Whitehead v. Safway Steel Products, Inc.
1985 Md. LEXIS 623, 497 A.2d 803, 304 Md. 67 (1985)
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Rule of Law:
A worker employed by a temporary services agency is also considered a "special employee" of the company to which they are assigned if that company has the right to control the details of the work. As a special employee, the worker's exclusive remedy for on-the-job injuries is through the workers' compensation system, barring a separate negligence lawsuit against the special employer.
Facts:
- Bay Services, Inc. (Bay), a temporary help agency, hired Whitehead.
- Safway Steel Products, Inc. (Safway) contacted Bay and requested two temporary workers.
- Bay assigned Whitehead to work at Safway's plant.
- At the Safway plant, Safway personnel directed Whitehead to perform various tasks and supervised his work.
- While loading steel scaffolding as directed by Safway, a bundle of scaffolding fell on Whitehead, causing serious injury.
- Bay paid Whitehead's wages and maintained workers' compensation insurance for him.
Procedural Posture:
- Whitehead filed for and received workers' compensation benefits through his temporary agency, Bay Services, Inc.
- Whitehead then filed a negligence lawsuit against Safway Steel Products, Inc. in a Maryland state trial court.
- A jury found that Whitehead was not an employee of Safway and that Safway was negligent, awarding damages to Whitehead.
- The trial court judge granted Safway's motion for judgment notwithstanding the verdict (j.n.o.v.), setting aside the jury's decision and ruling that Whitehead was Safway's employee as a matter of law.
- Whitehead appealed the judge's ruling to the Court of Special Appeals (Maryland's intermediate appellate court).
- Before the Court of Special Appeals could decide the case, the Court of Appeals of Maryland (the state's highest court) granted certiorari to hear the appeal itself.
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Issue:
Is a worker hired by a temporary services agency also considered an employee of the company to which the worker is assigned for purposes of the workers' compensation exclusive remedy rule, when that company controls the details of the work?
Opinions:
Majority - Couch, J.
Yes, a temporary worker is considered an employee of the company to which they are assigned when that company controls the details of the work. The court analyzed the employment relationship using two tests. First, under the traditional five-factor common law test, the right to control the employee's conduct is the 'decisive' factor. Here, Safway instructed Whitehead on his tasks, supervised his work, and could reassign or dismiss him from the site, establishing conclusive control. Second, the court applied the three-prong 'lent employee' doctrine, which was satisfied because: (1) Whitehead made an implied contract of hire with Safway by accepting the assignment and submitting to its direction; (2) the work he performed was essentially that of Safway; and (3) Safway had the right to control the details of the work. Therefore, Whitehead was a special employee of Safway, and his negligence suit is barred by the exclusive remedy provision of the workers' compensation laws.
Dissenting - Eldridge, J.
No, whether Whitehead was an employee of Safway is a question of fact that should have been left to the jury. The majority improperly elevates the 'control' factor to be singularly decisive, ignoring other significant facts that point to a different conclusion. Factors such as Bay hiring, paying, and having the power to fire Whitehead, as well as the disparity in pay and benefits between Whitehead and regular Safway employees, create conflicting inferences about the employment relationship. When undisputed facts lead to conflicting inferences—one suggesting Bay was the sole employer and another suggesting Safway was also an employer—the issue is for the trier of fact. The trial court therefore erred by overturning the jury's verdict that Safway was not Whitehead's employer.
Analysis:
This decision solidifies the 'lent employee' or 'dual employment' doctrine in the context of temporary staffing agencies, establishing a strong precedent that the client company is often a 'special employer.' By prioritizing the 'right to control' as the decisive factor, the ruling provides client companies with immunity from tort liability for injuries to temporary workers, limiting those workers to workers' compensation benefits. The case significantly impacts the temporary labor industry by defining the legal relationships and liabilities between agencies, workers, and clients, making it more difficult for injured temporary workers to pursue negligence claims for larger damages against client companies.
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