State Not Liable to Workers Who Also Recovered Under Workers’ Compensation System

Fuhriman v. Idaho Dept. of Transp., 143 Idaho 800, 153 P.3d 480 (2007)

Idaho law provides that workers’ compensation benefits are the exclusive remedy for workplace injuries.  Idaho Code §72-223, however, contains an exception to that "exclusive remedy."  The exception allows a finding of liability against a third party, even where the injured employee has received worker’s compensation benefits, if the third party is legally liable for damages.  This exception to the exclusive remedy rule does not apply, however, to employers described in §72-216, which includes third party that has expressly or impliedly hired or contracted the services of another, including contractors and subcontractors, and the third party is liable to pay workers’ compensation benefits if the direct employer, the contractor or subcontractor, does not.

In a February 2007 opinion, the Idaho Supreme Court held that the Idaho Department of Transportation was not subject to the exception (that is, it was protected by the exclusive remedy rule).  The State was using workers employed by a contractor.  Those workers were killed on the job.  Their families received workers’ compensation benefits and sued the State.  The Court rejected the claims, however, because the State would have been liable for the worker’s compensation benefits if the contractor/employer failed to pay those benefits.  The exception therefore did not apply.