Durham v. Prime Industrial Recruiters, Inc. , 2014 Ark. App. LEXIS 671 ( 2014 )

Cite as 2014 Ark. App. 494
ARKANSAS COURT OF APPEALS
DIVISION IV
No. CV-14-54
WILLIAM L. DURHAM Opinion Delivered September 24, 2014
APPELLANT
V. APPEAL FROM THE ARKANSAS
WORKERS’ COMPENSATION
PRIME INDUSTRIAL RECRUITERS, COMMISSION
INC.; ELITE WORKFORCE [NO. G011082]
MANAGEMENT; AND WELSPUN
PIPES, INC.
APPELLEES
AFFIRMED
DAVID M. GLOVER, Judge
In this workers’ compensation case, the Commission affirmed and adopted the ALJ’s
decision, which concluded that William Durham was jointly employed by both Elite
Workforce (Elite) and Welspun Pipes (Welspun). Application of the dual-employment
doctrine protects Welspun from tort liability under the exclusive-remedy provisions of the
Workers’ Compensation Act. In this appeal, Durham contends that 1) the Commission’s
finding that an implied contract of hire existed between him and Welspun was based upon
circular logic, 2) the Commission arbitrarily disregarded all of the documentary evidence
obtained from Welspun regarding the relationship of the parties, and 3) the dissimilar
treatment of Elite employees, as opposed to Welspun employees, refuted the implication of
an implied contract between him and Welspun. We affirm the Commission.
Cite as 2014 Ark. App. 494
Standard of Review
In reviewing Commission decisions, we examine the evidence and all reasonable
inferences deducible therefrom in the light most favorable to the Commission’s findings and
affirm if the decision is supported by substantial evidence. Beaver v. Graphic Packaging, 2011
Ark. App. 524. Substantial evidence exists only if reasonable minds could have reached the
same conclusion without resorting to speculation or conjecture. Id. Although we give
deference to the Commission on issues of weight of evidence and credibility of witnesses, the
Commission may not arbitrarily disregard testimony and is not so insulated that it renders
appellate review meaningless. Id. We will not reverse the Commission’s decision unless we
are convinced that fair-minded persons with the same facts before them could not have
reached the Commission’s conclusions. Id.
Applicability of Dual-Employment Doctrine
In National Union Fire Insurance v. Tri-State Iron & Metal, 323 Ark. 258, 261, 914
S.W.2d 301, 302 (1996), our supreme court described the dual-employment doctrine:
When a general employer lends an employee to a special employer, the special
employer becomes liable for workmen’s compensation only if
(a) The employee has made a contract for hire, express or implied, with the
special employer;
(b) The work being done is essentially that of the special employer; and
(c) The special employer has the right to control the details of the work.
The solution of almost every such case depends upon the answer to the basic, fundamental,
and bedrock question of whether, as to the special employee, the relationship of employer and
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employee existed at the time of the injury. Daniels v. Riley’s Health & Fitness Ctrs., 310 Ark.
756, 840 S.W.2d 177 (1992) (citing Charles v. Lincoln Constr’. Co., 235 Ark. 470, 361 S.W.2d
1 (1962); Stuyvesant Corp. v. Waterhouse, 74 So. 2d 554 (Fla. 1954)). If the facts show such
a relationship, the existence of a general employer should not change or be allowed to confuse
the solution of the problem. Id. Because both employers may each have some control there
is nothing logically inconsistent, when using this test, in finding that a given worker is the
servant of one employer for certain acts and the servant of another for other acts. Id. (citing
Nepstad v. Lambert, 50 N.W.2d 614 (Minn. 1951)). The crucial question is which employer
had the right to control the particular act giving rise to the injury. Id. Because the question
of liability is always raised in relation to some specific act done, the important question is not
whether the employee remains the servant of the general employer as to matters generally but
whether, as to the act in question, he is acting in the business of and under the direction of
one or the other. Id.
Background
Three persons testified at the hearing before the ALJ: William Durham, claimant; Chris
Rawlings, owner of Elite; and Martin Cain, health, safety, and environment director for
Welspun. Their detailed testimony follows.
