No FTCA Waiver When Vermont Workers’ Compensation Covers Multi‑Employer Injuries: Coverage by Any Employer Preserves Exclusive-Remedy Immunity for Federal “Statutory Employers”

Case: Williams v. United States, No. 24‑2408 (2d Cir. Oct. 6, 2025) (summary order)

Court: U.S. Court of Appeals for the Second Circuit

Disposition: Affirmed (dismissal for lack of subject‑matter jurisdiction)

Note: This is a Summary Order. Under Second Circuit Local Rule 32.1.1 and Federal Rule of Appellate Procedure 32.1, summary orders do not have precedential effect, though they may be cited for their persuasive value.

Introduction

This appeal stems from workplace injuries suffered by Troy Williams while working for a contractor performing services for the U.S. Postal Service (USPS) in Vermont. Williams sued the United States under the Federal Tort Claims Act (FTCA), alleging negligence by USPS workers. The U.S. District Court for the District of Vermont dismissed for lack of subject‑matter jurisdiction, holding that the Vermont Workers’ Compensation Act (VTWCA) provided Williams’s exclusive remedy and therefore the FTCA’s waiver of sovereign immunity did not apply.

On appeal, Williams conceded that the United States was his “statutory employer” under Vermont law and accepted that the FTCA permits suit only if a private person in like circumstances would be liable. He argued, however, that the VTWCA’s exception allowing a civil action where an employer fails to secure workers’ compensation benefits (21 V.S.A. § 618(b), referencing § 687) should apply because the United States, as his statutory employer, allegedly did not itself “secure” coverage. The Second Circuit affirmed, concluding that where the direct employer carried workers’ compensation insurance and the employee received benefits, Vermont law does not require each employer in a multi‑employer setting to separately secure coverage; thus, the exclusive remedy bar remains intact and the FTCA waiver does not extend to the claim.

Summary of the Opinion

The FTCA waives sovereign immunity only to the extent that a private person in like circumstances would be liable under the law of the place of injury (28 U.S.C. §§ 1346(b), 2674). Vermont law supplies the rule of decision.
Under the VTWCA, workers’ compensation is the exclusive remedy against an employer for work‑related injuries, subject to narrow exceptions (21 V.S.A. § 622). One exception allows a tort suit when an employer has “failed to comply with section 687,” which requires certain employers to secure workers’ compensation (21 V.S.A. § 618(b), § 687).
Williams’s direct employer (RSD Transportation, Inc.) maintained a workers’ compensation policy; USPS verified that coverage and paid associated costs; and Williams received workers’ compensation benefits under RSD’s policy.
The court held that, in Vermont, multi‑employer arrangements are expressly contemplated and the VTWCA does not mandate that every employer in such a setting secure coverage for shared employees. Because coverage existed and was paid, the exclusive‑remedy rule applies to the statutory employer as well, foreclosing a negligence suit and, by extension, an FTCA waiver.
Reading § 687 to require every employer to secure coverage lacks textual support and would undermine the VTWCA’s policies against double recovery and in favor of expeditious, fault‑free compensation.
The court distinguished Smith v. Desautels, where the employee recovered from a single uninsured employer; that scenario does not apply when the direct employer carried insurance and paid benefits.
Because a private employer in like circumstances would be immune under Vermont law, the FTCA does not waive sovereign immunity; the district court correctly dismissed under Rule 12(b)(1).

