Hamberg v. Sandia Corp.
| Decision Date | 14 February 2008 |
| Docket Number | No. 30,391.,30,391. |
| Citation | 179 P.3d 1209,2008 NMSC 015 |
| Parties | Carl HAMBERG, Plaintiff-Petitioner, v. SANDIA CORPORATION, d/b/a Sandia National Laboratories, Defendant-Respondent. |
| Court | New Mexico Supreme Court |
Duane Lind, Albuquerque, NM, William H. Lazar, Tesuque, NM, for Petitioner.
Rodey, Dickason, Sloan, Akin & Robb, P.A., Edward Ricco, Jocelyn Drennan, Kennedy, Moulton & Wells, P.C., Deborah D. Wells, Sandia Corporation, Charles Pechewlys, Albuquerque, NM, for Respondent.
{1} Plaintiff brought this tort action against Defendant for injuries Plaintiff allegedly suffered while working at Defendant's facility. The issue in this case is whether Defendant is considered Plaintiff's special employer under the Workers' Compensation Act, NMSA 1978, Sections 52-1-1 to -70 (1929 and as amended), such that Defendant is immune from tort liability under the exclusivity provision, NMSA 1978, Section 52-1-8 (1989). We conclude as a matter of law that Defendant had the right to control the details of Plaintiff's work, thus making Defendant a special employer under the test established in Rivera v. Sagebrush Sales, Inc., 118 N.M. 676, 678-79, 884 P.2d 832, 834-35 (Ct.App. 1994). Because Defendant complied with the requirements of the Workers' Compensation Act, it is protected by the exclusivity provision. We therefore affirm the Court of Appeals, which upheld the district court's dismissal of Plaintiff's complaint.
{2} Plaintiff, a graphic artist, was injured while working at Defendant's facilities. At the time of the accident, Plaintiff was directly employed by Orion International Technologies ("Orion"). Orion was under contract to provide various professional services to Defendant, including Plaintiff's position. This case thus involves two contracts: Plaintiff's employment contract with Orion, and Orion's services contract with Defendant.
{3} Under the employment contract, Orion pays Plaintiff an hourly wage; provides him with benefits, leave, and educational assistance; and evaluates his job performance. The services contract requires Orion, among other things, to provide certificates of workers' compensation insurance. Orion did, in fact, pay workers' compensation premiums for its employees, including Plaintiff. Defendant paid Orion a direct labor rate for each Orion employee who worked at Sandia, plus a "Direct Labor Multiplier" component to cover Orion's overhead costs for each employee.
{4} The services contract limited the control that Defendant had over Orion's employees. Defendant was not allowed to make any employment decisions, such as hiring, firing, promotion, or benefits determinations, and it was not allowed to supervise Orion's employees. Defendant was, however, allowed to direct Orion to remove any person from the contract. Defendant was also entitled to have a delegated representative who could assign work, monitor technical performance, and inspect and accept the work of Orion's employees.
{5} Plaintiff was assigned to work for Defendant under the services contract as a graphic technologist. Plaintiff was injured after a direct employee of Defendant allegedly ordered Plaintiff to disassemble, move, and reassemble a large metal storage unit. Plaintiff alleges that this order violated the supervision provisions of the services contract.
{6} Plaintiff received workers' compensation benefits for his injury through Orion's insurer. Plaintiff now seeks to sue Defendant under a theory of negligence. Defendant moved for summary judgment on the basis that it was Plaintiff's special employer and that it had complied with the requirements of the Workers' Compensation Act. Plaintiff responded that he was an independent contractor and that Defendant had not paid workers' compensation insurance premiums as required by the Act. The district court granted summary judgment for Defendant, and the Court of Appeals affirmed.
{7} Blea v. Fields, 2005-NMSC-029, ¶ 10, 138 N.M. 348, 120 P.3d 430 (citations omitted). We will construe all "reasonable inferences from the record in favor of the party that opposed the motion." Id.
{8} The exclusivity provision of the Workers' Compensation Act shields employers who comply with the Act from tort liability. Section 52-1-8. Thus, Defendant may be immune from tort liability if it has an employment relationship with Plaintiff. Plaintiff would have an employment relationship with Defendant if he was a direct employee, a statutory employee, or a special employee. In contrast, if Plaintiff was an independent contractor, he would not have an employment relationship with Defendant. Defendant was clearly not Plaintiff's direct employer. We turn next to the tests for statutory employment and special employment.
