The News You Need for Aug. 2

We cover it all, from teamwork to borrowed servants.

Serving the Injured Worker as a Team

Dr. Claire C. Muselman

College Park, MD (WorkersCompensation.com ) -- Antagonism in workers' compensation rarely delivers the best outcomes. However, when the various stakeholders are cohesively focused on return to work, function, and life, the results can be truly transformative. Achieving the best results for injured workers hinges on the ability of a well-coordinated team to work in harmony. This article explores the significance of teamwork in the workers' compensation context, the attributes of strong teams, the red flags of dysfunctional teams, and the impacts of team dynamics on injured workers. By creating a supportive environment that benefits everyone involved, stakeholders can feel optimistic and motivated about the potential for collaboration and shared goals.?

Setting the Foundation?

To understand the concept of a team in workers' compensation, we first need to define what we mean by "team." Generally, a team is a group of individuals working together towards a common goal, each contributing their skills and expertise. In workers' compensation, a team comprises various stakeholders dedicated to helping an injured worker recover and return to work. These stakeholders include the injured worker, employers, medical providers, case managers, adjusters, and sometimes legal representatives. When these individuals work together efficiently, recovery becomes smoother and more effective.?

Identifying the stakeholders is the first step in building a robust support system for injured workers. Each member plays a crucial role in the recovery process, ensuring that the injured worker receives comprehensive care. Employers ensure the work environment is safe and supportive, providing necessary accommodations. Medical providers deliver appropriate treatment tailored to the worker's specific injuries. Case managers coordinate care, streamline communication, and assist injured workers in following all aspects of the recovery plan. Adjusters ensure efficient management of claims, handling financial aspects promptly and fairly.?

Attributes of Strong Teams?

Strong teams in the workers' compensation arena share several key attributes that contribute to their effectiveness. First, proactive, transparent, and timely communication is essential. Proactive communication ensures that we address potential issues before they become significant problems, which can expedite recovery. Transparency builds trust among team members, allowing for open and honest discussions about the injured worker's needs. Timely communication keeps everyone informed and aligned with the recovery plan, preventing misunderstandings and delays.?

Second, sharing common and well-documented goals provides direction and purpose to the team. A shared vision ensures that every stakeholder works towards the same objectives, which is crucial for maintaining a unified approach. Documenting these goals ensures that everyone understands their role and the collective objectives, fostering a sense of unity and collaboration. This shared understanding helps coordinate efforts and track progress effectively. It also enables the team to adjust strategies to better support the injured worker.?

Third, high-character leadership with clearly articulated roles is vital for guiding the team and focusing on the injured worker's recovery. Leaders with high character set the tone for ethical behavior and accountability, which is crucial in building trust within the team. Clearly defined roles prevent confusion and ensure that all necessary tasks are covered, allowing team members to focus on their specific responsibilities. This clarity helps in avoiding overlaps and gaps in care. Strong leadership also motivates the team to stay committed to the shared goals and work collaboratively towards achieving them.?

Fourth, open-mindedness to innovation and differing opinions is crucial for continuous improvement. The ability to innovate and consider different perspectives allows the team to adapt to new methods and technologies, leading to better outcomes for injured workers. Open-minded teams can implement creative solutions to challenges and improve their practices over time. This openness fosters a culture of learning and growth, inspiring stakeholders to think forward and strive for continuous improvement. By valuing diverse viewpoints, teams can identify potential issues early and develop more comprehensive strategies to address them.?

Team Red Flags?

Despite the best intentions, some teams need to function more effectively. Identifying red flags early in the claims process can prevent issues from escalating and ensure a more supportive environment for injured workers. First, a lack of trust and conflicts of interest can undermine the team's efforts. Trust is fundamental to teamwork; without it, collaboration breaks down, leading to inefficiencies and misunderstandings. Conflicts of interest can cause stakeholders to prioritize their interests over the well-being of the injured worker, creating friction within the team.?

Second, inefficiencies or redundancies waste time and resources that could be better spent on supporting the injured worker. Overlapping responsibilities can cause confusion and delays, while inefficient processes can slow recovery. Streamlining tasks and clarifying roles can mitigate these issues, ensuring all efforts are directed toward the injured worker's recovery. Identifying and addressing these inefficiencies early on can significantly improve team performance. It also helps in allocating resources more effectively, leading to better outcomes.?

Third, low or no accountability means that problems go unaddressed, and the injured worker may not receive the support they need. Accountability ensures everyone fulfills their responsibilities and contributes to the team's success. Without it, team members may become complacent, leading to inconsistent support for the injured worker. Clear expectations and regular check-ins can help maintain accountability within the team. This practice ensures everyone stays focused on their tasks and works towards the shared goals.?