William Durham testified that when he was looking for a job in 2010, he completed
an application for employment at Elite; that he completed it at the Elite office, which is
located on the Welspun property in a separate building; that he did not talk to anyone from
Welspun when he filled out the application at Elite; and that he interviewed at the Elite office
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but did not interview with anyone from Welspun. He stated that he was eventually hired by
Elite, and they told him he would be working at Welspun. He said he worked as a quality-
control inspector in the inspection department at Welspun.
Durham explained that he started his job at the Welspun plant and that he was trained
for a week or two by an Elite employee, who was also a temporary employee working at
Welspun, to work the computers. He said that Elite provided the hard hats, ear plugs,
goggles, and eye protection when he went to work at Welspun; that there were differences
between the Elite and Welspun safety equipment worn by employees; that the Elite hard hats
were orange and the Welspun hats were blue; that the ID badges were different; and that his
ID badge indicated he was an Elite employee. He explained that he was paid by Elite every
week, but Welspun employees were paid every two weeks, and that if he had a problem with
his paycheck he would go to the Elite facility. He stated that he did not always get a lunch
break when he worked at Welspun; that Welspun employees did get lunch breaks; and that
Elite employees were not allowed to go to Welspun employee events.
Durham explained that Saleem Sawar was his supervisor and that Sawar was a Welspun
employee. He said that Sawar called him into the office one morning and told him that if he
did not miss any days from November until January, Sawar would hire him as a Welspun
employee. He stated that it was his perception that he would have a better job and more pay
as a Welspun employee. He said that in order to be hired by Welspun, he would have to go
through the Welspun office, which was separate from the Elite office.
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Durham testified that on December 21, 2010, he reported to work at 7:00 p.m. and
went to see Sawar to find out which station he was to work. He said that during his
inspection of the pipes, a pipe came in behind him and “smashed” him. He stated that one
of his co-workers, a panel operator, tried to hit the “e-stop” button and reverse the rollers;
that nothing worked and the co-worker came down to try to help him; that he fell to the
ground trying to reach up and grab the co-worker, but the pipes came back and “grabbed”
the co-worker by the head; and that there was nothing he could do about it. Durham
explained that he was taken to the hospital after the accident and that while he was there, he
received a letter from Elite stating that Elite employees needed to come in and sign a waiver.
On cross-examination, Durham testified that Elite supplied him to Welspun as a
temporary employee, and that he understood if he was hired by Elite he would be working
at the Welspun plant. In discussing a document that he filled out during orientation
conducted by Welspun, he explained that he put his name after the word, “employee”; that
Welspun was written at the top of the document; that he received a document that provided,
“I have received the orientation from the Welspun safety team according to all safety aspects
here at Welspun”; and that his name was printed on the document and he signed and dated
it at the bottom. He said that the training was basically about hard hats, goggles, ear plugs,
and boots; and that they were not shown any particular way to be safe in a plant. He stated
that on the day he was hired, he was given a tour of the Welspun plant and learned about the
different areas; that he met his Welspun supervisor, Saleem Sawar; and that Sawar told him
he would be working in quality control in Welspun’s coating plant.
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Durham testified that Elite supplied him with his identification card and that his card
got him into the same places as the Welspun identification cards.
Durham stated that the Elite employee who trained him also taught him how to
inspect pipes and make sure the coatings did not have bubbles; that at some point he worked
at the outbound station in the coating plant; that he was trained by Elite and Welspun
employees; and that the Elite employees were temporary employees from Elite who were
working at the Welspun plant. He identified attendance sheets from Welspun training
sessions that included “Codification in Final Table Inspection, Fire Extinguisher/Fire Safety,
Master Paints, Hearing Protection, Mobile Equipment Inspection, and KXL Inspections.”
He stated that Welspun decided his rotation, his hours, and which holidays he would
work. He explained that, aside from the helmets, goggles, and his first set of ear plugs, all of
the other equipment he used came from Welspun. He acknowledged that he understood
Welspun could fire him; that every day he went to work, he clocked in at the Welspun plant
and reported to Sawar; that Sawar would tell him what to do that day; that the only reason
he would return to the Elite office was if there was a problem with his check; that no one at
the Elite office ever told him what to do in the Welspun plant; and that there were no Elite
supervisors in the Welspun plant.
