Georgia court mulls whether staffing agency or insurer should pay workers' comp claims
The question boils down to whether temporary workers are technically employees of the companies they are contracted out to.
The Georgia Insurer’s Insolvency Pool (GIIP), a safety net for employees with workers’ compensation claims in instances where the carrier went insolvent, appealed two cases to the Georgia Court of Appeals in early December 2023.
At the heart of these disputes were disagreements on who was each claimant’s employer at the time of the accidents. Both were employed through temp agencies with an insurer that went insolvent and both were doing work for companies with different insurers.
The question boils down to whether those temporary workers were technically employees of the companies they were contracted out to under the “borrowed servant doctrine” for workers’ comp claims, as the GIIP argues, or if they were employees of the temp agencies that hired them. If the latter is true, the GIIP is responsible for paying workers’ compensation and vice versa.
According to the GIIP, this is a question that will have “serious and far-reaching consequences” for Georgia workers, because it will determine whether similarly situated employees can receive workers’ comp benefits, and “the decision dismantles the long-established principle that the State Board will go up the ladder of liability to find coverage to prevent an injured employee from going without benefits.”
Whitney Arp of Gorby Peters, arguing for the GIIP, said the borrowed servant doctrine gave a three-prong test to determine whose insurer is responsible for the claims:
- Whether the “special master,” or the entity the temp is contracted out to, had complete direction and control over the “borrowed servant,” or temp worker.
- Whether the “general master,” or temp agency, had no such control.
- Whether the “special master” had the exclusive right to discharge the servant.
Lexi West of Eraclides Gelman, arguing for appellee company Carpet Cycle, on the other hand, gave three reasons why the GIIP should be responsible for paying the claims:
- The superior court did not err in applying the “any evidence” standard to the factual findings of the State Board of Workers’ Compensation Appellate Division.
- Even if the Court of Appeals determines the superior court erred as a matter of law in applying the “any evidence” standard, there is still no theory of law in which the pool can prove that her client is subject to workers’ compensation liability under the act, and in turn there is nothing for the pool to request as an offset and reimbursement.
- Even if the Court of Appeals finds that her client is liable for workers’ compensation coverage, the GIIP applied the statute in a way that violated her client’s due process rights.
Judge Elizabeth Gobeil asked what cases supported the parties’ positions, with particular interest in recent cases dealing with borrowed servant doctrine and the appellate court’s authority in ruling on the issue. She scrutinized the third prong’s interpretation, in particular.
Seth Martin of Speed Seta Martin Trivett Stubley & Fickling, representing appellee company Zep, argued “The Superior Court Judge’s order actually mentioned the third prong specifically and said that that prolong had not been met.”
According to Arp, however, there’s an exception carved out for staffing companies, and “The special master’s ability to discharge must relate only to the temporary assignment.” Arp said the courts have held it’s immaterial whether the employee was always under the control of a special master and to focus on the specific occasion when the injury occurred, as opposed to the the general work relationship. To this end, “the testimony undisputedly stated that [the appellee company] had complete control over the work being done at the time of the injury.”
The appellants also noted that “opposing counsel will literally talk about every other moment except the moment of injury,” while the appellees pointed out that the case has now been litigated by six different courts through which they have thus far prevailed.
Martin said that if the appellate court does find in favor of the GIIP, then it should not affirm, but rather remand the case down to the lower court.
The cases are Georgia Insurers Insolvency Pool v. Carpet Cycle, No. A24A0103, Carpet Cycle v. Georgia Insurers Insolvency Pool, No. A24A0211, and Georgia Insurers Insolvency Pool v. Zep, No. A24A0287 in the Georgia Court of Appeals.
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