WORKERS' COMPENSATION LAW - "Third Person" Entities

An employee who is injured during the course of his employment may, in addition to workers' compensation, seek damages in a third party action. Whether the employee of a subsidiary may sue the parent corporation, or vice versa, to recover damages for his injury is dependent on the jurisdiction. Though most often an affiliated corporation, such as a subsidiary or its parent, strives to maintain its independence from the other entity so as to be shielded by the corporate veil, in cases of worker injury such entities claim mutual identity to be protected from suit by the "employer's" immunity. In other words, if the injured employee works for the subsidiary, but files a third party action against the parent, the parent will argue that it stands in the shoes of the subsidiary as the employer and is thus immune from suit. This argument may very well work if the subsidiary is wholly owned and controlled by the parent.

In some instances, an injured employee may attempt to bring a third party action against a governmental entity. However, the fact that the injury occurred in the course of his employment and that workers' compensation is an issue does not denigrate the governmental entity's already established immunities. Generally, workers' compensation is the worker's exclusive remedy and the entity's governmental function is not transmuted into a proprietary one.