Massachusetts Appeals Court Extends Workers’ Compensation Bar to “Alternate Employers”

by Paul Hourihan, Pierce & Mandell, P.C.

The Massachusetts Appeals Court recently extended the bar on liability provided in the Massachusetts Workers’ Compensation Act, G.L. c. 152, § 1, et seq., to protect employers whose employees are provided by a separate staffing entity. The Massachusetts Workers’ Compensation statute requires employers to obtain workers’ compensation insurance for all employees to ensure that employees injured during the course of their employment will be adequately and expeditiously compensated.  The statute also provides that, on the other hand, workers injured on the job cannot sue their employer for negligently causing the accident.

This statute has created a bit of an ambiguity in the context of the temporary workers provided by staffing companies. When a company needs extra manpower (or womanpower), and contracts with a staffing company for temporary employees, nothing in the Workers’ Compensation Act prevents an injured temporary employee from suing the temporary employer, regardless of coverage under an insurance policy.

The Massachusetts Appeals Court, in Molina v. State Garden, Inc., 88 Mass. App. Ct. 173 (Sept. 3, 2015) recently ruled that the Workers’ Compensation Act will serve to bar the claims of an injured employee against a temporary employer when (1) the temporary employer works at the direction of the temporary employer and (2) the temporary employer is afforded workers’ compensation insurance coverage under an “alternate employer endorsement” of the staffing company’s insurance policy. The “alternative employer endorsement” of the policy will serve to cover a temporary employee’s accident and will provide the temporary employer the protections of the Workers’ Compensation Act.

This ruling serves as an exhortation to any employers who contract for employees from staffing companies: insist that any staffing company provide an “alternate employer endorsement” naming your company as an alternate employer. Doing so will protect your temporary employees and will protect your company from lawsuits.

Paul Hourihan is an associate at Pierce & Mandell who handles claims for workplace accidents and injuries.

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