Fourth, unclear expectations as to processes and outcomes cause confusion and delays. Ambiguity in processes and expected outcomes can lead to misunderstandings and miscommunication, hindering recovery. Clear communication of expectations is essential for smooth operation, ensuring that all team members are on the same page. By setting clear goals and guidelines, teams can work more effectively and efficiently. This clarity also helps measure progress and make necessary adjustments.?

Worker Stories?

Consider the case of an injured worker with an inguinal hernia. The team displayed strong communication, responsiveness, and genuine care, facilitating a smooth recovery. The medical providers coordinated well with the employer, ensuring the worker received timely treatment and support. This positive dynamic led to a quicker and more successful return to work. Similarly, in a case involving a severe back injury, a well-coordinated team of medical providers, case managers, and employers ensured the worker received comprehensive care and support, leading to a successful return to work.?

In contrast, consider a case involving multiple orthopedic injuries. Here, the team members were not attentive to their responsibilities, and better communication could have led to significant delays. Barriers to specialty collaboration further complicate the worker's recovery, resulting in prolonged treatment and additional stress. This example highlights the detrimental effects of poor team dynamics on the injured worker's recovery process. The lack of coordination and responsiveness created unnecessary challenges for the workers, leading to prolonged recovery, increased stress, and potential long-term impacts on the worker's health and well-being. Addressing these issues could have improved the outcome significantly.?

Worker Impacts When Teams Aren't Working Well?

When teams fail to work cohesively, the consequences for the injured worker can be severe. First, delays in treatment create delays in recovery, prolonging the worker's physical and emotional stress. Ineffective teamwork often delays treatment, worsening the injured worker's condition. Prompt and coordinated care is essential for a smooth recovery process. Quickly addressing delays in care can prevent complications and support the worker's overall well-being.?

Second, poor team dynamics can create or accentuate psycho-social baggage. Poor team dynamics can exacerbate an injured worker's psychological and social challenges, leading to increased anxiety, depression, and feelings of isolation. This additional stress can hinder recovery and affect the worker's long-term health. A supportive team can help mitigate these effects by providing consistent care and communication. Ensuring that the worker feels supported and understood can make a significant difference.?

Third, poorer outcomes impact both the injured worker and the employer. Suboptimal recovery outcomes negatively affect both the injured worker and the employer, leading to long-term health issues for the worker and higher costs for the employer. Effective teamwork is crucial for achieving better medical and financial outcomes. By focusing on collaboration and efficiency, teams can reduce the overall impact of the injury. This approach benefits everyone involved, creating a more positive and productive environment.?

Fourth, a toxic team environment can negatively impact other and future claims. A toxic team environment can create a ripple effect, influencing other current and future claims and diminishing trust in the system. This lack of trust makes cooperation harder to achieve, leading to further inefficiencies and poor outcomes. Addressing toxicity within the team is essential for maintaining a healthy and supportive work environment. By fostering a positive culture, teams can improve performance and support injured workers more effectively.?

Key Takeaways?

Building and maintaining strong teams is essential to ensuring the best outcomes for injured workers. First, know who's on the team and why. Understanding the roles and contributions of each stakeholder is crucial for building a cohesive team. Ensure that everyone is aligned with the common goal of supporting the injured worker's recovery. This alignment helps coordinate efforts and maintain focus.?

Second, constant collaborative communication is vital. Maintain open lines of communication to address issues promptly and keep everyone informed. Regular check-ins and updates can prevent misunderstandings and ensure everyone is on the same page. This practice fosters a sense of unity and collaboration. Effective communication also helps in identifying potential issues early and addressing them before they escalate.?

Third, identify red flags and address them ASAP. Be vigilant in spotting signs of dysfunction within the team and take immediate action to rectify them. Promptly addressing red flags can prevent issues from worsening and ensure that the team remains focused on the injured worker's recovery. This proactive approach helps maintain a positive and productive team environment and supports the overall well-being of the injured worker.?

Serving the injured worker as a team requires a cohesive, well-coordinated effort from all stakeholders. By fostering strong team dynamics and promptly addressing red flags, we can ensure better outcomes for injured workers, employers, and the workers' compensation system. The focus should always be on collaboration, communication, and shared goals. Working together effectively can create a supportive environment that benefits everyone involved, leaving injured workers with positive outcomes and the team.?

Did Surf Shop Worker’s Ladder Injury Claim ‘Jump the Shark?’

Chris Parker

What Do You Think?

Hilton Head, SC (WorkersCompensation.com ) – Workers compensation is generally available for an injury that occurs in the course and scope of employment. A South Carolina case delves into the question of whether an injury remains work-related if it occurs when the worker is engaging in an action her boss prohibits.

