not be sued in tort.