Opinion ID: 380347
Heading Depth: 2
Heading Rank: 1

Heading: The Appropriate Standard

Text: 8 The initial step in resolving the employment question is to ascertain the standard to be applied in deciding whether an individual is an employee. Surprisingly, this is a question of first impression in this Circuit. All prior litigation in this Circuit has involved the question of whether an employee is covered by the LHWCA. See, e. g., Odom Construction Co., Inc. v. United States Department of Labor, 622 F.2d 110 (5th Cir. 1980); Alabama Dry Dock and Shipbuilding Co. v. Kininess, 554 F.2d 176 (5th Cir.), cert. denied, 434 U.S. 903, 98 S.Ct. 299, 54 L.Ed.2d 190 (1977). This Court has not yet had an opportunity to set forth a test to be used in determining the existence of an employee-employer relationship under the LHWCA. 9 Both Oilfield Safety and Harman Unlimited urge that this Court adopt the right to control test. They contend that only if a party has the right to control the details of another's work does an employee-employer relationship exist. Two other courts that have considered this issue have adopted this standard. Cardillo v. Mockabee, 102 F.2d 620 (D.C. Cir. 1939); Yellow Cab Co. v. Magruder, 49 F.Supp. 605 (D.Md.1943), affirmed 141 F.2d 324 (4th Cir. 1944). Both the ALJ and the Board used the relative nature of the work test. That test requires examining the nature of a claimant's work and the relation of that work to an employer's regular business. In deciding which test should be incorporated into LHWCA jurisprudence, this Court must examine the background and policies underlying the two standards. The test that best promotes the purposes and policies of the LHWCA should be used in determining the existence of an employer-employee relationship. 10 The right to control test comes from common law. It serves one main function in common law: to limit the scope of an employer's vicarious tort liability. 1C A. Larson, Workmen's Compensation Law § 43.42 (1980). Within the context of respondeat superior the focus on control is proper, because only if an employer controlled the details of an employee's work should the employer be liable for the employee's negligence. The principles underlying worker's compensation, however, are completely different from those that animate respondeat superior. 11 The theory of compensation legislation is that the cost of all industrial accidents should be borne by the consumer as part of the cost of the product. It follows that any worker whose services form a regular and continuing part of the cost of that product, and whose method of operation is not such an independent business that it forms in itself a separate route through which his own cost of industrial accidents can be channeled, is within the presumptive area of intended protection. 12 Id. at § 43.51. In short, the basic purpose for which the employee-employer relationship is used in compensation law is completely different from the basic purpose for which that relationship is used in the doctrine of respondeat superior. In the area of worker's compensation, the employee-employer test should be inclusive. Cf. Northeast Marine Terminal Co., Inc. v. Caputo, 432 U.S. 249, 97 S.Ct. 2348, 53 L.Ed.2d 320 (1977). In resolving whether employees satisfied the status test of the LHWCA, the Supreme Court noted that the 1972 Amendments are broad and suggest taking an expansive view of coverage. The right to control test tends to exclude, and thus is inappropriate for the LHWCA. 13 The test that best suits the principles of the LHWCA is the one applied by the ALJ and the Board, the relative nature of the work test. In determining the existence of an employee-employer relationship pursuant to this test, one examines the nature of the claimant's work in relation to the regular business of the employer. This examination must focus on two distinct areas: the nature of the claimant's work and the relation of that work to the alleged employer's regular business. In evaluating the character of a claimant's work, a court should focus on various factors, including the skill required to do the work, the degree to which the work constitutes a separate calling or enterprise, and the extent to which the work might be expected to carry its own accident burden. Id. at § 43.52. In analyzing the relationship of the claimant's work to the employer's business the factors to be examined include, among others, whether the claimant's work is a regular part of the employer's regular work, whether the claimant's work is continuous or intermittent, and whether the duration of claimant's work is sufficient to amount to the hiring of continuing services as distinguished from the contracting for the completion of a particular job. Id. 14 The adoption of the relative nature of the work test is in accordance with the basic principles set forth by the Supreme Court in Cardillo v. Liberty Mutual Insurance Co., 330 U.S. 469, 67 S.Ct. 801, 91 L.Ed. 1028 (1947), and by this Court in Gaudet v. Exxon Corp., 562 F.2d 351 (5th Cir. 1977), cert. denied, 436 U.S. 913, 98 S.Ct. 2253, 56 L.Ed.2d 414 (1979). Cardillo v. Liberty Mutual involved a related issue whether an employee killed while driving to work in a company encouraged car pool was injured during the course of employment. The Supreme Court refused to apply rigid common-law legal principles in determining whether the injury occurred during the course of employment. 15 (T)o import all the common law concepts of control and erect them as the sole or prime guide for the Deputy Commissioner in cases of this nature would be to encumber his duties with all the technicalities and unrealities which have marked the use of those concepts in other fields. 16 330 U.S. at 481, 67 S.Ct. at 808. The Supreme Court concluded that the profound changes in employer-employee relationships had diminished the applicability of the common-law master-servant doctrines in the workers' compensation area. 17 This Circuit expressed a similar concern in Gaudet v. Exxon Corp. Gaudet involved the use of the common-law borrowed employee doctrine to extend the coverage of the LHWCA. This Court applied the traditional borrowed employee test, with its emphasis on control. In doing so we noted that, (i)n many cases, as in the instant one, the traditional test yields conclusions valid in the LHWCA context, but (the) doctrine should not be applied blindly, especially in circumstances in which it did not evolve. Gaudet, 562 F.2d at 357 (emphasis added). Today this Court, by adopting the relative nature of the work test, adheres to the basic notions set forth in Cardillo and Gaudet. 18 This is not to say that the various factors composing the right to control test are irrelevant. The factors should be used in determining the existence of an employee-employer relationship. Indeed, in many cases, the traditional right to control test will produce a result that is appropriate in the LHWCA context. There will be cases, however, where the right to control test simply produces an inappropriate conclusion. Given the nature of the LHWCA and workers' compensation statutes in general, this Court holds that the proper test to be used in determining whether an employer-employee relationship exists is the relative nature of the work test. 19