The Road Less Traveled: Wisconsin Court of Appeals Shuns Majority Rule Re: Borrowing Employer’s Tort Immunity

Temporary Employee Has Option of Claiming Benefits or Suing in Tort

Based, at least in part, on the court’s so-called “literal” reading of a Wisconsin statute [Wis. Stat. § 102.29(6)(b)1.], the Court of Appeals of Wisconsin recently held that a worker employed by one firm and assigned to a borrowing employer may proceed in tort against that borrowing employer (referred to in some jurisdictions as the “special employer”) for injuries sustained in the course and scope of the employment, so long as the worker has not already sought workers’ compensation benefits from the borrowing employer [Ehr v. West Bend Mut. Ins. Co. (In re Estate of Rivera), 2018 Wisc. App. LEXIS 16 (Jan. 9, 2018)]. In its decision, the Court adopted a position in opposition to the vast majority of jurisdictions, which generally bar tort actions by a temporary (i.e., “lent”) employee against the borrowing or special employer [see Larson’s Workers’ Compensation Law §§ 67.01, 100.01, 111.04].

Background

Rivera worked for Alex Drywall (“Drywall”), which, in turn, provided him to perform work for Alpine. Alpine paid Drywall for Rivera’s services and, in turn, Drywall paid Rivera for his work. Rivera sustained fatal injuries as a passenger in a single-vehicle accident. The vehicle’s driver was also a temporary worker for Alpine, but one that had been assigned by another temporary help agency.

Rivera’s estate did not file a workers’ compensation claim, but rather, filed a wrongful death action against Alpine, contending Rivera had dies as the result of Alpine’s negligence. Alpine contended the civil action was barred by the exclusive remedy provisions of the Wisconsin Workers’ Compensation Act. The trial court agreed and granted summary judgment in Alpine’s favor.

Was Rivera the Borrowing “Employer’s” Employee?

The Court acknowledged that if Alpine had been Rivera’s “employer” under the Act at the time of his death, the exclusive remedy provision would indisputably bar the Estate’s tort claims against Alpine and its insurer. The Court added that it was undisputed that Drywall was Rivera’s employer. Skirting the issue of Rivera’s status as Alpine’s employee, the Court indicated the immunity issue was controlled by Wis. Stat. § 102.29(6)(b)1., which the Court quoted, in relevant part:

(b) 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 of the following:

1. Any employer that compensates the temporary help agency for the employee’s services.

[Id.].

Only an Employee “Who Makes a Claim” is Barred

The Court stressed that the “plain language” of the statute expressly prohibited an employee of a temporary help agency “who makes a claim for compensation” from maintaining an action in tort against any employer that compensates the temporary help agency for the employee’s services—i.e., the temporary employer. The Court concluded that the necessary implication of this language, therefore, is that a temporary employee who does not make a claim for compensation under the Act is not prohibited from bringing a tort claim against his or her temporary employer. As noted above, Rivera’s estate had not sought workers’ compensation benefits from either Drywall or Alpine. Accordingly, the estate was free to proceed against Alpine in tort.

Result: Temporary Workers Have Option Not Available to “Regular” Employees

Perhaps the Wisconsin Court of Appeals is justified in its “literal reading” of this statute. One might hope that the court—and all other courts, for that matter—would always give statutes their clear and plain reading, rather than legislating from the bench; but I digress. The result of this decision is clear, nonetheless. Temporary workers in Wisconsin—that is to say, workers who are hired on by temporary staffing agencies and then “lent” out to employers—have more options than “regular” employees, as least when it comes to recovering for their work-related injuries. They may choose between a claim for workers’ compensation benefits and a third-party tort action against the borrowing/special employer.

Of course, the Wisconsin Supreme Court may have the final word here. It may choose to follow the rule established in the vast majority of states that bars third-party actions against borrowing employers on the grounds, stated simply, that they are employers. Alternatively, if the Wisconsin legislature had something different in mind, other than what the Court of Appeals has labeled the statute’s “plain language,” perhaps it will amend the relevant statutes.