Borrowed Employee Status Limitation on Award

While on the job, a man was severely injured when a 30-ton hydraulic jack which was being used in a repair operation became disengaged, slipped, was hurled through the air for a distance of about 12 feet and struck him.

In many suits like the case described above, the principal question at issue is not whether the employer or another entity was negligent as one might expect. Instead, the question turns on whether or not an injured employee was a borrowed employee at the time of his injury.

This is important because a court that finds the employee was a borrowed employee may limit  an injured employee’s remedy to workmen’s compensation rather than for damages in tort under the Longshore and Harbor Workers’ Compensation Act (“LHWCA”). In other words, the injured employee’s personal injury suit and award may be limited under the Act.

Definition of a Borrowed Employee

A borrowed employee is employed by his regular employer but is released to temporarily work for a borrowing employer and becomes the latter’s employee. If an employee is found be a borrowed employee, the question turns to the liability of the borrowing employer. A borrowing employer may become vicariously, or indirectly, liable if the borrowing employer assumes control over the acts of the employee and is directing the employee at the time when the liability arises.

Factors: Determining the Status of Borrowed Employee/Employer

In Ruiz v. Shell Oil Co., the  Fifth Circuit set out the following nine factors for district courts to use as guideposts in admiralty cases when determining whether a person should be considered the borrowed employee of another:

1. who has control over the employee and the work he is performing, beyond mere suggestion of details or cooperation;
2. whose work is being performed by the employee;
3. whether an agreement, understanding, or meeting of the minds exists between the nominal and the borrowing employer;
4. whether the employee acquiesced in the new work situation;
5. whether the original employer terminated his relationship with the employee;
6. who furnished the employee’s tools and place of performance;
7. whether the employee’s new employment was over a considerable length of time;
8. whether the nominal or the borrowing employer had the right to discharge the employee; and
9. whether the nominal or the borrowing employer had the obligation to pay the employee.

Although no one factor controls the outcome, an injured employee usually needs to be able to show that the employer against whom recovery is sought had the power to control and direct the performance of the injured party’s work.

Longshore and Harbor Workers’ Compensation Act (“LHWCA”)

In many maritime accident cases, the Longshore and Harbor Workers’ Compensation Act “expressly preempts all other claims” against an employer or vessel owner. The Act essentially overrides traditional tort theories like negligence. While every employer is liable for employees for  medical services and supplies, compensation for disability, and compensation for death, an employer who pleads the Federal LHWCA can also avoid liability for damages proximately caused by negligence if the employer establishes that the employee was covered by insurance and that the employer had provided it for the employee’s benefit. This limitation may include borrowed employees. In a case in which the limitation applies, an employer’s liability may be limited to compensation benefits.

Like the court in Ruiz v. Shell Oil Co., each case’s unique facts and circumstances must be examined to first determine whether the injured employee and employer are “borrowed.” Then, even if the LHWCA applies to a borrowed employee and employer, the employer may be liable for compensation benefits to the injured plaintiff.

Speak With an Attorney at Morrow & Sheppard LLP About Your Case

If you have been injured offshore or on the high seas, be aware:  in all likelihood, your employer already has lawyers. The company lawyers know the various Jones Act traps that can bar your recovery.  Having your own attorney can help you navigate the legal landscape to give you the greatest chance at maximizing your recovery. At Morrow & Sheppard LLP, we help injured offshore and maritime workers seek to secure the full compensation they are entitled to. Each day you are unrepresented, is a day your employer has the upper hand.

Our maritime accident attorneys are ready to step in and advocate for your rights and are licensed in both Texas and Louisiana. If you or your loved one has been injured offshore request a free consultation with our team today.  You should not hesitate to seek legal help from someone who knows maritime law and can help you to understand and assert your rights.