Limiting Liability When Utilizing Temporary Workers
Generally, the worker’s compensation statute, M.G.L. c. 152, would bar employees from filing a civil lawsuit against their employer if injured in the workplace as workers’ compensation would be the employee’s exclusive remedy. If the agreement between the temporary agency and the client company provides that the client company is not the temporary employee's employer, the worker’s compensation statute does not prevent a temporary worker from filing suit against the client company. If the worker is considered an employee of the temporary agency, he can seek worker’s compensation benefits through the temporary agency’s worker’s compensation insurer and also file suit against the company where he was working as a temporary worker. The worker’s compensation exclusivity bar would offer no protection to the client company.
The Massachusetts Appeals Court, however, has held that where a plaintiff signs a release waiving his right to file suit against the client company of a temporary agency, such a release is valid and enforceable. In Horner v. Boston Edison Co., 45 Mass. App. Ct. 139 (1998), the Appeals Court held the client company, Boston Edison, was entitled to summary judgment on a temporary employee’s claim. The employment agreement that the plaintiff signed with the temporary employment company specifically provided that the plaintiff recognized that the Worker’s Compensation Act covered any injuries that he might sustain during his employment and that he agreed to “waive and forever release any rights [he] might have to make claims or bring suits against any client or customer of [the temporary employment company.] The plaintiff argued that this clause was not valid and enforceable and violated public policy. The Appeals Court, however, upheld the agreement and found that it did not violate public policy because “it extinguishes only the employee’s right to recover additional amounts as a result of a work-related injury for which the employee has already received workers’ compensation benefits.” Here, the release was “not extracted by the employer as a shield against its own liability, bur rather as protection for its customers for those risks assumed by its employees who, in turn, are covered by workers’ compensation insurance.” The Court in Horner reiterated the well settled principle that “[a]llocation of risk by means of a release is generally not against public policy.”
Recently, Melick & Porter was successful in obtaining summary judgment for a client in a serious personal injury claim by a temporary worker against the client. The temporary worker was receiving worker’s compensation benefits from the temporary company, but filed a third-party action against our client. After obtaining documents from the temporary employment company, which included an employment agreement with the temporary employment company that specifically limited the plaintiff’s right to file suit against customers of the temporary staffing company, we moved for summary judgment and it was granted. The Appeals Court then affirmed the decision, saving our client from protracted litigation and a potentially costly judgment.
Please contact us if you have any questions as to how best to protect your business when using temporary workers.
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