A surf shop employee returned from vacation with an injury. That day, her boss told her not to climb the ladder in the store, but she did so anyway while performing her job duties. She fell from the ladder and injured herself.

The employer denied her workers’ compensation claim, reasoning that the injury did not occur in the course and scope of employment.

Did the surf shop employee’s injury occur outside the sphere of employment?

A.?Yes. She was injured while violating her boss’s prohibition on climbing the ladder.

B. No.?Using the ladder to retrieve items for customers was an essential aspect of her job.

If you selected A, you agreed with the court in Bridges v. Harbour Town Surf Shop, LLC,?No. 2022-000600 (S.C. Ct. App. 07/17/24, unpublished), which held that the employee’s claim did not occur in the course and scope of employment.?

The court explained that when an employer specifically limits the scope of a worker’s job and the worker is injured while exceeding those limits, the injury isn’t compensable.

Not every violation of an employer’s orders leads to such a result, the court stated. An employee may violate his employer’s rules for conducting himself at work but remain within the sphere of employment.?

That wasn’t the case here, however, where the boss clearly prohibited the employee from using the ladder. The employee’s violation of that limit took her conduct and associated injury outside the sphere of her employment, the court held.

"[B]ecause she disregarded Employer's instructions, which led to her injury, she was outside the sphere of employment when her injury occurred and thus, the injury was not compensable,” the court wrote.

Lowe’s Employee Attacked with Sledgehammer, as Attacks on Workers Continue

Liz Carey

Durham, NC (WorkersCompensation.com ) – An elderly Lowe’s employee is recovering after he was attacked by a customer with a sledgehammer, as the attacks on employees continue across the country.

Police in Durham, N.C., said video cameras caught a man who was accused of shoplifting taking a sledgehammer out of his cart and hitting the employee on July 30. The suspect then ran out of the store with a drill set box in his hands as the employee fell to the ground.

Emergency responders transported the victim to the hospital with serious injuries. The victim is now reported to be in stable condition. Police have charged Aaron Deshown Williams, 25, with aggravated assault and robbery with intent to kill, inflicting serious injury.

According to WRAL News, another employee said it’s been hard for him to return to work since the attack.

“I didn’t realize until I stepped a little closer and saw he was in a red vest and lying in his pool of blood from his injury. It was shocking and very scary,” the employee, who asked to not be identified to save his job, said.

In Elk Grove, Calif., an angry customer chased employees around a Baskin-Robbins store before punching one worker and throwing items on the floor.

Police said the customer came into the store on July 16 and ordered a sandwich at the Baskin-Robbins/Togo’s. Video caught when the suspect started shouting at one employee and chasing them into the back of the store. There, the customer found another employee, Emily Ruiz, and punched her in the face, pushing her into a door. When Ruiz turned to get away from the attack, the suspect hit her with a backpack.

“She hit me and I was like 'What? What happened?' I was in shock and then I tried to enter [the manager's office], to go to a manager, and she hit me again and my head started to hurt and I was like, nervous," Ruiz told news outlets. Ruiz went to the hospital for treatment with shoulder and neck pain, as well as scratches on her face and neck.

Store manager, Michelle Narayan, said the attack left her speechless.

"It was really scary. We've been here 30 years," Narayan said. "We've never experienced anything like this before."

Narayan said she is planning on having two additional locks installed in the building and adding an extra panic button.

Police said they are looking for Hazel Shaver, 44, for the attack. An arrest warrant has been issued for her on charges of battery causing bodily injury, assault with force likely to produce great bodily injury and vandalism.

Workers at a Henry County, Ga., Sam’s Club are calling for a security guard to be stationed in the store after they were attacked by a customer over pizza.

Workers at the store said a mother and her two daughters came in two minutes before closing on July 10. The group ordered two whole pizzas. When workers told them it was too late to order the pizzas, and could not get a manager fast enough for the customer’s liking, the mother, Andreana McKnight, came back to the kitchen and punched the manager in the face.

Police arrested McKnight. Her 20-year-old daughter Victoria Wilson was taken to the hospital, but there is now a warrant out for her arrest.

Video of the incident shows a worker trying to defend herself as a woman swings at her while other employees break up the fight. Henry County police said they have another video that shows McKnight walking around behind the counter hitting the workers, and her daughters following her.

The victim, Cierra Monroe, said she still has headaches, scratches and a scar on her face. She wants to know why Sam’s doesn’t have a security guard, especially since another customer attacked a different worker earlier in the week.

“Prior to, we did have an altercation with another customer and he was escorted out,” she said. “But he was escorted out by the employees though. I just feel like we need to have security from the moment we open to the moment we close, every day, seven days a week.

A spokesperson for Sam’s Club told WSB-TV employee safety was a priority but would not say for certain if the company plans to have a full-time security guard.

