Did Tourism Let Jim Beam Claim Kentucky’s ‘Up-the-Ladder’ Defense?

Case File

When a worker for a contractor was injured on Jim Beam's premises, could the bourbon distiller-cum-tourist attraction claim protection under Kentucky's "up-the-ladder defense"? Simply Research subscribers have access to the full text of the decision.

Case

Norman v. Jim Beam Brands Co., No. 2024-CA-0332-MR (Ky. Ct. App., unpublished)

What Happened

While dispensing fuel oil into large holding takes on the property of Jim Beam, a worker for a fuel company was injured in a fall from a ladder. The worker filed a premises liability action against Jim Beam.

At the time the worker brought the action, he also had a pending workers' compensation claim against the company for his injuries. The company's carrier had paid most of his medical bills.

Jim Beam moved for summary judgment based on immunity from tort liability under Kentucky's "up-the-ladder defense," arguing that it as a "contractor" under the exclusive remedy provisions of Kentucky law, it was entitled to immunity given to statutory employers for the work-related injuries of the employees of subcontractors.

At trial, the court granted summary judgment, finding that the work being performed by the worker was a regular and recurrent part of operating a distillery, making Jim Beam an "up-the-ladder" employer.

The worker appealed.

Rule of Law

Under Kentucky law, if an employer secures payment of workers' compensation the liability of such employer under workers' compensation law is exclusive and in place of all other liability of the employer to the employee on account of the employee's injury or death. "Employer" includes a "contractor," which is a person who contracts with another to "have work performed of a kind which is a regular or recurrent part of the work of the trade, business, occupation, or profession" of the person.

What the Appeals Court Said

According to the court, for the "up-the-ladder defense" to apply, the worker's delivery and unloading of fuel would have to be a "regular or recurrent part of the work of the trade, business, occupation, or profession" of Jim Beam.

Workers' Comp 101: In Kentucky, "regular" means that the type of work performed is a “customary, usual or normal” part of the premises owner’s “trade, business, occupation, or profession,” including work assumed by contract or required by law. "Recurrent" means that the work is repeated, though not "with the preciseness of a clock."

The appeals court disagreed with the trial court's conclusion that, because Jim Beam was in the tourism business as part of Kentucky's Bourbon Trail, fuel delivery was regular and recurrent work.

"We must consider what the statutory employer's particular business is, and not solely whether the work of the injured person was repeated or done with some degree of regularity," the court wrote. "The 'regular or recurrent' label applies when the prospective statutory contractor delegates or assigns a part of its own work to another, which becomes its subcontractor."

The appeals court explained that none of the facts indicated that fuel deliver was "customary, usual, or norma" to Jim Beam's business in the production of bourbon or tourism. Additionally, the worker's work wasn't the type that Jim Beam employees performed or were expected to perform.

The court explained that the up-the-ladder defense did not apply because the work performed by the worker was not involved in the production of bourbon or tourism, and his work was not mandated by law for Jim Beam to operate its business. Instead, the worker was a business invitee on Jim Beam's premises who was owed the appropriate duty of care by Jim Beam under applicable law.

"The purpose of the up-the-ladder defense is 'to discourage a contractor from subcontracting work that is a regular or recurrent part of its business to an irresponsible subcontractor in an attempt to avoid the expense of workers’ compensation benefits,'" the court wrote. "The purpose 'is not to shield owners or contractors from potential tort liability but to assure that contractors and subcontractors provide workers’ compensation coverage.'"

Verdict: The appeals court reversed and remanded the trial court's decision.

Takeaway

The public policy for the "up-the-ladder defense" in Kentucky is for the protection of the worker, not for shielding the "up-the-ladder" statutory employer from liability.

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