The use of temporary employees provided by agencies that supply laborers, secretaries, nurses or other skilled or unskilled workers to the public and private sector is increasing. Employers who use these temporary agency workers’ must be wary of the relationships created by the use of the temporary agency workers. Are the temporary workers “employed” by the agency, the borrowing employer, or both, for purposes of the Pennsylvania Workers’ Compensation Act (the “Act”)? The answer will determine which entity or entities may claim immunity from a common law action, under the exclusive remedy provisions of the Act.
The critical test for determining whether a worker furnished by one entity to another is “employed” by the latter, is whether the worker is under the latter’s right of control with respect to both the work performed and the manner in which the work is performed. For example, suppose a municipal township needs a temporary worker to ride on the back of a municipal trash truck. After receiving only minimal instruction, the worker falls from the moving truck on his first day of work and dies ten (10) months later. Suppose the agency, Labor Ready, pays $770,000 in workers’ compensation benefits. A civil suit is then initiated by the decedent’s estate against both Labor Ready and the Township. Does the decedent’s estate have a viable civil claim against either entity? Under this fact pattern, the trial judge dismissed, on summary judgment, both Labor Ready and Rye Township, finding that both entities were “employers” entitled to protection under the immunity provisions of the Act. The ruling was affirmed by the Commonwealth Court on appeal. Nagle v. Labor Ready and Rye Township (Pa. Cmwlth. 2016). Similar results have been reached in volunteer fire fighter liability cases, where both the volunteer fire company and the sponsoring township enjoy immunity. Indeed the “borrowed employee” doctrine provides broad immunity in both the public and private sectors, at least where the borrowing employer exerts the requisite degree of control over the borrowed employee, (See, e.g., Hendershot v. Emmeci Northampton County 2016). A temporary agency supplied a machine operator to its manufacturing client and the agency employee sustained serious injuries while cleaning the machine.
Nevertheless, despite broad interpretation on the “borrowed employee” doctrine, employers have been found to be liable for damages beyond workers’ compensation, in circumstances where: (a) the requisite degree of control does not exist (i.e. a company leases a piece of equipment with an operator and the operator is then injured on the company’s premises) or (b) the borrowing employer forfeits its immunity by filing an Answer to the workers’ compensation claim petition denying that it is the employer, and alleging that the temporary agency is solely responsible. Black v. Labor Ready (Pa. Super. 2010).
Employers should be sensitive to the range of potential outcomes when staffing positions with “borrowed employees,” and should review any temporary agency agreements to insure the broadest possible immunity from suit, along with proper indemnification language, with respect to agency employees who are hired into temporary positions or assignments.
Please contact a member of our Labor and Employment Group for specific legal analysis of temporary employment arrangements at your facility.