Something Old, Something New, Someone Borrowed, Someone to Sue?

Gary Wickert

Workers’ Compensation Subrogation and Employee Leasing Companies?

At its core, workers' compensation subrogation is quite simple. Employee injured while at work receives workers compensation benefits. Carrier paying benefits recovers those benefits from anyone responsible for causing the injury other than the employer. As the saying goes, however, "Progress is man's ability to complicate the simple." Over time, exceptions, time limits, equitable prohibitions, made whole requirements, and politics have complicated workers' compensation subrogation in nearly every state. Nowhere is this complication for evident than in cases involving temporary employee, leased employee, and borrowed servant situations.??

It is not unusual for an employee to be subject to the direction and control of an entity other than his employer during the workday. This is especially common in construction situations. In such cases, many states employ the borrowed servant doctrine which states that an employee can become a “borrowed servant” of an entity other than his employer, for a limited period of time, while that employee is subject to the “special employer’s” right to control the details of the employee’s work. Just as each state has its own criteria for determining whether an employee is subject to the right of another to control the details of his work, some states provide that a borrowed servant becomes the employee of the “special employer”, which allows him to then sue his previous employer (general employer) as a “third party.” Still other states employ something known as the “dual employment doctrine,” which states that the employee can be employed by two employers at the same time, both of which are protected from being sued by the injured employee.??

Most claims handlers are familiar with the common law borrowed servant doctrine because of its application to the adjusting and handling of workers’ compensation claims. In determining whether or not a carrier is responsible for workers’ compensation benefits, the claims handler must look at whose employee the injured claimant was at the time of the injury. However, the borrowed servant doctrine can also be used as a defense to third-party lawsuits. Where the injured worker and the carrier sue a third party based on negligence, they will not be able to recover anything where the third party shows that the claimant was, in fact, their borrowed servant. Carr v. Carroll Co., 646 S.W.2d 561 (Tex. Civ. App. - Dallas 1992), writ ref’d n.r.e. In essence, they can then take advantage of the workers’ compensation bar.?

Professional Employer Organizations (PEO)?

The employee leasing business has grown to become a very competitive $200 billion annual industry with nearly 4,000 companies providing temporary employment, employee leasing, and staff leasing services. The definitions vary from state to state but are increasingly all subsumed under the umbrella title of Professional Employer Organizations (PEO). Some believe that a true PEO not supply labor to employers like a leasing or staffing service does. Instead, they claim that true PEOs supply employment and human resource services and benefits to its client and its existing employees. PEOs enter a "co-employment" relationship wherein it provides human resources services to the client, including access to health insurance, retirement savings plans, and other critical employee benefits. If a PEO relationship is terminated, the employees continue as employees of the client.?

By comparison, many believe that a leasing or staffing service supplies new workers, usually on a temporary or project-specific basis, to the client. These leased employees return to the staffing service for reassignment after completion of their work with the client company. Some are based on a work-to-hire basis wherein they become employees of the client company after a specified probationary period of being dual employees. In that situation, when the staffing or leasing company arrangement ends, the employee has no further relationship with the client. Clients in these relationships see employee leasing as a means of increasing the benefits that their employees receives and an effective strategy for getting rid of human resource paperwork.??

Special legislation has been enacted in many states that declares both the leasing company and the leasing company’s customer to be joint employers of the employee, under certain circumstances. And if things weren’t complicated enough for the subrogation professional, virtually every state has enacted special legislation in construction settings involving contractors and subcontractor, requiring general contractors to pick up the provision of workers’ compensation coverage where subcontractors fail to do so – thereby making “statutory employers” of the general contractors or other parties in the contractual food chain. While the subject of “statutory employers” and its application in all 50 states was discussed at length in the article Workers’ Compensation Subrogation In Construction Settings (see HERE ), this article focuses on the challenges workers’ compensation subrogation professionals face when dealing with traditional borrowed servant/loaned employee, employee leasing companies, and professional temporary employment agencies.??

Some states, such as Texas, have enacted specific statutes to deal with this. Texas enacted the Texas Staff Leasing Services Act, which addresses the use of leased employees and their employers in Texas. Texas Labor Code § 91.001, et seq. This Act codified the dual employment theory in Texas and held that for staff leasing situations, both the leasing company and the customer may be deemed employers, worthy of the workers’ compensation bar. Texas also enacted the Temporary Common Worker Employer’s Act in 1991, covering temporary employment services who loan employees for short periods of time or even for a single day or task. Texas Labor Code § 92.001, et seq. (1991). The Temporary Common Worker Employer’s Act, unlike the Staff Leasing Services Act, does not specifically provide for dual employment in temporary employee leasing situations. Richard v. L.D. Brinkman & Co., 36 S.W.3d 903 (Tex. Civ. App. - Dallas 2001). Therefore, the law of each state should be looked at carefully to determine how borrowed servant scenarios are to be handled and what effect they will have on the right of the defendant to claim the benefit of the workers’ compensation bar. In some states, subrogation against the client of a staff leasing service is all but neutered, while in other states, such efforts still can be successful. Equitable subrogation/equitable contribution actions between workers’ compensation carriers for the leasing company and the customer are still possible, depending on the state involved.?