In response to the question whether he considered himself a Welspun employee,
Durham acknowledged that, in a way, he did consider himself a Welspun employee, but in
a way, he did not. He acknowledged that he had testified in his deposition that he considered
himself a Welspun employee because he worked there inside the plant; that Welspun basically
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told him what to do at work; and that his supervisor, Sawar, told him that if he could improve
his attendance, he would probably be hired at Welspun.
Durham acknowledged that he was injured during the course of his work and received
medical treatment; that all of his medical bills had been paid; that he understood that Elite
supplied people to the Welspun plant only; that the only supervisors he had worked for were
Welspun supervisors; and that the only people who assigned duties were Welspun supervisors.
He stated that if the Welspun plant were not there, he would not have any employment
through Elite.
Chris Rawlings, who is the owner of Elite, testified that he was responsible for business
functions, financial responsibilities, sales, marketing, and staff management. He stated that he
was familiar with Welspun’s relationship with Elite; that Elite’s primary function was to
“onboard employees and recruit”; and that once the employees were on site, Welspun
dictated work direction, shift hours, pay rates, and everything else. He stated that Elite
employees hired in Little Rock worked only at the Welspun plant and that Elite had had an
exclusive-market contract with Welspun since roughly August 2010. He stated that Elite’s
office was located at the Welspun facility, and he identified a copy of the contract for services
between Welspun and Elite as it existed in 2010. He identified his signature on the document
and stated that once employees were in the facility, payroll was Elite’s primary function. He
stated that Welspun managed the training, management, timekeeping, supervision, direction
of work, setting of shifts and hours, and provision of hard hats and goggles after the first ones
were issued. He said that Welspun disciplined and fired employees provided by Elite; that if
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such an employee were fired, there was no place else to go through Elite; that Elite employees
worked exclusively for Welspun; that Welspun had the right to control their work; and that
Elite did not have any supervision in the Welspun plant.
Rawlings testified that he was familiar with Durham and that Durham was one of the
Elite temporary employees who was assigned to Welspun; that once Durham was sent to the
Welspun plant, Elite could go into the Welspun timekeeping system and get the time that he
logged in and out; and that Elite would then process payroll based on those hours. He
explained that Durham was paid weekly; that the pass-through to Welspun was based on
work hours performed per employee; that Elite created a weekly invoice and submitted it
with the backup timekeeping data; that Welspun would turn over Durham’s hours and pay
Elite for the time that Elite was paying Durham; and that Welspun determined Durham’s pay
rate.
On cross-examination, Rawlings further explained that Elite was an onsite staff-
management business, and that it did not function as a professional-employer organization,
which has to be registered with the State. He stated that in Elite’s agreement with Welspun,
his company was referred to as the contractor, and that a paragraph of the agreement titled,
“Contractor’s Negligence,” provided that if an Elite employee was negligent and caused
damage, then Elite would indemnify and hold Welspun harmless for any damages caused. He
explained that after the incident involving Durham, Elite was given some direction by
Welspun to have the Elite employees come into the office and sign a waiver form. He could
not recall who specifically told him to do that, but he said it would have been someone in
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Welspun’s upper management. He stated that the waiver agreement existed before the
incident; that it existed between the employee and Welspun, not between the employee and
Elite; that Welspun asked Elite to make sure that everybody had signed one; and that Elite did
not sign any part of it. He acknowledged sending out the January 7, 2011 letter following the
work incident and at the direction of Welspun.
On redirect examination, Rawlings stated that he was not aware of whether Durham
signed the agreement; that the person who signs the agreement is referred to as an assigned
employee under the agreement; and that the January 7, 2011 letter did not change anything
about the relationship between Elite and Welspun.
Martin Cain, who is the health, safety, and environment director for Welspun, testified
that he worked directly for the president of Welspun and that he was familiar with Welspun’s
relationship with Elite. He explained that Elite interviewed, screened, and sent employees
to Welspun; that Welspun was committed to its regular employees to try to maintain level
employment for them; and that if there were a decrease in sales, the Elite people would be
the first ones laid off.
