Pennsylvania’s Supreme Court has announced it will hear a Workers’ Compensation case that could establish state precedent for whether a franchisor can be held liable as a statutory employer in injury claims by franchisee employees. The case in question involves a franchisee employee who was injured on the job and sought Workers’ Compensation benefits from both the franchisor and the franchisee. Things became complicated when it was found that the franchisee was not carrying Worker’s Compensation insurance. The case is reaching the Pennsylvania Supreme Court after a whirlwind of conflicting decisions by lower courts and governing bodies.
Initially, a Worker’s Compensation judge determined that the franchisee was not the actual employer of the injured party. However, the Workers’ Compensation Appeal Board reversed this ruling, stating that the franchise relationship was substantially similar to a contractor-subcontractor relationship, determining the franchisee to be a statutory employer able to be held liable for workplace injuries. Pennsylvania considers contractors to be liable for their subcontractors.
Subsequently, the Commonwealth Court reversed the Workers’ Compensation Appeal Board’s ruling to reflect the original decision. This court argued that the Franchisee’s primary business was “The sale of franchises to franchisees. … [I]t is not in the restaurant business or the business of selling salads,” indicating that franchisee’s should not be held liable in Workers’ Compensation cases. The Pennsylvania Supreme Court will be hearing arguments to settle the matter some time in the Spring of 2017.
However the case is decided, it will have major implications for those who are filing Workers’ Compensation claims within franchises in Pennsylvania. Those who find themselves in a Workman’s Compensation dilemma will find that the guidance of a lawyer with experience in the field of Workers’ Compensation claims can help ensure that the rights of the injured remain protected while fair compensation is negotiated.
Source: pennrecord.com, “Pennsyvania Supreme Court To review Franchisor as Possible Statutory Employer,” Russell Boniface, Aug. 15, 2016