TORTS / WORKERS COMPENSATION — Exclusive remedy, coworkers, contractors and temporary labor: Labor Ready, Inc. and Sylvann C. Hudson III v. Wanda Sue Johnston (SC 6/25/2009)

Labor Ready, Inc. and Sylvann C. Hudson III v. Wanda Sue Johnston
2007-SC-000419-DG June 25, 2009
Opinion of the Court; Justice Abramson not sitting.

Mid-America Auto Auction routinely supplemented its permanent workforce during auctions by ordering temporary employees from Labor Ready, a temporary labor service. During one such auction, Johnston, a permanent employee of Mid-America, was struck by a vehicle operated by Hudson, a temporary employee. Johnston settled her claim for workers’ compensation benefits with Mid-America and then filed suit in tort against Labor Ready and Hudson.

The defendants moved for summary judgment arguing that Hudson was Johnston’s coworker at the time of the accident—thus her sole remedy was workers’ compensation. The trial court granted summary judgment, reasoning that allowing a permanent employee to receive workers’ compensation benefits and to sue a subcontractor in tort would unconstitutionally grant the permanent employee greater rights than a similarly situated temporary employee even though they would both be performing the exact same work. The Court of Appeals reversed.

The Supreme Court affirmed the Court of Appeals and remanded the case back to the trial court, holding that a contractor’s permanent employee may maintain a tort action against a temporary labor service and its employee for an injury that occurred while working for the contractor. The Court concluded that the exclusive remedy provision of KRS 342.690(1) did not legislatively 12 overrule the holding in Dillman that a subcontractor’s employee was not immune from a tort claim by the principal contractor’s employee. The Court also rejected Labor Ready’s argument that Hudson was a loaned employee, since KRS 342.615(4) states that temporary help service workers are deemed to be employees of the temporary agency. Therefore, Johnston and Hudson were not coworkers.

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