Analysis

Precedents and Authorities Cited

Makarova v. United States, 201 F.3d 110 (2d Cir. 2000): Establishes that sovereign immunity is jurisdictional; FTCA waivers are strictly construed; and the FTCA confers jurisdiction only if a private person would be liable under state law. Provides the standard for Rule 12(b)(1) dismissals and de novo review of legal conclusions. The court relies on Makarova to frame the “private person in like circumstances” analysis and the strictness of the waiver.
Dolan v. U.S. Postal Serv., 546 U.S. 481 (2006): Confirms FTCA applicability to tort claims arising from USPS activities. Cited to dispel any question that USPS-related negligence falls within the FTCA framework, subject to exceptions.
McGowan v. United States, 825 F.3d 118 (2d Cir. 2016): Reinforces that the FTCA’s waiver must be strictly construed in favor of the government. This supports the court’s refusal to extend the waiver when state law would immunize a private employer.
Windward Bora LLC v. Sotomayor, 113 F.4th 236 (2d Cir. 2024): The government, for the first time on appeal, argued that the United States is in like circumstances to a private employer that did secure coverage (because USPS required RSD to maintain it). The court declined to address newly raised arguments without justification, invoking Windward Bora’s rule against considering new appellate arguments absent good cause.
Vermont statutory framework:
- 21 V.S.A. § 622: Exclusive remedy provision—workers’ compensation replaces tort claims against employers.
- 21 V.S.A. § 618(b): Exception allowing a civil action where the employer “failed to comply with section 687.”
- 21 V.S.A. § 687: Requires employers (excluding state, county, or municipal bodies) to secure workers’ compensation coverage.
- 21 V.S.A. § 601(3): Broadly defines “employer,” including owners/lessees who are effectively the proprietor/operator of the business, even if not the direct employer—codifying the “statutory employer” concept.
Candido v. Polymers, Inc., 687 A.2d 476 (Vt. 1996): Affirms that the VTWCA covers multi‑employer business situations and articulates the quid pro quo: employees receive “expeditious and certain” benefits without proving fault, while surrendering tort claims against employers. The Second Circuit invokes Candido to align the outcome with core VTWCA policies.
Yustin v. Dep’t of Pub. Safety, 19 A.3d 611 (Vt. 2011): Recognizes a strong policy against double recovery. The court relies on Yustin to reject interpretations that would allow an employee to receive workers’ comp benefits and also sue another employer in tort for the same injury.
Welch v. Home Two, Inc., 783 A.2d 419 (Vt. 2000): Holds that allowing an employee with multiple employers to collect compensation from one employer and sue another in negligence frustrates VTWCA policy. This case squarely supports the Second Circuit’s multi‑employer analysis.
Smith v. Desautels, 953 A.2d 620 (Vt. 2008): The principal case invoked by Williams, involving recovery from a single, uninsured employer. The Second Circuit distinguishes Smith because it addressed an employer’s lack of any workers’ comp coverage; here, Williams’s direct employer insured him and paid benefits.
Butler v. Huttig Bldg. Prods., 830 A.2d 44 (Vt. 2003): Emphasizes that the VTWCA is read to ensure injured employees receive benefits unless the law clearly says otherwise. The Second Circuit agrees with that goal but observes that the goal is satisfied once one employer provides coverage—there is no textual basis to require all employers to duplicate coverage.
State v. Berard, 220 A.3d 759 (Vt. 2019) and Northfield Sch. Bd. v. Washington S. Educ. Ass’n, 210 A.3d 460 (Vt. 2019): Vermont’s interpretive canons: begin with plain text; if unclear, consider the statute’s subject, effects, and purpose. The court invokes these canons to reject the proposed reading of § 687 as imposing coverage duties on each employer in multi‑employer contexts.

Legal Reasoning

FTCA’s threshold “private person in like circumstances” inquiry controls jurisdiction. The FTCA allows suits for damages caused by federal employees’ negligence only where a private person would be liable under the law of the place of injury (28 U.S.C. § 1346(b), § 2674). Sovereign immunity is jurisdictional; thus, if state law immunizes a comparable private actor, the FTCA does not waive immunity and the court lacks subject‑matter jurisdiction (Makarova; McGowan).
Vermont’s exclusive‑remedy rule applies in multi‑employer settings and encompasses statutory employers. Vermont law sets workers’ compensation as the exclusive remedy for work‑related injuries against an “employer,” a term defined to include non‑direct employers who are the effective proprietors/operators of the business conducted on the premises (21 V.S.A. § 601(3), § 622; Candido). Williams conceded the United States is his “statutory employer.”
The § 618(b) “failure to secure” exception does not apply when the employee’s direct employer maintained coverage and paid benefits. Section 618(b) permits a tort suit if the employer “failed to comply with section 687” (securing coverage). However:
- RSD, Williams’s direct employer, held a compliant policy under § 687; USPS verified that coverage and covered its costs; and Williams actually collected benefits.
- Nothing in Vermont law requires each employer in a multi‑employer arrangement to independently secure coverage for shared employees. The plain text does not support imposing duplicative obligations, and the VTWCA “specifically and unambiguously” contemplates multi‑employer situations (Candido).
- Reading § 687 to require duplicate coverage would subvert VTWCA’s core policies—ensuring swift, fault‑free compensation without double recovery. Allowing a negligence action against a statutory employer after compensation has been paid would enable a windfall (Welch; Yustin).
Policy coherence and statutory interpretation reinforce the outcome. Vermont’s interpretive canons emphasize plain meaning and statutory purpose (Berard; Northfield). The court’s reading preserves the quid pro quo: employees receive “expeditious and certain” benefits without proving fault; employers receive immunity from tort claims for covered injuries (Candido). Williams’s construction would fracture that balance by allowing duplicate recoveries in multi‑employer contexts.
Smith v. Desautels is inapposite. Smith involved a single uninsured employer—precisely the scenario § 618(b) was designed to address. Here, the existence of adequate coverage and actual payment distinguishes the case and forecloses the exception.
Unreached issue: the government’s “like circumstances” argument raised for the first time on appeal. The government argued that the United States is in like circumstances to a private employer that “secured” coverage because it required RSD to maintain insurance. The panel declined to consider this new argument under Windward Bora. Importantly, the court assumed without deciding the contrary premise (that the United States is like an employer that did not itself secure coverage) and still ruled against Williams—signaling that, even on his best framing, the claim fails.
Jurisdictional consequence. Because a private employer in Vermont would be immune from tort liability in these circumstances, the FTCA’s waiver of sovereign immunity does not apply. The district court properly dismissed the case under Rule 12(b)(1) for lack of subject‑matter jurisdiction (Makarova).

