Temporary Help Employees Can Sue Their Employers? …. Well, maybe not.
The Wisconsin Court of Appeals considered the following issue: can a temporary help employee who was injured at work elect not to pursue a worker’s compensation claim and, instead, actually sue their employer in civil court? The Court said the answer is “YES.”
Wait….what?! That is not how the worker’s compensation system was supposed to work. Cue panic mode for employers who used temporary help employees. (or at least until the legislature “fixed” this).
The necessary background (and backbone) of the worker’s compensation system is the 100+ year old “grand bargain” between employers and employees. Employers agreed to provide smaller, defined benefits regardless of fault for the work injury, while employees gave up the right to tort damages (like pain and suffering) in exchange for those benefits. Thus, worker’s compensation became the worker’s exclusive remedy against the employer. A worker cannot sue their employer (or co-worker) for a work injury.
That exclusive remedy also extends to temporary help agency situations. Under the traditional interpretation of the worker’s compensation act, a temporary help employee is barred from any tort lawsuit against their employing temporary help agency and against the employer where they were placed/working. This was the interpretation…or so we thought.
In Estate of Carlos Esterley Cerrato Rivera v. West Bend Mutual Ins Co., the Court of Appeals allowed a temporary help employee’s tort lawsuit to proceed against the placed employer. The case arose from tragic and slightly convoluted facts. Three temporary help employees all died in a motor vehicle accident. All three were driving in the same car and performing services for Alpine Insulation (insured by West Bend Mutual). Mr. Rivera was a temporary help employee of Alex Drywall, who sent him to work for Alpine Insulation. Alpine, in turn, paid Alex Drywall for the services. The driver, whose negligence resulted in the accident, was also a temporary help employee, but of another employer.
Mr. Rivera’s estate did not pursue a claim for worker’s compensation death benefits. The estate instead sued the placed employer, Alpine Insulation, in circuit court for tort damages. Alpine and West Bend Mutual argued that the work comp exclusive remedy protects them from these types of lawsuits.
[Note: the facts are unclear about whether there was an “election” not to pursue a work comp claim. There could have been difficulties by the work comp carrier in determining if there were any eligible surviving dependents. There also could have been issues involving establishing the employment relationship with Alex Drywall. This is mere speculation, but it is interesting to think about how the case genesis]
The Court of Appeals interpreted the relevant statutes to allow the tort suit to proceed! Specifically, Section 102.29(6)(b)1. says that “no employee of a temporary help agency who makes a claim for compensation may make a claim … in tort against … any employer that compensates the temporary help agency for the employee’s services.” The Court ruled that because Rivera’s estate had never pursued a worker’s compensation claim, the statute actually allowed the tort suit.
Based on the immediate outrage and backlash in the employer community (and specifically the massive amount of employers who use temporary help employees), the Wisconsin legislature moved swiftly to “fix” this perceived loophole in the law. The legislature passed 2017 Wisconsin Act 139 (effective March 1, 2018). The Act amended the governing statutes in Section 102.29 to now state that “no employee of a temporary help agency who has the right to make a claim for compensation may make a claim … in tort against … any employer that compensates the temporary help agency for the employee’s services.”
Accordingly, for a fleeting moment, it appeared injured temporary help employees could elect to forego a work comp claim and maintain a civil lawsuit against their placed employers for pain and suffering. The legislature effectively restored and reiterated the exclusive remedy provision in temporary help agency situations. If a temporary help employee is injured on the job, worker’s compensation remains their only recourse against the temporary help employer and their placed employer.