Kentucky’s “up-the-ladder” immunity doctrine has long been a trap for the unwary subrogation professional. In Kentucky, the concept of who is an “employer” (as opposed to a “third-party tortfeasor” who can be sued in subrogation) extends well beyond the injured worker’s direct employer. Under K.R.S. § 342.610(2)(b), a contractor may be deemed a “statutory employer”—and therefore immune from tort liability under § 342.690 (Kentucky’s Exclusive Remedy Rule)—when the injured employee is performing work that is a regular or recurrent part of the contractor’s trade or business. This “up-the-ladder” immunity doctrine presents a significant and often outcome-determinative obstacle in third-party and subrogation cases, as it can transform an otherwise viable tort defendant into an immune entity. The Kentucky Supreme Court’s recent decision in Minova U.S., Inc. v. Jolly, expands the reach of that doctrine, particularly in the context of modern supply-chain and transportation relationships, and underscores the need for careful early analysis in every Kentucky subrogation file.
The Kentucky Supreme Court’s recent decision in Minova U.S., Inc. v. Jolly, No. 2024-SC-0169-DG (Ky. Feb. 19, 2026), materially expands that doctrine, particularly in the transportation and logistics context. For carriers and subrogation counsel, the case represents both a warning and an opportunity: a warning that more defendants will now be insulated from third-party liability, and an opportunity to sharpen early liability analysis before pursuing recovery and throwing good money after bad.
The decision in Minova reinforces and extends the analytical framework first articulated by the Supreme Court in 2007, but applies it in a modern commercial setting involving integrated supply chains. The result is a broader conception of what constitutes a “regular or recurrent” part of a business, with direct implications for subrogation strategy.
Kentucky’s Statutory Employer Framework
Kentucky’s Workers’ Compensation Act provides that an employer who secures payment of compensation is immune from tort liability for work-related injuries. Importantly, the statute defines “employer” to include not only the worker’s direct employer but also certain “contractors.” A contractor is defined as one who contracts “to have work performed of a kind which is a regular or recurrent part of the work of the trade, business, occupation, or profession” of the contractor.
When this statutory relationship exists, the upstream contractor becomes a “statutory employer,” liable for workers’ compensation benefits if the subcontractor fails to secure coverage and, in exchange, immune from tort liability. For subrogation purposes, this doctrine is critical. If a tort defendant qualifies as a statutory employer, it is immune from suit, and the workers’ compensation carrier’s lien rights under K.R.S. § 342.700 are effectively eliminated as to that party.
The controlling test, as articulated in Cain, is whether the injured worker was performing work that is “customary, usual, or normal” to the business, or work that is repeated with some regularity, and of a kind that the business or similar businesses would ordinarily perform or expect to perform with employees. Crucially, Cain rejected the notion that all work necessary to a business qualifies. Work that is merely incidental, beneficial, or even essential is not enough. Instead, the inquiry is functional and industry-based, focusing on whether the work has become part of the business’s operations in a practical sense.
The Minova Decision
Against that backdrop, Minova presented a question that had been percolating for years: can a manufacturer become a statutory employer of a transportation contractor’s employee simply by contracting for delivery of raw materials? Minova manufactured resin products and relied on a steady supply of limestone filler, which it obtained from a supplier in Tennessee. To move the material, Minova entered into a detailed transportation services agreement with Trimac, a trucking company. A Trimac driver was injured while delivering limestone at Minova’s facility and sued Minova in tort after receiving workers’ compensation benefits from Trimac. The Kentucky Supreme Court held that Minova qualified as a statutory contractor and was therefore immune from suit. The Court emphasized that the transportation and delivery of limestone were “regular and recurrent” and had become part of Minova’s business through its contractual arrangement with Trimac.
Several aspects of the Court’s reasoning are particularly significant. First, the Court reaffirmed that work need not be performed by the defendant’s own employees to qualify. Consistent with Cain, the relevant inquiry is whether the work is of a kind that the business or similar businesses would expect to perform, not whether it actually does so in-house.
