SC Court Affirms Finding That Maintenance Worker Was Not Statutory Employee of Manufacturer

$14 Million Verdict Stands, Worker’s Duties, Although “Essential,” Were Not Part of Defendant’s Business

In a South Carolina wrongful death action, the state’s Court of Appeals recently affirmed a trial court’s denial of a corporate defendant’s motion for judgment notwithstanding the verdict. In its decision, the appellate court agreed that the deceased maintenance worker was not a statutory employee of the defendant’s predecessor in interest (“Celanese”) [Keene v. CNA Holdings, LLC, 2019 S.C. App. LEXIS 20 (Feb. 13, 2019)]. The appellate court’s ruling let stand a $14 million mesothelioma verdict against the former textile manufacturer.

Background

From 1971 to 1980, Seay performed maintenance work at the Celanese polyester plant in Spartanburg. Celanese had contracted with Daniel Construction Company, Seay’s direct employer, to handle all maintenance work at its Spartanburg plant, and Daniel assigned Seay to work at the plant. In performing his work, Seay came into contact with asbestos gaskets, packing, and insulation materials. Tragically, in August 2013, Seay was diagnosed with mesothelioma. He died in late 2014.

$14 Million Verdict

At trial, the primary issue was whether Seay was the statutory employee of Celanese. If he was, his personal representative would have been barred from pursuing the tort action under the exclusive remedy doctrine. The trial court determined that Seay was not the statutory employee of Celanese and a jury returned a verdict against Celanese totaling some $14 million.

Statutory Employee Doctrine

The appellate court set the context by observing that under the statutory employee doctrine, non-employees may be converted into employees for purposes of the Workers’ Compensation Act. The rationale is to prevent owners and contractors from subcontracting out their work to avoid liability for injuries incurred in the course of employment [see Larson’s Workers’ Compensation Law, § 70.06]. Generally speaking, the guidepost is whether or not the work being performed is a part of the general trade, business, or occupation of the owner.

“Essential to” Versus “Part of” the Trade or Business

Celanese argued that maintenance of plant and equipment was a necessary and integral part of any operation like the one it had carried out in Spartanburg and accordingly, that Seay was a statutory employee. Agreeing with the trial court, the appellate court stressed that even though the maintenance work Seay performed was essential for Celanese’s conduct of manufacturing polyester fiber, that did not mean such equipment maintenance was a part or process of Celanese’s manufacturing business.

The court observed that only Daniel employees performed maintenance and repairs on the equipment in the Spartanburg plant. None of the Celanese employees performed this type of work. Further, a Celanese employee admitted that Celanese contracted with Daniel because it was a qualified, capable contractor that could do the expert work that Celanese needed done, both in construction and maintenance. The appellate court concluded that, as aptly noted by the trial court, Celanese had presented no evidence that its corporate purpose included equipment maintenance.