{9} Whether we apply the statutory employment or the special employment test depends on whether Defendant procured work or labor. A statutory employment relationship exists when "`any employer procures any work to be done wholly or in part for him by a contractor other than an independent contractor and the work so procured to be done is a part or process in the trade or business or undertaking of such employer[.]'" Harger v. Structural Servs., Inc., 1996-NMSC-018, 121 N.M. 657, 661, 916 P.2d 1324, 1328 (1996) (quoting NMSA 1978, § 52-1-22 (1989)). The statutory employer test thus applies when a defendant procures work. Rivera, 118 N.M. at 681, 884 P.2d at 837 (quoting Word v. Motorola, Inc., 135 Ariz. 517, 662 P.2d 1024, 1026 (1983) (en banc)). For example, in Chavez v. Sundt Corp., we applied the statutory employer test to a general contractor that had hired a subcontractor to perform electrical work. 1996-NMSC-046, ¶¶ 2, 12, 122 N.M. 78, 920 P.2d 1032. In contrast, the Court of Appeals declined to apply the statutory employer test in Rivera because the employer had contracted with another company to supply labor for its lumberyard, not to actually run the lumberyard. Rivera, 118 N.M. at 681, 884 P.2d at 837. In that situation, the Court of Appeals applied the special employment test. Id. at 678, 884 P.2d at 834.
{10} The statutory employment test does not apply to Plaintiff's relationship with Defendant. Defendant contracted with Orion for labor, not for work. The contract called for Orion to supply a graphic designer—a laborer. It did not call for Orion to perform Defendant's graphic design work. When a general employer (Orion) arranges labor for a third party (Defendant), we look to the special employment test. In concluding that the statutory employment test does not apply to Plaintiff, we necessarily conclude that Plaintiff is neither a statutory employee nor an independent contractor.1
{11} Before applying the special employment test, we must determine what that test should be. Defendant argues that the proper test for determining special employer status is the three-part test established in Rivera, 118 N.M. at 678-79, 884 P.2d at 834-35, which was followed by the Court of Appeals in this case. Under Rivera, both the general employer and the special employer are liable for workers' compensation when the following conditions are met: "(1) the employee has made a contract of hire, express or implied, with the special employer; (2) the work being done is essentially that of the special employer; and (3) the special employer has the right to control the details of the work." Id. (). This test arises out of the lent employee doctrine. Hamberg, 2007-NMCA-078, ¶ 10, 142 N.M. 72, 162 P.3d 909; see also Rivera, 118 N.M. at 681, 884 P.2d at 837.
{12} Plaintiff urges instead that we replace all three parts of the Rivera test with the Harger test, recasting special employment as a totality of circumstances test.2 See Harger, 121 N.M. at 667, 916 P.2d at 1334. Plaintiff bases this argument on the complexity of his employment relationship with Orion and Defendant, claiming that the Rivera test is only appropriate in relatively simple borrowed employee situations.
{13} We see no reason to depart from the test set out in Rivera. Although modern labor contracts may be complex, that complexity can be captured by the Rivera test's third part. In this case, we agree with the Court of Appeals that the first two parts of the Rivera test were met and were not seriously contested by Plaintiff. Hamberg, 2007-NMCA-078, ¶¶ 26, 29, 142 N.M. 72, 162 P.3d 909. The third part recognizes that the general employer and the special employer may "both exercise[] control over the employee and both benefit[] to some degree from the employee's work." Restatement (Third) of Agency § 7.03 cmt. d(2) (2006). Thus, Plaintiff must show not that Orion retained some control over his work, but rather that Defendant lacked the right to control his work.
{14} In his response to Defendant's motion for summary judgment, Plaintiff listed a number of disputed material facts. Assuming that the facts are true for this analysis, Plaintiff has still failed to raise an issue of material fact regarding Defendant's right to control. Plaintiff alleges that Orion maintained control over his hours of work, evaluated his job performance, provided all of his employment benefits, disciplined him when required, and could terminate his employment at will. Plaintiff also alleges that he was supervised by an Orion manager, that he owed certain duties to Orion, and that Orion's employees were sometimes physically segregated from Defendant's employees. These facts, assuming they are true, merely show that Orion retained some control over P...
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