Agreement with employment agency exposes county to potential liability
Gregory v. Cleveland County, No. COA12-742, COA12-813 (N.C. Ct. App. 12/31/12).
Ruling: The North Carolina Court of Appeals held that the exclusive remedy provision of workers' compensation did not bar a suit brought by a worker's estate against a county.
What it means: In North Carolina, the special employment doctrine does not apply when a contract between a temporary staffing agency and its client states that employees of the agency are not employees of the county.
Summary: A temporary employment agency contracted with a county to send temporary workers to a landfill. The county paid the agency, and the agency paid its workers. The agreement between the agency and county stated that the agency was responsible for workers' compensation insurance and that temporary workers were not employees of the county. A temporary worker was assigned to work at the landfill as a spotter, helping dump trucks and other vehicles navigate the terrain. A driver, who was employed by the county, was driving a trash compactor near the spotter. The trash compactor's "backup camera" did not provide adequate visibility. The driver ran over the spotter, driving him into a pile of trash. The spotter died later that day. The spotter's estate filed a workers' compensation claim against the agency and received benefits. The estate also sued the driver and county. The North Carolina Court of Appeals held that the exclusive remedy provision of workers' compensation did not bar the suit.
The court explained that the exclusive remedy provision bars suits against a special employer. The special employer is liable for workers' compensation if the worker made a contract of hire, express or implied, with the special employer. The estate asserted that the county was not a special employer of the spotter because the agreement between the agency and county stated that he was not a county employee. The court agreed, finding that the agreement expressly stated that temporary workers were not county employees.
The court explained that because the county chose not to establish an employment relationship with the spotter it was not afforded the protections of the workers' compensation law. Having made a contract that allocated the risk of workers' compensation liability to the agency, the court said that the county could not use the workers' compensation law as a "shield" against the risk of liability from a suit.
Read more at the WorkersComp Forum homepage.
April 8, 2013
Copyright 2013© LRP Publications