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Slippery Issues of Fact Denies Party “Borrowed Servant” Defense (PA)

May 31, 2018

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On May 30, 2018, the Superior Court of Pennsylvania overturned a trial court’s granting of summary judgment in <em><a href="http://blog.wcmlaw.com/wp-content/uploads/2018/05/Gardner-v.-MIA-Products-Company-et-al.-4.pdf">Gardner v. MIA Products Company et al.</a></em>  In the underlying facts of the case, plaintiff Eric Gardner was an employee of DelVal Staffing, a temporary employment agency, that assigned him to work at MIA Products as a packer in their food freezer.  While working in the freezer, Gardner slipped and fell and suffered injuries.  He received workers’ compensation benefits through DelVal and then filed suit against MIA Products alleging negligence.
MIA Products moved for summary judgment on the basis that Gardner was a “borrowed employee” and therefore ineligible to file a tort action against it under Pennsylvania’s Workers’ Compensation Act, which the trial court granted.  Gardner then appealed.
Under Pennsylvania’s workers’ compensation law, employees are limited from suing their employers for injuries on the job, as workers’ compensation is meant to be the avenue for their recovery.  These limitations can also extend to other entities that are not individuals’ direct employers and are termed the “statutory employer defense” and the “borrowed servant defense”.  If a worker falls under either of these definitions, then the workers’ compensation limitation extends to them and prevents them from then suing that company that hired them.
In Pennsylvania, the requirements to be a “statutory employer” are defined in the Workers’ Compensation Act.  In this case, whether an individual is a “borrowed servant” is analyzed under the common law.  To determine if a worker who is furnished by one entity to another becomes the employee of the company to whom they are loaned, courts look at whether the latter company has the right to control the work that is being done and the manner in which it is being performed, irrespective of whether control is actually exercised.  Courts also look at other factors like the right to discharge the employee, the skill and expertise required for the work, and the payment of wages.
In the instant case, the Superior Court overturned the trial court’s granting of summary judgment for MIA Products as it found there were still genuine issues of material fact as to who actually controlled Gardner as an employee.  Though the court conceded that MIA Products personnel were present and directed Gardner on certain aspects of the job, they also cited deposition testimony that showed that DelVal personnel also transported Gardner to the site, provided work clothing, lockers for personal items, directed him on packing methods, provided a walkthrough of the facility, among other actions.  As such, the court concluded that there were still issues as to whether Gardner was truly “borrowed” by MIA Products.
This case demonstrates the important statutory employer and borrowed servant defense in Pennsylvania.  These defenses can provide a company a complete defense in a case and bar a plaintiff’s claims against it if a court agrees, as tort claims against an employer are barred under Pennsylvania’s Workers’ Compensation Act.  This case also demonstrates the difficulty with establishing the defenses, as well, as they are both very fact intensive with multiple elements to meet.  In addition, if these defenses backfire then the record is set up to establish that a defendant exercised significant control over an area or plaintiff, thus possibly setting it up for more exposure.  Thus, though the statutory employer and borrowed servant defenses are powerful in Pennsylvania, they do come with risks.  Thanks to Peter Cardwell for his contribution to this post.  Please email <a href="mailto:BGibbons@wcmlaw.com">Brian Gibbons</a> with any questions.

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