Each state varies with its application of the exclusive remedy rule to situations involving employee leasing companies and temporary employees. Some states set forth the respective rights of a worker and/or potential third-party tortfeasor in the workers’ compensation subrogation statute or other statutes, while other cases make declarations in established case law. Thirtythree (33) states have statutes or regulations which address employee leasing and its effect on which entity is the actual employer, while seventeen (17) states and the District of Columbia make such determinations via court decisions. Below is a summary of the laws in all 50 states.?

Alabama: An employee of a temporary services agency was also held to be an employee of the client company to which she was assigned to work for purposes of workers’ compensation, where the client company supervised her work and paid a fee to the temporary services agency which included an amount to obtain workers’ compensation insurance for the worker. Marlow v. Mid-South Tool Co., Inc., 535 So.2d 120 (Ala. 1988).??

Alaska: There is very little precedence and no statutory guidance given to us in Alaska. However, one case leads us to believe that both the general and special employers will be afforded protection under the exclusive remedy rule. Ruble v. Arctic General, Inc., 598 P.2d 95 (Alaska 1979).?

Arizona: Arizona’s statute dictates that a professional leasing organization is given protection under the exclusive remedy rule as a coemployer of the worker. A.R.S. § 23901.08. However, in order to be given immunity under the exclusive remedy rule, the parties must be in compliance with various regulations and rules regarding employee leasing.??

Arkansas: In Arkansas, a specific statute governs “Professional Employer Organizations”. It provides that both the employer organization and its client are considered coemployers, and both may avail themselves of the immunity provided under the exclusive remedy rule. A.C.A. § 2392409.?

California: In California, both the employee leasing firm and its client are considered to have made workers’ compensation insurance premium payments, and both are immune from a third-party suits, provided an employee leasing agreement has been executed and insurance coverage for the worker remained in effect throughout the length of his employment. Ann. Cal. Labor Code § 3602(d).?

Colorado: By statute, Colorado allows the leasing company to be considered a “coemployer” of a work site employer’s employee, provided the leasing company actually instructs the employees at the work site, it sets and actually pays the employee’s compensation, and retains the right to control the details of the employee’s work. C.R.S. § 870114(2).?

Connecticut: The Connecticut statute provides that the employer who originates a contract where an employee is loaned to another employer is ultimately responsible to the worker for all benefits. C.G.S.A. § 31292. Section 31284 provides:??

“... all rights and claims between an employer who complies with the requirements of Subsection (b) of this section and employees, or any representatives or dependents of such employees, arising out of personal injury or death sustained in the course of employment are abolished other than rights in claims given by this chapter ...” C.G.S.A. § 31284.?

Delaware: While there are no statutes or cases which directly determine the respective subrogation rights against an employee leasing company or its client, most likely, both are going to be afforded protection under the exclusive remedy rule. Porter v. Pathfinder Services, Inc., 683 A.2d 40 (Del. 1996).District of Columbia: The special employer is entitled to protection under the exclusive remedy provisions of the Workers’ Compensation Act, just as is the actual employer. Thomas v. Hycon, Inc., 244 F. Supp. 151 (D.C. 1965).?

Florida: Any employer who utilizes the services of an employee leasing service is entitled to immunity under the exclusive remedy rule. F.S.A. § 440.11(2). However, such immunity will only extend to an employer and to each employee of the employer who utilizes the services of the employees of a "help supply services company" as set forth in Standard Industry Code Industry Number 7363.?

Georgia: Employers are immune from suit under the exclusive remedy rule when utilizing employee leasing companies or temporary help agencies, provided that workers’ compensation benefits are provided to a worker by either the leasing employer or the employee leasing company. O.C.G.A. § 34911(c).?

Hawaii: Hawaii’s statutes do not address the issue. Although there are no cases directly interpreting employee leasing situations, the Hawaii Supreme Court has held that a temporary employer utilizing an employee from a temporary agency was entitled to the exclusive remedy protection because it had paid a fee to the temporary agency, which the court construed to include the cost of workers’ compensation insurance premiums. Frank v. Hawaii Planing Mill Foundation, 963 P.2d 349 (Haw. 1998).?

Idaho: Similar to Georgia, if either the employee leasing company or its client provides workers’ compensation coverage to the employee, both entities are protected under the exclusive remedy rule. Idaho Code § 72103.?

