Case Name: KIDDER v. MILLER-DAVIS COMPANY; WOLTHUIS v. MILLER-DAVIS COMPANY
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1997-07-08
Citations: 455 Mich. 25
Docket Number: Docket Nos. 103024, 105498
Parties: KIDDER v MILLER-DAVIS COMPANY WOLTHUIS v MILLER-DAVIS COMPANY
Judges: Brickley, Riley, and Weaver, JJ., concurred with Mallett, C.J.
Reporter: Michigan Reports
Volume: 455
Pages: 25–55

Head Matter:
KIDDER v MILLER-DAVIS COMPANY WOLTHUIS v MILLER-DAVIS COMPANY
Docket Nos. 103024, 105498.
Argued January 15, 1997
(Calendar Nos. 8-9).
Decided July 8, 1997.
Rehearings denied 456 Mich 1201.
Donald L. Kidder, an iron worker, was leased to Miller-Davis Company, a general construction contractor, by Construction Labor Services, a labor broker. After suffering injuries while working on a Miller-Davis renovation project, he and his wife, Dawn M. Kidder, brought a negligence action in the Kalamazoo Circuit Court against Miller-Davis. The court, John F. Foley, J., granted summary disposition for the defendant. The Court of Appeals, Hoekstra and 6. Schnelz, JJ. (Neff, P.J., dissenting), affirmed in an unpublished opinion per curiam, holding both Construction Labor Services and Miller-Davis to be coemployers within the meaning of the Worker’s Disability Compensation Act, and that Miller-Davis thus was entitled to enforcement of the act’s exclusive remedy provision (Docket No. 166059). The plaintiffs appeal.
David L. Wolthuis also was leased to Miller-Davis Company through Construction Labor Services and was injured while performing demolition work for Miller-Davis. He and his wife, Esther Wolthuis, brought a negligence action in the Kalamazoo Circuit Court against Miller-Davis. The court, William G. Schma, J., granted summary disposition for the defendant, holding that Miller-Davis was a coemployer and immune from liability under the exclusive remedy provision of the wdca. The Court of Appeals, Sawyer and J. P. Jodrdan, JJ. (Neff, P.J., dissenting), affirmed in an unpublished opinion per curiam (Docket No. 168754). The plaintiffs appeal.
hi an opinion by Chief Justice Mallett, joined by Justices Brickley, Riley, and Weaver, the Supreme Court held:
A labor broker and its customer both are subject to, and protected by, the exclusive remedy provision of the worker’s compensation act. A labor broker relationship existed between Construction Labor Services and its customer, Miller-Davis, to an extent that each was a coemployer for purposes of the act and is protected by, and entitled to, the exclusive remedy provision of the act. Further, under the economic-reality test, Miller-Davis was the plaintiffs’ employer for purposes of the exclusive remedy provision and, thus, immune from tort liability.
1. In determining who is an employer for purposes of the exclusive remedy provision of the wdca, Michigan case law rejected the rigid, common-law control test and adopted the economic reality test, which examines the totality of the circumstances surrounding the employment relationship and the work performed. Control is only one factor to be considered, and no one factor is controlling. A court must examine the work performed, whether it was a part of a common objective integral to the employer’s business, and whether it normally would follow the usual path of an employee.
2. In these cases, Construction Labor Services was a labor broker that provided workers pursuant to job description requests furnished by Miller-Davis. It billed Miller-Davis weekly, dollar for dollar for the workers’ wages, fringe benefits, payroll taxes, worker’s compensation and liability insurance premiums, state corporate tax, trade travel pay, fica, and, additionally, for the cost of administering the contract and handling of all other employment matters. Constructive Labor Services was a payment conduit for Miller-Davis, which unequivocally assumed the responsibility for these payments. Clearly, the trades construction personnel worked for both Constructive Labor Services and Miller-Davis.
3. Under the economic-reality test, both Construction Labor Services and Miller-Davis must be considered coemployers for purposes of the exclusive remedy provision of the worker’s compensation act. The totality of the circumstances surrounding the employment relationship and the work performed reveals that the two were so integrally related that their common objectives were only realized by a combined business effort. Their agreement to the contrary is neither dispositive nor controlling.
Kidder, affirmed.
Wolthuis, affirmed.
