Court Opinion

ID: 9698634
Source: CourtListenerOpinion
Date Created: 2023-08-25 19:56:25.447636+00
Date Added: 2024-06-11T18:20:42.478598
License: Public Domain

SUNDBY, J.
(dissenting). This appeal presents an important question of third-party liability under sec. 102.29(1), Stats., of the Worker's Compensation Act. The question is whether Gansch is subject to sec. 102.29(6) and may not maintain an action in tort against *679Nekoosa Papers for his injuries.1
I.
Section 102.29(6), Stats., provides:
No employe of a temporary help agency who makes a claim for compensation may make a claim or maintain an action in tort against any employer who compensates the temporary help agency for the employe's services. [Emphasis added.]
This statute does not apply only to Manpower-type agencies. Section 102.01 (2)(f), Stats., provides that " '[temporary help agency' means an employer who places its employe with another employer who controls the employe's work activities and compensates the first employer for the employe's services." For a discussion of worker's compensation acts as applied to temporary help agencies, see 1C A. Larson, The Law of Workmen's Compensation, sec. 48.23, at 8-484.
The Legislative Reference Bureau questioned the Worker's Compensation Advisory Council's request for the above definition as follows: "Note that the language as requested does not define a temporary help agency as an employer who is 'in the business of placing employes with other employers. As such, it may be too broad." Limprecht Memorandum, October 15, 1981, Legislative *680Reference Bureau Drafting Record, ch. 92, Laws of 1981. The legislature nonetheless adopted the requested definition of "temporary help agency." We must therefore give the term broad construction.
Bassuener2 is a "temporary help agency." It is an independent contractor engaged in the business of renting heavy equipment to Nekoosa Papers. It has been so engaged for a number of years. Its rental agreement was an "annual agreement," which was drafted by Nekoosa Papers. Bassuener (1) placed its employee, Gansch, (2) with another employer, Nekoosa Papers, (3) who controlled Gansch's work activities, and (4) who compensated Bassuener for Gansch's services. The definitional elements of sec. 102.01(2)(f), Stats., are thus present.
(1) Placing its employee. When Nekoosa Papers wished to rent an item of heavy equipment from Bas-suener, it issued to Bassuener a purchase order. Paragraph 7(c) of the purchase order provides that Bassuener shall:
Retain under his direct supervision and control all persons and employees furnished by him for the work contemplated to be done under this purchase order. Such employee shall be, and shall remain at all times, employees of [Bassuener]. [Emphasis added.]
Gansch concedes that, under the contract and purchase order, he was a "loaned" employee, in the same sense that Bassuener's equipment was "loaned." There*681fore, it is not subject to serious dispute that Bassuener "placed" Gansch with Nekoosa Papers.
(2) Another Employer. Nekoosa Papers is another employer as defined in sec. 102.04(l)(b)l., Stats. For purposes of sec. 102.01(2)(f), it is not necessary that Nekoosa Papers qualify as a "special employer" under the four-part test consistently applied by the Wisconsin courts. See Meka v. Falk Corp., 102 Wis. 2d 148, 151, 306 N.W.2d 65, 68 (1981). Section 102.29(6) was intended to eliminate the "loaned" employee requirement as a condition of immunity from third-party tort liability.
(3) Control of the Employee's Work Activities. When the legislature acts in an area where the courts have been active, the legislation can be construed as codifying the decisions or changing the decisional result. In view of the dissatisfaction expressed by the Wisconsin Supreme Court with the "loaned employee" rule, it would be illogical to conclude that the legislature intended to put its imprimatur on that rule. In Freeman v. Krause Milling Co., 43 Wis. 2d 392, 394 n. 2, 168 N.W.2d 599, 600 (1969), the court said: "The court has given some thought to a revision of the rule but has determined to hold to its precedents until persuaded a change is justified." In DePratt v. Sergio, 102 Wis. 2d 141, 146, 306 N.W.2d 62, 65 (1981), the court conceded that "the traditional borrowed servant rule has deficiencies in theory and in application." In Meka, the court refused to hold that as a matter of law in labor-broker cases the loaned employee becomes the employee of the labor-broker's customer. The court said, however:
We do not adopt such a rule although we recognize that the tests this court has adopted to determine when the borrowing employer becomes a special *682employer "when applied to specific factual situations" result in distinctions which "are sometimes slight" and in decisions which are "well-nigh irreconcilable." [Freeman at 394, 168 N.W.2d at 600.] See 1C [Larson], The Law of Workmen's Compensation sec. 48.23 (1980).
