CWS 3.0: June 20, 2012

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Risk: Does Workers' Comp Protect the Buyer from Lawsuits?

In this final article meant to debunk myths that persist in the contingent workforce arena, attorneys Eric H. Rumbaugh and Mark Lotito discuss workers’ compensation and whether injured workers can sue for compensation beyond workers’ comp.

Joint employment is often associated with mutual liability for contingent worker issues, and is often feared. In one important situation, however, joint employment can be mutually beneficial to staffing firms and their client companies. When a contingent worker is injured, workers’ compensation may provide an exclusive remedy. In that situation, the injured worker’s remedy against both the staffing firm and its client company is limited by the workers’ compensation statute.

That was exactly the outcome in Jones v. UTI Integrated Logistics Inc. In that case, the plaintiff was employed by a temporary staffing agency, which sent him to work at a client company facility. While working at the client company facility, the plaintiff injured his back and filed suit against the client company. The court determined that the plaintiff was a leased employee, so the staffing agency and the client company were joint employers under Indiana law. Accordingly, the plaintiff was limited to the exclusive remedy of Indiana’s workers’ compensation law, and he could not sue the client (or the staffing company) company for negligence.

Eric H. Rumbaugh is a partner and Mark Lotito is an associate with the law firm Michael Best & Friedrich LLC (www.michaelbest.com). They represent employers in labor, employment and benefits law matters.

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