Doughty v. Work Opportunities Unlimited/Leddy Group

Majority: SAUFLEY, C.J., and LEVY, MEAD, and GORMAN, JJ.

Dissent: ALEXANDER, SILVER, and JABAR, JJ.

GORMAN, J.

[¶ 1] Charles Doughty appeals from a decision of a Workers’ Compensation Board Hearing Officer (Collier; HO), granting his petition for award against Work Opportunities Unlimited/Leddy Group, an employment agency, but denying his petitions to remedy discrimination pursuant to 39-A M.R.S. § 353 (2010) against Work Opportunities and Poland Spring Water Co./Nestle Waters, Inc.1 Doughty contends mainly that the hearing officer erred by denying the petition to remedy discrimination against Poland Spring on the ground that Doughty was not in an employer-employee relationship with Poland Spring. We affirm the decision.

I. BACKGROUND

[¶ 2] Work Opportunities hired Charles Doughty in May of 2008, and assigned him to work at Poland Spring’s bottling facility in Hollis. Work Opportunities paid Doughty’s salary, and Poland Spring paid Work Opportunities a fee for his services. In general, Poland Spring uses agency-supplied temporary workers on an as-needed or seasonal basis, and then hires its employees from the pool of temporary workers.

[¶ 3] On August 13, 2008, Doughty fell at the Poland Spring plant while attempting to clear a jam in the filler machine, and hit his head. A Poland Spring supervisor took him to the emergency room, where the treating physician diagnosed a closed head injury, noting that he had “minimal mechanism of injury with no evident trauma to his head and no ongoing symptoms.”

[¶ 4] Immediately after the injury, Poland Spring’s production manager decided that Doughty could no longer work there because he had committed an unsafe act, as evidenced by the accident. The production manager informed Work Opportunities that Doughty’s assignment at Poland Spring had ended. When the Work Opportunities representative called Doughty to tell him that there was no need for him to return to Poland Spring, Doughty informed her of his injury.

[¶ 5] On August 18, Doughty returned to the emergency room, complaining of headaches. He had radiologic tests performed, and was referred to his own physician for any follow up. Doughty saw his personal physician on August 21, who took him out of work for headaches and neck pain secondary to probable post-concussion symptoms. That physician released him to full duty work as of September 17.

[¶ 6] During the same period of time, Work Opportunities scheduled appoint*412ments for Doughty with its medical provider. Doughty missed several appointments and did not return calls from Work Opportunities. After Doughty failed to show up for another scheduled medical appointment on October 8, 2008, Work Opportunities determined that Doughty would no longer be eligible for work assignments. Although this was not communicated to Doughty, he never returned to work for Work Opportunities.

[¶ 7] In November of 2008, Doughty filed petitions for award and to remedy discrimination pursuant to 39-A M.R.S. § 358 against Work Opportunities and, in January 2009, filed similar petitions against Poland Spring. The petitions alleged that he had been injured while working on August 13, and that he had been fired for exercising his rights under the Workers’ Compensation Act. The hearing officer granted the petition for award against Work Opportunities, awarding Doughty total incapacity benefits for the thirty-five-day period that his doctor had taken him out of work. The hearing officer denied the petitions to remedy discrimination against Work Opportunities2 and Poland Spring.

[¶ 8] The hearing officer specifically determined that Doughty was an employee of Work Opportunities, and was not an employee of Poland Spring, because Doughty did not have a “contract for hire” with Poland Spring pursuant to 39-A M.R.S. § 102(11)(A) (2010) (defining “employee” as “every person in the service of another under any contract of hire, express or implied, oral or written ... ”). The hearing officer concluded that section 353 of the Workers’ Compensation Act does not provide a temporary worker employed by an insured employment agency a right of action for discrimination against the employment agency’s client when there is no such contract. The hearing officer further determined that 39-A M.R.S. § 104 (2010), which extends employers’ immunity from suit for work injuries to employers that hire temporary workers through insured employment agencies, also does not authorize an action against Poland Spring pursuant to section 353.