Impact

FTCA claims by contractor employees in Vermont face a high bar. If an injured worker has received workers’ compensation benefits through any employer in a multi‑employer arrangement, Vermont’s exclusive‑remedy provision will generally preclude tort claims against other employers in the chain—including federal “statutory employers”—and therefore defeat FTCA jurisdiction.
Practical compliance strategy for federal agencies. Although the court did not reach whether requiring contractor coverage makes the United States “like” an employer that has “secured” insurance, the opinion underscores best practices: verify contractor coverage and allocate costs to ensure employees are covered. This approach aligns with VTWCA policy and provides a robust jurisdictional defense in FTCA suits.
Limiting double recovery in multi‑employer settings. The decision reinforces Vermont’s policy against double recovery: once workers’ compensation benefits are paid, tort suits against other employers for the same injury are generally barred. Plaintiffs seeking to invoke § 618(b) will need to show an actual failure to secure coverage that leaves the statutory scheme’s compensation guarantee unfulfilled—something absent when a co‑employer’s policy has paid benefits.
Doctrinal clarity without binding precedent. While non‑precedential, the order synthesizes Vermont Supreme Court authority (Candido, Welch, Yustin, Smith) with FTCA jurisdictional doctrine (Makarova, McGowan), offering persuasive guidance to district courts within the Second Circuit and to litigants formulating FTCA strategies involving workplace injuries in Vermont.
Scope boundaries. The ruling does not address liability of independent third‑party tortfeasors that do not qualify as “employers” under § 601(3), nor does it decide how “like circumstances” might apply if the United States’ only role were to require contractor coverage. Those questions remain open for a case where they are properly preserved and necessary to the judgment.

Complex Concepts Simplified

FTCA (Federal Tort Claims Act): A law that lets people sue the United States for certain torts committed by federal employees, but only when a comparable private person would be liable under the state’s law where the injury occurred. If state law would immunize a private actor, the FTCA usually does not waive the government’s immunity.
Sovereign Immunity: The principle that the government cannot be sued without its consent. The FTCA is a limited consent, strictly construed in the government’s favor.
Exclusive Remedy (Workers’ Compensation): In exchange for prompt, no‑fault benefits for workplace injuries, employees generally cannot sue their employers in tort for those injuries.
Statutory Employer: An entity treated as an “employer” by law even if it is not the direct employer—for example, a property owner or principal who effectively operates the business on the premises (21 V.S.A. § 601(3)). Statutory employers benefit from the exclusive‑remedy rule.
Multi‑Employer Business Situation: A setting where more than one entity qualifies as an “employer” for workers’ compensation purposes (e.g., a contractor and the principal on whose premises the work is performed). Vermont law contemplates such arrangements and does not require every employer to buy duplicate coverage if coverage exists and benefits are paid.
“Failure to Secure” Exception (§ 618(b)/§ 687): If an employer fails to obtain required workers’ compensation insurance, the injured employee may elect to sue the employer for full damages. In Vermont, this exception is aimed at the uninsured‑employer problem and does not, as interpreted here, convert multi‑employer coverage into a right to sue other covered employers once compensation has been paid.
“Like Circumstances” (FTCA): The comparison the FTCA requires between the United States and a private person under the same state law constraints. If the private analogue would be immune, so is the United States.

Conclusion

The Second Circuit’s summary order affirms a straightforward but consequential proposition for FTCA litigation involving workplace injuries in Vermont: when an employee is covered by workers’ compensation, and benefits are paid by the direct employer in a multi‑employer arrangement, the VTWCA’s exclusive‑remedy rule bars tort suits against other employers in the chain—including federal statutory employers—thereby foreclosing the FTCA’s waiver of sovereign immunity and depriving the federal courts of subject‑matter jurisdiction. The court’s reading is anchored in the text and purposes of Vermont’s workers’ compensation scheme, particularly its aversion to double recovery and its commitment to swift, fault‑free compensation. Although non‑precedential, the decision synthesizes Vermont Supreme Court doctrine with FTCA principles and will be persuasive authority guiding future FTCA cases involving contractor employees and federal facilities in Vermont.