Opinion ID: 498401
Heading Depth: 1
Heading Rank: 3

Heading: Was Daniel Melancon a Borrowed Employee of Amoco?

Text: 14 All the parties agreed that the question of Mr. Melancon's status as a borrowed employee of Amoco constituted a threshold issue for the Melancons' recovery from Amoco. If Mr. Melancon was found to be the borrowed employee of Amoco, he was covered by the LHWCA, entitling him to worker's compensation under this Act. Worker's compensation under the LHWCA is the exclusive remedy for an employee against his employer because the Act bars all common law tort actions against the employer, and Amoco was the employer if Melancon was Amoco's borrowed employee. 9 Alday v. Patterson Truck Line, Inc., 750 F.2d 375 (5th Cir.1985); Hebron v. Union Oil Co. of California, 634 F.2d 245, 248 (5th Cir.1981); Gaudet v. Exxon Corp., 562 F.2d 351, 356 (5th Cir.1977), cert. denied, 436 U.S. 913, 98 S.Ct. 2253, 56 L.Ed.2d 414 (1978). 10 15 [T]he issue of whether a relationship of borrowed servant existed is a matter of law for the district court to determine. Gaudet v. Exxon, 562 F.2d at 357; Ruiz v. Shell Oil Co., 413 F.2d at 314. See also Capps v. N.L. Baroid-NL Industries, Inc., 784 F.2d 615, 617 (5th Cir.1986), cert. denied, --- U.S. ----, 107 S.Ct. 141, 93 L.Ed.2d 83 (1986). There are, however, nine separate factual inquiries underlying borrowed employee status. In its analysis, the district court considered all nine factors and found the evidence clearly indicating borrowed employee status on all but one. On this one factor, 11 the district court found the evidence weighed in favor of borrowed employee status or at least was a draw. Thus, the court decided the issue of borrowed employee after full trial. 16 We do not upset a district court's factual findings unless they are clearly erroneous. In Ruiz v. Shell Oil, this Court suggested the nine factors to be evaluated in determining whether the borrowed employee doctrine applies: 17 (1) Who has control over the employee and the work he is performing, beyond mere suggestion of details or cooperation? 18 (2) Whose work is being performed? 19 (3) Was there an agreement, understanding, or meeting of the minds between the original and the borrowing employer? 20 (4) Did the employee acquiesce in the new work situation? 21 (5) Did the original employer terminate his relationship with the employee? 22 (6) Who furnished tools and place for performance? 23 (7) Was the new employment over a considerable length of time? 24 (8) Who had the right to discharge the employee? 25 (9) Who had the obligation to pay the employee? 26 See also Capps v. N.L. Baroid-NL Industries, Inc., 784 F.2d at 616-17; West v. Kerr-McGee Corp., 765 F.2d 526, 530 (5th Cir.1985); Alday v. Patterson Truck Line, Inc., 750 F.2d at 376; Hall v. Diamond M Co., 732 F.2d at 1249; Gaudet v. Exxon, 562 F.2d at 355. 27 The first factor, the question of who has control over the employee and the work he is performing, has been considered the central issue of borrowed employee status in some of our cases, e.g. Hebron v. Union Oil Co., 634 F.2d at 247, 12 although not necessarily determinative. In the case at bar, Amoco clearly had control over Melancon and his work: Melancon took orders only from Amoco personnel who told him what work to do, and when and where to do it. Beraud gave no instructions to Melancon except to go to the Amoco field and perform the work requested by Amoco personnel. The fact that Melancon had specialized welding skills he utilized in most of his work and none of the Amoco personnel had similar welding expertise does not bar a finding of borrowed employee status. Huff v. Marine Tank Testing Corp., 631 F.2d 1140 (4th Cir.1980). 28 As to the second factor, there can be no doubt that Amoco's work was being performed by Melancon. Melancon's work assisted Amoco in the production of hydrocarbons by maintaining the production equipment and platforms in the Amoco field. It is irrelevant that Melancon's primary job was welding, which was an essential, although only incidental, aspect of Amoco's business. 29 The third factor, whether there was an agreement, understanding, or meeting of the minds between Beraud, the original employer, and Amoco, the borrowing employer, is a closer question. Provision 6 of the Well and Lease Service Master Contract does specify that no Beraud employee is to be considered the agent, servant, or representative of Amoco. The reality at the worksite and the parties' actions in carrying out a contract, however, can impliedly modify, alter, or waive express contract provisions. McDonough Marine Service, Inc. v. M/V ROYAL STREET, 465 F.Supp. 928, 935 (E.D.La.1979), aff'd 608 F.2d 203 (5th Cir.1979); Stauffer Chemical Co. v. W.D. Brunson, 380 F.2d 174, 182 (5th Cir.1967). In the case at bar, Beraud clearly understood that Melancon would be taking his instructions from Amoco, notwithstanding Provision 6 of the contract. Obviously parties to a contract cannot automatically prevent a legal status like borrowed employee from arising merely by saying in a provision in their contract that it cannot arise. We agree with the district court that there was an understanding between Beraud and Amoco sufficient to satisfy this factor. 