102 Wis. 2d at 158 n. 13, 306 N.W.2d at 71.
It is not coincidental that, after the decision in Meka, the Worker's Compensation Advisory Council recommended legislative changes that would relieve employers of "placed" employees from third-party tort liability. Meka was employed by a business which provided temporary help to other companies. Meka was decided June 2, 1981. The memo outlining the Worker's Compensation Advisory Council's request for a legislative change as to temporary help agencies was dated October 15,1981. Legislative Reference Bureau Drafting Record, ch. 92, Laws of 1981. On December 2, 1981, the chairperson of the Worker's Compensation Advisory Council forwarded to the members of the council copies of Meka which, she advised, involved the subject matter of a "part of the amendments." Worker's Compensation Advisory Council's 1981 Records.
I conclude that the legislature intended to eliminate Meka's four-part test to determine whether an employee of a temporary help agency working temporarily for another employer may maintain a third-party tort action against the temporary employer.3 The "control" factor of the four-part test is not therefore applicable to temporary help agency employment. The temporary employer's control of the temporary employee's work *683activities need not be so detailed as to make the employee a "loaned" employee. The control contemplated by sec. 102.01(2)(f), Stats., is that typically exercised by a temporary employer over a temporary help agency employee. Larson says that "[e]mployers obtaining workers from the kind of labor service typified by Manpower, Inc., have usually, but not invariably, been held to assume the status of special employer." 1C A. Larson, supra, sec. 48.23, at 8-488-489 (footnote omitted). Larson cites Simmons v. Atlas Vac Mach. Co., 493 F. Supp. 1082 (E.D. Wis. 1980) where the court, applying Wisconsin law, held that an employee of an employer engaged in the business of providing temporary help to various businesses and factories was a "special" or "loaned" employee of the business where she was placed. Id.
Even under Meka's four-part test, Nekoosa Papers exercised such control over Gansch's work activities as to make him a "loaned" employee of Nekoosa Papers. Certainly it controlled Gansch's work activities to the degree necessary to fulfill the "control" criterion of sec. 102.01(2)(f), Stats.
Bassuener had annual agreements with Nekoosa Papers for many years pursuant to which it provided heavy equipment and operators. Bassuener hired Gansch with the expectation of having him perform services for Nekoosa Papers. The contract in effect when Gansch was injured was dated February 7,1986. Nekoosa Papers issued a purchase order to Bassuener to rent a bulldozer and operator from June 7 through June 21, while its caterpillar tractor was being repaired. Gansch was injured on June 20.
Gansch's job was to disk and pile lime in Nekoosa Paper's lime storage area. Gansch reported each morning to Nekoosa Paper's lead man who instructed him as tp *684his work activities during the day. Gansch described Nekoosa Paper's lead mein as his supervisor. Bassuener did not supervise Gansch although Darrel Bassuener, the sole owner of both Bassuener and Midway Transport, drove through the area two or three times a day to see if Gansch was "sloughing off." Darrel Bassuener testified that he believed it was up to Nekoosa Papers' foreman or superintendent to tell Gansch what he should do, when he should do it and how he should do it. He acknowledged that the disking and piling of the lime was Nekoosa Papers' work and for its benefit.
Gansch followed the same routine of reporting to work, taking lunch breaks and other breaks, and leaving work as did Nekoosa Papers' regular employees.
Bassuener paid Gansch's wages, and his social security and withholding taxes. Bassuener had the right to discipline or fire Gansch or reassign him to another work place. Gansch considered himself Bassuener's employee. Bassuener's insurance carrier paid Gansch's worker's compensation benefits. The employment relationship between Gansch and Nekoosa Papers was typical of a temporary help agency employment relationship. The degree of control exercised by Nekoosa Papers was therefore sufficient to satisfy the "control" criterion of sec. 102.01 (2)(f), Stats.
It is true that Larson says that "[t]he factor that seems to play the largest part in lent-employee cases is that of furnishing heavy equipment." 1C A. Larson, supra, sec. 48.30, at 8-505. He states that the majority of the decisions have been influenced by the arguments that the general employer would naturally reserve the control necessary to insure that the general employer's equipment is properly used, and that a substantial part of the operator's duties would consist of the continuing duty of maintenance of the equipment. Id. at 8-510.
