Exclusive-Remedy Provisions Extend to Special Employer in Workers’ Comp
Ex parte Tenax Corp.: An analysis of the extension of exclusive-remedy provisions to a special employer, and when a temporary employee becomes a special employee for purposes of workers’ compensation.
A Fact Specific Situation
In July 2014, John Dees sought employment from Tenax Corporation (“Tenax”). The general manager at the Tenax plant directed Dees to apply through Onin Staffing (“Onin”) for the job at Tenax. Onin hired Dees, who began working at Tenax. In January 2015, while operating a machine in the line and scope of his employment, Dees injured his left arm. Dees worked at the Tenax plant continuously from July 2014 through January 2015, except for a period of about a month when he was fired by Tenax but eventually rehired.
As a result of his injury, Dees sued Onin for worker’s compensation benefits, and sued Tenax for negligence and wantonness under the Alabama Extended Manufacturer’s Liability Doctrine. In its answer, Tenax claimed immunity against the tort claims under the Alabama Worker’s Compensation Act. It moved for summary judgment on these grounds, but the trial court denied its motion. Tenax petitioned for a writ of mandamus. Ex parte Tenax Corp. and Tenax Mfg. Alabama, LLC [Ms. 1151122, Jan. 27, 2017], — So.3d — (Ala. 2017).
Dees alleged in his complaint that at the time of his injury, he was employed by Onin and was working in the line and scope of that employment. Contrarily, Dees testified during his deposition he understood himself to be an employee of Tenax, and Onin was just a temp agency. Dees further testified that Tenax trained him, disciplined him, and controlled his work. Tenax gave Dees an employee handbook. The Tenax plant was the only job placement Onin ever assigned to Dees.
Tenax’s relationship with Onin was that Onin supplied Tenax with temporary labor. For the laborers Onin supplied, Tenax wrote a check to Onin, out of which Onin withheld the laborer’s taxes and paid of insurance, including worker’s compensation insurance. Onin’s corporate representative specifically testified at deposition the fee Tenax paid for laborers went toward expenses “like workers’ compensation premiums”.
What is a Special Employer?
Tenax contends that Olin was Dees’s general employer and Tenax was Dees’s special employer, and as such, Tenax was privy to the exclusive-remedy provision of the Alabama Workers’ Compensation Act. Under Alabama Code (1975) § 25-5-53, an action brought under the Workers’ Compensation Act is the exclusive remedy for injuries an employee sustains during the course of his employment. The exclusive remedy provision extends to special employers, which are businesses that may be considered primary or co-employers of the injured employee. See Rhodes v. Alabama Power Co., 599 So.2d 27 (Ala. 1992).
There is a three-pronged test in Alabama to determine when an employee of a general employer can become the employee of a special employer for the purposes of workers’ compensation. When a general employers lends to a special employer an employee, the special employer becomes liability for workers’ compensation (and becomes immune from liability for tort actions brought against the special employer) only if: (a) the employee has made an express or implied contract for hire with the special employer, and (b) the work the employee is performing is essentially that of the special employer, and (c) the special employer has the right to control the details of the work the employee is performing. See Terry v. Read Steel Products, 430 So.2d 862 (Ala. 1983).
Applying the Law to the Facts
Dees concedes that work he was doing was that of Tenax. He also agrees Tenax had the right to (and did in fact) control the details of his work. Therefore of the components of the special employer test were satisfied. The only issue to be decided by the Supreme Court of Alabama was whether Dees had in implied contract of hire with Tenax. If so,then Tenax would be a special employer of Dees, to whom the exclusive-remedy provision of the Workers’ Compensation Act would extend.
To determine whether an employee has implicitly consented to a contract of hire, the court analyzes four several factors. With all of the considered factors “the focus is on what the employee intended in provided services for the alleged special employer.”
- Whether the general employer is, in reality, acting as a temporary employment agency for the special employer. See Hicks v. Alabama Power Co., 623 So.2d 1050 (Ala. 1993). When the employee applies to the general employer for the specific purpose of temporary placement with the special employer, he necessarily agrees to a contract of hire with the special employer.
- This was demonstrated in the instant case by Dees seeking employment with Tenax and being directed to apply with Onin for an assignment at Tenax.
- Whether the special employer provided the workers’ compensation insurance. See Gaut v. Medrano, 630 So.2d 362 (Ala. 1993).
- The facts and testimony in the case demonstrated that the rate paid by Tenax to Onin (which was above the rate Onin paid to Dees) was in part to pay workers’ compensation insurance premiums.
- Whether the employment with the special employer was of such duration that the employee could reasonably be reasonably presumed to have evaluated an acquiesced to the risks of the employment. See Gaut, 630 So.2d at 367.
- Because Dees worked at Tenax for approximately six months before his injury, once can reasonably presume that he evaluated and acquiesced to the risks of the employment. See G.UB.MK Constructors v. Garner, 44 So.3d 479 (Ala. 2010).
Based on the above factors, Tenax made a prima facie showing that it was Dees’s special employer, and as such the exclusive-remedy provisions of the Alabama Workers’ Compensation Act extended to Tenax. The Alabama Supreme Court entered the write of mandamus directing the trial court to enter summary judgment in favor of Tenax.
For more reading on recent Alabama workers’ compensation decisions, here is my 2016 Alabama Workers’ Compensation Wrap-Up.
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