The Borrowed Servant Doctrine in Florida: The Legal Implications of Loaning Out Employees

Key Points:

  • In Florida there is a presumption that an employee “lent” to a temporary employer remains the employee of his regular employer.
  • In order to overcome that presumption and receive the benefit of workers’ compensation exclusivity, the temporary employer must satisfy a three-part test.

 

From time to time, one employer may loan an employee to another employer on a temporary basis. For instance, it is not unusual for one subcontractor on a construction site to loan out its workers to another in order to get a particular task accomplished at the job site. If that loaned employee is injured while working, the question arises: which of the employers is entitled to workers’ compensation immunity? The short answer is that, in some circumstances, both employers are entitled to workers’ compensation immunity. This article does not pertain to situations where the loaned employee is provided by an employee leasing company.

Florida retains the common law “borrowed servant” doctrine that one employer can lend its employee to another temporary employer. See, e.g., Pensacola Christian College v. Bruhn, 80 So. 3rd 1046, 1049 (Fla. 1st DCA 2011). That temporary employer is sometimes referred to as the “special employer.”

A presumption arises that, even though the employee has been “lent,” the employee’s general employment with his regular employer continues. But that presumption can be overcome. In order to do so, the party claiming to be the special employer must establish that: (1) there was a contract for hire, either express or implied, between the special employer and the employee; (2) the work being done at the time of the injury was essentially that of the special employer; and (3) the power to control the details of the work resided with the special employer. Shelby Mutual Ins. Co. v. Aetna Ins. Co., 246 So. 2d 98, 101 n. 5 (Fla. 1971); Fossett v. Southeast Toyota Distribs., LLC., 60 So. 3d 1155, 1157-58 (Fla. 1st DCA 2011); Coleman v. Mini-Mac Maint. Serv., Inc., 706 So. 2nd 393, 395 (Fla. 1st DCA 1998). Where all three of the conditions are satisfied, both employers have the benefit of the workers’ compensation exclusivity defense to tort claims raised by the injured employee. Hazealeferiou v. Labor Ready, 947 So. 2d 599, 603 (Fla. 1st DCA 2007).

Establishing all three conditions is not easily done, but it can be made somewhat easier if those businesses that loan out their employees from time to time understand the legal concepts involved. Of the three elements, the first factor is the critical one. Derogatis v. Fawcett Mem’l Hosp., 892 So. 2d 1079, 1081 (Fla. 2d DCA 2004) (citing Horn v. Tandem Health Care of Fla., Inc., 862 So. 2d 938, 940 (Fla. 2d DCA 2004)); Pepperidge Farm, Inc. v. Booher, 446 So. 2d 1132, 1132 (Fla. 4th DCA 1984), approved by Booher v. Pepperidge Farm, Inc., 468 So. 2d 985, 985-86 (Fla. 1985). The remaining two factors are considered indicia of such a contract. Biggins v. Fantasma Prods., 943 So. 2d 952, 957 (Fla. 4th DCA 2006).

This first factor, whether there was an express or implied contract, requires evidence that there was a contract for hire, either express or implied, between the special employer and the employee and that there was “deliberate and informed consent by the employee” to the contract. Biggins, 943 So. 2d at 957 (citing Sagarino v. Marriott Corp., 644 So. 2d 162, 165 (Fla. 4th DCA 1994) (citing Shelby Mut. Ins. Co., 246 So. 2d at 101, n.5).) At least one of Florida’s courts requires the special employer to show a “definite arrangement between the general and special employer and the employee’s knowledge thereof.” Sagarino, 644 So. 2d at 165 (citing Pepperidge Farm, Inc. v. Booher, 446 So. 2d 1132). Practice pointer: Those special employers who use loaned employees on a regular basis should consider having that loaned employee sign a statement: (a) that he or she knows that his or her regular employer has an agreement with the special employer, whereby the employee is being loaned to the special employer; (b) that the employee consents to being loaned to the special employer; and (c) that, while on loan, the special employee knows that he is subject to and consents to the direct control of the special employer. Although such a signed consent form might not be entirely dispositive of the issue, it should serve as admissible evidence of the existence of the first, critical element.

Where there is no express contract or statement, it can be difficult for the special employer to establish an implied contract. Other factors that a court might consider as establishing a consensual relationship between the loaned employee and his special employer would include “benefit, right of control and payment of compensation... .” Shelby, 246 So.2d at 10. However, some courts hold that, even where there is evidence that the loaned employee accepted direction from the special employer, this is not sufficient to establish implied consent to a contract for hire. See, Austin v. Duval County Sch. Bd., 657 So. 2d 945, 950 (Fla. 1st DCA 1995) (explaining that an employee’s acceptance of direction from another employer is insufficient to demonstrate the employee knowingly entered into a contract of hire with that employer). For this reason, every effort should be made to get something in writing, signed by the loaned employee.

The second factor is that the work being done at the time of the injury was essentially that of the special employer. This factor would appear to require evidence of some differentiation of the work that the employee performs for his regular employer from the work he performs for his special employer.

Finally, the third factor to be considered in making a determination of whether the employee remains the employee of the general employer is one that relates to who had the power to control the details of the employee’s work. If the regular employer is continuing to control the day-to-day details of the employee’s work, this would mean that that borrowed servant doctrine would not apply.

*Pamela and Mike work in our Jacksonville, Florida office. Pamela, special counsel, can be reached at 904.358.4206 or pslynde@mdwcg.com. Mike, senior counsel, can be reached at 904.358.4204 or mjobringer@mdwcg.com.

Defense Digest, Vol. 21, No. 1, March 2015

Defense Digest is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2015 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.