*685The decisions attaching significance to the furnishing of heavy equipment were not decided under statutes limiting the "loaned" employee's right to maintain a third-party tort action against the special employer. Even if the rationale of these cases is applied, they do not justify the conclusion that Gansch was a "loaned" employee. Gansch was not in charge of maintaining any of the equipment that Bassuener supplied. All he was required to do was follow the normal practice of checking the water, oil and fuel on a daily basis.
Most important, however, is the fact that when Gansch was injured, he had abandoned the bulldozer supplied by Bassuener and was assisting Nekoosa Papers' employees in getting Nekoosa Papers' caterpillar into operation. "[W]hen the lent employee becomes separated from the lent equipment with which he was identified, this may sever his contract with the general employer." 1C A. Larson, supra, sec. 48.24, at 8-495. Larson cites a Pennsylvania case, Ramondo v. Ramondo, 82 A.2d 40 (Pa. Super. Ct. 1951), which held that when the lent-employee was injured using the special employer's equipment and not that furnished by the employer, the special employer was solely liable for worker's compensation benefits.
A new test as to control will have to be developed in applying sec. 102.29(6), Stats. Greater weight must be given to whose work is being done. Even in the "loaned" employee situation, whose work is being done is accorded an almost presumptive weight. Larson says that ”[i]f it is possible to say, in a particular case, that the job being accomplished was of interest only to the special employer, the chances are good that the lent-employee doctrine will be applied." 1C A. Larson, supra, sec. 48.21, at 8-449. It is only common sense that when an employer uses its own employees, whether perma*686nent, temporary, loaned, or placed, the employer will wish to control the work activities of its employees so that the work is done to the employer's satisfaction.
In this case, it is undisputed that at the time of the accident, Gansch was doing Nekoosa Papers' work.
For these reasons, I conclude that at the time of Gansch's injury, Nekoosa Papers was the employer who controlled Gansch's work activities, within the meaning of sec. 102.01(2) (f), Stats.
(4) Compensation. It is undisputed that Nekoosa Papers compensated Bassuener for Gansch's services. Bassuener charged Nekoosa Papers an hourly rate which included the cost of an operator.
(5) Summary. All of the elements of sec. 102.01(2)(f), Stats., are satisfied. Bassuener was therefore an employer who placed its employee, Gansch, with another employer, Nekoosa Papers, who controlled Gansch's work activities and compensated Bassuener for Gansch's services. Because Gansch made a claim for worker's compensation, sec. 102.29(6) prevents him from maintaining a third-party action in tort against Nekoosa Papers.4
HH HH HH
Limiting the temporary employee to his or her remedy under the worker's compensation act is consistent with the philosophy and purpose of the act. "Worker's compensation laws are basically economic regulations by which the legislature, as a matter of public policy, has balanced competing societal interest." Mulder v. Acme-*687Cleveland Corp., 95 Wis. 2d 173, 180, 290 N.W.2d 276, 280 (1980).
The Mulder court quoted the following from Coleman v. American Universal Ins. Co., 86 Wis. 2d 615, 621, 273 N.W.2d 220, 222 (1979):
It is boilerplate law in Wisconsin that the rationale underlying statutory worker's compensation is that workers accept smaller recoveries than those potentially available at common law in return for coverage of all work-related injuries regardless of fault. [Citations omitted.] Instead of damages, the statutory compensation scheme provides an injured employee with medical care and income maintenance, the latter being figured as the percentage of preinjury income.
Mulder, 95 Wis. 2d at 180-81, 290 N.W.2d at 280. As to this, the Mulder court stated that "[t]he exclusive-remedy provision, sec. 102.03(2), Stats., is an integral feature of the compromise between the interest of the employer and the interest of the worker." Id. at 181, 290 N.W.2d at 280. "The principle of exclusivity is firmly entrenched in Wisconsin law." Coleman, 86 Wis. 2d at 621, 270 N.W.2d at 222.
The Mulder court further said:
It is clear that this court's interpretation, which outlaws any contribution by the employer or which immunizes an employer from otherwise recognized common law suits where the underlying injury was work connected, is not the result of a superimposed judicial gloss but, rather, reflects the explicitly stated legislative intent. [Emphasis added.]
95 Wis. 2d at 182, 290 N.W.2d at 280-81.
