Hazealeferiou v. Labor Ready

• Decision Date: 05 January 2007
• Docket Number: No. 1D05-5619.,1D05-5619.
• Citation: 947 So.2d 599
• Parties: Paul HAZEALEFERIOU, Appellant, v. LABOR READY and Employer Self Insured Services (ESIS), Appellees.
• Court: Florida District Court of Appeals

947 So.2d 599

Paul HAZEALEFERIOU, Appellant, v. LABOR READY and Employer Self Insured Services (ESIS), Appellees.

No. 1D05-5619.

District Court of Appeal of Florida, First District.

January 5, 2007.

Rehearing Denied February 5, 2007.

Stephen L. Rosen, Tampa, for Appellant.

John G. Brady and Benjamin Winter of Brady, Andrews & Winter, Tampa, for Appellees.

VAN NORTWICK, J.

In this workers' compensation appeal, Paul Hazealeferiou, claimant, seeks reversal of a final order by which the Judge of Compensation Claims (JCC) dismissed his petition for benefits under the Florida Workers' Compensation Law. In the order, the JCC ruled that, based upon findings that the employment accident occurred in Alabama, the subject employment agreement was made in Alabama, and no record evidence established that claimant's employment was principally located in Florida, under section 440.09(1), Florida Statutes (2005), claimant had not established jurisdiction under chapter 440. Because competent substantial evidence supports the JCC's findings, we affirm.

P & H Stucco and Construction, Inc. ("P & H") is a stucco, sandblasting, and painting company based in Florida and operating in several southeastern states. Depending on the level of P & H's business, the company maintains between three and seven employees. P & H has three officers: claimant is vice-president of the company and owns 49% of its capital stock; claimant's wife is president and owns 51% of the stock; claimant's daughter is secretary of the company.

P & H began operations in 1978. In early 2003, P & H entered into an agreement with appellee Labor Ready, Inc. ("Labor Ready"), an employee leasing company, under which Labor Ready employed the P & H employees, leased those employees back to P & H, maintained payroll, and provided workers' compensation and general liability insurance for P & H's ongoing business in all states in which P & H operated. P & H reached agreement with Labor Ready through Labor Ready's Florida branch, but dealt with the Labor Ready branch in Tuscaloosa, Alabama for all subsequent matters. Claimant entered into an employment agreement with Labor Ready at the inception of the employee leasing agreement between P & H and Labor Ready. Claimant's employment documentation with Labor Ready was completed by mail or fax between claimant in Florida and the Labor Ready office in Alabama.

The leasing fee paid by P & H to Labor Ready including a premium for workers' compensation insurance. The Labor Ready branch manager testified that this premium varied according to the state in which the employment was based. Thus, a work ticket issued by the Tuscaloosa branch would designate employees as Florida employees if their project was in Florida. Labor Ready would issue paychecks for employees on a weekly basis according to hours worked for P & H.

In September 2003, P & H procured a contract to perform sandblasting work for the State of Alabama. When the project began in October 2003, claimant and his wife traveled to the job site. During the Alabama job, Labor Ready paid payroll through its Tuscaloosa, Alabama branch and charged P & H workers' compensation premiums based on the Alabama locus.

In December 2004, claimant was injured on the Alabama job. The parties stipulated that the injury occurred on December 8, 2004, and that, at such time, there existed an employer/employee relationship between claimant and Labor Ready. Upon notification of claimant's injury, the Labor Ready branch manager filed an Alabama Notice of Injury by contacting Labor Ready's adjustor, appellee Employer Self Insured Services (ESIS). Claimant filed a petition for benefits in Florida. On consideration of claimant's petition for benefits under chapter 440, Florida Statutes, the JCC found that the contract at issue was the employment contract between claimant and Labor Ready, the contract between claimant and Labor Ready was made in Alabama, and there was no evidence establishing that claimant's employment was principally located in Florida. Based upon these findings, the JCC dismissed the claim, ruling the claim did not satisfy the requirements of section 440.09(1)(d), Florida Statutes (2005), and that proper jurisdiction was in Alabama. Claimant filed a timely notice of appeal.

