Companies with same owner, different purposes are not 'alter egos'

In Mississippi, two companies owned by the same owner are not "alter egos" of each other if they have distinct business purposes, separate insurance, different names, and different areas of expertise.

Case name: Kukor v. Northeast Tree Service, Inc., No. 2010-WC-01280-COA (Miss. Ct. App. 07/26/11).

Ruling: The Mississippi Court of Appeals held that a worker suffered a 75 percent loss of earning capacity, and his average weekly wages should be calculated using the wages he earned from working for one company he was employed by.

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What it means: In Mississippi, two companies owned by the same owner are not "alter egos" of each other if they have distinct business purposes, separate insurance, different names, and different areas of expertise.

Summary: A worker worked for two companies owned by the same owner. One was a tree cutting and trimming service; the other performed stump and debris removal. The companies sometimes worked separately but often worked on the same jobsite. The companies had separate payroll and workers' compensation insurers. While working for the tree trimming company, the worker was seriously injured when he fell while repelling down a tree. He attempted to return to work in a light-duty position for the stump removal company, but he said he was unable to handle the work. He claimed he was permanently totally disabled. The Mississippi Court of Appeals held that in calculating his average weekly wage, only the worker's wage from the tree trimming company should be considered.

The worker contended that the companies were "alter egos" of each other and that they were essentially the same company. The court disagreed, stating that the companies had distinct, although complimentary, purposes. The companies had separate insurers, different names, and different areas of expertise.

The court also rejected the worker's argument that he was jointly employed by the companies. The worker was injured while performing the activities of the tree trimming company.

The court found that the worker suffered a 75 percent loss of earning capacity despite the worker's contention that his physical impairments and limited education left him permanently disabled. The worker was offered a light-duty position, which he quit. The owner said he would have tried to adapt the position to accommodate the worker's restrictions. A vocational expert said the worker was employable and identified positions he could hold.

Read more at the WorkersComp Forum homepage.

September 19, 2011

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