[¶ 9] Doughty filed a motion for additional findings of fact and conclusions of law, which the hearing officer denied. He then appealed, and we granted his petition for appellate review pursuant to 39-A M.R.S. § 322 (2010) and M.R.App. P. 23(c). Project Staffing, Inc., filed a brief as ami-cus curiae.

II. DISCUSSION

[¶ 10] The issue for decision is whether an employee hired by an employment agency and injured while working for the agency’s client has a right of action for discrimination pursuant to 39-A M.R.S. § 353 against both the employment agency and the client company, when the employee does not have a contract for hire with the client company.

*413[¶ 11] The issue of employment status is a mixed question of law and fact. Marcoux v. Parker Hannifin/Nichols Portland Div., 2005 ME 107, ¶ 13, 881 A.2d 1138. “We give deference to the [board’s] findings, and will vacate a decision regarding the employment relationship only when it falls outside the deci-sional range in which reasonable [hearing officers], acting rationally, could disagree, or when a [hearing officer] misconceives the meaning of the applicable legal standard.” West v. C.A.M. Logging, 670 A.2d 934, 937 (Me.1996) (quotation marks omitted); see also Timberlake v. Frigon & Frigon, 438 A.2d 1294, 1296 (Me.1982).

[¶ 12] “When construing provisions of the Workers’ Compensation Act, our purpose is to give effect to the Legislature’s intent.” Hanson v. S.D. Warren Co., 2010 ME 51, ¶ 12, 997 A.2d 730. “In so doing, we first look to the plain meaning of the statutory language, and construe that language to avoid absurd, illogical, or inconsistent results.” Id. We also consider “the whole statutory scheme of which the section at issue forms a part so that a harmonious result, presumably the intent of the Legislature, may be achieved.” Davis v. Scott Paper Co., 507 A.2d 581, 583 (Me.1986).

[¶ 13] Two provisions of the Workers’ Compensation Act must be discussed to explain our decision: title 39-A M.R.S. §§ 353 and 104. Section 353 governs actions brought by an employee to remedy discrimination and provides:

An employee may not be discriminated against by any employer in any way for testifying or asserting any claim under this Act. Any employee who is so discriminated against may file a petition alleging a violation of this section. The matter must be referred to a hearing officer for a formal hearing under section 315, but any hearing officer who has previously rendered any decision concerning the claim must be excluded. If the employee prevails at this hearing, the hearing officer may award the employee reinstatement to the employee’s previous job, payment of back wages, reestablishment of employee benefits and reasonable attorney’s fees.
This section applies only to an employer against whom the employee has testified or asserted a claim under this Act. Discrimination by an employer who is not the same employer against whom the employee has testified or asserted a claim under this Act is governed by Title 5, section Jp572, subsection 1, paragraph A.

(Emphasis added.)

[¶ 14] Title 39-A M.R.S. § 104 extends immunity from civil liability to employers who use private employment agencies to provide temporary help, so long as the employment agency secures workers’ compensation insurance. It provides in relevant part:

An employer who has secured the payment of compensation in conformity with sections 401 to 407 is exempt from civil actions, either at common law or under sections 901 to 908; Title 14, sections 8101 to 8118; and Title 18-A, section 2-804, involving personal injuries sustained by an employee arising out of and in the course of employment, or for death resulting from those injuries. An employer that uses a private employment agency for temporary help services is entitled to the same immunity from civil actions by employees of the temporary help service as is granted with respect to the employer’s own employees as long as the temporary help service has secured the payment of compensation in conformity with sections k01 to U07. “Temporary help services” means a service where an agency assigns its *414own employees to a 3rd party to work under the direction and control of the 3rd party to support or supplement the 3rd party’s work force in work situations such as employee absences, temporary skill shortages, seasonal work load conditions and special assignments and projects.

(Emphasis added.)

