dissenting. The controlling issue in this case is whether the fact that the County did not provide direct compensation to Slater serves to negate the District’s claim that the County was Slater’s special employer via an express or implied contract for hire. I believe it does not.
The County and the District agreed that Slater sustained a compensable injury for which he received medical treatment and a fifteen percent permanent impairment rating to his knee. The District, through its insurance company, initially accepted Slater’s claim and paid for Slater’s knee surgery in the amount of $9,238 in medical expense and for $4,518 in indemnity benefits. In a hearing before the administrative law judge, the District asserted that Slater was not performing employment services for the District at the time of his injury. Rather, it contended that Slater was performing employment services for the County. In response, the County argued that no employer-employee relationship existed between the County and Slater. The County controverted Slater’s claim in its entirety.
Arkansas Code Annotated section 11-9-102 (9) (A) (Supp. 1999) defines an employee as “any person, including a minor, whether lawfully or unlawfully employed in the service of an employer under any contract of hire or apprenticeship, written or oral, expressed or implied[.]” Black’s Law Dictionary defines an implied contract as “an agreement which legitimately can be inferred from intention of [the] parties as evidenced by circumstances and ordinary course of dealing and common understanding^]” Black’s Law Dictionary 225 (abridged 6th ed. 1990).
Arkansas law recognizes two types of dual employment. See Daniels v. Riley’s Health & Fitness Ctrs., 310 Ark. 756, 840 S.W.2d 177 (1992). The first, as set forth in 3 Arthur Larson, The Law of Workmen’s Compensation § 67.00 (2000), provides as follows:
When a general employer lends an employee to a special employer, the special employer becomes liable for workmen’s compensation only if:
(a) the employee has made a contract of hire, express or implied, with the special employer;
(b) the work being done is essentially that of the special employer; and
(c) the special 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 are liable for worker’s compensation.
Id. See also Daniels, supra (quoting 1C Arthur Larson, The Law of Workmen’s Compensation § 67.00).
A second type of dual employment is said to exist when one can separately identify the job activities performed by a worker on behalf of one employer from job activities performed on behalf of a different employer. See Daniels, supra. When the employee’s job activities are clearly distinguishable, the employer whose work is being performed at the time of the incident is deemed solely Hable for the incident. See Daniels, supra.
Larson emphasizes that the critical issue in determining whether a special employment exists is whether the employee knowingly made a contract of hire with the special employer. See 3 Larson, supra.
Compensation law, however, is a mutual arrangement between the employer and employee under which both give up and gain certain things. Since the rights to be adjusted are reciprocal rights between employer and employee, it is not only logical but mandatory to resort to the agreement between them to discover their relationship. The element of payment, to satisfy the requirement of a contract of hire, need not be in money, but may be in anything of value.
3 Larson, § 64.01 (emphasis added).
When the facts demonstrate that an employee has not given informed consent, a special employment relationship does not exist. Consent may be implied through the employee’s acceptance of the special employer’s control or direction; however, Larson cautions that the fact that the employee is on the payroll of the special employer is perhaps the least significant factor in determining whether a special employment relationship exists. See 3 Larson, supra. Instead, one should query whether the employee and the special employer entered into a contract of hire, whether the activity being performed was exclusively that of the special employer, and whether the special employer assumed the right to dictate the details of the employee’s work activity. See 3 Larson, supra. Whether a special employment relationship may exist when a borrowing employer has not compensated a loaned employee is a matter of first impression in Arkansas. However, other states reviewing this issue have concluded that the fact of who pays the employee is not wholly dispositive.
In Sonners v. Department of Labor & Indus., 3 P.3d 756 (2000), the Washington Court of Appeals reviewed the issue of dual employment in the context of which employer was responsible for paying industrial insurance premiums. The court held that a leasing company who issued paychecks, had employees fill out applications, performed drug tests, and conducted safety training was not a dual employer under the consent or control prongs of its test to determine whether a dual-employment relationship exists. Although the leasing company provided an entire workforce to a corporation, the court of appeals concluded that the leasing company did not retain the right of control over the worker’s daily activities and that the workforce had not consented to an employee-employer relationship such as to satisfy the requirement of dual employment. See Sonners, supra.
