The Law

Exclusive Remedy Rule Prohibits Worker from Filing Negligence Suit Over Oil Well Explosion Injuries

After gaining injuries from an oil well explosion, one worker was denied the possibility to file a negligence claim due to exclusive remedy laws.
By: | October 15, 2018

California Resources Elk Hills, (CREH) contacted independent contractor Weatherford International to perform oil well services at its Elk Hills oilfield. Weatherford sent worker Edgar Verdugo.

While Verdugo and two other Weatherford employees attempted to vent the pressure from the well, they discovered there were no flowlines connected for venting. This led the crew to vent the well pressure directly at the wellhead itself, but it wouldn’t bleed down. They closed the well, causing it to explode. The employees sustained multiple injuries and burns.

A few months later, Verdugo filed a complaint for damages against CREH, citing negligence, premises liability and strict liability for ultrahazardous activity. CREH submitted its own form, detailing a list of indisputable facts of the incident. In it, the company stated that Verdugo had trained under Weatherford to bleed wells when there are no flowlines available — a dangerous practice, CREH said.

When servicing CREH’s oil well, Verdugo instructed his crew to move forward with the process without requesting assistance, equipment or alteration of the well. This, CREH argued, stemmed from Verdugo’s training — or lack thereof — on how to handle the situation.

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CREH then pointed to a master service agreement signed between Weatherford and the oil well company: “Contractors shall take necessary measures to ensure the safety of all persons on the work site. Contractors shall comply with … all applicable federal, state and local regulatory laws in order to help prevent injury to personnel and damage to property or the environment.”

Further, CREH argued, Verdugo’s exclusive remedy for the injuries was under the workers’ compensation system, which barred this employee from seeking damage recovery against CREH.

Verdugo argued that, because CREH owned and operated the wells, they were responsible for providing the flowlines. However, the trial court granted CREH summary judgment, based on the master service agreement wording.

Further: “The general rule … when the hirer of an independent contractor delegates control over a work to a contractor, the hirer also delegates responsibility for performing the task safely. Therefore, an employee of a hired independent contractor who suffers injury resulting from risks inherent in the hired work is limited to worker’s comp and may not recover from the hirer.”

Scorecard: Due to the exclusive remedy rule, Edgar Verdugo will not be able to pursue legal action against CREH.

Takeaway: Companies that hire independent contractors are wise to include language in the contract that defines how workers’ comp exclusive remedy will work in the case of an injury. &

Autumn Heisler is the digital producer at Risk & Insurance®. She can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]