[¶ 15] The hearing officer determined that (1) section 104 assigns liability for workers’ compensation claims to the employment agency because it relieves the client company of liability under the Act if the employment agency secures the payment of compensation; (2) because Doughty did not have a contract for hire with Poland Spring, Poland Spring was not his employer and section 353 therefore did not give Doughty a right of action against Poland Spring; and (3) although Doughty was precluded from bringing a discrimination claim under the Act against Poland Spring, he was not without a remedy— pursuant to section 353, he has a remedy against Poland Spring under the Maine Human Rights Act, 5 M.R.S. § 4572(1)(A) (2010).

[¶ 16] Doughty contends that the hearing officer erred when determining that he did not have a right of action against Poland Spring pursuant to section 353 on the basis that Poland Spring was not his employer. Doughty asserts that both Work Opportunities and Poland Spring were his employers because he had an employment contract with Work Opportunities and because he worked under Poland Spring’s control. Nothing in the Workers’ Compensation Act precludes simultaneous employment by two different employers, he contends.

[¶ 17] Although we have suggested that the concept of joint employment, under which two employers could be jointly liable under the Workers’ Compensation Act, might apply in Maine, we have not expressly adopted or applied it. See Bean v. Alrora Timber, Inc., 489 A.2d 1086, 1087 (Me.1985) (not deciding whether joint employment existed between the two potentially joint employers because actual employer was independent contractor). Professor Larson notes that the concept of dual employment is well established in several states, as follows:

When a[n] employer lends an employee to another party, that party becomes liable for worker’s [sic] compensation only if
(a) the employee has made a contract of hire, express or implied, with the second employer;
(b) the work being done is essentially that of the second employer; and
(c) the second employer has the right to control the details of the work.
When all three of the above conditions are satisfied in relation to both employers, both employers will be liable for workers’ compensation and both will both have the benefit of the exclusivity defense to tort claims.
Under this doctrine, the lending employer is known as the “general employer” and the borrowing employer, the “special employer.” Because the inquiry into the employment relationship between the special employer and the employee is a factual one, courts at times have looked outside the terms of any contract between the two employers, to determine the actual relationships of the parties.
In this context some states place special emphasis on the right to control, and some states apply a longer list of criteria, but the various renditions of the special employer test typically, though not always, require consideration of the factors listed above.
*415In one sense, the lent-employee doctrine is not a separate doctrine at all. Theoretically, the process of determining whether the special employer is liable for compensation consists simply of applying the basic tests of employment set out in an earlier chapter. If they are satisfied, the presence of a general employer somewhere in the background cannot change the conclusion that the special employer has qualified as an employer of this employee for compensation purposes.

3 Arthur Larson & Lex K. Larson, Larson’s Workers’ Compensation Law § 67.01 [1], [2] (2011) (footnotes omitted).

[¶ 18] When determining that there was no employment relationship between Doughty and Poland Spring, the hearing officer looked to the Larson factors, and focused on the Act’s general definition of “employee,” which “includes ... every person in the service of another under any contract of hire, express or implied, oral or written....” 39-A M.R.S. § 102(11)(A) (emphasis added).

[¶ 19] Doughty argues that the statutory definition is of minimal importance here, and the control test should apply, citing Marcoux, 2005 ME 107, 881 A.2d 1138. In Marcoux, the injured employee was an on-site coordinator of Kelly Services’ temporary employees who were assigned to work at Nichols’s plant. Id. ¶ 2. The employee slipped on Nichols’s premises while performing work on Kelly’s behalf. Id. ¶ 3. Kelly had secured workers’ compensation insurance, and Marcoux brought her claim for benefits against Kelly. Id. ¶ 4. She also brought a negligence action against Nichols. Id.

[¶ 20] At issue was whether section 104 extended immunity from suit to Nichols. We examined the language in section 104 defining “temporary help services” as a “service where an agency assigns its own employees to a 3rd party to work under the direction and control of the 3rd party,” 39-A M.R.S. § 104, and construed it to mean that immunity from suit applies only when the loaned employee is under the direction and control of the third-party employer. Marcoux, 2005 ME 107, ¶ 12, 881 A.2d 1138. Because there were genuine issues of material fact with respect to the degree of control Nichols exercised over Marcoux as a supervisory employee, we affirmed the denial of the motion for a summary judgment. Id. ¶ 15.

