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“Borrowed Employee Doctrine” Provides Viable Summary Judgment Defense in Dual Employment Cases

Workers’ compensation is the exclusive remedy for an employee’s injuries when they occur in the scope of employment. (Labor Code §3601.). However, an injured worker can have a cause of action against a third party for negligence in causing the injury. Pursuant to the holdings in a line of cases referred to as the “Borrowed Employee Doctrine,” if a third party defendant can show it had a special employment relationship with an injured employee, that entity can also obtain the benefit of the workers’ compensation exclusion.

The possibility of dual employment is well recognized in case law. “Where an employer sends an employee to do work for another person, and both have the right to exercise certain powers of control over the employee, that employee may be held to have two employers—his original or “general” employer and a second, the “special” employer.” (Riley v. Southwest Marine, Inc. (“Riley”) (1988) 203 Cal.App.3d 1242, 1249, citing Kowalski v. Shell Oil Co. (“Kowalski”). (1979) 23 Cal.3d 168, 174.) When determining whether a special employment relationship exists, the court looks to a set of factors.

Factors relevant to determining whether an employee is the borrowed employee of another include: (1) whether the borrowing employer’s control over the employee and the work he is performing extends beyond mere suggestion of details or cooperation; (2) whether the employee is performing the special employer’s work; (3) whether there was an agreement, understanding, or meeting of the minds between the original and special employer; (4) whether the employee acquiesced in the new work situation; (5) whether the original employer terminated his relationship with the employee; (6) whether the special employer furnished the tools and place for performance; (7) whether the new employment was over a considerable length of time; (8) whether the borrowing employer had the right to fire the employee and; (9) whether the borrowing employer had the obligation to pay the employee.

(Riley, supra, 203 Cal.App.3d at 1242.)

“In determining whether a special employment relationship exists, the primary consideration is, ‘the right to control and direct the activities of the alleged employee or the manner and method in which the work is performed, whether exercised or not…’” (Kowalski, supra, 23 Cal.3d at 175, citing McFarland v. Voorheis-Trindle Co. (1959) 52 Cal.2d 698, 704.) This type of special relationship is commonly found in cases involving employment agencies, but has been found to exist in a variety of other contexts.

The requisite control has been found in situations involving construction projects where an employee is lent by a general contractor/subcontractor to another subcontractor. (Riley, supra, 203 Cal.App.3d at 1250.) A special relationship has also been found to exist in a labor brokerage situation barring an employee who in injured while on assignment from a labor broker from bringing a tort against the assigned employer (Maynard v. Kenova Chemical Co. (4th Cir. 1980) 626 F.2d 359) and a stuntman working concurrently for a studio and a production company. (Caso v. Nimrod Productions, Inc. (2008) 163 Cal.App.4th 881, 892.)

Therefore, if a case involves a third party defendant in a matter in which the plaintiff was injured in the scope of his employment, then consideration should be given to the Borrowed Employee Doctrine. This is an issue that can be addressed via a motion for summary judgment. “[I]f neither the evidence nor inferences are in conflict, then the question of whether an employment relationship exists becomes a question of law which may be resolved by summary judgment.” (Riley, supra, 203 Cal.App.3d at 1248.) A successful summary judgment motion will limit plaintiff’s recovery to workers’ compensation benefits.

ABOUT THE AUTHOR: Jillian Fairchild specializes in insurance defense, personal injury, professional liability, and general civil litigation. Contact her at 858-263-4065 or jfairchild@tysonmendes.com.

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