Second, the Court placed heavy emphasis on the contractual integration between Minova and Trimac. The transportation agreement imposed detailed operational requirements, including training, reporting, exclusivity, and coordination obligations. This level of integration demonstrated that transportation was not merely incidental to a purchase of goods but had become part of Minova’s operational framework.
Third, the Court distinguished ordinary delivery situations. Routine shipments by common carriers incidental to a sale of goods may not qualify. However, where the delivery function is structured as an ongoing, integrated service central to the business, it can meet the statutory test. In reversing the Court of Appeals and reinstating summary judgment, the Court effectively expanded the reach of up-the-ladder immunity into modern logistics arrangements.
Implications for Third-Party Liability and Subrogation
For subrogation professionals, Minova narrows the universe of viable third-party defendants in Kentucky. Historically, transportation defendants were often viewed as distinct third parties, particularly where the upstream entity was merely a purchaser of goods. Minova blurs that distinction. A manufacturer, retailer, or distributor may now be deemed a statutory employer if it has sufficiently integrated transportation into its business through contract.
This expansion is consistent with earlier cases recognizing that work may become part of a business “by contract or by law.” But Minova extends that principle into a context that will arise frequently in subrogation practice. The practical effect is that plaintiffs—and subrogation carriers—will face more immunity defenses at the outset of litigation. Defendants will increasingly argue that transportation, logistics, maintenance, or other outsourced functions are “regular or recurrent” and therefore protected. This raises the stakes of early factual development. The determination is highly fact-intensive and turns on the nature of the contract, the frequency of the work, and industry expectations. All of this must be done immediately after a loss and underscores the importance of getting qualified subrogation counsel involved early in Kentucky losses.
Impact on Subrogation Strategy
From a subrogation perspective, Minova reinforces several strategic imperatives. First, early investigation must include a detailed review of contracts. The Minova-Trimac agreement was central to the Court’s analysis. Subrogation counsel should obtain and scrutinize all relevant service agreements at the outset to assess whether a defendant may assert statutory employer status.
Second, practitioners must carefully analyze the “regular or recurrent” element under Cain. The mere fact that work is necessary to a business is not enough. There remains room to argue that certain activities—particularly specialized, capital, or one-off projects—fall outside the doctrine. Indeed, Cain itself illustrates that large-scale construction, renovation, or specialized work may not qualify where it is not work the business would ordinarily perform with employees.
Third, the distinction between incidental delivery and integrated logistics will be critical. Minova expressly preserves this distinction. Subrogation professionals must focus on whether the defendant exercised operational control, imposed detailed requirements, or otherwise integrated the work into its business.
Fourth, the decision underscores the importance of identifying alternative tort defendants. In Minova, claims against other parties remained viable. Where a statutory employer defense eliminates one defendant, recovery may still be pursued against others not within the statutory chain.
Finally, Minova may affect lien recovery expectations. If more defendants are deemed statutory employers, fewer third-party recoveries will be available, reducing opportunities to recoup workers’ compensation payments under K.R.S. § 342.700.
Conclusion
The Minova decision represents a significant development in Kentucky workers’ compensation law. By recognizing that transportation and delivery services can become part of a manufacturer’s business through contractual integration, the Court has expanded the reach of up-the-ladder immunity. For subrogation professionals, the message is clear. The statutory employer doctrine is no longer confined to traditional construction or maintenance scenarios. It now extends into modern supply-chain relationships where services are integrated into a company’s operations. The practical consequence is a more aggressive use of immunity defenses and a corresponding need for more rigorous early analysis. The key questions remain those articulated in Cain: Is the work customary, usual, or normal? Is it performed with some regularity? And is it of a kind that the business or similar businesses would perform with employees? In the wake of Minova, those questions must now be asked not only about construction and maintenance, but also about the movement of goods that keeps modern businesses running.
For questions regarding subrogation in any state, please contact Lee Wickert at leewickert@mwl-law.com
