Court Opinion

ID: 9543830
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:49:39.408999+00
Date Added: 2024-06-11T15:11:17.958462
License: Public Domain

FIDEL, Judge,
dissenting.
The law is tugged in opposite directions in defining the vicarious liability of labor brokers — those in the business of supplying temporary labor to others. On the one hand, “loaned employees” are the labor broker’s stock-in-trade. Working at their temporary posts, they further the labor broker’s business; if they go about that business negligently, they do so in the course and scope of the very work the labor broker has hired them to perform. On the other hand, loaned employees are generally subject to direction at their temporary posts by their temporary employers. Though the essence of the labor broker’s business is to profit from its loaned employees’ labors, a common feature of that business is to pass control to the temporary employer over the immediate details of their work.
Because a transfer of control defines the course of the labor broker’s business, there is no self-evident answer to the question whether the labor broker should bear vicarious liability for a loaned employee’s tort. Is it more significant that the employee, at the time of the act, is furthering the labor broker’s business, or more significant that, at the time of the act, he is outside the labor broker’s immediate control? The answer to this question is not available by deduction; to provide an answer, the law must choose between competing rationales.
An early Arizona Supreme Court decision reflects both rationales. In Lee Moor Contracting Co. v. Blanton, 49 Ariz. 130, 65 P.2d 35 (1937), a general employer supplied a truck and driver for a gravel haul, the driver caused an accident, and the court considered on appeal whether the evidence supported the jury’s assignment of vicarious responsibility to the temporary employer. The plaintiff had sued both employers; the jury had absolved the general employer and allocated responsibility to the temporary employer alone; the temporary employer asserted on appeal that the trial court should have directed a verdict in its favor, attributing vicarious responsibility to the general employer alone. Although the court found the evidence “very unsatisfactory,” id. at 139, 65 P.2d at 39, it ruled that the record contained sufficient evidence to submit to the jury the question whether the temporary employer had the right to control the driver at the time of his tort. Id. at 141, 65 P.2d at 39. Thus the court made the right to control the decisive test of a temporary employer’s vicarious liability. Yet the court also took note of numerous “text-books and decisions sustaining the proposition, that as long as the employee is furthering the business of his general employer by service rendered to another he is the servant of the former.” Id. at 135, 65 P.2d at 37 (emphasis added). The decision thus suggests that, had the question been the liability of the general employer, it would have sufficed to establish that the employee was “furthering the business of his general employer by service rendered to another.”
Lee Moor’s recognition of a furtherance-of-business standard of vicarious liability for the general employer might be dismissed as dictum; the general employer was not a party to the appeal. Yet the issue of the general employer’s vicarious liability was framed by the temporary employer’s assertion that vicarious liability should be assigned to the general employer alone. And in a lengthy string of citations, the court demonstrated that a furtherance-of-business standard for general employers was well grounded in the cases and authorities of the time. See id.
The first of these authorities was the Restatement of Agency, which contemplates dual vicarious liability when the loaned employee acts within the course and scope of his general employment but subject to the direction of the temporary employer. Restatement of Agency § 227, comment d, provides:
Where servant obeys temporary employer. The servant may depart from the service of the general employer as to a given act either in accordance with the agreement between the general employer and *558the other, or in spite of it. The fact that he obeys the requests of the temporary employer as to the act does not necessarily cause him to be the servant of such employer. If, however, the temporary employer exercises such control over the conduct of the employee as would make the employee Ms servant were it not for his general employment, the employee as to such act becomes a servant of the temporary employer. If the employee does the very act directed by the temporary employer, the latter is responsible for having directed it, and the first employer is responsible as a master if the act is within the scope of his general employment.
(Emphasis added.)
In four of the cases cited in Lee Moor, the courts gave substantial weight to a furtheranee-of-business or scope-of-employment rationale. See Thatcher v. Pierce, 281 Pa. 16, 125 A. 302, 303 (1924); Densby v. Bartlett, 318 Ill. 616,149 N.E. 591, 596 (1925); Babbitt v. Say, 120 Ohio St. 177, 165 N.E. 721, 725 (1929); Independence Indemnity Co. v. Carmical & Woodring, 13 La.App. 64, 127 So. 10, 11 (1930). In Babbitt, the Supreme Court of OMo described as “crucial” the question, “Who was the master at the very time the negligent act complained of took place?” 165 N.E. at 724. Yet the court found the temporary employer’s control over the driver’s loading, unloading, and route of travel less significant than the general employer’s power to hire, fire, designate, and pay the driver. Id. at 725. And most significant for present purposes, the Babbitt court identified as a distinguishing factor “[t]he fact that [the general employer] profited by the service of his employ[ee] ... and Ms truck.” Id.
In Densby, the Supreme Court of Illinois found the general employer’s power to discharge the employee was adequate to supply the element of control. But the court added:
[N]o one fact is decisive, and ... among other things to be considered is the business in which the general employer is engaged and that in wMeh the special employer is engaged. There can be no question the driver of the car when appel-lee was injured was performing the service he was employed to perform by the general employer.
149 N.E. at 593 (emphasis added).
In Independence Indemnity, the Louisiana Court of Appeal found it only minimally important that the temporary employer controlled the loading operation in which the accident occurred; the court emphasized instead that the hiring-out of trucks and drivers was the regular business of the general employer. 127 So. at 11.
And in Thatcher, the Supreme Court of Pennsylvania expressly distinguished general employers in the “regular business” of lending truck and driver from those whose temporary loan was incidental to their “regular business.” 125 A. at 303. The court stated:
[W]here one is engaged in the business of “hiring out trucks, and furnishing a driver as part of the hiring,” when an accident happens in the course of that hiring the owner of the truck is liable in damages. The presumption is that if the injury happened while the driver was operating the truck, it was in the original master’s business, as it occurred in doing the specific thing the driver was engaged by the owner to do, and to whom the driver was directly responsible.

