In a recent decision, the Wisconsin Court of Appeals addressed the insurance implications of a car accident made unusual because at least two of the deceased workers were employees of temporary help agencies. See Ehr et al. v. West Bend Mutual Insurance Co. et al., Case No. 2017AP142 (Wis. Ct. App. January 9, 2018) [decision]. In so doing, the Court clarified that worker’s compensation laws—and particularly the exclusive-remedy provision that prevents injured employees from bringing tort suits against their employers—apply differently to temporary workers than to permanent employees.
The accident involved a vehicle owned by the temporary employer and occurred during work-related activities, which unfortunately resulted in the death of three individuals, at least two of which were temporary employees. It’s the last of these circumstances that complicated matters.
One of the temporary employee’s estate and two surviving minor children filed a wrongful death action in Milwaukee County Circuit Court against Alpine Insulation, the temporary employer, and Alpine’s automobile liability insurer, West Bend Mutual Insurance Company. That suit sought damages for pain and suffering as well as the minor children’s loss of society, companionship, and support. Id., ¶¶ 3-5.
After answering the complaint, Alpine and West Bend moved for summary judgment on the ground that the plaintiffs’ claims were barred by Section 102.29(6)(b)1 of the Wisconsin Worker’s Compensation statute, which states:
“[n]o employee of a temporary help agency who makes a claim for compensation may make a claim or maintain an action in tort against . . . any employer that compensates the temporary help agency for the employee’s services.”
According to Alpine and West Bend, the plaintiffs’ wrongful death tort claim was barred under this statute because the deceased had been employed by a temporary help agency and Alpine had compensated that agency for the deceased’s services. As a result, the defendants argued that under Section 102.29(6)(b)1 the plaintiffs could not bring tort claims against Alpine as the deceased’s temporary employer. The circuit court agreed and therefore granted summary judgment in favor of the defendants. Ehr slip op. ¶ 6.
The Wisconsin Court of Appeals reversed. The Court noted that, by holding that Wis. Stat. 102.29(6)(b)1 completely bars tort claims a temporary employee may otherwise bring against its temporary employer under all circumstances, the circuit court ignored the qualifying phrase “who makes a claim for compensation.” The Court held that the plain meaning of the statute governs, such that a temporary employee injured during the scope of his or her temporary employment may seek relief in either of two ways: (1) by making a worker’s compensation claim against his or her permanent employer (the temporary help agency) and be subject to the exclusive remedy provision or, alternatively, (2) by pursuing a third-party claim against his or her temporary employer and foregoing any claim under the worker’s compensation statute. Id. ¶¶ 14-18.
The Court further rejected Alpine and West Bend’s argument that such an interpretation would unfairly place temporary employees in a more advantageous position than permanent employees. The Court explained that the exclusive-remedy provision only limits permanent employees’ claims against their employers, and that such employees are free to pursue tort claims against third parties. The exclusive-remedy provision, the Court continued, places the same limitation on temporary employees vis a vis their permanent employers (the temporary help agency). The legislature’s adoption of Wis. Stat. § 102.29(6)(b)1 was a reasonable recognition of a “middle ground” for claims by a temporary employee against his or her temporary employer; rather than treat such entities as a truly independent third party and allow a temporary employee to pursue those tort claims in addition to a worker’s compensation claim against the temporary help agency, the temporary employee may only choose one avenue of recovery. Id. ¶¶ 21-25.
An interesting factual wrinkle that was not explored in this decision is that the driver of the Alpine-owned vehicle was also a temporary Alpine employee, but had been hired through a different temporary help agency than the employee whose estate brought this lawsuit. One wonders if the plaintiffs could have avoided any potential worker’s compensation statutory complications altogether by filing a claim against only West Bend under the theory that, as the insurer of the Alpine vehicle, West Bend was obligated to provide coverage for any liability arising from the negligent operation of that vehicle. Additionally, given that the temporary workers were employed by different temporary help agencies, the plaintiffs presumably could have brought suit directly against the driver and possibly his personal auto liability insurer without implicating any potential worker’s compensation statutory limitations.
In any event, in light of the Ehr decision, Wisconsin employers should factor in their increased liability exposure when deciding whether to seek help on a temporary basis. While it may be cost-effective to avoid taking on additional permanent employees in other areas of their business, the Ehr decision makes clear that businesses employing temporary workers are exposing themselves to additional liability exposure should a temporary employee be injured on the job. At a minimum, Wisconsin businesses should ensure that all of their liability insurance provides adequate coverage for any potential tort claims brought by a temporary employee.