Doctors' Assocs. v. Uninsured Employers' FundAnnotate this Case
Doctors' Associates, Inc. (DAI) owns the "Subway" trademark and franchises the right to operate Subway sandwich shops nationwide. A claimant sought workers' compensation benefits for a work-related injury sustained while working for an uninsured Subway franchisee. The DAI and Uninsured Employers' Fund (UEF) were later joined as parties. The sole issue submitted for a decision by the ALJ was whether DAI was a contractor and, thus, liable to the employee of its uninsured subcontractor. The ALJ dismissed the UEF's claim against DAI, ruling that Ky. Rev. Stat. 342.610, which provides that a contractor can be liable to the employee of its uninsured subcontractor, imposed no liability on DAI because the statute did not encompass franchise relationships. The workers' compensation board affirmed. The court of appeals reversed, holding that the ALJ committed by legal error by concluding that the legislature did not intend for section 34.610 to encompass the franchisor-franchisee relationship simply because the statute failed to mention the relationship. The Supreme Court reversed, holding (1) the ALJ erroneously interpreted section 342.610, but (2) the error did not require reversal of the ALJ's ruling because the ALJ properly analyzed the facts of the case under the statute.