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January 31, 2018Client Alert

Court Says Temp Employees Can Sue Worksite Employer

A recent decision of the Wisconsin Court of Appeals has some troubling implications for companies that use temporary staffing firms. In Ehr v. Alpine Insulation, decided on January 9, 2018, the Court of Appeals held that temporary workers may be able to sue the worksite employer and that worker’s compensation benefits are not the exclusive remedy available to an injured temporary worker. This decision is contrary to the longstanding approach to injuries involving temporary workers under the exclusive remedy protections of the Wisconsin Workers Compensation Act. Wisconsin Statute 102.03 states that worker’s compensation is an employee’s exclusive remedy where the conditions exist for coverage under the Workers Compensation Act. However, according to the Court of Appeals, that statutory provision only covers the direct employer/employee relationship, not the relationship between the temp employee and the company where s/he is placed. Temporary workers are, instead, covered by Wisconsin Statute 102.29, which uses different language. That statute states that the exclusive remedy protection for employers applies only when the temp employee has made a “claim” for worker’s compensation benefits. Based upon that language, the Court of Appeals ruled that a temporary help employee may file a personal injury lawsuit against the worksite employer (and presumably the individual employees at that worksite) where the temporary employee worked, so long as the temporary employee does not make a claim for worker’s compensation as well.

This decision leaves open the question of what constitutes the making of a claim for worker’s compensation. As most employers know, when an injury occurs in the course of employment and arising out of the employment, an employer is obligated to provide worker’s compensation benefits. There is no formal “claim” process. The decision leaves open many questions: Does the temp employee need to decline worker’s compensation benefits in order to be entitled to make a personal injury claim? Can a temp employee give back benefits that have already been paid so that they can file a personal injury lawsuit? What actions constitute the making of a claim?

There is very little doubt that this decision will be appealed and that legislative efforts will be made to correct this outcome. Most employers who use temporary help agencies have assumed that they are protected from personal injury claims and may reconsider the wisdom of using temporary help employees if this decision is allowed to stand. In the interim, employers who use temp employees would be wise to document the injury on a “claim” form for workers compensation and submit that “claim” form to the staffing firm. Also, employers should look at their contract with staffing firms to determine what protections and insurance coverages are provided. 

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