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Potter v. Hawaii Newspaper Agency2/19/1999
ies available to young people. Moreover, pursuant to the terms of the agreement, the HNA sought to avoid liability for employee benefits, state and federal payroll taxes, and vicarious liability for any damages that might result from the news carriers' delivery of its newspapers. The agreement offered no reciprocal benefits to the carriers. By the express terms of its own agreement, the HNA hired "independent contractors."
Accordingly, because the HNA itself chose to construe the relationship in the foregoing manner, pursuant to this court's decisions in Locations and Makaneole, we hold that it is estopped from claiming the protections of the HRS § 386-5 tort defense in actions involving the carriers unless and until the injured carrier challenges the form-over-substance nature of the agreement and is awarded workers' compensation benefits by the Director or the LIRAB. Only upon payment of such benefits would the HNA then be entitled to seek the protection of HRS § 386-5 as a defense to a tort lawsuit. Any other result would allow the HNA to reap the rewards of its own duplicity in dealing with underage workers who were ripe for exploitation. Moreover, this result both protects the principle, enunciated in Locations and Harter, that an employer-employee relationship must be entered into in a deliberate manner with the informed consent of both parties and maintains the integrity of the social bargain that lies at the heart of the workers' compensation system, wherein a worker surrenders his "right to recover common law damages from the employer in exchange for the certainty of a statutory award for all work-connected injuries." Evanson, 52 Haw. 595, 598, 483 P.2d 187, 190 (1971).
In arguing to the contrary, the HNA contends that
" his appeal poses the issue whether a member of only one of the groups intended to be benefitted by the workers' compensation statute, i.e., the workers, has the right to opt out of the socially enforced bargain and to ignore the procedures of the Director and the Board because the worker prefers to prosecute a tort remedy against the employer."
The HNA further expresses its concern that
" f Potter's argument were to be sustained, Chapter 386 would become an elective remedy, rather than a socially enforced bargain imposed by statute. An injured worker who preferred to risk his medical benefits and financial future by seeking recompense from his employer in the tort system could void the "exclusivity" provision by the simple expedient of failing to request workers' compensation benefits. If the only interests advanced by the workers' compensation scheme were the worker's, perhaps this chancy election by the worker might be allowable. However, the beneficiaries of the socially enforced bargain include the worker's dependents, employer, health care insurer, the judiciary, and society as a whole. Ill-advised worker bets on the outcome of a tort suit can result in the disability, poverty and public dependency of the worker and his family. The goal of developing a specialized agency with expertise in the area of industrial accidents would be undermined. The workload of the courts would increase. Workers could be expected to elect statutory benefits when their tort recovery prospects looked unfavorable, and not to file benefit claims when the statutory scheme worked to the advantage of their employer, thereby undercutting the employer's side of the social bargain. The idea that the jurisdiction of the Director and the provisions of the workers' compensation laws are subject to nullification by the worker makes no more sense than the notion that each citizen can select which laws pertain to him or her."
Our holding, limited
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