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March 23rd, 2017
workers compensation
ALABAMA SUPREME COURT AFFIRMS EMPLOYERS RIGHT TO CLAIM IMMUNITY FROM TORT CLAIMS FOR EMPLOYEES INJURED ON THE JOB WHO ARE OBTAINED THROUGH STAFFING AGENCIES

In Ex parte Tenax Corp., the Alabama Supreme Court reaffirmed that the exclusive-remedy provisions of the Alabama Workers' Compensation Act, § 25–5–1 et seq., Ala. Code 1975 can provide immunity from tort claims filed by workers’ provided to an employer through a staffing agency.

In July 2014, John Dees submitted an application with Onin Staffing, LLC (“Onin”) for a job at a Tenax Corporation (“Tenax”) plant in Evergreen, Alabama. On January 14, 2015, while operating a machine at the plant, Mr. Dees suffered significant injuries to his left arm. In December 2015, Dees sued, among others, Tenax and Onin. Mr. Dees sought workers' compensation benefits from Onin, and he sought damages under the Alabama Extended Manufacturer's Liability Doctrine (“AEMLD”) and for negligence and wantonness from Tenax.

According to Mr. Dees's complaint, in January 2015 he was employed by Onin and, at the time of his injury, “was acting within the line and scope of his job duties and responsibilities with Defendant Onin.” However, Mr. Dees testified in his deposition that he viewed Onin as a “temp agency” and he considered his employer to be Tenax. He even went as far as to state that if he was asked to complete an application listing his former employers, he would have written Tenax, not Onin. Further, it was undisputed that Tenax trained, supervised, took any necessary disciplinary actions, and controlled Mr. Dee’s work. Mr. Dees also submitted his work hours to his supervisor at Tenax, and received and signed for a Tenax employee handbook.

Tenax admitted that it had a relationship with Onin, whereby Onin supplied Tenax with temporary labor. Rather than pay workers directly, Tenax would write Onin a check for all labor provided, and Onin in turn would withhold appropriate taxes and other items and issue a check to the workers. Onin charged Tenax an hourly rate for all work completed by Mr. Dees, which encompassed costs for workers' compensation insurance.

Based on these facts, Tenax moved for summary judgment on the grounds that it was immune from Mr. Dees's tort claims under the exclusive-remedy provisions of the Alabama Workers' Compensation Act. Specifically, Tenax contended that, although Onin was Mr. Dees's “general employer,” Tenax was Mr. Dees's “special employer” and, thus, that the exclusive-remedy provisions of the Workers' Compensation Act extend to Tenax. The Circuit Court of Conecuh County denied Tenax’s Motion for Summary Judgment and Tenax petitioned the Alabama Supreme Court for a writ of mandamus directing the Conecuh Circuit Court to enter a summary judgment in their favor.

The Court began by noting that an action brought under the Workers' Compensation Act is the exclusive remedy for an employee's injuries sustained in the course of his employment. Further, this exclusive remedy provision extends to ‘special employers,’ which have been described as ‘individuals or businesses who, for practical purposes, may be considered primary or co-employers of the injured employee.’  When a general employer lends an employee to a special employer, the special employer becomes liable for workmen's compensation [and thus immune from liability for tort actions brought by the special employee] only if

      (a)   the employee has made a contract of hire, express or implied, with the special employer;
      (b)   the work being done is essentially that of the special employer; and
      (c)   the special employer has the right to control the details of the work.

When all three of the above conditions are satisfied in relation to both employers, both employers are liable for workmen's compensation. In the present case, the evidence was clear that Mr. Dees was essentially doing the work of Tenax and that Tenax had the right to control the details of his work. It was also undisputed that Mr. Dees did not have an express contract of hire with Tenax, in that Onin was the entity which “hired” him. As such, the issue of whether or not Tenax was immune from his tort claims rested upon whether or not he had an implied contract of hire with Tenax.

In determining whether a worker has impliedly consented to a contract of hire, the Court “has considered a number of factors to be particularly significant to the analysis of [whether the worker impliedly consented to a contract of hire]. One consideration is whether the general employer is, in reality, acting as a ‘labor broker’ or a temporary employment agency for the special employer. Another consideration is whether the special employer provided the workers' compensation insurance. Still another important consideration is whether the employment with the borrowing employer was of such duration that the employee could be reasonably presumed to have evaluated and acquiesced in the risks of his employment.”

In the instant case, the Court felt that Tenax had presented sufficient that Mr. Dees had impliedly consented to a contract of hire with it. He was supplied by a temporary agency and had hopes of obtaining full time employment with it. The employment was indefinite. And, most importantly, the court found that although Onin may have technically been the party who provided workers’ compensation coverage, it was clear that Tenax was the entity paying for the coverage in the form of a higher hourly wage than they would have paid Mr. Dees had he not been supplied through a staffing agency.

Because the Court felt that Tenax had established that Mr. Dees had impliedly consented to a contract of a hire with Tenax, it granted Tenax’s petition and issued the writ, thereby directing the Conecuh Circuit Court to enter summary judgment in favor of Tenax finding that it was immune from tort liability based upon the exclusivity provision of Alabama’s Workers’ Compensation Act. In light of the Court’s holding, employers in Alabama who rely upon staffing agencies to meet their employment demands can rest assured that in doing so they can continue to rely upon the exclusivity provision and not inadvertently open themselves up to an additional layer of liability. 

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