Employers that hire through private temp agencies are not liable for discrimination under the Workers’ Compensation Act, even if they fire an employee the very day after he asserts a work injury. To hold otherwise, says Maine’s Supreme Judicial Court, would require such employers to purchase additional insurance coverage, which is inconsistent with the Legislature’s goals of reducing costs to employers, attracting employers to the state, and cutting costs to the workers’ compensation system as a whole.
In Doughty v. Work Opportunities Unlimited, a divided (6-3) Law Court decided that Charles Doughty, who worked at Poland Springs but was hired through Work Opportunities, a temp agency, and was fired the day after he asserted a work injury, did not have the right to sue Poland Springs for discrimination under Workers’ Compensation Act because Poland Springs was not his employer. The court focused on the fact that Doughty’s contract-for-hire was with Work Opportunities, even though he worked at the Poland Springs’ bottling plant, performing Poland Springs’ work, under Poland Springs’ direction and control. In Doughty’s case, he sought employment at Poland Springs by submitting an application to Work Opportunities. Poland Springs interviewed and hired him. He worked every day at the Poland Springs’ plant, filling, capping and labeling bottles. Poland Springs controlled his schedule and provided all the equipment and machines he worked on. He was paid by the hour, supervised by Poland Spring, and not Work Opportunities. The next day after Doughty got hurt on the job, Poland Springs notified Work Opportunities that they were terminating Doughty.
The Workers’ Compensation Act contains an anti-discrimination provision which states that an employee may not be discriminated against in any way for testifying in a workers’ compensation proceeding or for asserting a claim under the Act. It provides remedies including reinstatement with back pay and benefits, and payment of attorneys’ fees. However, it applies only to an employer against whom the employee has testified or asserted a claim. The court found that Poland Springs was not that employer.
Doughty argued that Poland Springs was in fact his employer because Poland Springs, not Work Opportunities, controlled his work. Doughty cited Marcoux v. Nichols Portland, a 2004 case where the court used the “control test” to determine whether Nichols Portland was Marcoux’s employer for purposes of immunity from civil liability for negligence. Marcoux was a supervisor for a staffing company who was sent over to Nichols Portland to monitor temporary employees working there. While making her rounds at Nichols Portland, she slipped on grease and suffered debilitating injuries. Adrienne S. Hansen of Maine Employee Rights Group represented Marcoux in both her workers’ compensation case against the staffing company she worked for and the negligence case against Nichols Portland. Adrienne convinced the court that Nichols Portland did not exert sufficient control over Marcoux’s work to be her employer and therefore was not immune from civil liability for negligence. The Marcoux case was a reaffirmation of the “control test” as the proper way to determine the existence of an employer-employee relationship, regardless of what the parties said in a contract or just verbally.
Doughty involves an employer’s immunity from liability for discrimination under the Workers’ Compensation Act, as opposed to immunity from civil liability for negligence. In Doughty, the court rejected the “control test” and relied instead on the fact that Doughty did not have a contract-for-hire with Poland Springs. The court reasoned that if the “control test” governed in this instance, the outcome as applied to temporary workers, would be preordained because such workers almost always work under the control of the third party employer. Such an outcome would have significant unintended consequences, the court said:
“Because the Act requires every employer to secure the payment of compensation… with respect to all employees, two workers’ compensation insurance policies would have to be acquired for a single employee: one by the temporary help service and the other by the third-party employer. This outcome is illogical and cannot be squared with the Legislature’s goals in reforming the Workers’ Compensation Act, which include reducing workers’ compensation costs to employers and attracting employers to the state, as well as cutting costs to the system as a whole.”
The court did say that although Doughty was barred from suing Poland Springs for discrimination under the Workers’ Compensation Act, he can still sue Poland Springs for discrimination under the Maine Human Rights Act, which features broader remedies such as compensatory and punitive damages.
Critics of the court’s decision say that it opens a loophole for Maine employers to avoid liability for discrimination under the Workers’ Compensation Act by subcontracting out their Human Resources function to a temp agency, just as Poland Springs has done ever since the initial startup of its plant in Hollis ten years ago. These employers are not using temp agencies simply to supplement their workforce in situations such as employee absences, temporary skill shortages, and special assignments; they are using them to hire permanent staff. Further, critics say that the court appears to have been motivated by wanting to avoid increasing costs to employers rather than accurately interpreting the law. Finally, critics question whether the court’s consolation, that temp-to-hire employees can still pursue discrimination claims against third party employers through the Maine Human Rights Act, is truly a viable option.
If you have been injured at work or wrongfully terminated, call Maine Employee Rights Group, toll free 1.800.490.5218, for a free consultation today.