ANOTHER VOICE: LLC law change would help protect small business owners

There are currently almost 130,000 LLCs (limited liability companies) registered in Oregon. These companies represent businesses of all sizes, but the vast majority are small businesses working and employing people in communities throughout Oregon.

When the Oregon Limited Liability Act was passed almost 20 years ago establishing LLCs as a recognized corporate entity in Oregon, the idea was to provide business owners with a structure that gave them flexibility and assurance on liability exposure for the company’s members and owners.

This was well understood and has been the operating practice, not just in Oregon but in states throughout the country that adopted similar laws.

Included in that certainty was ensuring that LLCs have clarity in their liability for workers’ compensation issues. Like all businesses, LLC employers need to provide safe workplaces and need to be responsible for situations where an employee is injured during a work-related incident.

Oregon has a strong and nationally recognized workers’ compensation system, with fairly clear laws about such liability. However, a recent Court of Appeals decision pointed out some unintended ambiguity in current law.

Their interpretation of this ambiguity has unfortunately opened the door to massive liability issues for these 130,000 LLCs by effectively allowing not just the company, but also all individual members and owners of the LLC, to be liable.

To help clarify the law and ensure that printed language matches what many — if not all — of us already believed the law actually is, I introduced House Bill 2923. This is a simple bill that adds specific language to our workers’ compensation statute’s “exclusive remedy” provisions so that employees, employers, lawyers and judges clearly know what possible legal action is available to individuals injured in a work-related incident.

I want to thank a number of stakeholder groups for working together to perfect the language in HB 2923. Business organizations, SAIF, the Oregon Trial Lawyers Association and others worked collaboratively to ensure this bill could receive broad support.

The bill had its first hearing today in the House Business and Labor Committee, and I hope to see it work through the process very soon.

This is an important bill, not just for those 130,000 businesses, but also for the many other individuals they employ.


Bruce Hanna is a Roseburg Republican serving in the Oregon House.

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