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A U.S. appeals court on Wednesday ruled that lawsuits filed by the family of a worker killed and two workers who were injured in a chemical accident can proceed, reversing an earlier ruling that barred the lawsuit over exclusive remedy.
In December 2016, Alton Zeigler, Jacob Jackson and Kevin Vann — maintenance employees of DAK Americas LLC — attempted to remove a faulty pump on a chemical production line in Calhoun County, South Carolina, and owned by Eastman Chemical Co., which contracted work with DAK, which then contracted with another maintenance company, Mundy Maintenance Service and Operations LLC.
While attempting to remove a chemical pump without draining it first, the three workers loosened the bolts securing the pump, an explosion erupted in which molten liquid killed Mr. Zeigler and severely burned Mr. Jackson and Mr. Vann.
In April 2017, the two workers and a surviving spouse filed separate personal injury actions against Eastman and Mundy in federal district court, alleging that Eastman’s employees “were negligent in their management of the retained line, and that Mundy’s employees were negligent in their attempt to unclog the drainpipe prior to the explosion,” according to case No. 19-1643, consolidated by the 4th U.S. District Court of Appeals.
Eastman moved to dismiss the suits, contending that the contractors qualified as Eastman’s “statutory employees” under the South Carolina Workers’ Compensation Law and that workers compensation was their exclusive remedy, and that the courts lacked jurisdiction to hear their claims. The district court agreed and dismissed the lawsuits.
The appeals court reversed, applying relatively new case law: a 2019 decision of South Carolina’s Supreme Court in Keene v. CNA Holdings LLC, which clarified that “when an employer makes a ‘legitimate business decision’ to outsource a portion of its work, the contractors it hires to perform that work are not ‘statutory employees’ for workers compensation purposes,” according to the appeals court.
“No party here contests that Eastman’s outsourcing of its maintenance and repair work was a ‘legitimate business decision,’” the court wrote. “It follows that the plaintiffs, independent contractors performing maintenance at the time of the 2016 pump explosion, were not statutory employees and may bring personal injury actions. Accordingly, we reverse the district court’s judgment dismissing the actions for lack of subject matter jurisdiction and remand for further proceedings.”