It has been held that the quid pro quo of the worker's compensation act is not satisfied if the third-*688party employer has no exposure to worker's compensation liability. In Candler v. Hardware Dealers Mut. Ins. Co., 57 Wis. 2d 85, 91, 203 N.W.2d 659, 662 (1973), the court said that, "[g]enerally a '3rd party,' against whom an action is authorized under the workmen's compensation law, is a person on whom no liability could be entailed under the Act."5
For decades, Larson has been saying that immunity follows compensation responsibility. 2A A. Larson, supra, sec. 72.33, at 14-228.6.1 believe that where the new temporary help relationship exists, the temporary employer is primarily responsible for worker's compensation. The temporary employer's liability is at least contingent under sec. 102.06, Stats.61 conclude that con*689tingent responsibility is sufficient to invoke immunity from tort liability.7 Larson approves the result in Washington Metro. Transit Auth. v. Johnson, 467 U.S. 925, reh'g denied, 468 U.S. 1226 (1984), where the Court held that a general contractor whose subcontractors were also insured was entitled to immunity from tort liability in an action by a subcontractor's employees. 2A A. Larson, supra, sec. 72.31(b), at 14-177. "The two key points established by this decision are, first, that the contingent liability of the general contractor is sufficient to entitle it to immunity, and, second, that both the general contractor and the insured subcontractor are immune to tort suit, the former in its role as statutory employer and the latter in its role as direct employer." Id.
In Washington Metro, the Court said that the language of the exclusive remedy statute "does not effortlessly embrace contractors." 467 U.S. at 933. Likewise, the language of sec. 102.06, Stats., does not effortlessly prescribe contingent liability for special or temporary employers. The Wisconsin Supreme Court has held that sec. 102.03(2) does not preclude an action by an injured employee against the defendant unless the defendant is liable under the act to pay compensation to the *690employee. Cermak v. Milwaukee Air Power Pump Co., 192 Wis. 44, 211 N.W. 354 (1927); Culbertson v. Kieckhefer Container Co., 197 Wis. 349, 222 N.W. 249 (1928).
Cermak and Culbertson may not survive review by the supreme court. See Wagner v. Continental Cas. Co., 143 Wis. 2d 379, 387, 421 N.W.2d 835, 838 (1988); but see id. at 406, 421 N.W.2d at 846 (Abrahamson, J., dissenting). If not, presumably the view of the dissent in Cermak will prevail. See Cermak, 192 Wis. at 50, 211 N.W. at 357 (Rosenberry, J., dissenting). Justice Rosenberry stated that because the defendant was an employer under the act and was potentially liable under the act for compensation to its contractor's employee, it was not a third party under sec. 102.29(1), Stats.
Justice Rosenberry's view seems sound, given the quid pro quo philosophy of the worker's compensation act. An employer which has insured against its compensation liability by complying with sec. 102.28(2)(a), Stats., will be very surprised to learn that that protection is illusory if a loaned employee is injured while in its employ.
The United States Supreme Court in Washington Metro said that in choosing between conflicting interpretations of the immunity provision of the act, "we are predisposed in favor of the majority view that tort immunity should extend to contractors. This position is presumptively the better view because it is more consistent with the compromise underlying the [act]. The reward for securing compensation and assuming strict liability for worker-related injuries has traditionally been immunity from tort liability." 467 U.S. at 934.
The holding of the Wisconsin Supreme Court in Culbertson is termed by Larson as "extreme." 2A A. Larson, supra, sec. 72.31(c), at 14-183-84. "The usual rationale of this extraordinary holding is that the general *691contractor does not in any sense become the 'employer'; he is rather an insurer of the subcontractor's compensation obligation. This looks like a case of preoccupation with labels at the expense of substance. The general contractor, like the immediate employer, is subjected to nonfault liability for compensation, whether he is called a statutory employer, or insurer, or anything else, and he ought in return to get immunity from damage suits." Id. at 14-187.
Similarly, the temporary employer ought to get immunity from employee damage suits on the theory that the temporary employer is primarily liable for the employee's worker's compensation, is contingently liable for such compensation, or shares in the cost of providing such compensation.
Because Gansch was an employee of a "temporary help agency," as defined in sec. 102.01(2)(f), Stats., and he made a claim for worker's compensation benefits, sec. 102.29(6) prevents him from maintaining this action in tort against Nekoosa Papers. I therefore respectfully dissent.

