Appeal of Longchamps Elec., Inc.

• Decision Date: 30 November 1993
• Docket Number: No. 92-442,92-442
• Parties: Appeal of LONGCHAMPS ELECTRIC, INC., and another. (New Hampshire Department of Labor Compensation Appeals Board).
• Court: New Hampshire Supreme Court

Page 994

634 A.2d 994

137 N.H. 731

Appeal of LONGCHAMPS ELECTRIC, INC., and another. (New Hampshire Department of Labor Compensation Appeals Board).

No. 92-442.

Supreme Court of New Hampshire.

Nov. 30, 1993.

Devine, Millimet & Branch, P.A., Manchester (Douglas N. Steere on the brief and orally), for Longchamps Elec., Inc. and Hanover Ins. Co.

Abramson, Reis & Brown, Manchester (Kenneth C. Brown on the brief and orally), for Thomas Pratte.

Ouellette, Hallisey, Dibble and Tanguay, P.A., of Dover (Stephen J. Dibble on the brief and orally), for Aetna Life & Cas.

THAYER, Justice.

Longchamps Electric, Inc. (Longchamps) and its insurer, Hanover Insurance Co., appeal the decision of the compensation appeals board (board) that Thomas Pratte was an employee of Longchamps at the time of his work-related injury and is thus entitled to workers' compensation benefits from Longchamps' insurer. Longchamps argues that the board incorrectly applied the borrowed servant doctrine in determining that Pratte was its employee, and not the servant of Mikol Electrical Services and Controls Corp. (Mikol), at the time of the injury. For the following reasons, we affirm.

The facts of this case are largely uncontroverted. On February 10, 1988, Longchamps, which was experiencing a slow-down in its work, entered into an agreement to supply electricians' services to Mikol at a Massachusetts work site. Pratte, an apprentice electrician of two years experience, was in the general employ of Longchamps at that time. One evening Pratte was told to bring his hand tools and to report an hour earlier than usual to the Longchamps shop the next day because there would be an hour drive to the work site. When he arrived at the shop, he was told that he would be working at a Mikol site in Massachusetts. Each morning until the time of his accident, Pratte and the other Longchamps employees assigned to this job would report to the Longchamps shop and drive to the Mikol site in the Longchamps company van.

As an apprentice, Pratte was required to work with a licensed master electrician. At the Mikol site, the master with whom Pratte worked was always another Longchamps employee. Pratte was never watched or instructed by a Mikol employee concerning the manner in which he conducted his work. The Longchamps employees were in fact unsure as to whether there were any licensed electricians from Mikol on the site at any time. Mikol provided the supplies and wires to be installed at the site, and a Mikol representative gave the Longchamps crew a daily agenda each morning. Beyond that, Mikol provided very little if any supervision of the job site. The Longchamps electricians themselves determined the manner in which their tasks were to be completed.

Longchamps continued to pay Pratte his customary hourly wage based upon Longchamps' timecards that Pratte filled out at the Mikol site. In turn, Longchamps submitted bills, charging Mikol an hourly rate for these employees that represented the wages paid as well as overhead, amounts for workers' compensation premiums, FICA payments and profit. The rate charged was analogous to that charged by Longchamps in its own bid jobs.

The board determined that there was no contract of hire between Mikol and Pratte, either expressed or implied, which would alter his employment status for the purposes of workers' compensation insurance. It based this determination on Pratte's lack of consent to any employment by Mikol, and on Mikol's lack of control over the details of Pratte's work at the site. Longchamps argues that the board's decision should be reversed because it failed to consider all of the relevant factors under LaVallie v. Simplex Wire & Cable Co., 135 N.H. 692, 609 A.2d 1216 (1992), and that if these factors had been considered, the board would have found Pratte to be the servant of Mikol. We disagree.

We do not overturn agency decisions or orders, absent an error of law, "unless the court is satisfied, by a clear preponderance of the evidence before it, that such order is unjust or unreasonable." RSA 541:13 (1974); Appeal of Nolan, 134 N.H. 723, 727-28, 599 A.2d 112, 115 (1991). Such is not the case here.

As we recently held in LaVallie, we determine the existence of an employee-employer relationship for the purposes of workers' compensation through reference to the factors set forth in the New Hampshire Department of Labor regulations. LaVallie, 135 N.H. at 695, 609 A.2d at 1218. In the instant case, the parties agree that these factors govern the existence of any employment relationship between Pratte and Mikol:

" 'In determining whether a person acting for another is an employee ... all relevant factors shall be considered including, but not limited to the following:

a. The extent of control which, by the agreement, the employer may exercise over the details of the work.

b. Whether or not the person performing a service is engaged in a distinct occupation or business.

c. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision.

d. The skill required in the particular occupation.

e. Whether the employer or the worker supplies the instrumentalities, tools and the place of work for the person doing the work.

f. The method of payment, whether by the time, or by the job.

g. Whether or not the work is a part of the regular business of the employer.

h. The nature of the relationship that the parties believe they are creating.

i. Whether the person doing the work can be summarily discharged by the employer with a right to no more than wages already earned.' "

LaVallie, 135 N.H. at 695-96, 609 A.2d at 1218 (quoting N.H. Admin. Rules, Lab 104.02 (expired Jan. 6, 1989) (current version at N.H. Admin. Rules, Lab 101.05 (1991)).

The board made factual findings relevant to several of the factors: control over the details of Pratte's work, supervision of the work, the supply of the requisite tools, and the parties' beliefs. Additionally, after considering the testimony presented to it, the board found that Pratte had not consented to an employment relationship with Mikol such that the workers' compensation statute would come into play. In considering consent as a factor, the board relied on the writings of the leading commentator in the field, Professor Arthur Larson, whose treatise notes that "[t]here can be no compensation liability in the absence of a contract of hire between the employee and the borrowing employer." 1C A. Larson, The Law of Workmen's Compensation § 48.11, at 8-405 to 8-406 (1990). In a situation such as the instant one, where the issue is not whether the injured employee will recover at all, but rather which of the involved insurers will pay such coverage, Professor Larson advocates as a threshold requirement for borrowed servant status the consent of the employee to the new employment relationship:

"This must necessarily be so, since the employee loses certain rights along with those he gains when he strikes up a new employment relation. Most important of all, he loses the right to sue the special employer at common law for negligence; and when the question has been presented in this form, the courts have usually been vigilant in insisting upon...