[¶ 21] We also addressed whether an entity was an employer for purposes of immunity from suit in Bourette v. Dresser Industries, Inc., 481 A.2d 170 (Me.1984). In that case, Westinghouse Corporation had a contract to do specific work at a power plant involving maintenance and inspection of relief valves manufactured by Dresser Industries. Id. at 172. Plaintiffs were millwrights assigned by their union to work for Westinghouse at the power plant, pursuant to a contract between Westinghouse and the union. Id. Westinghouse assigned the plaintiffs to assist a Dresser employee who was attempting to fix leaks in the relief valves. Id. The plaintiffs had worked at the direction of the Dresser employee for four days when a valve exploded, injuring them. Id. They brought a tort action against Dresser, and a jury entered verdicts for the plaintiffs. Id.

[¶ 22] Dresser argued that the plaintiffs were its employees and should have been barred from bringing suit by the Workers’ Compensation Act’s exclusive remedy provision. Id. The trial court determined that neither the plaintiffs nor Dresser intended that the plaintiffs become Dresser’s employees, and thus no contract for hire had been entered into. Id.

*416[¶ 23] Dresser asserted on appeal that the “control” test should apply. Id. at 172-73. We disagreed, reasoning that the control test had evolved from common law decisions concerning an employer’s vicarious liability for the acts of employees, and its purpose is “not coextensive with the underlying purposes of the statutory scheme.” Id. at 173; see also Timberlake, 438 A.2d at 1296-97. “Under workers’ compensation ... the statutory definition is of paramount importance, and the issue is whether the employee entered into a contract of hire with the special employer. In the absence of a contract, express or implied, the control test is unnecessary.” Bourette, 481 A.2d at 173.

[¶ 24] Pursuant to section 104, both Work Opportunities and Poland Spring would be immune from suit in a negligence action brought by Doughty. However, employer status for purposes of immunity under section 104 does not confer employer status for purposes of a discrimination action under section 353. Instead, to decide whether Poland Spring, as a “special employer,” is liable for compensation or other remedies under the Act, the hearing officer properly applied the factors identified in Larson’s treatise: (1) the existence of an employment contract, (2) whether the work being done is that of the special employer, and (3) whether control is by the special employer. As he correctly found, although Doughty was doing Poland Spring’s work, and although he was under its control, there was no contract, either express or implied, between Doughty and Poland Spring. Again, we note that the hearing officer denied Doughty’s petition for award against Poland Spring because he was not a Poland Spring employee, and Doughty has not appealed from that decision.

[¶ 25] If, as the dissenting opinion contends, the eight-part test from Timberlake, 438 A.2d at 1296, which traditionally has been used to determine whether an entity is an employer as opposed to an independent contractor, should be used in this context — to determine whether an employee of a temporary staffing agency is also the employee of the 3rd party employer— the result would be problematic. The Act defines “temporary help services” as

a service where an agency assigns its own employees to a 3rd party to work under the direction and control of the 3rd party to support or supplement the 3rd party’s work force in work situations such as employee absences, temporary skill shortages, seasonal work load conditions and special assignments and projects.

39-A M.R.S. § 104 (emphasis added). Thus, if the eight-part control test is the governing test, the outcome of the test, as applied to the employees of temporary help services, in most cases would be preordained because employees of temporary help services, by definition, work under the direction or control of the third-party employer. Thus, third-party employers will necessarily be found to be in an employer-employee relationship with most temporary workers.3

[¶ 26] The practical, unintended consequences of this approach would be significant. Because the Act requires every *417employer to “secure the payment of compensation ... with respect to all employees,” 39-A M.R.S. 401(1) (2010), two workers’ compensation insurance policies would have to be acquired for a single employee: one by the temporary help service and the other by the 3rd party employer. This outcome is illogical and cannot be squared with the Legislature’s goals in reforming the Workers’ Compensation Act, which include reducing workers’ compensation costs to employers and attracting employers to the state, as well as cutting costs to the system as a whole. See Doucette v. Hallsmith/Sysco Food Servs., Inc., 2011 ME 68, ¶ 16 n. 5, 21 A.3d 99; Temm v. S.D. Warren Co., 2005 ME 118, ¶ 13, 887 A.2d 39.

