The Borrowers

The formal Worker’s Compensation system is, broadly speaking, based on a general compromise between worker’s and business: employees get benefits from work-related injuries without having to prove liability, and businesses get immunity from normal civil lawsuits over those injuries. Of course there are numerous exceptions to this principle, but usually if a worker is injured the Worker’s Compensation Process is the exclusive remedy that they have. But what happens if a worker gets injured while working at a location and it is unclear who his employer is? As demonstrated by the case of Jaime Quintana and Ferrara Candy Company, things can get messy. JAIME QUINTANA, Plaintiff-Appellee, v. FERRARA CANDY COMPANY, Defendant-Appellant., 2020 IL App (3d) 190414-U.

Jaime Quintana was hired by a temporary staffing company to work at Ferrara’s packaging center, where he was subsequently injured when a nominal Ferrara-employed forklift driver dropped a wooden pallet on top of him. He probably had a Worker’s Compensation claim against the staffing company, but could he also sue Ferrara for the civil negligence of its employee? Ferrara argued that he could not, as a result of what is known in Worker’s Compensation as the “borrowed employee” doctrine. The circuit court agreed with Ferrara and dismissed the civil case. The Third Appellate District, however, said “not so fast” and reversed the dismissal, sending it back to the circuit court for further litigation.

In the Illinois Worker’s Compensation system, a “borrowed employee” is an employee who is formally employed by one entity but who is “borrowed” by another company for the performance of specific work. If this relationship is established, the worker is considered to be an employee of both companies when it comes to immunity from civil suit and for Worker’s Compensation benefits being the exclusive remedy when the worker is injured. The borrowing employer must establish that (1) they have the right to control and direct the manner in which the employee is working and (2) that there is some kind of express or implied contract of hire between the worker and the borrowing employer. The second requirement can be met by something as simple as the worker acknowledging that they are accepting the control and direction of his work activities mimicking an employer-employee relationship.

The Appellate Court had not problem saying that the first factor was met between Jaime and Ferrara—he was, after all, working under their direction in their packaging center. The wrinkle here regarding the “contract for hire” factor was a waiver that Jaime had signed when he started working at Ferrara. This contract contained language which stated that Jaime was “solely an employee of [the] staffing firm.” It goes on to describe how the employee of the staffing firm is not entitled to any Ferrara employee benefits. Ferrara argued that this was the only point of the waiver: to ensure that employees of staffing agencies could not make claims on their internal employee benefit plans. The company argued that there certainly still seemed to be a relationship that met the standard for a borrowed employee relationship. Jaime, on the other hand, argued that since the waiver seemed to disclaim an employee-employer relationship with Ferrara, that he could not have possibly had an implied contract of hire with them.

The Court ultimately found that either of these interpretations of the waiver was reasonable enough that the circuit court shouldn’t have granted the motion to dismiss. While the court is pretty clear that while they thought that Ferrara and Jaime had entered into an employee-employer relationship, a contract (express or implied) requires that both parties actually agree on something. If Ferrara and Jaime had a fundamentally different conception of their arrangement as a result of the waiver, such a contract couldn’t really exist.

-Attorney Travis Dunn