Justice Kelly, joined by Justices Cavanagh and Boyle, dissenting, stated that where the terms of a contract are clear and unambiguous, they should be enforced as written. The defendant entered into an agreement that, by its clear and unambiguous terms, denied that the defendant was the plaintiffs’ employer, specifically spelling out that Construction Labor Services was the sole employer. Under the circumstances, the defendant should be bound by the terms of its contract. Because it is not plaintiffs’ employer, the defendant is liable in tort for any negligence to the plaintiffs.
Coemployer status cannot be found solely because two parties enter into a labor broker relationship. The contract that the defendant and Construction Labor Services signed makes theirs an atypi cal labor broker relationship. Its language renders it so clear and unambiguous that defendant is not plaintiffs’ employer, that it alone must control. There is no reason to apply the economic realities test. The contract also explicitly sets forth the duties of Miller-Davis and Construction Labor Services. Because Miller-Davis contracted to avoid an employer’s responsibilities, it should not be allowed to assert the exclusive remedy provision as an affirmative defense.
Schenk, Boncher & Prasher (by Frederick J. Boncher and Curtis D. Rypma) for plaintiffs Kidder.
Ford, Kriekard, Domeny & Byrne, P.C. (by Thomas H. Rosenhagen and David W. McMorrow), for plaintiffs Wolthuis.
Straub, Seaman & Allen, P.C. (by John M. Donahue), for the defendant.

Opinion:
Mallett, C.J.
We granted leave in these consolidated labor broker cases to determine whether defendant Miller-Davis is a coemployer of the plaintiffs and thus immune from tort liability under the exclusive remedy provision of the Worker's Disability Compensation Act. In both cases the Court of Appeals affirmed grants of summary disposition in favor of the defendants, holding that the defendant was a customer of Construction Labor Services (cls), a labor broker, and as such was protected from suit under the exclusive remedy provision of the wdca. We affirm and hold further that under the economic-reality test defendant was also the plaintiffs' employer for purposes of the exclusive remedy provision of the WDCA.
I
The two cases are almost factually indistinguishable. Both Mr. Kidder and Mr. Wolthuis, plaintiffs in their respective cases, were injured on construction sites at which the defendant was the general contractor. Both men were employees of cls. Cls is a labor broker in the business of providing "leased services of construction trades personnel on an independent contractor basis" to construction contractors. Both Mr. Kidder and Mr. Wolthuis were leased construction trades personnel furnished to Miller-Davis by CLS. The lease agreements between CLS and Miller-Davis, covering both employees, are identical.
A
Plaintiff Wolthuis, leased to Miller-Davis through CLS, was performing demolition work on a multimillion dollar construction project in Kalamazoo when he was impaled through the neck by a piece of jagged reinforcement steel protruding from a block of concrete being hoisted by defendant's crane at the work site. He was subsequently burned by an acetylene torch that fell on him after he was impaled. Plaintiff alleged in his complaint that defendant was negligent in failing to provide a safe workplace and negligent in the operation of the crane. Just before trial, the court entertained and granted the defendant's motion for summary disposition, holding that Miller-Davis was a coemployer and immune from liability under the exclusive remedy provision of the WDCA.
In the Court of Appeals, plaintiff argued that Miller-Davis was not a coemployer, that, in the alternative, the court erred in granting the motion because more than a single inference could be drawn from the facts, and that the issue should have been decided by a jury. In addition the plaintiff asserted that Miller-Davis was estopped from asserting that it was an employer by virtue of the express language in the contract. The Court of Appeals rejected these arguments. The majority held that only one conclusion could be drawn from the facts: defendant was a customer of cls, a labor broker, and as such was entitled to the exclusive remedy of the wdca. Unpublished opinion per curiam, issued February 23, 1995 (Docket No. 168754), citing Howard v Dundee Mfg Co, 196 Mich App 38, 40; 492 NW2d 478 (1992); Farrell v Dearborn Mfg Co, 416 Mich 267; 330 NW2d 397 (1982); Renfroe v Higgins Rack Coating & Mfg Co, Inc, 17 Mich App 259; 169 NW2d 326 (1969). With regard to the contract between CLS and Miller-Davis, the Court stated, "[w]e also find no merit to plaintiffs' estoppel argument on these facts because courts will look beyond the labels placed on relationships in applying the wdca." Id., citing Fitzgerald v Mobil Oil Corp, 827 F Supp 1301 (ED Mich, 1993).
The statute provides in pertinent part: "The right to the recovery of benefits as provided in this act shall be the employee's exclusive remedy against the employer . . . ." MCL 418.131(1); MSA 17.237(131)(1). The only exception to the exclusive remedy provision is an intentional tort, which has not been alleged in these cases. Id.