Morgan v. ABC MANUFACTURER
1998 WL 213900, 710 So. 2d 1077 (1998)
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Rule of Law:
A general employer, such as a temporary employment agency that is in the business of hiring out its employees to a special employer, remains vicariously liable for the torts of its 'borrowed' employees. Both the general and special employer may be held solidarily liable under the 'dual employer' doctrine.
Facts:
- Worktec Temporaries, Inc. (Worktec) was a temporary services provider that supplied laborers to other companies.
- Worktec entered into an agreement with Goldin Industries (Goldin) to provide industrial laborers for Goldin's scrap yard.
- Worktec recruited, screened, paid, provided insurance for, and retained the sole power to fire its employee, Daryl Hines.
- Hines was assigned to work at Goldin's yard for several months, where he followed instructions and used equipment provided by Goldin's supervisors.
- Edward Morgan, a Goldin employee, was severely injured when he was struck by a large piece of scrap iron being transported by a crane.
- Morgan alleged that Hines, the Worktec employee, had negligently hooked the iron to the crane, causing it to fall.
Procedural Posture:
- Edward Morgan sued Worktec Temporaries, Inc., in a Louisiana trial court for negligence.
- The trial court instructed the jury that if it found the employee, Hines, was the 'borrowed employee' of Goldin, then Worktec would be relieved of all liability.
- The jury found that Hines was the borrowed employee of Goldin, and based on the instruction, returned a verdict for Worktec.
- The trial court entered a judgment in favor of Worktec, dismissing Morgan's suit.
- Morgan, as appellant, appealed to the Louisiana Fifth Circuit Court of Appeal, which affirmed the trial court's judgment in favor of the appellee, Worktec.
- The Supreme Court of Louisiana granted writs to review the court of appeal's decision.
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Issue:
Does a general employer that operates as a temporary employment agency remain vicariously liable for the tortious conduct of its employee while that employee is working for, and under the supervision of, a special employer?
Opinions:
Majority - Justice Knoll
Yes, a general employer that operates as a temporary employment agency remains vicariously liable for its employee's torts. The court repudiated the old 'one master' rule, which would relieve the general employer of liability, and reaffirmed the 'dual employer' doctrine established in LeJeune v. Allstate Insurance Co. The justification for vicarious liability has shifted from a rigid 'right of control' test to a broader concept of 'enterprise liability.' Since the temporary agency's business is to profit from its employees' labor, and that labor simultaneously furthers the business of both the general and special employer, both should share the liability for torts that are characteristic of that business activity.
Dissenting - Justice Marcus
No, the general employer should not be held vicariously liable when it had no right to control the employee's specific work activities at the time of the accident. Liability under respondeat superior is predicated on the right of control. Here, Goldin, the special employer, exercised sole control and supervision over Hines's day-to-day work, while Worktec only performed administrative tasks. Holding Worktec liable is inequitable because it was the party least able to prevent the accident and unfairly forces the entire financial burden onto the temp agency, as the special employer is often immune from tort suits by its own employees under worker's compensation laws.
Dissenting - Justice Traylor
No, the majority unconstitutionally ignores the plain text of Louisiana Civil Code article 2320. The third paragraph of that article provides an exculpatory clause, stating that 'responsibility only attaches, when the... employers... might have prevented the act which caused the damage, and have not done it.' By imposing liability on a general employer like Worktec that had no control and could not have prevented the act, the court is judicially 'writing out' a portion of a validly enacted statute, which is not the judiciary's role.
Analysis:
This decision solidifies the 'dual employer' doctrine in Louisiana, particularly for the growing temporary staffing industry. It marks a significant shift from the traditional 'right of control' test toward the 'enterprise liability' theory, which holds that a business should bear the costs of accidents characteristic of its activities. By holding that temp agencies cannot absolve themselves of liability simply because a client supervises the employee's daily tasks, the court ensures that these agencies internalize the risks associated with their business model. This precedent significantly impacts risk allocation and insurance considerations for temporary staffing firms.
