South Carolina Supreme Court Addresses Apportionment of Liability on Verdict Form as to Non-Party Employer in Action by Employee Against Third-Party


By W. James Flynn:

The South Carolina Supreme Court issued an opinion on April 26, 2017 addressing previously unanswered questions as to allocation of fault to non-party employers in cases brought by employees against third parties.  The Court held that: (1) a trial judge may instruct a jury on the reason why a non-party employer is not part of an action by an employee against a third-party related to an on-the-job injury; (2) a third-party may use an “empty chair” defense and suggest that an employer was at fault; (3) a jury may not apportion fault against a non-party employer ; (4) a trial judge may instruct a jury that an employer’s legal responsibility has been determined by the South Carolina Workers’ Compensation Commission; and (5) the amount of workers’ compensation benefits received by an employee is not admissible.  The opinion is Machin v. Carus Corporation (Opinion No. 27714).

The Court took up these issues in the context of a federal district court action by an employee who had received workers’ compensation benefits from his employer after alleging exposure to chemicals used in the work caused damages.  The employee could not sue his employer in tort since workers’ compensation benefits were his exclusive remedy as against his employer.   The employee instead sued companies responsible for manufacturing and distributing the chemicals. At trial, the chemical companies denied that the employee’s exposure was sufficient to cause damages.  The chemical companies put forth evidence demonstrating that it had provided warnings and directions for use of the chemicals to the empty chair employer, which the employer had not followed.  During deliberations, the jury asked why the employer was not part of the lawsuit.  The federal judge, applying South Carolina law, instructed the jury that they could only consider evidence presented.  The jury then returned a defense verdict.  The employee moved for a new trial, which resulted in the federal court judge certifying questions on the issues outlined above to the South Carolina Supreme Court. Before deciding the issues, the Court analyzed provisions of the Workers’ Compensation Act which grant injured employees the right to bring suits against third parties, but which bar the amount of compensation paid by the employer from being admissible as evidence.  The Court also analyzed the Uniform Contribution Among Tortfeasor’s Act, which provides for apportionment of percentages of fault, noting that it allows a defendant to assert that another “potential tortfeasor, whether or not a party, contributed to the alleged injury or damages and/or may be liable.”  In its discussion, the Court commented that it is difficult to reconcile the intersection of tort-based products liability principles to the no-fault workers’ compensation framework, given the potential for third parties to bear a disproportionate share of liability in tort and the employer’s central role in many workplace product-related injuries. The Court reconciled these competing principles by holding that a defendant may defend by arguing that the employer was at fault, or by using an “empty chair” defense.  But the Court refused to allow for use of a verdict form allocating fault to a non-party employer.  The Court based this upon the fact that an employer is immune from tort liability under the exclusivity provisions of the Workers’ Compensation Act.  The Court commented that an employer could still be found to have been responsible even if a jury could not allocate fault to an employer on a verdict form.  The Court explained that since there is no statutory basis for an employer to be a defendant in the tort action, there is no possibility of the employer being a “potential tortfeasor”, which is what the language of the Uniform Contribution Among Tortfeasor’s Act requires. The Court then held that a trial judge may instruct a jury that an employer is immune from suit pursuant to the Workers’ Compensation Act, but that an employer’s responsibility, if any, for an employee’s injuries is determined in another forum.  The Court specifically held that the amount of workers’ compensation benefits received by an employee is not admissible. The key takeaways from the decision are that defendants using an “empty chair” defense against a non-party employer may now get evidence of an employee’s workers’ compensation claim before a jury, though the amount of workers’ compensation benefits received by an employee cannot be put into evidence.  Additionally, while a non-party employer cannot be listed on a verdict form to apportion fault, the decision indicates that other non-parties may be eligible to be listed on a verdict form to allocate fault.

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