Russell v. TMT Transportation Corp.
Russell v. TMT Transportation Corp.
Opinion of the Court
This dispute concerns a worker’s compensation claim arising out of the hiring of the plaintiff as an independent contractor. The plaintiffs claim must rest upon the manual labor exception to the independent contractor rule under the Worker’s Compensation Act. The defendants challenged the claim as premature based upon an arbitration provision in the parties’ contract. The worker’s compensation judge (“WCJ”) denied defendants’ exception of prematurity and the defendants appeal. Finding that the parties’ contract did not provide for the arbitration of a worker’s compensation claim, we affirm the WCJ’s ruling.
Facts
Arthur James Russell, Jr., (“Russell”) filed this disputed claim for compensation with the Office of Workers’ Compensation (“OWC”), requesting wage benefits, disability status, and penalties, interest and attorney’s fees in connection with an alleged on-the-job accident. Russell alleged that he injured his back and leg after he lost his footing and fell on the trailer portion of his tractor-trailer rig while untarp-ing the load during the early morning of August 16, 2001.
Russell alleged an employment relationship with TMT, Inc. (“TMT”), with whom he had entered an “independent contractor contract” dated May 9, 2001. The contract recited that TMT was a for-hire motor carrier and that “[Russell was] an independent contractor who is in the business of providing transportation service and is willing to assist TMT in providing that service.” The contract further stated, “[t]his contract is not intended to | gcreate an employee/employer relationship between the [contractor] and TMT.”
Additionally, we note that a reference to worker’s compensation was set forth in the following provision of the contract:
Occupational accident insurance premium — If CONTRACTOR fails to provide TMT with proof of all states worker’s compensation coverage, TMT is authorized, at its sole discretion, to obtain an occupational accident policy for CONTRACTOR at a premium of One Hundred and Fifty Dollars ($150) per month. The premium will be charged and reflected on the first settlement of each month.
After the requisite initial mediation conference with the OWC, the issues were unresolved by the parties. Thereafter, TMT and its insurer, Clarendon National Insurance Company, were served through their attorney of record. They responded by urging a dilatory exception of prematurity based on the existence of an arbitration clause in the parties’ contract. The arbitration clause provided as follows:
Any claim, dispute, or controversy between the parties arising, directly or indirectly, under the Contract shall be submitted to the American Arbitration Association in Dallas, Texas for binding arbitration pursuant to the American Arbitration Association’s Rules. Neither party will be entitled to recover punitive or exemplary damages, damages for mental anguish or emotional distress or pain and suffering, or similar damages. Neither party will be entitled to recover attorney’s fees. This provision shall survive termination of the Contract.
At the conclusion of the hearing on the exception and immediately prior to overruling TMT’s exception, the WCJ noted that the inclusion of the above quoted lan
Thereafter, TMT moved for reconsideration of the WCJ’s ruling based on its waiver of the contractual limitations on recovery of damages and attorney’s fees. The WCJ denied TMT’s motion to reconsider, whereupon TMT requested thirty days within which to apply for supervisory writs from this court. Upon the application, this court granted its application as the equivalent of an appeal of an interlocutory ruling under La. C.C.P. art.2083.
Discussion
The parties’ contract purports to create an independent contractor relationship between Russell and TMT. While Section 1021(6) of the Worker’s Compensation Act (“the Act”) provides that independent contractors are excluded from the Act’s coverage, the provision also lists an exception to that rale for those independent contractors who spend a substantial part of their work time performing manual labor. La. R.S. 23:1021(6); Moreno v. Simonton, 33,854 (La.App.2 Cir.12/20/00), 779 So.2d 887, writ denied, 01-0444 (La.4/20/01), 790 So.2d 634; Savoy v. Clark Directional Drilling Equip., 01-918 (La.App. 3d Cir.12/12/01), 801 So.2d 610; Fleniken v. Entergy Corp., 00-1824 (La.App. 1st Cir.2/16/01), 780 So.2d 1175, writs denied, 01-1268, 01-1305, 01-1317 (La.6/15/01), 793 So.2d 1250, 1253, 1254. Whether the manual labor exception applies and provides coverage under the Act is the threshold issue for the OWC to decide in this case. Riles v. Truitt Jones Const., 94-1224 (La.1/17/95), 648 So.2d 1296; Guillory v. Overland Express Co., 01-419 (La.App. 3d Cir.10/3/01), 796 So.2d 887; Mullen v. R.A.M. Enterprises, 02-1157 (La.App. 1st Cir.3/28/03), 844 So.2d 376.
The Louisiana Arbitration Law (“LAL”) provides that “a provision in any written contract to settle by arbitration a controversy thereafter arising out of the contract ... shall be valid, irrevocable and enforceable.” La. R.S. 9:4201 (emphasis supplied). We note that the LAL expressly states that it shall not apply to “contracts of employment of labor.” La. R.S. 9:4216. Likewise, the Worker’s Compensation Act provides in Section 1033 that no contract shall operate to relieve the employer from any liability created by the Act. La. R.S. 23:1033.
Although these statutory provisions do not directly address the arbitration issue presented by this agreement for an independent contractor relationship, they indicate to this court that the substantive coverage of the Act, which may have application in this case because of the statutory manual labor exception, may not be thwarted by the parties’ contract. Additionally, the arbitration provisions of the LAL appear concerned with controversies arising out of contracts, not those arising from the Act and related to the employment relationship.
Nevertheless, TMT argues that the contractual provision at issue is procedural and does not affect substantive rights under the Act, particularly in view of its waiver of the contract’s prohibition against penalties and attorney’s fees. In other words, TMT argues that the contract contains only a forum selection clause waiving Russell’s procedural rights before the OWC, but not his substantive rights under the Act. Since arbitration is 1 flavored in
While our Civil Code provides for contractual freedom under Article 1971, “persons may not by their juridical acts derogate from laws enacted for the protection of the public interest.” La. C.C. art. 11. Specifically dealing with conventional obligations, Article 1968 provides:
The cause of an obligation is unlawful when the enforcement of the obligation would produce a result prohibited by law or against public policy.
Prior to the enactment of the Federal Arbitration Act
The contract in question expressly states that the parties did not intend for an employee/employer relationship to exist. It indicates that Russell would therefore be responsible for his own worker’s compensation insurance which would not be the obligation of TMT. While this agreement may be contrary to the Act to the extent that the manual labor exception is established, the parties clearly did not intend for worker’s compensation obligations to be applicable to their relationship. Most importantly, there is no express authority in the contract referring a worker’s compensation claim by Russell to arbitration. Even assuming that such provision would not offend public policy, we would require an express statement in the contract waiving Russell’s rights to adjudication before the OWC. Accordingly, we affirm the WCJ’s denial of TMT’s exception of prematurity. The case is remanded, and costs of appeal are assessed to appellant.
AFFIRMED AND REMANDED.
BROWN, C.J., concurs with written reasons.
. 9 U.S.C. § 1, et seq. TMT agrees that the federal law has no application in this case.
Concurring Opinion
Concurring.
The employer in this case maintains that plaintiff is an independent contractor based solely upon a written agreement. Whether plaintiff is an independent contractor must be decided by the WCJ and
The Workers’ Compensation Act provides an exclusive remedy, both procedurally and substantively. It cannot be waived. An arbitration provision in a written contract is without effect and contrary to public policy where a claim falls under the Workers’ Compensation Act.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.