September 2019 Articles

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TO: LFBF State Board of Directors and Parish Presidents

TO: LFBF State Board of Directors and Parish Presidents FROM: Henry H. Bernard, Jr., General Counsel RE: Recent Federal Court Decision and Possible Liability Exposure Risk A case dealing with contract H-2A workers provided by a farm labor contractor was recently decided by a federal court, and it has caused a lot of concern among businesses using this kind of labor and needing liability coverage for accidents occurring on the job. Agricultural production is one such business activity, and while Louisiana Farm Bureau does not give legal advice to its members, the organization is attempting to publicize the case and encourage producers and others affected by its holding to seek competent legal advice to avoid problems raised by the facts of this particular incident. Under certain circumstances, laborers provided by a labor contractor will have grounds for a judgement outside of and that far exceeds the traditional exclusive remedy available under workers’ compensation rules. The Chavelas case has caused us to ask legal authorities whether there was language that could be included in a contract between an agricultural producer or farmer and an independent contractor furnishing laborers to that producer that would insulate the producer from the financial harm that resulted from the decision in this case. We were told that the contract you have with someone who furnishes labor for your operation (a labor contractor) and the specific language in that contract is critical to your ability to avoid this liability. If you have such a contract with your contract-labor-supplier, and it doesn’t have adequate language to protect you (and only a knowledgeable legal advisor can tell you that), you may want to show the following language to your attorney to see whether he or she thinks it might be helpful: Statutory Employer. It is further agreed that the Services contemplated by this Agreement which are performed at the Work Site are a part of the trade, business or occupation of Owner and they are an integral part of and essential to the ability of Owner to generate its goods, products and services. It is the express intention of Owner and Contractor that Owner is the statutory employer of the employees of the Contractor and in accordance with La. R.S. 23:1061(A)(1) and (3) is granted the exclusive remedy protections of LA. R.S. 23:1032, and shall be liable to pay any employee employed in the execution of the work or his dependent compensation which Owner would have been liable to pay if the employee had been immediately or directly employed by the Owner, if such compensation is not paid by the contractor or its insurer. In the event Owner is required as the statutory employer to pay any workers’ compensation benefits Owner shall be entitled to indemnity under La. R.S. 23:1061(B) from Contractor or its insurer for such benefits. This paragraph shall not be construed to make the employees of the Contractor the payroll, direct or actual employees of Owner for the purposes of the doctrine of respondeat superior as a foundation for the imposition of vicarious tort liability for Owner under Article 2320 of the Louisiana Civil Code or any other statute. It is intended solely for the purpose of permitting the Owner to take advantage of the provisions of La. R.S. 23:1061 and La. R.S. 23:1032. We are told that this language should make you a statutory employer for purposes of the protections offered by the workers’ compensation statute, but only an attorney who is familiar with your particular operation can tell you that. Our next question was whether this language would subject the producer to all the federal rules, regulations, and paperwork that H-2A labor contractors have to comply with. You need to ask your attorney this same question for his opinion as to whether the language fits your situation or something different is required. Remember that every case turns on the facts of that particular case. Your contract should fit your operation. Because the Chavelas case decision was deemed to be highly significant and important to our members and anyone else affected by its holding, Farm Bureau held a Labor and Environmental Conference on Friday, June 21, at our 2019 state convention and brought in an expert attorney in the field of contract labor to address the subject. We hope the conference was helpful and that it convinced you to seek competent legal advice for your farming operation. If you were not able to attend, an interview with the speaker at that conference and a news article are available for viewing at: https://lfbfconvention.org/news/2019/6/22/workers-comp-court-ruling-affects-farmers (In order to view the news article, you may have to scroll down after viewing the video.) You can also find the actual case that has created the problem at: Jorge-Chavelas v. Louisiana Farm Bureau Casualty Insurance Company, 917, F.3d 847, 849 (5th Cir. 2019). If you think this subject matter could be a problem for you in your farming operation, you need to take this letter and give it to your attorney when you talk to him. He will need the information in it to help advise you on your best course of action.