October 21, 2019

October 21, 2019

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Temporary Employees and Worker's Compensation: The Rivera Case

On January 8, 2018, the Wisconsin Court of Appeals reversed course on long-standing precedent regarding the application of the exclusive remedy provision of the Worker's Compensation Act ("the Act") by allowing a temporary employee to bring a tort claim against his temporary employer. The decision, In re the Estate of Carlos Esterley Cerrato Rivera v. West Bend Mutual Insurance Company, 2017AP142, allows a temporary employee injured while working for a temporary employer to pursue either worker's compensation benefits from the employment agency or to sue the temporary employer in civil court. The decision potentially exposes thousands of employers and insurance carriers to unexpected tort liability. Thankfully for employers, the Legislature is already considering legislation to fix the loophole.

The case arose out of a fatal motor vehicle accident that killed Mr. Rivera and two other individuals. At the time of the accident, Mr. Rivera was a passenger in a vehicle owned by Alpine Insulation and insured by West Bend Mutual Insurance Company. Mr. Rivera was employed by Alex Drywall, who sent him to perform work for Alpine. The driver of the vehicle, whose negligence was found to be a cause of the accident, was another temporary employee of Alpine.

Although the outcome of the case is certainly cause for concern, it is nonetheless very narrow in its application. Essentially, in order for the new rule enunciated in the decision to apply, a temporary employee must be injured in the course of his employment, choose not to bring a worker's compensation action against his employment agency, and instead decide to sue the temporary employer in tort. In fact, the Court of Appeals specifically stated that if a temporary employee attempts to make a worker's compensation claim after filing the tort claim, the employer and insurance carrier can use Wis. Stat. § 102.29(6)(b)1. as a defense to the worker's compensation claim. This statute provides that "[n]o employee of a temporary help agency who makes a claim for compensation may make a claim ... in tort against ... [a]ny employer that compensates the temporary help agency for the employee's services." (Emphasis added.) In simple terms, the trigger for the defense occurs when an employee actually makes a worker's compensation claim.

In response to the Court of Appeals' decision in Rivera, the Wisconsin Legislature introduced Assembly Bill 884 and companion Senate Bill 781, which legislatively overturns the Rivera decision and amends the applicable statute to bar temporary employees from bringing tort actions against their temporary employer. Specifically, this Bill changes the "makes a claim for compensation" language to "has the right to make a claim for compensation." If the legislation is adopted in its current form, Wis. Stat. § 102.29(6) would provide that any employee of a temporary help agency that "has the right to make a claim" for worker's compensation benefits would be prohibited from making a claim in tort against either the temporary help agency or the employer that compensates the temporary help agency for the employee's services. The Assembly Committee on Insurance has recommended adoption and the Senate Committee on Labor and Regulatory Reform is anticipated to take similar action soon.

Nonetheless, even if the Legislature fails to adopt the corrective legislation, there is still the opportunity for the decision to be reversed by the Wisconsin Supreme Court. It is commonly understood that a petition for review will be filed and that the Supreme Court is likely to examine carefully the need for the Court to provide definitive guidance.

For now, Wisconsin temporary employers and insurance carriers should be aware that they may be exposed to a tort action in the event that any temporary employee is injured while at work. We will continue to monitor the progress of the legislation and the continuing appeal.

Scott E. Wade also contributed to this article. 

©2019 von Briesen & Roper, s.c


About this Author

Scott Wade, Workers Compensation Lawyer, von Breisen Law Firm, Milwaukee, Wisconsin

Scott Wade is a Shareholder in the firm’s Litigation and Risk Management Practice Group. He focuses his practice on Worker’s Compensation and is the Chair of the firm’s Worker’s Compensation Section. He is recognized in The Best Lawyers in America® in Workers’ Compensation. He was awarded an AV Preeminent® Peer Review Rating by Martindale-Hubbell®, the highest rating possible.

Scott is a frequent author and presenter on Wisconsin worker’s compensation and is a contributing author to Wisconsin Association of Worker’s Compensation Attorneys Case Law Update.

He is a...

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Andrew Guzikowski, von Briesen Roper Law Firm, Milwaukee, Finance Law Attorney

Andy Guzikowski is a Shareholder and Chair of the Firm’s Public Finance Section.

Andy has had more than 25 years of experience in public finance. He has served as bond counsel and issued the approving bond/tax opinions in over $500 million of tax-exempt bond issues that financed municipal equipment purchases, sewers, new schools and school improvements as well as manufacturing facilities, nursing homes and senior living facilities and has a broad range of experience representing bond issuers, borrowers, underwriters, bond purchasers, remarketing agents and banks/credit enhancement providers in tax-exempt and taxable bond financing transactions.  He frequently serves as issuer’s counsel to the Public Finance Authority in bond issues and has represented PFA in over $750 million of tax-exempt and taxable bond issues financing a wide variety of projects throughout the United States.

Andy is also a senior member of the firm’s Banking and Commercial Transactions practice group.  He represents financial industry clients in a variety of matters, including corporate and holding company reorganizations, mergers and acquisitions, branch purchases and sales, loan and servicing portfolio sales, loan participations and in structuring and restructuring complex commercial lending transactions.  He also handles compliance matters before regulatory agencies including the Wisconsin DFI, the FDIC the Federal Reserve, the SEC and FINRA. His experience includes structuring, negotiating and documenting interest rate swaps, letters of credit, securities lending and repo transactions.  He has also advised banks, credit unions, savings institutions, broker-dealers and registered investment advisers in matters involving the on-premise sale of non-deposit investment products, on FDIC and NCUA deposit insurance rules, regulatory capital requirements and other regulatory and compliance matters.