Opinion ID: 1839593
Heading Depth: 1
Heading Rank: 3

Heading: dual employers

Text: Aware of these inconsistencies, this Court revisited the issue of the borrowed employee defense, and repudiated the one master rule of Benoit in favor of finding both the general employer and the special employer solidarily liable for the torts of the borrowed employee. In LeJeune v. Allstate Insurance Co., 365 So.2d 471 (La.1978), a hearse driver loaned from Ardoin's Funeral Home of Ville Platte, Inc. to Ardoin's Funeral Home of Mamou, Inc. negligently failed to stop at a flashing red light during a funeral cortege. An employee of the special employer (Mamou) who was riding in the hearse was killed in the resulting collision between the hearse and an automobile with the right of way. Although the court found that the driver was the borrowed employee of the special employer, the court held the general employer liable, stating: Nevertheless, this [borrowed employee] determination should not relieve the general employer of his liability for his employee's negligent acts done in the pursuance of duties designated for him by his employer, in whose pay he continued and who had the sole right to discharge him. This is especially so in the present case, where the employee was loaned out to another in a continuing arrangement between the employers for their mutual benefit.       A number of other jurisdictions have likewise held that both the general and special employer may be held solidarily liable for the employee's tort. We believe this to be the better rule and, accordingly, overrule expressions indicating to the contrary, as well as the two decisions of the intermediate courts (see footnote 11) which expressly held the general employer not liable to a third person for torts committed by his employee while loaned to a special employer. We conclude, therefore, that under the circumstances, Ville Platte, the general employer, is liable to the plaintiffs for the damages caused them by Lafleur while negligently driving the hearse for Mamou. LeJeune, supra at 481-82. (Footnotes omitted). The dual employer rule was recently reaffirmed by this court in Blair v. Tynes, 621 So.2d 591 (La.1993), wherein we held both a general and a special employer liable to a third party for damages caused through the negligence of five loaned sheriff's deputies. In Blair, we stated: Our jurisprudence has held that special and general employers may be solidarily liable in tort to third parties injured by the negligence of their employees. In LeJeune v. Allstate Ins. Co., 365 So.2d 471 (La.1978), we addressed the issue of whether the general employer of a negligent employee remained liable for its employee's tort despite the fact that the employee had been borrowed to perform services for a special employer at the time of an accident. We held that a general and special employer may be solidarily liable for injuries to a third party caused by an employee's negligence. Blair, supra at 599. As noted above, there is no legislative expression regarding the borrowed employee defense. It is a jurisprudential creation. The immunity provided to the general employer is in derogation of the general tort rights of victims. Thus the scope of the immunity must be strictly construed. See Sewell v. Doctors Hospital, 600 So.2d 577 (La.1992). As we see it, the issue before this Court is not whether the scope of the borrowed employee defense should be restricted only to employers who exercise supervisory control over the borrowed employee. Rather, this Court must determine whether the borrowed employee defense extends to the circumstances of the instant case, namely, whether temporary agencies who are in the business of lending their employees under the supervision of others should receive the benefit of tort immunity. [10] In short, Worktec asserts that its lack of supervisory control over its own employee should form the basis for its tort immunity. We are not persuaded by this argument. This Court's limitation of the borrowed employee defense in LeJeune and Blair is supported by the continuing development in the law of employer liability or respondeat superior. While the borrowed servant defense focuses on which employer controlled the employee's actions, modern justification for employer liability is not based so much on the employer's control of the employee's actions, but on the concept of enterprise liability. In Ermert v. Hartford Ins. Co., 559 So.2d 467 (La.1990), this Court recently stated: The master's vicarious liability for the acts of its servant rests not so much on policy grounds consistent with the governing principles of tort law as in a deeply rooted sentiment that a business enterprise cannot justly disclaim responsibility for accidents which may fairly be said to be characteristic of its activities. Ermert, supra at 476. To a temporary services provider such as Worktec, loaned employees are its stock in trade. Though the essence of Worktec's business is to profit from its employee's labors, a significant feature of its business is to pass control of the details of the work to its customers. However, Worktec retains ultimate and overriding authority over its loaned workers. This makes the application of the traditional right of control test problematic. Additionally, Worktec only bills its customers for the hours its employees actually work for those customers. The loaned employees are furthering the business of Worktec at the identical time when they are also furthering the business of the special employer. Put simply, both employers had contemporaneous control over Hines, and both contemporaneously benefitted from his labor. It is therefore reasonable that considering the overlapping control and shared financial interest that they share liability. As noted by Professor Galligan: [11] The two master rule is the more sensible rule, especially in cases where the general employer is engaged in the business of renting out people and equipment (or at least sometimes renting out people and equipment). In situations where the general employer's business is to rent out his or her employees and equipment to others, the general employer's business is being furthered even if he does not control the details of the actual work. Moreover, the special employer benefits: it is his work that is being done as well. In such situations, the relevant enterprise benefitted by the work consists of the combination of the general and special employers. The two master rule represents a triumph of function over (legal) fiction. Thomas C. Galligan, Jr., A Primer on the Patterns of Louisiana Workplace Torts, 55 Louisiana Law Review at 91 (1994). [12] The labor provided by Worktec is its product, and Worktec should bear the expenses and risks associated with its product, in addition to reaping the benefits derived therefrom. Since modern justification for employer liability is not based so much on the employer's control of the employee's actions, but on the concept of enterprise liability, Worktec's failure to exercise direct supervisory control over Hines should not preclude its liability. We therefore hold that where, as here, a general employer is in the business of hiring its employees out under the supervision of others, the general employer remains liable for the borrowed employees' torts under La.Civ.Code art. 2320. In the present case, plainly the jury instruction given by the trial court follows the one master rule and is inconsistent with the current law of the borrowed servant doctrine in Louisiana. The approved instruction provided: [i]f after consideration of the ten factors listed above, you find that Worktec Temporaries was a lending employer, then Worktec is relieved of liability. LeJeune and Blair, supra, specifically repudiated the one master rule in favor of solidary liability among the general and the special employers. Put simply, a determination that Hines was the borrowed employee of Goldin does not preclude Worktec's liability. The trial court clearly erred as a matter of law in instructing the jury otherwise. Accordingly, we find that the trial court committed legal error in instructing the jury that a finding that Hines was Goldin's borrowed employee would relieve Worktec of liability for his torts. When such a prejudicial error of law skews the trial court's finding of a material issue of fact and causes it to pretermit other issues, the appellate court is required, if it can, to render judgment on the record by applying the correct law and determining the essential material facts de novo. Lasha v. Olin Corp., 625 So.2d 1002 (La. 1993). Accordingly, for the foregoing reasons, we reverse and remand the case to the Fifth Circuit Court of Appeal for further consideration of the trial record and for a de novo decision on the merits. REVERSED AND REMANDED TO THE COURT OF APPEAL. MARCUS and TRAYLOR, JJ., dissent and assign reasons. VICTORY, J., dissents for the reasons assigned by MARCUS, J.