The United States Court of Appeals for the Eleventh Circuit recently addressed its standard for determining whether a borrowed-employment relationship exists in cases arising under the Longshore and Harbor Workers' Compensation Act.
Bruce Langfitt worked as a temporary day laborer for labor broker Able Body Temporary Services, Inc..
Able Body supplied Langfitt and other employees to Federal Marine Terminals, Inc. (FMT), which needed assistance at a longshoring facility in Florida.
Langfitt was seriously injured while performing longshoring services for FMT.
As compensation for his injury, Langfitt received Longshore and Harbor Workers’ Compensation Act (LHWCA) benefits from Able Body’s LHWCA insurer. It was undisputed that Langfitt was engaged in maritime employment when he was injured, and so he was eligible for LHWCA compensation for the injury received while he was supplied to FMT for longshoring work.
Seeking to supplement his LHWCA benefits, Langfitt sued FMC, contending that he was injured by the negligence of one of FMT’s employees.
FMT responded that it was Langfitt’s employer for purposes of LHWCA, which meant that LHWCA benefits were the sole remedy that he was entitled receive. FMT cited LHWCA § 905(a), LHWCA’s exclusive remedy provision. 33 U.S.C. § 905(a).
The federal district court in Florida agreed and granted summary judgment in favor of FMT.
The United States Court of Appeals for the Eleventh Circuit affirmed, holding that FMT was Langfitt’s “borrowing employer” for purposes of LHWCA, so that his negligence claim was barred by § 905(a).
In an extended discussion of the law governing who qualifies as a LHWCA “employer” in cases like Langfitt’s, the Eleventh Circuit observed that its approach has been to apply the common law borrowed-servant doctrine, with modifications that accommodate important policy concerns unique to LHWCA.
Under the borrowed servant doctrine, an employee who is directed or allowed to perform services for another may become the employee, or “borrowed servant,” of the other (the “borrowing employer”), with the borrowing employer being held liable to third parties on account of the borrowed servant’s negligence in the scope of the borrowed-employment relationship.
The same considerations that determine whether someone was an employee, rather than an independent contractor, guide the borrowed-servant analysis, the court said, except that the focus is which of the two potential employers had the right to control the worker’s performance.
In cases arising under LHWCA, the focus is even more limited than at common law. The borrowed-servant doctrine is applied in the LHWCA context only to assess whether an employee covered under the Act, and injured in the course of employment, was a borrowed servant at the time of injury. Where this is found to be true, the term “employer” in the Act encompasses the borrowing employer, with the result that the borrowing employer is liable to the employee for LHWCA benefits but remains immune from tort liability under the LHWCA exclusive remedy provision.
According to the Eleventh Circuit, the borrowed-servant doctrine had to be restated in LHWCA cases. A restatement of the doctrine was necessary because LHWCA represents a statutorily imposed “industrial bargain,” like all workers’ compensation laws. Under the bargain, the covered employee gives up the right to sue the employer for negligence, and thus loses the possibility of a more significant damages award from the employer; the employer, for its part, loses its common law defenses available in employee negligence actions. The benefits are that the employee receives more certain compensation for injuries arising from the employment, regardless of fault; the employer, in turn, avoids litigation expenses and pays only scheduled LHWCA benefits.
That bargain, according to the court, meant that for purposes of the borrowed-servant doctrine, the issue was not only whether a borrowing principal assumed control over an employee from his or her general employer, but also whether the employee gave deliberate and informed consent to the borrowed-employment relationship. Only then could the relationship result in a bar to the employee’s common law tort claims.
The court distilled its analysis to an express statement of the standard for determining whether a borrowed-employment relationship exists in cases arising under the LHWCA:
When a general employer transfers its employee to another person or company, the latter is the employee’s borrowing employer for purposes of the LHWCA, and thus is liable for the Act’s compensation and has the benefit of the Act’s tort immunity, if each of the following three criteria is satisfied:
Employee Consent to the New Employment Relationship. The employee must be shown to have given deliberate and informed consent to the new employment relationship with the borrowing principal. The test is objective, and the employee’s consent may be shown to have been given either expressly or impliedly.
Borrowing Principal’s Work Being Done. The work being performed by the employee at the time of the injury must be shown to have essentially been that of the borrowing principal—that is, that it was primarily the borrowing principal’s interests that were being furthered by the employee’s work.
Borrowing Principal Assumed Right to Control the Details of Employee’s Work. The borrowing principal must be shown to have received, from the employee’s general employer, the right to control the manners and details of the employee’s work. This might be evidenced by: (a) an express agreement between the general employer and the borrowing principal that directly evidences a transfer of control over the employee to the borrowing principal; (b) the borrowing principal’s actual exercise of control; (c) the borrowing principal’s furnishing of the equipment and space necessary for the employee to perform the work; (d) the borrowing principal’s right to terminate the employee’s relationship with the borrowing principal; and (e) the method and obligation of payment for the employee’s services.
In Langfitt’s case, the court concluded that the elements of the analysis were met. Working for a labor broker, Langfitt knew that he would be assigned to new work situations on a regular basis, and this implied his consent to working under the control of Able Body’s clients. Likewise, here Langfitt’s assignment to the FMT job was voluntary, and one which he willingly accepted.
The “control” element also was satisfied, as Able Body expressly ceded authority to control Langfitt to FMT for purposes of the longshoring operations. FMT also could terminate Langfitt’s employment with FMT, it furnished the place for performance of FMT’s work, and it was obligated to compensate FMT for his work. The record showed, too, that FMT actually did exercise control over Langfitt’s work.
Thus, because all the elements necessary for a borrowed-employment relationship were met, the district court did not err in concluding that FMT was Langfitt’s borrowing employer for purposes of LHWCA and that, consequently, Langfitt’s negligence claim was barred by 33 U.S.C. § 905(a).
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