Legal Memorandum: Liability of Contractor's Employer in VI

Issue: In Virgin Islands court, does the third-party beneficiary provision in an Agreement undermine the legislature’s express policy of allowing employers of contractors to be sued for their negligent conduct?

Area of Law: Employee Law, Workers Compensation Insurance
Keywords: Negligent conduct; Third-party beneficiary provision; Liability of employers of contractors
Jurisdiction: Virgin Islands
Cited Cases: 198 F. Supp. 2d 632; 311 F.3d 237
Cited Statutes: 24 V.I.C. § 284(b), § 414
Date: 06/01/2005

The Virgin Islands Legislature has expressly required that a “contractor’s employer can be liable to a subcontractor’s employees.”  Gass v. V.I. Tel. Corp., 311 F.3d 237, 245 (3d Cir. 2002); 24 V.I.C. § 284(b).

Section 284 of the Virgin Islands Workers’ Compensation Act provides in relevant part:

For purposes of this section, a contractor shall be deemed the employer of a subcontractor’s employees only if the subcontractor fails to comply with the provisions of this chapter with respect to being an insured employer.  The “statutory employer and borrowed servant” doctrine are not recognized in this jurisdiction, and an injured employee may sue any person responsible for his injuries other than the employer named in a certificate of insurance.

24 V.I.C. § 284(b) (emphasis added).  The official notes to § 284 also make clear that “the Legislature never intended immunity for these secondary wrongdoers.”  Bill No. 498, 16th Legislature (1986) (attached explanation).  As the Third Circuit Court of Appeals determined, “[t]hese legislative enactments . . . provide a clear statement of the public policy of the Virgin Islands.”  Gass, 311 F.3d at 246.  Thus, Virgin Islands public policy provides that “‘an injured employee of an independent contractor may sue the employer of the independent contractor under the provisions of section 414 . . . , if that employer is not named in the worker’s compensation certificate and [the employer’s] negligent conduct caused the employee’s injuries.'”  Id. (quoting Figueroa v. HOVIC, 198 F. Supp. 2d 632, 641 (D.V.I. App. […]

Subscribe to Litigation Pathfinder

To get the full-text of this Legal Memorandum ... and more!

(Month-to-month and annual subscriptions available)