Background
Kevin Gibson worked as a construction foreman for Koetter Building Services, which was contracted by bourbon maker Brown-Forman to design and construct a “ricker”—a crane-like apparatus to retrieve and move barrels in Brown-Forman’s bourbon warehouse. For decades, Brown-Forman had manually moved and retrieved barrels as part of its core bourbon production process, using workers with chains and pulleys in what was sometimes dangerous work. Koetter’s ricker was commissioned to make this existing barrel-moving operation safer and more efficient.
While installing the ricker, Gibson was loading aluminum plates into a freight elevator. He attempted to close the exterior doors manually, reaching through the door opening to pull an exterior handle since there was no interior pull handle. As the exterior doors closed, their mechanism caused them to accelerate. Gibson’s hand was caught between the closing doors, causing serious injury. His workers’ compensation claim with his employer’s insurer was paid.
Gibson then sued Brown-Forman for negligence and gross negligence, alleging the company failed to provide safe working conditions, adequate safety warnings, and proper training. Brown-Forman moved for summary judgment, claiming it was entitled to “up the ladder” tort immunity because the services Koetter provided—designing and building equipment for barrel moving—constituted regular and recurrent work of Brown-Forman’s core business, making Brown-Forman a statutory employer under Kentucky’s workers’ compensation law.
The Court’s Holding
The Kentucky Court of Appeals affirmed summary judgment for Brown-Forman, holding that the company qualifies for “up the ladder” tort immunity. The court rejected Gibson’s argument that the ricker was a novel, one-of-a-kind project falling outside Brown-Forman’s regular business. Instead, the court applied the proper legal test: whether the work’s fundamental purpose and character are regular and recurrent parts of the defendant’s trade or business—not whether the specific project itself is routine.
The court found substantial evidence that barrel storage, movement, and retrieval is a core and longstanding element of Brown-Forman’s bourbon production operations, dating back many decades before Koetter’s involvement. Although the ricker was newly designed equipment, its core purpose—barrel moving and retrieval—was unquestionably regular and recurrent work of Brown-Forman’s business. The court noted that Gibson’s own counsel had acknowledged in pleadings that “moving barrels around as part of the bourbon aging process” was Brown-Forman’s regular and recurrent work, and that Koetter was asked to devise a better method because the existing process had become too dangerous.
Under Kentucky Revised Statutes § 342.610(2)(b) and § 342.690(1), when a principal contractor (Brown-Forman) subcontracts regular or recurrent work of its business, it becomes a statutory “up the ladder” employer. As such, it enjoys exclusive remedy immunity—meaning injured workers’ sole remedy is the workers’ compensation system, not tort claims. The court concluded Gibson’s only available recovery was through the workers’ compensation benefits already paid by his direct employer’s insurer.
Key Takeaways
- A contractor is entitled to exclusive remedy immunity when it subcontracts work that is regular or recurrent to its core business operations, even if the specific project is novel or one-of-a-kind.
- The relevant inquiry focuses on the fundamental purpose and character of the work, not whether the particular project itself is routine or has been done before.
- A company’s own admissions in legal pleadings can constitute substantial evidence that work serves its regular business operations.
- Workers injured by third-party contractors may be limited to workers’ compensation remedies if the contracted work relates to the principal company’s core business functions.
Why It Matters
This decision clarifies the scope of “up the ladder” immunity in Kentucky workers’ compensation law. The ruling means that companies can invoke tort immunity when hiring contractors for special projects—even innovative, newly-designed projects—if those projects serve the company’s established core business functions. The test focuses on what the work accomplishes (barrel moving) rather than how the company accomplishes it (whether via employee-performed manual labor or newly-designed equipment). This significantly broadens the application of statutory employer immunity beyond cases where the exact same work has been done before.
For injured workers and their counsel, the decision narrows the potential defendant universe in injury cases involving principal contractors. Gibson was limited to workers’ compensation recovery—a no-fault but also no-punitive-damages regime—rather than being able to pursue negligence claims directly against Brown-Forman. The ruling suggests that courts will readily find statutory employer status whenever contracted work relates to a company’s acknowledged core business operations, even in construction or equipment-design contexts where the work is expressly tailored to improve upon existing operations.