Employers Who Utilize Temporary Or Loaned Employees Are Now Potentially Liable For Third Party Claims Brought By An Injured Employee

By Daniel Pedriana, Joseph Birdsall and Claudia Harke - Lindner & Marsack, S.C.

January 29, 2018

On January 9, 2018, District III of the Wisconsin Court of Appeals decided that Wis. Stat. § 102.29(6)(b)1 allows an injured temporary employee to choose between filing a worker’s compensation claim and suing the temporary employer for tort damages.

In Rivera v. West Bend Mutual, Carlos Rivera and two other individuals died in a single-vehicle accident. Rivera was survived by five children, two of whom were minors at the time of his death. At the time of the accident, Rivera was a passenger in a vehicle owned by Alpine and insured by West Bend. Rivera was employed by Alex Drywall, which, in turn, had provided him to perform work for Alpine. Alpine paid Alex Drywall for Rivera’s services and Alex Drywall paid Rivera for his work.

In February 2016, Rivera’s two minor children and the special administrator of Rivera’s estate commenced a wrongful death lawsuit against Alpine and West Bend. The Estate had not filed a claim for worker’s compensation under the Act. A Milwaukee County Circuit court judge granted summary judgment for Alpine and West Bend, concluding that because Rivera was an employee of a temporary help agency (Alex Drywall), the Estate was prohibited from bringing a tort action against Alpine.

On appeal, the Wisconsin Court of Appeals reversed the circuit court, ruling that the exclusive remedy provision of the Worker’s Compensation Act does not bar a temporary employee from bringing tort claims against a third party. The Court found that Alex Drywall was Rivera’s employer, and therefore, the exclusive remedy provision prohibited the Estate from bringing a tort claim against Alex Drywall, but it did not prohibit the Estate from pursuing tort claims against Alpine and West Bend, which the Court found to be third parties in this case.

The Court concluded that Wis. Stat. § 102.29(6)(b)1 only bars tort claims from temporary employees who make claims for worker’s compensation. In this case, it was undisputed that the Estate had not made a worker’s compensation claim. As a result, the Estate was not barred from pursuing tort claims against Alpine and West Bend—the temporary employer and its insurer. The Estate was still barred from suing Rivera’s primary employer, Alex Drywall, which the Court treated as a temporary help agency in this case.

The Rivera decision is significant because it exposes certain Wisconsin employers to tort liability that they were previously sheltered from. Under the decision, if a temporary employee is injured, the temporary employee may pursue tort claims against the employer that they are placed with or they may file a worker’s compensation claim against their primary employer—the temporary employment agency.

Employers who compensate temporary employment agencies for the services of employees primarily employed by the temporary help agencies should be concerned about tort liability in the event of an injury. Even if other employers do not advertise themselves as temporary help agencies, they may fit the definition of temporary help agency under the statute like Alex Drywall did in the Rivera decision. Furthermore, the Rivera decision indicates that loaned employees under Wis. Stat. §102.29(7) produce the same tort liability as temporary employees who are primarily employed by a temporary help agency.

This decision is currently unpublished, but was recommended for publication by the Third District of the Wisconsin Court of Appeals. The parties have 30 days to file a petition for review to the Wisconsin Supreme Court. This 30 day period will expire on February 8, 2018. As of January 29, 2018, no petition has been filed.

If you have questions about this material, please contact Daniel M. Pedriana (dpedriana@lindner-marsack.com), Claudia R. Harke (charke@lindner-marsack.com), or Joseph D. Birdsall (jbirdsall@lindner-marsack.com) or any other Lindner & Marsack, S.C. attorney.