[¶ 27] The hearing officer did not misconceive the legal standard when focusing on whether a contract for hire existed between Doughty and Poland Spring pursuant to section 102(11)(A) and Bourette, and did not err in concluding that Doughty had a contract for hire only with Work Opportunities.

[¶ 28] This holding is consistent with the overall statutory scheme established by sections 104 and 353. Section 104, which grants a special employer immunity from civil suit if the general employer has secured the payment of claims brought pursuant to the Act, has no specific applicability to the issue presented by this case. Because Section 104 is the only provision in the Act that addresses temporary workers, however, the hearing officer’s reference to it is understandable.

[¶ 29] Section 353, which applies only to an employer against whom the employee has testified or asserted a claim under this Act, requires that there be a determination as to whether there is an employer-employee relationship between the petitioning employee and the named employer. Discrimination by an employer who is not the same employer against whom the employee has testified or asserted a claim under this Act is governed by Title 5, Section 4572. See Laskey v. Sappi Fine Paper, 2003 ME 48, ¶14, 820 A.2d 579 (“Section 4572(1)(A)(1) does not suggest a determination by the Legislature that section 353 was intended to occupy the field of discrimination claims by injured workers to the exclusion of the Maine Human Rights Act or other laws that may provide protection for individuals with work limitations or disabilities.”). If the employee does not have a claim against a 3rd party “employer” pursuant to the Act, the employee may pursue a remedy for discrimination under the Maine Human Rights Act.4 The potential remedies for a discrimination claim under the Maine Human Rights Act are broader than those for a discrimination claim under the Workers’ Compensation Act. Compare 39-A M.R.S. § 353 with 5 M.R.S. §§ 4613(2)(B), 4614 (2010).

The entry is:

The judgment of the Workers’ Compensation Board Hearing Officer is affirmed.

. The hearing officer also denied Doughty’s petition for award against Poland Spring. Doughty does not appeal that determination.

. Doughty contends on appeal that the hearing officer was compelled to find that Work Opportunities discriminated against him for asserting his right under the Workers' Compensation Act to treat with a medical provider of his choice, pursuant to 39-A M.R.S. § 206(2) (2010). The key question for determination on a discrimination claim is whether the motivation for taking an adverse employment action against an employee "was rooted substantially or significantly in the employee's exercise of his rights under the Workers’ Compensation Act.” Maietta v. Town of Scarborough, 2004 ME 97, ¶ 14, 854 A.2d 223 (quotation marks omitted). The hearing officer found as a matter of fact that Work Opportunities did not terminate Doughty for asserting his right to treat with a medical provider of his choice. We do not disturb that finding. See 39-A M.R.S. §§ 318, 322(3) (2010); see also Leighton v. S.D. Warren Co., 2005 ME 111, ¶ 22, 883 A.2d 906.

. Marcoux v. Parker Hannifin/Nichols Portland Division, 2005 ME 107, 881 A.2d 1138, provides an example of when the result would not be preordained. We held that a supervisory employee, although employed by a private agency, would not provide “temporary help services,” pursuant to section 104 for purposes of the third-party employer’s immunity from tort liability, if she could establish that she did not work under the third-party employer’s control. Id. ¶ 12. In this case, it is established that Doughty worked under Poland Spring’s control.

. Because Doughty does not contend that Work Opportunities may be held liable, under the Act, for acts of discrimination against its employees by its client, Poland Spring, we have no reason to consider that argument.