Borrowed Servant With a Lapsed Policy
A Lafayette staffing agency assigned Marcus T. to a shipyard under a one-year written agreement stating that each assigned worker is the shipyard's 'borrowed employee for all purposes' and that the shipyard 'accepts responsibility for workers' compensation.' The shipyard directed Marcus's daily work, set his shift, provided his tools, and could remove him from the site. Separately, at the agency's request, Marcus signed a document calling him an 'independent contractor' with no withholding; he has no Louisiana workers' compensation policy of his own. Eight weeks into the assignment, a sling failed and Marcus fractured his wrist and shoulder and cannot work. His average weekly wage is $1,350. The agency's Louisiana comp policy was cancelled for nonpayment 40 days before the accident. Assume the maximum weekly benefit in effect for the injury year is $1,000.
1. Identify the responsible employer(s) and explain whether the 'independent contractor' label changes the analysis.
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Reasoning:
- The label does not control. Workers' compensation status turns on the right to control the work and the realities of the relationship, not on a document signed at the agency's request. Marcus was assigned a shift, directed daily, given tools, and removable - factors pointing to employee status.
- Two employers can exist at once. The agency is the general employer; the shipyard, exercising direction and control and having contractually accepted responsibility, is the special or borrowed employer. Under Louisiana's statutory employer doctrine, a principal that contracts out work that is part of its trade, business, or occupation can also be liable for the injury - and the written agreement recognizing the relationship strengthens that conclusion.
- The lapsed agency policy does not eliminate the claim. Uninsured-employer status exposes the agency directly, and the shipyard's carrier is on the risk for a borrowed/statutory employee. Comp is a no-fault system: the worker's recovery does not depend on finding a policy, it depends on finding an employer.
- Practical consequence: file against the shipyard's carrier, notify the agency in writing, and expect the shipyard to pursue the agency for indemnity under the staffing agreement.
Conclusion: Marcus is an employee; the shipyard is at minimum a special/statutory employer and the agency a general employer. Both are potentially liable, and the shipyard's carrier should be put on notice immediately.
2. Calculate the weekly indemnity benefit and identify any additional benefits owed.
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Computation:
- AWW: $1,350
- Two-thirds of AWW: $1,350 × 2/3 = $900
- Statutory maximum for the injury year: $1,000
- $900 is below the cap, so the cap does not reduce it.
Weekly total temporary disability benefit: $900 per week, subject to the statutory maximum number of weeks.
Additional items:
- Medical - all reasonable and necessary treatment, with no dollar cap, including surgery, physical therapy, and prescriptions. This is the largest exposure in a shoulder fracture and is often overlooked when reserving only the indemnity figure.
- Mileage for travel to treatment, and vocational rehabilitation if the injury prevents a return to the same work.
- Supplemental earnings benefits if he returns at reduced wages - the calculation compares 90% of his pre-injury AWW to post-injury earning capacity, and is different from the 2/3 TTD figure. Do not use $900 as the model for a wage-loss claim later.
- Cap check: if his AWW had been $1,800, two-thirds would be $1,200 and the benefit would be limited to $1,000, the statutory maximum. Verify the maximum weekly benefit actually in effect for the injury year before issuing payment.
Conclusion: $900/week TTD plus uncapped reasonable medical, with SEB analysis deferred until a return-to-work opinion exists.
3. Marcus's attorney files a negligence suit against the shipyard for the defective sling. What is the likely outcome?
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Reasoning:
- Workers' compensation is the exclusive remedy between an employer and an injured employee. Where the shipyard is his borrowed or statutory employer, the tort suit is barred.
- Exclusive remedy covers the employer and its workers' compensation carrier, and it applies even where the employer was negligent - indeed, negligence is precisely what comp replaces.
- The narrow exception is an intentional act: the employer must have consciously desired the result or known the result was substantially certain to follow. A worn sling, without evidence of knowledge and near-certainty of injury, is negligence at most, not an intentional tort.
- What survives: a claim against a third party who is not his employer or a statutory employer - for example, the sling's manufacturer or a separate contractor on the site. The exclusivity bar does not immunize strangers to the employment relationship.
- What the plaintiff will try: arguing the shipyard is not his employer, that the staffing agreement is a sham, or that the agency's lapsed policy means no comp remedy existed. The first argument is his best one, but the direction-and-control facts and the written agreement cut against it.
Conclusion: The tort suit against the shipyard is most likely barred by exclusive remedy; the claim should be redirected against the sling manufacturer or other third parties, while comp benefits proceed.