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Click here for the full text of this decision FACTS:In early 2000, Enron contracted with Clark Construction Group to build Enron Building #2. Clark subcontracted part of the work to Way Engineering Co., who in turn contracted with Walsh & Albert to do sheet metal work. As part of the agreement between Way and Clark, Clark exercised an option to buy a single workers’ compensation insurance policy to cover all subcontractors and employers who worked at the building site. The policy also covered Walsh & Albert workers. Sheldon Etie worked for Way. He was injured in April 2001 due to improper construction work by a Walsh & Albert employee. Etie received workers’ compensation benefits. Etie also filed a negligence lawsuit against Walsh & Albert. The trial court granted Walsh & Albert’s summary judgment motion, that the workers’ compensation was Etie’s exclusive remedy. Etie appeals, contending that Walsh & Albert misconstrues the act by creating an inference of deemed employee status to Walsh & Albert through a “legal fiction.” Etie further contends that Walsh & Albert was an independent contractor, not a subcontractor, and not entitled to immunity from suit. HOLDING:Affirmed. Labor Code �406.123(a) authorizes a general contractor to provide workers’ compensation insurance coverage for subcontractors and the subcontractor’s employees. The statute does not say whether it applies to subcontractors of the subcontractors, that is, whether the lower-tier subcontractor employees are also the statutory employees of the general contractor. Etie relies on Labor Code �401.012(b)(2), which says that subcontractors and their employees are not statutory employees when the subcontractor operates as an independent contractor. Walsh & Albert even admitted at oral argument that it was an independent contractor. This does not, however, settle the matter, the court finds. “We conclude that the provision of workers’ compensation insurance transforms an independent contractor into a ‘deemed employee.’” The court points out that under these facts, Way was both a subcontractor for Clark, and a general contractor for Walsh & Albert. Clark’s contract with Way provided insurance to all workers affiliated with Way at the site. In turn, Way’s contract with Walsh & Albert incorporated by reference all of the provisions of the Clark/Way contract. Consequently, Walsh & Albert employees were also covered by Clark’s workers’ compensation insurance policy. Though this may indeed be a status created by a “legal fiction,” as Etie calls it, it is the same legal fiction that permits Way and its employees to be deemed employees of Clark. The Workers’ Compensation Act acknowledges this fiction and limits its application to the act itself. “We hold that the Act’s deemed employer/employee relationship extends throughout all tiers of subcontractors when the general contractor has purchased workers’ compensation insurance that covers all of the workers on the site. All such participating employers/subcontractors are thus immune from suit. The court further holds that the participating employees are fellow servants, equally entitled to workers’ compensation benefits and equally immune from suit.” The court declares that it is not abrogating the right of an injured worker to sue a subcontractor who acts as an independent contractor when the subcontractor does not choose to participate in workers’ compensation coverage. Similarly, an injured worker may still sue a third-party, as long as that party is not a covered employee. This case is one of first impression. OPINION:Keyes, J.; Radack, C.J., Keyes and Alcala, JJ.

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