July 2, 2024
by Matthew Baker

How exclusive is the exclusive remedy in Oregon Workers’ Compensation?

At the core of the Oregon workers’ compensation system is a compromise between workers’ and employers. Employers must provide benefits for work-related injuries even when there was no negligence by the employer which led to the incident. But these work-related injuries cannot serve as the basis of a lawsuit against the employer, precluding potentially massive liability in a civil suit. Likewise, workers obtain easy access to benefits without the need to file a lawsuit but give up the possibility of a larger civil award.

This arrangement is known as the exclusive remedy. But despite the name, there are scenarios where a worker could be injured on the jobsite and still sue an employer. A particular gray area exists where parent companies might exercise some degree of control over employees of their subsidiaries, and therefore could be considered “indirect employers” subject to civil liability, but potentially outside the scope of the exclusive remedy. The language of “indirect employer” comes from caselaw based on the Employers’ Liability Law, which is codified in ORS 656.305.

The ELL creates liability for any entity having “charge of, or responsibility for, any work involving a risk or danger” to a worker. The ELL was created by voter initiative in 1910, three years prior to the establishment of the workers’ compensation system (also through ballot measure). The former law was largely restricted in scope in light of the workers’ compensation law, being reduced for the most part to situations involving contractors at multi-party jobsites.

However, the ELL does not only apply to the duty owed by sub-contractors to employees of other sub-contractors (or to employees of the general contractor, or vice-versa), and the wording of the law is broad enough to cover any gaps left by the workers’ compensation system. In a decision cited as Wilson v. Portland General Elec. Co., Inc., 252 Or 385 (1968), the Oregon Supreme Court determined ELL liability applied to any entity indirectly employing the injured worker by either (1) engaging in a common enterprise with the direct employer, (2) retaining the right to control the manner or method of performance of the risk-producing activity, or (3) actually controlling the manner or method of performance of of the risk-producing activity.

A “common enterprise” exists where two entities are working on a project and the work of the indirect employer is integral to the “risk-producing activity” aspect of the project. This does not necessarily need to be conceived of as a specific task with a completion date; a common enterprise can be as broad as the sale of goods at a grocery store, provided there is a risk-producing activity. Retained right to control and actual control are relatively straightforward and are evidenced by processes such as training methods and disciplinary measures.

If an employer meets the criteria listed above and also meets the definition of a “covered employer” for purposes of the workers’ compensation law (as defined in ORS 656.023), the exclusive remedy applies. However, if an employer only meets the ELL criteria, it may be liable under the ELL for a workplace injury.

This analysis gets particularly tricky when dealing with the liability of a parent corporation, where the subsidiary is a direct employer. If, for example, the parent does not directly control the conduct of employees working for the subsidiary but does provide resources critical to the functioning of the risk-producing activity, is the parent involved in a common enterprise? The answer depends on a thorough review of the relevant facts and can only be analyzed on a case-by-case basis.

The scope of liability for parent companies under the ELL remains murky, but the existing body of caselaw provides a guide for navigating the potentially dizzying factual investigation involved in an ELL lawsuit. If you have been served with an ELL suit or merely have questions on how to best reduce liability, feel free to reach out to me at 971-867-2718 or .

Posted by Matthew Baker.