The workers’ compensation exclusivity exception must be narrowly construed and the contract at issue must contain sufficient language to establish a third-party indemnity obligation.

The plaintiff originally asserted several theories of liability in his complaint, including negligence and breach of express and implied warranties against the defendants, the manufacturer/seller of industrial equipment and the licensor/seller of a piece of equipment used with the industrial equipment. Each defendant filed a third-party complaint against the third-party defendant (the plaintiff’s employer at the time of injury). The Delaware Supreme Court granted the third-party defendant’s motions to dismiss the third-party complaints because the contract at issue prevented the defendants/third-party plaintiffs from being able to recover against the third-party defendant under a theory of contractual indemnification. The court discussed and followed the Delaware Supreme Court’s decision in Precision Air Inc. v. Standard Chlorine of Delaware, Inc., such that the workers’ compensation exclusivity exception permits an employee to recover from a third party where a contract between the employer and the third party contains provisions requiring the employer to (1) perform work in a workmanlike manner and (2) expressly or impliedly indemnify the third party for claims rising from the employer’s own negligence. The court rationalized that implied contractual indemnification, as established in Diamond State Telephone v. University of Delaware, exists only when an employer performs services for a third party under a contract on the third party’s premises; the court declined to apply the “special relationship” test from Roy v. Star Chopper (a U.S. District Court for the District of Rhode Island case) and concluded that the defendants’ third-party complaints did not meet the Diamond requirements to trigger implied indemnity. Therefore, the Delaware Superior Court granted the third-party defendant’s motion to dismiss the third-party complaints, concluding that the workers’ compensation exclusivity exception must be narrowly construed and the contract at issue must contain sufficient language to establish a third-party indemnity obligation. 

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