He testified that Welspun hired management employees directly; that it also hired for
positions that required special qualifications, such as an equipment operator, maintenance
machinist, or millwright; and that, generally, Elite provided the other employees. He stated
that Welspun and Elite had a contract for their service, and once Elite supplied a temporary
employee, Welspun trained him at safety orientation and assigned him to a job in the plant
and trained him regarding what job he should do, work instructions, and job-safety analysis.
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He explained that Welspun supervised the employees’ work and decided what job they would
perform, and that Welspun provided any needed replacement equipment and special personal-
protection equipment.
Cain also testified that Welspun set the shifts and work hours; that Elite temporary
employees and full-time Welspun employees were given the same breaks and had the same
break room; that Welspun could discipline and terminate the employees; that all of the work
done by employees supplied by Elite was for Welspun; that Welspun had the right to control
their work; that Elite did not provide onsite training; and that Elite did not supervise them
in the Welspun plant.
Cain stated that he was familiar with Durham and the fact that he was injured at the
plant; that Durham was a temporary employee hired by Elite and working at Welspun; that
he was a quality inspector for Welspun, supervised by Saleem Sawar, who was a full-time
employee of Welspun; that Sawar could tell Durham where to work every day and which job
to perform every day; that he could determine which equipment Durham would use and
would make sure he was trained; and that Sawar would determine Durham’s shift and the days
and hours Durham worked.
He explained that Durham was paid based on an hourly rate; that Welspun provided
the hours to Elite for him to get paid; that Welspun kept track of Durham’s hours at the plant;
that it was done on the same system as full-time Welspun employees; and that no
differentiation was made on the time system.
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He testified that on December 21, 2010, which was the date Durham was injured,
Durham came to work at the Welspun plant; that he was being supervised by Welspun; that
no Elite supervisors were present and none came to the scene after the accident; that Durham
was treated the same as a full-time Welspun employee; and that his actions were controlled
by Welspun.
Discussion
All of Durham’s points challenge in some way the Commission’s conclusion that he
was jointly employed by both Elite and Welspun at the time of his injury. He does not
dispute the existence of two of the three elements necessary to establish dual-employment,
i.e., he does not dispute Welspun’s right of control or that he was performing Welspun work
at the time of his injury. He does, however, dispute the existence of an implied contract of
hire.
1. Implied Contract
Durham contends that the Commission’s finding that an implied contract existed
between him and Welspun was based on circular logic because Welspun expressly disavowed
the existence of such a contract prior to the instant litigation, the ALJ pointed to no evidence
of the existence of such a contract in his decision and did not discuss the waiver, and Saleem
Sawar had offered him at job at Welspun if he improved his attendance. We do not agree
that the Commission employed circular logic in finding an implied contract.
The ALJ’s decision was affirmed and adopted by the Commission. The ALJ specifically
found that an implied contract of hire existed between Durham and Welspun. The ALJ’s
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decision notes that Durham testified at the full hearing that he understood that if he was hired
by Elite that he would be working in the Welspun plant because Elite supplied employees to
Welspun only. In addition, the ALJ noted that in finding an implied contract of hire, he was
not disregarding the fact that Elite actually paid the claimant’s wages and provided the
claimant with some safety equipment at the time of hire. He explained that whether the
special employer pays the general employer who in turn pays the employee, or whether the
special employer pays the employee directly, the difference was one of mechanics and not
substance.
Our review of the evidence before the Commission supports the finding of an implied
contract of hire. Durham acknowledged that he knew when he was hired by Elite that he
would be working for Welspun, that he considered himself an employee of both, and that he
attended Welspun’s orientation and training meetings. Durham’s wages were the ultimate
responsibility of Welspun, even though he received his paycheck from Elite, because Welspun
paid Elite for Durham’s work based on the hours he worked, plus payment to Elite for its
services in providing temporary personnel.
Our review must focus on whether the Commission’s decision displays a substantial
basis for its decision, i.e., could fair-minded persons with the same facts before them have
reached the same conclusion. Beaver, supra. It is within the Commission’s province to
reconcile conflicting evidence, and to determine the true facts. Raulston v. Waste Mgmt., Inc.,
2012 Ark. App. 272, 411 S.W.3d 711. The Commission’s failure to specifically discuss
conflicting evidence does not mean that it was arbitrarily disregarded where there is substantial
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evidence to support its decision. Id. There was substantial evidence to support the
Commission’s finding of an implied contract for hire between Durham and Welspun.
