Opinion ID: 2635943
Heading Depth: 3
Heading Rank: 1

Heading: plaintiff's employment status

Text: {8} The exclusivity provision of the Workers' Compensation Act shields employers who comply with the Act from tort liability. Section 52-1-8. Thus, Defendant may be immune from tort liability if it has an employment relationship with Plaintiff. Plaintiff would have an employment relationship with Defendant if he was a direct employee, a statutory employee, or a special employee. In contrast, if Plaintiff was an independent contractor, he would not have an employment relationship with Defendant. Defendant was clearly not Plaintiff's direct employer. We turn next to the tests for statutory employment and special employment. {9} Whether we apply the statutory employment or the special employment test depends on whether Defendant procured work or labor. A statutory employment relationship exists when `any employer procures any work to be done wholly or in part for him by a contractor other than an independent contractor and the work so procured to be done is a part or process in the trade or business or undertaking of such employer[.]' Harger v. Structural Servs., Inc., 1996-NMSC-018, 121 N.M. 657, 661, 916 P.2d 1324, 1328 (1996) (quoting NMSA 1978, § 52-1-22 (1989)). The statutory employer test thus applies when a defendant procures work. Rivera, 118 N.M. at 681, 884 P.2d at 837 (quoting Word v. Motorola, Inc., 135 Ariz. 517, 662 P.2d 1024, 1026 (1983) (en banc)). For example, in Chavez v. Sundt Corp., we applied the statutory employer test to a general contractor that had hired a subcontractor to perform electrical work. 1996-NMSC-046, ¶¶ 2, 12, 122 N.M. 78, 920 P.2d 1032. In contrast, the Court of Appeals declined to apply the statutory employer test in Rivera because the employer had contracted with another company to supply labor for its lumberyard, not to actually run the lumberyard. Rivera, 118 N.M. at 681, 884 P.2d at 837. In that situation, the Court of Appeals applied the special employment test. Id. at 678, 884 P.2d at 834. {10} The statutory employment test does not apply to Plaintiff's relationship with Defendant. Defendant contracted with Orion for labor, not for work. The contract called for Orion to supply a graphic designera laborer. It did not call for Orion to perform Defendant's graphic design work. When a general employer (Orion) arranges labor for a third party (Defendant), we look to the special employment test. In concluding that the statutory employment test does not apply to Plaintiff, we necessarily conclude that Plaintiff is neither a statutory employee nor an independent contractor. [1] {11} Before applying the special employment test, we must determine what that test should be. Defendant argues that the proper test for determining special employer status is the three-part test established in Rivera, 118 N.M. at 678-79, 884 P.2d at 834-35, which was followed by the Court of Appeals in this case. Under Rivera, both the general employer and the special employer are liable for workers' compensation when the following conditions are met: (1) the employee has made a contract of hire, express or implied, with the special employer; (2) the work being done is essentially that of the special employer; and (3) the special employer has the right to control the details of the work. Id. (citing 1B Arthur Larson, The Law of Workmen's Compensation § 48.23, at 8-515 to -532 (1993)). This test arises out of the lent employee doctrine. Hamberg, 2007-NMCA-078, ¶ 10, 142 N.M. 72, 162 P.3d 909; see also Rivera, 118 N.M. at 681, 884 P.2d at 837. {12} Plaintiff urges instead that we replace all three parts of the Rivera test with the Harger test, recasting special employment as a totality of circumstances test. [2] See Harger, 121 N.M. at 667, 916 P.2d at 1334. Plaintiff bases this argument on the complexity of his employment relationship with Orion and Defendant, claiming that the Rivera test is only appropriate in relatively simple borrowed employee situations. {13} We see no reason to depart from the test set out in Rivera. Although modern labor contracts may be complex, that complexity can be captured by the Rivera test's third part. In this case, we agree with the Court of Appeals that the first two parts of the Rivera test were met and were not seriously contested by Plaintiff. Hamberg, 2007-NMCA-078, ¶¶ 26, 29, 142 N.M. 72, 162 P.3d 909. The third part recognizes that the general employer and the special employer may both exercise[] control over the employee and both benefit[] to some degree from the employee's work. Restatement (Third) of Agency § 7.03 cmt. d(2) (2006). Thus, Plaintiff must show not that Orion retained some control over his work, but rather that Defendant lacked the right to control his work. {14} In his response to Defendant's motion for summary judgment, Plaintiff listed a number of disputed material facts. Assuming that the facts are true for this analysis, Plaintiff has still failed to raise an issue of material fact regarding Defendant's right to control. Plaintiff alleges that Orion maintained control over his hours of work, evaluated his job performance, provided all of his employment benefits, disciplined him when required, and could terminate his employment at will. Plaintiff also alleges that he was supervised by an Orion manager, that he owed certain duties to Orion, and that Orion's employees were sometimes physically segregated from Defendant's employees. These facts, assuming they are true, merely show that Orion retained some control over Plaintiff's work; they do not show that Defendant lacked control. We would expect no less from a special employment situation. {15} Turning to Defendant's right to control, Plaintiff first argues that he is a skilled specialist, and therefore he is not subject to Defendant's control. We agree with the Court of Appeals that the right to control the details of a skilled specialist's work does not mean control over the `technical details[,]' but means control over `the time and place of the services, the person for whom rendered, and the degree and amount of services.' Hamberg, 2007-NMCA-078, ¶ 33, 142 N.M. 72, 162 P.3d 909 (quoting 3 Arthur Larson & Lex K. Larson, Larson's Workers' Compensation Law § 67.06, at 67-17 (2006) (footnotes omitted)). In the case that established this rule, the Arizona Supreme Court considered a situation where a welder was loaned from one company to another. Carnes v. Indus. Comm'n, 73 Ariz. 264, 240 P.2d 536, 539 (1952). Although the welder was highly skilled, such that the borrowing company could not direct the technical details of his work, the fact that he was told which tanks to repair and shown exactly where to patch leaks was sufficient to show control for the special employment test. Id. at 537, 539. {16} In trying to argue that his specialized skills show that Defendant lacked the right to control, Plaintiff instead shows that his situation falls precisely under the scenario described in Carnes. Plaintiff alleged that he controlled all the details of the conceptualization, design and creation of the projects he worked on[,] while Defendant's role was limited to assigning projects, monitoring technical performance and inspecting and accepting [Plaintiff's] work and that these assignments were limited to a description of a desired end product. These are the types of controls recognized by both Larson and Carnes as satisfying the special employment relationship. {17} As a second argument against Defendant's right to control, Plaintiff describes an elaborate contract that refers to Plaintiff as a contractor and disclaims any employment relationship. As explained by the Court of Appeals, we look to the relationship's actual circumstances, not to how the parties define the relationship in their contracts. Hamberg, 2007-NMCA-078, ¶ 34, 142 N.M. 72, 162 P.3d 909. Therefore, these facts do not raise a genuine issue about Defendant's right to control.