Illinois: Illinois’ statute provides that unless the employee leasing contract specifies otherwise, both the employee leasing company and the client employer are protected by the exclusive remedy rule. 215 I.L.C.S. § 113/45.?

Indiana: Indiana’s statute dictates that the employee leasing company is considered the employer of any employee leased to the client company. I.C. § 271691. The employee leasing company is known in Indiana as a Professional Employer Organization (PEO). A professional employer agreement must specify the allocation of the responsibility of obtaining workers’ compensation coverage to either the client or the PEO. I.C. § 271672. If this duty is met, a client and a PEO are both considered the employer of a covered employee for purposes of the exclusive remedy rule. I.C. § 271692.?

Iowa: Unless there is a contract of hire between the temporary employee company and the client company, the client company will not be considered an employer and is subject to a third-party action brought by the worker. However, when a contract of hire exists, the client company is considered the worker’s employer and is immune under the exclusive remedy rule. Fletcher v. Apache Hose & Belting Co., Inc., 519 N.W.2d 839 (Iowa App. 1994); Parsons v. Procter & Gamble Mfg. Co., 514 N.W.2d 891 (Iowa 1994); Swanson v. White Consolidated Industries, Inc., 77 F.3d 223 (8th Cir. 1996).?

Kansas: Neither statute nor case law has decided whether or not an employee leasing company and the client company are considered employers for purposes of the exclusive remedy rule. However, if an employee becomes a borrowed servant, the special employer is immune to any third-party actions. Hollingsworth v. Fehrs Equipment Co., 729 P.2d 1214 (Kan. 1986).?

Kentucky: Under Kentucky law, the employee leasing company is considered the statutory employer of any leased employee. K.R.S. § 342.615.?

Louisiana: The employee leasing company and its client company are both considered employers and both are protected by the exclusive remedy rule. La. R.S. § 22:1210.56(C).?

Maine: Maine has a special statute dealing with employee leasing companies, located in Title 32, Chapter 125: Employee Leasing Companies. Provided either the employee leasing company or the client company secures workers’ compensation coverage, both entities are considered employers and immune from third-party suits under the exclusive remedy rule. Me. Rev. Stat. Ann. Tit. 32 § 14055(1).?

Maryland: Maryland case law holds that where there is an implied contract of hire between an employee provided by a temporary services agency and the client company, the client company is considered the employee’s special employer and is afforded protection under the exclusive remedy rule. Travelers Indemnity Co. v. Insurance Co. of North America, 519 A.2d 760 (Md. App. 1987). The employee is considered jointly employed by the temporary services agency and the client company.?

Massachusetts: It appears that Massachusetts allows an employee to sue a client company. Margolis v. Charles Precourt & Sons, Inc., No. 97-4029 (May 6, 1999) (unpublished); Home Ins. Co. v. Liberty Mutual Fire Ins. Co., 830 N.E.2d 186 (Mass. 2005).?

Michigan: The employee leasing company and its client company are both considered employers and immune from third-party actions under the exclusive remedy rule. Renfroe v. Higgins Rack Coating & Mfg. Co., 169 N.W.2d 326 (Mich. App. 1969).?

Minnesota: Minnesota deals with employee leasing situations in its Workers’ Compensation Statute. It provides that when an employee leasing company and a client company are engaged in a common enterprise, the injured worker may proceed against either the employer for benefits or the responsible third party for damages. M.S.A. § 176.061.?

Mississippi: The temporary employment agency and the client company are both considered employers and immune from third-party actions under the exclusive remedy rule. Northern Electric Co. v. Phillips, 660 So.2d 1278 (Miss. 1995).?

Missouri: When work is performed under a contract involving leasing or borrowing of an employee, and an injury occurs on or about the premises of the alleged statutory employer and the alleged statutory employee was doing work in the usual course of business of the alleged statutory employer, the worker is considered a statutory employee of the special employer and cannot be sued under the exclusive remedy rule. Wilson v. Altruk Freight Systems, Inc., 820 S.W.2d 717 (Mo. App. 1991). Employee leasing companies are not specifically dealt with in the Workers’ Compensation Act or in case law.?

Montana: An employee leasing company and its client company are both considered employers and immune from third-party actions under the exclusive remedy provision of the Workers’ Compensation Act. Mont. St. § 398207.?

Nebraska: An employee leasing company and its client company are both considered employers for purposes of the exclusive remedy rule, and are immune from third-party actions. Scwartz v. Riekes & Sons, 240 N.W.2d 581 (Neb. 1976).?

Nevada: Provided there is a written agreement between the employee leasing company and the client company, as well as meeting several other conditions set forth in the Nevada’s statute, an employee leasing company in compliance with the leasing provisions set forth in the Act is considered the employer for purposes of the Act. N.R.S. § 616B.691.?

