My rule: blogs should be short and to the point, no more than four paragraphs. I have chastised attorneys in my firm who have created blogs that turned into epistles. Well, here is their chance to criticize me, because there is no way the topic I have chosen for this blog can be discussed in four paragraphs.
In 2006, I wrote an article for the South Carolina Business Lawyer in which I discussed the third party statutes of the Workers’ Compensation Act and how the employer who is without fault for injuries to an employee caused by the negligence of the third party has a lien against any proceeds from the employee’s suit against that third party. The last part of the article addressed the employer whose negligence did contribute to the employee’s injuries. I concluded under that scenario, the employer had no lien, and the third party could seek contribution or indemnity from the employer. I ended with a discussion of Gordon v. Phillips Utilities, Inc. in which our Supreme Court recognized the conundrum created by § 42 – 1– 580. Now, almost 10 years later, it is time to revisit Gordon and §42-1-580.
Gordon involved an injured worker who received $87,000 in workers’ compensation benefits and sued a third-party. The third party in turn sought an offset or contribution from the employer on the theory the employer’s negligence contributed to the claimant’s injury. Section 42-1-580 was intended to address this very situation, but the exclusivity doctrine of the Workers’ Compensation Act prevented the employer from being made a party to the suit. Because the employer was not present, there was no one to protect the employer’s interest. Without the employer present to defend itself and its workers’ compensation lien, the Supreme Court held the statute simply could not be applied.
In the 10 years since Gordon, no legislation has been introduced in the General Assembly to resolve the dilemma of §42-1-580. The original intent of the legislature when §42-1-580 was enacted was clear. The legislature wanted to balance the rights of the injured worker, the employer, and the third party, but the statute simply doesn’t work when a basic tenet of the Act prohibits the employer from being sued in civil court, and workers’ compensation is the sole remedy against the employer. (§42-1-540) The judicial system has muddled along, without clear legislative action to fix the problem. Now the issue is again before the Supreme Court.
The case of Machin v. Carus Corp. (3:12-cv-02675)(Joseph Anderson, Jr., J.) has been working its way through the federal courts. Machin was injured at work by exposure to a third party’s chemicals. The court found South Carolina law was unclear as to whether the third party should be able to argue the “empty chair defense” (as to plaintiff’s employer) and what the jury should be told about workers’ compensation.
The court has certified four questions to the South Carolina Supreme Court:
- Under South Carolina law, when a plaintiff seeks recovery from a person, other than his employer, for an injury sustained on the job, may the jury hear an explanation of why the employer is not part of the instant action?
- Under South Carolina law, when a plaintiff seeks recovery from a person, other than his employer, for an injury sustained on the job, may a defendant argue the empty chair defense and suggest that plaintiff’s employer is the wrongdoer?
- In connection with Question 2, if a defendant retains the right to argue the empty chair defense against plaintiff’s employer, may a court instruct the jury that an employer’s legal responsibility has been determined by another forum, specifically, the South Carolina Workers’ Compensation Commission?
- Under South Carolina law, when a plaintiff seeks recovery from a person, other than his employer, for an injury sustained on the job, may the court allow the jury to apportion fault against the nonparty employer by placing the name of the employer on the verdict form?
The court is without the ability to involve the employer in the suit. Because the employer is not present, there is no one to protect its lien. The employee cannot speak for the employer. If the employee avers the employer was without fault and prevails, the employee preserves the employer’s lien against the proceeds, which may be contrary to the employee’s interests. If the jury finds the employer contributorily negligent, the employer loses its lien but the third party is credited with contribution, and the employee may receive a greatly reduced verdict. If the defense is allowed to argue the “empty chair defense”, the employer is at a distinct disadvantage of protecting its workers’ compensation lien, and a verdict finding the employer contributorily negligent could wipe out its lien altogether.
I submit a reasonable solution is to make the employer a party to the third party action for the limited purpose of protecting its lien. The employer should be allowed to participate in the trial. If the jury finds the employer contributorily negligent, the employer’s exposure should be limited to the benefits provided by the Act and the employer loses its lien. The jury should render a verdict, and if it is in favor of the plaintiff, the jury should apportion the fault between the third party and the employer. The third party is responsible for its portion of the verdict, the employer pays nothing beyond workers’ compensation benefits, and the claimant keeps both the benefits paid by the employer and the proportioned verdict from the third party.
 South Carolina Lawyer, January 2006.
 362 S.C. 403, 608 S.E.2d 425 (2005).
 The full text of §42-1-580 is as follows: When the facts are such at the time of the injury that a third person would have the right, upon payment of any recovery against him, to enforce contribution or indemnity from the employer, any recovery by the employee against the third person shall be reduced by the amount of such contribution of indemnity and the third person’s right to enforce such contribution against the employer shall thereupon be satisfied.