The issue was also addressed in Croston v. Montefiore Hosp., 229 A.D.2d 330 (1996), when the New York supreme court held that the fact that a technologist-trainee was not financially compensated by Montefiore hospital did not preclude a finding that the trainee was an employee of the hospital. In reaching its decision, the court noted that the hospital selected trainees, supervised and controlled the work of trainees, retained the sole power to discharge trainees, and benefitted from the work performed by trainees. The court observed that the experience and training received by the trainee constituted value to the trainee because it was necessary for her eventual certification. It then held that the trainee’s sole remedy against the hospital was workers’ compensation benefits. See Cros-ton, supra.
In discussing the issue of whether a special employment relationship existed such as to trigger the exclusivity remedy of workers’ compensation and bar a common-law claim, the supreme court of Indiana listed several factors to consider. See Hale v. Kemp, 579 N.E.2d 63 (1991). These factors include the right to discharge, how an employee is paid, who supplied necessary tools and equipment, whether the parties believed that an employment relationship existed, who controlled the work activities to reach the end result, and whether work boundaries were established. See Hale, supra. However, the Hale court noted that the primary factor to determine the existence of an employment relationship was whether the parties intended to create a relationship. See Hale, supra.
The record in the instant case clearly demonstrates that Slater’s application process with the County occurred after Slater had been hired by the District as a security guard. The parties do not dispute that Sheriff Powell interviewed Slater numerous times, performed a background investigation, and approved Slater’s application for the position of deputy sheriff after Slater underwent a physical at the behest of the County. Also, Slater testified that his employment with the District was not contingent upon him becoming a commissioned deputy sheriff with the County. It is significant that Powell testified that he viewed the application process seriously, that he had the power to approve or deny an application for deputy sheriff, and that he could revoke a deputy sheriffs commission if he determined the deputy was acting in an unprofessional manner.
Slater was aware of the arrangement between the County and the District. The fact that Slater did not receive a monetary benefit from the County is simply not dispositive. The County received the benefit of extra law enforcement in areas outside of the District while the District received the benefit of law enforcement within the District. Slater also benefitted through an increase in the pay he received from the District. Clearly, these facts demonstrate that Slater and the County entered into an express or implied contract for hire. Next, there is no disagreement that Slater received his injury while responding to a law-enforcement call from the County’s dispatcher at a time when he was not performing employment services for the District. Because Slater responded during his non-working hours to a call from the County that directed him to investigate a matter located in the County and outside of the District, it is plain that the District received no direct benefit from Slater’s law-enforcement activity when his injury occurred.
The County had the right to control Slater’s activity while he served in the capacity of a commissioned deputy sheriff outside the District as evidenced by the testimony of Slater and Sheriff Powell. Slater testified that the ranking officer within the sheriff’s department had the power to control the activities associated with every response call that took place in the County. Powell corroborated Slater’s testimony, and also testified that he retained the ability to revoke the commission of a deputy sheriff if necessary.
Óur standard of review is not whether we would have reached a different conclusion from the Commission based on the facts before the Commission, but whether substantial evidence exists to support the Commission’s decision. The Commission’s decision is supported by substantial evidence and I would affirm. I see no reason to treat Slater different from a leased employee who suffers an injury while working for the employer who procured his labor from a leasing company. The majority, unfortunately, has elevated the factor deemed least important — whether Slater was on the County payroll — as controlling. The better approach is to decide the case based on whose interest Slater was directly serving when injured. Like the Commission, I believe that the record plainly shows that the County was being served. Thus, it should pay the workers’ compensation benefits associated with that service.