Wash. Metro. Area Transit v. Johnson
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467 U.S. 925 (1984)
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U.S. Supreme Court
Wash. Metro. Area Transit v. Johnson, 467 U.S. 925 (1984)
Washington Metropolitan Area Transit Authority v. Johnson
Argued April 24, 1984
Decided June 26, 1984
467 U.S. 925
Section 4(a) of the Longshoremen's and Harbor Workers' Compensation Act (LHWCA or Act) provides that "[e]very employer shall be liable for and shall secure the payment to his employees" of compensation payable under the Act, and further provides that,
"[i]n the case of an employer who is a subcontractor, the contractor shall be liable for and shall secure the payment of such compensation to employees of the subcontractor unless the subcontractor has secured such payment."
Section 5(a) provides that the liability of an "employer" prescribed in § 4 shall be exclusive and in place of all other liability of "such employer" to the employee, except that, if an "employer" fails to secure payment of compensation as required by the Act, an injured employee may elect to claim compensation under the Act or to maintain an action at law or in admiralty for damages. Petitioner, a general contractor governed by the Act and responsible for construction of a rapid transit system (Metro) for the District of Columbia and surrounding metropolitan area, purchased a comprehensive "wrap-up" workers' compensation insurance policy to cover all employees of subcontractors engaged in the construction of Metro. Respondents, employees of subcontractors who had not secured their own workers' compensation insurance, after having obtained compensation awards from petitioner's insurer for work-related injuries, each brought a tort action against petitioner in Federal District Court to supplement such awards. The court in each case awarded summary judgment to petitioner, holding that, by purchasing workers' compensation insurance for the employees of its subcontractors, petitioner had earned § 5(a)'s immunity from tort suits brought for work-related injuries. In a consolidated appeal, the Court of Appeals reversed, taking the view that § 5(a)'s grant of immunity applies to a general contractor only if the contractor secures compensation after the subcontractor fails to do so. The court therefore concluded that, since petitioner unilaterally purchased the "wrap-up" policy, and thus preempted its subcontractors, it was not entitled to § 5(a)'s immunity.
1. Section 5(a)'s grant of immunity extends to general contractors. While § 5(a) speaks in terms of an "employer" and a general contractor
does not act as an employer of a subcontractor's employees, there is ample evidence in the use of the term "employer" elsewhere in the LHWCA to infer that Congress intended the term to include general contractors as well as direct employers. This is particularly so with respect to § 5(a), inasmuch as granting tort immunity to contractors who comply with § 4(a) is consistent with the quid pro quo underlying workers' compensation statutes, whereby, in return for the guarantee of compensation, the employees surrender common law remedies against their employers for work-related injuries, while the employer, as a reward for securing compensation, is granted immunity from employee tort suits. Pp. 467 U. S. 933-936.
2. A general contractor qualifies for § 5(a) immunity as long as it does not fail to meet its obligations to secure compensation for subcontractor employees under § 4(a). Section 4(a) simply places on general contractors a contingent obligation to secure compensation whenever a subcontractor has failed to do so. This is the most natural reading of § 4(a). Moreover, this reading furthers the underlying policy of the LHWCA to ensure that workers are not deprived of compensation coverage, and saves courts from the onerous task of determining when subcontractors have defaulted on their own statutory obligations. Pp. 467 U. S. 936-940.
3. Based on the above interpretations of §§ 4(a) and 5(a), petitioner was entitled to immunity from respondents' tort actions. Far from failing to secure payment of compensation as required by the LHWCA, petitioner acted above and beyond its statutory obligation by purchasing the "wrap-up" insurance on behalf of all its subcontractors. Pp. 467 U. S. 940-941.
230 U.S.App.D.C. 297, 717 F.2d 574, reversed and remanded.
MARSHALL, J., delivered the opinion of the Court, in which BURGER, C.J., and WHITE, BLACKMUN, POWELL, and O'CONNOR, JJ., joined. REHNQUIST J., filed a dissenting opinion, in which BRENNAN and STEVENS, JJ., joined, post, p. 467 U. S. 941.