Florida Utility Was Not Statutory Employer of Injured Workers of Maintenance Company

The obligation of a Florida public utility to maintain its facilities and equipment arose out of an administrative regulation and, therefore, was not the sort of obligation that could be “sublet” to a third party for purposes of the state’s statutory employer statute, § 440.10(1)(b), Fla. Stat. (2017), held a Florida appellate court [Tampa Elec. Co. v. Gansner, 2020 Fla. App. LEXIS 14601 (2d DCA, Oct. 16, 2020)]. Moreover, while the utility promised to exercise reasonable diligence to provide power to its customers pursuant to a state tarif, nothing in that tarif, imposed upon it a contractual obligation to its customers to maintain its electrical generating equipment. Accordingly, the utility was not the statutory employer of two injured workers who were employed by an entity with whom the utility had contracted to provide maintenance work.

Background

Tampa Electric, a public utility, owns Big Bend Power Station, an electrical generating facility in Hillsborough County, Florida. Gansner and Carter were employed by Zachry Industrial Inc., an entity with whom Tampa Electric had contracted to provide maintenance work at Big Bend. Gansner and Carter sustained injuries at one of Big Bend’s condenser units, Unit 3, as they attempted to perform maintenance work on the access door of a condenser inlet tunnel. When they reached the access door of the unit, it blew open, releasing a large column of water that struck them. They, along with their spouses and Gansner’s children, filed lawsuits against Tampa Electric.

Trial Court Denies Motion for Summary Judgment

Tampa Electric moved for summary judgment in the consolidated litigation, arguing that it was the statutory employer of Gansner and Carter pursuant to § 440.10(1)(b), Fla. Stat. (2017), and that since it was their statutory employer, the exclusivity provision of § 440.11, Fla. Stat. limited Gansner’s and Carter’s remedies to workers’ compensation benefits, which they had received through Zachry Industrial. The trial court denied the motion, explicitly finding that Tampa Electric was not the statutory employer of either Gansner or Carter.

Appellate Court Decision

The court initially indicated that in order for Tampa Electric to be entitled to workers’ compensation immunity, it must be a statutory employer of Gansner and Carter, pursuant to § 440.10(1)(b), which provides:

In case a contractor sublets any part or parts of his or her contract work to a subcontractor or subcontractors, all of the employees of such contractor and subcontractor or subcontractors engaged on such contract work shall be deemed to be employed in one and the same business or establishment, and the contractor shall be liable for, and shall secure, the payment of compensation to all such employees, except to employees of a subcontractor who has secured such payment.

In essence, Tampa Electric would be entitled to immunity if it was considered a “contractor” that “sublet any part” of its “contract work” to Zachry Industrial, the “subcontractor.” The court added that to be considered a contractor, Tampa Electric’s primary obligation in performing a job or providing a service must arise out of a contract. Then part of that contract must be “sublet” to another.

Had Tampa Electric “Sublet” Part of its Prime Contract?

Here, the trial court determined that the undisputed material facts did not establish that Tampa Electric had sublet to Zachry Industrial any part of a prime contract it had entered into with a third party. On appeal, Tampa Electric argued, as it did before the trial court, that it has an implied contractual obligation to its customers to maintain its electrical generating equipment at Big Bend and that it sublet that obligation to Zachry Industrial. The appellate court rejected the argument.

Tampa Electric argued that it had a contractual obligation to customers to supply them with electricity and that the obligation arises out of its “tariff,” the document setting forth a public utility’s services, the rates for the services, etc. It argued further that it undertook an implied contractual obligation to its customers to maintain its electrical generating equipment at Big Bend because the maintenance of such equipment “contributes to the performance” of its express contractual obligation to supply electricity.

“Contract Work” is the Key

The appellate court said there was an “obvious problem” with Tampa Electric’s argument; § 4410.10(1)(b) used the term “contract work,” not “work that contributes to the performance of the contract.” The court stressed that § 440.10(1)(b) did not create statutory employer status whenever a party entered into a contract with another that contributed to or facilitated its work under a separate contract; surely, that could be said of nearly every contract that a business entered into except those for the most incidental of services.

The court continued by noting that Tampa Electric’s “contract work” with its customers under the tariff did not include the maintenance of its electrical generating equipment at its facilities. Instead, its obligation to maintain its equipment arose out of a regulation promulgated by the Public Service Commission. The court stressed that that a party that contracted with another for a service that was subject to an administrative regulation would not be precluded from being considered a statutory employer simply because the service was regulated by the state. Here, however, there had not sublet to a third party an obligation created by a contract. It was not the statutory employer of Gansner and Carter. Summary judgment against Tampa Electric was, therefore, appropriate.