The Superior Court of Pennsylvania recently upheld a lower court decision finding that Atlas Resources, LLC (“Atlas”) qualified as a statutory employer under Section 302(a) of the Workers Compensation Act (the “Act”). As a statutory employer, Atlas is entitled to immunity from the wrongful death suit brought by the estate of a rig worker who was killed while working on the drilling rig. The deceased rig worker was an employee of a drilling company subcontracted by Atlas for the “removal, excavation or drilling of . . . minerals” on land subject to an oil and gas lease taken by Atlas. The drilling company paid the workers’ compensation benefits to the decedent’s beneficiary after the accident. Even though compensation payment was not made by Atlas, the Superior Court held that Atlas was still entitled to the benefit of immunity since the benefit is solely dependent upon a party’s qualification as the statutory employer under the Act – regardless of whether it was the party who actually paid the compensation.
The Superior Court’s interpretation of the plain meaning of Sections 302(a) and 203 of the Act is consistent with prior Pennsylvania court decisions; however, oil and gas operators should be aware of the growing sentiment for the Pennsylvania legislature to reconsider the Act. This call for change was echoed by the Superior Court in its decision. The Superior Court opined that the Act should not permit a general contractor to utilize the benefits of immunity unless it also undertakes the duties intended by the Act. General contractors, including oil and gas operators, should remain vigilant as the calls for legislative intervention increase.
Click here to read the full decision.