Nekoosa Papers states that one of the issues before the court is whether the trial court erred in failing to adopt a labor-broker exception to the loaned employee rule. We cannot resolve that issue without determining the application of sec. 102.29(6), Stats. The majority states that neither party cites sec. 102.29(6). Maj. op. at 669. There is no rule of appellate procedure that justifies ignoring an issue clearly raised by a party and dispositive of the appeal simply because a party has overlooked an applicable statute or decision.

Gansch was employed by Midway Transport Company, Inc., which is wholly owned by Bassuener Construction Company, Inc. In this opinion Bassuener refers to both entities.

The Meka test or rule may continue to be applied to determine liability for worker's compensation or liability for the negligent act of the employee. The validity of the test or rule as applied to those situations is not involved in this case.

 An employee cannot avoid the exclusive remedy effect of sec. 102.03(2), Stats., by not making a claim under the act. Section 102.03(2) applies where the conditions of liability exist.

In a recent decision, Henning v. General Motors Assembly, 143 Wis. 2d 1, 419 N.W.2d 551 (1988), the Wisconsin Supreme Court relied on the employer's exposure to worker's compensation liability and the employee's right to the recovery of worker's compensation to limit the right of that employee to maintain a tort action against his employer.

Section 102.06, Stats., provides:
An employer shall be liable for compensation to an employe of a contractor or subcontractor under the employer who is not subject to this chapter, or who has not complied with the conditions of s. 102.28(2) in any case where such employer would have been liable for compensation if such employe had been working directly for the employer, including also work in the erection, alteration, repair or demolition of improvements or of fixtures upon premises of such employer which are used or to be used in the operations of such employer. The contractor or subcontractor (if subject to this chapter) shall also be liable for such compensation, but the employe shall not recover compensation for the same injury from more than one party. In the same manner, under the same conditions, and with like right of recovery, as in the case of an employe of a contractor or subcontractor, described above, an employer shall also be liable for compensation to an employe who has been loaned by the employer to another employer. The employer who becomes liable for and pays such compensation may recover the same from such contractor, sub-
*689contractor or other employer for whom the employe was working at the time of the injury if such contractor, subcontractor or other employer was an employer as defined in s. 102.04.

It is not necessary, therefore, to decide whether the legislature could base immunity solely upon the employee's right to worker's compensation. However, even if the temporary employer is not primarily or secondarily liable for worker's compensation, the cost of worker's compensation liability coverage will be passed on to the temporary employer in the compensation it will pay the temporary help agency. This involvement of the temporary employer in the providing of worker's compensation is sufficient to immunize the employer from third-party tort liability.