Id.

The furtherance-of-business rationale reflected in these cases has not faded over time. Section 227, comment d of the original Restatement of Agency, quoted above, remains unchanged in the Restatement (Second) of Agency, which was published in 1958, and, as demonstrated in the cases that follow, retains support in case law around the country.
Many of the cases continue to arise from the torts of loaned equipment operators. See Strait v. Hale Construction Co., 26 Cal. App.3d 941, 103 Cal.Rptr. 487 (1972); LeJeune v. Allstate Ins. Co., 365 So.2d 471 (La.1978); Viggiano v. William C. Reppenhagen, Inc., 55 N.J.Super. 114, 150 A.2d 40 (1959). But the furtherance-of-business rationale has not been limited to such cases. In one case, for example, a corporation whose business was to supply a film director for temporary employment with independent *559film producers, remained subject to vicarious liability for the director’s negligence, even though it lacked control of his conduct on the set. Von Beltz v. Stuntman, Inc., 207 Cal. App.3d 1467, 255 Cal.Rptr. 755, 767 (1989) (finding it decisive that the director was acting within the scope of his general employment at the time of his tort). And in numerous cases, hospitals have been held to retain vicarious responsibility for the torts of residents, nurses, and other operating-room personnel, though at the time of surgery the employees had been “loaned” to an independent surgeon and were subject to the surgeon’s supervisory authority and control. See Foster v. Englewood Hosp. Assoc., 19 Ill.App.3d 1055, 313 N.E.2d 255, 259-60 (1974) (“It was a part of the hospital’s business to furnish [physicians with] the use of [employees], and the fact that during the period of the operation [an employee is] subject to the direction of a physician does not change the relationship.”); City of Somerset v. Hart, 549 S.W.2d 814, 817 (Ky.1977) (because the nurse’s work is performed “to effect [the] common purpose” of the surgeon and the hospital, “respondeat superior is ... equally applicable to both employers”); Brickner v. Normandy Osteopathic Hosp., 746 S.W.2d 108, 114-15 (Mo.App.1988) (“at the time of surgery, [the resident] was performing the very work for which the hospital had hired and was paying him”).
In cases involving labor brokers, or those regularly engaged in lending employees temporarily to others, some courts have abandoned the control test and explained their attribution of vicarious liability to the general employer in terms of risk allocation or enterprise liability. See Strait, 103 Cal.Rptr. at 492 (“The losses caused by the torts of employees, which as a practical matter are sure to occur in the conduct of the employer’s enterprise, are placed upon that enterprise itself, as a required cost of doing business.”); see also Bright v. Cargill, Inc., 251 Kan. 387, 837 P.2d 348, 364 (1992); Note, Borrowed Servants and the Theory of Enterprise Liability, 76 Yale L.J. 807 (1967). Others have continued to apply the control test, but, as in the Lee Moor cases previously discussed, have softened the element of control. For example, in Kral v. Patrico’s Transit Mixing Co., the court found, despite the temporary employer’s supervisory authority over the employee’s work at the time of injury, that there remained a jury issue whether the general employer retained concurrent control. The court observed:
It is not so much the actual exercise of control which is regarded, as the right to exercise such control. To escape liability the original master must resign ftdl control of the servant for the time being, it not being sufficient that the servant is partiaHy under control of a third person.