Claimant asserts that the contract between P & H Stucco and Labor Ready was made in Florida, his primary residence was in Florida and he was loaned to a company (P & H) principally located in Florida, he was hired by P & H in Florida and his salary and expenses for the Alabama contract were provided by P & H, and all documentation provided by Labor Ready to P & H was sent to P & H's Florida business address. Based on these facts showing contracts with the State of Florida, claimant argues that the JCC erred in denying jurisdiction to his claim pursuant to section 440.09(1)(d). We cannot agree.

Section 440.09(1)(d), in pertinent part, provides:

If an accident happens while the employee is employed elsewhere than in this state, which would entitle the employee or his or her dependents to compensation if it had happened in this state, the employee or his or her dependents are entitled to compensation if the contract of employment was made in this state, or the employment was principally localized in this state. . . .

§ 440.09(1)(d) (2005), Fla. Stat. (2005). Thus, under section 440.09(1)(d) a claimant injured in an employment accident outside of Florida is entitled to compensation under chapter 440 only if one of the following two factors are established: (1) the contract of employment was made in Florida or (2) the claimant's employment was principally localized in Florida. We will examine each factor separately.

The Contract of Employment

In determining whether the contract of employment was made in Florida, we must first examine the relevant employee-employer relationship under these circumstances. Section 440.02(15)(a) defines "employee" in the worker's compensation context as follows:

"Employee" means any person who receives remuneration from an employer for the performance of any work or service while engaged in any employment under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed. . .

§ 440.02(15)(a) Fla. Stat. (2005) (emphasis added). This section goes on to define "employer" as follows:

"Employer" means the state and all political subdivisions thereof, all public and quasi-public corporations therein, every person carrying on any employment, and the legal representative of a deceased person or the receiver or trustees of any person. `Employer' also includes employment agencies, employee leasing companies, and similar agents who provide employees to other persons.

§ 440.02(16)(a) Fla. Stat. (2005) (emphasis added). The broad language of these provisions reflects the intent of the legislature to afford expansive reach to employee coverage under Florida workers' compensation, subject only to narrow exceptions. See 9 Patrick John McGinley, Florida Workers' Compensation § 6.4 (2006 ed.).

Distinguishing the relevant employer for workers' compensation purposes in an employee leasing context is more complicated, however, than simply determining who might qualify as an employer under chapter 440. Section 468.529, pertaining specifically to licensed employee leasing companies, provides:

(1) A licensed employee leasing company is the employer of the leased employees . . . and shall be responsible for providing workers' compensation coverage pursuant to chapter 440.

§ 468.529(1) Fla. Stat. (2005). In the workers' compensation context, however, our analysis does not stop with section 468.529. As Professor Larson explains, under the so-called doctrine of lent employment:

When a[sic] employer lends an employee to another party, that party becomes liable for worker's compensation only if

(a) the employee has made a contract of hire, express or implied, with the second employer;

(b) the work being done is essentially that of the second employer; and

(c) the second employer has the right to control the details of the work.

When all three of the above conditions are satisfied in relation to both employers, both employers will be liable for worker's compensation and both will both [sic] have the benefit of the exclusivity defense for tort claims.

Under this doctrine, the lending employer is known as the "general employer" and the borrowing employer, the "special employer."

3 Arthur Larson & Lex K. Larson, Larson's Worker's Compensation Law § 67.01 (2006) (emphasis added); see also Shelby Mut. Ins. Co. v. Aetna Ins. Co., 246 So.2d 98, 100-01 (Fla.1971).

The doctrine of lent employment reflects the dual purpose of ensuring that a lent employee is covered by workers' compensation and immunizing employers attaining "special employer" status from liability in tort. In Florida, the doctrine's specific application to employee leasing arrangements is embodied in section 440.11(2), which provides, in pertinent part:

[I]mmunity from liability [other than for workers' compensation] shall extend to an employer and to each employee of the employer which utilizes the services of the employees of a help supply services company, as set forth in Standard Industry Code Industry Number 7363, when such employees, whether management or staff, are acting in furtherance of the employer's business. An employee so engaged by the employer shall be considered a borrowed employee of the employer and, for the purposes of this section, shall be treated as any other employee of the employer. The employer shall be liable for and shall secure the payment of compensation to all such borrowed employees as required in § 440.10, except when such payment has been secured by the help supply services company.

§ 440.11(2) Fla. Stat. (2005). For the purposes of this section governing employer immunity from tort liability, employers leasing employees...