New Hampshire: An employee leasing company must be certified by the insurance commissioner to meet certain criteria. If it does, it is considered the employer of the leased employee under the Employee Leasing Company Act. The employee leasing company and the client company are both entitled to protection under the exclusive remedy rule. N.H. Rev. Stat. Ann. § 277B:9 and 10.?

New Jersey: An employee leasing company must register with the State under the State’s statutes. If it does, the employee leasing company and the client company are both considered employers and immune from third-party actions under the exclusive remedy rule. N.J.S.A. § 34:872.?

New Mexico: If certain conditions are met, the employee leasing company and the client company are both considered to be employers and immune from third-party actions under the exclusive remedy rule. N.M.S.A. § 6013A5 (1978).?

New York: Neither the New York Workers’ Compensation Act nor case law directly addresses employee leasing. However, the issue is addressed by Rule 11G of the New York Workers’ Compensation and Employers Liability Manual. New York refers to the employee leasing company as the “labor contractor”, and refers to the client company as the “client”. Although it does not apply to temporary workers, Rule 11G provides that both parties must provide workers’ compensation coverage for the leased employee but does not specifically extend the exclusive remedy rule to the client company.?

North Carolina: Neither the North Carolina Workers’ Compensation Act nor case law directly addresses the exclusive remedy rule as applied to employee leasing situations. However, a court has held that a temporary employee could not pursue a third-party action against the employer to whom the worker was assigned. Brown v. Friday Services, Inc., 460 S.E.2d 356 (N.C. App. 1995).?

North Dakota: Both the employee leasing company and the client company are considered employers and immune from third-party actions when the two entities have secured the payment of compensation in accordance with North Dakota law. N.D.C.C. § 650108.?

Ohio: Neither the Ohio Workers’ Compensation Act nor case law directly addresses the issue. However, employee leasing and temporary employee situations are dealt with in the Bureau of Workers’ Compensation Rules. Ohio Adm. Code § 41231715. Workers provided by an employee leasing company are considered employees of the employee leasing company. An employee leasing company is referred to as a “Professional Employer Organization” or “PEO” in Ohio. There does not appear to be any cases clearly delineating whether or not the client company is entitled to protection under the exclusive remedy rule.??

Oklahoma: Neither the Oklahoma Workers’ Compensation Act nor case law directly addresses the exclusive remedy rule in connection with employee leasing situations. The Oklahoma Court of Appeals, however, has held that a worker assigned by a temporary agency to a client company is considered a loan servant, and that both employers are responsible for the provision of workers’ compensation, and therefore cannot be sued in a third-party action. Zant v. People Electric Cooperative, 900 P.2d 1008 (Okla. App. 1995).?

Oregon: The employee leasing company and the client company are both immune from third-party actions under the exclusive remedy rule, provided they comply with all of the provisions required under the Act. O.R.S. § 656.020 and O.R.S. § 656.850.?

Pennsylvania: Neither the Pennsylvania Workers’ Compensation Statute nor Pennsylvania case law sheds any light on the issue of whether or not an employee leasing company and the client company are entitled to protection under the exclusive remedy rule in Pennsylvania. The determination of who is the employer in leasing situations is addressed via common law factors involving which entity controls and directs the details of the work being performed by the employee. American Rock Mechanics, Inc. v. W.C.A.B. (Bik & Lehigh Concrete Technologies), 881 A.2d 54 (Pa. Commw. Ct. 2005).?

Rhode Island: Rhode Island case law has held that an employee leasing company remains the employer of a leased employee as long as the employer remains on the general employer’s payroll, but the employee leasing company and the client company are both considered employers for purposes of the exclusive remedy rule. Sorenson v. Colibri Corp., 650 A.2d 125 (R.I. 1994).South Carolina: Employee leasing companies and staff leasing services are governed by Section 406870 of the South Carolina Statutes. In order to be a statutory employee under the Workers’ Compensation Act, a worker must be engaged in an activity that “is a part of the client company’s trade, business, or occupation”. S.C. St. § 421400. This statutory requirement has been construed to include activities that: (1) are an important part of the employer’s trade or business of the employer; (2) are a necessary, essential, and integral part of the employer’s business; or (3) have previously been performed by employer’s employees. Glass v. Dow Chemical Co., 482 S.E.2d 49 (S.C. 1997). Only one of these tests must be met in order for a subcontractor’s employee to be considered a statutory employee of the owner and immune from third-party actions as a result of the exclusive remedy rule. Woodard v. Westvaco Corp., 433 S.E.2d 890 (S.C. App. 1993), vacated on other grounds, 460 S.E.2d 392 (1995).?

