A Certain Degree of Control Could Save You from Suit

Here is the fact scenario: A contractor employs certain employees that are union members or employees that have a tendency to “roam” and/or be “loaned” - i.e. the employee technically works for one entity, but also performs work for another affiliated company. The employee is injured while working for the affiliated entity and not his actual employer. The employee collects workers compensation insurance benefits from his actual employer and then tries to file suit against the affiliated company.

Question: Is the employee entitled to collect workers compensation benefits from his actual employer, and then file a lawsuit to collect damages from the affiliated company?

Answer: Not according to the Rhode Island Supreme Court.

In Selby v. Baird, the plaintiff arrived at a residential home to begin his job as the foreman of a tree removal crew for a tree removal company. While the crew was setting up their equipment at the job site, one of the trucks rolled and pinned the plaintiff between two work trucks. The plaintiff sustained serious injuries, and ultimately collected workers’ compensation benefits from an affiliated mulch company. The mulch company provided the plaintiff with his paychecks and benefits. However, the mulch company did not provide tree removal services. After collecting workers’ compensation benefits, the plaintiff filed a law suit alleging that the tree removal company had been negligent.

The Rhode Island Supreme Court held that the plaintiff’s lawsuit was barred by the Workers’ Compensation Act, which, when elected by the employee, provides the exclusive remedy to injured employees “in lieu of all rights and remedies as to that injury…against an employer.” G.L. 1956 § 28-29-20. The Court reasoned that, pursuant to prior precedent, the determinative factor in the existence of an employer-employee relationship focuses on the degree of control and superintendence over employees. This concept of control and superintendence over employees even extends to the scenario of the “loaned employee.” According to the Court, any other construction would run contrary to the purpose of the Workers’ Compensation Act.

In Selby, the Court focused on a variety of evidence that indicated the plaintiff was an “employee” of the tree removal company. Namely, deposition testimony where the plaintiff himself admitted to being employed by the tree removal company, that his job involved cutting trees, that the machinery that injured him was owned by the tree removal company, and that the clothing he wore while working had the tree removal company insignia on it. In addition, the plaintiff had submitted a safety form and training acknowledgement form to the tree removal company on its own letter. Finally, the Court looked to affidavits that had been submitted by other employees of the tree removal company that established the plaintiff was hired to work for the tree removal company in 1997 and had been an “employee” there ever since.

What about the plaintiff’s relationship with the mulch company? The Court concluded that the mulch company’s only role with regard to the plaintiff’s employment was administrative, in that it provided paychecks and benefits—such as workers’ compensation.

So, what is the moral of Selby? Even contractors or companies that happen to obtain loaned or roaming employees can be immune from a lawsuit after injury to such an employee. Provided the employee collects workers’ compensation benefits, and that you exercise enough dominion and control over your employees.

Here is a link to the case.