Statutory Employer Issues in the Industrial Construction and Maintenance Markets

Abstract

Statutory employer provisions are an important issue for in-house counsel in the construction industry – particularly in the heavy industrial and maintenance markets. If properly negotiated, these provisions result in significant reductions in business and insurance costs. Professor Frank L. Maraist of the Paul M. Hebert [LSU] Law Center once declared, “Like the moon across the night sky, the (tort) immunity defense has waxed and waned across the ever changing horizon of American tort law.” The above statement is never more true than in the industrial construction, maintenance, and fabrication markets – particularly on the U.S. Gulf Coast, where contractors in refineries, chemical plants, paper mills, and other industrial ventures often leverage significant risk in the hope of landing lucrative contracts. Chaotic economic conditions in 2008 and beyond have exacerbated those concerns. Faced with an ever changing industry where negotiated risk swings like a pendulum depending on a party’s status, contractual indemnities require constant re-evaluation of the protections afforded by statutory employer provisions.