February 19, 2026|Franchise Frontlines
February 19, 2026 | Supreme Court of Kentucky | Published Opinion
Executive Summary
In a published decision, the Supreme Court of Kentucky held that a manufacturer that contracted for the transportation and delivery of raw materials qualified as a “contractor” entitled to statutory “up-the-ladder” immunity under Kentucky’s Workers’ Compensation Act. The case arose after a truck driver employed by a transportation contractor was seriously injured while unloading raw limestone at the manufacturer’s facility. The injured worker argued that the manufacturer should remain subject to tort liability because it merely purchased raw materials and did not employ the driver. The manufacturer responded that the delivery and transportation of the raw materials was a regular and recurrent part of its business and therefore triggered contractor immunity under Kentucky Revised Statutes §§ 342.610 and 342.690. The Kentucky Supreme Court agreed with the manufacturer and reinstated summary judgment in its favor, concluding that the contractual transportation arrangement made the delivery work part of the manufacturer’s business for purposes of statutory immunity.
Relevant Background
Minova USA, Inc. operates a manufacturing facility in Georgetown, Kentucky that produces resin capsules used in mining, construction, and energy applications. A key component of the product is ground limestone filler. To obtain that material, Minova purchased limestone from a supplier and entered into a transportation services agreement with a trucking company to haul the material from the supplier’s mine in Tennessee to Minova’s plant in Kentucky.
Tom Jolly worked as a truck driver for the transportation company and regularly delivered limestone to the Minova facility. During one delivery in 2018, Jolly was preparing to unload a truck when a heavy metal cart rolled down a ramp and struck him, causing serious injuries. Jolly received workers’ compensation benefits from his direct employer but also filed tort claims against Minova and other defendants, alleging negligence related to the accident.
Minova moved for summary judgment, arguing that it qualified as a statutory “contractor” under Kentucky’s workers’ compensation statute and therefore enjoyed “up-the-ladder” immunity from tort liability. The trial court agreed and dismissed the claims against Minova. The Kentucky Court of Appeals reversed, holding that transporting limestone was not part of Minova’s regular business. The Kentucky Supreme Court granted discretionary review to determine whether the manufacturer qualified as a statutory employer entitled to immunity.
Decision
The Kentucky Supreme Court reversed the Court of Appeals and reinstated summary judgment in favor of Minova. The court focused on the statutory framework governing contractor liability and immunity under Kentucky’s Workers’ Compensation Act.
Under Kentucky law, workers’ compensation benefits are the exclusive remedy for workplace injuries against an employer. The statute extends that protection beyond the direct employer to certain “contractors” who subcontract work that is a “regular or recurrent” part of their business. When that statutory relationship exists, the contractor becomes responsible for ensuring workers’ compensation coverage and in exchange receives immunity from tort claims.
The central issue before the court was whether the delivery and transportation of limestone filler constituted work that was “regular or recurrent” in Minova’s manufacturing business. The court concluded that it did.
The record showed that Minova relied on a steady stream of limestone deliveries and entered into a detailed transportation services agreement with the trucking company governing the logistics of transporting the material. The agreement required the carrier to load, transport, and unload the material according to Minova’s procedures, provide performance reports, and participate in operational review meetings. The court viewed this contractual arrangement as evidence that the transportation function had effectively become part of Minova’s business operations.
The court emphasized that work may qualify as “regular or recurrent” even if the company does not perform the work with its own employees. Instead, the relevant inquiry focuses on whether the work is customary or repeated and whether businesses in the same industry would expect such work to occur as part of the business’s operations. Because Minova repeatedly relied on contracted transportation to bring raw materials to its facility and incorporated the logistics process into its operational framework, the court concluded that the delivery function satisfied the statutory test.
The court also distinguished situations in which delivery services are merely incidental to a simple purchase-and-sale transaction. Here, the transportation contract imposed significant obligations on the carrier and integrated the delivery process into Minova’s operations. That level of operational involvement supported treating the delivery work as part of Minova’s business.
As a result, the court held that Minova qualified as a statutory contractor and therefore was immune from tort liability because the injured driver had already received workers’ compensation benefits from his employer.
A dissenting opinion warned that the majority’s reasoning risked expanding contractor immunity too broadly. The dissent argued that Minova was a purchaser of raw materials rather than a transportation company and that extending immunity in these circumstances could improperly shield companies from liability even when they play no role in providing workers’ compensation coverage.
Looking Forward
Although the decision arises under Kentucky’s workers’ compensation statute, it illustrates broader issues that frequently arise in modern business structures involving layered contractual relationships.
Companies increasingly rely on third-party logistics providers, staffing agencies, and other contractors to perform operational functions that historically might have been handled internally. Courts evaluating contractor immunity or similar liability doctrines will often focus on whether the outsourced work has effectively become integrated into the company’s regular business operations.
For franchisors and other brand-driven systems, the decision underscores the importance of understanding how courts analyze contractual relationships when determining liability exposure.
• Courts may treat outsourced operational functions as part of a company’s core business if the services are recurring and deeply integrated into the company’s operational framework.
• Detailed operational contracts—particularly those involving oversight, performance requirements, and operational coordination—may strengthen arguments that the work is functionally part of the company’s business.
• At the same time, courts remain sensitive to the risk of expanding liability shields too broadly, particularly where a company simply purchases goods or services without assuming responsibility for the underlying work.
As business models increasingly rely on complex networks of contractors, vendors, and logistics providers, the boundaries of doctrines such as statutory-employer immunity will likely continue to evolve. Companies operating multi-entity systems should carefully evaluate how contractual relationships may affect potential liability exposure in workplace injury cases.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Shareholder at Buchalter LLP and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
