Court of Appeals Decides Exclusivity Case Concerning Employee of Temporary Agency
The court, in Kelly v. Riser, Inc., No. 11-1898 (Iowa App. Oct. 31, 2012) addressed a question of an employee of a temporary workers' agency, who recovered benefits for an injury from the workers' compensation carrier, could also proceed against the property owner, general contractor and subcontractor. The court concluded that there was no right of recovery in tort against parties other than the employer, and that workers' compensation was the exclusive remedy available to the claimant.
Claimant worked for Labor Ready, a temporary employment contractor, and was assigned to dismantle and install a new bleacher system for Bettendorf High School. He was injured on the job. The contract between claimant and Labor Ready indicated that the exclusive means of recovery for an injury was through workers' compensation. Following the injury, claimant received workers' compensation benefits, but later sued over parties in tort. The district court, on summary judgment, dismissed all claims against the property owner, general contractor and contractor. The court found that the subcontractor was a third party beneficiary of the contract between Labor Ready and Kelly. With respect to the owner and contractor, the district court rejected claims for negligent supervision, duty to maintain a safe workplace, negligent hiring or negligence per se for OSHA violations.
The court of appeals found that the release signed by Kelly was a broad exculpating release of which the subcontractor was a third party beneficiary, and affirmed the award of summary judgment in the subcontractor's favor.
Claimant argued that he was a third party beneficiary of the contract between the employer and the subcontractor, which provided that the safety requirements in the subcontractor's agreement were for the protection of Labor Ready workers. The court concluded that the contractor did not manifest an intent to benefit a third party, and rejected the claimant's contention. The same was found to be true of contract between the owner and the contractor, which did not contain any language that was designed to benefit the interests of a third party.
On the negligent hiring claim, the court concluded that section 411 of the Restatement of Torts did not include protection for employees of an independent contractor suing a general contractor for negligent hiring of its own employer. This is because, in part, the cost of workers' compensation insurance is expected to be borne by the employer who hired the injured worker. The court affirmed the dismissal of the lawsuit against the subcontractor, owner and general contractor.
Claimant worked for Labor Ready, a temporary employment contractor, and was assigned to dismantle and install a new bleacher system for Bettendorf High School. He was injured on the job. The contract between claimant and Labor Ready indicated that the exclusive means of recovery for an injury was through workers' compensation. Following the injury, claimant received workers' compensation benefits, but later sued over parties in tort. The district court, on summary judgment, dismissed all claims against the property owner, general contractor and contractor. The court found that the subcontractor was a third party beneficiary of the contract between Labor Ready and Kelly. With respect to the owner and contractor, the district court rejected claims for negligent supervision, duty to maintain a safe workplace, negligent hiring or negligence per se for OSHA violations.
The court of appeals found that the release signed by Kelly was a broad exculpating release of which the subcontractor was a third party beneficiary, and affirmed the award of summary judgment in the subcontractor's favor.
Claimant argued that he was a third party beneficiary of the contract between the employer and the subcontractor, which provided that the safety requirements in the subcontractor's agreement were for the protection of Labor Ready workers. The court concluded that the contractor did not manifest an intent to benefit a third party, and rejected the claimant's contention. The same was found to be true of contract between the owner and the contractor, which did not contain any language that was designed to benefit the interests of a third party.
On the negligent hiring claim, the court concluded that section 411 of the Restatement of Torts did not include protection for employees of an independent contractor suing a general contractor for negligent hiring of its own employer. This is because, in part, the cost of workers' compensation insurance is expected to be borne by the employer who hired the injured worker. The court affirmed the dismissal of the lawsuit against the subcontractor, owner and general contractor.
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