2. Documents
Durham next contends that the only way the Commission could have reached its
decision was to arbitrarily disregard all of the documentary evidence obtained from Welspun
regarding the relationship among the parties, along with the testimony of Chris Rawlings.
In particular, he relies on the “Confidentiality and Waiver Agreement,” the January 7, 2011
letter that was sent to Elite employees following Durham’s injury, the “Staffing Services
Agreement,” and the “Agreed Schedule of Contracted Rates.” He further contends under
this point that the Commission’s decision violates “the doctrine against inconsistent
positions,” warranting reversal of the decision. We disagree.
The fact that these documents refer to Elite employees and designate Elite as the
contractor does not preclude those same employees from also being employees of Welspun,
which is what the Commission concluded. Moreover, it can be fairly said that these
documents support the Commission’s decision. For example, the “Confidentiality and
Waiver Agreement” is attached as Exhibit A to the Staffing Services Agreement, which
provides in part:
7.4 Dual Employment—For purposes of determining responsibility for
indemnification under Sections 7.2 and 7.3 above [Contractor’s and Company’s
negligence], Contractor [Elite] shall be solely responsible for the negligence, gross
negligence or willful misconduct of any employee Contractor [Elite] provides under
this Agreement including any employee treated for purposes of Arkansas law as an employee
of Contractor [Elite] and Company [Welspun].
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(Emphasis added.) Similarly, nothing in the “Agreed Schedule of Contracted Rates” or the
January 7, 2011 letter to “Elite Employees” undermines the Commission’s decision that
Durham was jointly employed by both Elite and Welspun.
As mentioned previously, the Commission’s failure to specifically discuss conflicting
evidence does not support the position that it arbitrarily disregarded that evidence if there is
substantial evidence to support its decision that Welspun and Elite were joint employers.
Raulston, supra. Here, the Commission determined that Durham was employed by both Elite
and Welspun. The documents relied on by Durham do not demonstrate such inconsistent
positions that fair-minded persons could not consider them as part of the overall evidence and
reach the same result as the Commission that Durham was jointly employed by both Elite and
Welspun.
As our supreme court explained in Edgin v. Entergy Operations, Inc., 331 Ark. 162, 169,
961 S.W.2d 724, 727 (1998):
Furthermore, our interpretation of this agreement is not inconsistent with the
sound public policy considerations that form the basis of our workers’ compensation
laws. Nor is it inconsistent with this court’s previous holdings in Daniels v. Riley’s
Health & Fitness Ctrs., 310 Ark. 756, 840 S.W.2d 177 (1992), and National Union Fire
Ins. v. Tri-State Iron & Metal, 323 Ark. 258, 914 S.W.2d 301 (1996), which involved
the application of the dual-employment doctrine. In both of those cases, this court
held that the workers, who were employed by temporary employment agencies and
were injured while working their assigned jobs for a special employer, were not
entitled to bring suit against those special employers, as such claims were barred by the
exclusive-remedy provision of our Workers’ Compensation Act.
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Our review convinces us that there was substantial evidence to support the Commission’s
decision, and the existence of the documents relied on by Durham do not support reversal of
that decision.
3. Dissimilar Treatment
For his final argument, Durham contends that the dissimilar treatment of Elite
employees, as opposed to Welspun employees, refutes the implication of an implied contract
between him and Welspun. He lists examples, such as Elite employees wore different-colored
hard hats and identification badges, Elite employees used a separate human-resources office,
Elite employees were paid weekly while Welspun employees were paid every two weeks, and
Welspun events did not include Elite employees. The argument is simply not convincing and
demonstrates a misunderstanding of the concept of dual employment. We have earlier held
in this opinion that the Commission’s finding that an implied contract existed between
Durham and Welspun was supported by substantial evidence. Durham’s argument here does
not convince us otherwise.
Affirmed.
HARRISON and WYNNE, JJ., agree.
M. Keith Wren, for appellant.
Friday, Eldredge & Clark, LLP, by: James M. Simpson, Guy Alton Wade, and Phillip M.
Brick, Jr., for appellees.
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