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Gunderson v. Harrington9/6/2001
r v. Ramsey County, 609 N.W.2d 868, 874 (Minn. 2000).
As an initial observation, we note that the WCA is based on a policy of "mutual renunciation of common law rights and defenses by employers and employees." Minn. Stat. § 176.001 (2000). The exclusive remedy provision of the WCA states that " he liability of an employer prescribed by this chapter is exclusive and in the place of any other liability to such employee * * * entitled to recover damages on account of such injury or death." Minn. Stat. § 176.031 (2000). The WCA defines an employer as "any person who employs another to perform a service for hire; and includes corporation, partnership, limited liability company, association, group of persons, state, county, town, city, school district, or governmental subdivision." Minn. Stat. § 176.011, subd. 10.
Both parties argue that the clear and unambiguous language of the WCA supports their position regarding whether Harrington is Gunderson's employer. Gunderson emphasizes that the act states that a corporation may be an employer but doesn't list "shareholder" or "alter ego" in the definition of employer. She also notes that a corporation is a legal entity separate from its shareholders. Harrington argues that as the court of appeals held, the "common sense" reading of "any person who employs another to perform a service for hire" includes Harrington, and that as sole shareholder and president of Harrington Orthodontics, a corporation organized solely to support his professional practice as an orthodontist, he and the corporation are virtually indistinguishable.
Recognizing Harrington as Gunderson's employer is consistent with the reality that the form but certainly not the substance of his business changed when Harrington incorporated. The corporation was for all practical purposes Harrington personally as its sole principal and shareholder, and it could act only through him. To rigidly cling to the form of the corporation, ignoring Harrington's sole authority to manage and direct Gunderson's employment, would frustrate the purpose of the WCA: "mutual renunciation of common law rights and defenses by employers and employees alike." Minn. Stat. §176.001 (2000).
The dissent correctly indicates that our holding is not based on an equitable pierce of the corporate veil. The dissent cites our decision in Wessin v. Archives Corp., 592 N.W.2d 460 (Minn. 1999) for the proposition that a closely held corporation must be treated the same as all other corporations under Minnesota statutes for purposes of the WCA. The corporation in that case had a small number of shareholders and the issue presented was whether the actions brought were direct or derivative. Wessin, 592 N.W.2d. at 462. In this case, much like a sole proprietorship, Harrington is the president and sole shareholder of the corporation. The clear indication that Harrington himself acted as the corporation and the well-settled doctrine that the WCA is intended to replace the uncertainty of tort actions against employers and provide the exclusive remedy for employment-related injuries supports our holding that Harrington is Gunderson's employer under the WCA.
We hold that Harrington Orthodontics is so completely dominated by and identified with Harrington that he must be considered Gunderson's employer for purposes of the WCA. Therefore, Gunderson is restricted to the remedies provided by the WCA for injury by Harrington in the course of her employment. We affirm the court of appeals ruling that Harrington is Gunderson's employer as defined by the WCA.
II.
We turn next to Gunderson's claim that even if Harrington is deemed to be her employer, the intentional injury exception
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