South Dakota: Neither the South Dakota Workers’ Compensation Act nor South Dakota case law shed any light on the issue involving the exclusive remedy rule and employee leasing companies. This issue, most likely, will be determined by applying common law factors to determine who is the employer, and who is the third party subject to suit.?

Tennessee: Tennessee has a specific statute dealing with employee leasing. Both the employee leasing company and the client company are entitled to the exclusive remedy protection based on a worker’s compensation policy secured by either entity. T.C.A. § 6243113.?

Texas: Texas enacted the Texas Staff Leasing Services Act, which addressed the use of leased employees and their employers in Texas. Texas Labor Code § 91.001, et seq. The Act codified the dual employment theory in Texas and held that in staff leasing situations, both the leasing company and the customer are considered employers. Most, if not all, efforts by the general employee’s workers’ compensation carrier to equitably subrogate or seek equitable contribution against the workers’ compensation carrier for the special employer ceased with this statute. Due to the theory of contribution being equitable in nature, the court considered the fact that it was contemplated by the parties that the leased staff would have their workers’ compensation premiums paid for by the general employer (the staff leasing company). The Staff Leasing Services Act, however, does not cover providers of temporary workers. The term “staff leasing services” within the Act does not include temporary help or a temporary common worker employer. The Staff Leasing Services Act applies to arrangements in which the employee’s assignment is intended to be longterm or continuing in nature, rather than temporary or seasonal in nature, and where a majority of the workforce at a client company work site is a specialized group within that workforce consisting of assigned employees of the license holder. Wingfoot Enter. v. Alvarado, 111 S.W.3d 134 (Tex. 2003).?

Utah: The employee leasing company and the client company in an employee leasing situation are both entitled to protection under the exclusive remedy provisions of the Utah Workers’ Compensation Act, provided the employee leasing arrangement meets the requirements of the Employee Leasing Company Licensing Act. U.C.A. § 34A2102(3)(a) and U.C.A. § 34A103(7)(e).?

Vermont: Both the leasing company and the client company are immune from third-party actions based on the exclusive remedy rule. Vt. Stat. Ann. Tit. 21, § 121037.?

Virginia: Both the employee leasing company and the client company are afforded protection by the exclusive remedy provisions of the Virginia Workers’ Compensation Act. Va. St. § 65.2803.1.6.?

Washington: Neither the Washington Workers’ Compensation Act nor case law directly give us guidance on employee leasing situations, and such questions will be answered by common law under Washington case decisions.?

West Virginia: Neither the West Virginia Workers’ Compensation Act nor case law give us direct answers to employee leasing situations. However, the 4th Circuit has indicated that a worker assigned by a temporary agency is a loan servant and therefore was not entitled to bring a third-party action against the client company, who was considered to be a special employer. Maynard v. Keynard Chemical Co., 626 F.2d 359 (4th Cir. 1980).?

Wisconsin: Section 102.29 provides that no employee of a temporary help agency who makes a claim for compensation may make a claim or maintain an action in tort against any employer who compensates the temporary agency for the employee’s services. Wis. Stat. § 102.29(6). Furthermore, no employee who is loaned by his or her employer to another employer and who makes a claim for workers’ compensation may make a claim or maintain an action in tort against the employer who accepted the loaned employee’s services. Wis. Stat. § 102.29(7).?

Wyoming: The Wyoming Workers’ Compensation Act defines a temporary service contractor as an entity that employs individuals directly for the purpose of furnishing services of the employed individuals on a temporary basis to others. Wy. St. § 2714102(a). The Act also designates that the employer is considered to be the entity utilizing the services of a worker furnished by another, except in the instance of a temporary service contractor. Wy. St. § 2714102(a). The entity considered the employer is immune from third-party actions by virtue of the exclusive remedy provisions of the Act.?

In most states, an injured employee cannot sue a co-employee, absent certain exceptional circumstances such as gross negligence or an intentional act. So, when an employee is injured due to the negligence of a leased employee, whether the leased employee is a co-employee becomes a matter of paramount importance. States are littered with exceptions and nuanced approaches to the entire concept of exclusive remedy protection for a PEO. Therefore, in any case involving a PEO, it is usually recommended to consult with subrogation counsel regarding the ability to reimburse the carrier's lien or obtain a future credit.??

It is important for subrogation professionals to familiarize themselves with the lay of the land when evaluating subrogation potential in employee leasing situations, regardless of which state you are subrogating in. Knowing who can be sued and when is extremely critical in evaluating your recovery chances and performing the necessary due diligence and investigation necessary to preserve your rights to bring a third-party action and recoup your claim payments. For additional questions involving employee leasing or temporary employment scenarios, please contact Gary Wickert at [email protected] .??