181 Mich.App. 226, 448 N.W.2d 790, 793 (1989) (quoting Janik v. Ford Motor Co., 180 Mich. 557, 147 N.W. 510, 512 (1914)); see also Kenyon v. Second Precinct Lounge, 177 Mich.App. 492, 442 N.W.2d 696 (1989).5
Whether the cases speak of enterprise liability, however, or look instead to general rudiments of control, a common element is the Restatement notion that vicarious liability should attach if the employee, at his temporary post, was furthering — and acting within the course and scope of — his general employer’s business. As the Supreme Court of New Jersey recently decided,
[I]f the causative act was within the service which the general employer agreed to furnish, he is responsible with respect to that act, no matter who directed its performance and without regard to the concurrent liability which may exist on the part of the one who issued the immediate order that the act be done.
Volb v. G.E. Capital Corp., 139 N.J. 110, 651 A2d 1002, 1012 (1995) (quoting Devane v. Newark Tidewater Terminal, Inc.,- 14 N.J.Super. 401, 82 A.2d 425, 432 (1951) (Schettino, J., concurring)). But see Volb, 651 A.2d at 1014 (Pollock, J., dissenting).
Many cases also accept as an economic reality that an employee in this context has two masters. As a Texas court sensibly observed,
*560The Biblical doctrine that one may only serve one master is followed in the law of the borrowed servant. However, unless the obligations to the masters conflict, so that the servant must choose between those obligations, the servant is usually fulfilling his obligations to both. Therefore, unless the servant has a dilemma regarding which master he should obey, there is no reason to exculpate one and bind the other vicariously for the sin of the servant.
Lara v. Lile, 828 S.W.2d 586, 588 n. 2 (Tex. App.1992); see also 5 Fowler V. Harper and Fleming James, Jr., The Law of Torts, § 26.11, 67-68 n. 14 (2d ed. 1986) (“The trouble with [control] tests is that commonly both employers have a measure of control and the business of both is being done.”).
The Louisiana Supreme Court similarly observed that neither the temporary employer’s supervision of the borrowed servant nor the temporary employer’s susceptibility to vicarious liability
should ... relieve the general employer of [concurrent] 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 ... where the employee was loaned out to another in a continuing arrangement between the employers for their mutual benefit.
LeJeune, 365 So.2d at 481; see also City of Somerset, 549 S.W.2d at 817; Strait, 103 Cal.Rptr. at 489; Keitz v. National Paving & Contracting Co., 214 Md. 479, 134 A.2d 296, 301 (1957); Gordon v. S.M. Byers Motor Car Co., 309 Pa. 453, 164 A. 334, 336 (1932).
I would hold similarly in this case. The control test may indeed be, as the majority describes it, the “sine qua non” to decide whether a temporary employer has assumed sufficient.control to accept vicarious liability for the temporary employee’s acts. But in the dual employer context, the law unduly binds itself by treating vicarious liability as an either/or proposition. Particularly when, as here, the general employer is in the business of supplying temporary labor and the employee is acting within the course and scope of that business, I see no reason to relieve the general employer of concurrent liability for his employee’s negligent acts.
For these reasons, I respectfully dissent.

. The plaintiff in the present case, attempting to satisfy the control test, argues similarly that the general employer has sufficiently retained the right to exercise control as reflected in retention of the residual power to hire, fire, or replace.