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Ask attorney for help in structuring joint ventures to limit employer liability

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in Employment Law,Human Resources

Good news if your company is involved with another firm in a joint venture that includes provisions for sharing labor and workers’ compensation insurance costs: Employees working under the joint-venture agreement can’t sue you for damages relating to injuries covered by the workers’ compensation system.

If the agreement is worded correctly, your company will have immunity from lawsuits related to any injuries on the job.

Recent case: Several construction workers were hurt when a platform collapsed and they fell into a river. They collected workers’ compensation payments from their employer. Then they sued another company that was a joint-venture partner with their employer on the construction project.

The Illinois Supreme Court ruled the workers couldn’t sue the second party because the joint-venture agreement clearly spelled out that the two companies were sharing labor obligations. That essentially made the two companies one company for workers’ compensation purposes.

Because the workers’ compensation system is the sole remedy for on-the-job injuries, the workers couldn’t separately sue the second company for their injuries. (Ioerger, et al., v. Halverson Construction, No. 105912, Supreme Court of Illinois, 2008)

Final note:
Always have an attorney review any joint-venture or subcontracting agreements to make sure your company is protected from negligence lawsuits. He or she can suggest ways to protect your company from liability or alert you that you may have to purchase additional insurance to cover the risk.

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