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Contracts may waive some workers' compensation protection

Under workers' compensation laws in Wisconsin, both workers and employers are protected in a number of situations. In cases where a worker is injured on a job that involves multiple hiring and contracting companies, agreements signed by entities involved can have an impact on how workers' compensation claims are paid.

Two construction-related companies were involved in a case related to a worker injury in Wisconsin. One company, Riley Construction, was the general contractor for the project. Another company, Harsco, was contracted to supply scaffolding.

The contract between Harsco and Riley included an indemnification agreement. Specifically, Riley agreed to be responsible for damages or losses that came from Riley employees using Harsco equipment. Riley would indemnify Harsco related to any such injuries unless the injury was the result of negligence or error on the part of Harsco or its employees, said the agreement.

During the project, a Riley employee fell from the scaffolding. According to reports, another Riley employee put a plank on a scaffold that was undecked. The scaffold broke, causing the fall, which resulted in serious injuries for the employee.

The employee sued Harsco, settling for $900,000. Harsco sought reimbursement from Riley under the indemnification agreement, but Riley fought back in court. Riley claimed that the indemnity provision nullified Wisconsin's workers' compensation law. A final appeals court rejected the argument, stating that the agreement between Riley and Harsco represented a waiver of the workers' compensation exemption.

It's important to note the impact that contracts can have on things like workers' compensation. In this case, the employee wasn't impacted, but the case does show that contracts can include waivers of certain legal rights. Before signing any contract, companies and individuals should understand how agreements may impact future actions.

Source: Daily Reporter, "Don't unwittingly waive your workers' comp exemption," June 27, 2014

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