13 30 Melancon clearly acquiesced in his new work situation, the fourth factor under Ruiz. He knew when he began to work on Amoco's offshore platforms in 1977 what his work conditions would be, and he made no complaint regarding these conditions to Beraud or to Amoco. 31 The district court was not in error in finding that Beraud had, in effect, ceased control in its relationship with Melancon. This factor does not require a lending employer to sever completely its relationship with the employee, because such a requirement would effectively eliminate the borrowed employee doctrine. Capps v. N.L. Baroid-NL Industries, 784 F.2d at 617-18. The emphasis when considering this factor should focus on the lending employer's relationship with the employee while the borrowing occurs. Id. Beraud's control over Melancon was nominal at most while Melancon worked for Amoco. 32 The factor asking who furnished the tools and the place of performance gave the district court some reason for concern. Beraud furnished Melancon his welding machine and related equipment, while Amoco furnished certain consumables, the place of performance, transportation to and from the place of work, food, lodging, etc. We have no problem in agreeing with the district court that the balance on this factor is in Amoco's favor. 33 The three remaining factors need only be mentioned briefly. Clearly the employment of Melancon by Amoco was over a considerable length of time. Melancon had worked primarily for Amoco for the seven years while he was with Beraud Enterprises prior to the accident. Amoco also had the right to discharge Melancon even though Amoco could not terminate Melancon's employment with Beraud. Amoco's right to terminate Melancon's services in the Amoco field satisfied this requirement. Capps v. N.L. Baroid-NL Industries, Inc., 784 F.2d at 618, Hebron v. Union Oil Co., 634 F.2d at 247. Finally, we agree the district court was correct in finding that Amoco paid Melancon's wages via Beraud based on the number of hours Melancon worked for Amoco. The fact that Beraud kept a percentage of the amount Amoco was charged is not relevant. Amoco furnished the funds from which Beraud paid Melancon, and this is the determinative inquiry for this factor. Capps v. N.L. Baroid-NL Industries, Inc., 784 F.2d at 618. 34 The summary is that the district court conducted a thorough borrowed employee status analysis under the nine factor Ruiz test. It was not clearly erroneous in any of its factual findings, and it correctly concluded that Melancon was Amoco's borrowed employee for LHWCA purposes. 35 IV. Does LHWCA Sec. 905(a), as Amended in 1984, Preclude Mr. Melancon from Being a Borrowed Employee of Amoco? 36 The Melancons also argue that Amoco can be considered Melancon's employer, responsible for his worker's compensation under LHWCA Sec. 904(a) and thus shielded from tort liability under LHWCA Sec. 905(a), only if Melancon's nominal employer, Beraud, had failed to secure Melancon's worker's compensation coverage and Amoco did secure compensation coverage. They claim the 1984 amendments to Sec. 904(a) 14 and to Sec. 905(a) 15 allow a borrowing employer to utilize the tort immunity of Sec. 905(a) only if the nominal employer failed to provide for worker's compensation for the borrowed employee, and the borrowing employer did in fact secure the worker's compensation insurance instead. They claim this did not happen here since Beraud secured Mr. Melancon's worker's compensation insurance through American General. See Doucet v. Gulf Oil Corp., 783 F.2d 518, 522 (5th Cir.1986). 37 We rejected this argument in West v. Kerr-McGee, supra, and in subsequent cases have continued to follow this holding. Alexander v. Chevron, U.S.A., 806 F.2d 526 (5th Cir.1986), cert. denied, --- U.S. ----, 107 S.Ct. 3229, 97 L.Ed.2d 735 (1987); Capps v. N.L. Baroid-NL Industries, Inc., supra; Doucet v. Gulf Oil Corp., supra. These cases hold that the 1984 amendments to LHWCA Secs. 904(a) and 905(a) do not restrict borrowed employee status only to instances when the lending employer fails to secure worker's compensation coverage and the borrowing employer does. The cases continue to apply the Kerr-McGee rule on the borrowed employee doctrine as it relates to the LHWCA and tort immunity under the LHWCA. The Kerr-McGee opinion carefully explains what these 1984 amendments were meant to accomplish. 765 F.2d at 528-30. 16 Thus, the law is clear that the 1984 amendments did not affect the established borrowed employee analysis. 17